BP PLC (LSE:BP.) outlined plans for further share buybacks as it reported a rise in first-quarter profit on the previous quarter, reflecting strong oil and gas trading.
The oil major said underlying replacement cost profit for the first three months of 2023 totalled US$4.96bn, up from US$4.81bn in the fourth quarter last year but lower than the US$6.25bn reported in the first quarter of 2022. City analysts had expected a profit of around US$4.3bn.
BP said compared to the fourth quarter, the result reflects an exceptional gas marketing and trading result, a lower level of refinery turnaround activity and a very strong oil trading result, partly offset by lower liquids and gas realisations and lower refining margins.
Announcing a return of US$1.75bn to shareholders, the FTSE 100-listed firm said it expects to be able to deliver share buybacks of around US$4.0bn per year, at the lower end of its US$14-18bn capital expenditure range, and have capacity for an annual increase in the dividend per ordinary share of around 4%.
Operating cash flow in the quarter was US$7.6bn, including a working capital build of US$1.4bn, while capital expenditure was US$3.6bn.
BP continues to expect capital expenditure, including inorganic capital expenditure, of US$16-18bn in 2023.
The firm declared a quarterly dividend of 6.61 cents, unchanged from the previous quarter but up from 5.46 cents a year before.
“This has been a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations,” said chief executive Bernard Looney.
For the second quarter, BP expects oil prices to remain elevated as the recent decision by OPEC+ to restrict production, combined with strengthening Chinese demand, tightens supply/demand balances.