LONDON -- BP's fourth-quarter earnings increased five-fold as it benefited from higher oil prices, increased production and lower costs.
Underlying replacement cost profit jumped to $2.1 billion from $400 million in the same quarter a year earlier, the London-based company said Tuesday. The figure, which excludes one-time items and fluctuations in the value of inventories, is the industry's preferred gauge of earnings.
Net income fell to $27 million from $497 million, largely due to another $1.7 billion charge for the 2010 Deepwater Horizon oil spill and a $900 million charge related to changes in the U.S. tax code.
"This has been a really, really good year and it sets us off very well to enter into 2018," CEO Bob Dudley said. "We've got some real momentum."
Energy companies are benefiting from a rebound in oil prices after leading oil producers cut production and companies cut costs when crude plunged to its lowest level in more than a decade early in 2016. Brent crude, a benchmark for international oil prices, averaged $61.26 a barrel in the fourth quarter, up 24 percent from a year earlier.
BP's earnings also got a boost as seven new projects came on line during the year. Fourth-quarter oil and gas production rose 18 percent from a year earlier to 2.58 million barrels of oil equivalent a day.
For the full year, production costs fell 16 percent to $7.11 per barrel.