BP underlying replacement cost profit for fourth quarter of 2016 was $400 million, compared with $196 million for the same period in 2015 and $933 million for the third quarter of 2016.
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Compared to a year earlier, the quarter’s result benefited from higher oil prices and significantly lower costs, offset by weaker refining margins and higher turnarounds in the Downstream.
The full year 2016 price environment was challenging: the average Brent oil price of $44 per barrel was the lowest for 12 years; Henry Hub gas marker prices averaged $2.46 per million British thermal units; and the refining marker margin was the lowest since 2010.
The headline reported result for the full year was a profit of $115 million, compared with the headline loss of $6.5 billion reported for 2015.
The 2016 headline result included a total of $4 billion non-operating charges taken through the year associated with resolution of the remaining legacy of the 2010 oil spill.
The headline profit excluding these legacy charges was $4.1 billion for 2016, compared with $2.0 billion for 20153.
Underlying operating cash flow4, excluding pre-tax Gulf of Mexico payments, was $17.8 billion for 2016, with $4.5 billion in the fourth quarter, compared with $20.3 billion in 2015.
BP’s full year controllable cash costs5 were $7 billion lower than in 2014 - a target reached a year earlier than previously expected. Organic capital expenditure for the year totalled $16 billion6 in 2016, compared with the range of $17-19 billion anticipated at the beginning of last year.
In total $7.1 billion in pre-tax payments related to the Gulf of Mexico oil spill were made through 2016, as processing of outstanding claims accelerated. Total divestment revenues were $3.2 billion in the year7.
BP reported a reserves replacement ratio for 2016 of 109%. At year end, BP’s gearing level was 26.8%, within the target range of 20-30%.
BP also announced an unchanged dividend for the quarter of 10c per ordinary share, expected to be paid in March 2017. ■