BP has posted its highest profit in eight years, driven by resurgent demand for oil and natural gas, as the oil major maintained its dividend and committed to buying back $1.5bn of shares in the first quarter of 2022.
The UK-listed group’s underlying profit on a replacement cost basis for 2021 — the profit measure most closely tracked by analysts — was $12.8bn, the highest in eight years.
Earnings for the last three months of the year rose to $4.1bn from $3.3bn in the third quarter, beating average analyst estimates of $3.9bn. That compares with $100mn in the final three months of 2020.
The profits marked an improved performance from 2020 when BP recorded a $5.7bn loss — its first annual loss in a decade — after coronavirus restrictions hit oil demand and BP wrote down the value of billions of dollars’ worth of assets.
The group’s share price fell to a 25-year low in September 2020, days after Looney presented investors with his strategy to overhaul the company by increasing low-carbon investment, while cutting oil and gas production 40 per cent by 2030.
“Over the past two years we have set a new purpose, direction and strategy for BP, and completed the largest reorganisation in our history,” Looney said. “With this period of change fully behind us, we are now solely focused on driving value through the safe, efficient delivery of our strategy.”
Net debt declined for the seventh quarter in a row to $30.6bn, down from $32bn three months earlier. It was at $38.9bn at the end of 2020.
Shares in BP have risen 24 per cent this year.