BP is like a CASH MACHINE
As the price of oil and gas takes off, boss declares:
THE boss of BP has described the energy giant as a ‘cash machine’ after soaring oil and gas prices boosted profits.
It made £2.4bn in the third quarter as crude prices averaged $74 a barrel.
The profits haul was around a fifth higher than the previous three months, and beat City forecasts. And it represented a sharp rise from the £63m it eked out in the third quarter of 2020, when many countries still had tough Covid restrictions.
BP announced it would buy back another £1bn of shares following the profit jump – in line with a pledge to buy around £730m a quarter if oil prices stayed above $60. It will also hand investors around £800m through a dividend of 4p per share.
Chief executive Bernard Looney said: ‘When the market is strong, when oil prices are strong and when gas prices are strong, this is literally a cash machine.’
Looney’s boast about the success of its core fossil fuel business comes as global leaders meet in Glasgow at the Cop26 climate change summit to discuss reducing carbon emissions.
The comments may also raise eyebrows among British households facing a squeeze on their finances as energy bills and fuel prices soar.
Looney, 51, has been pushing to transform BP into a green power giant since he took over last year, just before the UK went into lockdown. As countries have reopened and the global economy has rebounded this year, demand for oil has rocketed. It is now at eight-year highs of around $80 a barrel. And gas shortages have sent prices to new records.
Brent crude dropped as low as $19 a barrel last April when the strictest lockdowns were in place in the West, bringing travel and industry to a standstill.
The pandemic hammered BP’s finances, with the firm posting a heavy loss last year. It cut 10,000 jobs and slashed its prized dividend by around half last August – though it has increased it in tiny increments since then.
The dividend cut last summer hurt millions of ordinary Britons as it is a staple stock for many pension funds and savings accounts already hit hard by stock market turmoil.
Despite the knock to its finances last year, BP is ploughing money into green projects and is aiming to reach net zero by 2050.
Since Looney took over from long-time boss Bob Dudley, he has unveiled wide-ranging plans that include increasing its investment in low-carbon technology tenfold, to £3.8bn a year by 2030.
Rival Shell is also struggling with the same balancing act – and has come under fire from an activist investor US hedge fund Third Point, led by financier Daniel Loeb, which is demanding that it break up into separate renewables and fossil fuel businesses.
Shell boss Ben van Beurden has said the calls miss the point as maintaining its oil and gas arm is the only way to fund transition.
Despite the roaring profit figures, BP shares fell 3.4pc, or 12.05p, to 344.95p.