BP signals more cost cuts on way after fall in profits | BP

BP said it would step up efforts to separate parts of the business as the energy company reported a decline in profits in the latest quarter.

The company reported underlying profits of $2.2bn (£1.7bn) in the three months ending September. It slowed down from the previous quarter, when it made a profit of $2.4 billion, but it beat analysts’ expectations of $1.98 billion.

Under pressure from shareholders to reverse years of underperformance by moving away from renewable projects and increasing investment in oil and gas, its chief executive, Murray Auchincloss, said BP would seek to sell some of the business more quickly.

“We aim to accelerate the implementation of our plans, including a comprehensive review of our portfolio to drive simplification and target further improvements in cost performance and efficiency,” he said.

Promising to sell assets worth $20 billion by the end of 2027, Auchincloss added that he expects the company to sell or sell assets worth $5 billion by the end of the year.

BP’s new chairman, Albert Manifold, told staff on his first day in office last month that the company needed to accelerate its plan to cut costs and sell assets.

BP has already agreed to sell its US onshore wind business to LS Power, as well as spin off retail fuel yards and electric vehicle charging hubs in the Netherlands.

This week, BP also agreed to sell its stake in US shale oil assets, including four Permian central processing facilities – Gand Slam, Bingo, Checkmate and Crossroads – for $1.5 billion.

But BP has not provided an update on the sale of its multibillion-dollar Castrol lubricants unit, which will be a central part of its plan to raise at least $20 billion by 2027.

The company has been under pressure from activist New York hedge fund Elliott Management, known for its attempts to shake up publicly traded companies. The company owns a stake in BP, pushing the company to cut costs.

BP launched a significant cost-cutting plan over the summer, raising the possibility of further layoffs. The company, which is headquartered in London and employs about 100,000 people worldwide, said in January that it expected to cut thousands of jobs and cut contractor positions as part of plans to cut costs.

The company said it expects 6,200 jobs to be shed in August (about 15% of its office-based workforce), up from the 4,700 announced at the beginning of the year, and that it will use artificial intelligence to support cost cuts.

BP said it has cut 3,200 contractor positions since January and will cut another 1,200 jobs by the end of 2025.