BP plots further cost cuts as boss intensifies profitability push

Daily Mail​

3 days ago

BP could sell off more assets in a fresh costs review, as the energy giant continues its push to improve profitability.
Chief executive Murray Auchincloss, who earlier this year announced plans to sell $20billion of assets by 2027, said BP would 'conduct a thorough review' of its portfolio to maximise shareholder value.
It came as BP told shareholders its second quarter profits smashed expectations with adjusted net income of $2.4billion, down 14 per cent year-on-year but well ahead of the $1.8billion forecast by analysts.
BP is under pressure to boost profitability and investor returns after a protracted period of share price underperformance, which has sparked rumours rival Shell could launch an opportunistic takeover bid.
The group, which is re-embracing fossil fuels in an effort to revive underperforming shares after a renewables push, told investors on Monday it has made its largest oil and gas discovery in 25 years in Brazil's Santos basin.
Auchincloss said BP has brought five new oil and gas major projects onstream, sanctioned four more and made 10 exploration discoveries so far this year.
BP has also achieved $1.7billion of its goal of cutting $4billion to $5billion in costs from 2023 levels by the end of 2027.
It has made $3billion in divestments out of its $3billion to $4billion target for 2023.
Auchincloss said: 'We will conduct a thorough review of our portfolio of businesses to ensure we are maximizing shareholder value moving forward - allocating capital effectively. We are also initiating a further cost review.
'BP can and will do better for its investors.'
BP's second quarter performance was driven by a 33 per cent profit increase in its customers and products business, thanks to strong oil trading results, higher volumes and strong growth within its Castrol lubricants unit - which it also plans to sell.
The group on Tuesday also lifted its quarterly dividend to 8.32 cents from 8 cents in the first quarter, and kept the pace of its share buyback programme.
It plans to buy back an additional $750million worth of shares by the time of its third-quarter results.
Auchincloss said: 'We remain fully focused on delivering safely and reliably, investing with discipline and driving performance improvement - all in service of growing cash flow, returns and long-term shareholder value.'
BP shares were up 1.4 per cent to 411.55p in early trading, bringing 2025 gains to 2.5 per cent.
Lale Akoner, global market analyst at eToro, said: 'Overall, we think that this quarter is a sign of regained discipline and strategic clarity.
'After years of mixed signals, BP is now showing it can balance near-term performance with long-term potential.
'The focus on execution, capital discipline, and shareholder returns is paying off. If it can keep this up, sentiment around the stock and the story could shift meaningfully.'