BP Cuts Costs, Raises $3B from Divestments Amid Pressure to Turn Business Around

BP has achieved $900 million in cost cuts and raised $3 billion from divestments, aiming to strengthen its balance sheet and reverse years of poor performance. The oil and gas major posted a $2.35 billion adjusted net income in Q2, exceeding analyst estimates. BP aims to cut $4-5 billion in structural costs and spend $20 billion on assets by 2027. Net debt has dropped to $26 billion, and the company maintained quarterly share buybacks at $750 million.

BP Plc has announced significant progress in its turnaround efforts, achieving $900 million in cost cuts and raising approximately $3 billion from completed or announced divestments in the first half of 2025. These moves are part of the company's broader strategy to strengthen its balance sheet and reverse years of underperformance.

In the second quarter, BP reported a $2.35 billion adjusted net income, surpassing the average analyst estimate of $1.76 billion. The period was marked by oil market volatility, with Brent crude prices fluctuating due to geopolitical factors and OPEC+ policy shifts. Despite these challenges, BP maintained its focus on cost reduction and divestments, demonstrating its commitment to improving financial performance.

The company has set a goal to reduce structural costs by $4 billion to $5 billion by the end of 2027, with $800 million already achieved in 2024. Additionally, BP plans to divest $20 billion worth of assets by the end of 2027. These efforts have already yielded $1.7 billion in structural cost reductions since the start of the program, contributing to a decrease in net debt by about $1 billion to $26 billion at the end of the second quarter.

BP's share buybacks remained at $750 million for the quarter, indicating a continued focus on shareholder value. The company's CEO, Murray Auchincloss, expressed optimism about the company's performance and the progress made in executing the turnaround plan. He highlighted improvements in operations, growth in the upstream and downstream businesses, and increased refining availability.

BP is the last of the five major oil companies to report earnings for the second quarter. While Shell Plc, Exxon Mobil Corp., and Chevron Corp. all exceeded expectations, TotalEnergies SE missed estimates. Saudi Aramco reported a decline in profit for the tenth consecutive quarter due to lower oil prices.

As BP continues to navigate market volatility and execute its turnaround plan, investors will closely monitor the company's progress in cost reduction, asset divestments, and financial performance. The company's ability to deliver on its goals will be crucial in restoring investor confidence and reversing years of underperformance.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-05/bp-cuts-costs-as-pressure-mounts-to-turn-business-around
[2] https://seekingalpha.com/news/4478115-bp-beats-top-line-and-bottom-line-estimates-initiates-q3-and-reaffirms-fy25-outlook
[3] https://www.bp.com/en/global/corporate/news-and-insights/energy-in-focus/second-quarter-results-interview-with-murray-auchincloss.html