LONDON | British oil company BP PLC reported an 83 percent profit rise on Tuesday for the third quarter on the back of high energy prices that peaked in July.
The company said it was well-placed to continue to reap profits despite the fact that the price of oil has now more than halved from July's all-time high of $147. Oil traded around $64 per barrel Tuesday.
British politicians called for BP to pass on falling fuel prices to consumers.
BP, Europe's second-biggest oil producer behind Royal Dutch Shell PLC, said it earned $8.05 billion for the three months ended in September, up from $4.41 billion in the same period a year earlier.
Revenue rose 45 percent to $103.2 billion from $71.3 billion the previous year.
"The high oil price of the third quarter obviously helped our absolute result," said Chief Executive Tony Hayward.
But Hayward also said he was confident the company would continue to do well even though oil prices could dip even further in the face of an anticipated global economic slowdown that would cut the demand for crude.
"I believe that BP is well-positioned to cope with such volatility," Hayward said, saying the company had not committed as much money as its rivals to high-cost ways of producing oil, such as mining tar sands and converting gas.
"We think the current turmoil may in fact create opportunities for us," he added.
Los Angeles-based Occidental Petroleum Corp. also reported a big profit increase on Tuesday. It said its third-quarter profit rose 71 percent to $2.27 billion on revenue of $7.06 billion, up from $4.84 billion in the year-earlier period.
Hayward, who replaced John Browne at the helm of BP last year, has focused on bringing new production and refining capacity on line to improve earnings, which have lagged behind rivals such as Exxon Mobil Corp. and Shell. For example, the company began production at Gulf of Mexico oil field Thunder Horse, which was discovered nine years ago, in June.
"These numbers have comfortably surpassed the top end of expectations," said Richard Hunter, head of British equities at Hargreaves Lansdown Stockbrokers. "The change of management seems to be reaping positive early returns."
The company's closely watched replacement cost profit more than doubled to $10.03 billion from $4.04 billion.
The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes gains or losses related to any changes in the value of oil companies' fuel inventories, instead measuring the amount it would cost to replace assets at current prices.
BP makes the bulk of its profits in its upstream business, which incorporates exploration for and production of oil. Pretax profits in that division doubled to $12.5 billion.
Underlying profit for the downstream business, which includes refining oil and selling it at BP's 24,000 gas stations worldwide, made a pretax profit of $1.3 billion, up 70 percent compared to the third quarter of last year.
British politicians from both the ruling and opposition parties called for BP to pass on falling fuel prices to consumers in the wake of its enormous third quarter profits.
"Oil companies should recognize that these are worrying and difficult times for many people and that we want the benefit of price changes to feed through to individuals who have to pay their bills," a spokesman for British Prime Minister Gordon Brown's office said, speaking on condition of anonymity in line with official policy.
Meanwhile, George Osborne, the Conservative Party's Treasury chief, said "it would be a scandal" if BP did not pass on fuel price declines.
BP's U.S. shares rose $2.50, or 6.2 percent, to $42.65 in late morning trading in New York.
