BP profit hits highest level in 8 years as it boosts low-carbon plans

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  • BP announces a profit of 12.8 billion dollars in 2021
  • BP increases share buybacks
  • Fourth-quarter profits hit $4.1 billion, beating forecasts
  • BP extends its plans to reduce greenhouse gas emissions

LONDON, Feb 8 (Reuters) – BP’s profits hit their highest level in eight years in 2021, buoyed by soaring gas and oil prices, as the company boosted share buybacks and accelerated emission reduction plans with increased spending on low-carbon energy.

BP’s rebound to an annual profit of $12.85 billion after a steep loss in 2020, is set to add to calls in Britain for higher taxes on energy producers to help lower utility bills. consumer energy.

“It’s about one thing, one thing only – implementing the strategy we’ve set out. It’s working,” chief executive Bernard Looney told Reuters.

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In the fourth quarter of 2021, BP’s underlying replacement cost profit, the company’s definition of net profit, reached $4.1 billion, beating analysts’ expectations for a profit of $3.93 billion. dollars.

It was BP’s biggest profit since early 2013.

BP shares were up 1.4% at 0845 GMT, against a 1% gain for the broader European energy index (.SXEP).

Results were supported by higher oil and gas prices and production, partly offset by weaker business results and the impact of higher energy costs on operations such as refining, a said the company.

Global natural gas and electricity prices have soared since the middle of last year due to tight gas supplies and rising demand as economies rebound from pandemic shutdowns . ,

For the year, BP’s $12.85 billion profit compared to a loss of $5.7 billion in 2020, when BP wrote off the value of its $6.5 billion oil and gas assets at the following a drop in energy demand.

BP’s debt fell to $30.6 billion at the end of last year, down $8.3 billion from a year earlier.

BP kept its dividend at 5.46 cents per share and raised its share buyback target to $1.5 billion per quarter from $1.25 billion.

Capital spending will increase in 2022 to a range of $14-15 billion, up from $12.8 billion in 2021.

Last week, Shell (SHEL.L) increased its share buybacks and dividends after fourth-quarter profits hit their highest level in eight years, helped by a strong trading performance in gas. Read more

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LOW CARBON SPENDING

Looney outlined plans in 2020 to reduce BP’s carbon emissions in coming decades by increasing its renewable energy capacity 20-fold by 2030 and cutting its oil production by 40%, more than a year. million barrels per day.

While maintaining its spending plan of $14 billion to $16 billion a year through 2025, in its strategy update on Tuesday BP said it would increase spending on low-carbon energy, which includes electric and retail vehicle charging, to 40% of total spending by 2025 and 50% by 2030.

These companies are expected to generate $9 billion to $10 billion in revenue by 2030, BP said, seeking to allay investor concerns about the returns of low-carbon companies over the long term.

BP has also accelerated its carbon reduction plans, now aiming to reduce all greenhouse gas emissions from its operations, production and sales to net zero by 2050, catching up to rivals including Shell (SHEL.L) and Equinor of Norway (EQNR.OL).

“We are accelerating the greening of BP. Our confidence is growing in the opportunities that the energy transition offers,” Looney said.

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Reporting by Ron Bousso, editing by Louise Heavens and Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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