BP’s boss has pledged to “fundamentally reset” the firm’s strategy as annual profits slumped by more than a third and as the oil giant faces pressure from an activist investor. The FTSE 100 firm reported a 36% drop in underlying replacement cost profits – the company’s preferred earnings measure – to 8.92 billion dollars (£7.22 billion) in 2024 from 13.84 billion dollars (£11.21 billion) in 2023.
It came after fourth quarter earnings fell by more than expected, down 61% year-on-year to 1.17 billion US dollars (£947 million) – the weakest result since 2020 – amid stagnant oil prices and weak oil refining margins. On a statutory basis, BP saw replacement cost profits tumble to 750 million US dollars (£607 million) last year from 16.18 billion US dollars (£13.1 billion) in 2023. Chief executive Murray Auchincloss said: “Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns.”.
He said it would be a “new direction for BP”, with the firm set to unveil further details at a keenly-awaited strategy update on February 26. It follows just days after US activist investor Elliott Investment Management was widely reported to have bought a stake in BP, which sent shares in the firm leaping higher on Monday on investor hopes it will spur a strategy rethink and board overhaul. BP’s shares have languished in the past two years on investor concerns over a shift under previous boss Bernard Looney towards renewable energy.
