Energy group BP has said it expects to have hit its US$35 billion net debt target in the first quarter of this year, sooner than expected and paving the way for it to deliver on its promise of buying back shares.
“This is a result of earlier than anticipated delivery of disposal proceeds combined with very strong business performance during the first quarter,” Chief Executive Bernard Looney said in a recent statement.
Shares in the London-based company, which had previously expected to reach the net debt target in around the fourth quarter of 2021 or the first quarter of 2022, rose as much as 3per cent to 299 pence in early trade on news it would reach the target sooner.
BP shares are now up around 16per cent this year, after shedding 45per cent in 2020 as the coronavirus pandemic hit oil demand.
BP plunged to a US$5.7 billion loss last year and had a debt pile of US$39 billion at the end of 2020. It had expected that debt level to rise in the first half of 2021 due to several payments due.
However, in the first quarter it generated around US$4.7 billion from sale proceeds.
As part of Looney’s plan to shift the focus of the oil major to low carbon energy investments, BP aims to sell US$25 billion of assets by 2025.