BP CEO Murray Auchincloss on Tuesday leaned into the growth potential of the company’s recent oil and gas discoveries, as the struggling energy major contends with takeover questions and a major turnaround plan.

“Inside the upstream, we’ve had tremendous performance, along with record operating efficiency [and] along with starting up five new major projects,” BP’s Auchincloss told CNBC’s “Squawk Box Europe“, just after the release of the company’s second-quarter results.

He added that he was “very optimistic” about the company’s latest exploration discovery in the Bumerangue block in Brazil’s Santos Basin, just over 400 kilometers (248.5 miles) from Rio de Janeiro. BP is currently carrying out tests to further analyze the block’s potential.

The Bumerangue discovery, announced Monday, is the firm’s 10th since the start of the year and reflects a potentially significant boost as BP continues to double down on hydrocarbons.

After underperforming its peers in recent years, the firm has shifted gears by way of a fundamental strategic reset that will see BP prioritize fossil fuels and slash renewable spending.

Earlier on Tuesday, the energy major reported underlying replacement cost profit, used as a proxy for net profit, of $2.35 billion for the three months through June — comfortably beating analyst expectations of $1.81 billion, according to an LSEG-compiled consensus.

Ramping up investor returns, the company also said its quarterly dividend will increase to 8.32 cents from 8 cents and that it will maintain the pace of its share buyback program at $750 million for the second quarter.

Shares of the company were last seen trading 1.6% higher during morning deals.

The downturn of recent years has turned BP into the subject of intense takeover speculation, with some questioning a potential future merger with domestic rival Shell. For its part, Shell in late June said that it had “no intention” of making an offer.

UAE oil giant ADNOC, as well as U.S. oil giants Exxon Mobil and Chevron, are among some of the names that have also been touted as possible suitors.

Asked whether the company had been approached by any potential merger partners amid ongoing takeover speculation, Auchincloss said BP is focused on growth.

“That’s what is going to drive the share price up for shareholders,” he added.

Maurizio Carulli, global energy analyst at Quilter Cheviot, said BP’s earnings were the company’s first positive quarterly results “in a very long time,” noting that “what is perhaps most encouraging” was the firm’s outperformance came despite a period of lower oil prices.

“The management team has clearly started delivering on the strategy reset announced a few months ago. There has been huge speculation of late on the fate of BP and whether or not a rival will look to take them out with a merger,” Carulli said.

“If positive results like this continue to be delivered, that speculation may just end up being a blip in BP’s long and storied history,” he added.

BP, which is under intense pressure to improve profitability from the likes of activist investor Elliott, noted that it would initiate a further cost review of its assets — mere weeks before Albert Manifold joins BP’s board from Sept. 1 and as chair from Oct. 1.

Asked for further details of this strategic review, Auchincloss told CNBC: “If you think back to 2020, we reduced our costs by 25%, and in 2024 we announced another program to reduce our costs by another 20%. That’s the $4-5 billion that I referenced earlier.”

“If we can achieve that, that will take us to around top quartile in the sector, but I don’t think that is enough,” Auchincloss said.

BP’s net debt came in at $26.04 billion at the end of the second quarter, down from nearly $27 billion compared to the first three months of the year.

“We need to keep driving safely to be the very best in the sector we can be. And that’s why we’re focused on another review to try to drive us toward best in class inside the sector,” Auchincloss added.

Saudi Aramco on Tuesday posted a drop in second-quarter revenues, citing lower crude oil and refined chemical products prices that were only partially offset by higher traded volumes.

The world’s largest oil company declared an adjusted net income of 92.04 billion Saudi riyal ($24.5 billion) over the three months to the end of June. The result compares with a forecast of adjusted net income of $23.7 billion, according to an analyst survey estimate supplied by the company.

Second-quarter revenues dropped to 378.83 billion Saudi riyals from 425.71 billion Saudi riyal in the same period of the previous year.

“Market fundamentals remain strong and we anticipate oil demand in the second half of 2025 to be more than two million barrels per day higher than the first half,” Aramco CEO Amin Nasser said in a Tuesday statement accompanying the results.

Crude prices have stayed depressed over the course of the year, barring a brief second-quarter flare-up sparked by Israel-Iran tensions. Futures have been under pressure from an uncertain outlook for demand, exacerbated since April by the rollout of Washington’s wide-spanning tariffs. The protectionist trade measures muddy the picture for growth in the world’s largest economy and the future of the U.S. dollar, which denominates most commodities — including crude oil.

Aramco’s income is set to see a boost from higher output, after Saudi Arabia – and seven other OPEC and non-OPEC partners — complete unwinding 2.2 million barrels per day of voluntary cuts through a last tranche in September. Saudi Arabia most recently produced 9.356 million barrels per day in June, according to independent analyst estimates compiled in OPEC’s Monthly Oil Market Report.

Aramco has increasingly tapped debt markets, with two issuances totalling $9 billion in the second half of 2024 and a three-part bond sale of $5 billion this year.  

Front of mind for investors is the dividend policy at Aramco, which in March slashed investor returns for 2025 to $85.4 billion — down sharply from the $124.2 billion of 2024 — after a first-quarter decline in net profits. Aramco declared a base dividend of $21.1 billion and a performance-linked dividend of $0.2 billion in the third quarter.

The company’s dividend yield stood at 5.5% as of Monday, still ahead of U.S. industry peer Exxon Mobil‘s 3.6% and Chevron‘s 4.5%, according to FactSet data.

Aramco’s payouts ripple sharply into the budget of Saudi Arabia, which has been juggling diversifying its economy away from oil reliance under Crown Prince Mohammed bin Salman’s signature Vision 2030 program. Saudi Arabia’s gross domestic product expanded by 3.9% in the second quarter, boosted by non-oil activities.