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UK shares: BP hails oil trading performance
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
It’s fair to say BP is going through a lot of change – a new CEO has taken over and embraked on a restructuring programme designed to supercharge its turnaround after years of lagging behind peers. But the ousting of its chairman in May and departure of its deputy chief executive just three months after being appointed the role suggest there is still a lot of work to do to turn this super tanker around.
Good news, then, that earnings are getting a lift from the surge in energy prices due to the US-Iran conflict.
Higher oil prices helped BP cut net debt in the second quarter – a key focus for the company’s turnaround plan as new CEO Meg O’Neill, who took over in April, seeks to impose a higher level of financial discipline. Net debt fell to between $22bn and $23bn in Q2 from $25.3bn at the end of the first quarter, a decline of as much as 13%, the oil major said in a trading update ahead of second quarter results scheduled for early August.
The decline in debt came as BP hailed the performance of its oil trading division, where profits will be “slightly higher compared with the first quarter”, when the division drove a doubling in group profits to $3.2bn. Gas marketing and trading results are expected to be “broadly flat” with the first quarter.
Oil and gas production fell over the quarter from 2.3mn barrels of oil equivalent per day to around 2.2mn, due to disruption from the Middle East conflict as well as seasonal maintenance.
The update comes just two months after the ousting of chairman Albert Manifold, who’d taken over only a year ago from Helge Lund amid a period of significant executive turnover. CEO O’Neill took over from Murray Auchinloss in April, who in turn had taken charge after previous boss Bernard Looney was sacked in September 2023. O’Neill is seeking to simplify the business – a surge in profits from its trading division will help give her time to turn the tanker around.
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