BP reported fourth-quarter profit ahead of expectations despite the fact that oil and gas prices have fallen from their highs at the start of the Ukraine war.
The FTSE 100 Oil and Gas group reported profits in the final quarter of last year of $2.99 billion, beating analyst expectations by $2.77 billion. This was boosted by the performance of the gas traders.
These figures are a boost to Murray Auchincloss who was appointed to his permanent top position in January. He is trying to rebuild investor trust after Bernard Looney’s abrupt resignation last year.
The profits for the entire year dropped to $13.8 billion, from a record-breaking $27.7 in 2022 when oil and natural gas prices soared due to fears of shortages after Russia’s invasion.
The group increased its target for shareholder returns from 60% to 80% of excess cashflow. The oil major announced that it would continue with another $1.75billion share buyback before the end March. It also committed to an additional $3.5billion in share repurchases during the first half of the year.
Brent crude, which is the global benchmark oil price, was $83.34 a barrel on average in the fourth quarter. This compares to $88.87 for the same period of 2022. Gas prices fell more dramatically, with the UK benchmark falling to 98.68p per therm from 166.54p in the fourth quarter 2022.
BP announced a one-off, pre-tax write-down of $600 million on its American offshore projects after agreeing with Equinor to dissolve a US Wind Partnership and take control of the Beacon Wind Project off New York. Equinor has taken full ownership of the second joint venture project.
Auchincloss (53), in his first results, claimed that the group has “real momentum” when it comes to delivery.
He said: “As we move forward, our destination is unchanged – from integrated oil company into integrated energy company – focused on increasing the value of BP.” “We’re confident in our strategy and on delivering a more focused, simpler and higher-valued company. We are committed to growing the long-term value of BP for our shareholders.”
Bluebell Capital (a hedge fund based in London) wrote to Helge Lind, the chairman at BP in October, urging him to abandon a plan of reducing oil production and reducing investment in renewables. This was shortly after Bluebell Capital had taken a stake in the company.
Auchincloss was chief financial officer between 2020 and the time he took over as interim CEO after Looney left. The Canadian was a close ally to Looney, having worked with him closely in BP’s Oil and Gas Production Division.
Shares of BP rose by 5 per cent or 23p to 477p
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