BP CEO hails exploration discovery boon after surprise profit beat

Trowbridge in Somerset, England, on March 15, 2025.Anna Barclay | Getty Images News | Getty ImagesBP CEO Murray Auchincloss on Tuesday leaned into the growth potential of the company's recent oil and gas discoveries, as the struggling energy major contends with takeover questions and a major turnaround plan."Inside the up, we've had tremendous performance, along with record operating efficiency [and] along with starting up five new major jects," BP's Auchincloss told CNBC's "Squawk Box Europe", just after the release of the company's second-quarter results.He added that he was "very optimistic" the company's exploration discovery in the Bumerangue block in Brazil's Santos Basin, just over 400 kilometers (248.5 miles) from Rio de Janeiro

BP is currently carrying out tests to further analyze the block's potential.The Bumerangue discovery, announced Monday, is the firm's 10th since the start of the year and reflects a potentially significant boost as BP continues to double down on hydrocarbons.watch now8:0008:00We’re focused on growing cash flows, BP CEO says, amid takeover rumoquawk Box EuropeAfter underperforming its peers in recent years, the firm has shifted gears by way of a fundamental strategic reset that will see BP prioritize fossil fuels and slash renewable spending.Earlier on Tuesday, the energy major reported underlying replacement cost fit, used as a xy for net fit, of $2.35 billion for the three months through June — comfortably beating analyst expectations of $1.81 billion, according to an LSEG-compiled consensus.Ramping up investor returns, the company also said its quarterly dividend will increase to 8.32 cents from 8 cents and that it will maintain the pace of its buyback gram at $750 million for the second quarter.s of the company were last seen trading 1.6% higher during morning deals.Takeover speculationThe downturn of recent years has turned BP into the subject of intense takeover speculation, with some questioning a potential future merger with domestic rival Shell

For its part, Shell in late June said that it had "no intention" of making an offer.UAE oil giant ADNOC, as well as U.S. oil giants Exxon Mobil and Chevron, are among some of the names that have also been touted as possible suitors.Asked whether the company had been apached by any potential merger partners amid takeover speculation, Auchincloss said BP is focused on growth."That's what is going to drive the price up for holders," he added.CEO of BP Murray Auchincloss speaks during the CERAWeek oil summit in Houston, Texas, on March 19, 2024

Mark Felix | AFP | Getty ImagesMaurizio Carulli, global energy analyst at Quilter Cheviot, said BP's earnings were the company's first positive quarterly results "in a very long time," noting that "what is perhaps most encouraging" was the firm's outperformance came despite a period of lower oil prices."The management team has ly started dering on the strategy reset announced a few months ago

There has been huge speculation of late on the fate of BP and whether or not a rival will look to take them out with a merger," Carulli said."If positive results this continue to be dered, that speculation may just end up being a blip in BP's long and storied history," he added.Asset reviewBP, which is under intense pressure to imve fitability from the s of activist investor Elliott, noted that it would initiate a further cost review of its assets — mere weeks before Albert Manifold joins BP's board from Sept. 1 and as chair from Oct. 1.Asked for further details of this strategic review, Auchincloss told CNBC: "If you think back to 2020, we reduced our costs by 25%, and in 2024 we announced another gram to reduce our costs by another 20%

That's the $4-5 billion that I referenced earlier.""If we can achieve that, that will take us to around top quartile in the sector, but I don't think that is enough," Auchincloss said.BP's net debt came in at $26.04 billion at the end of the second quarter, down from nearly $27 billion compared to the first three months of the year."We need to keep driving safely to be the very best in the sector we can be

And that's why we're focused on another review to try to drive us toward best in class inside the sector," Auchincloss added.