Fresh calls for windfall tax as oil giant BP unveils mixed numbers

Energy major BP has swung to a quarterly loss after taking a massive $25.5 billion (£20.4bn) hit following its move to quit Russia, but soaring oil prices saw underlying profits hit their highest for more than a decade, renewing calls for a windfall tax.

The group reported a $23bn replacement cost loss for the first three months of the year after booking a hefty impairment charge for its decision to ditch its near-20 per cent stake in oil producer Rosneft, which it co-owned with the Kremlin, in response to the conflict in Ukraine.

But, with the one-off charge stripped out, its underlying replacement cost profits more than doubled to $6.2bn from $2.6bn a year earlier on the back of the soaring cost of crude.

BP unveiled plans to invest up to £18 billion into the UK energy system by 2030 amid mounting government pressure to help with the cost-of-living crisis and growing calls for a windfall tax on oil and gas firms.

Business secretary Kwasi Kwarteng last week wrote to the oil and gas industry saying it must also set out plans for investment in clean energy during a meeting in the coming weeks.

But Labour is backing calls for a windfall tax on the companies to provide more direct help for cash-strapped households and businesses.

The chancellor, Rishi Sunak, has appeared to distance himself from such a tax, instead looking to companies making big profits to invest the cash back into the UK.

TUC general secretary Frances O’Grady said: “At a time when households across Britain are being hammered by soaring bills and prices these profits are obscene.

BP remains one of the world's largest oil producers and a key North Sea player but has been steadily moving into renewables and other green technologies.

“The government must stop making excuses and impose a windfall tax on oil and gas companies. The money raised should bring down costs for struggling families.”

Liberal Democrat leader Ed Davey said: “BP is raking in eye-watering profits while millions of people struggle to pay the bills. It is an unforgivable lack of leadership from Boris Johnson at a time of national crisis.

“Oil companies are handing out huge dividends and buying back shares, they could easily afford to pay a little more to help the most vulnerable.”

BP pledged alongside its quarterly results statement to invest in North Sea oil and gas, while driving down operational emissions, and said it is also working on a range of lower carbon energy projects in the UK, which are set to create jobs and develop new skills.

The group also further boosted returns to investors on the back of its underlying profit haul, announcing a further $2.5bn in share buybacks.

Chief executive Bernard Looney told investors: “In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, BP’s focus has been on supplying the reliable energy our customers need.

“Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today. But it has not changed our strategy, our financial frame or our expectations for shareholder distributions,” he added.