BP to be first oil company to resume share buybacks

BP is to begin a share buyback programme, making it the first major European energy company to resume buybacks since the 2014 price slump in a sign years of austerity have paid off.

The British oil company, which recently reported a doubling in third-quarter profit, said the buyback programme had been authorised for between November 15 and the date of its 2018 AGM, with the maximum number of shares not exceeding 1.96 billion.

BP first announced the buyback at the end of last month, as it gradually shakes off the impact of the deadly 2010 Deepwater Horizon spill that cost it over $63bn in clean-up costs and penalties.

BP said then it would buy back the equivalent number of shares it was issuing as part of its scrip dividend scheme through which investors can opt to receive dividend payouts in shares rather than cash.

It will buy back around $1.6bn worth of shares a year in order to offset the dilutive effect of the scrip dividend program, chief financial officer Brian Gilvary said.

Europe’s other top oil and gas companies are making other moves to woo shareholders. Norway’s Statoil will stop offering a scrip dividend in the fourth quarter, while France’s Total plans to do so next year.

BP’s shares, which had risen to their highest in over three years on news of the resumption of buybacks, were down 1.5%. Oil prices fell for a fourth day — Brent down 72c at $61.49 a barrel — weighed down by worries of US crude inventories rising after this week’s gloomy global demand outlook from the International Energy Agency (IEA). Brent has shed nearly 5% since hitting a two-year high last week.


More in this Section

Accumulated profits at Graeme McDowell firm climb to $17.4m

Struggling Debenhams to cut nearly 100 jobs

GSK to close Sligo site with loss of 165 jobs

Adare Manor named Hotel of the Year at international awards

Today's Stories

Doubts Donald Trump’s growth spurt can be sustained

More From The Irish Examiner