Oil giant BP has posted its highest annual profit in eight years amid mounting pressure on the sector as the cost-of-living crisis deepens.
The group revealed it swung to a mammoth 12.8 billion US dollar (£9.5 billion) underlying replacement cost profit – its preferred measure – for 2021 from losses of 5.7 billion US dollars (£4.2 billion) the previous year.
It notched up 4.07 billion US dollars (£3.01 billion) of profits in the final three months alone, which was better than expected and up from just 115 million US dollars (£85.1 million) a year earlier.
BP also announced more cash returns for shareholders, with another 1.5 billion US dollars (£1.1 billion) of share buybacks before its first-quarter 2022 results and a dividend payout of 5.46 cents (3.37p) a share for the fourth quarter.
The group recovered from a torrid 2020, when the pandemic sent it slumping 18.1 billion US dollars (£13.4 billion) into the red on a statutory basis – its biggest ever annual loss.
Oil and gas prices have since rebounded as economies worldwide reopened following the early stages of the pandemic.
But the results also intensify pressure on oil firms as they reap mammoth profit hauls while households and businesses are struggling due to soaring inflation.
Calls are growing for a windfall tax on energy giants, with Labour and Liberal Democrat MPs arguing that while households are paying through the nose for gas – energy bills are set to rise more than 50% in April – the companies which extract that gas are reporting massive profits.
Supporters of the tax believe some of this money should be reclaimed to help struggling households cope with the increase, but Chancellor Rishi Sunak has so far rejected the proposals.
Shell was in the firing line last week as it reported a hefty spike in profits on the same day as Ofgem announced a near £700 rise in the energy price cap.
Ed Miliband, shadow secretary of state for climate and net zero, said: “BP’s results yet again demonstrate the case for a windfall tax.
“The boss of BP described the energy price crisis as a cash machine for his company, and the people supplying the cash are the British people through rocketing energy bills.
“In these circumstances, it is only fair and right for oil and gas producers to make an additional contribution to helping the millions of families facing a true financial crisis.”
Liberal Democrat leader Sir Ed Davey said: “It simply cannot be right these energy companies are making super profits whilst people are too scared to turn their radiators on and terrified there will be a cold snap.
“A windfall tax is the best way to get money to the people who need it quickly, but also to make sure there is some sense of trust and proportionality in the system.”
Greenpeace branded BP’s 2021 profits as a “slap in the face to the millions of people dreading their next energy bill”.
BP did not comment directly on the windfall tax calls, but a spokesman said that “for every £1 that we earn in the UK, we are spending £2 out to 2025 and beyond”.
The group announced plans alongside its results to boost investment on low-carbon and renewable energy.
Chief executive Bernard Looney said: “2021 shows BP doing what we said we would – performing while transforming.
“We’ve strengthened the balance sheet and grown returns, we’re delivering distributions to shareholders with 4.15 billion US dollars of buybacks announced and the dividend increased, and we’re investing for the future.”