Adjusted net income for the first quarter was US$2.59 billion, the highest since 2014 and beating analysts' estimates of US$2.12 billion.
Shareholders react positively to the highest profit in years even as the continuing burden of oil-spill payments push debt higher. It also reported rising production, helping it post its strongest quarterly earnings since the middle of 2014.
"We have delivered another strong set of results", said Bob Dudley, BP chief executive.
BP's Chief Financial Officer Brian Gilvary said factors that reduced first-quarter cash flow - increases in working capital and payments related to the oil spill from the Macondo well in the Gulf of Mexico - would fade later in the year. The company expects its capital-expenditure budget to fall into the lower end of its guidance this year, estimated at around $15 billion. BP received the biggest criminal fine in U.S. history after the Deepwater Horizon oil spill killed 11 people in April 2010 and saw 4.2 million barrels of oil spilt into the Gulf of Mexico.
The company's production rose 6% in the first quarter compared with a year ago.
The company has also demonstrated that despite the general wariness in the industry, the supermajors are investing in new production: in the last quarter, BP made a final investment decision on four new projects-two in the United Kingdom portion of the North Sea, one in India, and one in Oman. The last time it reported profits of that size was in the third quarter of 2014 when oil prices were hovering near $100 a barrel. Oil prices fell to as low as about $25 a barrel by 2016, though have recovered strongly since then. With rising output from our new major projects and excellent reliability, Upstream production was 9% higher than a year earlier.
"The market seems satisfied for now by assurances that this will represent the peak for outflows relating to the disaster, but if this is not in evidence later in the year, BP may be in for harsher treatment". That included the final installment from a settlement with the Justice Department to resolve all criminal claims. Underlying profit was up 23 per cent on the previous quarter and was our best quarterly result in three years. BP is expected to pay $3 billion in 2018.
The company then faces charges of about $2 billion next year, and then more than $1 billion a year out past 2030.