Rise in the cost of crude helps BP to achieve one of its best ever trading years

OIL GIANT BP has cheered one of the strongest years in the company’s recent history after a hike in the cost of crude helped annual profits more than double.

The energy giant saw underlying replacement cost profit – BP’s preferred income measure – soar to $6.2bn (£4.4bn) for 2017, up from $2.6bn (£1.9bn) the year before.

On a fourth-quarter basis, BP chalked up another rise at $2.1bn (£1.5bn), climbing from $400m (£286.2m) over the same threemonth period in 2016

BP is among a string of oil majors benefiting from climbing prices, having seen Brent crude hit $70 per barrel last month – its highest level in more than three years.

Group chief executive Bob Dudley said: “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 per cent, and our finances rebalanced.

“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.”

The group said its 2017 performance “reflected higher oil prices” and a $163m (£116.6m) boost from an out-of-court settlement between Sistema, Sistema-Invest and Rosneft subsidiary Bashneft. BP, which joined Shell in beating analysts’ earning’s forecasts, also unveiled brighter overall profits for the year at $3.4bn (£2.4bn), up from $115m (£82m) in 2016.

However, the FTSE 100 firm posted a replacement cost (RC) loss for the fourth quarter at $583m (£417m), sinking from a $72m (£51.5m) profit during 2016.

Payments linked to the Deepwater Horizon oil spill hit $300m (£214.6m) in the fourth quarter, pushing the total bill for 2017 to $5.2bn (£3.7bn).