- BP’s Profits Decline to $2.5 Billion in Q2
- CEO Announces 10% Increase in Shareholder Payments
- Government Enacts Windfall Tax Amid Record Energy Prices
As profits decline from a record high, “resilient” shareholder payments are the company’s top priority, according to its Q2 and H1 financial results.
Profits fell significantly in BP’s first half of the fiscal year due to falling energy prices after Russia invaded Ukraine.
For the three months ended June 30, the oil and gas giant earned $2.5 billion (£2 billion).
It represents half of the $5 billion (£4 billion) profit earned in the first quarter of 2023.
The drop is much greater than last year’s $8.45 billion (£6.5 billion) profit.
Analysts had anticipated a decline in profits, but BP’s results were worse than anticipated.
BP stated that this was due to “significantly lower” refining margins, a “significantly higher level” of maintenance activity, and lower oil and gas prices; however, an “exceptional gas marketing and trading result, albeit lower than the first quarter.”
CEO Bernard Looney described it as a “resilient” performance “during a period of significant turnaround activity and weaker margins in our refining business”.
Mr. Looney stated that two significant oil and gas projects had been initiated and announced a 10% increase in shareholder payments and a $1.5bn (£1.17bn) share buyback plan.
“This reflects confidence in our performance and the outlook for cash flow, as well as continued progress in reducing our share count,” he explained.
According to the results, a stable payout to shareholders is BP’s “priority”
The International Energy Agency says no new fossil fuel project can meet the 1.5°C temperature target.
Russia’s invasion of Ukraine drove petrol and crude prices to record highs as nations cut imports.
Oil and gas producers such as BP garnered the financial benefits of these high prices and reported record profits, but as evidenced by Shell’s most recent earnings report, these profits are no longer at an all-time high.
The government imposed a windfall tax to reduce profits and provide consumer energy support when energy prices rose.
Ed Miliband, former Labour leader and current shadow climate and net zero secretary, stated that the figures demonstrate the “continuing scandal of the Tory failure to act on the windfalls of war being pocketed by the oil and gas producers”
Mr Miliband suggested closing “gaping loopholes” in oil and gas taxes instead of billions in subsidies.
Labor would introduce a genuine windfall tax on oil and gas giants to help combat the cost of living crisis, along with our plan to make Britain a clean energy superpower so that we can reduce bills for families and businesses, he said.
