BP’s (NYSE: BP) profit surged in the second quarter as the UK oil and gas company hiked its dividend for the first time since 2014.
Underlying replacement cost profit, a proxy for net income, for the second quarter was USD 2.8 Billion, quadruple the figure for the same period in 2017 and exceeding forecasts of USD 2.7 Billion, according to CNBC. The company increased its dividend by 2.5 percent to 10.25 cents a share. Production for the quarter was 3.6 million barrels a day and upstream production, was up 1.4 percent on the previous year.
“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,” BP chief executive Bob Dudley said on Tuesday.
Dudley attributed the oil giant’s progress to several major projects in 2017, as well as three that have been brought online this year in Russia, Egypt and Azerbaijan and another three to go before the year’s end.
“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 added.
Despite oil rising above USD 70 a barrel, the BP CEO is still planning for a lower oil price. “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.”
The positive results come after BP announced the acquisition of BHP Billiton’s shale assets for USD 10.5 Billion, which will strengthen its business in the US and increase earnings. The company plans to return sale funds to shareholders and plans a $5 to $6 billion share buyback.