BP’s first-quarter underlying replacement cost profit, used as a proxy for net profit, came in at $2.6 billion. Analysts had expected BP to report first-quarter profit of $1.4 billion. BP CEO Bernard Looney joined "Squawk Box" on Tuesday to discuss the results. For access to live and exclusive video from CNBC subscribe to CNBC PRO: [ Ссылка ]

British energy major BP on Tuesday reported better-than-expected earnings for the first quarter, following a period of stronger commodity prices and a brighter demand outlook.

It comes as oil and gas majors seek to prove to investors that they have gained a more stable footing amid the ongoing coronavirus crisis.

BP’s first-quarter underlying replacement cost profit, used as a proxy for net profit, came in at $2.6 billion. That compared with a profit of $115 million in the fourth quarter and $791 million for the first quarter of 2020.

Analysts had expected BP to report first-quarter profit of $1.4 billion, according to Refinitiv.

The London-based energy giant said the result was driven by “exceptional” gas marketing and trading performance, “significantly” higher oil prices and stronger refining margins.

Net debt fell $5.6 billion to $33.3 billion at the end of the first three months of the year, meaning BP hit its target of reducing net debt to $35 billion. The company said it would now retire this goal, subject to maintaining a strong investment grade credit rating.

Looking ahead, BP said it intends to resume share buybacks at a cost of around $500 million in the second quarter.

“Overall, a very strong quarter for the company,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.

“It has been a year of such uncertainty for the world and for the company. There have been many, many questions, of course, and that’s understandable but I think today’s results really answer many of those questions,” Looney said.

“It shows that it is possible to do two things at once. It is possible to deliver our shareholders with competitive cash returns and at the same time transition the company to a lower carbon future.”

Shares of BP rose over 2% during early morning deals in London. The firm’s share price has climbed more than 16% year-to-date.

The oil and gas industry was sent into a tailspin last year as the Covid-19 pandemic coincided with a historic demand shock, plunging commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job cuts.

BP reported its first full-year net loss in a decade in 2020 as the global health crisis took a heavy toll on its business operations, with Looney describing the 12-month period as the “toughest” of his career.

Gulf of Mexico payments

BP said it had generated a surplus cash flow of $1.7 billion in the first quarter after reaching its net debt target a year ahead of schedule.

“The market could not have asked for more from BP with these results,” said Steve Clayton, manager of the Hargreaves Lansdown Select UK Income Shares fund — which has a position in BP.

“The company has seized the opportunity of a recovery in energy prices to pay down its debts, leaving it well set for the future when conditions might not be so favorable,” he continued.

“The crucial question, as yet unanswered is what returns will BP be able to achieve from its growing portfolio of green energy investments. In the meantime, investors can look to a dividend yield of 5%.”

During the second three months of the year, the company warned cash flow was likely to be impacted by a $1.2 billion pre-tax annual Gulf of Mexico oil spill payment, further severance payments and a smaller-than-expected improvement in refining margins. As a result, BP said it anticipated a cash flow deficit in the second quarter.

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