BP's Q4 2024: Strategic Reset Sparks Cost Reduction Debate Amid Refining Performance Optimism

These are the key contradictions discussed in BP's latest 2024Q4 earnings call, specifically including: Strategic Reset, Cost Reduction Targets, and Refining and Trading Performance Improvements:



Strategic Progress and Portfolio Shifts:
- BP achieved significant strategic progress in 2024, including 10 new FIDs, access to new countries like India and Iraq, and divestments of non-core assets.
- These actions were aimed at reshaping its portfolio to focus on growth and increasing shareholder value.

Refining Challenges and Improvement Plans:
- BP's refining business faced challenges due to outages and difficult market conditions, impacting profitability.
- The company is focusing on improving plant reliability, optimizing commercial operations, implementing a strong cost agenda, and reducing complexity in turnarounds to enhance profitability.

Upstream and Trading Performance:
- Upstream production was around 2.36 million barrels per day, up 2% year-on-year, with plant reliability above 90%.
- BP's trading business maintained its average 4% uplift to group ROACE despite low oil and refined products volatility.

Capital Markets and Shareholder Returns:
- BP announced a 10% increase in its dividend per share and $7 billion in share buybacks, including $1.75 billion in Q4.
- The company aims to drive performance and improve cash flow through strategic actions, benefiting shareholder value.

Earnings and Growth Outlook:
- Adjusted EBITDA for 2024 was $38 billion, with expectations for 3%-4% underlying growth in 2025, considering the absence of the Whiting outage and improved performance across segments.
- The growth outlook is supported by improvements in refining margins, cost optimization, and stronger performance in segments like Castrol and TA.