英國石油 (BP) 2026 Q2 法說會逐字稿

Hello, everyone, and thank you for your interest in BP's second-quarter 2026 results. Today's video presentation features Meg O'Neill, Chief Executive Officer; and Kate Thompson, Chief Financial Officer.

The running order for today's prepared remarks is as follows. Meg will begin with her reflections since becoming CEO and the priorities she is setting for BP. Kate will then take you through our second-quarter financial performance. And Meg will return to close with her perspective on the path ahead.

Let me first draw your attention to our cautionary statement. In this video, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to the factors we note on this slide and in our UK and SEC filings.

Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website.

And with that, over to you, Meg.

Thanks, Craig. Just a few weeks ago marked my 100th day as CEO of BP. This has coincided with one of the most volatile periods within global energy markets. When the conflict in the Middle East disrupted global oil and gas supply, the BP team responded, keeping energy flowing across the world safely, reliably, and efficiently. And I want to start with an update on safety.

Over the past four months, I've seen a deep commitment to safety across BP. It comes first, always. But performance in the first half of the year has not been where it needs to be. Tragically, a Castrol colleague died following an incident at the Gemlik blending plant in Turkiye in April. Our thoughts remain with their family, friends, and colleagues. An investigation is underway to understand what happened, and we will learn and apply those lessons to improve our business.

On process safety, we saw an increase of events in the first half of 2026 when compared with the same period in 2025, including an increase in Tier 1 events. Nothing is more important than the safety of our people. Operational excellence is foundational to what we do, and this begins with consistent, safe performance. Our safety goal remains to eliminate fatalities, life-changing injuries, and Tier 1 process safety events across our operations.

Turning to second-quarter results, we demonstrated strong financial delivery and progress towards our 2027 targets. But there are also areas where performance has been below where it needs to be.

On the headlines, upstream production was 2.2 million barrels oil equivalent per day. This was 6% lower than the first quarter, driven by scheduled seasonal maintenance predominantly in the Gulf of America, disruptions in the Middle East, and some operational issues in the North Sea and Indonesia. This was partly offset by stronger performance at BPX.

Refining throughput was around 1.5 million barrels per day. This was 4% lower than the first quarter due primarily to higher planned turnaround activity and lower refining availability. We delivered $5.7 billion of underlying profit, $2.5 billion higher than the first quarter, and $10.9 billion of operating cash flow after a $1 billion working capital build.

Financial obligations, including net debt, hybrids, and Gulf of America settlement liabilities reduced by around $7 billion compared to the first quarter. And today, we have announced a 4% increase in the dividend per share.

Before I hand over to Kate to go into our 2Q results in more detail, I would like to share my reflections of the business and our direction of travel. Alongside working with the leadership team to manage the business, I've spent significant time with BP's teams on the ground. I've also spoken with investors, business partners, governments, and other key stakeholders. I came to BP because I believe this company can be extraordinary and I've seen enough in four months to know that's true.

When you combine great assets with great people who are ready to step up, you get a company with real potential. I believe our integrated model is a source of competitive advantage. The combination of upstream and downstream supported by trading gives BP an earnings and cash flow profile that is more resilient through the cycle with greater flexibility to capture value across markets. But our performance over the past few years has not met our own expectations nor the expectations of our shareholders.

We have not delivered consistently enough across our operations. We have written off too much shareholder value. And we face a challenge of liabilities and costs, that means our resilience to a low price environment is insufficient, exacerbated by a portfolio that is too stretched and too complex.

To achieve consistently strong performance, we have to challenge ourselves. We must hold up a mirror and be honest about what we see, be proud of our strengths, and do the work to identify and address our weaknesses. And we must deliver at pace with urgency and with deep accountability for the decisions we make.

Going forward, every part of the company needs to earn its place: generating cash, improving returns, and strengthening the whole. We need to improve the quality of our earnings and cash generation and unlock more value for shareholders. That is why I am setting five priorities to deliver a step change in performance and to grow shareholder value.

The first priority is strengthening the balance sheet. We are making progress, but we are not where we need to be. Too much cash is currently being used to service liabilities. I want more of the value proposition to move back to equity holders through growth, distributions or both. As a starting point, that means reducing financial obligations relative to our scale to at least in line with our European competitors. A stronger balance sheet gives us more resilience, more flexibility, and greater capacity to create value through the cycle.

Second, we will simplify and focus the portfolio. As we high grade, we will do so based on value creation, not sentiment, not history, and not legacy attachment. Some assets may have been important to BP in the past. That does not necessarily mean they are the right assets for BP's future. We are in action. We plan to market our US renewable natural gas business, Archaea Energy, and we recently launched a process to market our North Sea business. I'll come back to talk more about portfolio shortly.

Third, we will invest with discipline and drive capital efficiency. Every dollar of capital has to compete, and we need to get fit to grow. We need to compete in the weight class we are in, focusing capital on our best opportunities to maximize cash flow and returns. Our decision to exit Bay du Nord shows that discipline in action.

Fourth, we need to run our assets safely, reliably, and with greater cost efficiency. We have made progress on structural costs, but interventions to date have not delivered sufficient savings to the bottom line. That's what matters and we have more to do. The opportunity is to use technology, simplification, and organizational redesign to build a more competitive BP. Kate will talk more about costs shortly.

And finally, we must tackle culture to enable faster, more effective decision-making and greater accountability for results. I want challenge to be welcomed, disagreements surfaced early, and decisions to be rigorous, evidence-based, and accountable.

Reorganizing into upstream and downstream is an important first step on this journey. Portfolio optimization is central to building a simpler, stronger, and higher value BP. The data on this slide gives an illustrative view of free cash flow and returns from our assets over the past three years. It does not capture the three-cycle value of every business or the additional value created through integration and trading for all assets.

And as with capital allocation, we consider a broader set of factors, including strategic alignment, optionality, and sustainability. But it does show the value lens we are applying across BP. We have assets and businesses that generate attractive returns, material free cash flow, and strategic value for the group. But we also have variability, with some assets consuming capital, adding complexity, or diluting returns without generating enough cash flow. So we are taking an objective view, asset by asset, business by business, looking at cash generation, returns, capital efficiency, and strategic fit.

Upstream is anchored by material positions, including in the US and the Middle East. Advantaged basins where we have scale, deep technical capability, and strong relationships. I'm convinced that BP has the potential to be one of the best upstream businesses in the industry.

Major projects sanctioned for startup between 2028 and 2030 are progressing according to schedule, but sanctioning projects is not the proof point, delivery is. Executing these projects safely, on time, and on budget is what investors expect from BP, and it is a core measure of how we will rebuild confidence.

Downstream is a strategically important business, bringing scale, diversification, and resilience to the group earnings and cash flow. Regional integrated value chains link refining, logistics, trading, and customer channels to capture value across the system.

During recent volatility, that helps secure supply and keep products flowing to customers. The model varies by market, but the principle is the same. The system is strongest when it works together. Cherry Point's on the US West Coast is a good example. Its coastal position gives access to global crude markets, feedstock flexibility, export capability, and market optionality.

And our customer channels, retail, aviation, and B2B, provide stable offtake and a strong return on capital. But there are also areas to improve, including reducing total cash cost relative to gross margin and targeted performance programs in businesses like TravelCenters of America. And we will continue to assess and divest assets that do not provide integrated value or dilute our margin profile as we have with the announced sale of Austrian mobility and convenience and Gelsenkirchen refinery.

Now, the point of optimization is not simply to reduce the number of assets. It is to focus capital on activities that can generate stronger cash flow, better returns, and greater value through the cycle and taking action where they do not.

Assets matter, but it's our portfolio combined with a world-class trading organization that provides differentiated value for BP. Supply trading and shipping connects the system, enabling us to source supply, manage disruption, access demand growth, and direct molecules to the highest value markets.

We have built deep capability across regions, products, and markets over decades and now operate a trading business of significant scale. That scale and diversification matters. We are not dependent on any one region, asset, or market condition to create value.

And our track record is strong. Over the last six years, trading has delivered an average uplift of around 4 percentage points to BP's return on capital employed of which at least 2 percentage points has come from the base global portfolio, which has demonstrated resilience through the cycle. The breadth of the portfolio gives us the ability to capture upside when market conditions present greater opportunities. We will continue to invest in technology across trading to maintain leadership, improve efficiency and grow, and our merchant strategy will continue to provide access to emerging markets.

As we grow, we will maintain cost discipline, growing revenue while maintaining the cost base to improve margins. It is this combination of a high-quality upstream and downstream supported by distinctive trading capability that makes a world-class global integrated oil and gas company, one that provides energy to our customers while creating value for our shareholders. We're clear on our plan and looking to accelerate delivery.

Now let me hand over to Kate to talk in more detail on our second-quarter results. Thanks, Kate.

Thank you, Meg. So now, let me turn to our second quarter financial performance in more detail, starting with profit.

Group underlying profit increased by 78% from the first quarter, helped by a broadly strong price environment and higher trading performance. Starting with segment earnings, in gas and low carbon energy, segment underlying operating profit increased by around $800 million, reflecting higher realizations, including the impact of price lags, with gas marketing and trading broadly flat compared with the first quarter.

In oil production and operations, segment underlying operating profit increased by around $1.6 billion. This reflected higher liquids realizations, including the impact of price lags, production mix benefit, and higher income from equity-accounted entities. These positive factors were partly offset by higher exploration write-offs, mainly related to exiting Bay du Nord and lower production due to seasonal maintenance in the Gulf of America.

In customers and products, segment underlying operating profit increased by around $1.8 billion. Within customers, profit benefited from seasonally higher volumes, higher fuel margins, a stronger Castrol performance, and a slightly higher midstream contribution, partly offset by lower earnings from bioenergy. Within products, profit benefited from significantly stronger realized refining margins and a slightly higher oil trading contribution, partly offset by higher planned turnaround and maintenance activity, as well as the impacts of the third-party event at Whiting in April.

Other businesses and corporate charges were around $70 million higher than the previous quarter, primarily reflecting impacts of the venture's divestment and one-off corporate items. Taking all these factors together, group underlying replacement cost profit before interest and tax was $10.3 billion compared to $6.3 billion in the previous quarter.

Below the operating segments, the underlying tax charge increased by around $1.5 billion, reflecting higher earnings in the quarter. Group underlying replacement cost profit was $5.7 billion. We recorded net adverse adjusting items of around $1.1 billion across the segments, including post-tax net impairments of around $800 million, primarily related to transition businesses in the gas and low carbon energy segment. After inventory holding losses of around $700 million, our second-quarter IFRS profit was $3.9 billion.

Moving from earnings to cash flow and the balance sheet. This quarter, stronger earnings converted into stronger cash generation, helping us to reduce financial obligations by around $7 billion. Now, rather than follow the cash flow statement line by line, I want to walk through the quarter sources and uses of cash, showing how cash generated by the business flowed through to net debt and financial obligations.

Our total sources of cash in the quarter were $13.5 billion. Underlying cash generation was $12.9 billion. This compares with reported operating cash flow of $10.9 billion, which was after $1 billion of interest payments and around $1 billion billed in working capital during the quarter. I'll come back to working capital shortly. We also received around $600 million of divestment proceeds during the quarter.

On the uses of cash, the main outflows were CapEx of $3.1 billion; perpetual hybrid bonds of $3.1 billion, including the redemption of $2.9 billion; and $1.3 billion of dividends paid. After these cash outflows, net debt reduced by around $3.1 billion, which brought the balance at the end of the quarter to $22.3 billion.

I now want to spend a moment on working capital, given its importance to cash generation. During the second quarter, we reported a $1 billion build. This reflected the scheduled $1.1 billion Gulf of America settlement and around $200 million for decommissioning. And as a reminder, these items are not expected to reverse because of their accounting treatment. Partly offsetting this, we saw a $700 million release for seasonal effects and pricing, taking our first half working capital bill to $7 billion.

Subject to the macro environment and prices, we expect $2 billion to $3 billion to unwind from here over the remainder of the year as we move through the peak demand period in customers and products. And as I mentioned in the first quarter, the timing of the remaining unwind will depend on how the situation in the Middle East evolves.

The expected unwind of working capital is one important source of cash in the second half. Together with organic cash generation and the remaining contribution from divestment proceeds this year, including around $6 billion from the announced cash roll transaction, it supports our path to further reducing financial obligations.

On the stated price assumptions, we expect to see financial obligations reducing to around $39 billion to $41 billion by the end of 2026. This would mean delivering our $14 billion to $18 billion net debt target ahead of plan, including our plan to repay $1 billion of perpetual hybrid securities in the third quarter. But I want to be clear that at that level, there would still be more to do. We will continue reducing financial obligations beyond 2026 with organic cash generation and further expected divestment proceeds.

As Meg said earlier, cost efficiency is a management priority and a key to improving profitability. Since 2024, we've provided greater transparency by reconciling production and manufacturing expenses and distribution and administration expenses into two categories: variable costs and underlying operating expenditure.

Let me say a few more words on both. Starting with variable costs, the largest components are transport and shipping, environmental, and marketing and distribution. These costs are mainly linked to product movement, environmental compliance obligations, and customer-facing activity within our ST&S and C&P businesses. The important point is that these costs should be assessed alongside the gross profit they help generate. We're focused on growing and optimizing gross profit, capturing revenue and margin opportunities while managing the variable costs associated with that activity.

In the first half this year, variable costs increased year on year, but related gross profit increased by more. So we continue to manage these costs carefully with a focus on value creation. Underlying operating expenditure is different in that it represents the structural cost base of the company, and here, we are disappointed that underlying operating expenditure is not coming down quickly enough.

Since the start of the program, we have delivered $3.5 billion of structural cost reductions, but the benefits are not yet sufficiently visible in earnings and cash flow. The actions taken so far have not been sufficient to overcome inflation, some acquired costs, and the complexity of our cost base. We have identified further opportunities to optimize supply chain costs to simplify organizational structure and use technology to build a more competitive BP.

In parallel, the portfolio review Meg described has identified businesses where divestment can simplify BP, improve margins and strengthen the quality of cash flows. Gelsenkirchen is a clear example, an asset with a higher cost intensity than the group average. Divestment also reflects our assessment of strategic fit through cycle earnings and integration value. Our announcement to market Archaea Energy is another example. Importantly, cost reduction is an output of these portfolio decisions and not the reason for them.

Turning now to outlook and guidance. As we continue to enhance our disclosures, we are now adding production and throughput ranges to our forward-looking guidance. I won't read through all the details, but let me note some items by exception.

We now see full-year CapEx in the range of $13.5 billion to $14 billion, reflecting our decision to delay asset farmdowns to capture better value. We now expect full year divestment proceeds to be in the range of $8 billion to $9 billion. And to reflect the completion of the sale of the Gelsenkirchen German refinery effective July 31, we have updated our refining indicator margin.

And finally, we have updated our full year underlying effective tax rate to be around 35% to 40%. More details can be found in our appendices and supplementary disclosures on bp.com.

With that, let me hand back to Meg.

Thanks, Kate. I'm an operator at heart and pragmatic in decision making. I'm committed to analytical rigor and an unemotional approach to the decisions to be made, including a full review of the portfolio and cost structure and a relentless focus on performance. As we work through this process, we will be transparent about what needs to be fixed and make the tough decisions to ensure we move at pace to unlock the value that is embedded in BP.

I have deep conviction this company can and will be a world class global integrated oil and gas company. I have confidence in BP's strengths and future potential, and I'm also honest about where we need to improve. We need to convert potential into stronger, more consistent performance. How we do that is to focus, perform and grow.

BP has great assets, deep capabilities, and people who know how to deliver. We will focus on the assets, businesses, and markets where we have the strongest competitive positions and the clearest routes to value creation. That means simplifying the company, strengthening the balance sheet, high grading the portfolio, and allocating capital only where it can deliver competitive returns.

Every part of BP has to earn its place. We need to perform more consistently, safely, operationally, and financially. Safety performance must improve, costs must come down, project delivery must be disciplined, and accountability must be sharper. We need to get BP fit for the weight class we are in today so we can compete harder and generate more cash.

BP has real growth potential, but growth must be earned through a track record of delivering consistent positive returns and cash flow. We need to demonstrate that we can deliver on that commitment and do so quickly and with greater intensity.

As we build that track record, we build our capacity, confidence, and credibility to invest further. Ultimately, the growth that matters most is shareholder value, growing value per share over the long-term. I and all of us at BP will ultimately be judged by the performance of the business. This is the role that I signed up for, and I'm excited for the challenge.

In the first instance, that means delivering on the primary targets that we've laid out to the market. That's what my leadership team is focused on, and I'd like to acknowledge their discipline, accountability, and commitment to delivery.

I'm confident we're moving in the right direction. We've made progress so far this year and have momentum going into the second half with more to come. The task is to move with urgency, accelerate delivery, and build a stronger, more focused, more competitive company, one that performs consistently and delivers stronger outcomes for our shareholders and all those who rely on us.

Thank you for your interest in BP.