Aug. 1 (UPI) -- Production from British supermajor BP edged higher, though income was lower and the company's CEO said he was positioning the company for a new market climate.
"We delivered strong operational performance in the first half of 2017 and have considerable strategic momentum coming into the rest of the year and 2018, with rising production from our new upstream projects and marketing growth in the downstream," CEO Bob Dudley said in a statement.
Downstream is the refining side of the industry, while upstream represents exploration and production. With the Organization of Petroleum Exporting Countries working to offset the supply-side market strains with managed production declines, BP said its second quarter production was 10 percent higher than the same period last year, while first half production was 6 percent higher.
Working under the Quad 204 regional redevelopment effort, the company started oil production from the Schiehallion area west of the Shetland area of the North Sea midway through the second quarter. BP has produced nearly 400 million barrels of oil from Schiehallion since production started in the late 1990s and the company said redevelopment could yield another 450 million barrels and extend the field's life into the 2030s.
The company reported a first quarter profit of $1.5 billion, compared with a year-over-year loss of $583 million, joining its industry peers in reporting a strong early 2017 recovery, after struggling through a 2016 market that saw crude oil prices drop below $30 per barrel.
The price for Brent crude oil, the global benchmark, was around $52.50 in early Tuesday trading, up 30 percent from this time last year, but still about 50 percent lower than the price just three years ago.
"We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending," Dudley said.
Replacement cost profit, the metric BP uses to measure net income, was $648 million for the second quarter, down 5 percent from the same quarter in 2016 and more than 50 percent lower than the first quarter. Second quarter figures were marred by charges related to an unsuccessful exploration effort in Angola.
Dudley's peers echoed his market sentiment in their earnings reports, released last week. Shell CEO Ben van Beurden said the industry needed to adapt to life with oil trading lower. Exxon's CEO Darren Woods said his priority was to create long-term value "regardless of market conditions."
"The future is bright, but different," Dudley added.