BP increases share buybacks as net profit hits highest level in more than a decade

BP increases share buybacks as net profit hits highest level in more than a decade

The company, which also halted trading Russian oil, said the exit from Russia, which had contributed 3% of the company’s cash flow last year, would not affect its plan to shift away from oil and gas towards renewables. The exit “has not changed our strategy, our financial frame, or our expectations for shareholder distributions,” Chief Executive Bernard Looney said.

BP increased its share repurchase programme as its net earnings climbed to its greatest level in more than a decade as a consequence of excellent oil and gas trading performance, despite a $24 billion penalty for quitting its Russian operations. The non-cash writedown of BP’s holdings in Rosneft and two other joint ventures resulted in a quarter-over-quarter loss of $20.4 billion. BP’s early projections of $25 billion were slightly lower. After the London stock exchange opened, BP shares were up 1.5 percent.

BP’s underlying replacement cost profit, the company’s definition of net earnings, reached $6.2 billion in the first quarter, far exceeding analysts’ expectations for a $4.49 billion profit. The profit was driven by “exceptional” performance of BP’s oil and gas trading division, as well as higher oil and gas prices and strong refining margins. The company did not make any money from Rosneft in the quarter.

It compares with $4.1 billion in profit in the fourth quarter of 2021 and $2.63 billion a year earlier. Its 2021 profit was the highest in eight years. Global refining margins soared in recent months as economies recovered from the COVID-19 pandemic and Russian oil started to vanish from Europe, which heavily relies on Russian refined products like diesel.

BP’s refined oil products unit made a profit of $1.6 billion in the first three months, compared with a loss of $26 million in the previous quarter and a $2 million loss a year ago. BP said it would boost its quarterly share repurchases to $2.5 billion before the end of the second quarter after its surplus cash flow rose to more than $4 billion.

BP said in February it would accelerate its share buybacks to $1.5 billion per quarter from $1.25 billion. BP previously said it would repurchase $4 billion a year at oil prices of $60 per barrel, well below the current price of benchmark Brent , which was about $107 on Tuesday. The company maintained its dividend at 5.46 cents per share. BP rivals including Exxon Mobil, Chevron and TotalEnergies all saw a sharp rise in revenue in the quarter, lifted by higher oil and gas prices and strong performances of their trading divisions.

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