Oil group BP’s profit fell by 70 percent 2023 – Nokturnal

The British oil company BP managed a net profit of $2.59 billion (CZK 56.3 billion) in the second quarter, which is a year-on-year drop of almost 70 percent. The company announced this in a press release today. The reason is mainly the drop in oil prices compared to last year, so other large companies in this sector are also facing a significant drop. But BP will increase the dividend.

The quarterly result fell short of analysts’ estimates. In a survey by Refinitiv, they estimated it at roughly $3.5 billion. In the first quarter, the company had a net profit of almost five billion dollars.

Profit?

The firm said the result reflected significantly lower refinery margins, higher levels of turnover and maintenance, but also a weak result in oil trading. However, management proposed to increase the dividend by ten percent to 7.27 cents per common share for the second quarter. BP also said it would buy back $1.5 billion of its shares over the next three months.

“It was a very good quarter,” BP CEO Bernard Looney told CNBC. “So overall, we’re doing what we said we were going to do,” he added. According to him, this means that the company will maintain performance, but at the same time make a transformation. “We are very satisfied with the results,” he concluded.

Global dimension

A year ago, oil prices were significantly higher due to the effects of the Russian invasion of Ukraine. After it, Western countries introduced a series of anti-Russian sanctions, the result of which were fears that there would not be enough raw materials on the market. Now prices are lower partly because the situation on the markets has calmed down, partly because the growth of the global economy has slowed down significantly and demand has decreased.

For example, the British competitor Shell and the French oil giant TotalEnergies reported a significantly lower profit in Europe in the second quarter than a year ago. Similarly, the American colossus ExxonMobil’s profit in the second quarter fell by 56 percent year-on-year.

The five largest oil companies in the West made a combined profit of almost 200 billion dollars last year. The reason was precisely the effects of the war in Ukraine and the associated high price growth of some raw materials. BP reported a record profit of $27.7 billion last year.

source: ČTK