BP reports £6.9bn profit for Q2 after oil and gas prices soar

BP has reported its highest quarterly profit for 14 years, prompting calls for a tougher windfall tax on exceptional profits in the oil and gas sector.

The UK-based oil and gas giant said that its underlying replacement cost profit for the second quarter of 2022 was £6.9bn. This was more than triple the amount it made in the same period last year, and the strongest since 2008.

BP also said that it was increasing its dividend by 10% to 6.006 cents per share.

It comes days after huge profits were reported by rival Shell and British Gas owner Centrica, as well as US oil companies ExxonMobil and Chevron.

Oil and gas prices have soared after Russia invaded Ukraine and threatened to cut off gas supplies to Europe.

Typical household energy bills in the UK are forecast to hit more than £3,600 a year this winter.

Speaking to the BBC’s Today programme, Dale Vince, founder of energy supplier Ecotricity, said that BP was “holding a shedload of money that is coming from hard-pressed bill-payers in our country”, adding he believed it was time to increase taxation on the profits of oil and gas companies.

“Clearly there are exceptional windfall profits in the oil and gas sector, and clearly there’s a problem in the energy market, and we should fix one with the other.”

Doug Parr, chief scientist for Greenpeace UK, also called for a “proper windfall tax” on the huge profits made by oil and gas firms.

“This could unlock billions of pounds to alleviate household bills and fund a nationwide roll-out of home insulation which would keep bills low for good and get our UK fossil gas use under control,” he said.

BP takes 40% stake in Australian renewables project

BP is investing in a solar, wind and green hydrogen project in Western Australia.

The oil giant has agreed to acquire a 40.5% equity stake in the Asian Renewable Energy Hub (AREH) the Pilbara mining region of Western Australia, and will operate the project.

AREH intends to supply renewable power to local customers and also produce green hydrogen and green ammonia for the domestic Australian market and export to major international users.

According to BP, this project has the potential to be one of the largest renewables and green hydrogen hubs in the world.

AREH is planning to develop 26GW of onshore wind and solar power, equivalent to around a third of Australia’s entire generating capacity.

At full capacity, it could also produce around 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia per year.

“We believe AREH can be a cornerstone project for us in helping our local and global customers and partners in meeting their net zero and energy commitments,” said Anja-Isabel Dotzenrath, BP’s executive vice president of gas and low carbon energy. “It will also serve as a long-term clean energy security contributor in Asia Pacific, helping countries such as South Korea and Japan to decarbonise.”

BP’s partner shareholders in AREH will be InterContinental Energy (26.4%), CWP Global (17.8%) and Macquarie Capital and Macquarie’s Green Investment Group (15.3%).

BP to offload stake in Russian oil firm

BP has confirmed that it will exit its shareholding in Russian state-owned oil firm Rosneft after Russia’s invasion of Ukraine.

The oil giant has held a 19.75% stake in Rosneft since 2013.

BP said it would sever its financial ties with Rosneft and stop taking a dividend. Both BP-nominated directors will resign from the Rosneft board “with immediate effect”.

“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region,” commented BP chair Helge Lund.

“BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change.”

It has not yet been decided how and when the shareholding will be disposed of.

BP’s latest annual results revealed that Rosneft accounted for $2.7bn (£2bn) of its profits, about a fifth of its total, BBC News reports.

Norwegian energy group Equinor has also said it would stop new investments into Russia and start the process of exiting its joint ventures in the country.

“We are all deeply troubled by the invasion of Ukraine, which represents a terrible setback for the world, and we are thinking of all those who are suffering because of the military action,” said Anders Opedal, president and CEO of Equinor.

Irish support services firm DCC acquires BP’s LPG distribution arm

Irish marketing, distribution and business support services firm DCC Plc (ISE:DCC) said on Friday it had agreed to take over the Benegas liquefied petroleum gas (LPG) distribution business of UK oil and gas major BP Plc (LON:BP).

Under the terms of the deal, DCC will make a cash payment of EUR24.5m (USD31.8m), on a cash-and-debt-free basis, for Netherlands-based BP Gas Nederland BV and the trade and assets of BP’s smaller LPG distribution operation in northern Belgium, both of which trade under the name Benegas.

The purchase of this business comes after DCC bought BP’s British LPG distribution activities as well as the Swedish and Norwegian LPG distribution operations of Statoil Fuel & Retail ASA (OSL:SFR). All three deals will boost the scale and geographic scope of DCC’s LPG activities in Europe, its CEO Tommy Breen said.

The new transaction is seen to close in late 2012 after receiving clearance from the Netherlands Competition Authority.

With headquarters in Putten, the Netherlands, Benegas supplies about 55,000 tonnes of bulk, cylinder and aerosol LPG each year to various industrial, commercial and local clients. The business employs 44 people and as at the end of 2011 had adjusted gross and net tangible operating assets of around EUR15.4m and EUR6.7m, respectively. For that same year it generated an adjusted operating profit of EUR4m.

EC gives oil majors the green light to take joint control of Angola LNG

The European Commission said on Wednesday it had given its consent to the deal by oil and gas companies BP plc (LON:BP) in the UK, Chevron (NYSE:CVX) in the US, Italian Eni SpA (BIT:ENI), French Total SA (EPA:TOT) and Angolan Sonangol to take joint control of liquefied natural gas producer and supplier Angola LNG Ltd.

The regulator said it had found no competition concerns regarding the deal as the joint venture is anticipated to have a moderate market share, leaving room for a number of credible competitors in the market of interest for the EC whose ability to access re-gasification terminals will not be changed.

The JV would transform natural gas into LNG which it would then sell to clients around the world for re-gasification.

It would use natural gas obtained as a by-product from oil production and transported along pipelines to its liquefaction plant in Angola.

Although Total, Eni and BP hold capacity rights in re-gasification terminals in the European Economic Area, third party access to these terminals is ensured under the European Union (EU) law, the EC said, adding that the JV deal would not result in any changes in the competitors’ ability to access gas import infrastructures.

Based on all these findings, the EC concluded that competition in Europe will not be affected by the transaction, it said.

According to a memorandum of understanding (MoU) signed in 2007, Chevron would have 36.4% in the JV, Sonangol would hold 22.8%, Eni 13.6%, Total 13.6%, and BP 13.6%.