BP HAS beaten third-quarter earnings forecasts by a big margin in a sign that chief executive Tony Hayward’s restructuring plans are delivering results, with cost cuts ahead of targets and oil and gas output up strongly.

BP said third-quarter replacement cost net profit, which strips out unrealised gains or losses related to changes in the value of fuel inventories, fell 50 per cent to $4.98 billion (€3.32 billion), due to lower oil and gas prices.

However, the underlying result was almost 50 per cent ahead of average analyst forecasts, lifting BP’s shares to their highest level since June 2008. Analysts said a lower-than-expected tax rate and positive foreign exchange impacts flattered the figures but could not take away from a strong result.

“It’s just blow-away numbers. It’s good to see them bouncing back,” said Jason Kenney, oil analyst at ING.

BP was helped by production rising in lower-tax areas such as the Gulf of Mexico, where the Thunder Horse platform, one of the largest offshore rigs in the world, ramped up in the first half of this year. – (Reuters)