BP profits top $1bn a month amid criticism over shareholder payouts

BP said it would increase dividend payments and buy back its shares in a boost for investors

Holly Williams
Tuesday 06 February 2024 09:58 GMT
BP is one of the UK’s largest oil explorers
BP is one of the UK’s largest oil explorers (PA)

Oil giant BP has revealed profits of more than $1bn a month for 2023 as it announced another round of payouts for investors.

Despite profits halving compared to 2022’s record year, it was still the company’s second-best performance in a decade.

BP reported underlying replacement cost profits – the company’s preferred measure – of $13.8bn (£11bn).

This is down from the record 27.7 billion US dollars (£22.1 billion) notched up in 2022 when oil prices surged following Russia’s invasion of Ukraine.

BP joined rival Shell in announcing further rewards for shareholders after two years of bumper profits, with another $3.5bn (£2.8bn) of share buybacks for the first half of the year under plans to buy back at least $14bn until 2025.

It also increased its dividend payments by 10 per cent.

Think tank the Institute for Public Policy Research (IPPR) criticised BP’s “excessive payouts”.

Joseph Evans, researcher at the IPPR, said: “BP has decided to prioritise its shareholders over investing in the green transition.

“It’s clear that BP and other fossil-fuel giants can’t be trusted to drive the green transition: they will always prioritise their shareholders over the needs of the economy and the planet.”

The cost of crude has since eased back, with oil trading at about $82 a barrel on average through last year, against $100 in 2022.

Shares in the FTSE 100 group surged around 6 per cent on Tuesday morning as it reported a better-than-feared drop in profits in the final three months of the year.

Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business

Murray Auchincloss, BP

BP’s new chief executive, Murray Auchincloss, said: “Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business.

“And as we look ahead, our destination remains unchanged… focused on growing the value of BP.”

But campaign group Global Witness hit out at what it said were “reckless shareholder payouts” at BP.

It claimed BP’s shareholders’ returns in 2023 – 12.7 billion (£10.2 billion) – could “cover the projected cost of natural disasters for the next seven years in the UK”.

Jonathan Noronha-Gant, Global Witness senior campaigner, 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 payouts do the opposite.”

BP said its fourth-quarter results partly reflected strong gas trading, offset by lower refining margins and weak oil trading.

It marks the first set of figures for new boss Mr Auchincloss after he took over the role of chief executive last month.

Formerly BP’s chief financial officer, he had done the job on an interim basis since September until the board decided on a permanent replacement for Bernard Looney, who left after failing to fully disclose past relationships with company colleagues.

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