Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

BP charts $800m windfall tax hit in bumper Q2 results

BP logo on BP building

Oil giant BP (LON:BP) again reported bumper second-quarter profits, which ballooned to more than $8.4 billion, but estimates it will pay an extra $800 million by the end of 2025 in the wake of the UK’s windfall tax.

The supermajor reported earnings of over $8.4bn per its underlying replacement cost profit metric, while total revenues surged to just under $68 billion.

It continues a run of bumper results, with profits triple that of the same period last year, and well above average analyst estimates of around $6.7bn.

BP said the performance was driven by strong refining margins, continued “exceptional” oil trading performance and higher liquids realisations.

Results were offset by “average” gas marketing and trading performance – which receded fllowing an “exceptional” first quarter – and the impact from an ongoing outage at Freeport LNG.

In its first quarter results, the oil giant reported underlying profits of $6.2 billion (£4.9bn), though results were “partly offset” by paper write downs of $24bn (£19.2bn) and $1.5bn (£1.2bn) as a result of the “loss of significant influence” and its exit from its share of Russian group Rosneft.

The second quarter also saw the completion of share buybacks amounting to $2.3 billion, with the full $2.5 billion buyback programme completed on 22 July.

Net debt fell for the ninth successive quarter to reach $22.8 billion at the end of the second quarter.

The stellar results prompted the group to up its quarterly divided by 10% to 6.006 cents per share, and launch a further $3.5 billion share buyback programme.

Chief executive Bernard Looney said: “Today’s results show that BP continues to perform while transforming. Our people have continued to work hard throughout the quarter helping to solve the energy trilemma – secure, affordable and lower carbon energy. We do this by providing the oil and gas the world needs today – while at the same time, investing to accelerate the energy transition.”

Windfall tax

BP also began to quantify the effects of the UK’s new Energy Profits Levy (EPL), which increases the headline rate of tax from 40% to 65% on profits from its North Sea business as of 26 May 2022.

The introduction of the so-called windfall tax will result in a one-off non-cash deferred tax charge of an estimated $800m, BP said, reflecting the higher tax rate effective between 1 October 2022 and 31 December 2025.

At the company’s annual general meeting earlier this year, CEO Bernard Looney warned that “unpredictable” taxes such as this “would challenge investment in home-grown energy.”

However, speaking during a parliamentary committee last month, UK boss Louise Kingham told MPs that: “We don’t think at BP that the profits levy will impact on the investment plans we have in the North Sea.”

In May BP announced it would invest £18 billion in the UK over the next decade, three-quarters of which would be focused on low-carbon sources of energy, with the rest directed to its traditional oil and gas business.

Tags

More from SG Voice

Latest Posts