Profits at BP in the first half of the year beat expectations with the oil and gas giant upping its dividend payments to shareholders for the first time in a year.
The company's investors are due to receive a total of roughly $7 billion (£5.4bn) this year through a combination of dividend payments and share buy-backs as the company has scaled back on its green investments to deliver what chief executive Murray Auchincloss describes as a "simpler, more focused and higher-value company".
“We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025," said Mr Auchincloss, who took over at the beginning of this year.
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In a sign of change from his predecessor Bernard Looney's strategy to grow renewables and reduce fossil fuel output, BP said it had given a green light to the development of the Kaskida oilfield in the Gulf of Mexico, a highly complex project in deep geological formations. The field is expected to start production in 2029 and have a capacity of 80,000 barrels of oil per day (bpd).
BP said it will lift its interim dividend payment by 10% while buying back stock worth $1.75bn over the next three months. This takes total buy-backs for the first six months of the year to $3.5bn, and $7bn for the year as whole.
The group posted an underlying replacement cost profit - which is used as a proxy for net profit - of $2.8bn for the second quarter. That beat analysts' consensus expectations of $2.6bn.
BP also made a better-than-expected half-year profit of $5.5bn, although it was down on last year’s $7.6bn amid lower profitability in its refining business. The company had warned earlier this year that "significantly lower" profit margins from refining could wipe out up to $700 million from its earnings for the quarter.
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The result is likely to ease pressure on Mr Auchincloss after BP fell short of profit expectations in the previous two quarters.
"BP’s second-quarter results come as the company seeks to rebuild investor confidence in its strategy and facing headwinds as it pauses renewable projects to cut costs and maintain share buybacks in an effort to and boost returns," said Andrew Keen, an analyst at Edison Group.
Shares in BP, which have been relatively flat this year as the stock has underperformed its rivals, closed yesterday's trading down 1.35p at 451.65p.
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