BP has made a profit of $5 billion in the first quarter of 2023, up from the previous three months on the back of strong oil and gas trading.
BP’s results follow a strong showing by rivals including Exxon Mobil and Chevron last week as oil majors continue to benefit from energy prices that remain strong despite some softening since the start of the year.
First-quarter underlying replacement cost profit, the company’s definition of net income, reached $4.96 billion, up from $4.8 billion in the fourth quarter of 2022.
The profit reflects an exceptional gas marketing and trading result, a lower level of refinery turnaround activity and a very strong oil trading result, BP said in its earnings report.
Benchmark Brent crude oil prices averaged $81 per barrel in the first three months of the year, down 16 percent from a year earlier and 7 percent from the fourth-quarter.
BP had reported a $6.25 billion profit in the first quarter of 2022, on its way to a record $28 billion year.
The London-based BP said it expects oil and European gas prices to remain strong in the second quarter even as refining profit margins are expected to weaken due to lower diesel prices.
Fuel demand in Europe has been a little bit soft while consumption in China has been strong following the lifting of pandemic restrictions, BP Chief Financial Officer Murray Auchincloss told analysts on a call.
BP also said it expects to pay $1 billion under Britain’s windfall tax on the oil and gas sector between May 2022 and April 2023.
BP’s capital expenditure in the first quarter was $3.6 billion. BP continues to expect capital expenditure, including inorganic capital expenditure, of $16-18 billion in 2023.