BP has posted better than expected profits of almost $2.8bn (£2.2bn) for the April to June period and has promised to shower its shareholders with higher dividends and share buy-backs over the rest of the year.
The company will lift its dividend payments while buying back stock worth $1.75bn over the next three months to bring its total buy-backs for the first half of the year to $3.5bn – and $7bn for 2024 as whole.
In total BP has paid out $14.8bn to shareholders since June 2023, the month that marked the start of the world’s first year-long breach of the 1.5C heating limit, according to an analysis by Global Witness.
Alice Harrison, head of fossil fuel campaigns at the campaign group, said: “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 reported better-than-expected profits of $2.76bn for the three months to the end of June, compared with analyst forecasts of $2.54bn for the quarter. The shares rose 2% in early trading on Tuesday.
The company warned investors earlier this month to expect “significantly lower” profit margins from its refining business, which could wipe between $500m and $700m from its earnings for the quarter.
It also told investors it would take a $2bn writedown resulting from a plan to scale back its refining operations at its Gelsenkirchen biofuels refinery in Germany by a third from next year in response to weaker demand.
The chief executive, Murray Auchincloss, said BP was committed to delivering “a simpler, more focused and higher-value company” by scaling back its green investments and pushing forward high-value fossil fuel projects.
In the last quarter BP gave the go-ahead to the Kaskida oil project in the Gulf of Mexico while cutting investment in its German biofuels refinery and ruling out further investment in offshore wind.
Instead, BP has set out plans to build between five and 10 green hydrogen projects this decade to help produce sustainable aviation fuel and decarbonise BP’s refining operations.
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Auchincloss said BP was poised to go ahead with two green hydrogen projects, which produce the carbon-free gas through electrolysis using renewable power, at its Castellón refinery in Spain and at its Lingen plant in Germany.
Although the oil company’s underlying replacement cost profit – the metric most closely observed by City analysts – reached $2.8bn for the second quarter, its reported result showed a £129m loss, compared with a reported profit of £1.8bn in the same quarter last year, because of the refinery writedown.
Harrison said: “Fossil fuel companies like BP are turning a blind eye to climate breakdown, so now governments must act. Rather than propping up the climate-wrecking fossil fuel industry, we need them to make polluters pay for the damage they have already caused, and steer us towards a cleaner, greener future.”