Commodity boost

BP sees profits soar amid ‘greening’ plans

BP
BP is investing in new technologies

Soaring commodity prices saw BP post a full-year underlying replacement cost profit of $12.8 billion compared with a net loss of $5.7bn in the previous year, marginally ahead of forecasts.

It said fourth-quarter net profit came in at $4.1bn, beating analyst expectations of $3.9bn.

Chief executive Bernard Looney said the board would continue to invest in “greening” the company which meant that for every pound of profit it makes in the UK it will be investing two in its transition strategy.

The company’s plans to invest in renewables are among the most ambitious in the sector, with an aim to increase spending on low carbon technologies 10-fold, to almost a third of its budget in 10 years.

Mr Looney said: “2021 shows bp doing what we said we would – performing while transforming. We’ve strengthened the balance sheet and grown returns.

“We’re delivering distributions to shareholders with $4.15bn of buybacks announced and the dividend increased. And we’re investing for the future.”

BP maintained its dividend at 5.46 cents per share and boosted its share repurchases targets to $1.5bn per quarter from $1.25bn.

Capital spending will grow in 2022 to a range of $14bn to $15bn, up from $12.8bn in 2021.

BP is in line to receive a multimillion-pound dividend from the collapse of the household energy supplier it co-owned.

The oil major and the three co-founders of Pure Planet, which failed in October, are each expected to receive a dividend from the administration of Blue Marble Holdings, its parent company, thanks to valuable energy contracts it held on the supplier’s behalf.

Initial estimates suggest they could receive a payout worth about £11 million each, despite households across Britain being asked to pay £142 million through their energy bills for costs stemming from Pure Planet’s collapse.

Mr Looney insisted last year that there was “no sense here of BP in any way profiting from someone else’s demise”. He told The Times: “If the administrator does make a distribution to BP as a shareholder, we would intend giving that to charity.”

Stuart Lamont, investment manager at Brewin Dolphin, said: “BP was expected to deliver a strong set of results following last week’s update from Shell, and the company has duly delivered.

“Buoyed by the rising oil price, BP has swung to a substantial profit, cut debt, invested in its business, and upped its shareholder distributions.

“Management is striking a positive tone on its progress as BP transitions towards net zero and the company looks to be in a strong position to deliver on its commitments building up to 2030.”

See also: Six oil fields poised to go ahead in North Sea



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