Blog Marco

With the oil spill crisis still ongoing in USA, with no signs of ending anytime soon, and with environmental damage which will last more than 50 years, I ponder about how much BP actually profits from piping oil from deep underground. According to this media release, BP p.l.c. made a replacement cost profit of $5,598 million just in the first quarter of 2010. Assuming BP's first quarter is from January to March, that's 90 days. $5,598 million/90 days = BP made $62.2 million in profit (on average) for each day of the first 90 days of 2010. That's making $2.59 million in profit per hour!

What's "replacement cost profit"?

It is a profit figure that is calculated using the cost of supplies at the cost of replacing supplies at current prices Oil companies often disclose replacement cost profit. This is because the oil price is so volatile, they hold large stocks, and the amount stocked also varies significantly from one reporting period to period.

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