A strong Q3 for BP gives them positive news against a generally flat second half for the oil majors.
In a surprise for the analysts, BP’s Q3 profits beat the $4bn average Bloomberg estimate, although the $5.2bn recorded for 2012, was fractionally lower than the same period last year. Record earnings were recorded for the company's downstream segment at $3.4bn from just $1.1bn in 2011. Upstream performance remained flat from the second quarter: some new projects have created increased production but these have been offset by turnarounds and maintenance coupled with the effects of Hurricane Isaac in the Gulf.
BP continues its disposal strategy, set to meet Deepwater Horizon claims, with the total closing fast on the $38bn target set in 2010 for completion by next year.
Also better than expected were the numbers from French major, Total, with an increase of 20% in adjusted net income over Q3 2011, showing €3.3bn ($4.2bn) for the period in 2012, boosted by a sharp increase in refining margins. Profits for Total’s refining and chemicals divisions rose 54%, although oil and gas output fell two percent.
Meanwhile, Shell saw its underlying net profits fall by 6% in the third quarter of 2012. Because of repeated security breaches, Shell was forced to shut-in production in some of its Nigerian fields, leading to a fall in oil output. This was further exacerbated by flooding in the Niger delta. Overall, production remains weak, below three million barrels a day for the first time in three years.
Third quarter CSS earnings were $6.1bn, 15% lower than in the same quarter in 2011. Upstream earnings were also down year on year and a net gain in 2011 has become a net charge in 2012.
A fall of 30% in earnings between the third quarter in 2011 and 2012 was recorded by ConocoPhillips with revenue down 9.6% to $15 billion. Overall Q3 production fell, partly affected by normal field decline and partly by the disposition program of $8-$10 billion scheduled to finish by the end of 2013. Production in China and Libya appeared to offer the only positives. Sales volume exceeded production but sales figures were hit by an overall drop in global commodity prices.
A number of adverse factors have also culminated in a Q3 year-on-year fall in earnings for Chevron at $5.3bn, compared with $7.8 billion in 2011. This included a reduction in the price of crude oil, planned oil field maintenance which temporarily reduced oil and gas production, shut-ins in Brazil and the Gulf of Mexico and, unlike the previous year, foreign currency movements negatively affecting earnings. Sales and other operating revenues are were also down at $56bn, from $61bn last year.