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BP second quarter profit above expectations at $2.8 bn

The oil giant hiked its divided for the first time in four years as it exceeded its profit forecast

The $2.8 bn in second-quarter profit – boosted by higher oil prices– is four times the amount it reached last year—and exceeds the  initial forecast of $2.7 bn.

Dividend increased by 2.5% to 10.25 cents a share. Marking the first time that a hike has happened, since the third quarter of 2014.

Speaking exclusively to CNBC’s “Squawak Box Europe”,BP chief executive Bob Dudley said: “We changed our strategic direction six quarters ago, this is the sixth quarter in a row we’ve been at or above expectations. The company’s got momentum, it feels good,” referring to the several new projects that have driven the company’s progress.

In fact, BP cited bringing on seven major projects in 2017, as the primary motivator behind hiking the dividends. “That gave us the confidence to raise the dividend this year for the first time in 15 quarters, as well as some great assets in North America,” Dudley said. The company has also bought three more in Russia, Egypt and Azerbaijan – along with another three to go before the year’s end.

Production for the quarter was 3.6 mn barrels a day (bpd) and upstream production– excluding Rosneft, was up 1.4 % on the previous year.The company credited increasing output from major projects as playing a role in driving a lot of the rise. The earnings also come against the backdrop of higher crude prices, as rising geopolitcal risks in the Middle East, Venezuela and a massive crude outrage in Canada helped support oil markets.

Despite oil rising above $70 per barrel and Bent crude trading above $75 per barrel on Tuesday – Dudley stated that the company plans for lower oil prices – despite the recent rise.

The BP CEO stated: ” You look at the oil price — we’re planning BP on $50 to $65 a barrel.”

“That’s how we’re going to plan the company, we’re not going to get ahead of ourselves, we’re going to keep the capital discipline … We’ll probably be at the low end of that this year, yet you do see pricing and revenues coming through stronger because of the markets.” he added.

The results also come after BP’s acquisition of BHP Billiton’s hale assets for $10.5 bn –which was done in order to boost its US business and increase earnings and cash per share. The company has said it has plans to return sale funds to shareholders, and is planning a $5 and $6 bn share buyback.

-GBO Correspondent

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