Strengthening bp’s resilience
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Responding to ‘brutal market conditions’
global | 26 May 2020
“We are responding fast to adapt bp in the most brutal market conditions we have seen in a long time,” chief executive officer Bernard Looney told investors as bp reported is earnings for the first quarter of the year.
“We are calling on our vast experience of navigating through difficult circumstances. We have a clear plan. We are executing it. And we are working from a strong foundation.”
Bernard Looney, bp chief executive officer
He set out near-term objectives for strengthening bp’s finances, including reinforcing the company’s liquidity position, driving the cash balance point lower, and strengthening the balance sheet, enabling the energy transition.
While bp was on course with plans set out in 2017 to reduce its cash balance point, Bernard said the company now planned to go further. “Through the actions we are taking, we now expect to drive the cash balance point to less than $35 per barrel Brent – which is below our previous guidance and also assumes a lower refining margin and gas price,” he said.
Those actions include:
- Reducing 2020 capital expenditure by around 25%.
- Making $2.5 billion of cost savings by 2021, compared with 2019.
- Building a wall of liquidity – which currently enables bp to access around $32 billion of cash and undrawn facilities.
- Staying on track with the delivery of planned divestments of $15 billion of announced transactions by mid-2021 and reconfirming bp’s commitment to completing the sale of the Alaska business to Hilcorp in 2020, subject to regulatory approvals.
