BP (New York Stock Exchange: BP) became the latest supermajor to post windfall profits for 2021 on the back of rising oil and gas prices, as it reported its highest annual net profit in eight years on Tuesday.
BP noted today, its underlying replacement cost profit — its net profit indicator — jumped to $12.8 billion for 2021 from a loss of $5.7 billion for 2020.
This 2021 net profit was the strongest result BP has had in eight years and was ahead of analysts’ expectations of $12.5 billion.
The British supermajor also posted a bigger-than-expected fourth quarter profit: at $4.1 billion, it was above the $3.3 billion in the third quarter and well above the $115 million profit recorded for the fourth quarter of 2020.
BP announced additional buybacks, aiming to execute another $1.5 billion share buyback from 2021 cash surplus before announcing its first-quarter 2022 results.
“On average, based on bp’s current guidance, at approximately $60 per barrel of Brent and subject to the discretion of the Board of Directors each quarter, bp expects to be able to effect repurchases of shares of approximately $4.0 billion per year and to have the ability to increase the dividend per common share by approximately 4% annually through 2025,” the company said.
Capital spending in 2021 was $12.8 billion, while capital spending this year is expected to be $14-15 billion, with an expected range of $14-16 billion per year until in 2025.
“We have made great strides in our transformation into an integrated energy company: concentrating and leveraging our hydrocarbons business, developing convenience and mobility, and disciplinedly building a low-emissions energy business. of carbon – with now over 5 GW in offshore wind projects – and significant opportunities in hydrogen,” said CEO Bernard Looney.
In one update On the progress of its net-zero strategy, also released today, BP said it expects investments in transitioning growth companies to exceed 40% of capital spending by 2025.
BP also announced more ambitious emissions reduction targets, aiming to reduce operational emissions by 50% by 2030, compared to the previous target of 30-35% reduction. BP is now also targeting net zero emissions over the lifecycle of the energy products it sells by 2050 or earlier, compared to the previous target of a 50% reduction in their emissions intensity.
By Tsvetana Paraskova for Oilprice.com
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