BP has reported its weakest quarterly profits in almost four years after the slump in global oil prices and falling margins in its refinery business.
The oil company revealed underlying profits of almost $2.3bn for the third quarter, its weakest quarterly result since the fourth quarter of 2020 when Covid travel restrictions caused oil prices to crash.
Although the figure was down about 28% year on year, it beat the forecasts of City analysts, who had predicted that the company would make just over $2bn in underlying profit for the July to September period.
The BP chief executive, Murray Auchincloss, revealed the better than expected earnings alongside plans to cut at least $2bn of cash costs from the business by the end of 2026 relative to 2023.
He promised investors that he would continue to grow the value of the company by investing in fossil fuels while focusing on the “opportunity afforded by the energy transition”.
Auchincloss angered green groups earlier this month after reports emerged that he has dropped a target put in place by his predecessor Bernard Looney to reduce BP’s oil and gas output by 25% by 2030 as part of a plan to regain the confidence of fossil fuel investors.
The chief executive added that the company had made “significant progress” since it laid out its new priorities earlier this year to make the company “simpler, more focused and higher value”.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume. We also have a deep belief in the opportunity afforded by the energy transition – we have established a number of leading positions and will continue high grading our investments to ensure they compete with the rest of our business,” he said.
“I am absolutely clear that the actions we are taking will grow the value of BP,” Auchincloss added.
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The company reported underlying profits of $3.2bn in the same period last year, when oil prices averaged $90 a barrel in part due to the 7 October attack in Israel which has ignited ongoing conflict in the region. It was also weaker than the profits it reported in the previous quarter which were $2.8bn.
Global oil prices are now about $71 a barrel despite the tensions in the Middle East and the ongoing war between Russia and Ukraine because of weak demand for crude from China, the world’s largest energy importer.