Bumper first quarter net profit, massive loss on Russia

A BP logo on display in London, UK, on ​​Tuesday, February 2, 2021.

Chris J. Ratcliffe | Bloomberg | Getty Images

BP reported on Tuesday a large first-quarter profit and increased share buybacks, despite a massive loss after relieving its nearly 20% stake in Russian-controlled oil company Rosneft.

BP’s underlying quarterly replacement cost result, used as a proxy for net profit, came in at $ 6.2 billion. That compares with a profit of $ 4.1 billion in the fourth quarter and $ 2.6 billion for the first quarter of 2021. Analysts, according to Refinitiv, had expected BP to report a profit in the first quarter of $ 4.5 billion.

The oil and gas giant also announced an additional $ 2.5 billion in stock repurchases.

However, BP reported a total loss for the quarter of DKK 20.4 billion. This included pre-tax fees of $ 24 billion and $ 1.5 billion in connection with the end of its Rosneft stake in response to Moscow’s invasion of Ukraine.

“We made the decision to leave Russia within 96 hours of the invasion, and today you see the economic consequences 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.

The results for the first quarter come as the EU prepares its sixth package of economic sanctions against Russia; the bloc remains divided on how to settle its dependence on Russian energy supplies.

Meanwhile, the UK oil and gas companies are facing a possible unexpected tax to help fund a national package of support for households over rising energy bills.

UK 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 it could discourage investment.

Oil prices hover over $ 100 per barrel. barrel after rising to several-year highs earlier this year.

International benchmark Brent crude futures traded at $ 107.64 during morning deals in London, slightly changed for the session, while US West Texas Intermediate futures stood at $ 105.20.

Shares in BP have risen above 18% year-to-date.

BP reported a massive recovery in this year’s net profit for 2021, the highest in eight years, supported by rising commodity prices. Global oil demand roared back last year, with petrol and diesel consumption rising as consumers resumed travel and business activity recovered amid the coronavirus pandemic.

Leave a Reply

Your email address will not be published.