BP's profit nearly triples in the first quarter of 2017 from a year earlier, buoyed by rising oil prices and production that hit a five-year high. But as Sonia Legg reports, debt also piled up in order to pay for acquisitions and costs for the 2010 Gulf of Mexico spill.
Oil prices have risen fifty percent in the past year to around $54 a barrel in the first quarter. That's been good news for BP. It's tripled its first quarter profit, even though it's still recovering from the Gulf of Mexico oil spill. (SOUNDBITE) (English) NAEEM ASLAM, SENIOR MARKETS ANALYST, THINK MARKETS, SAYING: "The firm literally had to pull all the levers in order to balance their cash flows which is standing at $4.4bln, that's excluding payments for the spill in the Gulf of Mexico. So I think rising oil prices is very much supporting BP's growth right now." BP's main rivals beat forecasts too. But that's where the comparison ends. (SOUNDBITE) (English) NAEEM ASLAM, SENIOR MARKETS ANALYST, THINK MARKETS, SAYING: "BP stock is performing extremely bad in comparison to Exxon or in comparison to Total because of the major costs that the firm is facing in the Gulf of Mexico. The total debt is still substantially high and is sitting at $38 billion, when it comes to total debt, when a year ago it was sitting at $30 billion." BP is set to start a record seven new projects this year, adding 800,000 barrels of new production by the end of the decade. But in February it warned prices needed to be over $60 a barrel before it could balance its books. U.S. shale firms - according to some analysts - are happy to pump at anything over $40. (SOUNDBITE) (English) NAEEM ASLAM, SENIOR MARKETS ANALYST, THINK MARKETS, SAYING: "Given this intense battle that we have between OPEC and non-OPEC and the U.S. shale oil firms I think it's difficult to get a scenario where the crude oil price could touch $60 unless we have a demand shock." And that's with an agreement in place - the current one only runs until the end of June.