Bolstered by soaring crude oil prices, BP reported a 17 percent increase in first-quarter profits and sought to convince investors that it was coping with the costs of the massive oil spill in the Gulf of Mexico last year.
The company’s earnings did show signs of spill damage. Asset sales last year, which were carried out to fund the costs of spill cleanup and damages, helped shrink the oil giant’s production of oil and natural gas by 11 percent compared with the first quarter of 2010. BP also set aside an additional $400 million to cover spill costs, on top of the $40.9 billion it had already reserved for those costs.
But the company, whose stock had plunged in the wake of the April 20, 2010, blowout on its Macondo well, also showed signs that it is managing the impact of the spill and will survive with many lucrative assets intact.
A temporary glitch, but profits are again soaring, and among those lucrative assets that BP expects soon to be helping expand its profit margins:
BP has predicted it will be back drilling in the Gulf of Mexico within a matter of months despite continuing legal threats and rows over pollution from last year's Deepwater Horizon disaster. "We expect to be back and actively drilling during the second half of the year," Byron Grote, the company's chief financial officer, told financial analysts from the City of London on Wednesday.
The comments are likely to infuriate environmentalists who believe BP should be kept away from the Gulf and could upset a US offshore regulator still considering whether to grant permits to BP.
Verbal gaffes by former chief executive Tony Hayward in the wake of the Macondo well accident 12 months ago sent the company's reputation in America into freefall as it attracted widespread criticism from the White House downwards.
But widespread criticism easily can be borne when there's so much money to be made, including back in the Gulf.