BP’s profits more than double as calls grow louder for unpaid taxes
BP’s profits more than doubled in the third quarter of the year, extending a bumper run earnings for the biggest in the world oil and gas companies it will contribute to growing calls in Britain and the United States for higher taxes to windfall profits.
The UK-based energy company made an underlying profit of 8.15 billion dollars in the period from July to September, compared to $3.3 billion a year ago. Earnings were boosted by “exceptional” results in gas trading, BP said in a statement on Tuesday.
The result means that Big Oil — BP
(TO)Energies, ExxonMobil and Chevron
(CVX) – made more than $58 billion in profit in the third quarter alone. The record earnings come as a growing number of households in Europe and North America are squeezed by decades of high inflation caused by rising energy and food bills.
Meanwhile, shareholders benefit greatly. BP said it would use the excess cash to buy back $2.5 billion worth of shares, bringing its total share buybacks this year to $8.5 billion. Shell spent $18.5 billion on share buybacks this year, and on top of that, it made juicy dividend payments.
“We remain focused on helping to solve the energy trilemma – secure, affordable and low-carbon energy,” BP chief executive Bernard Looney said in a statement. “We provide the oil and gas that the world needs today, while simultaneously investing in accelerating the energy transition,” he added.
Energy companies made record profits this year thanks to rising oil and natural gas prices linked to Russia’s war in Ukraine.
Last week, Shell reported a 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 set a profit record for the second quarter in a row.
The unprecedented earnings are fueling fresh 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 “war profiteering” and said they would pay “higher taxes on their excess profits” if they did not “act beyond their narrow self-interest” and “give the American people a break.” and they face more restrictions.”
Biden has not explicitly supported a windfall tax, and the specifics of what he would consider are likely to remain unclear, but key Democrats in Congress have pushed various windfall tax proposals aimed at oil companies for more than a year.
In the United Kingdom, Ed Miliband, the opposition Labor Party’s climate change spokesman, said on Twitter that BP’s profits are “damning evidence” of the ruling Conservative Party’s failure to introduce “a proper windfall tax”.
Miliband said last week that Shell’s giant quarterly profit was “further proof that we need a proper windfall tax to make energy companies pay their fair share”.
The UK government introduced a 5 billion pound ($5.8 billion) tax on oil and gas company windfalls in May, but has so far resisted calls to extend it, although Chancellor of the Exchequer Jeremy Hunt said he was not opposed in principle and yes nothing is off the table. EU governments, on the other hand, agreed in September on a windfall tax that they hope will raise $140 billion.
Shell chief executive Ben Van Beurden, who will step down at the end of this year, told reporters last week that the industry should work with officials to ensure these taxes are well thought out.
“We should prepare and accept that our industry will be looked at for tax increases to fund transfers to those who need it most in these difficult times,” he said.
BP said it expected oil prices to remain elevated in the fourth quarter due to recent OPEC+ supply cuts and “ongoing uncertainty related to Russian oil exports.” It also expects gas prices to remain “elevated and volatile” due to supply shortages in Europe “with the outlook largely dependent on the flow of Russian pipelines or other supply disruptions.”
Saudi Aramco, the world’s largest oil and gas company, posted a 39% year-over-year rise in third-quarter profit to $42.4 billion on Tuesday.
“While global crude oil prices have been impacted by continued economic uncertainty during this period, our long-term view is that oil demand will continue to grow through the end of the decade given the world’s need for more affordable and reliable energy,” CEO Amin H. Nasser said. said in a statement.
— Phil Mattingly, Betsy Klein, Nikki Carvajal and Maegan Vazquez contributed reporting.
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