Thursday, 06 August 2020 12:51

bp reports sharp decrease of dividends

bp halved the size of dividends at the end of the second quarter -  down to $5.25 per share. The last time the company cut payments to shareholders was in 2010 when the fire and a massive fuel spill happened on the Deepwater Horizon oil rig in the Gulf of Mexico.

It should be noted that bp plc, as part of its updated development strategy until 2030, plans to increase investment in low-carbon technologies and reduce oil and gas production in order to reduce emissions.

So, low-carbon investments should grow to $5 a year, which is 10 times more than the company invests now, BP said.

The company also intends to create about 50 gigawatts (GW) of renewable energy production capacity, which is 20 times more than the existing 2.5 GW.

At the same time, oil and gas production will decrease by more than 40% - from 2.6 million barrels of oil equivalent per day in 2019 to 1.5 million boe/d. There are no plans to expand exploration in new countries. It is expected that the volume of processing will be reduced from 1.7 million b/d to 1.2 million b/d.

The company expects that the measures taken will reduce emissions from its activities by 35-40% by 2030.

The company has implemented a new strategy to achieve its stated goal of becoming a zero-emission company by 2050.

According to the strategy, the company plans to achieve sales of liquefied natural gas (LNG) in the amount of 25 million tons by 2030, while increasing the LNG portfolio to at least 30 million tons/year. In 2019 the company sold 4.6 million tons of LNG from projects with its participation. About two-thirds of the company's LNG is produced on projects with its participation.

During a conference call for analysts, representatives of the company also reported that the launch of the Tangguh LNG project is now expected in 2022 due to the COVID-19 pandemic.

It involves an increase in capacity by 3.8 million t/y to the existing 7.6 million t/y. Previously, the launch was planned for 2020, then it was postponed to 2021.

BP expects global oil demand in 2020 to be 8-9 million b/d lower than in 2019, and the gas market is likely to remain significantly oversupplied.

At the same time, BP emphasizes that it intends to maintain financial discipline with a strict business plan, including strengthening the balance sheet, maintaining strict discipline in regard to capital expenditures and reducing debt, net debt should fall to $35 billion.

BP plans to maintain annual capital expenditures at $14-16 billion until 2025. The company expects revenues from asset sales to reach $25 billion between the second half of 2020 and 2025.

As reported, BP has introduced a new profit distribution policy for shareholders. Thus, the interim dividend is set at 5.25 cents per share, compared with 10.5 cents in the previous quarter.

BP intends to maintain its dividend at this level, as well as distribute at least 60% of the cash balance by repurchasing shares after reducing net debt to $35 billion.


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