BP, one of the world's leading energy companies, has reported a record-breaking annual profit of $28 billion for 2022. This is due to the surge in oil and gas prices caused by Russia’s invasion of Ukraine. The company has also announced a 10% increase in its shareholder dividends and an extension of its share buyback programme.
In addition, BP has scaled back its climate ambitions to reduce the amount of oil and gas it produces by 2030. The company now expects its fossil fuel production to fall by 25 percent by 2030, compared to a previous expectation of 40 percent. This comes as the global energy transition accelerates and countries focus on domestic energy sources.
Noting the heightened focus on energy security, BP Chief Economist Spencer Dale said: “The demand for domestically produced renewables and other non-fossil fuels, helps to accelerate the energy transition.”
The Energy Outlook 2023 report by BP shows that the share of renewables in the global primary energy mix is expected to increase to between 35-65% by 2050, while the share of fossil fuels will slump to 20-50% in 2050. This comes as global electricity demand is predicted to increase by 75% across all three scenarios.
In response to the huge profits made by energy companies, Trades Union Congress general secretary Paul Nowak has called for higher windfall taxes on the oil and gas giants. He said: “As millions struggle to heat their homes and put food on the table, BP are laughing all the way to the bank.”
Ed Miliband, Labour’s Shadow Climate Change and Net Zero Secretary, has echoed this sentiment. He said: “What is so outrageous is that as fossil fuel companies rake in these enormous sums, Rishi Sunak still refuses to bring in a proper windfall tax that would make them pay their fair share.”
BP has estimated that its global tax bill sat at $15 billion, $2.2 billion of that coming from the North Sea. However, some MPs feel this amount is too low and are calling for the energy profits levy to be updated.
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