bp today provides an update on the expected timing of reaching its $35 billion net debt target including the delivery of disposal proceeds and performance during the first quarter of 2021.

Bernard Looney, chief executive officer, commented:
"We are pleased to announce that we now expect to have reached our $35 billion 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."

During the first quarter bp has received around $4.7 billion of disposal proceeds. This includes approximately:

• $2.4 billion from the completion of the sale of a 20% interest in Oman’s Block 61;
• $1.0 billion as the final payment from the sale of bp’s global petrochemicals business to INEOS;
• $0.7 billion from the sale of a 49% interest in a controlled affiliate holding certain refined product and crude logistics assets onshore US; and
• $0.4 billion from the sale of an interest in Palantir – a significant return on our initial investment.

bp now expects disposal proceeds in 2021 to be at the top end of the previously announced $4‑6 billion range.

bp’s target of $25 billion of disposal proceeds between the second half of 2020 and 2025 is now underpinned by agreed or completed transactions of around $14.7 billion with approximately $10.0 billion of proceeds received.

bp’s net debt at the end of the fourth quarter 2020 was $38.9 billion.

As disclosed at the time of the fourth quarter 2020 results, net debt was expected to increase in the first half of 2021, driven by: severance payments spread across both quarters; the payment to Equinor following completion of the US offshore wind joint venture which occurred during the first quarter; and the ~$1.2 billion pre-tax annual Gulf of Mexico oil spill payment scheduled for the second quarter.

Reflecting the delivery of disposal proceeds and the very strong business performance in the first quarter 2021, driven by trading, the price environment and resilient operations, bp now expects to have reached its net debt target of $35 billion during the first quarter 2021.

On reaching this net debt target, bp is committed to returning at least 60% of surplus cash flow to shareholders by way of share buybacks, subject to maintaining a strong investment grade credit rating.

KeyFacts Energy: bp UK country profile