BP made an underlying profit of $2.8bn for the quarter to June
BP (LON:BP) raised its dividend and committed to buying back shares after its Q2 profit surpassed expectations as oil prices rose and demand recovered.
BP will give shareholders $1.4bn (£1bn) through share buybacks, while it will increase its dividend by 4% a year up to 2025.
The FTSE 100 company is expecting a spike in near-term oil prices, in addition to a dramatic shift to low-carbon energy production.
BP made an underlying profit of $2.8bn for the quarter to June, a sharp increase from a loss of $6.68bn year-on-year, as the pandemic brought the oil industry to its knees.
The BP share price is up by 3.11% during the morning session on Tuesday to 298.75p per share.
BP forecast the price of Brent crude oil to average $60 per barrel for the remainder of 2021, a $5 upgrade on its previous forecast. The oil giant expects Brent crude to remain at this level for the rest of the 20s due to near term supply constraints across global markets.
BP’s net debt is down to $32.7bn from $40.1bn.
CEO of BP, Bernard Looney, said in a statement that the measures were possible due to an improved performance as well as “an improving outlook”.
“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.
The results show that “we continue to perform while transforming bp – generating value for our shareholders today while we transition the company for the future”, Looney added.
James Andrews, senior finance expert at money.co.uk, said: “BP’s previous earnings demonstrated renewed confidence in the company’s outlook, with a stronger than expected performance and improved year-on-year revenue growth.”
“Ultimately, this demand-led recovery will please shareholders of BP following a year of uncertainty and shock to the fuel industry. However, the relevance of the old model of the oil and fuel business remains under question as the world moves away from fossil fuels and pays closer attention to the worsening climate crisis.”