BP. Bp Plc

By Jaime Llinares Taboada

BP PLC on Tuesday reported better-than-expected earnings for the second quarter, raised the dividend and declared a $1.4 billion share buyback. Here's what the British oil-and-gas major had to say:

On 2Q results:

"Underlying replacement cost profit was $2.8 billion, compared with $2.6 billion for the previous quarter. This result was driven by higher oil prices and margins offset by a lower result in gas marketing and trading."

On market outlook:

"The oil market is expected to continue its rebalancing process. Global stocks are expected to decline and reach historical levels (in terms of days of forward cover) in the first half of 2022."

"Oil demand is expected to recover in 2021 on the back of a bright macroeconomic outlook, increasing vaccination roll-out and gradual lifting of Covid-19 restrictions around the world. The expectation is that demand reaches pre-Covid levels sometime in the second half of 2022."

"OPEC+ decision making on production levels is a key factor in oil prices and market rebalancing."

"Global gas demand is expected to recover to above 2019 levels by end 2021, and LNG demand to increase as a result of higher Asian imports."

"Industry refining margins are expected to be broadly flat compared to the second quarter, with recovery in demand offset by growth in net refining capacity. In lubricants, industry base oil and additive supply shortages are expected to continue in the second half."

On BP outlook:

"Looking ahead, we expect third-quarter reported upstream production to be higher than the second quarter reflecting the completion of seasonal maintenance activity and the ramp-up of major projects. Within this, we expect production from oil production & operations to be higher."

"If Covid restrictions continue to ease, we expect higher product demand across our customer business in the third quarter. Realized refining margins are expected to improve slightly supported by stronger demand and wider North American heavy crude oil differentials. In Castrol, industry base oil and additive supply shortages are expected to continue."

"We continue to expect divestment and other proceeds for the year to reach $5 [billion]-6 billion during the latter stages of 2021. As a result of the first half year divestments, our target of $25 billion of divestment and other proceeds between the second half of 2020 and 2025 is now underpinned by agreed or completed transactions of around $14.9 billion with over $10 billion of proceeds received."

"BP continues to expect capital expenditure, including inorganic capital expenditure, of around $13 billion in 2021."

"For full year 2021 we expect reported upstream production to be lower than 2020 due to the impact of the ongoing divestment programme."

"However, underlying production should be slightly higher than 2020 with the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets."

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

August 03, 2021 03:12 ET (07:12 GMT)

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