bp has reported a sharp rise in second-quarter earnings, delivering an underlying replacement cost profit of US$5.7 billion (AU$8.1 billion) as CEO Meg O’Neill outlined a major pivot to sharpen execution and streamline the company’s asset portfolio.
The second-quarter profit was up US$2.5 billion from the first quarter and nearly double from the US$2.35 billion in the second quarter of 2026, driven by higher realised oil and gas prices alongside stronger refining margins.
First half underly project reached US$8.93 billion, up from US$3.73 billion in the prior-year period.
Operating cash flow reached US$10.9 billion, enabling the company to lower its net debt to US$22.3 billion and increase its dividend per ordinary share by 4 per cent to 8.66 cents.
In her first full quarter at the helm, O’Neill acknowledged that while financial performance was robust, operational delivery fell short due to Middle East disruptions and planned maintenance, with upstream plant reliability dipping to 92.4 per cent.
“Our performance over the past few years has not met our own expectations, let alone those of our shareholders.
“We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment,” the CEO said.
“We need to take a clear look at ourselves: assessing what needs to change, stopping what holds us back and building strength where it matters. We have to get fit to grow.”
To address historical underperformance, O’Neill outlined five core priorities centered on balance sheet strength, portfolio simplification, capital discipline, operational excellence, and organisational accountability.
As part of this shift, bp has revised its full-year 2026 guidance, lowering expected annual capital expenditure to between US$13.5 billion and US$14 billion after deferring certain asset farm-downs to secure better value.
Full-year reported upstream production is now expected at 2,180 to 2,270 thousand barrels of oil equivalent per day (mboe/d), impacted by geopolitical friction in the Middle East and portfolio divestments.
For the third quarter of 2026, bp expects reported upstream production to drop slightly to between 2,100 and 2,250 mboe/d, factoring in potential seasonal weather disruptions in the Gulf of Mexico.
Marketing performance in the customers segment is also projected to decline due to higher base oil costs for Castrol and volatile global fuel margins.
Total divestment proceeds for 2026 are now targeted at US$8 billion to US$9 billion, bolstered by high-profile asset sales including the Gelsenkirchen refinery, the Austrian retail network, and ongoing sales processes for its UK North Sea assets and US biogas business Archaea Energy.
