Profits fall at BP on weaker oil demand

BP posted a slide in quarterly profits on Tuesday, hit by weaker refining margins, although the decline was not as steep as feared.

Underlying replacement cost profit, a key measure for the oil and gas major, was $2.27bn in the third quarter. That was down on both the second quarter’s $2.76bn and last year’s $3.29bn.

BP said the results reflected softer refining margins, weak oil trading and lower liquids realisations, although that was partly offset by higher gas realisations.

Energy companies have come under pressure over the last year after oil prices fell back, global economic activity slowed and demand in China softened.

However, while BP’s RC profits were the weakest since the fourth quarter of 2020, they were better than forecast. Analysts had been expecting profits closer to $2.05bn.

The oil and gas major also announced a dividend of 8 cents per ordinary share, up on last year’s 7.27 cents, and a $1.75bn share buyback, part of a commitment to return $3.5bn in the second half.

Murray Auchincloss, chief executive, 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."