BP today promised to "fundamentally reset" its strategy later this month after reporting a drop in underlying profit last year.
The company alluded to what the reset might entail, noting that last year it had "laid the foundations for growth" by committing capital to new oil and gas projects and "refocusing" its investments in low-carbon assets. Details of the strategy shift will be outlined at a capital markets day for investors on 26 February.
Key actions in 2024 included taking a final investment decision on the 80,000 b/d Kaskida oil field in the US Gulf of Mexico and raising its exposure to biofuels in Brazil. The company also took steps via a joint venture with Japanese utility Jera that will see it commit less capital to its wind energy investments.
BP reported an underlying replacement cost profit — excluding inventory effects and one-off items — of $1.2bn for the fourth quarter of 2024, compared with $3bn a year earlier. For the full year, underlying replacement cost profit fell by 36pc compared with 2023 to $8.9bn, while cash flow from operations dropped to $27.3bn from $32bn.
The company benefited from higher oil and gas production last year — up by 2pc on 2023 at 2.36mn b/d of oil equivalent (boe/d). But lower prices, a drop in refining margins and lower contributions from both oil and gas trading weighed on profitability.
BP said it expects upstream production to be lower this year and refining margins "broadly flat". It expects a similar level of refinery maintenance in 2025, with the work "heavily weighted towards the first half" and the second quarter in particular.
For now, BP is sticking with its share repurchasing programme, announcing a further $1.75bn of share buybacks for the fourth quarter. It has maintained its quarterly dividend at 8¢/share.
The company's capital expenditure remained steady at $16.2bn last year. It will provide guidance on this year's investment budget at the strategy day later this month.
