BP has recorded its highest quarterly underlying profits for more than a decade, due to rising oil and gas prices, as calls mount for a windfall tax on the sector.
The oil and gas giant reported a $6.2bn profit for the first quarter, compared from $4.1bn for the previous quarter.
The company lost $25.5bn due to the writedown of its 19.75% stake in Russian oil giant Rosneft and two other joint ventures during the first few months of 2022.
Its preferred definition of net earning the underlying replacement cost was driven by strong oil and gas trading and stronger refining results, exceeding analysts’s expectations of $4.49bn.
BP announced another $2.5bn in share buybacks on the back of the latest results.
However, the scale of profits have intensified calls from Labour and the Liberal Democrats for a one-off windfall tax on oil and gas groups, in order to provide more direct help for cash-strapped households and businesses.
Chancellor Rishi Sunak has so far distanced himself from taxing the industry, instead looking to companies to invest the money made back into the UK.
As part of its latest statement, BP did unveil plans to invest up to £18bn into UK energy system by 2030.
It pledged to invest in North Sea oil and gas, while driving down operational emissions, and said it is also working on a range of lower carbon energy projects in the UK, which are set to create jobs and develop new skills.
BP also stated that it expects to pay up to £1bn in taxes for its 2022 North Sea profits, on top of around £250m paid annually in other UK taxes.
Chief executive Bernard Looney insisted the group is “backing Britain”, stating: “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.
“We’re fully committed to the UK’s energy transition – providing reliable home-grown energy and, at the same time, focusing on the drive to net zero.”
Business Secretary Kwasi Kwarteng last week wrote to the oil and gas industry saying it must also set out plans for investment in clean energy during a meeting in the coming weeks.
Scottish Labour leader Anas Sarwar responded to the results by tweeting: “Today BP have announced quarterly profits of £4.9 billion, while your bills are going up.
“That’s almost £30,000 a minute in profit - more than some nurses earn in a year.
“That’s why we need a windfall tax on oil and gas giants - with the money going into your pocket.”
Labour leader Sir Keir Starmer said BP’s profits demonstrate that a windfall tax is the “right approach”.
He told BBC Breakfast: “I think those figures reinforce the case that we’ve been making, which is that, with so many people struggling to pay their energy bills, we should have a windfall tax on oil and gas companies in the North Sea who have made more profit than they were expecting.
“Have a windfall tax on that and use that to help people with their energy bills, up to £600 for those who need it most.”
He said his party would tailor help “to those who would need it most”.
Secretary of State for International Trade Anne-Marie Trevelyan said: “BP’s profits will help the company transition towards clean energy, adding that the company had been one of the “leading companies” to move towards a cleaner future and therefore “they need profits to invest in the new energies of the future”.
She told BBC Breakfast: “The reality is if we strip away their profits, we will not be able to do what is the most important thing, [which] is to invest in those clean energies of the future which will also enable us to come away from our reliance on foreign energy.”
Scottish Greens’ energy spokesperson Mark Ruskell said: "Far too many families are struggling and facing costs they simply cannot afford - nobody should have to choose between heating and eating, but for some they can now afford neither.”
“Introducing a windfall tax on the obscene profits made by the big energy companies would be a vital step in raising the money that is needed to help households pay for their fuel bills.”
“It would allow us to supercharge energy efficiency programmes, invest in renewables at a faster rate, and help homeowners to decarbonise their homes to make them warmer and more energy efficient.”
Meanwhile, Aberdeen & Grampian Chamber of Commerce's director of policy Ryan Crighton commented: “While BP’s underlying profits in the first quarter of the year have more than doubled, the Treasury’s tax take from the industry has risen by nearly 700% over the same period.
“Proponents of a windfall tax have said that it is only fair and right that oil and gas companies pay more taxes in good times - they are right, and energy companies are paying more, to the tune of £19m per day.
“We have said repeatedly that the windfall tax on North Sea profits is a blunt instrument that will achieve little apart from making the North Sea - where companies are already taxed at a rate of 40% - less attractive to investors.
“These issues are crucial to our future prosperity and should not be used as pawns in a local election campaign, so we again urge our politicians to take a pragmatic view and be wary that their words carry consequences for investment and confidence in a sector that supports hundreds of thousands of jobs.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
