BP Chief Signals Resilience Amid Oil Price Volatility and Strategic Overhaul

The chief executive of BP has asserted his confidence in delivering a long-awaited turnaround for the energy giant, even if oil prices decline further. After a year marked by a strategic shift back towards fossil fuel production, BP has managed to outperform analyst expectations despite challenging market conditions.

The FTSE 100 company achieved adjusted profits of $2.2 billion in the third quarter, surpassing the City’s consensus forecast of $2.02 billion. While profits dipped marginally from $2.3 billion in the same period last year, higher oil and gas output coupled with a recovery in refining margins have provided support. Annual oil and gas production remained largely stable at 2.36 million barrels of oil equivalent per day. However, the average realised Brent Crude price fell by 14 per cent to $69.13 per barrel, reflecting global pressures on hydrocarbons.

Chief executive Murray Auchincloss underscored BP’s flexibility in the face of downside price risks. Highlighting robust refining operations, which benefit from lower crude prices, and a strong trading arm, he stated that capital flexibility remains intact should further volatility occur. BP’s priorities also include managing its substantial debt, supporting $14.5 billion of project expenditure in the year, and maintaining its commitment to return 30 to 40 per cent of operational cash flow to shareholders.

Amid concerns that the OPEC Plus group’s unwinding of production cuts could lead to oversupply, the outlook remains uncertain. Auchincloss expects oil demand to grow by around 1 per cent this year and the next, though he acknowledged that supply dynamics are “very difficult to predict.”

BP will continue with a $750 million share buyback programme before year end and has lifted its quarterly dividend to 8.32 cents per share, up from 8. Shareholders have witnessed a positive trajectory with shares rising 15.3 per cent since the beginning of the year and closing 1.3 per cent higher at 453.25p in London on Tuesday.

This year, Auchincloss reset the company’s approach—dropping targets to cut fossil fuel production and setting a target to raise $20 billion from divestments by 2027. BP’s disposals are on track to top $4 billion for the year, boosted by the recent $1.5 billion sale of minority stakes in American pipeline assets. While the sale of its Castrol lubricants business remains pending, Auchincloss reported “lots of interest” since the process began in May and expressed no concerns over meeting BP’s $20 billion divestment or $14 to $18 billion debt reduction ambitions.

BP’s outlook has also been lifted by news of a major oil find off Brazil’s coast and a favourable arbitration outcome against American LNG producer Venture Global, which could result in substantial damages. The recent strategic U-turn comes after activist investor Elliott Investment Management acquired a five per cent stake in BP, intensifying scrutiny of its direction. As BP navigates changing market realities, its leadership maintains confidence in sustaining performance, preserving financial strength and returning value to shareholders.