BP production growth boost shares despite profit drop

British energy company BP's (BP.L) second-quarter profit dipped but beat forecasts after an exploration write-off in Angola, while a 10 percent rise in oil and gas production from a slew of new projects gave shares a strong boost. 

BP also increased cash flow from operations in a further sign that efforts by top oil companies to cut costs since the 2014 price slump are paying off as it expects oil prices to hold at around $50 a barrel into next year.

At the same time, BP saw its debt pile rise to nearly $40 billion as it invests in bringing projects online and continues to pay off its bill relating to the deadly 2010 Deepwater Horizon rig explosion in the Gulf of Mexico. 

Gearing, the ratio between debt and BP's market value, rose to 28.8 percent by the end of June from 24.7 percent a year earlier.

BP's production was up 9.9 percent from a year earlier at 2.431 million barrels of oil equivalent per day helped by some of the new start-ups. 

They include the Quad 204 oilfield, one of the largest projects in the North Sea in recent years which BP launched in May after a $5.7 billion redevelopment. 

BP said its oil and gas production will be broadly flat in the third quarter as further project start-ups outweigh the impact of maintenance. 

The company hopes to add 800,000 barrels per day of new production by the end of the decade.

Chief Financial Officer Brian Gilvary told Reuters BP's 2017 capital spending was expected to be around $16 billion, in the middle of the forecast range. 

BP's operating cash flow, excluding payments related to the Gulf of Mexico oil spill, rose in the second quarter of the year to $6.9 billion from $5.3 billion a year earlier. 

BP's operating cash flow, including payments related to the spill, rose to $4.9 billion in the first quarter of the year from $3.9 billion a year earlier.

OPEC meets to extend oil output cut, fight global glut

OPEC and non-member oil producers began talks in Vienna on Thursday to extend output cuts, most likely by nine months, in an effort to clear a global stocks overhang and prop up crude prices.

The Organization of the Petroleum Exporting Countries is discussing whether to prolong an accord reached in December in which it and 11 non-members agreed to curb oil production by about 1.8 million barrels per day in the first half of 2017.

Most OPEC ministers, delegates and the market see a nine-month extension - instead of the initially suggested six months - as the base-case scenario but some countries including Russia have suggested an unusually long duration of 12 months.

Iranian Oil Minister Bijan Zanganeh, who often clashed with Saudi Arabia at previous OPEC meetings, said he would follow the majority of members in their decision and added there was no proposal on the table for deeper cuts.

By 0900 GMT, Brent crude was trading flat at around $54 per barrel. It fell earlier by around $1 after comments from ministers dashed market bulls' hopes for deeper cuts or an extension by as long as 12 months.

OPEC's de facto leader, Saudi Arabia, and top non-OPEC producer Russia have said cuts need to be extended to speed up market rebalancing and prevent oil prices from sliding back below $50 per barrel.

OPEC sources have said the Thursday meeting will highlight a need for long-term cooperation with non-OPEC producers.

The formal OPEC meeting started at around 0900 GMT. It will be followed by a joint gathering with non-OPEC initially scheduled for after 1320 GMT.

OPEC's cuts have helped push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.

Oil's earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria.