British oil giant BP PLC yesterday said that it rebounded into first-quarter net profit as oil prices recovered from a slump amid the COVID-19 pandemic.
Earnings after taxation were US$4.7 billion in the three months to the end of last month, BP said in a results statement.
That contrasted sharply with a net loss of US$4.4 billion in the same period last year, when pandemic restrictions had savaged oil demand and prices.
Photo: AFP
The company, whose performance was also boosted by a series of asset sales, said that it would begin share buybacks this quarter.
“With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price environment, we generated strong cash flow and delivered on our net debt target around a year early,” BP chief executive officer Bernard Looney said. “We are commencing share buybacks in the second quarter, which alongside our resilient dividend, support the growth in distributions to shareholders.”
BP’s replacement cost profit — a measure stripping out exceptional items and changes in the value of oil inventories — soared to US$2.6 billion in the first quarter.
“This result was driven by an exceptional gas marketing and trading performance, significantly higher oil prices and higher refining margins,” BP said in the statement.
The price of oil has returned to pre-pandemic levels, hovering at about US$65 a barrel, with industry predictions that it will rise above US$80 in the next few months.
“The oil market is set to continue its rebalancing process,” BP said. “Oil demand is expected to recover in 2021 due to strong growth in US and China, and as the distribution of vaccinations gains momentum and lockdown restrictions are gradually lifted.”
“OPEC+ behavior is a key factor in oil prices and market rebalancing,” it said, referring to a group of 24 oil-producing nations that includes 10 non-OPEC members.
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