* Profit down 26% on weak oil, gas prices, but beats
forecasts
* Completes $1.5 billion share buyback programme
* Shares jump 4.5%, biggest gain in a year
(Adds details, updates shares)
By Ron Bousso
LONDON, Feb 4 (Reuters) - BP raised its dividend and
said it had completed a $1.5 billion share buyback programme in
a sign of confidence in its growing oil and gas business on the
last day in office for Chief Executive Bob Dudley.
BP shares were trading 4.5% higher at 1115 GMT on Tuesday,
on course for their biggest daily gain in over a year after the
company's profit beat forecasts for a twelfth quarter in a row.
As Bernard Looney prepares to take the helm, BP struck a
positive tone even as oil prices slumped to a near year-low on
concerns over China's coronavirus, bucking a trend among peers
that saw a sharp slowdown in revenues last week.
The shareholder rewards came as the London-based company
reported a 26% drop in fourth-quarter profit, which easily beat
forecasts, and $2.7 billion in charges.
Cash flow rose by more than 10% in 2019 to $25.8 billion,
despite lower commodity prices, as a result of higher production
- particularly in U.S. shale following the acquisition of BHP
assets.
Still, BP's debt-to-capital ratio, known as gearing, rose by
the end of 2019 from a year earlier, even though BP sold $9.4
billion of assets, underlying the strain oil companies face as
demand for fuels and chemicals weakened last year.
"Solid delivery in a tough environment," Redburn analyst
Stuart Joyner concluded in a note, adding the focus would be on
reducing debt.
Rivals ExxonMobil, Royal Dutch Shell and
Chevron reported sharp drops in 2019 revenues due to
softer demand, particularly in Asia.
Dudley, 64, bows out after a decade at BP's helm. He was
abruptly ushered in as CEO in October 2010 after his predecessor
Tony Hayward stepped down in the wake of the deadly Deepwater
Horizon spill in the Gulf of Mexico.
He has since led the company through a deep and long
downturn and rising pressure from investors to adapt to the
transition to more renewable energy.
Looney, who takes over on Wednesday, is planning to expand
BP's climate targets and is considering a major overhaul to the
structure of the 111-year-old company.
"I am proud to be handing over a safer and stronger BP to
Bernard and his team. I am confident that under their
leadership, BP will continue to successfully navigate the
rapidly-changing energy landscape," Dudley said in a statement.
STRONG OIL TRADING
BP reported $2.57 billion in fourth-quarter underlying
replacement cost profit, its definition of net income, exceeding
analysts' forecast of $2.1 billion in a company-provided poll.
That was down from $3.5 billion a year earlier, but up from
$2.3 billion in the third quarter.
The results were driven by a lower tax rate and
stronger-than-expected performance of the oil and gas production
unit, or upstream, which saw output rise in 2019 by 3.8% to 2.64
million barrels of oil equivalent per day, driven by a doubling
of output from U.S. shale oil following the $10.5 billion
acquisition of BHP's assets in late 2018.
Refining profits dropped by a third in the fourth quarter to
$1.44 billion due to a weaker performance of BP's large oil
trading business.
"Our oil trading result was not as strong as the previous
quarters even if it had a record year overall," Chief Financial
Officer Brian Gilvary, who steps down in June, told Reuters.
BP raised its dividend by 2.4% to 10.5 cents per share, the
second increase since the BHP acquisition.
BP also denied media reports it was considering selling its
10.75% stake in Russian oil giant Rosneft.
"Rosneft is one of our closest strategic partners," Gilvary
said.
(Reporting by Ron Bousso; editing by Jason Neely and Mark
Potter)
