BP posts surprise fall in third-quarter profits to $3.3B
Oct. 31 (UPI) -- British oil giant BP reported sharply lower-than-expected third-quarter profits Tuesday.
The company said earnings fell to $3.3 billion, down 60% over the same period in 2022, and well below the $4 billion it had been expected to make.
The weaker performance came despite cash flow rising to $8.75 billion, up from $8.29 billion in the third quarter of 2022, but profit was up from the $2.6 billion the company made in the second quarter, BP said in a news release.
The company made $8.15 billion profit in the third quarter of 2022.
Shares in BP were off 27 cents at $6.15, down 4%, in early trade on the London Stock Exchange. However, the stock price remains up 4.5% year-to-date.
With oil prices sharply lower than their July 2022 peak of $122 a barrel, the company said higher refining margins, refineries being offline for less time and a "very strong" oil trading result had helped it deliver a "solid" quarter despite weak performances from its gas marketing and trading divisions.
"This has been a solid quarter supported by strong underlying operational performance demonstrating our continued focus on delivery," said interim CEO Murray Auchincloss. "Momentum continues to build across our businesses, with recent start-ups including Tangguh Expansion, bpx energy's 'Bingo' central processing facility and Archaea Energy's first modular biogas plant in Indiana.
"As we laid out at our investor update in Denver earlier this month, we remain committed to executing our strategy, expect to grow earnings through this decade and on track to deliver strong returns for our shareholders."
The results are the first since the company's embattled CEO Bernard Looney abruptly quit in September -- apparently over his failure to disclose the nature of romantic relationships with female colleagues, prior to becoming BP head in 2020, to an internal investigation into his conduct.
However, he was also under pressure from shareholders over plans to cut production by 2030 to meet climate change commitments on one side and on the other from environmental groups when he announced the offramp plan would be implemented more slowly than he first proposed.
That was followed by the unexpected departure of BP America CEO Dave Lawler on Sept. 30, a little more than two weeks after Looney.
Looking forward to the October-to-December quarter, BP said it expected oil prices to be supported by tighter OPEC+ production quotas and a continued rebound in demand.
The weather, how well demand rebounds in Europe and China and geopolitical factors will dictate European gas and Asian LNG prices. Higher than usual stocks and higher production in the United States should mitigate price volatility but weather was also a risk there.
However, BP warned that the important contribution from refining would take a hit from what it predicts will be significantly lower refining industry margins than in the third quarter.
