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Calls for windfall tax reiterated as bp unveils £9.5bn in profit amid energy crisis

bp now has over 13,000 EV chargepoints. Image: bp pulse.

bp now has over 13,000 EV chargepoints. Image: bp pulse.

bp has seen its profits surge to £9.5 billion ($12.8 billion) for 2021, on the back of high oil and gas (O&G) prices.

In particular, the O&G giant’s fourth quarter underlying profit hit £3 billion ($4.1 billion) – up from £2.4 billion for the previous quarter – as increased demand and geopolitical tensions led to a shortage and subsequent surge in gas prices.

Bernard Looney, bp’s chief executive officer said: “2021 shows bp doing what we said we would - performing while transforming. We've strengthened the balance sheet and grown returns. We're delivering distributions to shareholders with $4.15 billion of buybacks announced and the dividend increased.”

The company’s financial results follow Ofgem raising the price cap by 54% in Britain due to increases in wholesale power prices. This is expected to push the number of households in fuel stress to 6 million, as bills hit £1,971, contributing to a cost of living crisis in the country.

On the same day the regulator announced the cap – and chancellor Rishi Sunak set out measures to combat the increase including a one-off repayable loan, a council tax rebate and a discretionary fund – Shell also unveiled surging profits, with its adjusted earnings jumping by 298%, from £3.6 billion in 2020 to £14.2 billion in 2021.

Such profits have led the Labour party to reiterate its call for a windfall tax on north sea O&G companies to help provide support for those strained by the energy price rises.

“bp’s results demonstrate again that it is fair and right to levy a windfall tax on oil and gas producers to help the millions of families facing the cost of living crisis,” Labour’s shadow climate and net zero secretary Ed Miliband wrote on Twitter.

“The Conservatives are completely out of step with the mood of the country in rejecting it.”

In January, the Labour party called for the one-off windfall tax, which could be used to accelerate home-grown renewables and new nuclear, to rollout retrofit measures for 19 million homes that could save households on average £400 a year on bills and to regulate the market better to help prevent the supplier failures seen over the last year, it said.

Additionally, it could provide support for the squeezed middle, pensioners and the lowest earners, who could benefit from up to £600 off bills.

Both the Liberal Democrats and Green Party have also called for a windfall tax, with former leader and co-leader of the Green Party and MP for Brighton Pavilion Caroline Lucas tweeting today: “Waking to news of BP profits surging to over £9bn, following similar story from Shell last week. It’s obscene to let families freeze while energy companies turn into cash machines for bosses & investors. How much longer do we have to wait for a #WindfallTax? #KeepItInTheGround"

As well as its financial results, bp provided an update on its strategic progress within its transition growth businesses, including renewables, hydrogen and electric vehicle (EV) charging.

Last year saw it double the number of EV chargepoints it has to 13,000 globally, and the company today announced it was increasing its target from 70,000 to 100,000 chargepoints by 2030.

Throughout 2021 the company’s Ventures arm invested in a number of EV charging companies to bolster its position in the sector, including charging start-up BluSmart, in-car payment app ryd and ultra-fast EV charging tech company FreeWire Technologies.

Globally, bp has quadrupled its renewable development pipeline to 24.5GW, putting it on track for its target of 20GW of developed renewables by 2025 and 50GW by 2030. In the UK, the company acquired software company Open Energi in July 2021, to help it optimise its low carbon assets.

Additionally, bp is building 11 hydrogen hubs in the UK, the Middle East and Europe, with a goal of capturing 10% of the global market. It unveiled plans for a 500MWe green hydrogen project in Teeside in November.

“We're investing for the future,” said Looney. “We've made strong progress in our transformation to an integrated energy company: focusing and high grading our hydrocarbons business, growing in convenience and mobility and building with discipline a low carbon energy business - now with over 5GW in offshore wind projects - and significant opportunities in hydrogen.”

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