Energy giant BP posted record annual profits after oil and gas prices soared last year following Russia’s invasion of Ukraine.
The company expects revenue to more than double to $27.7bn (£23bn) in 2022, up from $12.8bn a year earlier.
Other energy companies have seen similar growth, with Shell last week reporting record profits of nearly $40 billion.
The gains led to calls for energy companies to pay more in tax as many households struggle with rising bills.
BP CEO Bernard Looney said the British company is “helping to provide the world with the energy it needs” and is investing in the transition to green energy.
Energy prices started rising after the end of the Covid lockdown, but spiked last March after Russia’s invasion of Ukraine sparked concerns about global supplies.
The price of Brent crude reached almost $128 a barrel, but has since fallen to around $80. Gas prices also rose sharply, but fell from their highs.
This has resulted in huge profits for energy companies, but has also contributed to rising electricity bills for households and businesses.
Last year, ministers introduced a tax on excess profits – the so-called Energy Profits Levy – on “extraordinary” profits made by energy companies.
The rate was originally set at 25% but has now been increased to 35% and only applies to profits derived from UK oil and gas production.
BP said its British business, which accounts for less than 10% of global profits, will pay $2.2 billion in tax for 2022, including $700 million due to tax on energy profits.
“Surprises of War”
Andrew Griffith, economic secretary to the Treasury, said the excess profits tax struck the “right balance” between helping families deal with the cost of living and securing the UK’s energy supply. He said his aim was to encourage reinvestment of the sector’s profits back into the economy
Nick Butler, formerly a senior BP executive and now a visiting professor at Kings College, said oil and gas prices would not remain “extremely high” forever.
“This is a temporary situation. Oil and gas prices are falling, and the excess profits that these companies are getting will not last until 2023.”
But Ed Miliband, Labour’s shadow climate minister, said the profits were “unheard of” and called on the government to increase tax on excess profits.
The government has had to step in to cap household energy bills and the average home now pays £2,500 a year, although this is still more than double what it was a year ago.
In addition to announcing record profits, BP increased its payout to shareholders by 10%.
It also scaled back plans to cut oil and gas production by 2030. The company, which was one of the first oil and gas giants to announce plans to cut emissions to zero by 2050, previously promised to cut emissions by 35-40% by the end of the decade.
However, it said on Tuesday it now plans to cut by 20-30%, saying it needs to continue investing in oil and gas to meet current needs.
But climate campaign group Greenpeace said the oil company’s new strategy would continue to harm the planet.
BP’s results follow similarly strong earnings reported by rivals Shell, Exxon Mobil and Chevron last week.
