Sparks - bp

bp’s Q226 underlying RC profit of $5.7bn was up from $3.2bn in Q126 and more than double the Q225 result, although the 14 July trading statement had pre-announced most of this, leaving guidance and strategy as the substance of the latest release. Operating cash flow of $10.9bn, after a working capital build, cut net debt to $22.3bn from $25.3bn, with the wider total including hybrids, leases and Gulf of America settlement liabilities falling to $6.9bn. Refining and trading led the segments on an indicator margin of $29.6/bbl, with the oil trading contribution higher both quarter-on-quarter and year-on-year. The dividend rose 4% to 8.66c, with buybacks still suspended.

In her first full quarter, CEO Meg O’Neill set out five priorities, framed as focus, perform, grow, spanning balance sheet strength, portfolio simplification on value rather than sentiment or history, capital discipline, operational excellence and accountability. Operational excellence is the most pointed of these, with plant reliability down to 92.4% from 95.7% in Q126 due to maintenance and Middle East disruption. The July move to an Upstream and Downstream structure supported by trading is the first step, although reporting segments remain unchanged until 31 December 2026. Portfolio delivery covered completion of the Gelsenkirchen sale, agreed terms in Kirkuk, the Austrian retail disposal and marketing of the North Sea and newly announced Archaea Energy.

Guidance shifts in two directions that matter for deleveraging: FY26 capex rises to $13.5–14.0bn from $13.0–13.5bn as farm downs are delayed, while divestment proceeds fall to $8–9bn from $9–10bn, still including c $6bn from Castrol. The refining rule of thumb drops to $450m per $1/bbl from $550m post Gelsenkirchen, and impairment testing now assumes Brent of $80/bbl, up from $70/bbl, on the basis that Middle East supply disruption resolves before year end. Gearing including leases fell 1.6pp in the quarter to 31.8%, and hybrids are down to $13.0bn from $16.0bn at the start of the year, keeping the $14bn to $18bn net debt target for end 2027 in view.