Profits for BP have beaten expectations by growing ahead of last year as the oil major extended its share buyback programme.
The FTSE 100 oil and gas group reported profits of $2.76 billion in the second quarter of the year, up from $2.59 billion a year earlier and comfortably ahead of a market consensus forecast of $2.54 billion.
The group rewarded shareholders with a further $1.75 billion in share buybacks and announced plans to repurchase another $3.5 billion in shares during the second half of the year. It pledged in February to return a total of at least $14 billion by the end of next year. A quarterly dividend of 8 cents a share was also declared.
The result was boosted by higher oil production volumes and a lower tax bill, which offset a weaker performance for its chemicals operations and an “average” gas marketing and trading result following an exceptional performance last year.
Alongside the increase in returns, net debt was reduced to $22.6 billion, from $23.7 billion a year earlier.
The figures are a boost for Murray Auchincloss, 53, who was appointed permanently to the top job in January, as he attempts to rebuild investor confidence following the abrupt resignation of Bernard Looney last year.
Murray Auchincloss said he was committed “to delivering as a simpler, more focused and higher-value company”
AMR ALFIKY/REUTERS
Shares in BP have lagged both domestic and international rivals, having declined by 4 per cent since the start of this year. Auchincloss has set out plans to save at least $2 billion in costs by the end of 2026 and has frozen external hiring, except for frontline roles, well-site leaders and other safety-critical roles. Savings of about $500 million have so far been identified, the company said.
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Auchincloss said he was committed “to delivering as a simpler, more focused and higher-value company. This all supports growing returns for shareholders, as we have announced today.”
BP disclosed a $900 million writedown against the value of the Gelsenkirchen refinery in Germany, as it scales down the facility before an anticipated decline in demand for some petrochemical products.
The performance of its products business continued to be affected by weaker refinery margins on products including diesel and jet fuel, and at its Whiting refinery near Chicago.
The disclosure came two days before results from Shell, which is expected to report an impairment of up to $2 billion against the sale of its Singapore refineries and pausing work on its Dutch biofuel plant, when it delivers interim results this week.
Brent crude, the benchmark global oil price, averaged $84.97 per barrel in the second quarter, up from $78.05 in the same period in 2022. Gas prices declined, with the UK benchmark price falling to 76.57p a therm, from 83.18p a therm a year earlier.