Oil and gas giant BP has announced £4 billion in profits for the first quarter of 2023 and a further share buyback of £1.4 billion.
The company also said it expected capital expenditure of between £12.84 billion and £14.44 billion for the year. The announcement was criticised by think tank Common Wealth as a “doubling down” on oil and gas production at a time when the company could be investing more in a transition to renewable energy.
How are the energy giants using their bumper profits? By doubling down on oil and gas production instead of a transformative increase in clean energy.
— Common Wealth (@Cmmonwealth) May 2, 2023
Capital investment in fossil fuels was over 8x low-carbon expenditure in 2022. pic.twitter.com/aLnalGkpZ7
In its announcement, BP said it had generated “surplus cash flow of £1.85 billion ($2.3 billion) and intends to execute a £1.4 billion ($1.75 billion) share buyback from surplus cash flow prior to announcing its second quarter 2023 results.”
In the first quarter of 2022, BP made record profits of £5 billion, with total profits for the year amounting to £23 billion. The company was criticised by green groups like Friends of the Earth for plans to invest double the amount in oil and gas projects compared to renewable energy projects in 2023.
The company reported plans to invest up to £6.2 billion in oil and gas projects, but only £2.4 billion to £4 billion in renewable projects. It also announced at the end of 2022 that it was cutting its emissions reduction targets from 35-40% to 20%- 30%, compared with 2019 levels.
Labour Party leader Sir Keir Starmer, responding to the news on BBC Breakfast, said that “of course we want BP and others to make profits that they can invest, but these are profits they didn’t expect to make, these are profits over and above because the world price of energy is so high.
“The question then becomes a political one, what choice should you make in relation to that. What we say in the Labour Party is have a proper windfall tax that’s effective and use that money directly to freeze Council Tax.”
In January, Starmer said Labour would target 100% clean power generation by 2030 if it gained power.
BP reported in its quarterly statement that it would “progress its EV charging strategy – signing a strategic collaboration agreement with Iberdrola in Spain and Portugal and signing a global mobility agreement with Uber.”
The company also signed an agreement to acquire a 40% stake in the Viking carbon capture and storage (CCS) project in the North Sea. In an investor financial report on Q1 2023, the company said its renewables pipeline had grown to by 1.6GW in the year to date to a total of 38.8GW. The hydrogen pipeline also grew over the year by 0.2mtpa to a total of 2.0mtpa.