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BP rakes in $8.2 billion in quarterly profits as oil companies post another round of big earnings

Shares in BP have risen over 45% so far this year.

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Oil and gas giant BP reported stronger-than-expected profits for the third quarter on Tuesday, supported by high commodity prices and robust gas marketing and trading.

The British energy major posted underlying replacement costs, used as a proxy for net profit, of $8.2 billion for the three months to the end of September. That compared with $8.5 billion in the previous quarter and marked a significant increase from a year earlier, when net profit came in at $3.3 billion.

Analysts polled by Refinitiv had expected a net profit of $6 billion in the third quarter.

BP announced another $2.5 billion in share buybacks and said net debt had been reduced to $22 billion, down from $22.8 billion in the second quarter.

It reported a net loss for the quarter of $2.2 billion, compared with a profit of $9.3 billion in the previous quarter. BP said its third-quarter results included a net after-tax inventory loss of $2.2 billion and an after-tax item adjustment charge of $8.1[ads1] billion.

The world’s largest oil and gas companies have reported big earnings in recent months, taking advantage of rising commodity prices following Russia’s invasion of Ukraine.

Combined with BP, the oil companies Shell, TotalEnergies, Exxon and Chevron have delivered profits in the third quarter totaling almost 50 billion dollars.

This has renewed calls for higher taxes on record profits from oil companies, especially at a time when high gas and fuel prices have fueled inflation around the world.

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US President Joe Biden on Monday urged the oil companies to stop “war profiteering” and threatened to seek higher taxes if the industrial giants do not work to cut gas prices.

Oil and gas industry groups have previously condemned calls for a windfall tax, warning that it will not solve a sharp rise in energy prices and could ultimately deter investment.

“This quarter’s results reflect that we continue to perform as we transform,” BP CEO Bernard Looney said in a statement.

“We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy. We are delivering the oil and gas the world needs today – while investing to accelerate the energy transition,” Looney said.

Shares in London-listed BP rose nearly 1% in morning deals. The company’s share price is up over 45% so far this year.

Fall tax “now a necessity”

Environmental campaign groups said BP’s third-quarter results underlined the need for a windfall tax, describing the results as “a slap in the face” to millions of Britons facing a deepening cost-of-living crisis.

“The signs of a bigger, bolder windfall are now overwhelming,” said Sana Yusuf, energy campaigner at Friends of the Earth. “This must address the ridiculous loophole that undermines the levy by enabling companies to pay the minimum if they invest in more planet-warming gas and oil projects.”

“Some of the billions of pounds raised should be used to pay for a door-by-door home insulation program to cut energy bills and reduce emissions,” Yusuf said.

Combustion of fossil fuels, such as coal, oil and gas, is the main driver of the climate crisis.

“A real windfall tax on the profits of big polluters is no longer far off, it is now a necessity,” said Jonathan Noronha-Gant, senior fossil fuel campaigner at Global Witness.

“But the new UK government must also urgently put us on track for a rapid transition away from dirty fossil fuels and towards renewable energy and decent home insulation, so we can fix this broken energy system once and for all.”

Our job is to “pay our taxes”

Speaking at the ADIPEC conference in the United Arab Emirates on Monday, BP CEO Bernard Looney said on a panel moderated by CNBC that he understood the public scrutiny of the oil major’s record profits, but sought to defend the firm’s record on investment and paying taxes .

“We are facing a very difficult winter in the UK, in Europe and across the world,” Looney said.

“Our job is to pay our taxes; our job is to invest. We just announced a $4 billion acquisition in the U.S. last week in renewable natural gas, so that’s what our job is to do. We’ll continue to do that and do it. the very best we can,” he added.

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