The British energy company BP managed a basic profit of 2.7 billion dollars (62.8 billion CZK) in the first quarter, which is a year-on-year drop of 45 percent. The decrease is primarily due to lower oil and natural gas prices, the company said in a press release today message. The result fell short of analysts’ estimates. In the last quarter of last year, the profit was almost three billion dollars.
BP defines basic profit as the result of management after taking into account the costs of restoring production. The result is used in this industry as the equivalent of net profit. BP said it had significantly weaker fuel margins than it had originally expected. Analysts on average had expected profit to fall to $2.9 billion, according to LSEG.
At the beginning of the year, some competing companies also faced a drop in profits, also mainly due to lower oil and gas prices on world markets. Gas stocks in Europe were at a record high in the winter, which is the result of efforts by European countries to hedge against possible shortages. After the start of the invasion of Ukraine by Russian troops in February 2022, the European Union began to refuse gas from Russia, so member states had to procure gas elsewhere, mostly at higher prices.
Rival British company Shell announced last week that its profit for the first quarter fell by about a fifth to 7.7 billion dollars. However, energy companies still focus on returns to shareholders, in the form of paying dividends or buying back their shares. BP intends to buy back its shares for $3.5 billion in the first half of this year.
BP chief executive Murray Auchincloss said the firm was continuing to try to simplify its business. By the end of 2026, he plans to save two billion dollars.
The firm appointed Auchincloss as permanent CEO in January. His predecessor, Bernard Looney, resigned after less than four years in the job due to undisclosed personal relationships with female colleagues from before he became chief executive. There were suspicions that Looney then secured career advancement for these female colleagues, but the investigation did not show that Looney violated internal regulations, CNN reported. Looney joined BP in 1991 when he was 21 years old.
