October 3, 2022

Oil Spill Costs In Gulf Keep BP’s Profits Down

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BP returned back to profitability in the recent quarter, but net income was still hit hard

Although BP was back into the black profit-wise for the third quarter, the costs from the oil spill kept a cap on their net income. Company representatives also indicated the oil giant won’t be rushing back into the Gulf of Mexico any time soon.

Profits from the recent third quarter were down over 60 percent compared to the same period a year ago. Final numbers came in at $1.79 billion from $5.3 billion.

To blame, according to the company, are the increasing costs of cleanup and lost revenue from the oil spill earlier this year. Anticipated costs of the spill have just been increased by $7.7 billion, bringing the total to $40 billion. Operations in the Gulf account for approximately 10 percent of its overall production.

According to company Chief Executive, Bob Dudley, BP is in a recovery mode. He did indicate that, spill aside, he felt the BP group as a whole performed strongly in both a business sense as well as safety. The third quarter was Dudley’s first complete quarter at the helm of the company.

BP plans to continue expansion plans in the Gulf once the U.S. government lifts the moratorium on drilling. It will just be taking it slowly. They are also evaluating current equipment and rigs in those waters to ensure compliance with government regulations and safety standards.