Oil giant BP reported a stronger-than-expected net profit for the second quarter and raised its divided despite earlier warnings of lower refining margins.
The oil major posted underlying replacement profit – a sign of the firm’s profit were it not for unexpected or unusual expenses – of $2.8 (£2.2bn), beating analyst expectations of $2.6bn (£2bn).
As a result the energy firm announced an increase to its dividend of 10 per cent and hiked its share buyback programme to the fourth quarter.
The results come despite what has been a chequered start to the year for petrochemical giant.
In May, weaker oil and gas prices led it to report a 40 per cent dip in profit in the its Q1 results, missing expectations in doing so.
Earlier this month, it disclosed a hefty impairment of between one and two billion dollars (£781m to £1.6bn)in its quarterly production update.
Murray Auchincloss, the firm’s new chief executive who took over at the start of the year, said: “Our businesses continue to operate safely and efficiently. We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025.
“Our recent go-ahead of the Kaskida development in the Gulf of Mexico business, and decision to take full ownership of bp Bunge Bioenergia while scaling back plans for new biofuels projects, demonstrate our commitment to delivering as a simpler, more focused and higher value company. This all supports growing returns for shareholders, as we have announced today.”
The numbers also come of the back of a remarkable strategic shift from the FTSE 100 constituent. Under the stewardship of former CEO John Browne, BP became the first major oil firm to embrace the transition to renewable firms, rebranding itself as ‘Beyond Petroleum’ in the early noughties.
But in the last two years it has scaled down its climate committments, adjusting to a operating model which plans for high oil demand into the 2040s and beyond. Last month it decided to progress with investment in a deepwater in the Gulf of Mexico, alongside an announcement in which it said it was “scaling back” on new biofuels projects.
The firm’s low carbon and gas division performed poorly in these results, sliding to a loss of $0.1bn.
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By City AM
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