London (AFP) – Britain’s BP on Tuesday said its annual net profit slumped 97 percent last year, as the struggling oil and gas giant pledged to “fundamentally reset” its strategy. Profit after tax tumbled to $381 million in 2024 from $15.2 billion in 2023, owing to weaker refining margins, asset write-downs, and unfavourable accounting effects linked to gas prices, BP said in a results statement. Total revenues dropped nine percent to $195 billion.
“We now plan to fundamentally reset our strategy and drive further improvements in performance,” said chief executive Murray Auchincloss. He said it would be a “new direction for BP,” which is set to be revealed at an eagerly anticipated investor day on February 26. Auchincloss has put the emphasis on oil and gas to boost profits, scaling back on the group’s key climate targets since taking the helm just over a year ago. Last year, BP announced it would “significantly reduce” investment in renewable energy through the end of the decade.
This week it was widely reported that US activist investor Elliott Investment Management had built a significant stake in BP, sending its share price soaring on Monday. The fund is known for forcing through corporate changes within groups it invests in, signalling further upheaval ahead for BP, analysts said. “Expectations were low going into the final quarter and full-year numbers and, unfortunately, BP has duly delivered,” said Richard Hunter, head of markets at investment platform Interactive Investor. The company’s share price dipped slightly on London’s FTSE 100 index in reaction to the results.
The investor day is considered a crucial test for the future of the company that has lagged behind other oil majors including rivals Shell, ExxonMobil, and Chevron. BP has already embarked on a plan to find $2 billion in cost savings and last month axed 4,700 staff jobs, or around five percent of its workforce. BP has also scaled back its climate plans with a target of reducing carbon emissions by 20-30 percent by the end of this decade compared to 2019 levels. This is down from a previous target of 35-40 percent. British rival Shell and other oil majors, including France’s TotalEnergies and Norwegian firm Equinor, have also cut back on clean energy objectives.
Investors have speculated that BP could abandon its pledge to reduce oil production by 25 percent by 2030 compared to its 2019 levels. Faced with lower oil and gas prices, Shell also reported a drop to its annual net profits for 2024 last month.
© 2024 AFP
