BP and Shell off shore – created by Grok on XBP and Shell are expected to report lower profits this week due to weak oil prices and falling refining margins.
Both companies are facing investor pressure, with BP scaling back its renewable energy plans and Shell’s CEO hinting at a potential New York listing.
Activist investor Bluebell Capital Partners has criticized BP’s management and energy strategy, calling for the resignation of its chairman.
BP and Shell are expected to post lower profits this week as the supermajors grapple with weak oil prices and a global slowdown in demand.
BP is due to publish its third-quarter earnings on Tuesday, while Shell will report its results on Thursday.
Earlier this month, the FTSE 100 firms warned of falling profit margins at their oil refining businesses – major parts of their income streams.
The slump in margins came amid a broader faltering in demand for oil across consumer and industrial sectors, with brent crude prices staying broadly flat since the start of 2024.
Prices have been driven higher in recent weeks after escalating tensions between Iran and Israel and fears over how further conflict could impact energy sites in the Middle East.
Two weeks ago, the Organisation of the Petroleum Exporting Countries (Opec) downgraded its forecast for global oil demand growth in 2024 and lowered its projection for 2025 – its third straight cut of the outlook.
The downward revision underscores economic slowdowns in major economies like China, as well as growth in electric car sales.
Jefferies analysts expect Shell’s third-quarter net income to come in at £5.4bn, down 14 per cent compared to the same period last year.
The firm is expected to keep up its share buyback programme to reward investors, but with its stock price one per cent in the red so far this year, it could face further questions over its UK listing.
Chief executive Wael Sawan fuelled speculation in April that Shell could ditch the London Stock Exchange for a New York listing, calling the capital an “undervalued location”.
Meanwhile, analysts expect a 30 per cent year-on-year drop in BP’s net income to $2.3bn (£1.7bn). It has prevously estimated that the fall in refining margins will hit its quarterly profit by $400m to $600m (£306m to £459m).
BP’s shares have been down 14 percent so far this year, with CEO Murray Auchincloss looking to shore up investor confidence by scaling back its renewable energy plans and focusing on oil and gas.
Reuters reported earlier this month that Auchincloss had taken his plans a step further by abandoning a target to cut oil and gas output by 40 percent by 2030.
Bluebell Capital Partners, a London-based hedge fund, has recently written to BP’s board attacking its management and the firm’s approach to the energy transition, calling its recent performance “unacceptably dire”.
The activist investor, famed for ousting senior leadership, also called for BP’s chair Helge Lund to quit.
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