* Profit $2.8 bln (forecast: $2.15 bln)
* Boosts dividend by 4%
* Announces $1.4 billion share buyback
* GRAPHIC: Major oil firms' share performance https://refini.tv/3p1trlL
(Adds detail, shares)
By Ron Bousso
LONDON, Aug 3 (Reuters) - BP boosted its dividend and
share buybacks after beating expectations with a $2.8 billion
second-quarter profit powered by higher oil prices and
recovering demand.
The results bolster CEO Bernard Looney's plan to shift away
from oil and gas to renewable and low-carbon energy in an effort
to battle climate change.
BP shares were up 2.2% in early trading.
Rivals including Royal Dutch Shell, TotalEnergies
and Chevron also boosted shareholder returns
last week reflected a recovery from the pandemic which saw
energy demand plummet.
BP increased its dividend by 4% to 5.46 cents after it was
halved to 5.25 cents in July 2020 for the first time in a
decade.
BP also plans to repurchase $1.4 billion in shares in the
coming months after generating surplus cash of $2.4 billion in
the first half of the year, it said.
In April, BP launched a $500 million buyback plan to offset
dilution from an employee share distribution
programme.
Looney said in a statement that the measures were possible
due to a stronger performance as well as "an improving outlook".
BP expects global oil demand to recover to pre-pandemic
levels sometime in the second half of 2022.
BP's underlying replacement cost profit, the company's
definition of net earnings, reached $2.8 billion in the second
quarter, beating the $2.15 billion expected by analysts.
That was up from $2.63 billion in the first quarter and
marked a rebound from a loss of $6.68 billion a year earlier.
The results were also due to stronger demand for fuel,
including aviation fuel, as well as higher profit margins at
convenience stores in BP's petrol stations, it said.
BP's net debt fell dropped to $32.7 billion from $40.1
billion.
STRONGER OUTLOOK
BP said it has increased its price forecast for benchmark
Brent crude oil to 2030 to reflect expected supply constraints,
while also lowering its longer-term price forecast because it
expects an acceleration in the transition to renewable energy.
As a result, the company increased the pre-tax value of its
assets by $3 billion. That comes after writedowns of more than
$17 billion last year.
The company said at an oil price of $60 a barrel, it expects
to be able to buy $1 billion in shares and boost its dividend by
4% annually through 2025.
Brent oil prices rose in the second quarter to an average of
$69 a barrel from $61 in the previous quarter and from $29.56 a
year earlier.
(Reporting by Ron Bousso, editing by Anil D'Silva and Jason
Neely)