BP to Slash Costs by $2 Billion as Profits Fall Short

Oil giant BP has unveiled a plan to slash $2 billion in costs by the end of 2026, following a quarter where profits fell below analyst forecasts. The company reported underlying profits of $2.7 billion for the first quarter of 2024, a decline from $5 billion in the same period last year. Lower gas prices and an unplanned US refinery outage contributed to the weaker results.

Despite the shortfall, BP will continue its share buyback program, repurchasing $3.5 billion worth of shares in the first half of the year. Since the start of the Ukraine conflict, which triggered an energy price surge, BP has paid $27.4 billion to shareholders, according to Global Witness analysis.

BP CEO Murray Auchincloss outlined the cost-saving initiative, which aims to streamline operations by prioritising high-yield projects. Auchincloss indicated that low-carbon energy investments, currently budgeted at $4–$6 billion annually, could be adjusted based on returns.

Auchincloss, the former CFO, is focused on boosting BP's market value, which has lagged since its "net zero" strategy was introduced. He emphasises a "pragmatic" approach to balancing green goals and shareholder value. Despite speculation about oil companies abandoning the London Stock Exchange, Auchincloss asserts that BP will remain, prioritising safety and performance to improve its share price.