Oil and gas giant BP joined its peers in posting record quarterly profits on the back of higher oil and gas prices and strong refining margins. The company also announced a 10 per cent dividend increase and net debt reduction.

Last week, other oil giants, including Shell, Equinor, ExxonMobil, and Chevron issued their quarterly reports, posting record profits driven by increased production, tight cost control and, of course, higher oil and gas prices.

On Tuesday, BP also published its 2Q 2022 report, posting an underlying replacement cost profit of $8.5 billion, compared with $6.2 billion for the previous quarter and $2.8 billion in 2Q 2021. This was driven by strong realized refining margins, continuing exceptional oil trading performance and higher liquids realizations, partly offset by an average gas marketing and trading contribution, down from the exceptional result in the first quarter, including an impact from the ongoing outage at Freeport LNG.

According to Reuters, this was BP’s highest profit in 14 years.

In its report, BP announced a 10 per cent increase in its quarterly dividend to 6.006 cents per ordinary share, reflecting the underlying performance and cash generation of the business, which has enabled strong progress in delivering share buybacks and net debt reduction. As detailed, the company’s net debt fell for the ninth successive quarter to reach $22.8 billion at the end of the second quarter.

Looking ahead, on average, based on BP’s current forecasts, the company continues to expect to have the capacity for an annual increase in the dividend per ordinary share of around 4 per cent through 2025 at around $60 per barrel Brent and subject to the board’s discretion each quarter.

Murray Auchincloss, BP Chief financial officer, said: “Net debt fell for the ninth successive quarter; we are investing with discipline to advance our strategy, and we are delivering on our commitment to shareholder distributions – raising our dividend by 10 per cent and announcing a further $3.5 billion share buyback.”

BP’s reported oil production for the quarter was 1,274mboe/d, a 2.3 per cent higher than the second quarter of 2021.

In the gas & low carbon energy segment, reported production for the quarter was 924mboe/d, a 5.5 per cent higher than the same period in 2021.

In the third quarter, BP expects oil prices to remain elevated due to ongoing disruption to Russian supply, reduced levels of spare capacity and inventory levels significantly below the five-year average. Gas prices are also expected to remain elevated and volatile with the outlook heavily dependent on Russian pipeline flows or other supply disruptions.

Also on Tuesday, BP and Italy’s Eni revealed that their 50/50 independent joint venture in Angola, named Azule Energy, has been officially established. The JV is now Angola’s largest independent equity producer of oil and gas, holding 2 billion barrels equivalent of net resources and growing to about 250,000 barrels equivalent a day (boe/d) of equity oil and gas production over the next five years.