BP promises to cut costs as profit misses forecast

BP has promised to trim its costs by $2 billion (€1.85 billion) by the end of 2026 as it revealed lower than expected first-quarter profits of $2.7 billion, compared with a consensus forecast of $2.9 billion.

The UK-listed oil major said its performance had been “resilient”, despite lower oil and gas prices compared with last year, when the after-effects of Europe’s energy crisis were still being felt.

BP said it would maintain its quarterly pace of share buy-backs at $1.75 billion and left its dividend unchanged, but gave no guidance for the rest of the year.

In February, it pledged to return at least $14 billion to shareholders by the end of 2025, as long as oil and gas prices remained broadly stable.

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Murray Auchincloss, who took over from Bernard Looney as chief executive in January, said that BP’s “controllable” cash costs were about $22.6 billion in 2023 and that savings would be made in “all parts of our business”.

He said BP would focus its portfolio, push ahead with digital transformation and work with suppliers to take out waste.

He noted that BP had previously cut $3 billion of cash costs between 2020 and 2022 but that since then they had risen about 8 per cent compared with 2019 levels.

The company’s operating cash flow was $7.4 billion for the quarter, in line with expectations, as was a rise in net debt to $24 billion from $20.9 billion at the end of the fourth quarter.

BP shares were broadly flat in early trading in London at 509p. – Copyright The Financial Times Limited 2024