Long term price pressures in BP’s volume businesses damped glowing half year results that saw profits surge 21% to £1.5bn.
Margins in downstream refining fell during July and are expected to remain under pressure in coming months. Similarly, prices in the chemicals market will soften later in the year as new capacity comes on stream world-wide.
But BP said that recovery in the retail market would continue to sustain the business.
The retail market was largely responsible for the company’s 42% rise in operating margins, taking the sting out of margin pressures in the US.
The European marketing joint venture with Mobil would add to this trend later in the year, when nearly all the 2,300 Mobil sites would be rebranded.
Net debt fell 15% from £4.3bn to £3.7bn, prompting BP executives to give more back to the shareholders under a £500m share buyback scheme.
‘We have previously made clear our determination to return additional value to shareholders once we were confident we could meet our targets for net debt,’ said John Browne, chief executive. Debt of £3.7bn was £600m within target.