BP has reported first quarter profits of £4 billion, as more cash is pushed towards shareholder returns.
The energy giant also announced a further £1.4bn in share buybacks, drawing more fire from critics amid the cost-of-living crisis.
And it beat expectations on revenue, totalling £45.9bn for the quarter – up by more than £2.4bn on the same period in 2022.
Total production during the first three months of this year was 969 million barrels of oil equivalent per day, up slightly on 966million in Q1 2022.
Q2 production is expected to be lower due to the effects of seasonal maintenance.
For the year, production is “expected to be flat” compared to 2022.
Taxation, debt, divestment
The profits figure represents BP’s preferred measure, based on “underlying replacement cost” – what a business must spend to replace an essential asset.
On a pre-tax basis, the firm’s earnings totalled £9.5bn for the quarter, against losses of £14.14bn a year ago.
Chief financial officer Murray Auchinloss has previously said the UK accounts for about 15% of global profits.
In the UK, BP estimates it incurred taxes of around £524 million for its North Sea business in Q1 2023.
The firm recently told a Westminster committee it expects to have paid £2bn for its North Sea business for the 2022-23 tax year.
This includes tax measures beyond just the energy profits levy, or “windfall tax”.
Net debt dropped from £22.1bn in Q1 2022 to £17.1bn, as of Q1 2023.
Having realised divestments of £13.5bn since Q2 2020, it expects another £1.6-2.4bn this year, and to reach a £20.2bn total by 2025.
Buybacks
Announcing the latest share buybacks, BP said it expects to be able to deliver around £3.2bn per year, assuming a $60 per barrel price of Brent crude oil.
The company “expects oil prices to remain elevated” due to a recent decision by OPEC+ cartel producers to restrict production, combined with strengthened Chinese demand.
Chief executive Bernard Looney said: “This has been a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations.
“Momentum continues to build across our integrated energy company strategy.
“And, importantly, we continue to deliver for shareholders, through disciplined investment, lowering net debt and growing distributions.”
Cost of living
The London-listed firm continues to draw ire from activists over the cost-of-living crisis, given its huge profits.
Global Witness senior campaigner Jonathan Noronha-Gant said: “As the cost-of-living crisis continues to bite, BP is still raking in immense profits.
“The energy crisis has shone a spotlight on the huge gulf between the winners and losers of our fossil fuel-based economy, with oil giants like BP laughing all the way to the bank, while the elderly are freezing to death in their homes, and our kids are going to school hungry.”
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