- The British energy giant posted an underlying replacement cost profit, used as a proxy for net profit, of $4.96 billion in the first quarter as oil and gas prices fell.
- That compares with profits of $4.8 billion in the fourth quarter and $6.2 billion in the first quarter of 2022.
- The first quarter results come after a year of huge profits for Big Oil. Energy majors beat year-earlier highs in 2022 amid volatile oil and gas prices.
BP, which has set its ambition to become a net-zero company by “2050 or earlier” in 2020, has drawn heavy criticism for scaling back its emissions reduction targets in the wake of record profits.
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LONDON – Oil giant BP reported stronger-than-expected first-quarter profit on Tuesday, edging out exceptional volumes from its 2022 blockbuster, as fossil fuel prices surged following Russia’s full-scale invasion of Ukraine.
The British energy company reported an underlying replacement cost profit, used as a proxy for net profit, of $4.96 billion in the first quarter.
This compares to $4.8 billion in the fourth quarter and $6.2 billion in the first quarter of 2022. Analysts expected BP’s first-quarter profit to be $4.3 billion, according to Refinitiv.
BP’s first-quarter earnings reflected strong oil and gas trading. It also announced a $1.75 billion share buyback, which it expects to complete before announcing its second-quarter 2023 results in early August. The group said on April 28 it had repurchased $2.75 billion in shares previously announced.
“This is a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations,” BP CEO Bernard Looney said in a statement.
“More importantly, we continue to deliver to shareholders through regulatory investment, reduced net debt and growing distributions,” he added.
BP expects to be able to buy back about $4 billion of stock a year — at the lower end of its $14 billion to $18 billion capital spending range — and has the ability to increase its dividend per ordinary share annually. Approximately 4%.
BP’s dividend was unchanged from the previous quarter at 6.61 cents per ordinary share, following a 10% increase in February.
The company reported net debt of $21.2 billion in the first quarter, down from $27.5 billion in the same period a year earlier.
Shares of the London-listed stock are up 12.5% for the year.
The first quarter results come after a year of huge profits for Big Oil. Energy majors beat year-earlier highs in 2022 amid volatile oil and gas prices.
For its part, BP posted annual profits of $27.7 billion last year – more than doubling profits on record in 2021. The previous annual profit record for oil companies was $26.3 billion in 2008.
Big oil executives have sought to defend their bumper profits amid criticism, highlighting the importance of energy security in transitioning away from fossil fuels in general and suggesting that higher taxes could deter investment.
BP was one of the first energy companies to announce an ambition to reach net-zero emissions “by 2050 or earlier”. said In the wake of its annual record profits, it now plans to scale back its emissions reduction targets.
The move set the scene for a contentious annual shareholder meeting last week, with analysts commenting that there was “clearly very deep disillusionment” among some of the UK’s biggest pension funds.
In fact, 17% of the shareholder group – up from 15% last year, but 21% in 2021 – voted in favor of the resolution put forward by the Dutch group. The resolution called for the company to align its emissions reduction targets for 2030 with the landmark Paris Agreement.
The main driver of the climate emergency is the burning of fossil fuels such as coal, oil and gas.
Last week, French oil giant TotalEnergies kicked off big oil’s earnings season with first-quarter results that met analyst expectations. The company reported a 27% decline in net income to $6.5 billion in the first three months of 2023.
Britain’s Shell and Norway’s Equinor are both scheduled to report their quarterly earnings on Thursday.
