BP PLC returned to profit in the second quarter, the British energy giant said yesterday, having posted a hefty loss one year earlier as lockdowns amid the COVID-19 pandemic crushed oil prices.
Net profit for the April-to-June period was US$3.1 billion. That compared with a loss after tax of US$16.8 billion in the second quarter of last year.
With demand for crude crashing early last year amid the pandemic, oil prices plunged into negative territory. They have since recovered, currently trading above US$70 per barrel.
Photographer: Hollie Adams/Bloomberg
Oil demand was recovering on “a bright macroeconomic outlook, increasing vaccination roll-out and gradual lifting of COVID-19 restrictions around the world,” BP said in its results statement. “The expectation is that demand reaches pre-COVID levels sometime in the second half of 2022.”
In the wake of the pandemic, BP announced that it would cut about 10,000 jobs, or 15 percent of its global workforce, while it embarked upon major asset disposals.
BP yesterday said that it had completed deals on divestments totaling US$14.9 billion out of a target of US$25 billion.
That comes as BP chief executive officer Bernard Looney said the company aims to achieve “net zero” carbon emissions by 2050.
It hopes to achieve this with the help of an expected drop in oil and gas production that is pushing energy majors worldwide to improve their performance regarding cleaner, sustainable energy sources such as electricity and wind power.
“We are a year into executing BP’s strategy to become an integrated energy company and are making good progress — delivering another quarter of strong performance while investing for the future in a disciplined way,” Looney said in Tuesday’s statement.
BP also said it was hiking its shareholder dividend and launching a buyback of shares totaling US$1.4 billion.
The company will increase its dividend by 4 percent to US$0.0546 a share and buy back US$1.4 billion of stock in the third quarter, Looney said.
“What you’re seeing around the dividend is really a story of confidence,” Looney said in a Bloomberg television interview. “Confidence in the underlying performance of the business, confidence in the balance sheet.”
If oil averages about US$60 a barrel, BP expects to be able to continue increasing its dividend by about 4 percent annually and repurchase US$1 billion of shares each quarter until 2025, he said.
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