Size discount

6 February 2018 By George Hay Follow @gfhay

After years of Gulf of Mexico-related strife, the UK group is recovering. With oil prices high enough to pay comfortably for investments and dividends, the energy giant may be tempted to ramp up new projects in a bid to become bigger than Shell. That would be a mistake.

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BP on Feb. 6 reported underlying net profit for 2017 of $6.2 billion, compared with $2.6 billion for the previous year.

The UK oil major left its annual dividend unchanged at $0.40 and announced operating cash flow of $24.1 billion, compared with $17.6 billion in 2016. Payments related to the Gulf of Mexico oil spill amounted to $5.2 billion.

BP’s net debt of $37.8 billion was 27.4 percent of its shareholder equity plus net debt, compared with 26.8 percent at the end of 2016, and it announced a return on average capital employed for 2017 of 5.8 percent.

As of 0915 GMT, BP shares were trading at 477 pence, down 1 percent, with the FTSE 100 down 1.7 percent.

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