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Increase dividends and confirm repurchase

The BP logo will be seen at the BP Gasoline and Diesel Filling Station in Southeast London on June 15, 2020.

Benstan Sole | AFP | Getty Images

London — Oil and Gas Giant BP We exceeded our earnings forecast for the second quarter on Tuesday and expanded our dividend and share buyback program.

UK-based energy major announced that it will repurchase $ 1.4 billion in shares in the third quarter against the backdrop of $ 2.4 billion in cash surplus in the first half of this year. We also increased our dividend by 4% to 5.46 cents per share in the second quarter of 2020 and halved it to 5.25 cents per share.

It also expects a quarterly repurchase of approximately $ 1 billion and a 4% increase in annual dividends by 2025, based on an estimated average oil price of $ 60 per barrel.

Energy Major posted a full-year underlying replacement cost profit of $ 2.8 billion, which is used as a substitute for net profit.Compared to that $ 6.7 billion loss In the same period a year ago $ 2.6 billion Net income for the first quarter of 2021.

Analysts polled by Refinitiv expected a net profit of $ 2.06 billion in the second quarter.

Bernard Looney, CEO, said in a statement, “This shows that we are continuing to do business while transforming BP. Today, while migrating the company for the future. It creates value for shareholders. “

The results reflect a broader trend across the oil and gas industry as energy majors seek to reassure investors who have gained a more stable foundation in the ongoing coronavirus pandemic.British and Dutch multinationals Royal Dutch shell,French TotalEnergies And Norwegian Equinor all Share buyback scheme announced last week..

Shares of the world’s largest oil and gas majors have not yet reflected improved earnings, but the industry is still facing Many uncertainties and challenges..

BP’s share collapsed by about 47% in 2020 and has risen by almost 15% to date.

Operating cash flow at the end of the second quarter was $ 5.4 billion.For this, the company 2010 Gulf of Mexico oil spill..

Meanwhile, net liabilities fell from $ 33.3 billion in the first quarter to $ 32.7 billion, down for the fifth straight quarter from $ 51 billion in the first quarter of 2020.

A year after the announcement of the strategic overhaul announced in August 2020, the company emphasized that it has built a 21 gigawatt renewable energy pipeline and brought eight major oil and gas projects online.

Stronger product price

BP’s performance is the result of rising commodity prices.International benchmark Brent Crude oil futures Rise to an average of $ 69 a barrel In the second quarter, it increased from an average of $ 61 in the first three months of the year.

Oil prices have reached their highest levels in years in recent months, and all three major forecasting agencies in the world (OPEC, International Energy Agency and Energy Information Administration) expect demand-driven recovery to accelerate second. I am. Half of the year.

It comes after a 12-month period that BP described as a “unique year” for the global energy market.

In the World Energy Benchmark Statistics Review, Released on July 8Over the past 70 years, BP said the company has witnessed some of the most dramatic episodes in the history of the world’s energy systems. These crises included the Suez Canal crisis in 1956, the oil ban in 1973, the Iranian Revolution in 1979, and the Fukushima Daiichi nuclear accident in 2011.

“All moments of great turmoil in the world’s energy,” Spencer Dale, BP’s Chief Economist, said in a report. “But when compared to last year’s events, everything is pale.”

The ongoing Covid-19 crisis caused a historic oil demand shock in 2020, with big oil companies enduring a brutal 12 months. By virtually all means.. The pandemic occurred at the same time as falling commodity prices, evaporation of profits, unprecedented headcount reductions, and tens of thousands of headcount reductions.

Analysts are likely to try to insist on a clean health bill by energy companies ahead of the latest batch of earnings in the second quarter, while investors sayAwesome degree“Skepticism about the long-term business model of oil and gas companies. This is primarily a growing climate emergency. Urgent need to pivot away from fossil fuels..

Increase dividends and confirm repurchase

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