Jeremy Hobson: $4.9 billion: that’s what British oil giant BP made in profit last quarter — more than double what it made in the same quarter last year. The company, which shares the blame for the largest oil spill in U.S. history, says it has reached a turning point.
And here to talk with us about that is Marketplace’s Stephen Beard, who’s with us live from London. Stephen, how is this company doing so well so soon after the spill?
Stephen Beard: Two reasons, mainly. In the same period last year, BP was writing off vast sums of money to pay for the Gulf of Mexico spill, so this year’s figures look much better in comparison. And the price of oil has been much higher this year than last — it’s been up almost 50 percent.
Nick McGregor of brokers RedMayne Bentley says the buoyant price of crude has been a huge buffer for BP.
Nick McGregor: The sheer cash generation capabiltiy of the oil majors when oil prices are high is phenomenal, and easily enough to cover incidents such as those that BP have faced.
Hobson: So BP benefiting from the high price of oil — Stephen, how much business is BP doing in the Gulf of Mexico these days?
Beard: Things are looking a lot rosier for the company on that front, too. It’s just received U.S. regulatory approval for the first exploration drilling since the spill. And the company now says that it plans to have all its five Gulf of Mexico rigs working by the end of the year.
By the way, Jeremy, one interesting thing to emerge from these figures: BP is allowing an extra $600 million to pay for additional legal fees for the spill. So at least the lawyers cleaned up in the Gulf.
Hobson: Marketplace’s Stephen Beard in London. Thanks, Stephen.
Beard: OK, Jeremy.
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