Shares in BP rose more than 2% in early trading, after its underlying earnings beat expectations last quarter.
Investors will also be pleased that BP increased its share buybacks by $2.5 billion today, after its cash flow jumped on the back of higher energy prices.
Perhaps stung by criticism over its profitability, BP says it expects to pay up to £1billion in tax on its North Sea profits in 2022.
This is on top of the roughly £250million he has paid each year in other UK taxes in recent years, he adds.
Green Party MP Caroline Lucas also argues for a windfall tax to help struggling families:
BP has also presented plans for invest up to £18billion in the UK’s energy system over the next eight years, insisting it is ‘supporting’ the country.
The oil giant said it plans to continue investing in North Sea oil and gas, and also to develop low-carbon energy investments in the UK.
Those projects will include offshore wind, electric vehicle charging (where it announced a £1billion rollout in March) and two large-scale hydrogen production facilities in Teesside, as well as developing its network service stations across the UK.
Bernard looneygeneral manager of bpmentioned:
“We support Great Britain. It has been our home for over 110 years and we have been investing in North Sea oil and gas for over 50 years. We are fully committed to the UK’s energy transition – providing reliable local power and, at the same time, focusing on the road to net zero.
And we have ambitious plans to do more and move faster. Our plans go beyond just infrastructure – they see us supporting the economy, skills development and job opportunities in the communities where we operate. We are all in it.
Last week, Business Secretary Kwasi Kwarteng wrote to the North Sea oil and gas industry asking it to set out a clear plan to reinvest profits in UK energy projects.
BP’s projects for the North Sea include:
- Develop low-emission oil and gas projects to support short-term security of supply, for example, in the Murlach, Kate and Mungo fields around the bp-operated ETAP hub in the Central North Sea and in the fields Clair and Schiehallion West of Shetland.
- Invest in exploration around its existing hubs in the North Sea.
- Advance plans to electrify assets in the Central North Sea and West Shetland to further reduce operational emissions and support the North Sea Transition Agreement.
Liberal Democrat leader Ed Davey also calls for an exceptional tax on energy companies:
“The Conservative government’s refusal to introduce an exceptional tax on oil companies’ superprofits is becoming unjustifiable.
BP rakes in exorbitant profits while millions struggle to pay the bills. It is an unforgivable lack of leadership from Boris Johnson at this time of national crisis.
Oil companies are handing out huge dividends and buying back shares, they could easily afford to pay a little more to help the most vulnerable.
Shadow Chancellor of Labour, Rachel Reevesargues that the case for a windfall tax to help families struggling with higher energy bills “cannot be ignored”:
Hello and welcome to our ongoing coverage of business, the global economy and financial markets.
BP more than doubled its underlying profit as the war in Ukraine drove up energy prices…and was hit hard by its departure from Russia.
The oil company’s underlying replacement profits jumped to $6.245bn (£5bn) in the first quarter of the year, a period in which crude oil prices hit record highs since 2008 and gas prices have reached record highs.
That’s up from $2.63 billion in the same quarter a year ago and $4.065 billion in the final three months of 2021, BP’s latest financial results, just released, show. .
Reuters reports that these are the highest underlying earnings in more than a decade, and are well ahead of city expectations of around $4.5 billion in underlying earnings. underlyings.
BP says the rise in profits was driven by “outstanding oil and gas trading, higher oil realizations and stronger refining earnings.”
But he also took charges totaling $25.5 billion to cover his exit from Russia, where he is giving up his Rosneft stake.
This pushed the company to a huge reported loss of $23 billion, on a replacement cost basis.
BP CEO Bernard Looney says:
In a quarter dominated by the tragic events in Ukraine and the volatility of the energy markets, bp focused on providing the reliable energy that its customers need.
Our decision in February to divest our stake in Rosneft resulted in the material non-cash charges and comprehensive loss we announced today.
BP also announced a new $2.5 billion share buyback, which will redirect some of its profits to shareholders.
During the first quarter, bp generated excess cash flow of $4.1 billion and intends to execute a $2.5 billion share buyback before announcing its second quarter results .
BP’s windfall profits will renew the push for a windfall tax on energy companies, to helping energy companies help UK households struggling with rising bills.
Business Secretary Kwasi Kwarteng dismissed the idea on Sunday, saying it would discourage new projects, after Chancellor Rishi Sunak suggested he would consider it if companies did not invest more in new oil extractions. oil and gas.
Italy showed that it was possible. Mario Draghi’s government yesterday unveiled a €14 billion support package for vulnerable families and businesses facing soaring commodity prices following the war in Ukraine.
It will be partly financed by a 25% tax on the exceptional profits of energy groups, up from the 10% initially planned.
Also coming today
The latest manufacturing PMI report will show how UK factories fared in April, as concerns grow that Britain could slip into recession this year.
Concerns about the health of the global economy rose yesterday, with data showing that eurozone manufacturing output stagnated in April. In China, factory activity contracted at the fastest pace in two years.
the FTSE100 is expected to fall about 0.8% as traders in the city return to their keyboards after the holiday break, recouping losses in European markets on Monday. But other markets are opening higher, following a late rally on Wall Street last night.
EU finance ministers will discuss banking union proposals today in a video call. Irishman Paschal Donohoe, who chairs the Eurogroup, is pushing for a common deposit insurance fund to guarantee depositors’ funds across the bloc.
Bloomberg Explain :
Eurogroup President Paschal Donohoe has outlined his plans for breaking the deadlock in recent days and will present his ideas to eurozone finance ministers in a videoconference on Tuesday.
He wants to set up a common European deposit guarantee fund, at least in embryonic form, by 2024 to provide additional protection for savers and strengthen the European banking system, according to the proposal seen by Bloomberg.
- 8.55am BST: German unemployment report for April
- 9.30am BST: UK manufacturing PMI for April
- 9.30am BST: Hong Kong GDP report for the first quarter of 2022
- 10am BST: Eurozone unemployment report for March
- 15:00 BST: Eurogroup ministers hold video conference on banking union plans