BP’s outgoing boss to be dealt blow by low oil price

BP's outgoing chief executive Bob Dudley will present his final third quarter results tomorrow. Photo credit: Dominic Lipinski/PA Wire

The company will continue strong production, analysts expect, despite an outage when Hurricane Barry forced it to shut down production in the Gulf of Mexico for two weeks.

Middle East tensions in September briefly seemed to push up the price of oil enough to boost the bottom lines of the world’s majors.

The price of a barrel of crude oil spiked by 20 per cent after a drone attack hit Saudi Arabian refineries in September, taking out five per cent of global oil production. It was the biggest increase since the early 1990s.

However, the rise was short lived as the Saudis quickly restarted production.

This is likely to eat into profits as BP shows investors what it has achieved tomorrow.

“Investors should still expect reasonably good production figures for the third quarter but lower average oil prices during this period will put a dent on profitability,” said analysts at the Share Centre.

Analysts believe the company’s underlying replacement cost profit, what BP calls its net income, will reach 1.73bn US dollars (£135bn) over the quarter. It compares to 3.83bn dollars (£2.99bn) in the same period last year.

Although Mr Dudley will be looking to cement his legacy before stepping down next year, he is likely to be remembered for helping to steer the company through the Deepwater Horizon scandal.

The outgoing chief executive, who is retiring in 2020 after 40 years in the industry, was brought in to turn around the oil giant after it was forced to pay around 65bn dollars (£51bn) to clean up the Gulf of Mexico following the largest environmental disaster in US history.

But the American has signalled he might be trying to put another clean up on his CV, as the company looks to push its green credentials.

On Thursday, Mr Dudley called for a price on carbon emissions to drive up the cost of dirty energy.

“Get a price on carbon and boy, the market will respond,” Mr Dudley said at a conference in London, according to CNBC.

Mr Dudley’s departure is the latest in a series of changes in senior management at some of Britain’s biggest companies.

Chief executives at Tesco, Imperial Brands and RBS are stepping down.