BP has scaled back its industry-leading commitment to cut oil and gas production by 2030 after rising fossil fuel prices helped the British energy company post the highest annual earnings in its 114-year history.
The company on Tuesday reported underlying profit for last year of $27.7bn, surpassing the $26.3bn it made in 2008 and more than double the $12.8bn it reported after a strong 2021.
BP is already in one of the sector’s most ambitious strategic overhauls after cutting oil and gas production by 40 percent by 2030 as part of a plan launched three years ago by chief executive Bernard Looney to reduce the group’s emissions. and pivot to lower carbon energy forms.
But in what would appear to be a major U-turn, the group scaled back plans to cut production, suggesting that oil and gas output by 2030 would now be just 25 percent lower.
After record profits, Looney said BP will spend $8 billion more on its “transitional” businesses – biofuels, convenience, charging, renewables and hydrogen – between now and 2030 than previously planned.
However, the group said it would also increase its oil and gas investment by the same amount, aiming for “fast-cycle payback opportunities with lower additional operational emissions”.
“It is clearer than ever after three years ago that the world wants and needs energy that is safe and affordable as well as low-carbon,” said Looney.
The company’s shares rose nearly 4 percent in morning trade in London on Tuesday.
Capital expenditure in 2022 is $16.3bn. This year BP plans to spend $16bn-$18bn, up from a previous target of $14bn-$16bn annually until 2025.
The group’s results continue a series of historic earnings for the world’s biggest oil and gas companies, all of which have benefited from high fossil fuel prices over the past 12 months caused by Russia’s invasion of Ukraine.
ExxonMobil last week reported profits of $55.7bn for 2022, the highest annual earnings for a western oil company, while Shell made a record profit of $39.9bn and Chevron made $36.5bn.
BP said it would increase its dividend for the fourth quarter by 10 percent and announced a $2.75 billion share buyback plan.
The company’s underlying profit for the last three months of the year was $4.8bn, up from $3.3bn a year earlier but just short of analysts’ average estimate of $5bn.