BP profits beat analyst expectations by almost $1 billion in the first quarter, helped by two new oilfields and a strong performance from its trading division.
The British oil company - still fighting multi-billion dollar lawsuits over its Gulf of Mexico oil spill of three years ago - turned in underlying replacement cost net profit of $4.22 billion for the quarter.
That was down from $4.65 billion a year ago mainly due to asset sales, but it beat analysts' forecasts of around $3.27 billion.
BP has been flagging for some time that its new production might deliver better profitability.
The quarter included a full three months of production from its Skarv field in the North Sea and from its PSVM facility in Angola, which both started producing at the end of last year.
Lower unplanned downtime in the refining part of the business and lower costs also contributed to the earnings surprise.
Trading of oil and gas is not separated out in BP's figures, with oil trading included in a refining and marketing result that was twice as strong as a year ago, and gas trading tucked within the upstream oil and gas production section which was down slightly.
The lower overall profit versus a year ago tracks the group's shrinking earning power after the sale of its holding in Russian venture TNK-BP, and the disposal of other producing assets to pay its oil spill liabilities.
Ten days of earnings from its newly-acquired stake in Russia's top oil firm Rosneft and the profitable extra output failed to make up the difference.
BP's rivals Exxon Mobil and Chevron also reported better than expected first-quarter profits last week, although the scale of BP's earnings surprise is bigger.
BP's chief executive Bob Dudley, who has been under pressure from investors to deliver a turnaround for the company, said the completion of a $38 billion post-spill divestment programme along with the revamp of its Russian activities which was completed ahead of deadline earlier this year and produced an $8 billion share buyback, were steps in that direction.
"We have really simplified and focused down the portfolio," he said. ''We've got a lot still to do this year but it's off to a good start,'' he added.
BP hit by wave of new spill lawsuits ahead of April deadline
BP has been hit by over 2,200 new lawsuits seeking payback for the 2010 Gulf of Mexico oil spill in the past few weeks as individuals, companies and government bodies rushed to stake their claim before their right to do so expired.
The British oil company, whose deepwater Macondo well ruptured on April 20, 2010, killing 11 men and spilling crude into the sea for weeks, revealed the number of new claims made since March 6 in its first-quarter results.
The US Oil Pollution Act of 1990, under which most of the new lawsuits were registered, has a three year statute of limitations which could make bringing further legal action difficult after the third anniversary of the disaster.
BP said it would be applying to have the new legal challenges consolidated into a trial that is already under way in New Orleans.
The first phase of the trial of BP and its partners in the well, Transocean and Halliburton, ended earlier in April, but the judge, Carl Barbier, has yet to rule on the degree of blame that will be apportioned to each party and on the level of negligence that will be applied.
Both decisions could have a big impact on the size of BP's final liability, already measured in tens of billions of dollars. His ruling, to be made without a jury as is traditional under US maritime law, could come this summer.
BP also revealed that its $20 billion spill fund - some of which is earmarked for compensation claims it has already agreed to pay - has only $1.7 billion still unassigned.
The company is fighting to keep a lid on its ''Business Economic Loss'' (BEL) claims which are being paid out of the fund at a higher rate and to more businesses than it expected.
In the results statement today, it raised its estimate of such compensation payouts it can already quantify to $8.2 billion from $7.7 billion previously.
The estimate has been fluctuating up and down since last year, but BP has continued to stress it does not include any BEL claims that have yet to be made or processed.
