On June 15, 2020, BP logos can be seen at a BP petrol/diesel filling station southeast London.
"Rising commodity prices certainly assisted, but I am most happy that quarter-by-quarter, we're doing exactly what we said we'd - delivering significant money to strengthen our finances and grow distributions to shareholders, and invest in strategic transformation," Bernard Looney, CEO of the company, stated in its earnings report.
International benchmark Brent crude oil prices have risen by around 60% this year.
Refinitiv reported that the underlying replacement profit profit, which is a proxy of net profit, was $3.3 billion. This figure is higher than analyst estimates of $3.1 million. This compares to the $2.8 billion net profit from the previous quarter, and $100 million for 2020 when oil prices plummeted due to the coronavirus pandemic.
The company did report a $2.5 billion headline loss for the third quarter due to "significant adverse fair-value accounting effects." The company suffered a $6.1 billion loss due to an "exceptional" increase in forward gas prices at the quarter's end.
CNBC's Looney said Tuesday that the discrepancy in headline and underlying figures stemmed from a "simple timing impact" according to IFRS reporting rules. This means that BP is "accounting as a hedge, and not for the portfolio's value."
He said that it did not mean that hedges were in trouble, but that the company was only "accounting one side of the equation" and not the other, as required under IFRS. This will change over time.
The net debt decreased to just below $32 billion, from $32.7 billion during the second quarter. This is the sixth consecutive quarter of decreases.
BP's dividend was maintained at 5.46c per share, payable in the fourth-quarter. This is despite a 4% increase through 2025 announced during the second quarter.
This is a breaking story that will be updated soon.
