bp has announced its financial results for the second quarter of 2024, highlighting robust performance across its businesses. CEO Murray Auchincloss emphasised the company’s focus on operational efficiency, cost reduction, and strategic initiatives aimed at driving growth and shareholder returns.

Financial Highlights

  • Underlying Replacement Cost Profit: $2.8 billion, up from $2.7 billion in the previous quarter.
  • Reported Loss: $0.1 billion, compared to a profit of $2.3 billion in the first quarter of 2024.
  • Operating Cash Flow: $8.1 billion, reflecting strong financial management and operational performance.
  • Net Debt: Reduced to $22.6 billion, driven by strong operating cash flow.

 

Segment Results

  • Gas & Low Carbon Energy: RC loss before interest and tax of $0.3 billion, down from a profit of $1.0 billion in the previous quarter. The underlying RC profit before interest and tax was $1.4 billion.
  • Oil Production & Operations: RC profit before interest and tax of $3.3 billion, up from $3.1 billion in the previous quarter. The underlying RC profit before interest and tax remained steady at $3.1 billion.
  • Customers & Products: RC loss before interest and tax of $0.1 billion, compared to a profit of $1.0 billion in the previous quarter. The underlying RC profit before interest and tax was $1.1 billion.

 

Operational and Strategic Highlights

  • Kaskida Development: bp’s go-ahead in the Gulf of Mexico demonstrates its commitment to simplifying and focusing its operations.
  • Full Ownership of bp Bunge Bioenergia: Decision to take full ownership while scaling back plans for new biofuels projects aligns with bp’s strategy of delivering higher value.
  • Investment in Gulf of Mexico: Settlement payment and strategic moves reinforce bp’s commitment to enhancing its operational footprint.

 

Cash Flow and Debt Management

Operating cash flow remained strong at $8.1 billion, including a working capital release of $0.5 billion. The reduction in net debt to $22.6 billion highlights bp’s effective financial management.

Shareholder Returns and Capital Distribution

bp announced a dividend per ordinary share of 8 cents for the second quarter. The company completed a $1.75 billion share buyback programme and plans an additional $1.75 billion buyback prior to the third quarter results. bp remains committed to returning at least 80 percent of surplus cash flow to shareholders, aiming for share buybacks of at least $14 billion through 2025.

CEO’s Statement

“Our businesses continue to operate safely and efficiently. We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025. Our recent go-ahead of the Kaskida development in the Gulf of Mexico business, and decision to take full ownership of bp Bunge Bioenergia while scaling back plans for new biofuels projects, demonstrate our commitment to delivering as a simpler, more focused and higher value company. This all supports growing returns for shareholders, as we have announced today,” said Murray Auchincloss, CEO of bp.

Outlook

bp continues to invest with discipline and a returns-focused approach in its transition growth engines and in its oil, gas, and refining businesses. The company expects capital expenditure of around $16 billion per annum for 2024 and 2025, maintaining a strong investment-grade credit rating and targeting further improvements in credit metrics.

In setting the dividend per ordinary share and buyback each quarter, the board will consider factors such as the cumulative level of surplus cash flow, the cash balance point, and maintaining a strong investment-grade credit rating.

For more information visit www.bp.com

30th July 2024