BP writes off $25.5 billion on its Russia pullout, but oil and gas profits soar.
The energy company said quarterly profit had more than doubled from a year earlier.
BP, the London-based energy giant, reported its highest profit in a decade on Tuesday. The company said its underlying replacement cost profits were $6.2 billion for the first quarter of 2022, more than double the $2.6 billion of a year earlier.
BP attributed the results to higher oil and natural gas prices as well as “exceptional” performance in the buying and selling of those fuels.
In a move that had been anticipated after BP announced its withdrawal from Russia in February because of the invasion of Ukraine, the company also wrote off about $25.5 billion on its nearly 20 percent holding in Rosneft, Russia’s state-controlled oil company, and other ventures in that country.
That charge, though, is considered by analysts a paper loss with little relevance to continuing performance. BP without Russia “is a lower-risk investment, and the rest of the businesses are performing well,” Oswald Clint, an analyst at Bernstein, wrote in a note to clients on Tuesday.
Although many investors thought Rosneft was a liability for BP, the Russian holding earned the company $745 million in the last quarter of 2021.
With earnings strong, BP said it would keep its dividend at 5.46 cents a share. It also said the money it spent buying back shares — a way to increase the share price — would increase to $2.5 billion in the second quarter, from $1.6 billion in the first quarter.
With opposition politicians in Britain calling for a windfall tax on oil companies to help consumers pay soaring energy bills, BP said it would invest 18 billion pounds, or about $23 billion, on British energy by 2030.
The spending, which was mostly already on the cards, would include not only green energy initiatives such as offshore wind farms and hydrogen-making facilities but also oil and gas drilling in the North Sea “to support near-term security of supply,” BP said.
Stanley Reed has been writing from London for The Times since 2012 on energy, the environment and the Middle East. Prior to that he was London bureau chief for BusinessWeek magazine. More about Stanley Reed
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