BP chief dismisses takeover speculation: Boss remains confident despite 60% fall in profits

The boss of BP dismissed speculation it could be a takeover target after profits fell 60 per cent.

As consolidation sweeps through the oil and gas sector, Murray Auchincloss said he was ‘confident’ about the future.

He also reiterated his commitment to the UK and the North Sea.

The comments came after BP posted profits of £2.7billion in the three months to the end of September, a sharp drop on the £6.8billion recorded a year earlier.

Earnings last year were buoyed by surging oil and gas prices sparked by Russia’s invasion of Ukraine.

Vow: BP chief exec Murray Auchincloss (pictured) said firm was committed to the UK and the North Sea

Analysts had predicted a drop in profits due to the falling price of oil and gas. But with the figure far lower than the £3.3billion expected in the City, BP shares fell 4.5 per cent, or 24.1p to 502.6p.

Takeover fever has swept the sector with multi-billion dollar purchases by US giants Exxon Mobil and Chevron.

Auchincloss, who became interim chief executive in September when Bernard Looney was forced out over personal relationships with colleagues, dismissed suggestions BP could be a target. ‘I don’t feel vulnerable, in fact I feel quite confident,’ he told the Financial Times.

And with speculation over the future director of BP mounting following the departure of Looney, who spearheaded the company’s net zero strategy, Auchincloss was bullish about oil and gas production in the North Sea.

‘We remain very committed to the UK,’ he said. ‘We have a good concentrated portfolio west of Shetland and in the North Sea and continue to develop there.

‘We’ll be sustaining earnings and production from the North Sea, all the way through 2030.

‘We don’t guide beyond 2030 but certainly, we have the resources to grow.’

Auchincloss, the finance chief before stepping in to Looney’s shoes, said BP had a ‘solid quarter supported by strong underlying operational performance’.

Profits were hit by a weak performance in its gas marketing and trading arm and a £444million impairment charge on three US wind farms. 

Production in BP’s gas and low carbon energy division was around 1.8 per cent lower in the first nine months of 2023 compared to last year, while oil production was 6.1 per cent higher. 

A recovery in oil prices was not enough to boost BP, analysts said. 

BP expects production limits from the Opec+ group of oil-producing nations to support prices in the fourth quarter.

Jamie Maddock, energy analyst at Quilter Cheviot, said: ‘The impact of the Russian invasion of Ukraine has worn off, and while geopolitical tensions are rising elsewhere, they haven’t moved the needle in energy prices significantly.’

BP held its dividend at 7.27 cents per share and launched a further £1.23billion share buyback.

Analysts said uncertainty will remain over BP’s net zero strategy until a permanent chief executive is appointed. 

AJ Bell investment director Russ Mould said: ‘All Murray Auchincloss can do is try to keep the ship on course, while the wait for a permanent appointment goes on.’

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