BP has revealed record profits in its 2022 results at a whopping £23 billion ($27.7bn), with the windfall tax debate rolling on as the firm plans to hand more cash to shareholders.
The Scottish Greens called the figures “obscene”, while Greenpeace accused the energy giant of “mining gold out of the vast suffering caused by the climate and energy crisis”.
BP was quick to point out that £12.6bn ($15.1bn) of taxes paid globally were “the highest annual total it has seen”.
It added its UK North Sea business, which it said accounts for less than 10% of global profits, has forked out £1.8bn ($2.2bn) in tax, including £581.3m ($700m) for the UK Government’s windfall tax – otherwise known as the energy profits levy.
But the company still handed a further £2.28bn ($2.75bn) to shareholders in the final quarter, paying out a total of £9.3bn ( $11.25bn) in 2022. It also upped the quarterly dividend another 10%.
The firm insisted it would increase investment in renewable and green energy – what it calls its “transition growth engines”.
It said areas including hydrogen, renewables and electric vehicle charging – as well as its oil and gas business – would be allocated an extra £6.6bn ($8bn) each through 2030.
But BP has backtracked on targets for reducing the production of hydrocarbons.
BP backtrack on hydrocarbon production
It said it would slow its plan to reduce the amount of oil and gas it produces.
Previously, the company said it would cut the number of barrels it produces by 40% in 2030, compared to 2019, but now that reduction will be 25%.
Greenpeace UK’s head of climate justice, Kate Blagojevic, said BP’s green plans had been “strongly undermined”.
She added: “BP is yet another fossil fuel giant mining gold out of the vast suffering caused by the climate and energy crisis.
“What’s worse, their green plans seem to have been strongly undermined by pressure from investors and governments to make even more dirty money out of oil and gas. This is precisely why we need governments to intervene to change the rules.
“Not only will BP’s new strategy fail to deliver much-needed energy security in the UK but it will ensure that people across the globe already battling devastating droughts, floods and heatwaves, will continue losing their lives and livelihoods.
“It’s time to stop drilling and start making polluters, not communities – who did least to cause the problem – pay the price for the climate damage they are causing all around the world.”
Analyst says BP’s bumper profits have allowed it to ‘spray’ investors with cash
Joshua Warner, senior analyst at City Index, said: “Shareholders will welcome the $2.75bn share buyback, considering this was significantly larger than expected, as well as the 10% dividend increase.
“Those increased returns came after BP generated significantly more cash than anticipated, allowing it to spray investors with cash and reduce its net debt for an 11th consecutive quarter.”
According to Aberdeen & Grampian Chamber of Commerce policy director Ryan Crighton, BP is now paying an average of nearly £10 million per day in windfall taxes – enough to pay the wages of 65,000 nurses.
Mr Crighton added: “The windfall tax needs reformed, with a price floor to protect investment and jobs in our crucial offshore sector. It certainly does not need increased further.”
Campaigners call for more taxation
Campaign group Global Witness said BP’s profits could cover nine million UK homes’ energy bills, estimated to average £2,500 in 2023.
Senior campaigner Jonathan Noronha-Gant said: “Implementing a windfall tax to aid those struggling financially, paired with a significant increase in renewable energy and home insulation, could be the start of the end to the damaging fossil fuel era, both for people and the planet. BP is richer because you’re poorer.”
They are laughing their way to the bank, while the world is burning around us.”
Mark Ruskell, Scottish Greens
Scottish Greens energy and environment spokesman Mark Ruskell said: “These profits are obscene. They should be seen as a stark warning of where our climate is headed and the urgent need to move on from oil and gas.
“There are few companies who have done as much damage to our environment as BP. Yet, while millions are struggling to pay their bills, they are reporting some of the biggest profits in their history.
“All across the world we are seeing the devastating impact of climate change.
“But things have never been better for the oil giants. They are laughing their way to the bank, while the world is burning around us.”
‘Excessive fortunes’
He added: “We can’t go on like this. We can’t have multibillion-pound companies building excessive fortunes from the destruction of our planet.
“We urgently need to get away from oil and gas and from a system based on maximum extraction and maximum profits. That means action from every government and a major shift to renewable energy.
“Renewable energy is the cheapest and cleanest energy available. Yet, climate-wrecking governments like the one in Westminster are still prioritising fossil fuels at the cost of our climate.
“We need a fair and just transition that works for our communities and for people and planet. We have the technology and the money. All that is missing is the political will.”
BP chief says firm providing ‘energy the world needs today’
BP chief executive Bernard Looney said the firm was “helping provide the energy the world needs today”.
He added: “We are strengthening BP, with our strongest upstream plant reliability on record and our lowest production costs in 16 years, helping to generate strong returns and reducing debt for the 11th quarter in a row.
“Importantly, we are delivering for our shareholders – with buybacks and a growing dividend. This is exactly what we said we would do and will continue to do – performing while transforming.”
BP’s results come after fellow UK-based energy firm Shell last week reported the highest profits in its 115-year history.
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