bp's Q1 2025 profits halve amid strategic shift and market pressures

bp reported a near 50% drop in profits for the first quarter of 2025, to $1.38 billion, down from $2.72 billion in the same period last year due to weaker refining margins, softer oil and gas trading performance, and broader market volatility.

The results fell below analyst expectations, triggering a dip in bp’s share price as investor confidence took a hit. In response, the company announced a $500 million cut in capital expenditure for the year, revising its full-year investment plan down to $14.5 billion. The move is part of a broader push to stabilise finances and streamline operations.

To further strengthen its balance sheet, bp will increase asset divestments to as much as $4 billion, higher than previously projected. The company has also launched a $750 million share buyback programme aimed at reassuring shareholders and supporting its stock price.

bp also announced that bp's Executive Vice-President for Strategy, Sustainability, and Ventures Giulia Chierchia will leave her position in June. Her responsibilities will be absorbed across the organisation as bp simplifies its executive structure.

CEO Murray Auchincloss highlighted a renewed emphasis on bp’s core oil and gas operations, signaling a shift away from the company’s earlier ambition to lead in renewable energy. “In February, we announced a fundamental reset of our strategy, to grow the upstream, focus the downstream and invest with discipline in the transition, and we have already made significant progress,” he said.

This pivot aligns with growing pressure from the activist investor Elliott Investment Management, which recently increased its stake in bp to more than 5%. Elliott has been pushing for a tighter focus on profitability and capital discipline, challenging bp’s prior green transition narrative.

Operationally, bp continues to perform strongly in its upstream business, reporting over 95% plant reliability and six consecutive successful exploration projects. However, net debt has climbed to $27 billion. The company has set a medium-term target to reduce that figure to between $14 billion and $18 billion by 2027, relying on divestitures and cash flow discipline to meet the goal.