“This year debt is going up exactly in line with payments going out for Macondo,” chief financial officer Brian Gilvary said on Tuesday.
“And it will come back down commensurately in the second half of the year when disposal proceeds come in.”
Net borrowings totalled $39.8billion (R521.61bn) at the end of June, up almost $9bn in a year, because of continuing payments for the 2010 Gulf of Mexico spill.
While BP managed to cover its dividend and spending commitments with cash flow in the first half, it will need oil prices to rise or at least stay put to avoid further debt increases over the remainder of the year. “The thing which is alleviating any concerns is the fact that we’re now cash break-even at below $50 a barrel,” Gilvary said.
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Several of Europe’s biggest oil companies have signalled a return to growth with earnings that exceeded analyst expectations.
Royal Dutch Shell generated almost as much cash from operations in the second quarter as it did when crude was above $100. Still, many producers are relying on disposals and scrip dividends - payouts in stock - to free up funds.
At BP, the Macondo disaster forced chief executive Bob Dudley to sell billions of dollars of assets to fund fines and compensation.