bp profits jump to 8-year high on fuel prices and demand

British energy giant bp on Tuesday posted an eight-year high in annual profits, recording US $12.8 billion for 2021 on the back of soaring oil prices and tightening supplies.

bp’s underlying replacement cost profit, used as a definition for net profit, marks a dramatic reversal from its net loss of $5.7 billion the previous year, and is above Refinitiv’s poll of analysts who had expected full-year net profit of $12.5 billion.

The company’s net earnings reached $4.1 billion in the fourth quarter of 2021, compared to the $3.32 billion in profit in the third quarter – marking the largest quarterly profit bp recorded since early 2013. Fourth quarter earnings rose on the back of higher oil-and-gas prices, higher refining margins and stronger trading results, bp said in a statement.

The strong recovery comes as bp plans to boost its spending on low-carbon and renewable energy.

“2021 shows bp doing what we said we would – performing while transforming,” bp chief executive Bernard Looney said in a statement. “It's all about one thing, one thing only – delivering the strategy that we laid out. That’s working,” Looney separately told Reuters.

The company maintained its dividend at 5.46 cents per share and boosted its share repurchases targets to $1.5 billion per quarter from $1.25 billion, while capital spending is projected to grow in 2022 to $15 billion, up from $12.8 billion in 2021.

The energy major also said it will increase its spending on low carbon energy, which includes retail and electric vehicle charging, to 40 percent of total spending by 2025 and 50 percent by 2030 – while maintaining its plan to spend $14-$16 billion per year until 2025. The clean energy businesses are expected to generate earnings of $10 billion by 2030, the company said in a statement.

The company said it now aims to achieve net-zero emissions from its operations, production and sales by 2050 – the same target year as British rival Shell and Norway’s Equinor.