BP has announced plans to accelerate its major business overhaul, with a focus on larger asset sales and intensified cost reductions, as the group reported third quarter profits that surpassed analysts’ expectations.
The oil giant revealed underlying replacement cost profits of $2.21 billion (£1.68 billion) for the period ending 30 September, only a 3% decline compared to last year and 6% lower than the previous quarter. These results outperformed forecasts, with most analysts having predicted profits of $2.02 billion (£1.54 billion).
Murray Auchincloss, BP’s chief executive, emphasised the company’s commitment to accelerating its strategy, saying: “We are looking to accelerate delivery of our plans, including undertaking a thorough review of our portfolio to drive simplification and targeting further improvements in cost performance and efficiency.”
BP revealed that proceeds from divestments are now expected to exceed $4 billion (£3.05 billion) in 2025, with asset sales this year to reach around $5 billion (£3.81 billion). The group is also ramping up its cost-cutting programme, now expecting a total of 6,200 jobs – approximately 15% of its office-based workforce – to go, up from 4,700 previously forecast earlier in the year. Since January, BP has already cut 3,200 contractor roles, with a further 1,200 planned for elimination by the end of 2025 as the company turns to artificial intelligence to deliver further efficiencies.
Further, BP announced a new share buyback of $750 million (£572 million), matching the level reported in the third quarter and signalling confidence to investors amid significant structural change.
Earlier this year, BP signalled a strategic pivot, prioritising increased oil and gas extraction and pulling back on green energy investment, a move that has attracted pressure from shareholders and activist investor Elliott Management, which recently acquired a 5% stake in BP.
These changes come at a time of weaker oil prices, with benchmark Brent crude averages dropping 13% year on year in the third quarter. Nevertheless, BP’s customers and products division reported improved profits before interest and tax of $1.72 billion (£1.31 billion), boosted by higher refining margins, compared to $381 million (£290 million) last year.
BP’s solid results echo those of FTSE 100 peer Shell, which also surpassed profit expectations despite falling oil prices, benefiting from higher sales volumes and strong trading margins.
Looking ahead, BP’s management has pledged to maintain the momentum on efficiency, portfolio simplification, and shareholder returns as the company adapts to evolving market conditions and investor demands.
