British multinational company BP has announced its annual financial results, reporting underlying replacement cost profit, a proxy for net profit, of $12.8bn for 2021, its highest in eight years, compared to a loss of $5.69bn during 2020. The firm’s underlying profit for Q4 2021 was $4.1bn, up 24 percent quarter-on-quarter, compared with $3.3bn in Q3 2021.
The result was driven by higher oil and gas realisations, higher upstream production volumes, and stronger refining commercial optimisation, partly offset by a significantly lower oil trading result and an average contribution from gas marketing and trading and the impact of higher energy costs, the firm clarified in its financial statement.
Commenting on the annual results, the CEO of BP, Bernard Looney, said: “2021 shows BP doing what we said we would – performing while transforming. We’ve strengthened the balance sheet and grown returns. We’re delivering distributions to shareholders with $4.15 billion of buybacks announced and the dividend increased.”
“We’re investing for the future,” he said, adding that the have made strong progress in their transformation to an integrated energy company.
Meanwhile, BP’s CFO Murray Auchincloss, stated, “We raised our dividend, substantially reduced net debt, invested with discipline, and drove returns to 13.3 percent. Looking ahead, our priorities for capital allocation are unchanged and we remain committed to the continued execution of this plan.”
The oil and gas giant stressed that its accelerated EV strategy; 11 major projects in oil and gas; significant portfolio of hydrogen opportunities; and quadrupling its renewables pipeline shows their strategic progress over the last two years.
Accordingly, BP is also aiming to increase investment in transition businesses (bioenergy, convenience, electrification, renewables and hydrogen) to more than 40 percent of their CapEx by 2025 and around 50 percent by 2030. The company expects to generate earnings of $9-10bn by 2030 driven by these businesses.
“We are focusing and high grading our hydrocarbons business, growing in convenience and mobility and building with discipline a low carbon energy business – now with over 5GW in offshore wind projects – and significant opportunities in hydrogen,” Looney concluded.
