BP warns of fourth-quarter profit hit caused by weaker production
British oil and gas company postpones capital markets day because of CEO’s medical procedure
14 January 2025 - 14:55
byArunima Kumar and Ron Bousso
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London — BP warned on Tuesday that its fourth-quarter results would be hit by weaker oil and gas production, refining margins and trading, while also delaying a highly-anticipated investor day due to a medical procedure undergone by CEO Murray Auchincloss.
The British company said Auchincloss would be back in the office in February after undergoing a planned medical procedure from which he is recovering well. The planned February 11 capital markets day in New York will now be held on February 26 in London.
The delay is a further hiccup for Auchincloss, who has struggled to steady the company amid investor concerns over strategy and following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees.
Shares in the group, which have underperformed those of most of its rivals over the past year, were down nearly 3% in morning trade. BP will still publish its fourth-quarter and full-year results as planned on February 11.
Auchincloss is expected at the capital markets event to unveil his strategy for the company, after sharply slowing down investments in renewables and low-carbon energy and focusing on higher-return oil and gas projects since taking office in January last year.
“We remain of the view that the incumbent board do not have the courage to change direction and revitalise the strategy,” said Panmure Liberum analyst Ashley Kelty.
“The pressure on CEO Auchincloss will only continue to build unless he shows that he can be his own man and step out of Bernard Looney’s shadow.”
BP said a drop in refining margins and the impact of turnaround and maintenance activity would result in an up to $300-million drop in profit quarter-on-quarter.
The group could see a further $200m to $400m reduction in its oil production and operations unit, it said, and it also expects a decline in production.
Global gasoline and diesel demand has fallen short of expectations, while the launch of new oil refineries in Asia and Africa has resulted in oversupply.
The group’s third-quarter underlying replacement cost profit — its definition of net income — was already the weakest since the fourth quarter of 2020, when profits collapsed during the pandemic, at $2.27bn.
Last week, Shell warned of weakness across multiple divisions, while ExxonMobil signalled a $1.75bn drop in fourth-quarter earnings.
BP expects its net debt at end-December to have fallen quarter-on-quarter, while exploration write-offs are seen falling by $100m to $200m.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
BP warns of fourth-quarter profit hit caused by weaker production
British oil and gas company postpones capital markets day because of CEO’s medical procedure
London — BP warned on Tuesday that its fourth-quarter results would be hit by weaker oil and gas production, refining margins and trading, while also delaying a highly-anticipated investor day due to a medical procedure undergone by CEO Murray Auchincloss.
The British company said Auchincloss would be back in the office in February after undergoing a planned medical procedure from which he is recovering well. The planned February 11 capital markets day in New York will now be held on February 26 in London.
The delay is a further hiccup for Auchincloss, who has struggled to steady the company amid investor concerns over strategy and following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees.
Shares in the group, which have underperformed those of most of its rivals over the past year, were down nearly 3% in morning trade. BP will still publish its fourth-quarter and full-year results as planned on February 11.
Auchincloss is expected at the capital markets event to unveil his strategy for the company, after sharply slowing down investments in renewables and low-carbon energy and focusing on higher-return oil and gas projects since taking office in January last year.
“We remain of the view that the incumbent board do not have the courage to change direction and revitalise the strategy,” said Panmure Liberum analyst Ashley Kelty.
“The pressure on CEO Auchincloss will only continue to build unless he shows that he can be his own man and step out of Bernard Looney’s shadow.”
BP said a drop in refining margins and the impact of turnaround and maintenance activity would result in an up to $300-million drop in profit quarter-on-quarter.
The group could see a further $200m to $400m reduction in its oil production and operations unit, it said, and it also expects a decline in production.
Global gasoline and diesel demand has fallen short of expectations, while the launch of new oil refineries in Asia and Africa has resulted in oversupply.
The group’s third-quarter underlying replacement cost profit — its definition of net income — was already the weakest since the fourth quarter of 2020, when profits collapsed during the pandemic, at $2.27bn.
Last week, Shell warned of weakness across multiple divisions, while ExxonMobil signalled a $1.75bn drop in fourth-quarter earnings.
BP expects its net debt at end-December to have fallen quarter-on-quarter, while exploration write-offs are seen falling by $100m to $200m.
Reuters
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