In 2020 BP set its ambition to become a net zero company “by 2050 or earlier”.
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British oil major BP on Tuesday announced plans to raise shareholder returns, even after full-year profits were hit by lower oil prices.
Base replacement cost profit, used as a proxy for net profit of $13.8 billion in 2023, a decline from $27.7 billion a year earlier.
Analysts were expecting full-year net profit of $13.9 billion in 2023, according to a consensus compiled by LSEG.
BP reported fourth-quarter net profit of nearly $3 billion, beating analyst expectations of $2.6 billion.
BP increased the pace of its share buybacks, announcing an intention to buy back $1.75 billion of shares before reporting first-quarter results. The company said it was committed to announcing a $3.5 billion share buyback in the first half of the year.
BP announced a dividend of 7.27 cents per ordinary share for the final three months of 2023, representing a 10% increase compared to the same period last year.
“Looking back, 2023 was a year of strong operational performance with real momentum in delivery across the business,” BP CEO Murray Auchinclose said in a statement.
“In our strategy, we believe in delivering a simpler, more focused and higher value company, and we are committed to building long-term value for our stakeholders.”
Shares of the company's London-listed shares are down about 2.6% year-to-date.
British rival Shell on Thursday reported stronger-than-expected full-year profit, announced a 4% increase in its dividend and a new $3.5 billion share buyback plan.
BP's latest results show the company is facing pressure from an activist investor over its strategy.
In an October letter to BP chairman Helge Lund and then-interim CEO Murray Auchincloss, Bluebell Capital Partners urged the company to increase its oil and gas investments and reduce the cost of clean energy. The letter was first reported Financial Times Last week.
Bluebell Capital's Giuseppe Bivona expressed his disappointment with BP's “utterly underwhelming” share price performance compared to the company's US and European peers. Bivona told CNBC's “Squawk Box Europe” on Jan. 30 that BP should consider using its capital “in a rational way.”
In response to the publication of the letter, a BP spokesman at the time said the company “welcomes constructive engagement” with its stakeholders.
BP struggled with a mediating leadership transition. The company appointed Murray Auchincloss as permanent CEO last month, four months after his predecessor Bernard Looney resigned after less than four years in the job.
Under Looney's leadership, BP pledged that its overall emissions would be 35% to 40% lower by the end of the decade.
The company, which was one of the first energy companies to announce plans to reduce emissions to net zero by “2050 or earlier,” watered down its climate plans last year. Bp said About a year ago, it was targeting a 20% to 30% reduction, citing continued investment in oil and gas to meet demand.