(Reuters) - BP Plc (BP.L) said on Wednesday it would begin a share buyback program, making it the first major European energy company to resume buybacks since the 2014 price slump in a sign years of austerity have paid off.
The British oil company, which recently reported a doubling in third-quarter profit, said the buyback program had been authorized for between Nov. 15 and the date of its 2018 annual general meeting, with the maximum number of shares not exceeding 1.96 billion.
BP first announced the buyback on Oct. 31, as it gradually shakes off the impact of the deadly 2010 Deepwater Horizon spill, known as Macondo, that cost it over $63 billion in clean-up costs and penalties.
BP said then it would buy back the equivalent number of shares it was issuing as part of its scrip dividend scheme through which investors can opt to receive dividend payouts in shares rather than cash.
It will buy back around $1.6 billion worth of shares a year in order to offset the dilutive effect of the scrip dividend program, BP Chief Financial Officer Brian Gilvary said then.
Europe’s other top oil and gas companies are making other moves to woo shareholders. Norway’s Statoil STL.OL has said it will stop offering a scrip dividend in the fourth quarter, while France’s Total (TOTF.PA) plans to do so next year.
BP’s shares, which had risen to their highest in over three years on news of the resumption of buybacks, were down 0.9 percent at 498.6 pence at 0908 GMT, broadly in line with London’s blue-chip index .FTSE.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Jason Neely and Mark Potter