BP’s chief financial officer said today that the oil major was “comfortable” with its balance sheet despite net debts sitting at £30billion at the end of September.
Brian Gilvary said net debt was expected to be higher at this point due to “big chunky payments” around the Gulf of Mexico oil spill being made this year.
He said the debt pile would start to shrink over the coming quarters as BP pockets the proceeds of asset sales, but that continued Gulf of Mexico payments could make progress “lumpy”.
BP expects to receive £1billion from the sale of its stake in the Shanghai SECCO Petrochemical Company in the fourth quarter.
Mr Gilvary was speaking after BP announced plans to start buying back its own shares.
BP will use the share buyback scheme to offset dilution caused by its scrip dividend, when shareholders take payments in shares instead of cash.
The firm said the decision was a sign of the momentum it was building up and of the company’s confidence in its finances.
“You’re going to see net debt continue to track down,” Mr Gilvary said. “In Q3 we had a $500million negative impact on the debt book, so in actual fact net debt did drop $500million, then we had a $500million reversal on Forex movements.
“We’re very comfortable with where the balance sheet is. We would not have signalled a buyback programme today if we were concerned about the balance sheet.”
The company’s third quarter profits more than doubled.