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BP reported its lowest quarterly profit since the onset of the Covid-19 pandemic, with reduced oil prices and weak refining margins impacting its performance.
The FTSE 100 energy giant generated underlying profits of $2.27bn in the third quarter, surpassing the average analyst estimate of $2.05bn. However, this figure was lower than the $2.8bn recorded in the second quarter and the $3.3bn reported in the same period in 2023.
The 30% year-on-year decline in earnings will continue to put pressure on CEO Murray Auchincloss, who has committed to making BP “simpler, more focused, and of higher value.” Despite his efforts, the company’s performance has been trailing behind its competitors in 2024.
Auchincloss officially took over from Bernard Looney in January. The Canadian executive has affirmed that Looney’s strategy to transition BP from an oil and gas producer to an integrated energy provider offering a wider range of products remains unchanged. However, he has placed more emphasis on BP’s traditional fossil fuel business compared to his predecessor.
As the first former CFO to lead BP in its 115-year history, Auchincloss has also vowed to cut costs, with a promise of at least $2bn in savings by the end of 2026.
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Despite the decrease in earnings, BP announced on Tuesday that it would repurchase an additional $1.75bn of shares, staying true to its commitment to buy back $7bn of stock this year.
The company has pledged to return a minimum of 80% of excess cash flow to shareholders through buybacks in 2024 and 2025.