Abundant net profit in the first quarter and a huge loss for Russia

BP On Tuesday, it reported bumper first-quarter earnings and boosted share buybacks, despite it incurring heavy losses after offloading nearly 20% of its stake in Russian oil company Rosneft.

The oil and gas giant’s first-quarter base replacement cost profit, which was used as a proxy for net profit, jumped to its highest level in more than a decade at $6.2 billion.

This compares to a profit of $4.1 billion in Fourth quarter and $2.6 billion for First Quarter in 2021. Analysts expected BP to report first-quarter earnings of $4.5 billion, according to Refinitiv.

The oil and gas giant also announced a $2.5 billion share buyback.

However, BP reported a major loss in the quarter of $20.4 billion. This included a non-cash pre-tax fee of $24 billion and $1.5 billion related to the relinquishment of its stake in Rosneft in response to Moscow’s invasion of Ukraine.

“We made the decision to get out of Russia within 96 hours of the invasion, and today you’re seeing the financial implications of that decision,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.

Looney said trading had a “very good” start to the year and net debt – which fell to $27.5 billion – had fallen for the eighth consecutive quarter.

“All in all, in the implicit sense, a good quarter for the company,” he added.

When asked to give more details about how the company plans to extricate itself from Russia, Looney replied, “We’ve been very clear. We announce our intention to leave the country. We made that decision as I said very quickly. And like any ongoing business process, we wouldn’t We comment and prefer not to comment on that this morning.”

The first-quarter results come as the European Union prepares the sixth package of economic sanctions against Russia; The bloc remains divided over how to ease its dependence on Russian energy supplies.

Meanwhile, major UK oil and gas companies face the prospect of a windfall tax to help fund a national package of support for households in connection with spiraling energy bills.

British Finance Minister Rishi Sunak has reportedly opened the door to a potential tax on oil and gas suppliers after he repeatedly rejected the policy citing concerns it could discourage investment.

Oil prices are hovering above $100 a barrel after hitting multi-year highs earlier this year.

international standard Brent Crude oil futures were traded at $106.95 during morning trading in London, down 0.6% for the session, while US contracts traded West Texas Middle The futures contract was at $104.62. About 0.5% less.

Shares of London-listed BP rose 2% shortly after the opening bell. The company’s stock price is up more than 18% since the beginning of the year.

BP reported a massive rise in full-year net profit for 2021, its highest level in eight years, buoyed by higher commodity prices. Global demand for oil picked up again last year, with gasoline and diesel use rising as consumers resume travel and business activity recovers amid the coronavirus pandemic.