BP has dismissed suggestions it might quit the North Sea as the company posted better than expected profits for a period when the muted oil price recovery ran out of steam.

The oil and gas giant made an underlying profit of $684 million after tax in the quarter to June, compared with $720m in the same period of the preceding year. Analysts had expected the company to make $500m.

Chief executive Bob Dudley noted Brent crude averaged $50 per barrel in the quarter against $54/bbl in the preceding three months. Growth in production in US shale areas offset efforts by Opec members to cut production to support the market.

He said: “I’m not expecting big shifts in prices anytime soon and a price of $50 per barrel looks like the right number to plan on for the rest of the decade.

Directors are positioning BP for the new oil price environment with a tight focus on costs efficiency and discipline in capital spending.

BP has announced plans to cut around 900 jobs in the North Sea and sold off a range of what it deemed non-core assets since the crude price started plunging from the $115/bbl it reached in June 2014.

However Mr Dudley dismissed a recent report that BP could put its entire North Sea business up for sale.

“That is absolutely incorrect, we are deeply committed to the North Sea, it is one of our heartlands,” he told Reuters.

Mr Dudley noted the Schiehallion and Clair Ridge projects West of Shetland are in a group of seven major developments that are expected to help BP achieve a big increase in the profitability of its production operations.

The scale of these fields allows BP to achieve higher returns per barrel of output than on smaller fields using of modern technology.

It started production from Schiehallion and a big field off Trinidad in the second quarter, during which upstream exploration and production profits rose to $710m from $29m in the same period last year.

BP is on track to start production from Clair Ridge next year.

The company expects to double production in the North Sea to 200,000 barrels oil equivalent daily by 2020 and to drill up to five exploration wells in the UK over the next 18 months.

BP wrote off $753m exploration assets in the second quarter mainly in Angola.

Mr Dudley and finance chief Brian Gilvary have sounded bullish about the North Sea in recent months.

The enthusiasm is shared by some smaller players who believe the downturn has created good opportunities to invest in the North Sea, partly because big fish have been rationalising their portfolios.

Aim-listed i3 said acquisition opportunities are available at advantageous prices.

Chief executive Neil Carson said the Aberdeen-based company was making good progress with plans to develop the Liberator oil field in the Outer Moray Firth, which it acquired from Dana Petroleum.

He said i3 may not have been able to buy Liberator at the top of the market.

It expects to break even on production from Liberator at $20/bbl, following the sharp fall in the cost of services in the North Sea amid fierce completion from suppliers for business.

“We are looking at great rates to get this work done,” said Mr Carson, who helped develop the North Sea-focused Ithaca Energy and Iona Energy businesses.

Profits at BP’s refining and marketing business fell to $1.4bn from $1.5bn last time.

BP incurred a further $347m costs for the 2010 Gulf of Mexico oil spill, taking the total charge to $63.2bn.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said the Gulf of Mexico payments are forcing BP to take on an ever larger debt burden although the costs should fall from here.

He noted: “Fortunately the group’s Upstream division has delivered a strong set of numbers this time out.”

BP held the second quarter dividend at 10 cents. Its shares closed up 10.65p at 456.45p.