Oil and gas supermajor BP beat analysts’ predictions for the year’s third quarter, this morning announcing profits of £ 7.1 billion/ $ 8.2 billion, against $8.5 billion in the quarter to June, itself a 14-year high.
“Exceptional” gas marketing was a big contributor, said the company, despite weaker refining margins and only average performance in oil trading.
Today’s result follows rival Shell last week posting record profits worldwide of nearly $30bn so far in 2022. Increased investment by the company in expanding its North Sea fossil fuel extraction meant Shell’s UK entity paid no windfall tax to the Treasury, it admitted.
BP too plans to increase UK oil and gas production by as much as 30% by 2025, the firm states in today’s results.
Calls for deeper windfall taxes on gas and oil majors have continued to intensify since May, when the then Chancellor Rishi Sunak bowed to pressure, introducing his 30 month ‘energy profits levy’, projected to raise £ 5 billion.
Jeremy Hunt, Sunak’s replacement at No11 Downing Street, is reportedly considering increasing that windfall tax by as much as five percentage points, to 30%, and extending its lifespan by three years, to 2028. Details are expected in Hunt’s presentation of his autumn statement on 17 November.
Following similar record declarations by US extractors Exxon and Chevron in recent days, President Joe Biden yesterday accused oil and gas firms of ‘war profiteering’ and threatened them with a similar tax grab, if production is not increased.
BP will be buying back $2.5 billion of its shares, financial director Murray Auchinloss announced today, buoyed by $3.5 billion of surplus cashflow in the latest quarter.
After the recent Opec supply cut and continuing uncertainty in gas markets, BP said it expected oil prices to remain “elevated”. Gas prices on European trading platforms have fallen drastically in recent weeks, after sustained stock-building for winter by EU states.
BP is budgeting between $14 and $16 billion this year to invest in low carbon energy. Auchinloss highlighted the imminent completion of BP’s purchase of Archaea Energy, a leading US biogas producer; and its agreement with car rental giant Hertz to extend EV charging across north America.
CEO Bernard Looney drew criticism in May when he called BP a ‘cash machine’. Today he said” We are providing the oil and gas the world needs today – while at the same time investing to accelerate the energy transition.”
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