BP Navigates Choppy Economy

 

At the end of June, BP’s production had increased 4%–the equivalent of more than 4 million barrels of oil–in three months, compared to the same period in 2008.

 

In addition, the $2 billion reduction in cash costs the company predicted for 2009 has already been exceeded and a further $1 billion saving is expected during the rest of the year. And, the second quarter replacement cost profit of $3,140 million was up compared to 30% on the first quarter.

 

“We are in turbulent times, volatile and uncertain,” said BP Chief Executive Tony Hayward in a press release. “But we continue to steer a steady course through choppy waters. Two years ago we set out to restore our ability to compete more effectively with our rivals in the sector. The momentum we established in that process remains very powerful. Despite the current climate, we are making good progress in growing our upstream, turning around our downstream and driving cost-efficiency across the group.”

 

Hayward added that progress was thanks to a simplified organization, deepening expertise at the operational level and unrelenting focus on operational safety and integrity. Cash costs had been reduced by more than $2 billion in the first half of the year, compared to the same period last year.

 

“We have already surpassed the target we set ourselves at the beginning of this year for cash costs, but we are by no means complacent. We will continue to push efficiencies into the group and make sure every dollar counts. Based on this strong progress, we can expect cash costs for the full year to be down by more than $3 billion compared with 2008.”

 

Hayward said the latest economic data suggested the global economy could stabilize this summer, but that any recovery, whenever it arrives, would likely be sluggish. “The overall picture is of energy demand now stabilizing following significant falls in the first half of the year. We see little evidence of any growth in demand and expect the recovery to be long and drawn out.”

 

 

 

 

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