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BP’s Q4 Profits Highest In Eight Years, Boosts Zero Emission Plans

BP’s Q4 Profits Highest In Eight Years, Boosts Zero Emission Plans
Rising gas and oil prices helped oil and gas giant BP to report its highest level of profits in eight years for 2021 even while the company expanded its share repurchase program and hastened efforts to reduce emissions by increasing investment in low-carbon energy.
After suffering a big loss in 2020, BP's return to a $12.85 billion annual profit is likely to add to calls in the United Kingdom for increased taxes on energy producers to help decrease customers' energy prices.
"It's all about one thing, one thing only - delivering the strategy that we laid out. That's working," Chief Executive Bernard Looney told Reuters.
BP's underlying replacement cost profit, the company's measure of net profitability, reached $4.1 billion for the fourth quarter of 2021, beating analysts' forecasts of $3.93 billion profit for the period.
BP's fourth-quarter profit was the highest it had been since early 2013.
The BP stock rose 1.4 per cent, compared to a 1 per cent rise in the broader European energy index.
Increasing oil and gas prices and output aided the results, which were somewhat offset by poorer oil trading earnings and the impact of higher energy costs on activities like refining, according to the business.
Because of restricted gas supplies amid increased demand as economies recovered from pandemic shutdowns, natural gas, and energy costs have risen dramatically around the world since the middle of last year.
BP's $12.85 billion profit for the year 2021 contrasted with a $5.7 billion loss in 2020, when the company wrote off the value of its oil and gas assets by $6.5 billion due to a drop in energy demand.
By the end of last year, BP's debt had dropped to $30.6 billion, down $8.3 billion from the previous year.
BP kept its dividend at 5.46 cents per share and increased its share repurchase targets from $1.25 billion to $1.5 billion per quarter.
Capital expenditures will increase to $14 billion to $15 billion in 2022, up from $12.8 billion in 2021.
Shell increased its share buybacks and dividend last week after reporting its best fourth-quarter profits in eight years, aided by strong trading in gas.
In 2020, Looney outlined a strategy to cut BP's carbon emissions in the following decades by doubling renewable power capacity by 2030 and cutting oil output by 40 per cent or more than 1 million barrels per day.
BP said in its strategy update on Tuesday that it will raise expenditure on low carbon energy, which includes retail and electric vehicle charging, to 40% of total spending by 2025 and 50 per cent by 2030, while retaining its aim to invest $14-$16 billion each year through 2025.
By 2030, these businesses are expected to generate earnings of $9-$10 billion, according to BP, which is attempting to ease investor concerns about the long-term returns of low-carbon businesses.
BP has advanced its carbon reduction ambitions, now aiming to reduce all greenhouse gas emissions from its operations, output, and sales to zero by 2050, staying up to date with rivals Shell and Equinor of Norway.
"We are accelerating the greening of BP. Our confidence is growing in the opportunities that the energy transition offers," Looney said.

Christopher J. Mitchell

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