London (Parliament Politics Magazine) – BP’s shareholders can anticipate a multibillion-dollar payout this year after the oil giant registered better-than-expected quarterly earnings of almost $2.8bn (£2.2bn) and set out strategies to develop a new oil headquarters in the Gulf of Mexico.
Why are green groups criticizing BP’s Kaskida project?
The oil company has outraged green groups by giving the go-ahead to create potential oil resources of 10bn barrels from the latest Kaskida project 250 miles southwest of New Orleans, after climbing back its green investments in the last quarter.
What are the implications of BP’s $2.8bn earnings?
At the same time, it will increase its dividend payments by 10% while buying back stock worth $1.75bn over the next three months to obtain its total buy-backs for the first half of the year to $3.5bn – and $7bn for 2024 as complete. In total BP has paid out $14.8bn to shareholders since June 2023, the month that observed the start of the world’s first year-long violation of the 1.5C heating limit, according to an analysis by Global Witness.
Alice Harrison, head of fossil fuel campaigns at the campaign group, stated: “While millions of us struggle with high temperatures and high bills, BP are raking in billions of profits, paying out massive dividends, and doubling down on dirty new oil and gas projects.”
The shareholder windfall comes after BP noted better-than-expected profits of $2.76bn for the three months to the end of June, corresponded with analyst forecasts of $2.54bn for the quarter. The shares rose 2% in early trading on Tuesday.
The company cautioned investors earlier this month to anticipate “significantly lower” gain margins from its refining business, which could tap between $500m and $700m from its profits for the quarter. It also advised investors it would take a $2bn writedown resulting from a method to scale back its refining functions at its Gelsenkirchen biofuels refinery in Germany by a third from next year in reaction to weaker demand.
What does BP’s commitment to green hydrogen entail?
The chief executive, Murray Auchincloss, stated BP was committed to delivering “a simpler, more attentive and higher-value company” for shareholders. But the strategy has enraged climate campaigners by seeming to scale back its green investments while moving forward with high-value fossil fuel projects.
In addition to cutting investment in its German biofuels refinery, the company has also ruled out further investment in offshore wind while driving forward plans for major oil projects. Auchincloss informed the Guardian that BP is dedicated to transforming the company from an oil company to an “integrated energy company” and has set out goals to build between five and 10 green hydrogen schemes this decade to help make sustainable aviation fuel and decarbonise BP’s refining operations.
He stated BP was poised to go ahead with two green hydrogen schemes, which produce the carbon-free gas through electrolysis utilising renewable power, at its Castellón refinery in Spain and at its Lingen plant in Germany.