Apr 6, 2021

BP cuts debt load ahead of schedule

BP said on Monday that it had cut its debt load faster than expected thanks to a "Very strong" first quarter, indicating it will also restart share buybacks sooner than forecast. The oil company said it anticipated its results later this month would show its net debt fell from $38.9bn at the end of 2020 to its target of $35bn in the first quarter, having previously warned it was expected to rise in the first half of the year. "This is a positive announcement from BP signalling strong performance in the first quarter of the year, the earlier-than-expected start of cash returns to shareholders, while at the same time providing evidence that it can deliver on its various strategic initiatives," said Mark Nelson, analyst at Killik & Co. BP said its strong performance in the first quarter was "Driven by trading, the price environment and resilient operations". Since Looney became head of BP last year, the oil group has indicated that it expects its large trading operation, which is one of the biggest of any of the energy majors, to play a significant role in the company's plans to remain profitable as it invests more in cleaner forms of energy. Reuters reported last month that BP earned almost $4bn from its trading operations last year, citing an internal company presentation, while Royal Dutch Shell reported its own oil trading division made $2.6bn before counting what it made from trading natural gas and other non-oil fuels.

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