BP reports profit in 1Q21

The jump in profits from a year earlier comes as BP says it expects oil demand to recover in 2021 due to strong growth in the US and China as COVID-19 vaccination programmes accelerate.

BP said it will buy back US$500 million of shares in the second quarter to offset the dilution from an employee share distribution programme.

Net debt dropped US$5.6 billion from the end of December to US$33.3 billion at the end of March, chiefly due to around US$4.8 billion worth of disposals and stronger oil prices.

That pushed debt below the company's US$35 billion target sooner than expected, allowing it to deliver on its promise of buying back shares.

The company said it would provide an update on the third quarter buyback programme later this year.

As part of Chief Executive Bernard Looney's plan to shift the focus of the oil major to low carbon energy investments, BP aims to sell US$25 billion of assets by 2025.

BP's first-quarter underlying replacement cost profit, the company's definition of net income, rose to US$2.6 billion, far exceeding forecasts of US$1.64 billion in a company-provided survey of analysts.

That compared with a US$110 million profit in 4Q20 and a profit of US$790 million a year earlier.

BP expects global oil inventories, which swelled as the coronavirus pandemic hit fuel demand, to fall to historic levels by the end of 2021.

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