BP (NYSE:BP) looks like it is now on board with President Trump's "drill baby drill" mantra, saying Tuesday it is aiming to increase production of oil and gas in the U.S. by more than 50% by the end of the decade.
"We're pretty tightly aligned with the president," CEO Murray Auchincloss told The Wall Street Journal in an interview, adding that BP (NYSE:BP) plans to raise U.S. production from 650K bbl/day to more than 1M bbl/day by 2030, in oil and gas onshore and offshore in the U.S. Gulf.
But Trump's tariff announcements have pushed oil prices down on concerns of slower economic growth, and BP (BP) reported a sharp drop in Q1 profit and said it would return less cash to shareholders as market uncertainty and weaker oil prices weighed on its outlook; shares -2.5% in Tuesday's trading.
"We're being ultracautious," Auchincloss said, adding that the company has set aside an additional $1.5B in cash because of the uncertainty.
Q1 upstream production fell nearly 6% Y/Y to 2.24M boe/day, partly because of divestments. and BP (BP) said it expects output will be broadly flat in Q2.
Net debt jumped to nearly $27B, which BP (BP) had flagged in a recent update, saying its rise primarily was due to lower operating cash flow, which was hurt by seasonal inventory effects and the timing of various payments, including for annual bonuses.
In line with some analysts' expectations, BP (BP) cut its quarterly stock buyback to $750M from $1.75B in Q4 2024; the company's buyback has been regarded as one of the most vulnerable in the energy sector to weaker prices.
The rise in net debt could prompt calls from investors like Elliott to speed up cost cuts and offload non-core parts of the business, Hargreaves Lansdown analyst Derren Nathan wrote, noting the company increased its disposals target to $3B-$4B from ~$3B, which is not really going to move the dial when it comes to the $27B debt total.
BP (BP) is making impressive progress, but it is a slow process and the difficult macroeconomic backdrop makes it challenging, Nathan said.
https://www.msn.com/en-us/money/markets/bp-wants-to-drill-baby-drill-aims-to-boost-u-s-output-by-more-than-50-by-end-of-decade/