LONDON, June 3 (Reuters) - Ratings agency S&P Global on

Monday revised lower BP's credit outlook, citing slower

than expected debt reduction in a blow to CEO Murray Auchincloss

who has sought to win back investor support following a

turbulent year.

The agency downgraded the energy company's credit outlook to

stable from positive while affirming its 'A-' long-term and

'A-2' short-term issuer credit ratings.

"BP's updated cash allocation strategy is less likely to

result in meaningful further absolute debt reduction," S&P said

in a statement.

A BP spokesperson declined to comment.

Auchincloss took the reins in January with a vow to take a

pragmatic approach to steady the company after a bruising period

that followed the abrupt resignation of predecessor Bernard

Looney last September.

Auchincloss, who was head of finances under Looney, has

sought to simplify BP's operations and cut costs in the face of

investor doubts over plans to reduce the company's focus on oil

and gas and expand a low-carbon business.

BP's net debt rose to $24 billion in the first quarter of

the year, compared with $21.2 billion a year earlier. Its

debt-to-capitalization ratio also rose to 22% from 19.6% over

the same period.

BP, like many of its rivals, has increased shareholder

returns following a surge in energy prices and profits after

Russia's invasion of Ukraine in 2022.

The firm aims to allocate 80% of surplus cash towards

dividend payments and share repurchases.

The shareholder return ratio "would not facilitate

meaningful debt reduction, as we were previously expecting, even

at the current supportive market conditions," S&P said.

Although it has made significant progress in reducing debt

in recent years, BP's balance sheet remains weaker compared to

rivals including Shell, Chevron ( CVX ) and

TotalEnergies, it added.

"The gap in terms of balance sheet strength between BP and

the other supermajors will likely persist, and not narrow."