07 February 2023
If you are covering BP’s latest financial results, please find below a comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
“BP announced record profits today, news that will delight shareholders but will continue to ratchet up the political pressure on the energy giants. The results announced were impressively strong, even if in line with expectations, while dividends and share buybacks continue to increase. Ultimately, like Shell, BP has benefitted hugely from the spike in gas prices and shareholders are duly being rewarded. How long that can continue in today’s environment remains to be seen.
“BP has also announced that its capital expenditure to 2030 will be increased as it looks to reinvest some of these bumper profits into the business. This will be split 50-50 between new and traditional energy sources. It is also planning to moderate the runoff of its oil production compared to its previous strategy update. As such, with such clamour for energy sovereignty and security, and prices remaining historically elevated, in the short-term the transition to renewables will be impacted as BP looks to take advantage of these trends. With an election cycle just around the corner in the UK, the issue of energy company profits is only going to become more politicised and more controversial for as long as they remain extraordinary.”
