BP logo on display in London, UK on Tuesday, February 2, 2021
Chris J. Ratcliffe Bloomberg | Getty Images
BP reported huge first-quarter gains on Tuesday and stepped up share buybacks, despite a huge loss after unloading its nearly 20 percent stake in Russian-controlled oil company Rosneft.
The main profit to replace BP for the first quarter, used as a proxy for net profit, was $ 6.2 billion. That’s compared to $ 4.1 billion in fourth-quarter profit and $ 2.6 billion in the first quarter of 2021. Analysts had expected BP to report $ 4.5 billion in first-quarter profit, according to Refinitiv.
The oil and gas giant also announced another $ 2.5 billion to buy back shares.
However, BP reported a major quarterly loss of $ 20.4 billion. This includes pre-tax fees of $ 24 billion and $ 1.5 billion related to the release of its stake in Rosneft in response to Moscow’s invasion of Ukraine.
“We decided to leave Russia within 96 hours of the invasion, and today you see the financial implications of that decision,” BP CEO Bernard Looney told CNBC’s Squawk Box Europe on Tuesday.
Looney said trade had a “very good” start to the year and net debt – which fell to $ 27.5 billion – was reduced for the eighth consecutive quarter.
“Overall, basically a good quarter for the company,” he added.
The results for the first quarter come as the EU prepares its sixth package of economic sanctions against Russia; the bloc remains divided over how to reduce its dependence on Russian energy supplies.
Meanwhile, major oil and gas companies in the UK are facing the prospect of a possible contingency tax to help fund a national package of support for households on spiraling energy bills.
Britain’s Finance Minister Rishi Sunak has reportedly opened the door to a possible tax on oil and gas suppliers after repeatedly rejecting the policy, citing fears it could discourage investment.
Oil prices are hovering more than $ 100 a barrel after rising to multi-year highs earlier this year.
Brent’s international crude oil benchmark futures traded at $ 107.64 during the London morning trade, changing little for the session, while US middle futures futures in West Texas were $ 105.20.
Shares of BP have risen more than 18% since the beginning of the year.
BP reported huge growth in net profit for the whole year for 2021, its highest in eight years, supported by rising commodity prices. Global oil demand rose last year as gasoline and diesel consumption rose as consumers resumed travel and business recovered amid the coronavirus pandemic.
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