Energy major BP believes oil prices will stay high and that the company will continue to deliver higher profits and higher oil and gas output in the future.

Chairman Lord Browne made this bold prediction after announcing a set of strong results for the second quarter with second quarter profits up 23% to US$3.908 billion and half- year profits up 20% to US$8.625 billion.

The second quarter trading environment was generally stronger than a year ago, with higher oil and gas realizations and refining margins.

The company said net cash inflow for the quarter was $1.5 billion and net cash inflow for the half year was $5.3 billion, compared with an inflow of $2.4 billion and an inflow of $5.6 billion a year ago. Net cash flow from operating activities for the quarter and half year was $6.9 billion and $14.6 billion respectively, compared with $7.3 billion and $13.3 billion a year ago.

“Return on average capital employed for the quarter and half year respectively, on a pro forma basis, was 19.8% and 21.9%, compared with 18.7% and 21.2% a year ago. The cash return for the quarter was 36% compared with 32% a year ago, and for the half year was 34% compared with 35% a year ago,” it said.

Of growing concern to investors is the turmoil in Russia where BP is betting its future growth.

Lord Browne sought to calm investors, stating that BP’s venture in the country is not affected.

He also announced a rise in quarterly dividend payment to investors from 6.75 cents per share to 7.10 cents per share. This compares with 6.50 cents per share a year ago. For the half year the dividend showed an increase of 8.6%.

During the first half, the company repurchased for cancellation 380 million of its own shares, at a cost of $3.25 billion. The increase in the per share dividend growth rate reflects the reduction in the number of shares outstanding due to the share buyback programme. This allows the company’s level of dividend payments to be allocated across a smaller equity base.

Lord Browne added: “This has been another strong performance against the backdrop of a robust trading environment. We are on track against our targets of controlled investment for growth, increasing the dividend and using additional free cash flow to fund a significant level of share buybacks. The reduction in the number of shares outstanding has allowed us to accelerate the per share dividend growth rate. The plans to prepare the Olefins and Derivatives business for disposal are on track.”