BP hits debt target a year ahead of schedule as profit beats forecast

BP PLC on Friday delivered quarterly profit well ahead of forecast and reported much reduced debt as rising oil prices continued to support performance.

The London-based oil major reported profit attributable to shareholders of USD4.70 billion in its third quarter ended September 30, up sharply from USD1.16 billion a year earlier.

Underlying replacement cost profit ballooned to USD8.46 billion from USD2.21 billion, beating the company's compiled consensus of USD7.33 billion, and rising from USD5.73 billion in the second quarter.

Compared with the second quarter, BP said the underlying result mainly reflects "significantly higher realised refining margins and significantly higher gas and marketing trading result."

Performance was supported by higher oil and gas prices, stronger refining margins and improved operational performance, BP said.

Chief Executive Meg O'Neill said: "These are dynamic times with volatility and disruption to trade flows continuing to define energy markets."

The CEO noted BP has maintained upstream production at around 2.2 million barrels per day, upstream plant reliability and refining availability both improved compared to the previous quarter, and its trading performance was also higher.

"This has generated a strong set of results, supported by the higher-price, higher-margin environment and some good progress on performance improvement across the business," she added.

Operating cash flow, after a USD500 million working capital release, rose to USD14.83 billion from USD7.79 billion on-year, supporting a reduction in net debt to USD13.87 billion from USD22.25 billion at the end of the second quarter, and from USD26.05 billion the year prior.

CEO O'Neill noted BP has now "delivered our net debt and structural cost reductions targets."

BP had targeted a debt reduction to USD14 billion to USD18 billion by the end of 2027.

In the quarter, BP agreed the sale of its Austrian mobility and convenience business, completed the sale of the Gelsenkirchen refinery, and announced plans to market its North Sea and Archaea businesses.

"Still to come is the expected imminent closure of the Castrol divestment, unlocking USD6 billion to further strengthen the balance sheet," the FTSE 100 listing said.

Reflecting on the results, analysts at RBC Capital Markets commented: "BP has continued its streak of beating expectations and demonstrating it is highly leveraged to the macro environment, with a strong earnings and cash flow beat this quarter. Importantly, operational indicators and controllables look strong and BP has now delivered on its prior net debt target, more than a year early."

Shares in BP were up 0.8% at 629.40 pence each in London on Friday morning, having risen 40% in the last 12 months.

Capital expenditure was USD3.04 billion, down from USD3.38 billion the year before.

BP declared an interim dividend of 8.66 US cents per share, unchanged quarter-on-quarter but up from 8.32 cents a year earlier.

Looking ahead, the oil major expects fourth-quarter upstream production of between 2.09 million and 2.23 million barrels of oil equivalent per day, compared with 2.22 million in the third quarter.

It anticipates seasonally lower gas demand, continued disruption in the Middle East and the impact of a weather event in the Gulf of America, while warning that heightened oil and gas price volatility could affect production-sharing agreement contracts.

For 2026 as a whole, BP continues to expect capital expenditure to be USD13.5 billion to USD14.0 billion and expects divestment and other proceeds to be around USD8 billion, including approximately USD6 billion from the announced Castrol divestment.

BP will deliver a strategy and outlook update on December 15.

"Our goal is to be a resilient business that delivers strong performance in all price environments and grows long-term value for our shareholders. In December we will set out our longer-term plans and capital frame, alongside metrics and targets against which our performance can be judged as we continue to build a simpler, stronger, more valuable BP," CEO O'Neill added.

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