BP Reports Record Profit and Increases Dividends, Investing in Renewable Energy and Oil and Gas
BP has reported a record full-year 2022 adjusted profit of $27.6 billion and announced a 10% increase in shareholder dividends and an extension of the company’s share buyback programme. As a result of Russia’s war in Ukraine, countries are looking to prioritize domestic renewable energy sources as a way to increase security of supply while also cutting carbon emissions. However, BP has scaled back its climate ambitions and lowered its emissions reduction target from 35-40% to 20-30% by the end of this decade.
The company will begin investing the same amount, $8 billion annually, each on oil and gas development and on non-fossil fuel projects it calls its energy “transition growth engines” — biofuels, hydrogen fuel, solar and wind, electrical power and EV charging. BP announced it will pay $2.2 billion in 2022 for the North Sea, constituting less than 10% of global profits, including $700 million due to the Energy Profits Levy (EPL).
BP reported that its total taxes incurred globally amounted to $15 billion, its highest amount ever in a single year. The North Sea, which contributes less than 10% of global profits, will be subject to $2.2 billion in taxes for 2022, including $700 million from the UK's energy profits levy (also known as the windfall tax) – a lower amount than the $800 million estimated in the previous year due to declining gas prices.
Last week, Shell, Exxon Mobil, and Chevron reported record-breaking profits. BP's earnings for Tuesday follow the reports from Exxon Mobil, Chevron and Shell (SHEL) that together amounted to more than $132 billion in profit for the 2022 fiscal year. Over the course of the year, the three energy giants distributed a total of $78 billion to their shareholders in the form of buybacks and dividends.
BP is still committing up to $8 billion to their oil and gas assets, even though they plan to increase investment in their renewable businesses. Low carbon hydrogen plays a critical role in helping the energy system to decarbonise, including in shipping, over the outlook period, BP says in its latest annual energy report. BP stated that low-carbon hydrogen will be significant in the decarbonization of the energy system, particularly in contexts which are challenging to reduce emissions in industry and transport.
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4. “BP hikes spending for energy transition” Greentech Lead, 7 Feb. 2023, https://greentechlead.com/energy-news/bp-hikes-spending-for-energy-transition-41955
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