by Bloomberg
|
Mitchell Ferman
| Tuesday, August 05, 2025 | 3:08 AM EST
BP Plc said its new chairman will conduct a review of the entire portfolio and the company will seek to cut costs beyond its current targets, as the oil and gas major works to reverse years of poor performance.
The London-based company is under growing pressure to deliver on a turnaround, including from activist investor Elliott Investment Management, which amassed a stake earlier this year to force sweeping changes and has pushed for deeper cost cuts.
BP said it cut $900 million of structural costs in the first half, and expects to receive about $3 billion from completed or announced divestments. The company posted $2.35 billion in adjusted net income for the second quarter, topping the average analyst estimate of $1.76 billion.
New chairman Albert Manifold “will conduct a thorough review of our portfolio of businesses to ensure we are maximizing shareholder value moving forward – allocating capital effectively,” Chief Executive Officer Murray Auchincloss said in the earnings statement. “BP can and will do better for its investors.”
BP announced a turnaround plan in February that included a reduction in structural costs of $4 billion to $5 billion by the end of 2027, including $800 million already achieved last year. The company has also committed to cut spending and divest $20 billion of assets by the end 2027.
The company said it is initiating a further cost review.
Net debt dropped by about $1 billion to $26 billion at the end of the second quarter. The company maintained its quarterly share buybacks at $750 million.
BP has appointed Manifold, previously CEO of building-materials company CRH Plc, as chairman starting Sept. 1. Incumbent Helge Lund will depart Oct. 1. Elliott has called on Manifold to make urgent improvements to the firm’s cost base and capital allocation, citing a weak turnaround plan.
BP is the last of the five Big Oil majors to report earnings, with Shell Plc, Exxon Mobil Corp. and Chevron Corp. all exceeding expectations, while TotalEnergies SE missed estimates. On Tuesday, Saudi Aramco reported a decline in profit for a 10th straight quarter as lower oil prices outweighed the impact of higher production.
The period was marked by oil-market volatility, with prices buffeted by US President Donald Trump’s trade war, shifting OPEC+ policy and Israel’s attacks on Iran. Brent slid about 9 percent in the quarter and is now hovering just below $70 a barrel – the level BP uses to model financial targets.
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