BP doubles profit, increases oil and gas output target
BP more than doubled its profit in 2022, continuing the trend of record profits at the majors in the current results season. BP also raised its capital spending budget after adjusting its strategy to double down on low-carbon investments, and increased its 2030 target for oil and gas production to 2mn b/d of oil equivalent from 1.5mn boe/d previously.
BP's profit for 2022, excluding inventory effects, was $27.7bn — about 116pc greater than its 2021 profit of $12.8bn. For the fourth quarter its profit was $4.8bn against $4.1bn in the final quarter of 2021, although this result was down by 41pc on the preceding quarter.
Cash flow from operations for the year jumped to $40.9bn from $23.6bn in 2021. This was also up substantially in quarterly terms, with fourth-quarter 2022 operating cash flow hitting $13.6bn compared with $6.1bn in fourth-quarter 2021 and $8.3bn in third-quarter 2022.
BP announced plans to invest more in the energy transition and its own transformation. "Action is needed to accelerate the transition," chief executive Bernard Looney said. It will invest up to $8bn more than previously planned into its "transition growth engines" by 2030, with a focus on sectors such as bioenergy, electric vehicle charging, hydrogen, renewables and power. At the same time, it will invest an additional sum of $1bn per year through to 2030 into "resilient high-quality" oil and gas projects to meet near-term demand for secure supplies. This means that BP has dispensed with its previous plan to reduce its oil and gas production from 2.6mn boe/d to 1.5mn boe/d by the end of the decade, and is now targeting 2mn boe/d.
Consequently, BP has raised its capital spending budget range for 2023 to $16bn-18bn, from $14bn-15bn previously, and expects its capital spending to remain between $14bn and $18bn from 2024 to 2030. The move marks a departure from the rigid capex discipline BP has stuck to in recent years, alongside its peers among Europe's leading oil companies. Shell said last week that it was sticking with its $23bn-27bn capital spending frame.
But the company is also continuing to send cash back to its shareholders. For the fourth quarter BP increased its dividend by 10pc and it announced a further programme of $2.75bn of share buybacks that is to be completed by the time of its next results statement.
Oil and gas production remained steady in the fourth quarter compared with the previous one at 2.3mn boe/d. Average realisations of liquids in its oil production and operations segment during the quarter were $80.43/bl, compared with $93.14/bl in the third quarter, while in the gas and low carbon business they were $80.50/bl, compared with $88.03/bl previously. Gas prices realised were $10.20/000ft³ and $9.40/000ft³ compared with $12.12/000ft³ and $9.85/000ft³, respectively.
BP's average refining marker margin fell further in the fourth quarter to $32.2/bl from $35.5/bl in the third, although this was more than double the $15.1/bl it stood at a year previously. BP operated refining availability increased to 94.5pc in the period from 94.3pc in the third quarter.
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Singapore’s Jadestone cuts 2024 output guidance
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Australia’s QPM hikes gas reserves estimate
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High inventories pressure Brazil biodiesel prices
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