1 November 2022
If you are covering BP’s latest financial results, please find below a comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
“BP, like many of its industry peers, has delivered another set of impressive earnings as it continues to be one of the main beneficiaries of sky high gas prices and the related trading benefits. Earnings such as these will continue for as long as gas prices remain as high and as volatile as they currently are. With no sign of a resolution in Ukraine and inflation remaining stubbornly sticky, it has dawned upon many that elevated gas prices will be the norm for a while longer yet.
“While the dividend remains unchanged, unlike rival Shell’s, BP has announced another share buyback, potentially adding fuel to the fire for those calling for harsher windfall taxes. Interestingly BP’s 2022 spending will be the top end of prior guidance due to the recent renewable energy acquisition in the US.
“And it is this investment that it is going to try to use to pushback against increased windfall taxes. BP has not come out like Shell to call for harsher levies but continues to invest, though it is more likely smaller peers whose spending could be threatened if the government intervene further but who are as important to support the reduction in dependence upon overseas oil and gas suppliers. Democrats in the US are also touting similar windfall taxes but given the looming midterm elections this is very unlikely to be approved or implemented. Either way, however, for as long as BP makes profits like this every quarter, the calls for them to give up more of their profits will only grow louder.”
