BP chief executive Bernard Looney has underlined the potential the company sees in windfarm acreage off Scotland and held out the prospect that Aberdeen could remain an important centre for the firm for decades.

The oil giant has also increased the valuation of its North Sea business and unveiled plans to hike payouts to investors following the rally in crude prices. This has been fuelled by hopes that a strong global recovery from the economic damage caused by the pandemic is in prospect.

BP made $2.8 billion (£2bn) underlying profit in the second quarter on the replacement cost measure followed by analysts compared with a $6.7bn loss in the same period last year.

Mr Looney declared: “We are increasing our resilient dividend by four per cent per ordinary share and in addition, we are commencing a buyback of $1.4 billion from first half surplus cash flow.”

The decision reflects directors’ confidence in the company’s ability to generate huge amounts of cash from its operations at current oil and gas prices. They appear to think market conditions are likely to remain supportive.

READ MORE: BP claims ScotWind bid could unlock £10bn investment

“Oil demand is expected to recover in 2021 on the back of a bright macroeconomic outlook, increasing vaccination roll-out and gradual lifting of Covid-19 restrictions around the world. The expectation is that demand reaches pre-Covid levels sometime in the second half of 2022,” said the company.

It added: “Global gas demand is expected to recover to above 2019 levels by end 2021.”

The company has increased its forecast for oil prices in the period to 2030 to $60 per barrel. It had previously expected prices to average $50/bbl until the latter half of the decade.

The change in the crude price forecast has resulted in $1.8bn impairment reversals in respect of BP’s oil production and operations division. It noted these included amounts in respect of its North Sea business and the BPX Energy operation in the USA, without giving a breakdown.

HeraldScotland: BP chief executive Bernard Looney Picture: BP BP chief executive Bernard Looney Picture: BP

By contrast the company slashed the valuation of the North Sea operation by around $440m in the first quarter last year amid the fallout from the coronavirus crisis.

The price of Brent crude fell to less than $20 per barrel in April last year, from around $70/bbl at the start of 2020, after lockdowns were imposed around the world. The price rallied in response to the rollout of coronavirus vaccines. Brent crude fetched $72.36/bbl yesterday afternoon.

In its results presentation, BP emphasised that oil and gas is expected to remain a core part of the business as Mr Looney looks to reshape the company amid growing concern about global warming.

READ MORE: Shell boss defends North Sea business as Shetland field development plan angers campaigners

After taking charge in February last year, he set the target for BP to become a net zero business by 2050. This will involve it becoming a broader-based energy business by investing heavily in renewables.

The company expects to use the cash generated from oil and gas activity to fund the required renewables investment while increasing payouts to investors.

On a call with analysts Mr Looney noted that operations in Scotland could play an important role in the transformation of the company.

BP bid for windfarm acreage in the ScotWind offshore licensing round, which closed last month after winning a strong response.

Mr Looney described ScotWind as a very important licensing round. Regarding BP’s bid, he noted: “We have done a lot of work on it and we want to win it.”

READ MORE: Glasgow-based giant bids for windfarm licences

Mr Looney also noted that BP plans to set up a global offshore monitoring centre in Aberdeen, which he said was a lovely story of a city in transition. After becoming the capital of the North Sea oil and gas business, Aberdeen could play a similar role in the renewables industry.

Mr Looney said the city could be an important centre for BP for many years.

BP’s chief financial officer, Murray Auchincloss, said the group expects to be able to generate returns of eight to ten per cent on the investments it makes in windfarms.

In February BP was awarded acreage in the latest windfarm round covering the waters off England, Wales and Northern Ireland, with Germany’s EnBW.

READ MORE: BP makes big bet on windfarm acreage off Liverpool as crude price hits year high 

That month Mr Looney noted the North Sea is one of eight key oil and gas basins on which the company plans to focus.

The company employs around 1,000 people in the North Sea business run from Aberdeen.

Mr Looney told analysts that BP had noted not ruled out oil and gas acquisitions.

“There’s not a strategic no to doing oil and gas deals,” he said noting that the company wants to high-grade its portfolio. This will involve focusing investment on higher margin barrels and those that have the lowest emissions intensity.

BP declared a quarterly dividend of 5.46 cents per share, up from 5.25 cents per share for the first three months of this year.

Shares in the group closed up 6%, 16.35p, at 306.1p.