BP posts $8.2bn quarterly profit as oil majors post another round of windfall profits

BP posts $8.2bn quarterly profit as oil majors post another round of windfall profits

BP shares are up more than 45% since the start of the year.

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Oil and gas giant BP reported stronger-than-expected third-quarter earnings on Tuesday, supported by high commodity prices and robust gas marketing and trading.

The British energy major posted underlying profit at replacement cost, used as a proxy for net profit, of $8.2 billion for the three months to the end of September. That compared with $8.5 billion in the prior quarter and marked a significant increase from a year earlier, when net income was $3.3 billion.

Analysts polled by Refinitiv had expected net profit of $6 billion in the third quarter.

BP announced another $2.5 billion share buyback and said net debt had been reduced to $22 billion from $22.8 billion in the second quarter.

It reported a net loss for the quarter of $2.2 billion, compared to a profit of $9.3 billion in the prior quarter. BP said that third-quarter result included net-of-tax inventory holding losses of $2.2 billion and a net-of-tax item adjustment charge of $8.1 billion.

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The world’s biggest oil and gas majors have posted windfall profits in recent months, benefiting from soaring commodity prices following Russia’s invasion of Ukraine.

Combined with BP, oil majors Shell, TotalEnergies, Exxon and Chevron posted third-quarter profits totaling nearly $50 billion.

This has renewed calls for higher taxes on oil companies’ record profits, especially at a time when soaring gas and fuel prices have boosted inflation around the world.

US President Joe Biden on Monday called on oil majors to stop “profiteering from war” and threatened to raise taxes if industry giants did not work to lower gas prices.

Oil and gas industry groups have previously condemned calls for a windfall tax, warning it will not fix a sharp rise in energy prices and could ultimately discourage investment.

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“The results for this quarter show that we continue to perform while transforming ourselves,” BP CEO Bernard Looney said in a statement.

“We remain focused on solving the energy trilemma – secure, affordable and low-carbon energy. We deliver the oil and gas the world needs today – while investing to accelerate the energy transition,” said said Looney.

Shares of London-listed BP rose nearly 1% in morning trading. The company’s share price is up more than 45% since the start of the year.

Windfall tax ‘now a necessity’

Environmental campaign groups said BP’s third quarter results underscored the need for a windfall tax, describing the results as ‘a slap in the face’ for the millions of Britons facing a deepening cost of living crisis .

“The case for a bigger and bolder windfall tax is now overwhelming,” said Sana Yusuf, energy campaigner at Friends of the Earth. “This must close the ridiculous loophole that undermines the tax by allowing companies to pay the bare minimum if they invest in more oil and gas projects that warm the planet.”

“Part of the billions of pounds raised should be used to pay for a street-by-street home insulation program to reduce energy bills and emissions,” Yusuf said.

The burning of fossil fuels, such as coal, oil and gas, is the main driver of the climate crisis.

“A real tax on the windfall profits of big polluters is no longer a trivial matter, it is now a necessity,” said Jonathan Noronha-Gant, head of the fossil fuels campaign at Global Witness.

“But the new UK Government must also urgently put us on the right track for a rapid transition from dirty fossil fuels to renewables and decent insulation of homes, so that we can fix this broken energy system once and for all. .”

Our job is to “pay our taxes”

Speaking at the ADIPEC conference in the United Arab Emirates on Monday, BP CEO Bernard Looney told a CNBC-moderated panel that he understands the public scrutiny of oil majors’ record profits, but seeks to Defending the Company’s Investment Record and Paying Taxes.

“We are facing a very difficult winter in the UK, Europe and around the world,” Looney said.

“Our job is to pay our taxes, our job is to invest. We just announced a $4 billion acquisition in the United States last week in renewable natural gas, so that’s what our job is to We will continue to do so and do the best we can,” he added.

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