BP expects to pay down part of its debt months earlier than originally planned, after it was boosted by rising oil prices and earned billions from selling off parts of the business.
The oil giant said it will use the proceeds from several disposals, which raised 4.7 billion US dollars (£3.4 billion) in the first quarter, to hit its net debt target of around 35 billion dollars (£25 billion).
Combined with higher oil prices, it means that BP is on track to deliver the target considerably earlier than it had first thought.
Chief executive Bernard Looney said: “We are pleased to announce that we now expect to have reached our 35 billion dollars net debt target during the first quarter 2021.
“This is a result of earlier-than-anticipated delivery of disposal proceeds combined with very strong business performance during the first quarter.
“We look forward to updating the market at our first-quarter results, including further information on share buybacks.”
bp provides update on progress towards $35 billion net debt target https://t.co/W7i97DBLK4— bp Press (@bp_Press) April 6, 2021
Just two months ago BP said it expected net debt, which was around 39 billion dollars (£28 billion) at the end of 2020, to increase in the first half of this year.
The company was facing severance payments as well as an approximately 1.2 billion dollar (£860 million) payment over the Deepwater Horizon oil spill.
The 35 billion dollar target would not be met until the fourth quarter of this year, or the first three months of 2022, BP said at the time.
But a flurry of deals, including 2.4 billion dollars (£1.7 billion) BP made from selling a stake in an Omani oilfield, as well as the one billion dollars (£721 million) it made from selling its petrochemicals business to Ineos, helped reduce debt earlier.
The company also made more than one billion dollars (£721 million) from selling some US assets, as well as an interest in software company Palantir.
Meanwhile, oil has risen in value over recent months, from around 51 dollars for a barrel of Brent crude at the start of January to 63 dollars today.
Shares rose 2.5% as markets opened on Tuesday morning.