Home » UK Business News » BP doubles profits to record £23 billion as customers continue to struggle with high bills

BP doubles profits to record £23 billion as customers continue to struggle with high bills

By Nagasunder in UK Business News, posted February 8, 2023

BP has revealed it has doubled its profits to £23 billion but will still fall short of a key climate objective.

The company reported its main earnings measure, underlying replacement cost profit, was $27.7 billion (£23 billion) for 2022.

This is more than double the previous year's total, despite lower oil and gas prices slightly affecting its performance in the fourth quarter.

The massive profits will reignite the debate over whether big oil and gas companies should pay more in windfall taxes as the energy-driven cost of living crisis

The earnings figures fueled the debate over whether big oil and gas companies should pay more in windfall taxes in the midst of the energy-driven cost of living crisis.

It comes just days after Shell reported £32.2 billion in profits.

Both companies suffered significant losses in 2020 as the COVID pandemic drove up energy costs due to a lack of demand.

However, the subsequent recovery in oil and gas prices, aided in part by Russia's war in Ukraine, which has squeezed supplies.

This is a particular problem in Europe and has prompted national governments, including the UK, to levy windfall taxes on the sector.

Natural gas prices, while significantly lower than their peaks, remain high in comparison to pre-pandemic levels.

Along with the figures, BP admitted that it now expects carbon emissions from its oil and gas production to fall by 20-30 percent by 2030 when compared to 2019 levels.

However, BP admitted that it now expects carbon emissions from its oil and gas production to fall by 20-30 percent by 2030 when compared to 2019 levels.

Its previous target was a 35-40 percent reduction in emissions.

It blamed the shift on expected higher levels of output to meet global needs, a move slammed by climate campaigners such as Greenpeace, who called for government intervention.

While defending its performance, CEO Bernard Looney revealed £6.6 billion in additional investment in energy transition projects and another £6.6 billion in oil and gas to meet energy security demands.

Domestic critics, including unions, environmental groups, and Labour, want more tax cuts.

They claim that energy companies' profits have come at the expense of the rest of society because wholesale prices have caused decades of high inflation and have left households and businesses with record bills on a variety of fronts.

The energy profits levy on UK extraction activities was raised to 35 percent from 25 percent in Chancellor Jeremy Hunt's autumn statement last November, as the government sought to recover more on the back of its ongoing energy bill support.

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Shareholders have also benefited from share buybacks. BP said it would repurchase $2.75 billion in shares over the next three months, following an $11.7 billion purchase in 2022.

Shell said last week that it expected to pay around £100 million under the rules of the levy for its UK offshore activities last year, bringing its total windfall tax bill to nearly £2 billion.

It contributed £10.8 billion in global taxes.

Source: Sky News

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