BP, one of many world’s largest oil corporations, simply beat expectations for second-quarter revenue on Tuesday as excessive costs and constrained provide have pushed up earnings for vitality corporations.
BP reported an underlying revenue of $8.5 billion, up from $6.2 billion within the earlier quarter and triple the $2.8 billion in the identical interval final yr. Its shares rose greater than 3 % in buying and selling in London, the place the corporate relies.
The outcomes imply that the 5 greatest Western oil corporations — BP, Chevron, Exxon Mobil, Shell and TotalEnergies — generated some $60 billion in revenue for the second quarter. The surge in earnings adopted a spike in crude oil, pure gasoline and gasoline costs this yr, ensuing largely from Russia’s invasion of Ukraine.
The 5 vitality giants additionally spent about $25 billion within the first half of the yr shopping for again their very own shares, which primarily rewards shareholders by elevating the worth of shares. BP mentioned it spent $3.9 billion on buybacks within the first half, and deliberate $3.5 billion value of buybacks within the third quarter. The corporate mentioned it might commit 60 % of its “surplus money circulate” this yr to share buybacks. It additionally raised its dividend by 10 %.
“Now is just not the time to lose self-discipline,” Bernard Looney, BP’s chief govt, mentioned on a name with analysts. “In order that’s the very first thing to say is that we’re anxious to not get drawn into this into believing that this new world might be this new world eternally, and we’re cognizant of the business’s historical past.
BP introduced its exit from Russia in February, and within the first quarter wrote off about $25 billion within the worth of its stake in Rosneft, Russia’s state-controlled oil firm, and different ventures. Analysts thought of {that a} paper loss with little relevance to BP’s future efficiency.
Power corporations’ windfall earnings have introduced political strain on them to do extra to extend manufacturing and decrease prices to shoppers. President Biden has accused oil corporations of profiteering off surging vitality costs and Britain, dwelling of BP and Shell, has introduced a particular tax on the business’s “extraordinary” earnings.
A local weather and vitality invoice agreed by Senate Democrats final week goals to scale back world warming air pollution by 50 % in the US by 2030. The invoice additionally mandates lease gross sales for brand new oil and gasoline exploration within the Gulf of Mexico, a serious base of operations for BP, and customarily “provides a nod to the significance of oil and gasoline,” Mr. Looney instructed analysts.
“I believe is making an attempt to strike a stability, which I believe is sort of smart and pragmatic between delivering vitality safety at this time, which is a hydrocarbon-based system for the US,” he mentioned, “and on the identical time, clearly, lots of local weather provisions.”
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