BP pays $1bn in windfall tax so far to British exchequer as latest profits remain strong

BP paid about $300m (€273m) for the UK’s energy profits levy in the first quarter of 2023, the company’s chief financial officer Murray Auchincloss said in an interview.

BP has paid about $1bn in UK windfall taxes on profits from its North Sea operations since the levy was introduced less than a year ago. 

Disclosure of the payout, which is used to help British consumers cope with high energy prices, did little to deflect the ire of politicians, who once again criticised the extraordinary profits as households suffer a cost-of-living crisis. 

Ed Miliband, who oversees climate policy for the UK opposition Labour Party, decried the earnings as “windfalls of war”.  The party, which is polling ahead of the ruling Conservatives, has vowed to expand the tax if it comes into power in the next election. 

British prime minister Rishi Sunak introduced temporary higher taxes on North Sea oil and gas producers under an energy profits levy in May last year, when he was chancellor of the exchequer, to counteract soaring prices. He has since extended the measure.

BP paid about $300m (€273m) for the UK’s energy profits levy in the first quarter of 2023, the company’s chief financial officer Murray Auchincloss said in an interview. That was a bit less than half of its $650m North Sea tax bill for the period and brought the total BP has paid for the windfall measure to about $1bn. 

Details of the company’s tax burden came along with another quarter of bumper profits as BP recorded nearly $5bn of net income and announced another $1.75bn of share buybacks, $1bn less than in the prior period.

While the London-based energy giant’s profit beat estimates thanks to a strong performance by its oil and gas traders, the surplus cash flow it uses to boost investor returns shrank by about 40%.

Even as Big Oil’s earnings decline from the record levels seen in 2022, they remain strong by historical standards and companies are still generating a lot of extra cash. 

Bloomberg