BP has announced its biggest quarterly profit since the start of the Covid pandemic and will offer investors a windfall of $ 500 million (Â£ 360 million) as global oil markets recover from the crisis.
The oil company posted a profit of $ 3.3 billion for the first quarter, up sharply from a loss of $ 628 million in the same period last year when oil prices started to fall along with China’s economic slowdown.
BP’s quarterly profit is more than four times that of the last quarter of 2020 and has allowed the company to launch a $ 500 million program to buy back shares from its investors a year ahead of schedule.
Bernard Looney, CEO of BP, said the first quarter results demonstrate “what we mean by performing while transforming.”
The oil company has generated more than $ 6.1 billion in cash, nearly six times more than its operating cash flow in the first quarter of 2020 and enough to reduce its debt so that it can start repurchasing the shares it has. it paid investors instead of dividends.
The liquidity boom is driven by the recovery in global oil prices, which fell to a 21-year low of less than $ 20 a barrel in April last year due to the abrupt halt in travel and l economic activity in the world.
The impact of the pandemic caused the biggest drop in global oil demand in industry history, but experts predict the coming years could bring the fastest rise in demand.
Global oil prices have gone from an average of just over $ 61.60 per barrel in January of last year to an average of $ 21.40 per barrel in April 2020. In the first quarter of 2021, the average price of Brent has returned to nearly $ 60 a barrel, and is expected to bolster the fortunes of the world’s largest oil companies. Brent was trading at $ 66 Tuesday morning.
The influx of cash has enabled BP to be able to reduce its debt from $ 5.6 billion in the last quarter to $ 33.3 billion, meaning its share buybacks can begin as of second quarter, Looney said.
âAnd at the same time, we have made disciplined strategic progress across BP – including building a high quality offshore wind business, making great strides in our electrification program and preparing for future growth in the Gulf. from Mexico, âLooney added.