Billions for BP shareholders despite profit fall

SCANDAL-HIt BP’s profits halved last year – but it still raked in £11bn.

the FtSE 100 energy company yesterday said profit tumbled from a record £22bn in 2022, when the war in ukraine had pushed up oil and gas prices.

But full-year earnings were still the second-highest figure in a decade and fourth quarter profits were ahead of expectations at £2.4bn.

BP pledged to return more cash to shareholders through buybacks and dividends.

Shares in the London-listed company jumped 5.5pc yesterday.

the results came as a boost for Murray Auchincloss, who officially took over as chief executive from disgraced Bernard Looney last month.

Looney was forced to resign in September after failing to be ‘fully transparent’ about his personal relationships with colleagues. the board later found him guilty of serious misconduct and stripped him of £32m in pay and bonuses. Former finance chief Auchincloss has committed to sticking with Looney’s green transition strategy.

But some shareholders are concerned that BP is undervalued compared to rival Shell and uS giants Exxon Mobil and Chevron.

Activist investor Bluebell Capital Partners last week urged BP to abandon its plans to cut oil and gas production.

BP yesterday boosted investor returns, pressing ahead with a £1.4bn share buyback by the end of March.

It is planning a further £2.8bn buyback in the first half of the year and pledged a total of more than £11bn by the end of 2025.

BP held its dividend at 7.27 cents per share – 10pc more than a year earlier – despite the drop in profit.

Analysts said it would help to ‘reset’ the relationship with investors following the Looney scandal and concerns over the net zero strategy.

Hargreaves Lansdown head of money and markets Susannah Streeter said: ‘the priorities of Murray Auchincloss have been made clear.

‘Although on appointment he pledged that BP’s strategy to transition from an international oil company to an integrated energy company was unchanged, the big share buyback announcement shows the immediate focus is on boosting the share price and returning value to shareholders.’

Jamie Maddock, an energy analyst at wealth manager Quilter Cheviot, said: ‘BP recognises that it has work to do with shareholders given what has happened over the last 12 months, and this is a positive start to the resetting of that relationship.’

Auchincloss said the strategy ‘remains unchanged’ and added that he disagrees with activist investor Bluebell.

‘We just disagree with them, if I’m honest,’ Auchincloss told analysts.

‘We are very happy with the direction of travel, and the shareholders at the top tier are happy as well.’

Shell last week said it made £22bn profit in 2023 – a 30pc year-on-year drop but its second-highest earnings on record.

Exxon Mobil and Chevron reported their second-biggest annual profits in a decade on Friday.