Broker snap: BP buyback higher than expected, says Canaccord

Canaccord Genuity has kept its 'hold' rating and 500p target price for oil giant BP but has said that Friday's announced share buyback is bigger than the market had expected.Following the closure of the sale of BP's 50% stake in TNK-BP to Rosneft, the oil group announced a share buyback of up to $8.0bn, returning an amount equivalent to the value of the company's original investment. Canaccord said that the market was expecting a buyback of $5-6bn."Our own published forecasts have buybacks of $6bn this year and $2bn next year - this looks broadly consistent with BP's statement given that it expects the total $8bn of buybacks to take 12-18 months to conclude. As a result, we see no reason at this stage to alter our forecasts or our view."BP received a net total of $12.5bn in cash from the sale, along with an 18.5% stake in Rosneft. The two parties also said they are studying a series of potential joint-venture projects, both in offshore Arctic exploration and in development of west Siberian tight oil resources."Nothing firm has yet been announced, but these types of projects are the sort of upside that we have been expecting to flow from BP's closer alignment with Rosneft," the broker said.Canaccord believes that BP's investment in Rosneft offers access to "much better growth opportunities" than its interest in TNK-BP, though the cash contribution is significantly lower meaning that its contribution to dividends has reduced.Shares were up 2.49% at 460.6p by 10:43.BC