British energy major BP plc reported on Tuesday (Nov. 2) its third-quarter earnings results, revealing underlying replacement cost profit (net profit) of $3.32 billion, above analyst estimates of $3.1 billion, according to Refinitiv.
The oil and gas giant’s operating cash flow reached $6 billion, with the London-based company receiving $5.4 billion of divestment and other proceeds in the first nine months of 2021.
The last of the western world’s oil supermajors to report third-quarter earnings, BP like its peers is enjoying a sharp rise in quarterly profit amid surging global commodities prices. Oil prices are above $80 for the first time in more than three years while gas prices are skyrocketing.
The profit was “driven by higher oil and gas realizations, higher refining availability and throughput enabling the capture of a stronger environment and a stronger gas marketing and trading result.” On the other hand, BP’s revenue landed below estimates at $37.87 billion.
“Rising commodity prices certainly helped, but I am most pleased that quarter by quarter, we’re doing what we said we would – delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation” CEO Bernard Looney said in the company’s earnings report.
The energy giant which has already completed the $1.4 billion share buyback announced at its second-quarter results, left its dividend unchanged at 5.46 cents per share but said it would buy back an additional $1.25bn of shares before the publication of its fourth-quarter results. The oil major continues its efforts to win back investors after the share price dropped last year to a 25-year low.
Shares of the company fell tumbled 2.27 percent in London on Tuesday despite the oil and gas firm reporting a sharp rise in third-quarter profit.
Biraj Borkhataria at RBC Capital Markets told The Financial Times the reaction was probably a response to the relative “slowdown” in the level of the buyback.
BP’s quarterly results were released as leaders from more than 120 countries attend the
COP26 climate summit in Glasgow. Major oil companies have been barred from sponsorship deals and official involvement at the COP26 an event that has been billed as the “last best chance” to meet the goals of the Paris Agreement.
However, representatives of Big Oil have been allowed into the conference under the umbrella of the International Emissions Trading Association (IETA) which represents the carbon trading business and has a stall at the heart of COP26.
Speakers hosted by the IETA include Looney who took part in a ‘high level dialogue on business, human rights and the just transition’ along with Mary Robinson, the former president of Ireland and former UN commissioner for human rights, sparking anger from environmental campaigners.
35 official side-events at COP26 were being organised by, or would feature, big polluting companies or the lobby groups that represent them, the Ferret reported.
Oil companies have make commitments to cut oil output and invest heavily in clean energy. Earlier this year, BP laid out a 10-year plan to reduce oil and gas production by 40% and boost spending on low carbon energy to $5 billion per year.