BP posts record profit but infuriates climate activists by rowing back on targets

Company scaled back plans to cut oil output, now aiming to produce 2m barrels of oil equivalent per day by 2030, down just 25% from 2019 levels compared with previous plans for a 40% cut

BP reduced its ambitions to cut emissions from fuels sold to customers to 20% from 30% by 2030.

BP delivered a record profit of $28bn (€26bn) for 2022 and hiked its dividend, but infuriated climate activists by rowing back on plans to slash oil and gas output and reduce carbon emissions by 2030.

The blockbuster profit follows similar reports from rivals Shell, Exxon Mobil, and Chevron last week after energy prices surged in the wake of Russia's invasion of Ukraine, prompting new calls to further tax the sector as households struggle to pay energy bills.

Three years after chief executive Bernard Looney took the helm with an ambitious plan to pivot BP away from oil and gas towards renewables and low-carbon energy, the company said it would increase annual spending in both sectors by $1bn, with a sharper focus on developing low-carbon biofuels and hydrogen.

But it scaled back plans to cut oil output, now aiming to produce 2m barrels of oil equivalent per day by 2030, down just 25% from 2019 levels compared with previous plans for a 40% cut.

As a result, BP reduced its ambitions to cut emissions from fuels sold to customers to 20% from 30% by 2030. BP still aims to reduce its total emissions to net zero by 2050.

While many investors backed Mr Looney's strategy, which he said "is working", BP's shares have significantly underperformed top Western energy companies since the CEO took office, remaining largely flat compared with a 17% gain for Shell and a nearly 80% rise in Exxon shares.

"If the bulk of your investments remain tied to fossil fuels, and you even plan to increase those investments, you cannot claim to be aligned" with the 2015 UN backed goals to battle climate change, Mark van Baal, founder of activist shareholder group Follow This said.

Rival Shell was ordered by a Dutch court in 2021 to commit to a 45% reduction in its overall emissions by 2030 from 2019 levels, a decision Shell has appealed.

For the year, BP's $27.6bn profit exceeded its 2008 record of $26bn, despite a $25bn writedown of its Russian assets.

That allowed it to boost its dividend by 10%, after halving it in the wake of the pandemic, and announce plans to repurchase $2.75bn worth of shares over the next three months after buying $11.7bn in 2022. 

BP shares rose 7% to their highest since early 2020. 

• Reuters

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