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Bumper first quarter net profit, massive loss on Russia

A BP logo on display in London, UK, on ​​Tuesday, February 2, 2021.

Chris J. Ratcliffe | Bloomberg | Getty pictures

BP reported large profits in the first quarter on Tuesday and increased share buybacks, despite a massive loss after relieving its almost 20% stake in the Russian-controlled oil company Rosneft.

BP̵[ads1]7;s underlying claims expense in the first quarter, used as a proxy for net profit, came in at $ 6.2 billion. That compares with a profit of $ 4.1 billion in the fourth quarter and $ 2.6 billion for the first quarter of 2021. Analysts had expected BP to report a profit of $ 4.5 billion in the first quarter, according to Refinitiv.

The oil and gas giant also announced an additional $ 2.5 billion in share repurchases.

However, BP reported a total loss for the quarter of $ 20.4 billion. This included pre-tax costs of $ 24 billion and $ 1.5 billion related to the end of the Rosneft share in response to Moscow’s invasion of Ukraine.

“We made the decision to leave Russia within 96 hours of the invasion, and today you can see the economic implications of that decision,” BP chief Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.

Looney said trading had a “very good” start to the year and that net debt – which fell to $ 27.5 billion – was reduced for the eighth consecutive quarter.

“All in all, in an underlying sense, a good quarter for the company,” he added.

The results for the first quarter come as the EU prepares its sixth package of economic sanctions against Russia; The bloc is still divided over how to end its dependence on Russian energy supplies.

Meanwhile, British oil and gas majors are facing the prospect of a possible unexpected tax to help fund a national package of support for households over rising energy bills.

Britain’s Treasury Secretary Rishi Sunak has reportedly opened the door to a possible tax on oil and gas suppliers after repeatedly rejecting the policy, citing fears it could discourage investment.

The price of oil soars above $ 100 a barrel after climbing to several years’ heights earlier this year.

International benchmark Brent crude oil futures traded at $ 107.64 under morning deals in London, little changed for the session, while US West Texas Intermediate futures stood at $ 105.20.

The shares of BP have risen above 18% so far this year.

BP reported a massive increase in net profit for the full year for 2021, the highest in eight years, supported by rising commodity prices. Global oil demand roared back last year, with petrol and diesel consumption increasing as consumers resumed travel and business activity recovered amid the coronavirus pandemic.

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