BP wrote down $540 million in the quarter in its wind power projects offshore New York after officials rejected a request for better terms.
“This has been a solid quarter supported by strong underlying operational performance demonstrating our continued focus on delivery. Momentum continues to build across our businesses, with recent start-ups including Tangguh Expansion, BPx energy’s ‘Bingo’ central processing facility and Archaea Energy’s first modular biogas plant in Indiana. As we laid out at our investor update in Denver, we remain committed to executing our strategy, expect to grow earnings through this decade, and on track to deliver strong returns for our shareholders,” Murray Auchincloss, chief executive officer (interim), said.
Underlying replacement cost profit for the quarter was $3.3 billion, compared with $2.6 billion for the previous quarter. Compared to the second quarter 2023, the result reflects: higher realized refining margins, lower level of refining turnaround activity, a very strong oil trading result, higher oil and gas production, partly offset by a weak gas marketing and trading result.
Reported profit for the quarter was $4.9 billion, compared with $1.8 billion for the second quarter 2023.
Operating cash flow $8.7 billion and net debt reduced to $22.3 billion. Capital expenditure in the third quarter was $3.6 billion. BP now expects capital expenditure, including inorganic capital expenditure to be around $16 billion in 2023.
BP has announced the start-up of Tangguh Expansion – the third major project in 2023 – adding around 3.8 mtpa of producing capacity to the existing 7.6 mtpa facility. It has safely produced the first commercial cargo. In August, BPx energy successfully brought online ‘Bingo’, its second central processing facility in the Permian Basin. In September, a regulatory approval was received for the Murlach oil and gas development in the North Sea, a two well redevelopment of the Marnock-Skua field back to the ETAP (Eastern Trough Area Project) hub. BP has accelerated its biogas strategy – part of its bioenergy transition growth engine – BP’s Archaea Energy announced the start-up of its original Archaea Modular Design renewable natural gas plant in Medora, Indiana.
In convenience and mobility, BP continued to advance its growth strategy in EV charging and convenience: announcing an agreement in October with Tesla for the future purchase of $100 million of ultra-fast chargers in the US – this is part of the approved $500 million of investment in the US; and expanding its successful strategic convenience partnership with Auchan in Poland, with plans to add more than 100 EasyAuchan stores to its retail network by the end of 2025.
In low carbon energy, BP has strengthened its renewables pipeline to 43.9 GW net to BP from the rights awarded to develop two offshore wind projects, with total potential generating capacity of 4 GW, in the German tender round.