BP saw profits fall eight per cent in the first quarter amid oil price volatility which did not deter it from approving the latest in a series of North Sea developments.

The oil and gas giant made $2.4 billion net of one-offs in the three months to March 31 compared with $2.6bn in the same period last year.

The company said the fall in profits reflected factors such as the drop in oil prices during the period and turnaround work in the Gulf of Mexico.

However, chief executive Bob Dudley said the firm had made good progress and delivered a performance which demonstrated the strength of its strategy.

Read more: BP highlights scale of latest North Sea finds

“We produced resilient earnings and cash flow through a volatile period that began with weak market conditions and included significant turnarounds,” said Mr Dudley, adding: “Moving through the year, we will keep our focus on disciplined growth.”

The results announcement highlights the challenges posed by the fall in the oil price from October that continued into the early part of this year. Booming output in the US shale fields has undermined efforts by exporters led by Saudi Arabia to support the market by curbing production.

Read more: Oil price warning bodes ill for North Sea

The crude price has recovered in recent weeks amid disruption to supplies from Iran and Venezuela.

Chief financial officer Brian Gilvary said BP expects oil demand growth to remain relatively robust.

The company appears to be confident the crude price will remain at a level which will allow it to generate good returns on investment.

Mr Gilvary noted BP had approved a number of key projects during the quarter.

These include plans to develop the Seagull field in the North Sea, which Mr Gilvary described as an advantaged oil project.

Last year BP approved plans to develop the Vorlich find east of Aberdeen and the Alligin field West of Shetland.

Read more: North Sea growth on agenda at BP as oil giant doubles annual profits

The approvals reflect a big change in the company’s attitude to the North Sea since the firm completed a painful retrenchment in response to the crude price plunge between 2014 and 2016.

BP sold off a raft of older North Sea assets and shed hundreds of jobs in the area.

The rationalisation left the firm to focus on North Sea assets it felt had the best potential to support long-term growth such as the giant Clair field West of Shetland.

Read more: Bumper Shetland oil fields could be in production for decades

In the last quarter of 2018 BP bought an additional 16.5% stake in Clair from America’s ConocoPhillips in exchange for $1.7bn and acreage in Alaska.

BP can achieve good profit margins on the output from its remaining North Sea fields.

In February, the head of BP’s upstream exploration and production business, Bernard Looney, said the North Sea was one of the company’s top four cash-generating regions.

The $2.4bn profit BP achieved on the underlying replacement cost measure in the first quarter beat City expectations by $100m.

BP noted the results reflected strong supply and trading results without providing details of these. Production rose by 2% year on year, to average 2.7 million barrels oil equivalent daily.

Brent crude fell from the four year high of $85/bbl reached in October to around $53/bbl in January. It sold for around $72.80 yesterday.

Signalling confidence, BP increased the first quarter dividend to 10.25 cents per share from 10 cents last time.

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown, said: “In a pretty quiet quarter, it’s worth highlighting the group’s sizeable debt position, which will need dealing with at some point.”

Net debt rose to $45.1bn at March 31, from $39.3bn at the same point in 2018, BP bought US shale assets from BHP Billiton for $10.5bn in July.

Shares in BP closed up 6.5p at 559p.