The UK-based energy giant said on Tuesday that its main profit had risen to $ 6.2 billion from $ 2.6 billion in the same period last year, boosted by “exceptional oil and gas trading conditions”.
Oil prices have risen nearly 40 percent since early 2022, with benchmark crude Brent crude trading well above $ 100 a barrel. Natural gas prices also rose. The gains stemmed from fears of a global supply shock following Russia’s invasion of Ukraine.
In response to the war, the United States, Canada, the United Kingdom and Australia have banned Russian oil imports and the European Union may soon join. EU countries are drastically reducing purchases of Russian natural gas, and Moscow has already cut off supplies to Poland and Bulgaria. On February 27, three days after President Vladimir Putin sent troops across the border into Ukraine, BP (BP) announced it would drop nearly 20% of its stake in Russian state oil giant Rosneft and abandon three joint ventures with the most the largest oil producer in the country. On Tuesday, he said those decisions had led to a $ 24.4 billion tax levy and a $ 20.4 billion loss.
“In a quarter dominated by the tragic events in Ukraine and the instability of energy markets, BP’s focus has been on delivering the reliable energy our customers need,” CEO Bernard Looney said in a statement. “But this has not changed our strategy, our financial framework or our expectations for the distribution of shareholders,” he added.
How to spend it?
Shareholders are in line for unforeseen income. BP declared a first-quarter dividend of 5.46 cents a share from 5.25 cents last year and said it would spend $ 2.5 billion – or 60% of the excess cash flow – to repurchase shares over the next three months.
Shares of BP rose 2.5% in trading in London, which led to earnings for the year so far to nearly 22%.
Opposition lawmakers said the high profits had boosted their call on the UK government to impose a one-off contingency tax on the surplus profits generated by oil and gas companies in the North Sea. They want the proceeds to help fund extra relief for households that pay incredibly high fuel and heating prices in the worst cost of living crisis in decades.
“With so many people struggling to pay their energy bills, we need to have an unforeseen tax on North Sea oil and gas companies that have made more profits than they expected,” said Keir Starmer, leader of the opposition Labor Party. BBC. “Take an unforeseen tax on this and use it to help people with their energy bills, up to £ 600 for those who need it most.
The government of Prime Minister Boris Johnson has so far opposed these calls, saying it wants companies to invest more in securing energy supplies, especially from renewable sources, but also oil and gas. But his finance minister, Rishi Sunak, hinted last week at a possible turnaround in government policy.
“What I don’t want to do is postpone the investment needed to use these resources,” Sunak said in an interview with Mumsnet, a parenting website. “But what I would say is that if we don’t see this type of investment moving forward and if companies don’t make these investments in our country and in our energy security, of course, that’s something I would consider. Nothing is always out of the table in these things. “
BP says it expects to pay up to £ 1bn ($ 1.2bn) in profit tax this year from its North Sea operations and plans to invest £ 18bn ($ 22.5bn) in the UK by 2030 This will include investments in the North Sea, offshore wind energy, electric vehicle charging networks, hydrogen production and carbon capture and storage.
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