BP’s earnings tripled in the second quarter as the British energy giant profited from oil and natural gas prices that soared after Russia invaded Ukraine.
London-based BP said Tuesday that underlying replacement cost profit, which excludes one-time items and fluctuations in the value of inventories, jumped to $8.45 billion (€8.264 billion) from $2.80 billion (€2.73 billion) in the same period a year earlier.
The soaring earnings allowed BP to return billions of dollars to shareholders, with the company boosting its dividend by 10% and announcing that it would buy back $3.5 billion (€3.42 billion) in shares. BP stated that it plans to increase dividends by approximately 4% per year through 2025.
However, the good news for BP shareholders was not good news for consumers. Soaring energy prices are contributing to the cost-of living crisis in Britain as well as around the globe.
In the United Kingdom, where inflation hit a 40-year high at 9.4% in June 2013, the government announced a 25% windfall profits taxes on oil and gas companies that are British.
The opposition Labour Party criticized the government for not using more revenue from the new taxes to help consumers.
“People are worried sick about energy prices rising again in the autumn, but yet again we see eye-watering profits for oil and gas producers,” Rachel Reeves, the party’s spokeswoman on treasury issues, said in a statement.
“Labour argued for months for a windfall tax on these companies to help bring bills down, but when the Tories finally U-turned they decided to hand billions of pounds back to producers in tax breaks.”
BP stated that the windfall profits tax would raise the headline tax rate for its North Sea operations from 40% to 65%. The company said it plans to set aside $800 million (€782 million) to cover the tax increase.
BP said it received an average of $105.50 (€103.16) per barrel for its oil in the second quarter, up 71% from a year earlier. Gas more than doubled to $8.42 (€8.23) per thousand cubic feet.
Second-quarter net income rose to $9.26 billion (€9.05 billion) from $3.12 billion (€3.05 billion) in the year-earlier period.
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