Shares in Europe's second-largest oil company were up almost 5pc in late morning trading in London despite BP reporting that its so-called “replacement cost profit” fell by 50pc to $4.98bn (£3.04bn) in the three months to the end of September compared with $10bn the same period last year.
But City analysts had been forecasting a total of just $3.16bn, since crude oil is now trading at just below $80 a barrel, well below the record of $147 set in July last year. Replacement cost profit is the measure used by oil companies to strip out the effect of changes in the value of inventories
BP’s chief executive, Tony Hayward, said at the beginning of this year that the company would aim for $2bn of cost-savings to make up for the falling oil price. He achieved this target by the half year, raising the aim to $3bn. A spokesman said the programme is going so well that it wants to have reached $4bn of cuts by the year end.
The company is aiming for an increase in output this year and has focused its efforts on the Gulf Of Mexico. Last month the company announced a 'giant oil discovery' at the Tiber Prospect in a deepwater area of the Gulf of Mexico.