Oil and gas heavyweight BP has reported its Q1 earnings, which fell short of the forecasted $2.9 billion (£2.3 billion), coming to $2.7 billion (£2.1 billion).
The UK-listed company held its dividend at 7.27 cents per share and, similar to the previous quarter, maintained the rate of its share buyback programme at $1.75 billion (£1.4 billion) over the next three months.
The firm’s definition of net income missed the $2.87 billion consensus forecast from analysts polled by the company. It was also short of a $3 billion (£2.4 billion) profit in the previous quarter and $5 billion (£3.9 billion) a year earlier.
BP also promised to trim its costs by $2 billion (£1.59 billion) by the end of 2026 after missing its Q1 net income expectations.
Oil and gas production was up 2.1% from a year earlier at 2.38 million barrels of oil equivalent per day on the back of field start-ups in Azerbaijan and the United States.
The company’s operating cash flow was $7.4 billion (£5.9 billion) for the quarter, which was in line with expectations, as was a rise in net debt to $24 billion (£19.1 billion) from $20.9 billion (£16.6 billion) at the end of 2023’s fourth quarter.
Murray Auchincloss, who took up the role of CEO in January, said: “We have delivered another resilient quarter financially and continued to make progress on our strategy. Oil production was up, and our ACE platform in the Caspian is now producing.
“We are simplifying and reducing complexity across bp and plan to deliver at least $2 billion of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs.”
BP’s renewable ventures
Across 2023, BP recorded a profit of $13.8 billion as its renewable pipeline reached 58.3GW.
The profit figure drastically decreased from the previous year when the firm saw profits of $27.7 billion. Soaring oil and gas costs propelled the profits witnessed by BP across 2022 amid the war in Ukraine as the UK moved to transition away from Russian-imported fossil fuels.
Its results found that the company’s renewable pipeline had grown from the 37.2GW figure recorded in 2022 to 58.3GW in its 2023 results.
The firm’s electric vehicle (EV) charging sector also grew with a 35% year-on-year increase in the number of chargers available, with a 150% rise in energy sales volume, showcasing the growth in the adoption of EVs across 2023.
Part of this evolution was BP’s majority stake acquisition of utility-scale solar and battery developer Lightsource bp in November 2023. At the time, Lightsource bp had a pipeline of 61GW across 19 countries.
According to BP, the acquisition terms are “highly competitive” to reflect market conditions, with a base equity value of £254 million being agreed for the 50.03% stake.
It is worth noting that in February 2023, Lightsource bp, Schroders Greencoat and H&M Group confirmed two solar power stations had come online, with a total power output of around 50MWp.
Situated in Leicestershire, the Streetfields and Northfield House solar projects will supply renewable solar electricity to H&M Group in a bid to reduce the company’s Scope 1, Scope 2 and Scope 3 emissions. The company has established a target to reduce these emissions by up to 56% by 2030.
A tailored power purchase agreement (PPA) was confirmed between the companies in 2021. It will ensure varied tenors and price predictability to help the group meet its sustainability and decarbonisation targets.
Lightsource BP entered into an agreement with H&M Group in 2021 to support the journey to a climate-positive value chain by 2040. This would also mean that the group could source 100% renewable electricity in its operations no later than 2030.
