- The British energy giant posted an underlying replacement cost profit, used as a proxy for net income, of $4.96 billion for the first quarter as lower oil and gas prices took their toll.
- This compares to earnings of $4.8 billion in the fourth quarter and $6.2 billion in the first quarter of 2022.
- The first-quarter results come after a year of solid earnings for Big Oil. Big energy companies smashed previous annual records in 2022 at a time of volatile oil and gas prices.
BP, which set a 2020 goal of becoming a net-zero company “by 2050 or sooner” has been criticized for scaling back its emissions reduction targets after record profits.
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LONDON, Oct. 11 /PRNewswire/ — Oil major BP on Tuesday reported stronger-than-expected first-quarter earnings, which rose from the previous three months but declined from exceptional levels it had posted during a blockbuster 2022 when the Fossil fuel prices skyrocketed after Russia’s all-out invasion of Ukraine.
The British energy giant posted underlying replacement cost profit, used as a proxy for net income, of $4.96 billion for the first quarter.
This compares to earnings of $4.8 billion in the fourth quarter and $6.2 billion in the first quarter of 2022. According to Refinitiv, analysts had expected BP to post a profit of $4.3 billion in the first quarter would report.
BP said its first-quarter earnings reflected resilient oil and gas trading. The company announced another $1.75 billion share buyback, which it expects to complete before announcing its second-quarter 2023 results in early August. The group announced that it completed its previously announced $2.75 billion share repurchase on April 28.
“This was a quarter of strong performance and strategic execution as we remain focused on safe and reliable operations,” BP CEO Bernard Looney said in a statement.
“More importantly, we continue to deliver our share of shareholders through disciplined investing, lowering net debt and growing payouts,” he added.
BP expects share buybacks of around 4 billion about 4%.
BP’s dividend was flat at 6.61 cents per common share sequentially after rising 10% in February.
The company reported net debt of $21.2 billion for the first quarter, up from $27.5 billion for the same period last year.
Shares of the London-listed stock are up 12.5% year-to-date.
The first-quarter results come after a year of solid earnings for Big Oil. Big energy companies smashed previous annual records in 2022 at a time of volatile oil and gas prices.
For its part, BP posted annual profits of $27.7 billion last year — more than double 2021’s profits. The oil major’s previous annual profit record was $26.3 billion in 2008.
Oil major executives have since tried to defend their record profits amid a barrage of criticism, typically emphasizing the importance of energy security in the transition away from fossil fuels and pointing out that higher taxes could discourage investment.
BP, which was one of the first energy giants to announce a goal of achieving net-zero emissions “by 2050 or sooner,” said amid record annual profits that it now plans to scale back its emissions reduction targets.
The move set the stage for a controversial annual general meeting of shareholders last week, at which analysts commented that there was “clearly very deep frustration” at some of the UK’s largest pension funds.
In fact, a 17% shareholder group — up from 15% last year but up from 21% in 2021 — voted in favor of a resolution tabled by Dutch group Follow This. The resolution called for the company to align its 2030 emissions reduction targets with the landmark Paris Agreement.
The burning of fossil fuels such as coal, oil and gas is the main cause of the climate emergency.
Last week, French oil giant TotalEnergies started Big Oil’s earnings season with first-quarter results in line with analysts’ expectations. The company reported a 27% decline in net income to $6.5 billion in the first three months of 2023, partly due to lower fossil fuel prices.
Britain’s Shell and Norway’s Equinor are both expected to announce their quarterly results on Thursday.