By Shelley DuBois, writer-reporter
FORTUNE -- It's been a big week for BP. Not only did it report better-than-expected earnings on Monday, but yesterday it received the first permit to resume drilling in the Gulf of Mexico since the catastrophic oil spill last year. The company appears to be on track, albeit in repair mode, and gearing up for a kind of drilling homecoming in the Gulf.
The press around the company this week has been cautiously positive. This is a far cry from what it was over a year and a half ago. In April 2010, outrage at BP (BP) spread as pictures of a burning oil rig, owned by Transocean (RIG) and operated by BP, circulated through the press. The explosion on the rig caused a well leak that the company couldn't control -- it took 86 days and several failed attempts to stop the crude from hemorrhaging into Gulf waters. BP's leadership seemed tone-deaf and slow. Then-CEO Tony Hayward said he wanted his life back, when 11 workers had died on the Horizon rig. And there was even speculation that the oil giant would go bankrupt.
Now, BP is holding its own during Big Oil earnings week. The energy company's profits nearly doubled from the same quarter last year, from $1.8 billion to $4.9 billion. Net revenue increased by about 31% to $97.6 billion.
Behind the earnings jump
The sizable jump in net income comes partly on account of the immense spill-related costs that were on the company's balance sheet last year. And BP, which did not respond to a request for comment, is still feeling financial pangs from the disaster. This quarter's earnings declined by just under 4% from the same quarter the previous year, from $5.3 billion to $5.5 billion, in part due to BP's efforts to sell expendable assets and stash cash to pay for damages. This has meant BP hasn't produced as much oil. Its production decreased by about 12% from a year earlier to the equivalent of 3.3. million barrels a day. Ultimately, it's unclear how much the spill will cost the company, the 2011 third quarter earnings report said.
Certainly, BP has significant exposure. It has become increasingly dangerous to drill oil on account of political risks tied to allying with unstable foreign governments, as well as physical risks such as exploring highly technical terrain like deep water. More
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