London-based oil giant BP has reported a decline in third-quarter profits as a strong performance in all of its divisions helped offset weaker oil prices.
BP said underlying replacement cost profit (RC), used as a proxy for net profit, came in at US$2.21 billion for the quarter ending September 30, slightly down from US$2.27 billion in the third quarter of 2024. The company reported RC profit of US$2.35 billion in the second quarter.
The result reflects higher profitability in the company’s operating segments offset by a higher underlying effective tax rate in the quarter of 39 per cent.
BP CEO Murray Auchincloss said: “We’ve delivered another quarter of good performance across the business with operations continuing to run well.”
“We continue to make good progress to cut costs, strengthen our balance sheet and increase cash flow and returns.
“We are looking to accelerate delivery of our plans, including undertaking a thorough review of our portfolio to drive simplification and targeting further improvements in cost performance and efficiency.”
Operating cash flow came in at US$7.8 billion, up from US$6.3 billion in the second quarter. Net debt was broadly flat at US$26.1 billion in the third quarter as higher operating cash flow was partly offset by the redemption of US$1.2 billion hybrid bonds.
BP expects full-year divestment proceeds to be higher, driven by around US$5 billion of completed or announced disposal agreements. It expects divestment and other proceeds to be above US$4 billion in 2025.
The company announced on November 3 that it would sell its non-controlling interest in U.S. onshore midstream assets to private investor Sixth Street for US$1.5 billion. The midstream assets comprise BP’s pipelines and facilities in the Eagle Ford and Permian basins.
Meanwhile, the company will continue to invest with discipline. BP expects capital expenditure to be around US$14.5 billion in 2025, with a capital frame of around US$13 billion to US$15 billion for 2026 and 2027.
Looking ahead, BP expects fourth-quarter reported upstream production to be broadly flat compared to the third quarter. The company expects production from oil and operations to be slightly higher and production from gas and low carbon energy to be lower.
BP now expects reported upstream production to be slightly lower and underlying upstream production to be broadly flat in 2025 compared to 2024.
The company will also execute a US$750 million share buyback before reporting the fourth quarter results. BP already completed another US$750 million buyback on October 31.
