BP’s profits slump to £2bn but dividends boost by 10% - as Rishi Sunak grants 100 oil and gas licences in UK

BP has reported a profit of $2.6 billion on Tuesday (1 August), falling below expectations and dropping 70% from a year earlier.

Despite the slump in profits, the oil and gas giant boosted its dividend by 10% to 7.27 cents per share, the fourth hike since halving it in the wake of the coronavirus pandemic three years ago.

It will repurchase $1.5 billion of its shares over the next three months.

The £2 billion profit for the second quarter of 2023 is down from the £6.6 billion profit over the same period last year, when it was boosted by a surge in oil and gas prices.

BP’s underlying replacement cost profit, its definition of net income, missed expectations of $3.5 billion in a company-provided survey of analysts.

The firm said its weaker results are due to a significant decline in refining margins, a higher level of maintenance activity and weak trading results compared with the previous quarter.

Chief Executive Officer Bernard Looney said in a statement: “Our underlying performance was resilient with good cash delivery - during a period of significant turnaround activity and weaker margins in our refining business.”

He added; “We’re delivering our strategy at pace – we’ve started up two major oil and gas projects to help keep energy flowing today and we’re accelerating our transformation through our five transition growth engines.

“And we’re delivering for shareholders, growing our dividend and announcing a further share buyback.”

Imogen Dow, warm homes lead at environment campaign group Friends of the Earth, said that despite BP’s profits falling “let’s not forget that 2022 was its most profitable year on record, and that it’s still the beneficiary of massive tax breaks from the UK government.”

She added: “With BP’s earnings for last year more than double 2021’s takings, you’d think it might have significantly increased investment in clean and cheap renewable energy – but earlier this year the oil and gas giant retreated on its climate commitments instead.

“If soaring energy prices have taught us anything, it’s that we need to get off oil and gas for good – not forge ahead with hundreds of new licences as the Prime Minister announced yesterday.”

On Monday (31 July) Rishi Sunak announced more than 100 new licences for drilling oil and gas in the North Sea. He insisted the announcement was “entirely consistent with our plan to get to net zero”.

However, Green Party co-leader Carla Denyer said it would fuel further climate destruction, while doing nothing to help tackle the cost of living crisis.

She said: “To say we need to burn more fossil fuels from the North Sea in order to meet net zero by 2050 is blatant greenwash.

“The Intergovernmental Panel on Climate Change, the International Energy Agency and the United Nations have all made clear there can be no new fossil fuel projects if there is to be any chance of keeping global temperature rises under 1.5 degrees."