It was a profitable year for BP shareholders (Picture: Getty)
Oil giant BP has revealed its profits more than doubled for the past three months.
Despite the dangers of fossil fuels to the climate now being well known, they are still a big moneymaker – and the news on exactly how much comes amid calls for stricter ‘windfall taxes’ on large profits from energy companies.
The price ordinary people are paying for electric, oil and gas has rocketed following Russia’s invasion of Ukraine and the Covid-19 pandemic, causing concern about how people will afford to heat their homes.
In May, then Chancellor Rishi Sunak announced there would be a £5 billion windfall tax of 25% on North Sea gas and oil companies to get some funds to support those struggling with bills.
Since then, energy prices (and profits) have surged even further, with calls for the windfall tax to be extended – something former prime minister Liz Truss ruled out but her successor Rishi Sunak is said to be considering.
BP confirmed it will be hit by the current windfall tax on its UK operations this year, unlike rival Shell, which paid no UK tax on its North Sea oil and gas production last year.
London-listed BP announced the scale of recent profits today, reporting that underlying replacement cost profits – a measure preferred by BP – surged to 8.2 billion US dollars (£7.1 billion) for the quarter to September, compared with 3.3 billion dollars (£2.9 billion) a year earlier.
It was significantly ahead of the 6.1 billion dollars (£5.3 billion) expected by market analysts.
Nevertheless, BP said profits were weaker than the previous quarter after a dip in average oil price.
In June, the cost of a barrel of Brent crude oil hovered at around 114 dollars (£98.84) per barrel, but since early July the measure has rarely risen above the 100-dollar (£86.70) line.
On Tuesday, a barrel of crude would set a buyer back around 94 dollars (£81).
Visitors gather at BP’s stand during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) in Abu Dhabi, United Arab Emirates, yesterday (Picture: EPA)
BP told shareholders it will pay out 2.5 billion dollars (£2.2 billion) in UK taxes for its UK North Sea business in 2022, as well as 800 million dollars (£695 million) of tax related to the energy profits levy (windfall tax).
Bernard Looney, chief executive officer of BP, said: ‘This quarter’s results reflect us continuing to perform while transforming.
‘We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy.
‘We are providing the oil and gas the world needs today – while at the same time investing to accelerate the energy transition.
‘Our agreement on Archaea Energy is the most recent step in our strategic transformation of BP.’
After becoming prime minister, Liz Truss announced that all households would receive support to pay their energy bills for two years, with the average price they paid capped at £2,500 and the government paying the difference.
But after Rishi Sunak took over, he restricted the support to end in April next year saying the scheme was otherwise unaffordable, meaning people are likely to still face a high burden of energy costs in 2022.
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Oil giant BP has revealed its profits more than doubled for the past three months.
