BP profit beats in sign that turnaround is gathering pace

BP Plc’s profit exceeded expectations with operational improvements and higher oil and gas production outweighing lower prices, as the company’s turnaround plan builds momentum.

The British energy giant

posted adjusted third-quarter net income of $2.21 billion, higher than the average analyst estimate of $1.98 billion. Its quarterly share buyback plan was maintained and net debt rose slightly.

The results signal Chief Executive Officer Murray Auchincloss is starting to deliver a turnaround plan to win back investor confidence by focusing on oil and gas production, selling non-strategic assets and cutting costs. 

“We continue to make good progress to cut costs, strengthen our balance sheet and increase cash flow and returns,” Auchincloss said in BP’s earnings statement. “We are looking to accelerate delivery of our plans, including undertaking a thorough review of our portfolio.”

BP’s plan to divest $20 billion of assets by the end of 2027 to improve the balance sheet still includes expectations of a transaction for lubricants business Castrol, Auchincloss said in an interview on Bloomberg TV. The firm also raised its disposal expectations for 2025, saying proceeds will exceed $4 billion.

Quarterly share buybacks were kept at $750 million, a reduced level BP announced earlier this year along with a strategic reset. Gearing — a ratio of net debt to equity that analysts have flagged as elevated compared to peers — climbed to 25.1% from 24.6% in the previous quarter.

Even though the company returned to focusing on fossil fuels, BP’s full year reported upstream production is expected to be slightly lower than last year. 

Auchincloss highlighted improved asset operating availability during the interview on Bloomberg TV. That’s something BP had struggled with in 2024.

BP is the last of the so-called supermajors to post third-quarter earnings. Rivals Exxon Mobil Corp., Chevron Corp. and Shell Plc also exceeded expectations, while TotalEnergies SE reported profit that was in-line with estimates. The stocks of the two London-based companies have outperformed rivals this year, with BP leading since midyear.

In an effort to boost profits, the energy giants have cut jobs and costs, while seeking to boost production. They face a more challenging outlook next year, with the oil market headed for oversupply after the OPEC+ alliance unleashed more production to reclaim market share. Brent crude has lost 13% so far this year, set for its third annual decline and the worst yearly rout since 2020, when the pandemic precipitated the market into a crash.

Saudi Aramco posted a surprise increase in third-quarter profit as a production boost helped the world’s biggest oil-producing company break a years-long streak of falling earnings.