BP reported a sharp 48% drop in Q1 net profit to $1.4 billion, missing analyst estimates, as weaker gas trading, refining margins, and lower production squeezed earnings. The British oil giant also announced the departure of strategy chief Giulia Chierchia amid investor demands for higher cash flow and a pivot away from its renewables-focused strategy.
Key Developments:
- Strategic Shift: BP abandoned plans to aggressively cut hydrocarbon output and boost low-carbon investments—a legacy of former CEO Bernard Looney—under pressure from activist investor Elliott Management (now a top-3 shareholder).
- Financial Tightening:
- Share buybacks slashed to **750million∗∗(vs.750million∗∗(vs.7.1B in 2023).
- 2024 spending cut by 500Mto∗∗500Mto∗∗14.5B**, with asset sales raised to $3–4B.
- Refining margins crashed to **15.20/barrel∗∗(from15.20/barrel∗∗(from20.60 YoY), with heavier maintenance expected in Q2.
- Investor Backlash: BP shares have fallen 20% since CEO Auchincloss’s February strategy revamp, lagging Shell (-7.5%) and Exxon (-1.8%).
Market Context:
- Brent crude averaged **75/barrelinQ1∗∗(vs.75/barrelinQ1∗∗(vs.87 YoY), but prices recently collapsed to $66 on Trump’s trade tariffs.
- BP warned of $2.5B in additional spending cuts if oil stays low, risking long-term growth.
BP Profit Plummets 48% as Strategy Chief Exits Amid Investor Pressure; Cuts Buybacks & Spending