BP profit triples to $9.3 bn on soaring energy prices

Date:

BP profit triples to $9.3 bn on soaring energy prices

BP is the latest energy major to post bumper second-quarter earnings as oil and gas prices have surged in the wake of key producer Russia’s invasion of Ukraine.

The headquarters of BP (British Petroleum) in Aberdeen, Scotland. Picture: AFP
  • BP

LONDON – British oil giant BP rebounded to second-quarter profit on soaring energy prices, it said Tuesday, after a big loss linked to its Russia exit following Moscow’s invasion of Ukraine.

Net profit hit $9.3 billion in the three months to June – a threefold increase from the same period last year, the company said in a results statement.

That contrasted sharply with a $20.4-billion loss in the first quarter, when it took a vast writedown after its decision to leave Russia.

BP is the latest energy major to post bumper second-quarter earnings as oil and gas prices have surged in the wake of key producer Russia’s invasion of Ukraine.

Prices have also spiked after countries lifted Covid pandemic lockdowns, spurring global energy demand.

British rival Shell revealed last week a fivefold surge in net profit to $18 billion while France’s TotalEnergies raked in nearly $6 billion.

US majors ExxonMobil and Chevron last week logged record profits for the same period.

Turning to the third-quarter outlook, BP forecast Tuesday that oil prices will “remain elevated … due to ongoing disruption to Russian supply, reduced levels of spare capacity and with inventory levels significantly below the five-year average”.

And it warned gas prices will also remain “elevated and volatile” as Russia also squeezes European supplies in retaliation for Western sanctions over the assault on Ukraine.

The gas outlook was “heavily dependent on Russian pipeline flows or other supply disruptions”, BP added.

WINDFALL TAX PLEAS

At the same time, BP posted a net loss of $11.1 billion for the first half of 2022.

That was sparked by a colossal charge of $24.4 billion, linked to a decision to exit its 19.75% stake in Russian energy group Rosneft.

That wiped out the overall benefit of high energy prices in the first half.

Gas prices, which skyrocketed in March after Russia launched its invasion of neighbouring Ukraine, surged last week after Moscow curbed crucial deliveries to Europe.

The market remains at its highest level since March after state-run Gazprom suspended gas deliveries to Latvia on Saturday.

Back in Britain, the government in May proposed a temporary windfall tax on BP and its UK rivals including Shell to help ease a cost-of-living crisis.

The proceeds will help to fund a multi-billion-pound support package for consumers hit by surging domestic electricity and gas bills.

UK annual inflation hit a new 40-year high of 9.4% in June on rising motor fuel and food prices, further eroding workers’ wages.

Rocketing Chevron and ExxonMobil earnings also prompted calls for a windfall profits tax on the sector in the United States, which also faces the highest consumer price inflation in four decades.

A similar plea was made by left-wing politicians in France after TotalEnergies published its second-quarter earnings, but President Emmanuel Macron’s government has opposed such a move.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

Popular

More like this
Related

Building sector confidence ticks up despite overall decline for Q2, index finds

Building sector confidence ticks up despite overall decline for Q2, index finds Building confidence jumped from 25 to 46 in the second quarter of the year. Picture: Pexels.com Rand Merchant Bank Bureau for Economic Research RMB/BER Business Confidence Index Email Print Tweet Share Theto Mahlakoana | 66 days ago JOHANNESBURG - Rand Merchant Bank and the Bureau

Deregulation of fuel industry not the answer – Fuel Retailers Association

Deregulation of fuel industry not the answer - Fuel Retailers Association The local fuel industry and consumers are bearing the brunt of limited fuel stocks due to the war in Ukraine and while government’s stepped in to cushion consumers through the fuel levy relief, it has warned this is an unsustainable intervention. Picture: © zhudifeng/123rf.com

Nersa boosts renewable energy, approving 16 new projects in 19 days

Nersa boosts renewable energy, approving 16 new projects in 19 days John Maytham speaks to UCT's Hilton Trollip to discuss the National Energy Regulator of South Africa greenlighting new projects. © vencavolrab78/123rf.com Eskom Nersa Renewable energy Email Print Tweet Share Tyler  Layman | 67 days ago Nersa has given the go-ahead for 16 renewable energy projects.

EFF rejects Ismail Momoniat’s appointment as acting DG at Treasury

EFF rejects Ismail Momoniat's appointment as acting DG at Treasury Momoniat's appointment was announced on Wednesday by Finance Minister Enoch Godongwana. FILE: Acting Treasury Director-General Ismail Momoniat. Picture: @TreasuryRSA/Twitter Economic Freedom Fighters Ismail Momoniat Email Print Tweet Share Veronica Mokhoali | 67 days ago JOHANNESBURG - The Economic Freedom Fighters (EFF) has rejected the appointment of Ismail