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BP promises to ‘back Britain’ with £18 billion as profits hit highest since 2008

BP CEO Bernard Looney  (AFP via Getty Images)
BP CEO Bernard Looney (AFP via Getty Images)

BP today triggered a billion-dollar pay day for investors and promised to “back Britain” with investment as soaring oil and gas prices helped it to the highest quarterly profit in over a decade.

BP smashed City forecasts and announced a new $2.5 billion (£2 billion) share buyback, even as it revealed a $25.5 billion hit from its decision to exit Russia.

The FTSE 100 oil giant made an underlying profit of $6.2 billion (£5 billion) in the first quarter, its highest quarterly haul since 2008.

Profits were more than double what BP made in the same quarter last year and up from $4 billion in the final three months of 2021. Analysts had forecast a first quarter profit of $4.4 billion.

BP was boosted by “exceptional oil and gas trading” and higher prices, as fuel costs soared following Russia’s invasion of Ukraine.

Shareholders were rewarded with the new buyback and a dividend maintained at 5.46 cents per share.

High profits and a pay-out to investors immediately reignited the political row over a windfall tax, which Labour argues should be levied on energy majors to help Brits deal with the cost of living crisis.

BP sought to head off the row by pledging to invest £18 billion in the UK by 2030 and saying it is on track to pay £1 billion in taxes on its North Sea operations this year alone.

CEO Bernard Looney said: “We’re backing Britain. It’s been our home for over 110 years, and we’ve been investing in North Sea oil and gas for more than 50 years.”

Despite booming operating profits, BP posted a headline loss of $20.3 billion (£16.2 billion) as its decision to exit Russia led to a massive write-down in the value of its business.

BP pledged to sell its 19.75% stake in Russian oil giant Rosneft days after the invasion of Ukraine. It is trying to offload the stake to state-owned oil companies in China and India, Bloomberg reported, but will likely face a heavy loss on any sale. It took a $25.5 billion accounting write-down today.

“In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, BP’s focus has been on supplying the reliable energy our customers need,” Looney said.

“Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today. But it has not changed our strategy, our financial frame, or our expectations for shareholder distributions.”

Barclays said that BP “performed well across the board”. BP shares increased by 12.45p to reach 404p.