British energy giant BP has announced an underlying replacement cost profit, a proxy for net profit, of $2.9bn in the fourth quarter of 2023 (Q4 2023), down by 37.7% on Q4 2022. 

According to the financial report, the company’s reported profit fell from $4.9bn in Q3 2023 to $0.4bn in Q4 2023, while net debt reduced to $20.9bn, a record low in a decade, as shown in the financial report.

BP’s net profit in 2023 showed a steep decline to $13.8bn from the previous year’s $27.7bn. 

The company also announced a $1.5bn share buyback programme, after which bp’s share purchases increased more than 5% by midday Tuesday. 

“BP is committed to announcing $3.5bn for the first half of 2024,” the company said. 

According to the London Stock Exchange Group’s compiled consensus, analysts had predicted a net profit of $13.9bn for 2023. Having significantly missed forecasts in the previous two quarters, bp was relieved by its Q4 earnings results. 

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By GlobalData

The decline in profit may have been influenced by factors such as recent market trends, economic conditions or internal company decisions.

In January, bp appointed former CFO Murray Auchincloss as the new CEO after appointing him the interim CEO in September 2023. The previous CEO, Bernard Looney, suddenly resigned due to failing to disclose fully the details of past personal relationships with colleagues. 

BP expects capital expenditure of around $16bn per annum in 2024 and 2025, in line with the company’s medium-term target of $14–18bn. The company “continues to invest with discipline and a returns-focused approach in [its] transition growth engines and [its] oil, gas and refining businesses”, it said in the financial report. 

“We are confident in our strategy, on delivering as a simpler, more focused and higher-value company, and committed to growing long-term value for our shareholders,” Auchincloss said. 

BP’s Q4 results portrayed strong gas trading and “significantly lower industry refining margins, weak oil trading result and a higher level of refining turnaround activity”, according to the company statement. 

This week, US-based ExxonMobil announced its Q4 2023 earnings, which declined by 40.1% to $7.63bn, while Chevron’s Q4 2023 earnings were $2.25bn, a 64.4% drop from the same period in 2022, Offshore Technology reported. 

On 1 February, Shell announced a profit of $28bn in 2023, a 30% decline from the previous year’s all-time high due to lower energy prices and demand.