BP increases stake buybacks by $1.25 billion after gas prices, tradeoff boost Q3 profit

Listen to this Article Now

BP announced a gain in third-quarter earnings on Tuesday, boosted by higher oil and gas prices and solid trading results, allowing it to increase its share repurchase programme by over a billion dollars.

As constrained gas supplies combined with robust demand in economies recovering from the COVID-19 pandemic, natural gas and power prices soared around the world this autumn.

Natural gas prices are projected to stay robust in the coming months of peak winter demand, according to BP (NYSE: BP). The company’s definition of net earnings, underlying replacement cost profit, hit $3.32 billion in the third quarter, beating analysts’ forecasts of $3.06 billion.

This compared to a profit of $2.8 billion in the second quarter and $86 million a year ago, when the coronavirus outbreak caused energy demand and prices to plummet.

“Very robust trade” helped BP weather substantial changes in gas and liquefied natural gas (LNG) prices during the quarter, boosting the results. last month that BP’s trading arm made at least $500 million in the quarter.

“Rising commodity prices certainly helped, but I am most pleased that quarter by quarter, we’re doing what we said we would – delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation,” Chief Executive Officer Bernard Looney said.

After purchasing $900 million in the third quarter, the business announced that it will buyback another $1.25 billion of its shares by early 2022. BP had promised to deploy 60% of its cash reserves to increase shareholder payouts.

BP’s net debt declined to $32 billion in the third quarter, down from $32.7 billion in the second. However, as world leaders convene this week in Glasgow, Scotland for a United Nations conference vital to preventing the most severe effects of climate change, the long-term picture for fossil fuel use remains dubious.

BP plans to sharply reduce its carbon emissions in the coming decades by increasing its renewable power capacity 20 fold by 2030, while reducing its oil output by 40% and diverting more funds to low-carbon investments.

Story by : Norvisi Mawunyegah