BP is back on the growth path and is stepping up investment again, after years of multi-billion-dollar costs associated with the Gulf of Mexico oil disaster.
The oil giant’s chief executive Bob Dudley signalled that investment would rise from £12 billion to £12.8 billion this year, in an effort to crank up contributions from new projects and gave one of its most optimistic presentations for years, saying that the Deepwater Horizon spill was now behind it.
BP expects to have a positive cash flow again in 2018 and will be helped by the sharp fall in payments for Deepwater, that occurs at that time.
The oil giant now expects to pay £50 billion in total over the disaster, but was unable to say that the final bill would not climb further.
Mr Dudley insisted the Deepwater Horizon liabilities were “substantially behind us” and that the company was “fully focused on the future”.
A sum of £5.7 billion will be paid out this year, sending the company to a full-year loss of £800 million.
However, this was in improvement on 2015, when even higher charges over the spill brought a £4.2 billion loss, the company’s worst ever.
There was brighter news in the final three months of December when the oil company achieved £320 million of profit, compared with £156 million during the same period in 2015.
However, this missed analysts’ expectations and investors sent the shares down sharply in early trading.
BP said that future payments over the Gulf of Mexico would reduce sharply to £800 million in 2019, although payments will continue for another 18 years.
At the end of last year, the oil company made a string of acquisitions including in Abu Dhabi, Egypt and Australia.
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BP’s now has eight major projects in the works, the most it has taken on in a single year, and aims ramp production by 800,000 barrels a day by 2020.
“We have laid the foundations for BP to be back to growth,” Mr Dudley said.
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