BP has scaled back its climate change plans after raking in record profits on the back of soaring energy prices.
In an apparent U-turn by chief executive Bernard Looney, the energy company said it plans to cut oil and gas production by just 25 per cent between 2019 and 2030 – well short of its more ambitious previous target of a 40 per cent reduction.
The move, which sparked outrage among climate change campaigners, came as BP reported profits of £23billion for 2022 – the highest in its 114-year history.
U-turn: BP, led by chief exec Bernard Looney (pictured), says it now plans to cut oil and gas production by just 25% between 2019 and 2030
The figures – which came alongside a hike in the dividend and further pay outs to investors – sent BP shares up 8 per cent, or 38.05p, to 516.4p.
Looney has spent years boasting of BP’s green ambitions amid an increased focus on clean energy.
But announcing record profits on the back of soaring fossil fuel prices, he yesterday said BP needed to continue ‘near-term investment into today’s energy system – which depends on oil and gas – to meet today’s demands’.
He said the sector faced an ‘energy trilemma’ of the world needing energy that is secure, affordable and low carbon.
‘To tackle that, action is needed to accelerate the transition,’ he said.
‘And – at the same time – action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it’s needed today.’
But in comments likely to further enrage climate change activists, Looney also said in a presentation the company could pursue ‘smart’ acquisitions to expand its oil and gas portfolio amid the boom in profits.
Greenpeace UK’s head of climate justice Kate Blagojevic said: ‘Not only will BP’s new strategy fail to deliver much-needed energy security in the UK, but it will ensure that people across the globe, already battling devastating droughts, floods and heatwaves, will continue losing their lives and livelihoods.’
Despite the scaling back of its targets, BP outlined plans to pour £6.7billion into ‘transition’ projects over the next seven years including electric vehicle chargers, renewable energy and hydrogen power.
This was matched by another £6.7billion for investment in oil and gas projects to target ‘short-cycle fast-payback opportunities’.
The figures came less than a week after rival Shell posted profits of £33billion – also a record.
It means Shell and BP made a combined £56billion in profit last year as households and businesses faced rising energy bills.
Shell shares also climbed yesterday, by 2.4 per cent, or 56.5p, to 2455p. US giant ExxonMobil last week reported a £46billion profit for 2022 – the highest ever for a Western oil company.
Following the bumper results, BP announced plans to buy back another £2.3billion worth of shares, taking the cumulative total for the year to £9.8billion.
The company also hiked its dividend by 10 per cent in the final quarter of the year, taking the total paid out during 2022 to £3.6billion and providing a boost to the pension pots of millions of British workers.
The results sparked yet more anger from opposition politicians and campaign groups who have made repeated calls for oil and gas giants to be hit with even higher windfall taxes to help fund support measures for households grappling with surging energy bills.
‘While bill-payers across the UK are struggling with soaring costs, BP’s shareholders are reaping enormous pay outs,’ said Joseph Evans, a researcher at the Left-wing Institute for Public Policy Research think-tank.
The Government has already imposed a windfall tax on the energy giants, meaning they now pay a corporation tax of 75 per cent on activities in the North Sea.
But those in the sector have hit back by warning that punishing tax rises will risk choking off investment in the UK’s North Sea oil and gas industry.