BP is to cut $2bn in costs from its business by the end of 2026 after reporting worse than expected profits for the first quarter of the year.
Underlying replacement cost (RC) profit for the quarter was $2.7bn, compared with $3bn for the previous quarter.
Compared with the fourth quarter 2023, the result is in part due to falling gas prices and an unplanned outage at a refinery in the US.
In the gas and low carbon energy segment The RC profit before interest and tax for the first quarter 2024 was $1bn, compared with $2.2bn for the previous quarter.
BP has set a target to deliver at least $2bn of cash cost savings by the end of 2026 relative to 2023.
The reduction is expected to result from cost-saving measures across the company’s business underpinned by “high-grading the portfolio, digital transformation, supply chain efficiencies and global capability hubs”, while some of these cost savings may have associated restructuring charges.
BP told investors it would maintain the pace of its share buybacks by acquiring $3.5bn of shares in the first half of the year.
The company’s chief executive Murray Auchincloss said to investors that the company will focus on a more “pragmatic” approach to the company’s clean energy targets that can “create a higher value company for shareholders by moving towards net zero without wasting money”.