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Insider UK
Insider UK
Business
August Graham & Peter A Walker

BP profit more than £500 million higher than expected

BP's profit was over £500m more than expected in the first three months of the year, as it continued to benefit from elevated energy prices.

The group made just under £4bn in underlying replacement cost profit between January and March, citing a strong performance in its oil trading business.

This is a reduction from last year - when the business rested on extremely high energy prices - but apart from that is the best result that BP has reported in at least a decade.

The drop from last year was largely thanks to the fact that BP got less money for the oil and gas that it sold, although this was partly offset by an exceptional performance from its gas marketing division.

It is also around £560m more than analysts who follow the oil major had thought it would make.

Chief executive Bernard Looney said: “This has been a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations.”

BP has already been hit by extra windfall taxes on the profits it makes from pumping oil and gas from UK waters.

However critics have said the tax allows energy companies to get away with not paying much of it if they invest in drilling for more oil and gas.

SNP economy spokesperson Stewart Hosie MP responded: “With energy companies reporting bumper profits, the Tories must hand north sea oil and gas profits back to Scotland, instead of hoarding them at Westminster.

“The money raised through the windfall tax on oil and gas companies must be reinvested in Scotland - the UK Government must use it to bring down energy bills in Scotland and finally match the Scottish Government's £500m just transition fund.“

Mark Ruskell, climate spokesperson for the Scottish Greens, added: “While shareholders in these companies will be laughing all the way to the bank, it is ordinary people and the environment who are suffering so they can line their pockets.

“Here in the UK we are not only bracing for whatever the next few months brings weather wise, we are doing so against rising prices, brought about chiefly because of the soaring costs of energy, which are feeding these massive profits.

“Given the extraordinary values involved, the UK Government must change how we tax the fossil fuel companies.”

BP said it expects oil prices to remain high after a recent decision by Opec+, a cartel of oil-producing countries, to restrict production in order to keep prices up.

Demand from China will also serve to put upwards pressure on both the cost of oil and the cost of liquid natural gas.

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