The British energy major posted second-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.6 billion. Analysts had expected BP to report second-quarter profit of $3.5 billion, according to estimates collated by Refinitiv.

The second-quarter result compared with a profit of $4.96 billion recorded in the first three months of the year and with the $8.5 billion logged in the second quarter of 2022.

BP said the earnings reflected significantly lower realized refining margins, a higher level of turnaround and maintenance activity and a weak oil trading result.

Nonetheless, the energy giant boosted its dividend by 10% to 7.27 cents per ordinary share for the second quarter. BP also said it would repurchase $1.5 billion of its shares over the next three months.

“A very good quarter and that has given the board … the confidence to announce a $1.5 billion buyback program for the quarter and additionally we’ve raised the dividend by 10%,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.

“So, all in all, we’re doing what we said we would do which is performing while transforming and we’re very pleased with the results,” he added.

Shares of London-listed BP rose 1.8% during afternoon deals.

Oil majors have failed to match the bumper profits posted during the same period of last year amid weaker commodity prices.

British rival Shell and French oil major TotalEnergies on Thursday reported a steep drop in second-quarter profit, while U.S.-based Exxon Mobil’s second-quarter profit slumped 56% year-on-year.

The West’s five largest oil companies raked in combined profits of nearly $200 billion in 2022, as oil and gas prices soared following Russia’s full-scale invasion of Ukraine. For its part, BP reported annual record profit of $27.7 billion for the full year of 2022.

Oil and gas prices came under pressure in the first half of this year, however, as global economic jitters outweighed supply-demand fundamentals.

Like Shell, BP has attracted criticism in recent months for watering down its climate commitments. In 2020, the company committed to become a net-zero company “by 2050 or sooner,” then said earlier this year that it would scale back plans to cut carbon emissions by reducing its oil and gas output.

It had previously pledged that emissions would be 35% to 40% lower by the end of the decade, but said in early February that it was now targeting a 20% to 30% cut.

Asked on Tuesday why BP had moved these goalposts, Looney replied, “We, actually, in February announced that we’re leaning into our strategy and announced that we were going to put $8 billion more into the energy transition this decade, spending between $55 [billion] and $65 billion.”

“At the same time, we announced that we would increase our investment in oil and gas, and that’s because it’s crucial that we invest in the supply of today’s energy system to meet the demand,” Looney said.

“If we don’t, there’s only one thing that is going to happen and that’s that prices are going to go up,” he added. “We need a rapid transition and we need to make sure that the transition is orderly.”

The BP CEO was also asked to comment on whether the company would be involved with new oil and gas licensing in the North Sea, which U.K. Prime Minister Rishi Sunak confirmed on Monday.

Sunak has insisted the move is “entirely consistent” with the country’s net-zero commitments, despite campaigners slamming the decision as “terrible for our energy security, the cost of living, and the climate.”

“We are very much involved in the North Sea, and, as you quite rightly point out, have been for many decades. It is a great part of our company and I expect it to be a great part of our company for many decades to come,” BP’s Looney said.

“We are supportive of policies which recognize that the transition must be rapid, and the transition must be orderly. To do that, we have to invest in today’s oil and gas system [and] in the U.K. that means investing n the North Sea,” he added.

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