• Income soar to $8.45 bln, far exceeding forecasts
  • BP boosts dividend by 10%
  • BP to spice up spending on oil and fuel, CEO says
  • Income pushed by robust oil buying and selling, hit by LNG

LONDON, Aug 2 (Reuters) – BP’s (BP.L) second quarter revenue soared to $8.45 billion, its highest in 14 years, as robust refining margins and buying and selling prompted it to spice up its dividend and spending on new oil and fuel manufacturing.

The robust efficiency caps a blowout quarter for the highest Western oil and fuel corporations on the again of hovering vitality costs which have elevated stress on governments to impose new taxes on the sector to assist shoppers.

“The corporate is working properly and it continues to strengthen. We’ve actual strategic momentum,” Chief Govt Officer Bernard Looney instructed Reuters.

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BP shares have been up 4.3% by 1315 GMT, hitting their highest ranges since June and strongly outperforming the European vitality index (.SXEP) which was up 0.7%. BP shares have gained 23% this yr however are nonetheless some 10% beneath pre-pandemic ranges.

Looney, who took workplace in 2020 with a vow to quickly shift BP away from fossil fuels to renewables, stated that the corporate will improve its spending on new oil and fuel by $500 million in response to the worldwide provide crunch. learn extra

“We are going to direct extra funding in the direction of hydrocarbons to assist with vitality safety within the close to time period,” Looney stated. “We’ll most likely direct a few half a billion {dollars} for hydrocarbons.”

BP plans to keep up its total capital expenditure this yr in a variety of $14 billion to $15 billion.

BP elevated its dividend by 10% to six.006 cents per share, greater than its earlier steering of a 4% annual improve. It halved its dividend to five.25 cents in July 2020 for the primary time in a decade within the wake of the pandemic.

The corporate additionally elevated its share repurchases plan for the present quarter to $3.5 billion after it purchased $4.1 billion within the first half of the yr.

“The very fact it produced its highest quarterly revenue in 14 years, despite the fact that oil costs have been larger throughout that interval than they’re now, suggests BP is a extra environment friendly machine than it was beforehand,” AJ Bell funding director Russ Mould stated.

The corporate stated it anticipated crude oil and fuel costs in addition to refining margins to stay “elevated” within the third quarter and stated it could persist with its goal of utilizing 60% of its surplus money on share buybacks.

Reuters Graphics

The surge in income additionally allowed BP to sharply scale back its debt to $22.8 billion from $27.5 billion on the finish of March.


BP brings the second quarter revenue tally for the highest Western oil and fuel corporations to $59 billion after rivals together with Exxon Mobil (XOM.N) and Shell (SHEL.L) reported report earnings final week. learn extra

Its underlying substitute price revenue, its definition of web earnings, reached $8.45 billion within the second quarter, the very best since 2008 and much exceeding analysts’ expectations of $6.8 billion.

That was up from $6.25 billion within the first quarter and $2.8 billion a yr earlier.

The robust efficiency was pushed by robust refining margins, “distinctive” oil buying and selling efficiency in addition to larger gas costs, though fuel buying and selling was weaker, BP stated.

An outage at a significant U.S. Gulf Coast liquefied pure fuel (LNG) plant, additionally weighed on earnings.

The Freeport LNG plant provides BP with 4 million tonnes per yr of LNG, out of a complete portfolio of 18 million tonnes.

BP is taking a look at methods to produce prospects regardless of the misplaced provide although that can come at an elevated price, Chief Monetary Officer Murray Auchincloss instructed Reuters.

Reuters Graphics

The corporate has allotted cash to cowl for the additional prices of LNG provide on account of the Freeport outage, he stated.

Jefferies analysts estimated these further prices this quarter would whole $700 million to $900 million.

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Reporting by Ron Bousso and Shadia Nasralla; modifying by Jason Neely

Our Requirements: The Thomson Reuters Belief Ideas.

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