Weekly News Review
9th February 2024
Oil and gas giant BP has announced that its annual profits for 2023 halved to $13.8bn (£11bn) following a fall in oil prices. The figure is significantly less than the record $27.7bn in 2022 but is still the second highest annual profit since 2012. BP also revealed plans to increase returns to investors during the first half of 2024 through $3.5bn of share buybacks.
Similar results were announced by rivals Shell last week, with their profits falling to $28.2bn (£22.3bn) in 2023, down from $39.9bn the previous year. Energy firms made record earnings in 2022 when oil and gas prices soared following Russia’s invasion of Ukraine. The price of Brent crude oil reached nearly $128 a barrel soon after the invasion, but fell through 2023 and now stands just above $80 a barrel.
Within hours of the announcement, shares in BP had increased by 6% to 480.8p reversing the 2% drop seen over the past 12 months. BP’s new chief executive, Murray Auchincloss, outlined his intention to create a “more pragmatic” company that will reduce emissions without wasting money. However, the decision to increase share buybacks has received criticism from campaigners who say the money would be better spent on investing in the green transition.
Auchincloss said: “We have three jobs: we invest, we pay tax, and we must pay our shareholders. We’re moving as fast as we can [on low-carbon investments]. I’m pushing this as fast as I can without wasting money – which is very important to shareholders.”
Joseph Evans, a researcher at the think-tank IPPR, said: “BP has decided to prioritise its shareholders over investing in the green transition. With profits down on last year, you might expect BP’s executives to be looking for profitable investments in the growing industries of the future, like renewable energy. Instead, they’ve chosen to enrich their investors.”
Jonathan Noronha-Gant, a senior campaigner at Global Witness, said: “Shareholders should want to protect their long-term positions. That means demanding a rapid clean energy transition for companies like BP. These reckless shareholder pay-outs do the opposite.”
BOOK YOUR FREE