BP in 2020 set out its ambition to become a net zero company “by 2050 or sooner.”
Matt Cardy | Getty Images News | Getty Images
British oil giant BP on Tuesday reported slightly weaker-than-expected annual profits, following declines in fossil fuel prices.
The energy major posted underlying replacement cost profit, used as a proxy for net profit, of $13.8 billion for 2023, a sharp fall from a record $27.7 billion in the previous year.
Analysts had anticipated net profit of $13.9 billion for full-year 2023, according to an LSEG-compiled consensus.
BP posted fourth-quarter net profit of nearly $3 billion, beating analyst expectations of $2.6 billion.
BP announced a 10% increase to its dividend and a $1.75 billion share buyback program.
Shares of the company’s London-listed stock are down roughly 2.6% year-to-date.
BP’s latest results come as the company faces pressure from one activist investor over its strategy.
In a letter to BP Chair Helge Lund and then-interim CEO Murray Auchincloss in October, Bluebell Capital Partners urged the company to ramp up its oil and gas investments and reduce spending on clean energy. The letter was first reported by the Financial Times last week.
Bluebell Capital’s Giuseppe Bivona has since expressed his frustration with BP’s “totally underwhelming” share price performance relative to the firm’s U.S. and European peers. Bivona told CNBC’s “Squawk Box Europe” on Jan. 30 that BP should consider deploying its capital in a “rational way.”
In response to the publication of the letter, a spokesperson for BP at the time said that the company “welcomes constructive engagement” with its shareholders.
BP has also contended with a mediatized leadership change. The company appointed Murray Auchincloss as permanent CEO last month, roughly four months after his predecessor Bernard Looney resigned after less than four years on the job.
Under Looney’s leadership, BP promised its overall emissions would be 35% to 40% lower by the end of the decade.
The firm, which was one of the first energy giants to announce plans to cut emissions to net zero “by 2050 or sooner,” watered down these climate plans last year. BP said almost a year ago that it would instead target a 20% to 30% cut, noting that it needed to keep investing in oil and gas to meet demand.
This is a breaking news story, and it is being updated.