Shadia Nasralla and Ron Bousso

LONDON – BP (NYSE) has increased its share purchase program following a record net profit. This was due to strong oil and natural gas trading results. BP also had to pay $24 billion for Russian exits.

In the aftermath of Russia’s invasion of Ukraine on February 24, 2017, oil and gas prices soared which easily overcame the losses BP incurred by abruptly withdrawing its shares in Russia.

BP’s headline loss for the quarter was $20.4 billion due to a non-cash writedown in Rosneft, and two other joint ventures. This charge was slightly less than BP had originally estimated at $25 billion.

The BP shares gained 1.5% upon trading opening in London.

Company also stopped trading Russian oil. It stated that Russia’s exit, which contributed 3% to its cash flow last fiscal year, wouldn’t affect the company’s plans to move away from oil/gas towards renewables.

Chief Executive Bernard Looney claimed that exiting “hasn’t changed our strategy, financial frame or expectations for shareholder distributions.”

BP’s underlying substitute cost profit (the company’s definitions of net earnings) reached $6.2 Billion during the first quarter. It far exceeded analysts’ expectations for a profit of $4.49B.

Profit was driven by the “exceptional performance” of BP’s Oil and Gas Trading Division, higher prices for oil and high refining margins. Rosneft was not a source of revenue for the company during this quarter.

The profit compares to the $4.1 Billion in 2021’s fourth quarter and $2.63 Billion a year prior. This was the eighth highest profit in 8 years.

As economies recover from the COVID-19 pandemic, global refining margins have risen as Russian oil began to disappear from Europe. Europe heavily depends on Russian refined products such diesel.

BP’s refine oil products division made a profit $1.6 billion over the first three months. This compares to a loss in the last quarter of $26 millions and a loss in 2012 of $2 million.

(Graphic: https://graphics.reuters.com/BP-RESULTS/gkplgjjjovb/chart.png)

BUYBACK BOOST

After its excess cash flow increased to over $4 billion, BP announced that it will increase its quarterly share repurchases by $2.5 billion.

BP announced in February that it will accelerate share buybacks from $1.25 to $1.5 billion per trimestre.

BP stated previously that it would repurchase $4Billion per year at $40/barrel, which is lower than the current benchmark oil price, which is $107, on Tuesday.

Company maintained its dividend of 5.46 cents per shares.

BP competitors include Exxon Mobil (NYSE:), Chevron (NYSE:), TotalEnergies, and TotalEnergies saw sharp increases in their revenue during the quarter. This was due to higher oil prices and stronger performances by their trading divisions.