BP sees huge profit surge due to high oil and gas prices

BP has revealed that its profits more than doubled for the past three months amid ratcheting calls for stiffer windfall taxes for energy producers.

The London-listed oil giant reported that underlying replacement cost profits – a measure preferred by BP – surged to 8.2 billion US dollars (£7.1 billion), 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 but 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 per barrel, but since early July the measure has rarely risen above the 100-dollar line. On Tuesday, a barrel of crude would set a buyer back around 94 dollars (£81).

BP have announced profits amid the cost of living crisis.

BP profits: BP reports highest profit in 14 years as energy bills soar

Energy prices are still at elevated levels following the Russian invasion of Ukraine and therefore set to weigh heavily on household budgets over winter.

BP confirmed that it will pay UK windfall taxes this year. It told shareholders it will pay out 2.5 billion dollars (£2.2 billion) in 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. The Government launched the energy profits levy windfall tax in May for North Sea oil and gas producers.

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.”

Environmental group Friends of the Earth called on the Government to widen the windfall tax in response to BP’s latest profit haul.

Energy campaigner Sana Yusuf said: “With the economy sinking, energy bills soaring and the climate crisis deepening, Rishi Sunak must surely act on the excessive profits that fossil fuel firms like BP are raking in.

“The case for a bigger, bolder windfall tax is now overwhelming.

“This must address the ridiculous loophole that undermines the levy by enabling companies to pay the bare minimum if they invest in more planet-warming gas and oil projects.”

Dr George Dibb, head of the Centre for Economic Justice at the IPPR think tank, said: “Companies like BP are making huge profits and channelling these straight back to already-wealthy shareholders through share buyback schemes.

“Instead of reducing costs for consumers or investing in renewable energy, these fossil fuel giants are prioritising transfers to shareholders.”

Shadow climate change secretary Ed Miliband said: “Today’s profits at BP are damning evidence of the failure of the Government to levy a proper windfall tax.

“Rishi Sunak should be hanging his head in shame that he has left billions of windfall profits in the pockets of oil and gas companies, while the British people face a cost-of-living crisis.”