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British oil and gas giant BP‘s earnings for Q1 2024 were $2.7bn, down 45% from the same period in 2023, due to lower energy prices and a US refinery outage, despite an increase in oil and gas production. 

BP’s adjusted earnings before interest, taxes, depreciation, and amortisation was $10.3bn while underlying replacement cost (RC) profit stood at $2.72bn. The company’s upstream production grew by 2.1% compared with the previous year, with a new Azeri Central East platform launched in the Caspian Sea. 

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The reported profit for Q1 2024 was $2.3bn, a significant increase from the $400m reported in Q4 2023.  

The RC profit from BP’s oil production and operations before interest and tax for Q1 2024 was $3.1bn, compared with $1.9bn for the previous quarter. 

The company’s earnings for the quarter were 5% lower than analysts had predicted, causing a setback for CEO Murray Auchincloss, who was working hard to stabilise the company, according to Reuters. BP went through a difficult period after CEO Bernard Looney resigned abruptly in September 2020 due to allegations that he failed to disclose information about his personal relationships with colleagues. 

Auchincloss, who was previously Looney’s head of finances, has committed to simplifying bp’s operations and reducing costs. This move comes as investors are uncertain about the company’s plans to shift its focus away from oil and gas and towards a low-carbon business. 

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“Oil production was up, and our ACE platform in the Caspian is now producing. We are simplifying and reducing complexity across BP and plan to deliver at least $2bn of cash cost savings by the end of 2026 through high-grading our portfolio, digital transformation, supply chain efficiencies, and global capability hubs,” Auchincloss said in a press release.  

As for gas and low-carbon energy, the RC profit before interest and tax was $1bn in Q1 2024, compared with $2.2bn in the previous quarter.  

After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $600m, the underlying RC profit before interest and tax for Q1 2024 was $1.7bn, slightly lower than the $1.8bn reported in Q4 2023. 

BP said that the results were affected by lower energy prices, the consequences of an outage at its refinery at Whiting, Indiana, US, and a significantly weaker fuel margin. However, the impact of these factors was reduced by a lower level of turnaround activity at BP facilities and a solid oil trading outcome, along with higher realised refining margins, Reuters said.