BP Posts $1.63 Billion Net Profit in Q2 2025 as Strategic Shift to Oil Drives Recovery

BP returned to profitability in the second quarter of 2025, posting a net income of $1.63 billion, a sharp contrast to a $129 million loss in the same period last year [1]. This marks the first time since the company’s “fundamental reset” strategy—announced earlier this year—has yielded a positive earnings report. The reset represents a strategic shift from renewables back to oil and gas, a move that is now showing early signs of success. The results also exceeded the company’s projected full-year 2025 net profit of $381 million, suggesting a stronger-than-expected recovery [1].

Kathleen Brooks, research director at XTB, described the outcome as a “significant milestone for the company as it returns to profit” [1]. She noted that the new leadership is focusing more on core energy production rather than unconventional branding efforts, such as the former CEO Bernard Looney’s frequent mentions of BP selling over 150 million cups of coffee annually [1]. Looney resigned in 2023 amid controversy related to undisclosed personal relationships with employees.

Current CEO Murray Auchincloss has taken a more traditional approach, emphasizing operational efficiency and investor returns. Speaking during the earnings call, he stated that BP is “relentless in its aim to deliver improvements” [1]. Auchincloss has also initiated a further cost review in collaboration with the newly appointed chairman, Albert Manifold, who will assume the role on October 1 [1]. The cost review is part of a broader strategy to reduce expenses and improve profitability.

BP is also responding to pressure from activist investor Elliott Investment Management. The company has committed to divesting $20 billion in assets by 2027, sharply cutting debt, and increasing spending on oil and gas exploration and production [1]. A key part of this plan involves the ongoing strategic review of the Castrol lubricants business, valued at $8 billion, which may be sold [1]. To date, BP has achieved $1.7 billion in structural cost reductions, putting it on track to meet or exceed its $4 billion to $5 billion target by the end of 2027. The company also raised its quarterly dividend by 4% to 8.32 cents and plans a $750 million share repurchase in the third quarter [1].

BP’s exploration efforts have yielded significant results, including its largest oil discovery of the century in Brazil’s Bumerangue block. This follows a series of successful exploration projects in Trinidad, Egypt, Libya, Namibia, Angola, and the U.S. Gulf [1]. While details on the Brazilian find remain sparse, the announcement reinforces BP’s renewed focus on upstream oil and gas.

The company’s reversal from its previous energy transition goals has been driven by market realities, including the post-pandemic energy crisis and the increased demand for fossil fuels following Russia’s invasion of Ukraine [1]. BP is now selling parts of its onshore wind portfolio in the U.S. and reducing its stakes in global solar and offshore wind businesses [1].

Analysts have acknowledged BP’s progress but remain cautious. RBC Capital analyst Biraj Borkhataria noted that the company is now on the “front foot” of its turnaround but is still in the early stages. He expects further asset sales and a stronger shift in capital expenditures toward oil and gas production [1].

BP’s stock rose nearly 2.5% in early trading, reflecting growing investor confidence. While speculation about a potential acquisition by Shell has faded, the company’s recent performance and strategic direction indicate a return to core competencies and stronger financial discipline [1].

Source: [1] Embattled BP beats on earnings as it touts selling oil, not cups of coffee, poking fun at its former CEO, (https://fortune.com/2025/08/05/bp-earnings-oil-coffee-profitability/)