BP’s revenue more than doubles as calls intensify over windfall taxes

CNN Business

BP’s profits more than doubled in the third quarter of the year, extending a run of high profits for the world’s biggest oil and gas companies, which will fuel calls in Britain and the United States for higher taxes on windfall profits.

The UK-based energy company posted $8.15 billion in underlying profit in the July-September period, compared to $3.3 billion a year ago. “Exceptional” results in gas trading boosted earnings, BP said in a statement on Tuesday.

The result means that Big Oil – BP ( BP ), Shell, Total ( TOT ) Energies, ExxonMobil and Chevron ( CVX ) – made more than $58 billion in profits in the third quarter alone. The record income comes at a time when growing households in Europe and North America are being squeezed by decades of high inflation due to rising energy and food bills.

And the shareholders get a very good return. BP said it will use the extra cash to buy back $2.5 billion worth of shares, bringing its total share buybacks this year to $8.5 billion. Shell spent $18.5 billion on share buybacks this year and made juicy dividend payments on top of that.

“We continue to help address the energy trinity – secure, affordable and low-carbon energy,” BP chief executive Bernard Looney said. “We are providing the oil and gas the world needs today, while investing to accelerate the energy transition,” he added.

Energy companies have posted record profits this year amid rising oil prices natural gas prices linked to Russia’s war in Ukraine.

Last week, Shell reported profits of more than $30 billion for the first nine months of the year, up 58% from what it will earn in 2021, while ExxonMobil posted a record profit for the second consecutive quarter.

The unprecedented set of earnings is fueling calls for windfall taxes on energy companies to help households struggling to meet rising bills in Britain and the United States.

On Monday, President Joe Biden accused energy companies of “war profiteering” and said they would “pay higher taxes on their excess profits” unless they “act beyond their narrow self-interest” and “give the American people a break.” and face higher constraints”.

Biden has not publicly supported a windfall tax, and the specifics of what he would consider remain unclear, but key congressional Democrats have floated various windfall tax proposals targeting oil companies for more than a year.

Ed Miliband, climate change spokesman for the opposition Labor Party in Great Britain said. Twitter BP’s profits are “damning proof” that the ruling Conservative Party is not charging “proper income tax”.

Miliband said last week that Shell’s huge quarterly profit was “further evidence that we need a proper windfall tax to ensure that energy companies pay their fair share”.

The UK government introduced a £5bn ($5.8bn) tax on oil and gas company windfalls in May, but Finance Minister Jeremy Hunt has so far rejected calls for the tax to be extended, although he says he is not against it in principle and there is nothing wrong with it. refused. from the table. On the other hand, EU governments agreed in September on a surprise tax they hope will raise $140 billion.

Shell CEO Ben Van Beurden, who will step down later this year, told reporters last week that the industry needs to engage with officials to ensure these taxes are well drafted.

“We must prepare and accept that our industry will be considered for tax increases to fund transfers to those who need it most during these difficult times,” he said.

BP said it expects oil prices to remain high in the fourth quarter due to recent OPEC+ supply cuts and “continued uncertainty surrounding Russian oil exports.” It also expects gas prices to remain “high and volatile” due to supply shortages in Europe, “with the outlook highly dependent on Russian pipeline flows or other supply disruptions.”

Saudi Aramco, the world’s largest oil and gas company, grew 39% year-on-year to $42.4 billion in the third quarter.

“Although global crude oil prices are affected by continued economic uncertainty during this period, our long-term view is that oil demand will continue to grow over the rest of the decade given the world’s need for more affordable and reliable energy,” CEO Amin H. Nasser said in a statement. said.

– Phil Mattingly, Betsy Klein, Nikki Carvajal and Maegan Vazquez contributed reporting.

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