On Tuesday, BP (NYSE: BP) warned that its fourth-quarter results would be hit by weaker oil and gas production, refining margins, and trading while also delaying a highly-anticipated investor day due to a medical procedure undergone by CEO Murray Auchincloss.
The British company said Auchincloss will be back in the office in February after undergoing a planned medical procedure from which he is recovering well. The planned February 11 capital markets day in New York will now be held on February 26 in London.
The delay is a further hiccup for Auchincloss, who has struggled to steady the company amid investor concerns over strategy and following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees.
Shares in the group, which have underperformed those of most of its rivals over the past year, were down nearly 3% in premarket trade. BP will still publish its fourth-quarter and full-year results as planned on February 11.
Auchincloss is expected at the capital markets event to unveil his strategy for the company after sharply slowing down investments in renewables and low-carbon energy and focusing on higher-return oil and gas projects since taking office in January last year.
“We remain of the view that the incumbent board does not have the courage to change direction and revitalize the strategy,” said Panmure Liberum analyst Ashley Kelty.
“The pressure on CEO Auchincloss will only continue to build unless he shows that he can be his own man and step out of Bernard Looney’s shadow.”
BP (NYSE: BP) said a drop in refining margins and the impact of turnaround and maintenance activity would result in an up to $300 million drop in profit quarter-on-quarter.
The group could see a further $200 million to $400 million reduction in its oil production and operations unit, it said, and it also expects a decline in production.
Global gasoline and diesel demand has fallen short of expectations, while the launch of new oil refineries in Asia and Africa has resulted in oversupply.
The group’s third-quarter underlying replacement cost profit – its definition of net income – was already the weakest since the fourth quarter of 2020, when profits collapsed during the pandemic, at $2.27 billion.
Last week, Shell (NYSE: SHEL) warned of weakness across multiple divisions, while Exxon Mobil (NYSE: XOM) signaled a $1.75 billion drop in fourth-quarter earnings.
BP expects its net debt in December to have fallen quarter-on-quarter, while exploration write-offs are seen falling by $100 million to $200 million.
