BP Books $25.5 Billion Impairments on Russia Exit -- Update
May 03 2022 - 3:05AM
Dow Jones News
By Jaime Llinares Taboada
BP PLC on Tuesday reported impairments of $25.5 billion
following the decision to exit its 19.75% shareholding in Russia's
Rosneft Oil Co.
These non-cash charges included $24.0 billion on the exit from
Rosneft's share capital, and $1.5 billion related to BP's other
businesses with Rosneft in Russia.
As a result, the British energy major booked a net loss of
$20.38 billion for the first quarter of the year--compared with a
$2.33 billion profit in the fourth quarter of 2021.
"Our decision in February to exit our shareholding in Rosneft
resulted in the material non-cash charges and headline loss we
reported today. But it has not changed our strategy, our financial
frame, or our expectations for shareholder distributions," Chief
Executive Bernard Looney said. As part of the exit from Rosneft,
Mr. Looney in February resigned from the board of the Russian
company.
Underlying replacement cost profit, the company's preferred
metric, rose to $6.25 billion in the first quarter from $4.07
billion, reflecting exceptional oil and gas trading profits, higher
oil realizations and a stronger refining result. This was above the
market consensus of $4.49 billion compiled by BP and averaged from
26 brokers.
Operating cash flow increased to $8.21 billion from $6.12
billion. Net debt was reduced to $27.46 billion from $30.61
billion.
BP declared a dividend of 5.46 cents a share for the first
quarter, in line with the immediately prior period, and a buyback
of $2.5 billion to be executed before its second-quarter results.
This represents an increase compared with share repurchases of $1.6
billion during the first quarter.
As for the second quarter, BP forecast that its upstream
production will fall reflecting base decline, seasonal maintenance
and the absence of output from joint ventures in Russia. However,
refining margins are expected to be higher and energy prices are
expected to remain elevated.
For the full year 2022, BP continues to expect broadly flat
upstream production despite the exit from Russia.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
May 03, 2022 02:50 ET (06:50 GMT)
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