bp reports weakest quarterly profits in four years Amid Falling Oil Prices

In an article published by The Guardian, bp is navigating a challenging landscape as it reports its weakest quarterly profits in nearly four years, driven by falling global oil prices and decreased refining margins. 

The oil company reported underlying profits of nearly $2.3 billion for the period from July to September, marking its weakest quarterly result since the last quarter of 2020, when oil prices plummeted due to Covid travel restrictions. While this figure represents a decrease of about 28 per cent compared to the previous year, it surpassed the expectations of City analysts, who had estimated that bp would generate just over $2 billion in underlying profit for the same period.

bp's chief executive, Murray Auchincloss, announced the better-than-expected earnings along with plans to continue its quarterly share buybacks at $1.75 billion despite the profit decline. Auchincloss, who became bp's CEO in January this year, is facing pressure to reassure shareholders about his ability to enhance the company's value, which has fallen behind its oil industry competitors in recent years.  

The company anticipates maintaining shareholder distributions even after increasing its net debt by $1.7 billion over the last quarter, bringing it to $24.27 billion—the highest level since early 2022. bp has also outlined plans to reduce cash costs by at least $2 billion by the end of 2026 compared to 2023. Additionally, Auchincloss stated that the company intends to keep investing in fossil fuels while also focusing on the “opportunity afforded by the energy transition.” 

The bp CEO faced backlash from environmental groups earlier this month after it was revealed that he has abandoned a target set by his predecessor, Bernard Looney, to reduce the company's oil and gas output by 25 per cent by 2030. This move is part of a strategy to regain the confidence of fossil fuel investors. Auchincloss stated that the company has made “significant progress” since outlining its new priorities earlier this year to create a “simpler, more focused and higher value” organisation.  

By Naila Huseynova