OIL giant BP has highlighted the importance of the start-up of the major Culzean prospect in North Sea as it unveiled $2.8 billion underlying profit, similar to that for the same period of last year.

It said it delivered better-than-expected second-quarter earnings after higher production boosted by the ramp-up in the North Sea.

The firm said: “The results for the second quarter and half year mainly reflected lower liquids realisations, partly offset by ramp-up of major projects in the US Gulf of Mexico and North Sea and very strong gas marketing and trading.”

Shares in the FTSE 100 firm rose three per cent after it revealed replacement cost profits - the market’s preferred measure - held largely firm at $1.78bn in the three months to June 30 against $1.79bn a year earlier.

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On the underlying basis, second-quarter profits remained steady at $2.8bn against the same time last year.

This was better than the $2.46bn expected in financial markets.

BP cheered a 4% year-on-year rise in production to 3.8 million barrels of oil equivalent a day, which helped counter a drop in the cost of crude.

Half-year results were dragged lower by a tough first quarter, when falling oil and gas prices left BP nursing a 12% profits tumble.

This saw first-half profits drop 7.4% to $3.87bn.

BP also cautioned it expects third-quarter production to be lower than the second quarter, reflecting seasonal maintenance as well as the impact of Hurricane Barry on operations in the US Gulf of Mexico.

Bob Dudley, group chief executive of BP, said the firm was “right on target” at the halfway stage of its five-year 

plan. He said: "Reliable performance and disciplined growth across our businesses are delivering strong earnings, cash flow and returns to shareholders."

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Brian Gilvary, BP chief financial officer, said: “We have announced another resilient set of quarterly results, in particular delivering strong underlying cash of over $8bn.

“Following the final acquisition payments to BHP and the scheduled annual payments relating to the Gulf of Mexico oil spill being made in the quarter, we continue to expect gearing to trend down through 2020 in line with disposal proceeds from our $10bn programme and ongoing operating cash flow delivery.”

Oil giants have been impacted by lower oil prices since the end of last year, with blue chip rival Royal Dutch Shell set to reveal the impact on its results on Thursday.

Brent crude oil prices in the second quarter averaged around $69 a barrel, up from $63 the previous quarter but down from $74 a barrel a year earlier, BP said.

It also said it made proceeds from asset sales of $1.5bn for the first half as part of a drive to make more than $10bn of divestments by the end of next year to help pay for its mammoth deal to buy BHP Billiton's US shale assets.

It also said it made $1.4bn of largely scheduled payments for the Gulf of Mexico oil spill disaster in 2010.

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It announced a dividend of 10.25 cents a share, but the company could consider raising it towards the end of the year as proceeds from asset sales emerge.

David Barclay, of Brewin Dolphin Aberdeen, said: “BP’s profits have come in better than many analysts expected, but it’s still a mixed bag from the oil company.

“Average production has increased 4% on a year earlier, but this was offset by lower average oil prices in the second quarter of 2019.

"Debt levels remain beyond BP’s target range, which will be a concern, but the growing low carbon arm of the business is a positive move and will no doubt play a larger role in the future.”