11 February 2025
If you are covering BP's latest results, please see the following comment from Maurizio Carulli, energy and materials analyst at Quilter Cheviot:
"BP’s fourth quarter results came in slightly better than expected at operating level this morning, albeit this is after a recent trading statement saw its guidance lowered quite dramatically.
"The company’s Upstream segment, responsible for its activities in oil and natural gas exploration, field development and production, proved stronger than expected. However, its product and service led arm, Downstream, was weaker than had been hoped. The low reserve replacement ratio at 50% is also noteworthy, and BP’s guidance for $3bn of divestments in 2025 can be viewed as a positive.
"More importantly, however, BP is set to announce a reset of its strategy at the end of February, including a review of its capital expenditure and share buy-back policy. The company recognises that it has work to do with shareholders, and getting this right will be key for the return of investor confidence which has been negatively influenced by poor share price performance in 2024.
"Today’s results follow reports over the weekend that US activist investor Elliott Management has built a ‘significant’ stake in BP. While neither BP or Elliott confirmed, the latter has a long and successful history of causing both strategic and board changes at the companies it targets. This may well provide additional impetus for BP to deliver a sound strategy update in a few weeks."
