BP on Tuesday reported a fall in first-half profit, with the British oil and gas giant hit by asset writedowns and falling revenue.
Profit after tax fell 79% to $2.13 billion compared with a net profit of $10 billion in the first half of last year, BP said in a statement.
Revenue fell eight percent to $98 billion in the latest reporting period.
BP said increased volume and lower exploration write-offs were “partially offset by increased amortization charges and higher costs.”
The group earlier this month signaled to markets that its latest earnings would take a significant hit from a cut in oil refining in Germany.
Energy majors are also feeling the impact of falling gas prices, which have fallen sharply since soaring after energy major Russia invaded Ukraine in early 2022.
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Against this backdrop, BP’s “businesses continue to operate safely and efficiently,” chief executive Murray Auchincloss said in the earnings statement.
Auchincloss, a veteran BP employee, became CEO in January after a spell as interim boss in the wake of Bernard Looney’s sacking.
Looney was fired for failing to disclose past relationships with co-workers.
Despite the profit plunge, BP’s share price gained two percent on dividend and share buyback announcements, as well as better-than-expected underlying earnings in the second quarter, analysts said.
“After the 2022 energy crisis fueled by Russia’s invasion of Ukraine sent the oil giants’ profits soaring, BP and its rivals are accustomed to a more normal period for energy earnings,” noted Victoria Scholar, chief investment officer at Interactive Investor.
Oil project
Also on Tuesday, BP gave the green light to the Kaskida oil project in the US Gulf of Mexico, with production to begin in 2029.
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Auchincloss “restricted BP’s green energy plans, shifting the focus back to oil and gas,” Scholar added.
“Biofuel and wind projects have either been reduced or stopped.”
BP said Kaskida was the group’s sixth hub in the Gulf of Mexico, with a new floating production platform capable of producing an initial 80,000 barrels of crude a day.
Environmentalists slammed BP’s latest announcements.
“Big oil companies like BP know their fossil fuels are behind more deadly heatwaves, storms and fires around the world, but instead of investing in clean energy, they continue to profit from people’s misery,” said Alice Harrison, head of the mineral division. fuel campaigns at Global Witness.
“While millions of us struggle with high temperatures and high bills, BP is making billions in profits, paying huge dividends and doubling down on dirty new oil and gas projects,” she added in a statement.
Source: AFP