This week, British Petroleum — BP — had started a new project that will help double its output in the United Kingdom. The new project will help the company recover from the Gulf of Mexico oil spill. BP earnings came in strong because oil prices had remained elevated during the quarter. In addition, net profit was remarkably higher than expected.

New Project

BP will start up a new project in the U.K. North Sea. This was an undertaking where production was halted back in 2013. If all goes well with relation to this project, then the company expects that its output of oil will more than double by the end of the decade.

The project, which is known as Quad 204, will end up costing $5.4 billion to run. If everything remains on track, it is expected to generate up to 130,000 barrels of oil per day this year.

The good news is that this number is expected to rise to 200,000 barrels of oil per day by 2020. The main production area will be the Schiehallion and Loyal fields. BP had to temporarily stop production on these fields because of all the issues it had to deal with.

Recovery

BP had a good thing going with the UK. North Sea project. It had to put a halt on it because of the Gulf of Mexico oil spill. On April 20, 2010, the cement seal of an oil well in the Gulf of Mexico had failed.

The oil well spilled a total of 4.2 million barrels of oil in the Gulf that lasted for 87 days. The Quad 204 project had to be stopped a few years afterward because BP could no longer keep it running. The company was forced to sell one-third of all its assets because of the spill. It had to focus all its efforts on handling the Gulf spill for many years thereafter.

This project isn’t the only one that is coming back online for the company this year. It is the third of seven total projects that are expected to start drilling this year. The key positive is that this project will help restore production oil levels back to where they were before the oil spill. The Quad 204 project is expected to create a total of 4 million barrels of oil and natural gas per day.

Explosive Quarter

BP reported that its profit tripled during the first quarter of 2017. This happened because of two reasons. First, oil prices increased by 50% during the quarter up to $50 a barrel. Higher oil prices really had a huge effect on boosting earnings for the quarter.

Secondly, BP had continued to bring other projects online that boosted its production levels. One of the big renewal projects was the Abu Dhabi project, the ADCO onshore oil concession.

Total production levels for BP reached a five-year high to 2.39 million barrels of oil per day. Net income for the quarter rose to $1.51 billion during the first quarter. That compares to analysts only expecting it to rise to $1.26 billion.

What Binary Options Traders Should Watch For

There are a few things that traders should watch.

The first of which is if the new U.K. North Sea project reaches its 130,000 barrels of oil per day goal by the end of this year. It is imperative that it remains on track so that if can ultimately hit its 2020 goal of 200,000 barrels per day.

The second item would be if BP can continue to make a profit despite the Gulf of Mexico oil spill. To this day, the company still continues to make payments because of the spill. That is despite the fact that the spill happened back in 2010. Paying money out for this spill still has a negative effect on the company.

The final item that traders should keep an eye on would be if the net income continues to rise. The first quarter saw a huge increase in net profit that exceeded analysts’ expectations. If that happens again in the coming quarter, then traders will have a bullish case to bid up the stock.