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BP turns huge annual profit despite fourth-quarter loss

The BP Whiting Refinery is pictured. BP turned a profit in 2017 despite a fourth-quarter loss.

Jonathan Miano, The Times, file

BP posted one of its "strongest years in recent history" despite a $583 million fourth-quarter loss.

The London-based energy company, which operates the BP Whiting Refinery on the Lake Michigan shoreline, lost $583 million in the fourth quarter because of one-time expenses related to a Gulf of Mexico oil spill and the tax cuts, which diminish the value of deferred tax assets that reduce a company's taxable income in the future.

Despite the fourth-quarter loss, BP made $2.8 billion last year, as compared to a $1 billion loss in 2016.

"2017 was one of the strongest years in BP’s recent history. We delivered operationally and financially, with very strong earnings in the Downstream, Upstream production up 12 percent, and our finances rebalanced," CEO Bob Dudley said. "And we did all this while maintaining safe and reliable operations."

BP has benefited from rising oil prices, which were trading at about $64 a barrel Tuesday, according to Markets Insider.

The company's underlying replacement cost profit was $2.1 billion in the fourth quarter, up from $400 million during the fourth quarter of 2016. It was $6.2 billion for the year, up from $2.6 billion the previous year.

Upstream production rose by 12 percent last year, to the highest level since 2010.

"We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond," Dudley said. “At the same time, we are embracing the energy transition, seeking new opportunities in a changing, lower-carbon world."

BP employs more than 1,800 United Steelworkers-represented refinery workers and hundreds of additional tradesman at the sprawling refinery in Whiting, Hammond and East Chicago.

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Business reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.