BP today outdid Shell by declaring a sanctions-boosted doubling of profits for 2022, up to £23 billion.
The figure is a new record for the highest profits ever seen from a company on the London Stock Exchange, coming only a week after its rival posted the previous best of £22 billion.
Two UK-registered fossil fuel leviathans together posting £45 billion over the same year’s trading immediately brought renewed calls from opposition politicians to extend the windfall tax – or ‘energy profits levy’ as the Treasury knows it – which Rishi Sunak reluctantly imposed last May when Chancellor.
Following amendments including by current Chancellor Jeremy Hunt, the windfall now stands at 35% on ‘excess profits’ recorded by hydrocarbon extractors. The ‘temporary measure’ is scheduled to last until 2028.
LibDem leader Sir Ed Davey, – a former energy secretary – called on Radio Four for elimination of investment allowances which still permit BP and Shell to write off new North Sea drilling infrastructure against tax.
“No company should be making these kind of outrageous profits from Putin’s illegal war” said Davey. “It’s another sign of Rishi Sunak’s failure to re-act when the Liberal Democrats told him to, and tax profits these companies were never expecting, as homeowners struggle with bills.
Davey cited Hunt’s £40 billion estimate of the current windfall rate’s revenues to the Treasury over its five years. A further £10 billion could easily be achieved, said the LibDem leader, more than enough to offset the £3.1 billion cost to Britons of the government’s trimming back due in April of its emergency support for bill-payers.
BP CEO Bernard Looney – pictured – last year famously compared his company to a cash machine. Departing Shell boss Ben van Beurden in October called for targeted government intervention to protect the poor.
Analysis of BP’s highest earnings in its 114 year history showed it has slowed its commitment to renewables. The firm had intended to cut oil and gas production by an industry-leading 40 per cent by the year 2030. Today’s figures indicate the drop will now be only 25 per cent.
BP last year spent $16.3 billion on capital projects, a figure it plans to maintain. Looney told the Financial Times that it would increase by $ 8 billion its spending on its ‘transition’ businesses – renewables, hydrogen, biofuels and charging – over the years to 2030.
But critics pointed out that spending on oil and gas ventures will rise by the same amount. Last year BP invested more in its fossil fuel activities than in its future-oriented low-carbon businesses, provoking charges of green wash.
The company announced it is rewarding shareholders with a 10% rise in last year’s fourth quarter dividend, and buying back a further $2.75 billion in share buybacks, following $ 11.25 already purchased last year.
By noon, BP’s share price had risen over 5%, valuing the company at £ 86.484 billion. More on BP’s 2022 figures here.