29th Oct 2024 09:35
(Alliance News) - BP PLC on Tuesday said profit fell in the third quarter of 2024, due to to less profitable refining activities and weakening oil prices.
The London-based oil major said replacement cost profit for the third quarter that ended September 30 was USD1.11 billion, falling 70% from USD3.65 billion last year. RC profit for the first nine months of 2024 plummeted 82% to USD2.70 billion from USD14.66 billion the year before.
Pretax profit tumbled 81% to USD1.40 billion in the third quarter from USD7.31 billion a year before, and dropped 68% in the first nine months of the year to USD7.29 billion from USD22.65 billion.
However, though underlying RC profit fell 31% to USD2.27 billion from USD3.29 billion, it outperformed the company-compiled market consensus for USD2.05 billion in the quarter.
The profit decline was due to "weaker realised refining margins, a weak oil trading result and lower liquid realisations, partly offset by higher gas realisations," BP explained. The gas marketing and trading result for the quarter was "average".
BP earlier this month warned that its earnings would take a hit, as oil prices fell due to concerns over Chinese demand and the prospect of higher crude production in 2025.
The average realised oil price per barrel for the three-month period was USD74.80, 2.5% lower than USD76.69 per barrel a year prior. Brent averaged USD80.34 a barrel, down 5.3% from USD84.97 in the second quarter and falling 2.1% from USD86.75 last year.
Total revenue for the third quarter was 11% lower to USD48.33 billion from USD54.02 billion, whilst total revenue for the first three quarters of the year to date fell 8.7% to USD146.54 billion from USD160.45 billion.
BP declared an interim dividend of 8.00 cents per share, up 10% from 7.27 cents per share in the third quarter last year.
Chief Executive Officer Murray Auchincloss said: "We have made significant progress since we laid out our six priorities earlier this year to make BP simpler, more focused and higher value. In oil and gas, we see the potential to grow through the decade with a focus on value over volume. We also have a deep belief in the opportunity afforded by the energy transition - we have established a number of leading positions and will continue high-grading out investments to ensure they compete with the rest of our business. I am absolutely clear that the actions we are taking with grow the value of BP."
BP also on Tuesday announced the launch of a share buyback programme, planning to repurchase USD1.75 billion in shares. This is part of its previously announced USD3.5 billion commitment to share buybacks for the second half of 2024. It expects to announce a further USD1.75 billion share buyback in the fourth quarter of 2024.
Looking ahead, BP expects fourth-quarter upstream production to be lower than its third-quarter result of 2.4 million barrels of oil equivalent per day, but anticipates full-year upstream production to be slightly higher than in 2023.
In its customers & products business, it expects lower volumes in the fourth quarter compared to the third quarter, and said fuels margins will remain sensitive to movements in the cost of supply. BP expects realised refining margins in its products to remain low in the fourth quarter and "to continue to remain sensitive to relative movements in product cracks".
Shares in BP were down 1.4% at 393.45 pence each in London on Tuesday morning. The wider FTSE 100 index was up 0.5%.
By Emily Parsons, Alliance News reporter
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