BP slows down energy transition after result boosted by hydrocarbons

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BP slows energy transition after hydrocarbon boosted result

British giant BP saw its annual profit more than double to a record $27.7 billion in 2022.

British giant BP announced on Tuesday a full-year result for 2022 boosted by hydrocarbon prices, accompanied by significant distributions to its shareholders, but it slowed its energy transition, to the chagrin of environmentalists.

BP sees its profit excluding exceptional items, the indicator favored by the markets, more than double over one year to 27.7 billion dollars, a record, in the wake of the rise in oil and gas prices driven in particular by the war in Ukraine.

Seeing the title of BP climb on the London Stock Exchange on Tuesday, investors applauded.

The result — released shortly after Shell reported its highest-ever 2022 profit last week at $42.3 billion, and dramatic numbers from U.S. rivals ExxonMobil and Chevron — are fueling calls for higher taxation in the midst of the cost of living crisis.

But the conflict in Ukraine has also weighed heavily on the group, which saw its net result fall into the red with a loss net group share of 2.5 billion dollars, due to an accounting charge of more than 24 billion dollars linked to the exit of the Russian Rosneft.

BP also announced on Tuesday that it intended to boost its profits by 2030 by investing more both in renewable energies, but also in hydrocarbons, which will slow down the pace of its energy transition.

The group thus foresees an increase in investments until 2030 which could reach 8 billion dollars in low-carbon energies and as much in oil and gas. As a result, BP expects its oil and gas production to decline less rapidly than expected: in 2030 it will be 25% lower than in 2019, compared to a previously targeted 40% decline.

Despite record results, BP is backtracking on its recent climate promises, lamented the NGO Friends of the Earth.

We continue to believe that our ambition and targets, taken together, are consistent with the goals of the Paris Agreement, which aims to limit climate change, BP Chief Executive Bernard Looney said during a meeting. x27;an analyst conference.

He notably argued that BP was now more ambitious in its aim to reduce emissions from its operations: these will have to be at 50% carbon neutral by 2030, but Mr Looney acknowledged that it would be harder to achieve.

Greenpeace, which a year earlier praised the most ambitious of the oil giants for its transition, now castigates commitments undermined by pressure from investors and governments.

In fact, BP on Tuesday announced a 10% increase in its fourth quarter dividend, as well as a new share buyback program of 2, $75 billion.

Shareholder payouts exceeded $14 billion for 2022.

More than half of BP's profits go straight to super-rich shareholders while millions can't even afford to heat their homes, says NGO Global Justice Now, calling for more tax the oil giants.

The British government introduced in May, then increased at the end of the year to 35%, a tax on exceptional energy profits, as did the European Union which adopted a temporary solidarity contribution at the end of September.

According to BP, the exceptional British tax weighed in 2022 to the tune of 1.8 billion dollars in its accounts and the European contribution to the tune of 505 million.

A spokesman for Prime Minister Rishi Sunak appeared to rule out a further tax hike on hydrocarbon producers on Tuesday.

The government maintains a balance between funding significant cost-of-living support […] while encouraging investment in the North Sea to strengthen energy security, he noted.

The company was recently accused of delaying the implementation of the exit from Russia. It indicated in December that it was difficult to get rid of its 19.75% share in Rosneft.

We remain actively engaged in the sale of our participation […] and we will inform the market in due course, repeated Mr. Looney on Tuesday.