BP’s boss has said the oil supermajor will focus on extracting maximum cash from its investments going forward as the company resets its long-term goals.
Speaking to analysts today as the company revealed its second-highest profits in a decade, continuing the trend set by US petrogiants Chevron and Exxon last week, chief executive Murray Auchincloss said the company had established its priorities.
“I’m not going to be focused on volume, I’m going to be super focused on returns,” Auchincloss told analysts on Tuesday.
“We will be relentlessly value and returns focused with our investments and focused on growing value and returns from our oil and gas portfolio.”
He added: “I have a bias for returns, and don’t necessarily have a bias for volume, or oil or gas.”
His comments set in motion a new era for BP following the departure of former chief executive Bernard Looney in September last year who, prior to his departure, had set out a bold green agenda wish list for the company to hit en route to 2050 that provoked criticism across the company’s investor base.
As the company’s strategic vision sat in apparent purgatory for months following Looney’s exit, activist investor Bluebell Capital Partners went on the offensive last week, telling the firm it should “stay away from businesses in which they have no right to win,” including solar and offshore wind.
“We just disagree with them if I’m honest,” Mr Auchincloss said regarding Bluebell’s statement.
“We are very happy with the direction of travel, and the shareholders at the top tier are happy as well.”
The firm today committed to a $3.5bn (£3bn) buyback through the first six months of 2024 with a plan to deliver as much as $14bn (£11bn) by the end of the next financial year.
For the 2023 period, capital expenditure on gas and low carbon energy projects ticked up by only 0.7 per cent for 2023 against the year prior whereas spending across the firm’s oil operations leapt 19 per cent to $6.2bn (£5.1bn).
Additionally, high-profile missteps in the clean energy world such as the firm’s $500m (£397.5m) hit after backing out of a New York-based offshore wind project, led to questions from analysts on how the company would target profitable ventures in the space.
“[With the Equinor project] it was time to divorce ourselves,” he said.
“We will continue to be pragmatic in our approach to how we navigate this energy transition.
“Yes, we want to help scale lower carbon energy value chains and position ourselves to profit from them but we must remain flexible and adjust in line with changing demands and societal needs.”
Quilter Cheviot analyst Jamie Maddock said the results mark a “new start” for BP under Auchincloss.
“BP recognises that it has work to do with shareholders given what has happened over the last 12 months, and this is a positive start to the resetting of that relationship,” he added.
The firm’s share price was up 5.4 per cent over the course of the day.