BP buys back $500m worth of shares

Photo: AP

British Petroleum announced a new buyback programme focused on the company’s shares, AP reported. The UK firm said the operation will be funded by higher than expected revenues from sales in the first quarter of this year backed by higher international oil prices. The positive financial results were further stimulated by a significant reduction in debt levels.The expected buyback is valued at some 500 million dollars.

The energy company profit more than tripled to $2.6 billion in the first three months of 2021 from $791 million a year earlier. That was far ahead of the rise to $1.6 billion that had been the consensus in financial markets.

BP, which is seeking to transform its business to a lower-carbon future, said it will launch a $500 million share buyback program in the second quarter as it confirmed it had reached its target of reducing net debt to below $35 billion earlier than expected. Its net debt fell to $33.3 billion at the end of March against $38.9 billion at the end of 2020 on a combination of asset sales and firmer oil prices.

“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,” Chief Executive Bernard Looney said. BP also announced a dividend of 5.25 cents a share for the first quarter, which is in line with the previous quarter’s payout but half that seen a year earlier.

In response to the pandemic, which sparked an oil price rout on fears over the global economy, BP last year cut its dividend for the first time since the Deepwater Horizon oil spill in the Gulf of Mexico more than a decade ago. But oil prices have been recovering sharply as the world’s biggest economies bounce back from the pandemic. The price of Brent crude rebounded to an average of $61 a barrel in the first quarter, up from $44 dollars in the fourth quarter of 2020.

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