BP profit more than doubles as windfall tax calls grow |  CNN Business

BP profit more than doubles as windfall tax calls grow | CNN Business

CNN Business

BP’s profits more than doubled in the third quarter of the year, extending a run of windfall profits for the world’s biggest oil and gas companies, which will add to growing calls in Britain and the US for higher taxes on windfall profits.

The UK-based energy company posted underlying profit of $8.15 billion between July and September., compared to $3.3 billion a year ago. Earnings were boosted by “outstanding” results in gas trading, BP said in a statement on Tuesday.

The result means Big Oil – BP (BP), Shell, Total (TOT) Energies, ExxonMobil and Chevron (CVX) – made more than $58 billion in profit in the third quarter alone. The record incomes come as a growing number of households in Europe and North America are squeezed by decades-high inflation, driven by soaring energy and food bills.

The shareholders, for their part, benefit generously. BP said it would use excess cash to repurchase shares worth $2.5 billion, bringing total share buybacks this year to $8.5 billion. Shell has spent $18.5 billion on share buybacks this year and paid hefty dividends on top of that.

“We remain focused on solving the energy trilemma – secure, affordable and low-carbon energy,” BP CEO Bernard Looney said in a statement. “We are providing the oil and gas the world needs today, while investing to accelerate the energy transition,” he added.

Energy companies have posted record profits this year thanks to the oil boom and natural gas prices linked to Russia’s war in Ukraine.

Shell last week reported profit of more than $30 billion for the first nine months of the year, 58% more than it recorded for all of 2021, while ExxonMobil reported set a profit record for the second consecutive quarter.

The unprecedented revenue package is fueling renewed calls in Britain and the United States for windfall taxes on energy companies to help households struggling to pay rising bills.

On Monday, President Joe Biden accused energy companies of ‘profiteering from war’ and said if they didn’t ‘act beyond their narrow self-interest’ and ‘give the American people a break’ they would pay “a higher tax on their excess profits”. and face higher restrictions.

Biden hasn’t explicitly endorsed a windfall tax and the specifics of what he would consider will likely remain vague, but leading congressional Democrats have been pushing various windfall tax proposals targeting oil companies for more than a decade. a year.

In the UK, Ed Miliband, spokesman for the opposition Labor Party on climate change, said the Twitter that BP’s profits are “damning evidence” of the ruling Conservative Party’s failure to levy “a real tax on windfall profits”.

Miliband said last week that Shell’s huge quarterly profit was “further proof that we need a windfall tax to make sure energy companies pay their fair share”.

The UK government introduced a £5billion ($5.8billion) tax on oil and gas companies’ windfall profits in May but has so far rejected calls to extend it, although the minister of Finance Jeremy Hunt said he was not opposed in principle and nothing is off the table. EU governments, on the other hand, agreed to a windfall tax in September which they hope will raise $140 billion.

Shell CEO Ben Van Beurden, who will step down at the end of this year, told reporters last week that the industry should engage with officials to ensure these taxes are well designed.

“We need to be prepared and accept that our industry will be scrutinized to raise taxes to fund transfers to those who need it most in these trying times,” he said.

BP said it expects oil prices to remain elevated in the fourth quarter due to the recent OPEC+ supply cut and “ongoing uncertainty associated with Russian oil exports.” He also expects gas prices to remain ‘high and volatile’ due to a lack of supply in Europe ‘with the outlook heavily dependent on Russian gas pipeline flows or other supply disruptions’. .

Saudi Aramco, the world’s largest oil and gas company, on Tuesday posted a 39% year-on-year gain in third-quarter profit to $42.4 billion.

“While global crude oil prices during this period have been affected by continued economic uncertainty, our long-term view is that demand for oil will continue to grow for the remainder of the decade given the global need for ‘more affordable and more reliable energy,’ CEO Amin H. Nasser said in a statement.

– Phil Mattingly, Betsy Klein, Nikki Carvajal and Maegan Vazquez contributed reporting.

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