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(Sharecast News) - BP posted a surge in third-quarter profit and a reduction in net debt on Friday amid rising refining margins.
Third-quarter underlying replacement cost profit - BP's core measure of income - rose to $8.46bn from $2.21bn in the same period a year earlier, beating expectations of $7.33bn. The oil giant said the jump is due mainly to significantly higher realised refining margins and a significantly higher gas and marketing trading result.
Operating cash flow rose to $14.8bn in Q3 from $7.8bn a year earlier, helping the company to cut net debt by $8.4bn to $13.9bn.
The average refining indicator margin pushed up to $46.7 from $29.6 in the second quarter and $15.8 in the third quarter of last year.
Chief executive Meg O'Neill said: "These are dynamic times with volatility and disruption to trade flows continuing to define energy markets.
"The industry as a whole has been showing remarkable adaptability. Refineries have been running close to capacity to make up for shortfalls, shipping has been taking different and longer routes, and releases from strategic and commercial reserves are helping to bridge supply gaps.
"We maintained upstream production at around 2.2 million barrels per day, upstream plant reliability and refining availability both improved compared to the previous quarter, and our trading performance was also higher.
"This has generated a strong set of results, supported by the higher-price, higher-margin environment and some good progress on performance improvement across the business."
BP's results came a day after Shell posted a near-doubling of its third-quarter profit, driven by record refining margins.
Russ Mould, investment director at AJ Bell, said: "There is no doubt that BP chief executive Meg O'Neill has been dealt a useful hand thanks to the surge in energy prices this year.
"The company's quarterly profit has hit a new record, surpassing the levels seen in 2022 after Russia's invasion of Ukraine. A loss of capacity in the refining market has helped BP, like several peers, to chalk up exceptional levels of profitability for these activities.
"While its peer group has been busily returning cash to shareholders through enhanced dividends and buybacks, BP is focusing on getting its house in order debt-wise.
"This prudent fixing of the roof while the sun is shining could put BP on stronger long-term foundations. It shows an understanding that times won't always be this good for the business.
"O'Neill's simplification and streamlining of the business continues to progress and should be well-received by investors. However, eventually there will have to be a credible growth strategy to follow up on the fix-up job.
"December's strategy day is O'Neill's opportunity to show she has the vision to lead the business into a new phase in its development."
At 1040 GMT, BP shares were up 0.4% at 626.80p.
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