BP shareholders will receive a payout of several billion dollars this year, after the oil giant announced better-than-expected quarterly profits of nearly $2.8bn.
After reducing its green investments, the oil company angered environmental groups by approving the development of potential oil reserves of 10bn barils from the Kaskida Project 250 miles south-west New Orleans.
It will also increase its dividends by 10% and buy back stocks worth $1.75bn in the next three month to reach $3.5bn total for the first half year – and $7bn overall for 2024.
According to Global Witness, BP paid $14.8bn in dividends to its shareholders between June 2023 and December 2023. This was the month when the first breach of the 1,5C heating limit occurred.
Alice Harrison, the head of fossil-fuel campaigns for the campaign group said: “While we struggle with high temperatures, BP is raking in billions in profits, paying massive dividends and doubling down dirty new oil projects.”
The windfall for shareholders comes after BP announced better-than expected profits of 2,76bn dollars for the three-month period ending in June. Analysts had forecast $2,54bn. Early trading on Tuesday saw the shares rise 2%.
The company warned its investors in a letter earlier this month that it expects “significantly lower profit margins ” from its refining operations, which could result in a loss of $500m to $700m for its quarter earnings.
The company also informed investors that it would write down $2bn as a result of a plan to reduce its refining activities at its Gelsenkirchen Biofuels Refinery in Germany by one-third from next year due to a weaker demand.
Murray Auchincloss said BP is committed to delivering a “simpler, more focused, and higher value company” for its shareholders. The strategy angered climate activists because it appeared to reduce green investments, while pushing ahead high-value fossil projects.
has ruled out any further investments for offshore wind, while advancing plans for major oil project.
Auchincloss said that BP was committed to transforming itself from an oil company into an “integrated company”. The company has plans to build five to ten green hydrogen projects in the next decade, to produce sustainable aviation fuels and to decarbonise BP’s refining operation.
He said BP is ready to move forward with two green hydrogen project, which produces the carbon-free gases through electrolysis using renewable energy, at its Castellon refining plant in Spain and its Lingen facility in Germany.
Auchincloss stated that BP also leads the world in biofuels and biogas, as well as charging infrastructure for electric vehicles. “The world is in dire need of construction, not targets and paths. We are doing that. “We’re doing things.”
The refinery writedown resulted in a £129m net loss for the oil company, even though its underlying replacement costs profit, the metric that City analysts pay most attention to, reached $2.8bn.
Harrison stated: “BP and other fossil fuel companies are ignoring climate breakdown. Governments must now act.” We need to stop supporting the climate-destroying fossil fuel industry and instead make them pay for their damage.
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