BP slows retreat from fossil fuels after oil and gas drive record profit of $28bn

The company reported underlying profits for last year of $27.7bn, eclipsing the $26.3bn it made in 2008 and more than double the $12.8bn it reported after a strong 2021. BP is in the midst of one of the most ambitious strategic overhauls in the sector after pledging to cut oil and gas production by 40 per cent by 2030. It is part of a plan launched three years ago by chief executive Bernard Looney to reduce the group’s emissions and pivot to lower-carbon forms of energy. But in what will be seen as a U-turn, BP has scaled back its plans, indicating that oil and gas output in 2030 was now expected to be only 25 per cent lower. The shift follows a tumultuous year in energy markets driven by Moscow’s war in Ukraine and the ensuing clampdown on Russian gas and oil by western governments. Soaring fuel prices that drove up costs for households and businesses supercharged profits for the world’s biggest oil and gas companies last year. “Governments and societies around the world are asking companies like ours to invest in today’s energy system,” Looney told the Financial Times. Total shareholder returns since Looney took the helm in February 2020 have been the lowest among western energy majors, none of which set a hard target to cut oil and gas production like BP. Looney argued that the altered oil and gas output guidance, which means its carbon emissions will fall slower than planned, was not a shift in approach. “The strategy that we have is to invest in today’s energy system and to invest in accelerating the energy transition,” he said. “We’re leaning into it.” On the back of the record earnings, BP said it would raise its spending plans to expand the business over the next eight years. Looney said BP would spend $8bn more on its “transition” businesses — including renewables — and $8bn more on oil and gas. One top 30 shareholder welcomed the decision to increase spending in both areas, arguing the higher returns from more oil and gas production would support a faster expansion into renewables. “Everyone’s a winner,” the investor said.