BP Shifts Focus as Cost Cuts Announced and Profits Beat Expectations

BP is rolling out a fresh wave of cost-cutting measures, despite outperforming analyst profit forecasts, as it seeks to boost returns for shareholders and quell activist investor demands. The FTSE 100 oil and gas giant disclosed a jump in quarterly profits to $2.35bn (£1.77bn) for the period between April and June—15% lower than the exceptional results from a year ago, when energy prices soared in the wake of the Ukraine conflict, yet well ahead of the $1.38bn seen in the previous quarter and sharply above the expected $1.8bn.

Murray Auchincloss, BP’s chief executive, hailed the company’s solid operational and strategic performance, noting that crude prices are now around 10% lower compared to the first quarter, with Brent crude trading at just under $66 per barrel, down from last year’s $80 average. BP has introduced five major new oil and gas projects, sanctioned four more, and notched up ten exploration discoveries so far this year. Shareholders will see a 4% rise in dividend to 8.32 cents per share in the first quarter, a move reflecting management’s conviction to deliver greater value.

BP is also preparing for a full business review as Albert Manifold—the former CRH boss—joins as chair in September, replacing Helge Lund. In advance of this shift at the top, BP confirmed it would pare back its green investment programme by more than $5bn, following a strategic shift after cost overruns rocked the offshore wind industry. Rival oil majors capitalised on surging fossil fuel prices during this period, a move BP has resolved to emulate as it pivots away from renewables and doubles down on oil and gas.

Pressure from Elliott Management, a prominent activist hedge fund with a growing stake in BP, has accelerated these changes. The investor argues that BP’s operating costs remain too high relative to peers like Shell, pointing to BP’s larger workforce despite lower revenues and valuation. The incoming leadership team is expected to address these concerns by driving deeper efficiencies and responding decisively to shareholder discontent.

A recent oil and gas discovery in Brazil’s Santos basin marks BP’s tenth exploration find of the year and could be the group’s most significant since the Shah Deniz gasfield in 1999. As BP increasingly distances itself from the net zero ambitions set under former leadership, the company appears to be repositioning to remain competitive in a lower-carbon yet persistently fossil-focused energy market.

With share prices still trailing the sector, the coming months will see BP’s new strategy put to the test as it confronts economic headwinds, investor scepticism, and the ongoing challenge of balancing transition plans with traditional profit drivers.