BP PLC reported third-quarter underlying replacement cost profit of $2.3 billion, down from $3.8 billion a year earlier. The result was impacted by marked lower upstream earnings because of lower prices, maintenance, and weather impacts, the company said.
A divestment-related, non-cash, non-operating, after-tax charge of $2.6 billion resulted in a reported loss for the quarter of $700 million. Operating cash flow, excluding Gulf of Mexico oil spill payments, was $6.5 billion for the quarter, including a $100 million working capital release (after adjusting for net inventory holding losses). Gulf of Mexico oil spill payments were $400 million on a post-tax basis.
The company posted a replacement-cost loss of $351 million for the quarter compared with a profit of $3.09 billion a year earlier.
Upstream production for the third quarter, which excludes Rosneft, was 2.57 million boe/d, 4.4% higher than a year earlier. Underlying production, adjusted for portfolio changes and production-sharing agreement impact, decreased by 2.5% due to increased maintenance and the impact of Hurricane Barry in the US gulf. The company expects fourth quarter reported production to be higher than third quarter due to completion of seasonal maintenance and turnaround activities.
In July BP deepened its presence in Oman, signing an exploration and production sharing contract together with Eni for Block 77 in Oman, east of the BP-operated Block 61.
In October BP added to its position in the presalt region offshore Brazil, accessing two new blocks in the Santos and Campos basins.
In August BP reported an agreement to sell its Alaska interests to a Hilcorp Energy subsidiary for $5.6 billion. Subject to regulatory approval, the transaction is expected to complete in 2020.
Divestment transactions announced in 2019 totaled $7.2 billion at the end of the third quarter. BP expects this to reach about $10 billion by yearend.
