BP reported a $20.4bn (£16.3bn) loss for the first quarter of the year but faced further backlash amid gushing profits from its oil and gas operations gas.
The company reported net profit of $6.25 billion for the January-March period – its highest in more than a decade – thanks to high oil and gas prices that had already proved lucrative before the invasion of Ukraine by Vladimir Putin.
BP’s net loss was driven by a $24 billion non-cash writedown of its 19.75% stake in oil giant Rosneft and two other joint ventures following the company’s decision to leave Russia in February.
However, the underlying profit figure has prompted the government to push harder to introduce a one-off energy profit tax – so far rejected by ministers on the grounds that such a move would hurt investment in the future more country green.
Britain’s BP said it was making a greater commitment to national energy security with an £18 billion investment over the next eight years, which would include money for oil and gas from the North Sea – operations that would generate £1billion in tax for the UK Treasury this year alone.
But he said the investment would also include commitments to reduce operational emissions as part of his transition to tackle climate change as part of his net zero ambition for the Integrated Energy Society (IEC).
The investment would include money for more wind power and electric car charging stations, the company said.
Chief executive Bernard Looney said: “We support Britain.”
He told investors: “In a quarter dominated by the tragic events in Ukraine and the volatility in the energy markets, BP has been focused on providing the reliable energy our customers need.
“Our decision in February to exit our stake in Rosneft resulted in the significant non-cash charges and overall loss that we reported today.
“But it hasn’t changed our strategy, our financial framework or our expectations for shareholder distributions.
“It is important that BP continues to perform and, step by step, we are making progress in executing our IEC strategy – producing resilient hydrocarbons to ensure energy security while investing with discipline in the energy transition.
BP is keen to promote its role in energy security as the industry continues to face demands from opposition parties in Westminster for a windfall tax.
BP’s underlying profit was boosted by natural gas costs reaching record highs.
It has also benefited from the highest oil prices in 14 years, although the values of both have fluctuated wildly since Russian tanks first arrived in Ukraine in late February.
Its net profit figure of $6.25 billion compared to the $4.1 billion made in the previous quarter.
The company said it would reward shareholders by keeping its dividend at 5.46 cents per share and increasing its share buyback program to $1.5 billion per quarter.
The stock – up 20% since the start of the year – rose more than 3% at the open.
The TUC was among organizations to accuse the company of rewarding shareholders at a time when it was profiting from the war in Ukraine.
Its general secretary, Frances O’Grady, said: “At a time when households across Britain are being hammered by skyrocketing bills and prices, these profits are obscene.
“The government must stop making excuses and impose a windfall tax on oil and gas companies.
“The money raised should lower costs for struggling families.”
Business Secretary Kwasi Kwarteng said of the BP update: “BP’s £18bn investment in our energy system this decade is welcome.
“It is right that they reinvest the profits back into the UK. In return for increased production in the North Sea, I want companies to step up their investment in clean, local energy to create jobs in new industries. “
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said in reaction: “The company has raked in cash as the supply crunch in oil markets has intensified.
“The war and strong geopolitical tensions have caused a surge in the price of oil, which is up 40% since the start of the year, peaking in the first weeks of the war at $139.
As the European Union is increasingly expected to impose an export ban on Russian crude at the end of the year, the price is expected to remain high, which will help BP recoup the cost of its costly exit.
“The additional $2.5 billion share buyback announced underscores the company’s confidence that the direction of travel will come with rising crude prices as more of the world is about to avoid Russian oil.
“Although questions will inevitably arise over whether more revenue should be used to accelerate BP’s ongoing green transition rather than increasing shareholder returns.”