BP underlying profit soars to $8.2bn in third quarter

London (AFP): BP said Tuesday that underlying third-quarter profit more than doubled on high commodity prices after Russia’s assault on Ukraine, adding it would take a major hit from Britain’s windfall tax.

Replacement cost profit, excluding fluctuations in the value of crude oil inventories, soared to $8.2 billion in the three months to September, London-listed BP revealed in a statement.

That compared with $3.3 billion a year earlier and outstripped market expectations of $6.1 billion.

BP, flush with cash after surging gas and oil prices triggered calls for the UK government to massively enlarge its windfall tax on the sector, also revealed a $2.5-billion share buyback.

Yet underlying profits were weaker than the second quarter due to a dip in oil prices.

Nevertheless, energy markets remain elevated due to key producer Russia’s war on Ukraine, which has sent UK household fuel bills rocketing — but helped generate massive profits across the industry.

Energy prices have also leapt after countries lifted Covid pandemic lockdowns, spurring global demand. Soaring profits have heightened calls for Britain to increase its windfall tax on the industry to help cushion the impact of a cost-of-living crisis that has largely been sparked by sky-high electricity and gas bills.

BP added Tuesday that it will pay about $2.5 billion this year under the UK windfall tax.

The group is meanwhile seeking to pivot towards cleaner energy and away from fossil fuels, sparking scepticism from environmental campaigners.

“This quarter’s results reflect us continuing to perform while transforming,” said Chief Executive Bernard Looney. “We remain focused on helping to solve the energy trilemma — secure, affordable and lower carbon energy.

“We are providing the oil and gas the world needs today — while at the same time investing to accelerate the energy transition.”

BP agreed earlier this month to buy US renewable gas producer Archaea for $4.1 billion to help it reach net zero carbon emissions by 2050 “Our agreement on Archaea Energy is the most recent step in our strategic transformation of BP,” added Looney.

The group’s bottom line was however hit by large accounting charges in the third quarter.

Net losses stood at $2.2 billion in the reporting period, down from $2.5 billion last time around, it said Monday.