UK oil giant BP to hand shareholders $7 billion this year by buying back stock even as profit falls

LONDON — U.K.-based oil giant BP PLC said Tuesday it will reward shareholders to the tune of $7 billion this year through the purchase of its own stock, even as it reported a near 30% decline in profits in the first half of 2024.

BP said in a statement its underlying replacement cost profit — the industry standard that strips out one-off items — fell to $5.5 billion against last year's $7.6 billion, largely on the back of lower earnings from its refining business.

Despite the first half decline, BP's second quarter profit of $2.8 billion was modestly higher than expectations, which helped the stock rally 1.3% in morning trading in London to 4.60 pounds. Also boosting the share price was the news that BP was planning to continue with its share buyback program during the second half of the year and a 10% increase in its dividend.

Murray Auchincloss, chief executive of BP, said the company remains committed to creating a “simpler, more focused and higher value company.”

Critics say BP is not doing enough in the battle against climate change, prioritizing high-carbon activities, while relegating its green investments, noting the company's recent decision to go-ahead with the development of the Kaskida project in the Gulf of Mexico and scaling back its commitments in biofuels and offshore wind.

“As the world faces record-breaking heat, most of us are desperate to see urgent action on the climate crisis," said Alice Harrison, head of fossil fuel campaigns at Global Witness. “Unfortunately, it’s clear that BP couldn’t care less.”