BP posted its highest quarterly gains in more than a decade amid rising hydrocarbon prices and “exclusive” trading revenues, leading to renewed calls for higher taxes on oil and gas companies to offset rising costs. energy for consumers.
The group’s base profit based on replacement costs, the measure most closely monitored by analysts, rose to $ 6.2 billion in the first three months of the year, the highest since 2008 and more than twice as much as 2 , $ 63 billion registered a year earlier.
The indicator value, which came despite the loss of profits from Russia after making a huge loss of its business in the country, came against the background of BP’s highest profit for the whole year of eight years.
Sir Keir Starmer, leader of the UK’s opposition Labor Party, said BP’s revenues reinforced arguments for an unforeseen tax on oil and gas profits from the UK’s North Sea, while Ed Miliband, the shadowy climate and critical of the Labor the government for “refusing to act”.
BP CEO Bernard Looney told the Financial Times that he understood that many households were “really, really fighting” and that BP’s role was to return cash to shareholders, including millions of British retirees, pay their taxes and invests in the UK energy system.
UK Prime Minister Boris Johnson on Tuesday rejected new calls for an unforeseen tax, even after Chancellor Rishi Sunak said last week that it remained an option.
Johnson’s government says such a tax would deter investment in the North Sea. But a senior government official said more conservative lawmakers would have backed an unforeseen tax if the prime minister had backed one six months ago.
“By saying we don’t do it, and then turning around and doing it would be bad, he will give the land to Labor,” the man said.
BP has said it intends to invest up to £ 18bn in Britain’s energy system by the end of 2030 and expects to pay up to £ 1bn in taxes on its North Sea oil and gas profits this year. BP declined to disclose what percentage of $ 6.2 billion in quarterly profits was generated in the UK.
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Luni said the reorientation of global energy flows since Russia’s invasion of Ukraine has led to “the most volatile period in the history of probably energy markets”, adding that the instability underscores the need for integrated energy companies such as BP.
“Our first job is to make sure we connect the product supplier with product demand, and this quarter has never been needed more than the world this quarter,” he said.
BP’s quarterly earnings far exceeded analysts’ average estimates of $ 4.49 billion, up from $ 4.07 billion in the last three months of 2021. Its shares rose just over 2 percent in late morning trading on Tuesday.
The performance came despite the company’s decision in February to sell its 19.75 percent stake in Russian oil producer Rosneft after the invasion of Ukraine, which resulted in a pre-tax levy of $ 24 billion and a quarterly loss of $ 20.4 billion. dollars – the highest quarterly loss in the history of BP.
BP is still holding a case for which there are few potential buyers given the decisions of most international energy companies to distance themselves from Russia. The company declined to comment on how and when it expects to sell the stake.
The write-off weighed heavily on the oil company’s main profits – Rosneft added $ 745 million to BP’s adjusted profits in the last quarter of 2021 – but was more than offset by the impact of high commodity prices and the performance of other divisions.
“It’s not just the retail business, it’s the whole company, the business is doing well,” Looney said, adding that BP’s retail division had its best first quarter in history.
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The company maintained its dividend and expanded its repurchase program to $ 2.5 billion in the second quarter of 2022, after completing a $ 1.6 billion repurchase in the first three months of the year.
While the share of Russia’s state-backed oil producer was once at the heart of BP’s long-term strategy, even before the war some investors thought it was becoming increasingly incompatible with the group’s plans to cut oil and gas production by 40 percent by 2030. while increasing the cost of producing energy from renewable sources 20 times.
“BP’s former Russia is a lower risk investment and other businesses are doing well,” said Bernstein analyst Oswald Clint. “The departments are talking about higher volumes, price capture, refining margins and outstanding trade contributions.”
Additional reports by Jim Picard
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