BP’s £2bn profits cause anger amid climate crisis

BP has angered climate campaigners by reporting profits of $2.6bn (£2bn) for the second quarter of the year as the climate crisis triggers extreme heatwaves around the world.

The fossil fuel company blamed falling oil and gas markets for the drop in profits from $8.5bn in the same period last year when Russia’s invasion of Ukraine ignited a rise in global energy markets.

BP will increase its shareholder dividends by 10% to $2.3bn, despite the worse than expected profits. It will also return a further $1.5bn to investors through a share buyback over the next three months.

BP’s chief executive, Bernard Looney, said the payouts reflected the company’s confidence in its strategy and the outlook for its future cashflows.

BP’s profits have increased growing anger at fossil fuel companies among green groups, which have accused the oil companies of “obscene” profits at the expense of families and the environment.

Tommy Vickerstaff, a lead UK campaigner for 350.org, said: “We’re almost desensitised to BP’s profits at this point because the government has continuously failed to take action to redistribute them. But there is nothing normal or routine about BP’s profit margins or about the destructive heatwaves we’re seeing across Europe that BP is directly responsible for causing.”

Looney denied that BP had “profited from war”, after taking a $25bn writedown from its decision to exit Russia, and claimed its investments would help stabilise “the energy system of today, and the transition to the energy system of the future”.

Looney said that failing to invest in oil projects amid a record surge in energy demand predicted for 2023 would risk igniting an oil market surge similar to the record gas prices last year. This spurred a resurgence in coal use in Germany and parts of Europe that led to an increase in greenhouse gas emissions.

“What I believe is that the world needs a rapid and orderly transition. And ‘orderly’ is not an excuse for ‘slow’,” he said.

Looney pointed to BP’s €6.8bn bet on a major German offshore wind project as an example of the company’s plan to spend $65bn on bioenergy, electric car charging, wind and solar power and hydrogen before the end of the decade. “I think what we’re doing is incredible, and very hard to challenge,” he added.

Global Witness said BP’s multibillion-dollar shareholder payouts stood in contrast to the millions of households pushed into fuel poverty by the rise in global energy prices.

Jonathan Noronha-Gant, a senior campaigner at the organisation, said: “This is what a broken energy system looks like – oil giants get richer because the rest of us get poorer. For BP the energy crisis has been a giant cash grab; for parents across the country it has been an impossible choice between feeding their children and paying their bills.”

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In a recent report, the IPPR, a left-leaning thinktank, argued that share buybacks were a direct cash transfer away from hard-pressed households to already wealthy shareholders at the expense of the environment.

Pranesh Narayanan, a research fellow at IPPR, said: “For every £1 BP spent on ‘low carbon investments’ they gave shareholders £9 in buybacks.”

Russia’s war in Ukraine helped BP triple its profits in the second quarter of last year to $8.5bn, the second-best quarterly profit result in the company’s history. This allowed BP to hand investors $3.5bn through a share buyback programme, while it increased its total dividend payout by 10% to about $1.1bn.

It also fuelled a political row in which Labour demanded the government impose a windfall tax on energy companies that profited from the record prices caused by the Ukraine war.

Global oil and gas market prices have tumbled since reaching a peak last year. The global oil price averaged $76.60 a barrel in the last quarter, down sharply from an average of about $112 a barrel in the second quarter of last year after Russia invaded Ukraine in the February.