LONDON (AP) – British energy firm BP reported record annual earnings yesterday, fuelling demands that the United Kingdom (UK) government boost taxes for companies benefitting from the high price of oil and natural gas.
London-based BP said underlying replacement cost profit, which excludes one-time items and fluctuations in the value of inventories, jumped to USD27.7 billion in 2022 from USD12.8 billion a year earlier.
That beat the USD26.8 billion BP earned in 2008, when tensions in Iran and Nigeria pushed world oil prices to a record of more than USD147 a barrel.
BP also increased its quarterly dividend by 10 per cent and announced plans to buy back an additional USD2.75 billion of stock from shareholders.
But the good news for BP shareholders is likely to be tempered by the public fallout, particularly in its home country.
High oil and gas prices have hit Britain hard, with double-digit inflation fuelling a wave of public sector strikes, soaring food bank use and demands that politicians expand a windfall tax on energy companies to help pay for public services.
Opposition Labour Party’s spokesman on climate issues Ed Miliband, called on the government to bring forward a “proper” windfall profits tax on energy companies.
“It’s yet another day of enormous profits at an energy giant, the windfalls of war, coming out of the pockets of the British people,” Miliband said.
Similar censure was directed at London-based Shell last week, when it said annual earnings doubled to a record USD39.9 billion last year.
Bumper profits for energy companies around the world have sparked demands that the fossil fuel industry do more to offset high energy bills even as they cut climate-damaging carbon emissions. US-based Exxon Mobil posted record earnings of USD55.7 billion last week.
Last year, Britain approved a 25 per cent windfall profit tax on earnings from oil and gas produced in the UK, with the levy increasing to 35 per cent in 2023.
But opposition leaders have criticised the government for allowing energy companies to reduce the tax by investing in the UK.
BP said it took a charge of more than USD1.8 billion last year to cover the new UK tax.
The company also took charges of USD25.5 billion as the result of its decision to exit its investments in Russia.
After including one-time items and fluctuations in the value of inventories, BP posted a net loss of USD2.49 billion for 2022, compared with net income of USD7.57 billion the previous year.
BP yesterday said it would boost investment in renewable energy, hydrogen and electric vehicle charging as well as its oil and gas businesses, plowing an additional USD8 billion into the two segments through 2030.