Oil majors' results surprise, but output fall, volatile trading lurk
By Karolin Schaps
LONDON (Reuters) - Major oil companies' first-quarter results have so far not been as bad as feared but volatile trading operations and a likely fall in production mean any respite could be short lived.
Europe's big oil producers had been expected to report their worst quarterly earnings in the current downturn but instead BP, Total and Statoil have delivered share-boosting first-quarter results.
BP made a first-quarter profit of $532 million, against expectations of a $140 million loss, boosted, the company said, by refining and a strong performance from its trading unit. The same unit had a weak quarter at the end of 2015.
The British oil major does not disclose figures for its energy trading divisions, or give details on its performance.
"Given the lack of visibility on the repeatability of these profits, we have largely maintained our downstream (refining and trading) earnings estimates," said Biraj Borkhataria, analyst at RBC Capital Markets, without disclosing his estimates.
France's Total, whose net adjusted profit beat expectations by $400 million, also relied on a strong performance by its trading and petrochemicals units, which are equally difficult to read.
Statoil's trading unit suffered from lower margins, it said, but a cost-cutting program helped the company beat expectations. Underlying production rose by 2 percent in the first quarter, after adjusting for divestments.
BP's production rose 5.2 percent, without contribution from Russian oil major Rosneft, in the first three months of the year, mainly due to production sharing agreements (PSAs). Continued...