Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

BP Follows Big Oil Peers by Increasing Buybacks and Dividend

Stock MarketsAug 03, 2021 08:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Bloomberg. The BP Plc company logo on an electric vehicle charging point in Milton Keynes, U.K., on Tuesday, Feb. 9, 2021. BP aims to cut its oil and gas production by 40%, increase low-carbon spending to $5 billion a year and produce 50 gigawatts of renewable energy by the end of the decade. Photographer: Chris Ratcliffe/Bloomberg 2/2

(Bloomberg) --

BP (NYSE:BP) Plc followed its Big Oil peers by increasing dividends and share buybacks as higher crude prices boosted profit.

The oil majors -- with the notable exception of Exxon Mobil Corp (NYSE:XOM). -- are raising returns as they express confidence that the worst of the slump caused by the coronavirus pandemic is over. Their goal is to woo investors who are becoming increasingly wary about the future of the fossil fuels in a changing climate.

BP posted “another quarter of strong performance while investing for the future in a disciplined way,” Chief Executive Officer Bernard Looney said in a statement on Tuesday. “We are increasing our resilient dividend by 4% per ordinary share, and in addition we are commencing a buyback of $1.4 billion from first half surplus cash flow.”

Both are significant pledges that go further than the distributions policy outlined earlier this year. The turnaround reflects the impact of higher energy prices, but also demands from shareholders, who weren’t happy in early 2021 with BP’s plans.

If oil averages about $60 a barrel, BP expects to be able to continue increasing its dividend by about 4% annually and repurchase $1 billion of shares each quarter until 2025, Looney said.

“This shows we continue to perform while transforming BP -- generating value for our shareholders today while we transition the company for the future,” Looney said.

The London-based company’s second-quarter adjusted net income was $2.8 billion, compared with a loss of $6.68 billion a year earlier, according to the statement. That was above the average estimate of $2.13 billion in a Bloomberg poll of 19 analysts.

Higher shareholder returns show the oil majors’ confidence that higher oil and gas prices are here to stay. BP increased its Brent crude price assumptions to 2030 to reflect expected supply constraints, resulting in the reversal of a previous pre-tax net impairment of $3 billion.

Having achieved its net debt target of $35 billion in the first quarter, BP’s net liabilities dropped further in the period to $32.71 billion, thanks to the sale of assets. The firm has a goal of reaching $25 billion of divestments by 2025 to fund the expansion of its low-carbon business.

(Updates with dividend, buyback plans for coming years in fifth paragraph.)

©2021 Bloomberg L.P.

BP Follows Big Oil Peers by Increasing Buybacks and Dividend
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email