Oil giant BP posts £2bn quarterly profit but falls below expectations

The FTSE 100 giant posted underlying replacement cost profit – the firm’s preferred measure – of 2.59 billion US dollars (£2bn) for the second quarter of 2023.

That compares with an 8.45 billion dollar (£6.6bn) profit over the same period last year, when it was boosted by a surge in oil and gas prices.

BP blamed the decline in profits on planned maintenance work and lower margins in its refining business.

It comes a week after rival oil major Shell also delivered weaker-than-expected profits for its latest quarter.

BP said the performance takes its total profits for the first half of 2023 to 7.5 billion dollars (£5.9bn).

The company added that its North Sea business paid 970 million dollars (£755m) in tax over the half-year, with 460 million dollars (£358m) due to the energy profit levy windfall tax.

The update comes a day after Prime Minister Rishi Sunak insisted he wants to “max out” developments in the North Sea and claimed Labour’s refusal to support new oil and gas fields would be “bad for the British economy”.

BP chief executive Bernard Looney said it was “another quarter of performing while transforming”.

He added: “Our underlying performance was resilient with good

cash delivery, during a period of significant turnaround activity and weaker margins in our refining business.

"We’re delivering our strategy at pace. We’ve started up two major oil and gas projects to help keep energy flowing today and we’re accelerating our transformation through our five transition growth engines.

"And we’re delivering for shareholders growing our dividend and announcing a further share buyback. This reflects confidence in our performance and the outlook for cash flow, as well as continued progress reducing our share count.”

The statement added: “Looking ahead, BP expects third-quarter 2023 reported upstream production to be broadly flat compared to the second quarter of 2023.

"Within this, BP expects production from oil production and operations to be lower and gas and low carbon energy to be higher, including the effects of seasonal maintenance in higher margin regions offset by major project delivery.

“In its customers business, BP expects seasonally higher volumes. In refining, BP expects a lower level of turnaround and maintenance activity compared to the second quarter.”

Murray Auchincloss, the chief financial officer, said: “In the second quarter BP has continued to execute against its unchanged financial frame. We have increased our dividend by 10 per cent; we are investing with discipline to advance our strategy and we are committed to returning 60 per cent of 2023 surplus cash flow through share buybacks with a further $1.5bn announced for the second quarter.”