Under chief executive Meg O’Neill, BP has reached a new stage and the course it is following is becoming clear. The British energy giant has achieved its best quarterly result for years while at the same time proceeding with the sale of major assets, such as its historic North Sea business and a US biogas operation which had once been part of its green growth strategy.
According to The Guardian, BP achieved an underlying replacement cost profit of $5.73 billion in the second quarter of 2026, which was more than double the amount recorded the previous year. This result was due to higher oil and gas prices, strong refining margins and trading, as the disruption caused by the Middle East conflict had tightened the global energy markets.
For O’Neill, who was given the main position in April, the rise in earnings provides BP with more scope to repair its balance sheet and consider where it will place its capital.
A quarter worth $5.7 billion shifts the discussion.
According to The Guardian’s analysis of BP’s results, BP’s profit more than doubled to $5.73 billion over the three months up to June, and the company is moving towards its objective of reducing its net debt to below $18 billion by the end of 2026.
After a tough time during which BP fell behind its competitors and encountered dissatisfaction from investors regarding its strategy, the improvement came about when O’Neill was appointed, at that time shareholders were seeking better returns following years of poor performance and after the substantial cut in planned renewable-energy investment.
She has made strict discipline the core of her method. When speaking about BP’s portfolio, she stated that the company would not let “sentiment” or “history” decide which assets should remain. The North Sea shows off this principle clearly.
The North Sea Is Historic, but BP Is Ready to Leave
The company has been operating in the North Sea for about six decades, but merely relying on its history is no longer sufficient to ensure that it will not be sold.
The Financial Times stated that BP is putting its UK North Sea operation up for sale as part of a broader strategy to raise $20 billion through divestments by 2027; the business involves major oil and gas activities and has about 1,100 employees.
O’Neil’s explanation was unusually direct; when referring to the North Sea assets she stated that they “just don’t compete” for capital at BP.
She is also saying that Britain should keep using its domestic oil and gas even if BP sells off the assets, and according to O’Neill, UK production brings in employment, tax revenue and other economic benefits.
“As far as the first barrel of oil that we use and the first molecule of natural gas that we require is concerned, it should be obtained from the UK North Sea,” she stated in some comments reported by The Guardian.
A policy dilemma exists here since the UK government says that the current level of production in the North Sea will still play an important role while at the same time maintaining that further exploration would have little effect on reducing consumer prices since Britain is a price-taker in the international oil and gas markets.
The official figures explain why the debate is not fading away; the Office for National Statistics stated that fossil fuels made up 77.7% of UK energy use in 2024.
BP Is Also Cutting Back on Parts of Its Green Portfolio
BP is at the same time proceeding with the sale of Archaea, the American biogas company which it acquired for about $4 billion in 2022. According to The Guardian The Guardian the deal represents yet another indication that O’Neill is prepared to get rid of investments that no longer meet BP’s return criteria. The company is also moving forward with the sale of its solar business, Lightsource.
It doesn’t mean that BP is giving up on all its lower-carbon investments. O’Neil stated that climate change is still an important global challenge and that the company will continue to pursue emissions reductions, including those related to green hydrogen.
The situation is just as much a financial one as it is an environmental one: BP seems to be more interested in lower-carbon projects when they align with the businesses in which it already has expertise, rather than setting up large independent renewable energy portfolios just in order to diversify away from oil and gas.
What Investors Should Watch Next
The second-quarter profit earned by BP results in O’Neill having a stronger cash flow, which in turn makes it more difficult to reach strategic decisions.
That still does not amount to proof that the turnaround is complete since high oil prices can make an oil company appear healthier at once, as the UK government notes that it is the global markets, not the domestic producers, who finally set oil and gas prices.
The time when the test will take place will be when commodity prices are not providing as much support.
O’Connell’s “fit to grow” message could turn out to be more than just a slogan if BP is able to continue reducing its debt, sells off its weaker assets at values that are acceptable and boosts the returns from the businesses it keeps.
At this stage, one conclusion is already evident.
BP is not any longer attempting to do everything at the same time.