BP to resume share buybacks as Q3 profit beats expectations

LONDON: BP said it will resume share buybacks after reporting a doubling in third-quarter profit in the clearest sign yet that the oil company is confident about a turnaround in a week when oil prices hit a two-year high above US$60 a barrel.

BP said it was able to balance its cashflow in the first nine months of the year, excluding large payments for the settlement of the 2010 Deepwater Horizon spill, at US$49 a barrel as years of costs cuts pay off.

The profit growth was driven by a recovery in earnings from oil and gas production after BP started six major projects so far this year as well as from the downstream segment where refinery profit margins rose sharply after Hurricane Harvey knocked out around one quarter of the US refininig capacity for several weeks.

BP said it will start buying back shares in the fourth quarter in order to offset the dilutive effect of the scrip dividend programme, when investors can receive dividend payouts with cash and shares.

BP reported third-quarter underlying replacement cost profit, the company’s definition of net income, of US$1.87bil, exceeding analysts’ forecasts of US$1.58bil.

That doubled a profit of US$933mil a year earlier and US$684mil in the second quarter of 2017, when the company took a large writedown on exploration. — Reuters