BP posts best quarterly results in over 10 years


BP posted its highest quarterly profit in more than a decade, benefiting from soaring hydrocarbon prices and ‘windfall’ revenues from oil and gas trading, even as it wrote down the value of its business in Russia to almost zero.

The UK-listed oil major’s underlying profit on a replacement cost basis for the first three months of the year – the profit measure most closely followed by analysts – reached £6.2bn. dollars, more than double the $2.63 billion recorded a year earlier.

This far exceeded average analyst estimates of $4.49 billion and was up from $4.07 billion in the last three months of 2021.

BP’s surge in quarterly profits, after its 2021 profits were already the highest in eight years, are set to spark fresh calls from opposition politicians in the UK for a rise in corporation tax oil and gas companies to help consumers facing soaring energy costs.

Rishi Sunak, the chancellor, said last week for the first time that he would consider a windfall tax on industry if it fails to boost investment in new energy projects.

BP said on Tuesday it intended to invest up to £18bn in Britain’s energy system by the end of 2030 and expected to pay up to £1bn in taxes on its oil and gas profits in the North Sea in 2022.

“We support Britain,” said chief executive Bernard Looney. “This has been our home for over 110 years.”

The energy major’s windfall profits come despite a February decision to sell its 19.75% stake in Russian oil producer Rosneft following Moscow’s invasion of Ukraine. The move resulted in a pretax charge of $24 billion and a paper loss for the quarter of $20.4 billion, as the oil major had to stop reflecting a share of Rosneft’s profits in its accounts. In the last quarter of 2021, Rosneft had added $745 million to BP’s adjusted profits.

Buoyed by rising profits, BP maintained its dividend and pledged to repurchase $2.5 billion of shares in the second quarter of 2022 after completing buybacks of $1.6 billion in the first three months of the year.

“In a quarter dominated by the tragic events in Ukraine and the volatility in energy markets, BP focused on providing the reliable power our customers need,” Looney said.

The decision to exit Rosneft’s shareholding did not change BP’s strategy or expectations regarding distributions to shareholders, he added.

While the stake in the state-backed Russian oil producer was once central to BP’s long-term strategy, even before the war some investors felt the stake had become increasingly incompatible with plans for BP. Looney described one of the most ambitious corporate overhauls in the industry, pledging to cut oil and gas production by 40% by 2030, while increasing spending on oil production 20 times. renewable energy.

As part of this plan to become a net-zero emissions company by 2050, BP aims to sell $25 billion in assets by 2025 to reduce debt and pay for green investments. Divestment proceeds since January totaled $1.18 billion, compared to $2.27 billion in the last three months of 2021, when annual divestment was $7.63 billion.

Net debt fell for the seventh consecutive quarter to $27.5 billion, from $30.6 billion three months earlier, after falling $38.9 billion at the end of 2020.

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