BP to launch share buyback program after big profit spike

Energy company BP says it will be returning around half a billion dollars to shareholders after “significantly” higher oil prices contributed to a big rise in profits and a reduction in debt levels

LONDON -- BP said Tuesday that it would be returning around a half-billion dollars to shareholders after “significantly” higher oil prices contributed to a big rise in profits and a reduction in debt levels. The energy company said its underlying replacement cost profit — the industry standard that strips out one-off items — spiked to $2.6 billion in the first three months of 2021 from $791 million a year earlier. That was markedly 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.