Bp, the British oil major, posted its third-quarter financial results, beating analysts’ estimations with billionaire earnings and adding more than a billion dollars to its share buyback program. The boost in oil and commodity prices in Europe is the main factor for the company’s strong performance.
Firstly, as we reported earlier, strong oil and natural gas prices boosted earning of upstream and downstream companies. Bp said it expects that oil and gas prices will keep strong in the coming months as winter looms.
As a result, the company turned somewhat into a cash machine with its business running very well, said CEO Bernard Looney to Reuters. The company’s net profits reached $3.32 billion in the third quarter, exceeding analysts’ expectations for $3.06 billion.
Moreover, the company had posted $2.8 billion in profit in the second quarter and $86 million a year earlier, when energy demand and prices collapsed because of the pandemic. Consequently, the financial results for 3Q were significantly stronger.
According to Looney, these results were also boosted by “very strong trading,” which helped the company sustain constant changes and disruptions in liquified natural gas (LNG) prices throughout the quarter. Particularly, bp’s trading unit earned around $500 million during the quarter.
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Bp to increase renewable energy capacity 20-fold by 2030
However, bp’s performance “is not only a trading story. We have had production growth; we have stronger reliability and availability in our businesses,” Looney said.
Furthermore, the company said it will repurchase $1,25 billion of its shares by early 2022, after re-buying $900 million during the current quarter. Indeed, the company plans to maintain buybacks at a rate of around $1 billion per quarter if oil prices remain at $60 a barrel or over.
On the other hand, despite the strong performance, the company posted a loss attributable to shareholders of $2.54 billion. The loss was mainly due to accounting effects as a result of fluctuating LNG prices. Upon the news, the company’s shares were down 2,5% this Tuesday.
Nevertheless, the company’s net debt fell further to $32 billion from $32.7 billion in 2Q.
Finally, bp said it plans to further reduce its carbon emissions in the coming decades by increasing its renewable capacity 20-fold by 2030. The company will also reduce its oil output by 40% and will invest more in low-carbon solutions.
