BP quarterly profits lowest since pandemic on dip in oil prices

Weaker refining margins and a dip in oil prices have hit profits at BP, which have fallen to their lowest quarterly level since the pandemic.
Adjusted profits for the FTSE 100 oil major declined to $2.3 billion for the September quarter from $3.3 billion a year earlier, although they were ahead of a consensus forecast of $2.05 billion.
Lower refinery margins on products including diesel and jet fuel and a writedown against the value of the Gelsenkirchen refinery in western Germany hit earnings by $358 million and pushed adjusted profits for its customers and products division down to $381 million, from $2.1 billion a year earlier.
BP pumped 2.4 million barrels of oil equivalent a day in the third quarter, 3 per cent higher than a year earlier. Brent crude, the international benchmark, declined to $80.34 a barrel during the quarter, down from $86.75 a year earlier. UK gas prices fell to 81.77p per therm, from 82.03 per therm.
The group pressed ahead with plans to return a further $1.75 billion in share buybacks before the end of the year. In February, the company set a target to return $14 billion through repurchasing shares by the end of next year. It also declared a third-quarter dividend of 8 cents per share, in line with the previous three months.
Murray Auchincloss, the BP chief executive, has been working to close the valuation gap with rivals in the oil and gas sector. He said the group was progressing towards becoming a “simpler, more focused and higher value” business.
The Canadian added: “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.”
Expectations have been raised that the group will drop a target set under Bernard Looney, its previous chief executive, to reduce oil and gas output by 25 per cent by the end of the decade, compared with 2019 levels. The goal had already been scaled back last year from a previous target to reduce production by 40 per cent.
Auchincloss, who was appointed to the top job in January, has already 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. So far the company has identified $500 million in cost savings.
The company has also stopped bidding on new offshore wind licences. Instead, resources have been focused on existing projects in the UK and Germany where development is already under way.
The shares, down 1 per cent, or 4p, to 395p on Tuesday, have underperformed Shell, its London-listed peer, and American counterparts in the oil and gas sector, falling 24 per cent over the past 12 months.