BP sees annual profits halve but reveals stronger-than-expected end to 2023

BP has revealed profits halved in 2023 as lower oil prices took their toll but the company chalked up a better-than-expected performance in the final three months.

The oil giant reported underling replacement cost profits – the company’s preferred measure – of 13.8 billion US dollars (£11 billion).

This is down 50% from the record 27.7 billion US dollars (£22.1 billion) notched up in 2022 when oil prices surged following Russia’s invasion of Ukraine.

The company reported a better-than-feared drop in profits in the final three months of the year, with underlying profits of 3 billion US dollars (£2.4 billion) against the 4.8 billion US dollars (£3.8 billion) it reported a year ago.

Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business

Murray Auchincloss

Most analysts had expected profits of 2.77 billion dollars (£2.19 billion) for the fourth quarter.

BP announced further cheer for shareholders, with another 3.5 billion US dollars (£2.8 billion) of share buybacks for the first half of the year under plans to buy back at least 14 billion US dollars (£11.1 billion) over 2024-25.

It also hiked its dividend by 10% to 7.27 cents a share in the fourth quarter.

BP’s new chief executive Murray Auchincloss said: “Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business.

“And as we look ahead, our destination remains unchanged… focused on growing the value of BP.”

But campaign group Global Witness hit out at what it said were “reckless shareholder payouts” at BP.

It claimed BP’s shareholders’ returns in 2023 – 12.7 billion (£10.2 billion) – could “cover the projected cost of natural disasters for the next seven years in the UK”.

Jonathan Noronha-Gant, Global Witness senior campaigner, said: “Shareholders should want to protect their long-term positions.

“That means demanding a rapid clean energy transition for companies like BP. These reckless shareholder payouts do the opposite.”

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