London — Oil major BP reported a less-than-expected fall in third-quarter underlying profit on Tuesday thanks to a strong performance at all divisions, led by refining, that helped offset the impact of lower crude prices.
However, there was no update on the closely watched sale process for its Castrol lubricants unit, the centrepiece of its $20bn asset-sale drive to slash its debt pile.
After an ill-fated foray into renewables under previous CEO Bernard Looney, BP has vowed to increase profitability and cut costs while reallocating spending to focus on oil and gas.
In August, BP undertook a review of how best to develop and monetise its oil and gas production assets, and when chair Albert Manifold took up his post last month, he called for a deeper reshaping of BP’s portfolio to increase profitability.
In May, Reuters reported that BP had started the sale of Castrol, citing sources
“Interest is strong. We’re progressing well, and we’ll update you when we’re ready,” CEO Murray Auchincloss said.
BP said it made an underlying replacement cost profit, or adjusted net income, of $2.21bn, compared with analysts’ average estimate of $2.02bn in a company-provided survey and $2.27bn a year ago.
All of BP’s main units beat consensus forecasts. The customers and products division, boosted by higher refining margins, reported a profit of $1.7bn, outperforming last year’s $381mn, when the group experienced a big outage at its refinery in Whiting, Indiana.
The customers division delivered its strongest third-quarter results on record, BP said, adding that its refining availability was almost 97%, the best quarter in 20 years.
BP shares erased earlier gains and were down 2.6% at 2.25pm SA time, in line with the MSCI Europe Energy index.
Share buybacks continue apace
BP maintained the pace of its quarterly share buyback programme at $750m through the third quarter.
Auchincloss said he expected completed or announced asset sale agreements would reach about $5bn this year, helped by selling minority stakes in its US onshore pipelines announced on Monday.
Third-quarter profit at rivals Saudi Aramco, Shell and TotalEnergies all fell as average Brent crude oil prices dropped 13% year on year over the three months, though trading results, higher refining margins and higher output cushioned the impact.
BP’s quarterly operating cash flow was $7.8bn, above last year’s $6.8bn. As previously guided, net debt was steady at about $26bn compared to the previous quarter.
BP aims to cut its net debt to between $14bn and $18bn by the end of 2027.
Reuters
