BP strategy executive departs as profits halve – Daily Business

BP is cutting its spending plans and has announced that its strategy chief is leaving after its first-quarter profits fell by half.

The FTSE 100 energy firm said its preferred profit measure – underlying replacement cost profit – dropped by 49% to $1.38 billion from $2.72bn a year earlier.

This was mainly a result of lower refining margins and weaker performances by its oil and gas traders.

Analysts had expected $1.53 billion and the lower figure will increase pressure on BP’s chief executive Murray Auchincloss who is also facing criticism from environmentalists over the downgrading of its green targets.

In February, BP revealed a new growth strategy focused on extracting more oil and gas after pressure from some investors to boost profits at the firm.

However, the principal demand is for improved performance against a falling share price. Elliott, the New York hedge fund, has amassed a stake of more than 5% and has been calling for changes on the board. BP said Giulia Chierchia, its executive vice-president for strategy, sustainability and ventures, is stepping down.

The company also said its capital spending this year will fall by $500 million to $14.5 billion “in light of market volatility”.

Mr Auchincloss insisted the company has been making progress with the strategy despite wider economic uncertainty.

“In February, we announced a fundamental reset of our strategy – to grow the upstream, focus the downstream and invest with discipline in the transition – and we have already made significant progress,” the CEO said.

“So far this year we have started up three major projects, made six exploration discoveries and have progressed our divestment programme – all while delivering strong operational performance, with over 95% upstream plant reliability supporting the best operating efficiency on record, and over 96% refining availability,” he said.

“We continue to monitor market volatility and changes and remain focused on moving at pace,” he added.

The company indicated it could raise more money from divestments during the year.