BP p.l.c.

BP reported group underlying replacement cost profit of $5.7 billion and underlying replacement cost profit before interest and tax of $10.3 billion, versus $6.3 billion in the prior quarter. IFRS profit was $3.9 billion after around $1.1 billion of adjusting items. Operating cash flow was $10.9 billion after a $1 billion working-capital build, and underlying cash generation was $12.9 billion. Upstream production was 2.2 million barrels of oil equivalent per day, 6% lower than Q1, while refining throughput was around 1.5 million barrels per day, 4% lower than Q1. Net debt ended the quarter at $22.3 billion, down around $3.1 billion sequentially. Looking ahead, BP expects $2 billion to $3 billion of working capital to unwind over the rest of the year, full-year capex of $13.5 billion to $14 billion, full-year divestment proceeds of $8 billion to $9 billion, and a full-year underlying effective tax rate of around 35% to 40%. On stated price assumptions, financial obligations are expected to fall to around $39 billion to $41 billion by end-2026, putting the $14 billion to $18 billion net debt target ahead of plan.

Meg O’Neill said her first 100 days reinforced her conviction that BP has high-quality assets, strong people, and an integrated model that can create resilient earnings and cash flow through the cycle. She framed the business as underperforming relative to its potential and laid out five priorities: strengthen the balance sheet, simplify and high-grade the portfolio, invest with discipline, improve operational and cost efficiency, and drive a more accountable culture. Her tone was candid and reform-oriented, emphasizing urgency, tougher decisions, and a sharper focus on shareholder value per share.

Kate Thomson said quarterly profit improved sharply on stronger prices and trading, with group underlying profit up 78% sequentially to $5.7 billion and RCP before interest and tax at $10.3 billion. She walked through cash conversion, noting $13.5 billion of total cash sources, $12.9 billion of underlying cash generation, $3.1 billion of capex, $3.1 billion of perpetual hybrid bond activity, and $1.3 billion of dividends paid, leaving net debt at $22.3 billion. She also said BP has delivered $3.5 billion of structural cost reductions since 2024, but underlying operating expenditure is not coming down fast enough, and reiterated expected second-half cash support from a $2 billion to $3 billion working-capital unwind plus divestment proceeds, including around $6 billion from the Castrol transaction.

This call was largely prepared remarks with no real analyst Q&A included in the transcript. The main management responses were preemptive: BP said the working-capital unwind depends partly on how the Middle East situation evolves, and that the timing of the unwind is sensitive to the macro environment and prices. Management also clarified that the higher cost base remains an issue despite $3.5 billion of structural reductions, and that portfolio actions are intended to improve margins and simplify BP rather than merely cut costs.