British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.
Nurphoto | Nurphoto | Getty Images
British oil major BP on Tuesday reported its weakest quarterly earnings in nearly four years, weighed down by a slump in crude prices and lower refining margins.
The energy firm posted underlying replacement cost profit, used as a proxy for net profit, of $2.3 billion for the July-September period. That beat analyst expectations of $2.1 billion, according to an LSEG-compiled consensus.
BP reported net profit of $2.8 billion for the second quarter of the year and $3.3 billion for the third quarter of 2023.
The firm’s third-quarter results were the weakest since the fourth quarter of 2020, when industry profits cratered during the coronavirus pandemic.
“We have made significant progress since we laid out our six priorities earlier this year to make bp simpler, more focused and higher value,” Murray Auchincloss, CEO of BP, said in a statement.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume. We also have a deep belief in the opportunity afforded by the energy transition – we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business.”
Oil prices fell by more than 17% in the third quarter amid concerns about the outlook for global oil demand.
BP maintained its dividend at 8 cents per share after raising it in the second quarter and said it would keep the rate of its share buyback program unchanged at $1.75 billion over the next three months.
The company said it is committed to announcing a further $1.75 billion share buyback in the fourth quarter but warned that, as part of an update to its medium term plans in February next year, it intends “to review elements of our financial guidance, including our expectations for 2025 share buybacks.”
Analysts at RBC Capital Markets said Tuesday that given the weaker macro environment, it expects BP to trim its shareholder returns next year.
“However we also expect BP to walk away from its ‘surplus payout ratio’ guidance and move towards the rest of the sector on a CFFO payout, which would also allow more room for de-leveraging,” they added. CFFO refers to cash flow from operating activities.
‘BP on the back foot’
Net debt rose to $24.3 billion in the July-September period, up from $22.6 billion at the end of the second quarter. BP said the increase was primarily driven by lower operating cash flow, higher capital expenditures and lower divestment.
Shares of London-listed BP fell around 1% on Tuesday morning. The stock price is down over 15% year-to-date, underperforming its European rivals as investors continue to question the firm’s investment case.
BP CEO Murray Auchincloss speaks at the panel dicscussion during the Abu Dhabi International Petroleum Exhibition and Conference held at ADNEC Exhibition Center on October 2, 2023.
Ryan Lim | Afp | Getty Images
“Against a backdrop of difficult trading conditions, this last quarter has not been plain sailing for BP and profit is considerably lower than it was this time last year,” John Moore, senior investment manager at wealth manager RBC Brewin Dolphin, said in a research note.
“Oil price conditions, combined with the costs associated with simplification of the business has put BP on the back foot,” Moore said.
“There has been a feeling of uncertainty around the company’s strategic financial priorities but the announcement of share buybacks and dividends today will be welcomed by the market,” he added.
Oil and gas production
BP’s latest results come shortly after reportsemerged the company scrapped its pledge to reduce oil and gas production by 2030, rolling back a core tenet of the firm’s ambition to achieve net zero emissions by the middle of the century — or sooner.
The move, reported by Reuters on Oct. 7, citing three unnamed sources, would be viewed as further evidence of CEO Auchincloss’s plan to prioritize near-term returns from the firm’s more profitable fossil fuel operations.
BP was also said to be targeting several new investments in the Middle East and the Gulf of Mexico to boost oil and gas output, the news agency reported.
A BP spokesperson told CNBC: “As Murray said at the start of year in our fourth quarter results, the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company.”
Britain’s Shell and France’s TotalEnergies are scheduled to report quarterly results on Thursday, with U.S. majors Exxon Mobil and Chevron set to follow suit on Friday.
Last week, Norwegian oil and gas producer Equinorreported a 13% drop in adjusted operating income in the July-September period, missing analyst expectations.
On today’s episode of Quick Charge, I, for one, welcome our new insect overlords. I’d like to remind them that, as a trusted media personality, I can be helpful in rounding up others to toil in their underground sugar caves cobalt mines.
We’ve also got the world’s quickest police pursuit vehicle, an Amnesty International report highlighting Tesla and Mercedes’ efforts to improve worker conditions in the Congo, and an exploration of Trump voters’ love for solar power.
Today’s episode is sponsored by BLUETTI, a leading provider of portable power stations, solar generators, and energy storage systems. For a limited time, save up to 50% during BLUETTI’s exclusive Black Friday pre-sale, now through November 11. Learn more by clicking here.
New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news!
Got news? Let us know! Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show!
Donald Trump will push fossil fuels and undo renewable energy policies, but it ultimately won’t stop clean energy’s momentum.
Trump has always pushed for more oil drilling and fewer regulations, left the Paris Agreement in his first term as president, says he hates “windmills,” promised to scrap offshore wind on “day one” if he won the 2024 election, and calls climate change a “scam.” And now that he’s won, this is a direct threat to the US’s pledge to reach net zero by 2050. After all, federal policy directly impacts the pace of renewable energy growth, especially when it comes to incentives and research funding.
The Biden administration’s groundbreaking Inflation Reduction Act (IRA), which has spurred a clean energy boom, will be challenged under Trump. Because Republican states have received 80% of the IRA’s money with which they’ve built factories and created thousands of jobs, a complete IRA repeal is unlikely. What’s more probable is that the Republicans phase out tax credits earlier than planned or cap overall funding.
Federal financial support for innovative technologies and projects could also take a hit. Brendan Bell, COO of Aligned Climate Capital, who formerly led the US Department of Energy’s Loan Programs Office, told Electrek:
My partner Peter and I led the DOE Loan Program Office under President Obama. We supported the first utility-scale solar and storage projects, as well as early EV investments – including the first loan to Tesla.
Today, these technologies are commercialized and are propelling the clean energy transition. None of it would have been possible if these programs had been cut off 10 years ago.
Put simply, Trump can’t turn back the tide of clean energy – but he could delay tomorrow’s solutions and the birth of new industries.
BloombergNEF’s “2H 2024 US Clean Energy Market Outlook,” released at the end of October, examined the worst-case scenario, where control of both the Senate and the House leads to a full repeal of the IRA tax credits:
The wind, solar, and energy storage sectors jointly see a 17% drop in total new capacity additions over 2025-2035, with 927 gigawatts (GW) of cumulative build compared to 1,118GW in BNEF’s base case forecast. Wind sees the greatest fall in activity in this scenario with a 35% drop, followed by energy storage at 15% and solar at 13% relative to BNEF’s base case.
That’s a blow we can’t afford at a time when we need to reduce emissions by 50% from 2005 levels by 2030 to avoid climate disasters becoming even worse than they already are.
But all is not lost. The clean energy market isn’t solely driven by federal policy. Over the last decade, solar, wind, and EVs have become more cost-competitive and popular. State policies play a huge role too, and many states are committed to their own clean energy goals regardless of who sits in the White House. States like California, New York, and Washington have ambitious targets to combat climate change, and deep red Texas is No. 1 in the US for both solar and wind.
Corporations are also key players. Companies like Amazon, Google, and Walmart have committed to going 100% renewable, and they’re not about to reverse course. This demand keeps the market for renewables strong. Plus, there’s significant public support for clean energy jobs, and renewables create more employment opportunities than fossil fuels in many regions of the country.
JD Dillon, chief marketing officer of California-based solar tech manufacturer Tigo Energy (Nasdaq: TYGO), said to Electrek, “The march toward renewable clean energy is both inevitable and the right thing to do. In a perfect world, we would eliminate partisanship from the renewable energy conversation because everyone benefits from a cleaner environment and affordable energy. Unfortunately, none of us live in said perfect world.”
The US clean energy sector may slow down, but it’s hard to stop a train that has already left the station. What consequences this slower-moving train will have for the US and the world remains to be seen.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links.More.
The world’s largest EV battery maker is advancing a new type of battery, promising higher energy density. According to a new local report, CATL is investing heavily while ramping up its workforce to bring all-solid-state EV batteries to market.
With trial production reportedly kicking off, we could see CATL launch all-solid-state EV batteries sooner than expected.
According to a new local report from LatePost (via CnEVPost), CATL has entered the trial production phase of 20 Ah samples. The news comes after the EV battery giant added over 1,000 workers to its R&D team this year.
The report claimed that CATL is now focused on the final Sulfide phase and has already commenced trial production of 20 Ah samples.
The company’s solution has an energy density of up to 500 Wh/kg for lithium ternary batteries, 40% more than current batteries. However, the report said charging speed and cycle life are not quite where they need to be.
At 20 Ah, the battery solution is finalized and ready for its next stage, production tech exploration.
CATL is advancing all-solid-state EV batteries
The report says after that it’s mainly manufacturing hurdles, that can be overcome with a bigger workforce.
In April, CATL’s chief scientist, Wu Kai, announced that the company had developed a verification platform for 10 Ah all-solid-state EV battery cells. Wu also said CATL aimed to produce all-solid-state EV batteries in small volumes in 2027, the first time the news was made public.
In September, the company’s chairman, Robin Zeng, said CATL’s research into the new battery tech was “second to none.”
Several companies, including Toyota, Mercedes-Benz, Stellantis, and others, are betting on solid-state EV batteries as the future.
According to data from CnEVPost, CATL is dominating the global EV battery market with a 36.7% share through September 2024.
China’s BYD is second with a 16.4% share of the market. BYD is also planning to launch solid-state batteries. At the September 2024 World New Energy Congress, BYD’s head scientist and engineer, Lian Yubo, said solid-state EV batteries could be widely used in five years.
FTC: We use income earning auto affiliate links.More.