LONDON (Reuters) – BP on Tuesday reported a profit of $5 billion (4.55 billion euros) in the first quarter of 2023, up from the previous three months, on the strength of oil and gas trading. gas, but the company has scaled back its share buyback program.

BP’s share price was down around 4% in early trading on the London Stock Exchange to 513.3 pence, compared with a drop of around 1% for the index of European oil companies.

BP’s earnings beat forecasts, in line with strong results from rivals including Exxon Mobil and Chevron last week, which continue to benefit from high energy prices despite some weakness since the beginning of the year.

BP reported first-quarter profit underlying replacement cost, which defines the company’s net profit, at $4.96 billion. Up from $4.8 billion in the fourth quarter of 2022, and beating analysts’ expectations of $4.3 billion, according to a consensus provided by the company.

However, this is down from the $6.25 billion recorded in the first quarter of 2022.

The profit reflected “an outstanding result in gas marketing and trading, a lower level of refinery turnaround activity and a very strong result in oil trading,” BP said, noting the partial offset of the lower oil and gas prices and refining margins.

The company said it would repurchase an additional $1.75 billion in shares over the next three months, exceeding its goal of using 60% of its excess cash for this purpose. This amount, however, is less than the $2.75 billion redeemed in the previous three months.

Its dividend was unchanged at 6.61 cents per share, after a 10% increase in February. BP had already halved its dividend as a result of the pandemic.

WEAKER DIESEL

The London-based company said it expects European oil and gas prices to remain strong in the second quarter, although refining profit margins are expected to shrink due to lower diesel prices.

BP shares have outperformed the sector since the start of the year, rising 10%, against 6% for Exxon and 3% for Shell.

The benchmark Brent crude oil price averaged $81 a barrel in the first three months of the year, down 16% from a year earlier and 7% from the fourth quarter of 2022.

BP’s profit hit a record $28 billion in 2022 as energy prices soared and market volatility boosted its large trading business.

(Report Ron Bousso and Shadia Nasralla; Gaëlle Sheehan, edited by Kate Entringer)

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