Boost for City as BP vows to maintain London itemizing – however earnings tumble

BP’s boss insisted the oil giant has no plans to leave the London stock market as first quarter profits tumbled.

Chief executive Murray Auchincloss yesterday said leaving the City is not on the agenda.

It comes as Auchincloss faces pressure to close the valuation gap with competitor Shell and US rivals such as Exxon Mobil and Chevron.

Shell has said it would consider switching its listing to New York over concerns the company is undervalued.

Footsie firms across other industries have already departed the struggling exchange, with gambling giant Flutter the latest major player to announce a move to Wall Street.

Under fire: BP chief exec Murray Auchincloss (pictured) said leaving the City is not on the agenda as he comes under pressure to close the gap with Shell and US rivals

London’s stock market is also in the grip of a ‘takeover frenzy’ as buyers circle undervalued firms for cheap deals.

Recently announced bids include Australian miner BHP’s £31billion offer for rival Anglo American, which was dismissed.

Czech billionaire Daniel Kretinsky is considering another bid for Royal Mail owner International Distributions Services after the board rejected his £3.2billion offer as ‘opportunistic’. Challenger bank Virgin Money and packaging firm DS Smith have both agreed to sell up this year.

Analysts have suggested BP could be a takeover target, with Shell named as a potential bidder. 

Auchincloss, who took over after Bernard Looney quit as boss in disgrace last year, dismissed concerns that the oil giant could leave the City.

‘It’s not on our agenda,’ he said when asked about moving BP’s listing. ‘We’re just focused on quarterly deliveries.’

BP reported a 45 per cent fall in profits to £2.2billion in the first quarter as oil and gas prices fell from last year’s highs. An outage at an American oil refinery also hit profits in the first quarter.

The energy giant announced a further £1.4billion of share buybacks as part of its plan to return £2.8billion in the first half of the year. 

Auchincloss said BP is committed to returning at least £11billion to shareholders by the end of 2025 – provided oil and gas prices remain stable. 

BP held its dividend at 5.8p per share and promised to cut costs by £1.6billion by the end of 2026. 

Russ Mould, investment director at broker AJ Bell, said: ‘Auchincloss is eyeing a big valuation disparity between BP and rivals across the Atlantic and will clearly feel a big part of his remit is closing that gap.

‘To that end, the company is targeting efficiencies and savings through initiatives like the use of technology and improvements to its supply chain. 

Maintaining the pace on share buybacks demonstrates a commitment to returning cash to shareholders.’ 

Stuart Lamont, investment manager at RBC Brewin Dolphin, added: ‘BP has missed profit expectations on the back of lower gas prices, weaker margins, and operational outages.’

But he said the dividend and extension to the share buyback programme will ‘provide shareholders with some solace’.