BP is a global energy company headquartered in the UK, operating in approximately 65 countries. The company has an upstream production of around 2.2 million barrels of oil equivalent per day. BP's infrastructure includes refining and hydrocarbon processing facilities, approximately 13,100 electric vehicle (EV) charging points, and around 20,500 retail sites. In its commitment to transitioning towards renewable energy, BP aims to develop 20 gigawatts (GW) of renewable generating capacity by 2025 and 50 GW by 2030. Additionally, the company plans to expand its global EV charging network to over 100,000 charging points by 2030. These initiatives align with BP's strategy to diversify its energy portfolio and support the global shift towards sustainable energy solutions.
BP is a global energy company headquartered in the UK, operating across three primary segments: Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products. Gas & Low Carbon Energy: This segment encompasses BP's natural gas and low-carbon initiatives. The gas business includes upstream activities for natural gas production, integrated gas and power, and gas and power trading. The low-carbon business focuses on solar energy, offshore and onshore wind, hydrogen, carbon capture and storage (CCS), and BP’s stake in BP Bunge Bioenergia. Oil Production & Operations: This segment includes upstream activities dedicated to crude oil production in various regions. Customers & Products: This customer-centric segment covers convenience and mobility, including retail fuels, electric vehicle (EV) charging, Castrol lubricants, aviation fuels, and midstream services.
The global energy market in 2024 has been shaped by several key factors: Geopolitical Tensions: ongoing conflicts Ukraine - Russia and Israel - Palestine - Lebanon have disrupted energy supplies to Europe, leading to shifts in energy sourcing and pricing dynamics. Economic Challenges in China: China's economic slowdown has impacted global energy demand, particularly in the oil sector. The country's rapid adoption of electric vehicles and economic challenges, including a property sector crisis, have slowed oil consumption growth. Macroeconomic Conditions: High inflation rates and a strong U.S. dollar have influenced energy markets by affecting production costs and altering global trade balances. Oil Demand: Global oil demand in 2024 is estimated at approximately 102.8 million barrels per day. Market Stabilization: Energy markets have shown signs of stabilization in terms of supply and pricing, despite ongoing geopolitical and economic challenges.
- BP is a global energy company with operations in over 65 countries. The company operates through three main segments: - Gas & Low Carbon Energy: This segment includes natural gas production and marketing, as well as renewable energy initiatives such as solar, wind, and hydrogen projects. BP aims to expand its renewable generating capacity to 20 gigawatts (GW) by 2025 and 50 GW by
- - Oil Production & Operations: This segment focuses on the exploration and production of crude oil, along with refining and bioenergy activities. BP's upstream production is approximately 2.2 million barrels of oil equivalent per day. - Customers & Products: This segment encompasses customer-facing businesses, including convenience retail, mobility solutions, electric vehicle (EV) charging, lubricants (Castrol), aviation fuels, and midstream operations. BP plans to double adjusted EBITDA in this segment by 2030 through accelerated growth in EV charging, Castrol, aviation, B2B, and selective midstream businesses.
- BP's integrated business model provides sustainable cash flow to support investments in both traditional fossil fuel operations and renewable energy development. The company targets payback periods of less than 10 years for upstream oil and refining projects, and less than 15 years for upstream gas projects.
- Focusing on shareholder returns, BP maintains a share buyback program and stable dividend payouts. The company's extensive retail network, comprising approximately 20,500 retail sites and 13,100 EV charging points, benefits from product diversification and integration across the value chain—from exploration and production to retail distribution.
- BP plans to increase its global EV charging points to 100,000 by 2030, aligning with its strategy to support the energy transition and meet evolving customer needs. 5.These initiatives reflect BP's commitment to transforming its business model and contributing to a lower-carbon future.
- Declining Oil Demand and Production Targets: BP anticipates a reduction in oil production from 2.2 million barrels of oil equivalent per day (mboe/d) to approximately 2 million mboe/d by 2030, reflecting a 25% decrease from 2019 levels. This adjustment aligns with shifting energy demands and climate policies.
- Increased Capital Expenditure for Energy Transition: The company's strategic shift towards renewable energy necessitates substantial capital investments. BP plans to allocate up to $8 billion to its transition growth engines, including bioenergy, hydrogen, renewables, electric vehicle (EV) charging, and convenience services, by
- Impact of Rosneft Divestment on Cash Flows: BP's exit from its 19.75% stake in Rosneft, following geopolitical developments, is expected to adversely affect cash flows, given the significant contributions from this investment.
- Oil price volatility persists on the back of geopolitical tensions: Global geopolitical situation contributes to oil price fluctuations, impacting BP's revenue and profitability. For instance, in the third quarter of 2024, BP reported its lowest quarterly profit since the pandemic, attributed to lower oil prices and weak refining margins.
- Supply Chain Disruptions in EV and Solar Segments: BP's expansion into EV charging and solar energy is challenged by supply chain issues, potentially delaying project timelines and increasing costs. The Morven wind farm project, for example, risks missing its 2030 start date due to grid connection delays and supply chain constraints.
- Addressing these challenges is crucial for BP's successful transition to a more sustainable energy portfolio.
- Global Economic Slowdown: The global economy is experiencing a slowdown, leading to reduced demand for hydrocarbons. Coupled with high inflation, this trend poses risks to BP's revenue streams.
- Geopolitical Risks: the market remains influenced by the ongoing Ukraine-Russia conflict, affecting the divestment process and financial outcomes.
- Accelerated Cost Inflation: Rising costs in materials and labor may extend payback periods for new investments, challenging BP's financial performance.
- Transition to a Low-Carbon Economy: Shifts in policies, regulations, and technologies toward low-carbon energy could reduce BP's revenue and profitability from traditional fossil fuel operations, affecting investment returns.
- Investment in Hydrocarbon Reserves: Maintaining hydrocarbon production requires significant investment in reserves and resources. BP's ability to secure economically viable resources is crucial for sustaining production levels.
| Company | RIC | Market Capitalization, $mn | Last reporting year | P/E Fwd 1Y | P/E Fwd 2Y | EV/EBITDA 1Y fwd | EV/EBITDA 2Y fwd | EV/Revenues 1y fwd | EV/Revenues 2y fwd |
|---|---|---|---|---|---|---|---|---|---|
| BP PLC | BP.L | 78,551 | 2023-12-31 | 8.2 | 7.9 | 3.4 | 3.5 | 0.7 | 0.7 |
| TotalEnergies SE | TTEF.PA | 136,262 | 2023-12-31 | 7.3 | 7.5 | 4.1 | 4.2 | 0.8 | 0.8 |
| Eni SpA | ENI.MI | 46,441 | 2023-12-31 | 7.6 | 7.5 | 3.5 | 3.8 | 0.7 | 0.7 |
| Shell PLC | SHEL.L | 198,939 | 2023-12-31 | 7.7 | 8.6 | 3.7 | 4.1 | 0.8 | 0.8 |
| Equinor ASA | EQNR.OL | 68,314 | 2023-12-31 | 7.3 | 7.8 | 1.7 | 1.8 | 0.7 | 0.7 |
| Repsol SA | REP.MC | 14,275 | 2023-12-31 | 4.5 | 5.3 | 2.9 | 3.1 | 0.4 | 0.5 |
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 240,208 | 298,756 | 159,307 | 105,944 | 157,739 | 241,392 | 213,032 | 196,067 | 188,190 | 195,454 |
| Growth | 24% | -47% | -33% | 49% | 53% | -12% | -8% | -4% | 4% | |
| EBITDA | 25,375 | 33,046 | 33,737 | 8,666 | 26,588 | 55,473 | 43,710 | 37,301 | 37,366 | 38,511 |
| EBITDA margin | 10.6% | 11.1% | 21.2% | 8.2% | 16.9% | 23.0% | 20.5% | 19.0% | 19.9% | |
| Net income | 3,389 | 9,383 | 4,026 | -20,305 | 7,565 | -2,487 | 13,836 | 10,062 | 10,065 | 10,997 |
| Net margin | 1.4% | 3.1% | 2.5% | -19.2% | 4.8% | -1.0% | 4.7% | 5.1% | 5.8% | 0.0% |
| Net debt | 39,007 | 44,459 | 56,481 | 52,399 | 43,566 | 31,586 | 31,586 | 31,586 | 31,586 | 31,586 |
| MktCap | 125,680 | 70,510 | 90,599 | 90,599 | 78,714 | 73,742 | 73,747 | 73,751 |
Historical Multiples
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|---|---|---|
| EV/Revenue | 1.1 | 1.2 | 0.9 | 0.5 | 0.5 | 0.5 | 0.6 | 0.5 |
| EV/EBITDA | 5.4 | 14.2 | 5.0 | 2.2 | 2.5 | 2.8 | 2.8 | 2.7 |
| P/E | 31.2 | -3.5 | 12.0 | -36.4 | 7.8 | 7.3 | 6.7 |
