BP(US:BP)2025-08-05 13:00Financial Data and Key Metrics Changes - The company reported an underlying net income of $2,400,000,000 for the second quarter and $6,300,000,000 in operating cash flow, which included a $1,400,000,000 build in working capital [6][21] - A dividend per ordinary share of 8.32¢ was announced, marking a 4% increase, alongside a $750,000,000 share buyback for the second quarter [7][24] - Operating cash flow increased by $3,400,000,000 compared to the previous quarter, reflecting higher earnings and a lower working capital build [21][22] Business Line Data and Key Metrics Changes - Upstream production increased by approximately 3% quarter on quarter, averaging 2,300,000 barrels per day for the first half of the year [6] - The gas and low carbon energy segment's underlying financial result was $500,000,000 higher than the previous quarter, while oil production and operations saw a decrease of $600,000,000 [15] - Customer and products segment reported an underlying profit increase of around $900,000,000 compared to the previous quarter, with strong performance across fuels and midstream [15][16] Market Data and Key Metrics Changes - Refining availability was reported at 96.4% for the second quarter, the best since February 2006, with a 3% increase compared to the first half of the previous year [11][75] - The company completed two significant refinery turnarounds in the quarter, contributing to improved operational performance [11] - The refining environment is expected to remain tight due to low diesel and gasoline stocks relative to historical levels [73] Company Strategy and Development Direction - The company is focused on delivering structural cost reductions of $4,000,000,000 to $5,000,000,000 by 2027, with $1,700,000,000 already achieved [26][29] - A strategic review of the Castrol business is underway, with plans to divest non-core assets and focus on integrated positions in key markets [12][13] - The company aims to maintain a resilient dividend policy while sharing excess cash through buybacks over time [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth in upstream operations, supported by recent project startups and exploration successes [11][11] - The outlook for trading conditions remains volatile, particularly in oil, due to tight inventories and geopolitical factors [46][47] - The company anticipates a slight decrease in upstream production in the third quarter, with seasonally higher volumes expected in customer segments [36] Other Important Information - The company has made significant progress in its divestment program, with expected proceeds from completed or signed agreements now close to $3,000,000,000 [4][23] - The company has achieved 10 exploration discoveries so far in 2025, with a focus on high-quality opportunities [9][78] - The introduction of a new BP refining indicator margin aims to enhance external understanding of refining profitability [39][40] Q&A Session Summary Question: What is the outlook for trading performance in the second half of the year? - Management noted that oil trading performed well in Q2, with a shift to shorter duration trades to manage macro volatility [60][61] Question: Can you elaborate on the impairments taken this quarter? - Management confirmed impairments were taken in customer and products due to asset sales and in gas and low carbon space, particularly related to hydrogen and biofuels in Australia [62][63] Question: What are the expectations for net debt by the end of the year? - Management expects net debt to trend down slightly towards the end of the year, influenced by working capital reversals and operational performance [66][70] Question: Has the approach to exploration changed? - The company emphasized a data-led approach to exploration, focusing on quality opportunities without significantly increasing the exploration budget [78][79]