BP on Tuesday reported bumper first-quarter profits and boosted share buybacks, despite posting a massive loss after offloading its nearly-20% stake in Russian-controlled oil company Rosneft.
The oil and gas giant’s first-quarter underlying replacement cost profit, used as a proxy for net profit, jumped to its highest level in more than a decade as it came in at $6.2 billion.
That compared with a profit of $4.1 billion in the fourth quarter and $2.6 billion for the first quarter of 2021. Analysts had expected BP to report first-quarter profit of $4.5 billion, according to Refinitiv.
The oil and gas giant also announced a further $2.5 billion in share buybacks.
However, BP reported a headline loss for the quarter of $20.4 billion. This included non-cash pre-tax charges of $24 billion and $1.5 billion relating to the exit of its Rosneft stake in response to Moscow’s invasion of Ukraine.
“We took the decision to exit Russia within 96 hours of the invasion happening and today you’re seeing the financial implications of that decision,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.
Looney said trading had a “very good” start to the year and net debt — which fell to $27.5 billion — was reduced for the eighth consecutive quarter.
“All in all, in an underlying sense, a good quarter for the company,” he added.
When asked to provide further details on how the company plans to extricate itself from Russia, Looney replied: “We have been very, very clear. We are announcing our intention to leave the country. We made that decision as I said very, very quickly and like any commercial process that’s ongoing, we wouldn’t comment and I’d rather not comment on that this morning.”
The first-quarter results come as the EU prepares its sixth package of economic sanctions against Russia; the bloc remains split on how to wind down its dependence on Russian energy supplies.
Meanwhile, U.K. oil and gas majors face the prospect of a possible windfall tax to help fund a national package of support for households over spiraling energy bills.
Britain’s Finance Minister Rishi Sunak has reportedly opened the door to a possible tax on oil and gas providers after repeatedly rejecting the policy citing fears that it could discourage investment.
Oil prices are hovering above $100 a barrel after climbing to multi-year highs earlier this year.
International benchmark Brent crude futures traded at $106.95 during morning deals in London, down 0.6% for the session, while U.S. West Texas Intermediate futures stood at $104.62. around 0.5% lower.
Shares of London-listed BP rose 2% shortly after the opening bell. The firm’s stock price has climbed more than 18% year-to-date.
BP reported a massive upswing in full-year net profit for 2021, its highest in eight years, supported by soaring commodity prices. Global oil demand roared back last year, with gasoline and diesel use surging as consumers resumed travel and business activity recovered amid the coronavirus pandemic, CNBC reports.
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