Energy giant BP has revealed lower-than-expected profits in the face of lower energy prices and weaker refining margins than this time last year.
The London-listed company also revealed plans to deliver two billion dollars (£1.6 billion) extra in cost savings by 2026.
BP said that underlying replacement cost profit, its preferred measure, was 2.7 billion US dollars (£2.2 billion) in the first quarter, down from 4.9 billion dollars (£3.9 billion) a year earlier.
Lower profits were blamed on lower oil and gas prices, the impact of an outage at its Whiting refinery and weaker fuel margins,
However, it said this was partly offset by reduced levels of turnaround activity and stronger oil trading.
BP said on Monday that it will push forward with further cost-cutting, with plans to reduce costs by 2 billion dollars (£1.6 billion) by 2026 compared with levels from 2023.
Bosses at the company said it would look to digital and supply chain improvements in order to find savings.
The company said it will continue to hand more cash to shareholders despite the fall in profits, announcing a new 1.75 billion dollar (£1.4 billion) share buyback.
Murray Auchincloss, BP’s chief executive, said: “We’ve delivered another resilient quarter financially and continued to make progress on our strategy.
“Oil production was up and our Ace (Azeri Central East) platform in the Caspian is now producing.
“We are simplifying and reducing complexity across BP and plan to deliver at least two billion dollars of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs.”
Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “As with Shell last week, investors were looking for reassurance from BP on production volumes and capital discipline.
“However, BP has missed profit expectations on the back of lower gas prices, weaker margins, and operational outages.
“The extension to the share buyback programme and maintained dividend will, nevertheless, provide shareholders with some solace.”
Alice Harrison, head of fossil fuel campaigns at Global Witness, said: “Instead of helping to rebuild Ukraine, ease the burden of high bills or support countries suffering from the climate crisis, BP is making the rich richer.
“And this will continue to be the case until we make the urgent switch to a clean energy system.”
It comes a week after rival Shell reported better-than-expected earnings over its first quarter of the year.
Elsewhere in the energy sector, Saudi Arabian oil giant Aramco also reported a fall in earnings for the latest quarter on Monday.
