The company was the first among the European peers to resume share buy-backs in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.
Powered by higher prices and output of oil and gas, BP’s profits more than doubled in 2017 to $6.2 billion, allowing the company to resume share buy-backs as it recovers from a three-year downturn.
Chief Financial Officer Brian Gilvary said, “The company will be able to generate profits in 2018 at an oil price of $50 a barrel, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean-up costs of the deadly 2010 Deepwater Horizon spill.”
The company was the first among the European peers to resume share buy-backs in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.
With a 20 per cent bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343 million worth of shares in the fourth quarter, offsetting the scrip dilution.
At 0824 GMT, BP shares were lower at 1.4 per cent, compared with a 2.3 per cent decline for the sector.
Chief Executive Officer Bob Dudley in a statement said, “2017 was one of the strongest years in BP’s recent history. We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth.”
Though BP expects a long-term boost from the lowered corporate tax rates, it also took a one-off charge of $900 million to adjust to new US tax rules. A company-provided survey of analysts showed that the company reported a $2.1 billion fourth-quarter underlying replacement cost profit, its definition of net income, topping forecasts for $1.9 billion. That marked a jump from $400 million a year earlier and topped a third-quarter profit of $1.9 billion.
