UK Markets closed

Oil firm Aker BP posts record profit, will boost gas delivery

By Nerijus Adomaitis

OSLO (Reuters) -Norwegian independent oil company Aker BP said it was preparing to ramp up gas deliveries to Europe after reporting its fifth consecutive record quarterly profit on Thursday on the back of soaring fuel prices.

Earnings before interest and taxes (EBIT) for January-March rose to a fresh record of $1.78 billion from $591 million a year ago, Aker BP said.

Energy companies worldwide have benefited from surging oil and gas prices following Russia's invasion of Ukraine. With Europe covering about 40% of its gas needs with Russian supplies, importing nations have been scrambling to cut their dependence on Moscow and secure alternative supplies.

Aker BP company said its previously announced increase in gas output was progressing according to plan, and its gas production in the first quarter reached record levels.

"We have ...initiated the gas blowdown at Skarv, which will further strengthen our ability to deliver gas to the European market," Chief Executive Karl Johnny Hersvik said in a statement.

The measure could add between 2 billion and 3 billion cubic metres of extra gas per year from Norway's Skarv field with only a modest negative impact on crude oil production, Hersvik told an investor call.

Until recently, Aker BP has been injecting most of the gas from Skarv back into the ground to support reservoir pressure for oil production, instead of selling it.

Aker BP maintained plans to pay dividends of $1.9 per share for the full year, starting with $0.475 for the first quarter.

It said, however, it was open to pay an extraordinary dividend or buy back shares in the future if the oil price is sustained at above $65 per barrel. North Sea crude currently trades at $105.

"Although probably largely expected, this sets the scene for higher dividends after the closing of the Lundin Energy transaction," brokers DNB Markets said in a note to clients.

Aker BP last December agreed to acquire the Norwegian assets of Sweden's Lundin Energy in a cash and stock deal, which would make it the second-largest listed oil company in Norway after state-controlled Equinor.

The deal is expected to close by the end of June.

(Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Tomasz Janowski)