BP is anticipated to be the most recent beneficiary of the increase in oil prices, with analysts from the City predicting the company’s profits for the first quarter to report a healthy year-on-year rise.
The full-year results of the oil giant that was released earlier this year revelaed that the company was in a strong position already, with the profits of the company coming in at $6.2bn (£4.4bn).
Bob Dudley, the boss of BP, called 2017 as “one of the strongest years in BP’s recent history” as the company was able to recover from the Deepwater Horizon disaster that occurred in 2010 by bringing $343m worth of shares back from investors.
On Tuesday, the first quarter profits are set to be published by BP. The profits are expected to not only reflect the recent increase in the oil prices to $75 per barrel, which also boosted the earnings of Shell to $5.9bn, an increase of 67 percent, but also the strength of the upstream and downstream business of BP.
Recently, BP opened seven new gas and oil fields which helped improve the company’s oil production levels by 12 percent. CMC Markets said that the six projects that BP has in its pipeline in Egypt, Azerbaijan, and the North Sea should further help improve its profitability.
The announcement of the results coincides with the appointment of Helge Lund, its new chairman, that was appointed just last week. Lund was the mastermind of the $70bn sale of BG Group to Royal Dutch Shell and will be taking the place of Carl-Henric Svanberg, the incumbent board chair, on the 1st of January 2019. Lund is set to join BP as a non-executive director on the 1st of September.
However, investors and analysts will be watching to see if there will be any additional costs that will be relating to the Deepwater oil spill as well as whether BP could be able to capitalise on the benefits of the tax cuts of US President Donald Trump.
Another sticking point is the links of the company with Russia, which has left it exposed following the poisoning of Sergei Skripal, the Russian Spy, and his daughter Yulia last March. BP owns just under 20 percent of the Rosneft of Russia, and the senior market analyst at ETX Capital, Neil Wilson, said that Russia could “make life hard for BP if it chooses to.”
CMC Markets said that the overall debt of BP still remains to be on the high side at $37.3bn. However, it said that it must come down.