BP has launched a programme to return around $1.6 billion (£1.2bn) more cash to shareholders a year, after slashing costs in response to the crude price plunge and the Gulf of Mexico oil spill, writes Mark Williamson.

The oil and gas giant has become the first major to restart share buy backs since 2014, when the industry entered a deep downturn after the oil price fell sharply.

BP has shed around 900 jobs in the North Sea and sold off a range of what it deemed non-core assets in the area since 2014.

The company said last month it was planning to resume buy backs after third quarter profits doubled to $1.9bn. Chief executive Bob Dudley thinks BP has been put in shape to prosper if oil sells at $50 per barrel, compared with around $61.90/bbl yesterday.

BP noted its authority to buy back shares took effect yesterday. It will remain in place until the 2018 annual general meeting. The company will decide when to buy shares according to market conditions.

The buy backs will be used to offset the effect of paying around 20 per cent of its dividends in shares.

BP shares closed down 8p at 495p. They hit a two year high of 525p last week.

The cost of the 2010 spill off the US rose $0.2bn to $63.4bn in the third quarter.