BP’s first-quarter earnings plunged by 40 per cent to $2.7 billion, missing forecasts after lower energy prices and a US refinery outage offset increased oil and gas production.

The London-based company held its dividend at 7.27 cents per share and maintained the rate of its share buyback programme at $1.75 billion over the next three months, similar to the previous quarter.

Profit fell 5 per cent short of analyst forecasts, denting efforts by CEO Murray Auchincloss to steady the company after a bruising period that followed the abrupt resignation of predecessor Bernard Looney in September.

Auchincloss, who was head of finances under Looney, has vowed to simplify BP’s operations and cut costs in the face of investor doubts over plans to reduce the company’s focus on oil and gas and expand a low-carbon business.

BP on Tuesday introduced a target to deliver cash cost savings of at least $2 billion by the end of 2026 relative to 2023.

Shares in the company were down 0.2 per cent at 0852 GMT, compared with a 1.5 per cent gain for the European energy index.

First-quarter underlying replacement cost profit, the company’s definition of net income, missed the $2.87 billion consensus forecast from analysts polled by the company and was well short of a $3 billion profit in the previous quarter and $5 billion a year earlier.

BP beat earnings forecasts in the previous quarter but had missed them in the previous two.

The results reflected lower energy prices and the impact of the outage at its Whiting refinery in Indiana, which was partially offset by a strong oil trading result, higher refining margins and oil and gas output.

Oil and gas production was up 2.1 per cent from a year earlier at 2.38 million barrels of oil equivalent per day on the back of field start-ups in Azerbaijan and the United States.

“We’re seeing good operational momentum,” Auchincloss told Reuters.

BP’s cashflow was down 34 per cent at $5 billion after restocking of diesel and gasoline stocks ahead of summer, Auchincloss said. The company’s debt rose to $53 billion while its debt-to-market capitalisation ratio rose to 22 per cent from 19.7 per cent in the previous quarter.

BP is the last among the leading Western oil giants to report first-quarter results. Last week Shell reported net profit of $7.7 billion, exceeding expectations as disruption to Red Sea shipping and Russian refining boosted oil trading.

Rivals Exxon Mobil, Chevron and TotalEnergies all reported profit drops, reflecting a sharp downturn in natural gas prices.

Saudi Arabia’s state-owned oil giant Aramco on Tuesday reported first-quarter net profit of $27.3 billion, down 14 per cent from a year earlier.

BP beat earnings forecasts in the previous quarter but had substantially missed them in the previous two.

The results reflected lower energy prices and the impact of the Whiting, Indiana, refinery outage and a significantly weaker fuels margin, BP said. These factors were partially offset by significantly lower level of turnaround activity at BP facilities as well as a strong oil trading result and higher realised refining margins.

BP’s oil and gas production rose by 2.1 per cent from a year earlier to 2.38 million barrels of oil equivalent per day.

BP is the last among the top Western oil giants to report first quarter results. Last week Shell reported net profit of $7.7 billion, exceeding expectations as disruption to Red Sea shipping and Russian refining boosted oil trading. Rivals Exxon Mobil, Chevron and TotalEnergies reported a drop in profits from a year earlier, reflecting a sharp downturn in natural gas prices.

Meanwhile Britain’s FTSE 100 opened at a record high, boosted by gains in Shell after Reuters reported its plans to sell the Malaysian gas station business and BP gained on maintaining share buyback plans but missed earnings forecast.

The blue-chip FTSE 100 index was up 1.2 per cent at 8,309.04 by 0712 GMT, while the FTSE 250 midcap index rose 0.8 per cent.

Shell jumped 1.6 per cent after Reuters reported the energy giant is in talks to sell its gas station business in Malaysia to Saudi Aramco.

BP edged 0.4 per cent higher after the oil major maintained the rate of its share buyback programme at $1.75 billion over the next three months but missed forecasts due to lower oil and gas prices and a US refinery outage.

Homebuilders advanced 1.4 per cent as British house prices edged higher in April, rising 0.1 per cent from March and up 1.1 per cent from a year earlier, figures from mortgage lender Halifax showed. Medical equipment and services was the only sector trading in the red, down 0.2 per cent.