BP on Tuesday announced tumbling profits for the first half, with the British oil and gas giant hit by depreciation of assets and falling revenue.
Profit after tax slumped 79 percent to $2.13 billion compared with net earnings of $10 billion in the first six months of last year, BP said in a statement.
Revenue dropped eight percent to $98 billion in the latest reporting period.
BP said increased volume and lower exploration write-offs were “partly offset by increased depreciation charges and higher costs”.
The group earlier this month flagged to markets that its latest earnings would take a sizeable hit from a cut to oil refining in Germany.
Energy majors are also feeling the impact of declining gas prices, which have fallen heavily since soaring after the invasion of Ukraine by major energy producer Russia in early 2022.
Against this backdrop, BP “businesses continue to operate safely and efficiently”, chief executive Murray Auchincloss said in the earnings statement.
Auchincloss, a veteran BP employee, became CEO in January following a period as interim boss in the wake of Bernard Looney’s sacking.
Looney was dismissed over his failure to disclose past relationships with colleagues.
Despite the plunge in profits, BP’s share price gained two percent on dividend and share buyback announcements as well as thanks to better-than-expected underlying profits in the second quarter, analysts said.
“After the energy crisis in 2022 fuelled by Russia’s invasion of Ukraine which sent oil giants’ profits soaring, BP and its rivals have been getting used to a more normal period for energy earnings,” noted Victoria Scholar, head of investment at Interactive Investor.
Also Tuesday, BP gave the green light to the Kaskida oil project in the US Gulf of Mexico, with production set to begin in 2029.
Auchincloss “has been cutting back on BP’s green energy plans, shifting the focus back towards oil and gas”, added Scholar.
“Biofuel and wind projects have been either scaled back or paused.”
BP said Kaskida was the group’s sixth hub in the Gulf of Mexico, featuring a new floating production platform with the capacity to initially produce 80,000 barrels of crude daily.
Environmentalists hit out over BP’s latest announcements.
“Big oil companies like BP know their fossil fuel products are behind more deadly heatwaves, storms, and wildfires around the world, but instead of investing in clean energy, they are continuing to profit from people’s misery,” said Alice Harrison, head of fossil fuel campaigns at Global Witness.
“While millions of us struggle with high temperatures and high bills, BP are raking in billions of profits, paying out massive dividends, and doubling down on dirty new oil and gas projects,” she added in a statement.
