BP waters down environmental ambitions after record profit

Profits at oil giant BP hit record highs last year as the company benefited from runaway oil and gas prices caused by the war in Ukraine.

The company also said it has cut its emissions reduction targets by a third and will be producing much more oil and gas by the end of this decade than previously thought.

BP said underlying replacement cost profit – the number most closely followed by analysts – hit $27.7 billion (£23 billion) last year.

It also said it would pay shareholders about $4.4 billion in full-year dividends and announced plans to repurchase $2.8 billion of its own stock.

It came just days after Shell reported its highest-ever profit of almost $40 billion (£33 billion).

Within minutes, unions and interest groups were expressing outrage that BP is making huge profits while ordinary people struggle to afford the energy it is selling.

Unions Congress general secretary Paul Nowak said: “While millions struggle to heat their homes and put food on the table, BP is laughing to the bank.

“Ministers are letting big oil and gas companies rake in billions in excess profits. But they refuse to give nurses, teachers and other key workers a decent raise.”

Labor Shadow Climate Change Secretary Ed Miliband said: “What is so outrageous is that Rishi Sunak is still refusing to introduce a proper windfall tax that would make them pay their fair share while fossil fuel companies fuels raking in these enormous sums.

“In just eight weeks, the Government plans to raise the energy price ceiling to £3,000. Labor would apply an appropriate windfall tax to prevent prices from rising in April.”

Perhaps more significantly over the long term, BP cut its environmental targets on Tuesday.

The company was one of the first oil and gas majors in the world to announce a goal of net-zero emissions by 2050.

As part of this, it has previously pledged that emissions will be 35-40% lower by the end of this decade.

On Tuesday, however, the company announced that it was significantly revising this target. Instead, she is aiming for a 20-30% cut.

Boss Bernard Looney said it was about investing in both the transition and the energy needed today as he announced an additional $8 billion (£6.6 billion) for oil and gas investments through 2030 and another $8 billion for transition projects announced.

“With today’s announcement, we’re leaning further in,” he said.

“We are increasing our investment in our transition while increasing investment in today’s energy system.

BP said it now plans to cut oil and gas production by just 25% by the end of 2030 compared to 2019 levels. The previous goal was a 40% cut.

Kate Blagojevic, Head of Climate Justice at Greenpeace UK, said: “BP’s new strategy will not only fail to deliver much-needed energy security in the UK, but also ensure that people around the world already dealing with devastating droughts, floods and heatwaves are struggling will continue to lose their energy life and livelihood.”

BP said underlying replacement cost profit was slightly lower at $4.8 billion (£4 billion) for the final three months of the year compared to previous quarters.

BP said fourth-quarter earnings were impacted by its gas marketing division, which underperformed after an exceptional third quarter.

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