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BP reported a steep drop in third-quarter profits as energy prices fell and its gas trading business faltered.
The UK oil and gas major said on Tuesday that underlying earnings fell to $3.3bn, missing market expectations of $4bn and down from $8.2bn a year earlier. BP shares fell 5 per cent in early trading.
The results are the first since chief executive Bernard Looney resigned in September over his failure to disclose past romantic relationships with colleagues.
Interim chief executive Murray Auchincloss said the business had delivered a strong operational performance, with oil and gas production 3 per cent higher than last year and production costs 6 per cent lower.
But that could not compensate for lower prices for BP’s hydrocarbons and lower than expected results from its gas trading operations.
Despite the sharp drop in earnings, BP continued with its share buyback programme, announcing plans to repurchase another $1.5bn of stock. The company has committed to using 60 per cent of 2023 surplus cash flow for buybacks.
BP, like its rivals, has used record profits in the past 18 months to repurchase billions of dollars of its own stock, which the company views as undervalued. It left its dividend unchanged after raising it in the second quarter.
“We remain committed to executing our strategy, expect to grow earnings through this decade, and on track to deliver strong returns for our shareholders,” Auchincloss said.
BP’s board has insisted that the company’s strategy remains unchanged despite the unexpected departure of Looney, its key architect, in September. A search for Looney’s permanent replacement is ongoing.
Auchincloss pointed to BP’s $100mn October agreement with Tesla to install ultrafast electric vehicle chargers across the US as evidence of the company’s continued ambition to transform from an oil and gas producer into an integrated energy provider.