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BP is diluting its green energy plans as annual profits hit a record £23bn amid rising energy prices
BP has scaled back its climate change plans after making record profits on the back of rising energy prices.
In an apparent turnaround by CEO Bernard Looney, the energy company said it plans to cut oil and gas production by just 25 percent between 2019 and 2030 — far short of its more ambitious previous target of a 40 percent reduction.
The move, which sparked outrage among climate change campaigners, came as BP reported earnings of £23bn for 2022 – the highest in its 114-year history.
U-turn: BP, led by chief exec Bernard Looney (pictured), says it now plans to cut oil and gas production by just 25% between 2019 and 2030
The numbers — which were accompanied by an increase in the dividend and further payouts to investors — sent BP shares up 8 percent, or 38.05 pence, to 516.4 pence.
Looney has been bragging about BP’s green ambitions amid an increased focus on clean energy for years.
But announcing record profits due to rising fossil fuel prices, he said yesterday that BP must continue “short-term investment in the current energy system – which relies on oil and gas – to meet today’s demands.” .
He said the sector was facing an “energy trilemma” of the world requiring energy that is safe, affordable and low-carbon.
“To address that, action is needed to accelerate the transition,” he said.
‘At the same time, action is needed to get the transition in order, so that affordable energy continues to flow where it is needed now.’
But in comments likely to infuriate climate change activists even more, Looney also said in a presentation that the company could pursue “smart” acquisitions to expand its oil and gas portfolio amid the explosive profits.
Kate Blagojevic, head of climate justice at Greenpeace UK, said: ‘Not only will BP’s new strategy fail to deliver much-needed energy security in the UK, but it will also cause people around the world, who are already facing devastating droughts, floods and heat waves will continue to lose their lives and livelihoods.”
Despite cutting back on targets, BP outlined plans to put £6.7bn over the next seven years on ‘transition’ projects, including electric vehicle chargers, renewables and hydrogen.
This was matched by a further £6.7bn for investment in oil and gas projects to target ‘short cycle rapid payback opportunities’.
The figures came less than a week after rival Shell posted profits of £33bn – another record.
It means Shell and BP made a combined £56bn in profits last year as households and businesses faced rising energy bills.
Shell shares also rose 2.4 percent or 56.5 pence to 2455 pence yesterday. US giant ExxonMobil last week reported a profit of £46 billion for 2022 – the highest ever for a Western oil company.
Following the great results, BP announced plans to buy back a further £2.3bn of shares, bringing the cumulative total for the year to £9.8bn.
The company also increased its dividend by 10 per cent in the final quarter of the year, bringing the total amount paid out in 2022 to £3.6 billion and boosting the pension pots of millions of UK workers.
The results sparked further anger from opposition politicians and campaign groups who have repeatedly called for oil and gas giants to be hit with even higher windfalls to fund support measures for households struggling with rising utility bills.
“While bill payers in the UK grapple with skyrocketing costs, BP shareholders are reaping massive payouts,” said Joseph Evans, a researcher at the Left Institute for Public Policy Research think tank.
The government already imposed a windfall tax on the energy giants, as a result of which they now pay 75 percent corporate tax on activities in the North Sea.
But those in the industry have hit back by warning that sanctioning tax increases risks stifling investment in Britain’s North Sea oil and gas industry.