BP's profit more than doubles as calls for windfall taxes grow louder

By Hanna Ziady, CNN BusinessUpdated: Tue, 01 Nov 2022 10:03:10 GMTSource: CNN BusinessBP's profit more than doubled in the third quarter, extending a bumper run of earnings for the world's b

By Hanna Ziady, CNN Business

Updated: Tue, 01 Nov 2022 10:03:10 GMT

Source: CNN Business

BP's profit more than doubled in the third quarter, extending a bumper run of earnings for the world's biggest oil and gas companies that will add to growing calls in Britain and the United States for higher taxes on windfall profits.

The UK-based energy company posted underlying profit of $8.15 billion in the third quarter, compared with $3.3 billion for the same period a year ago. BP's earnings were boosted by "exceptional" results in its gas trading business, it said in a statement on Tuesday.

The company also said it would use surplus cash to buy back shares worth $2.5 billion, bringing total share buybacks this year to $8.5 billion.

"We remain focused on helping to solve the energy trilemma — secure, affordable and lower carbon energy," CEO Bernard Looney said. "We are providing the oil and gas the world needs today, while at the same time, investing to accelerate the energy transition," he added.

Energy companies have posted record profits this year off the back of soaring oil and natural gas prices linked to Russia's war in Ukraine.

Last week, Shell reported profit of more than $30 billion for the first nine months of the year — 58% more than it recorded for the whole of 2021. Also last week, America's largest oil company, ExxonMobil set a profit record for the second straight quarter.

The unprecedented set of earnings is fueling renewed calls in Britain and the United States for windfall taxes on energy companies to help households that are struggling to pay rising bills.

On Monday, President Joe Biden accused energy companies of "war profiteering" and said if they didn't "act beyond their narrow self interest" and "give the American people a break" they would pay "'a higher tax on their excess profits and face higher restrictions."

Biden did not explicitly endorse a windfall tax and the specifics of what he would consider are likely to remain vague, but key congressional Democrats have pushed different windfall tax proposals targeting oil companies for more than a year.

In the United Kingdom, Ed Miliband, the opposition Labour Party's spokesperson on climate change, said on Twitter that BP's profits are "damning evidence" of the failure of the ruling Conservative Party to levy "a proper windfall tax."

Miliband said last week that Shell's gigantic quarterly profit was "further proof that we need a proper windfall tax to make the energy companies pay their fair share."

BP said on Tuesday that it expects oil prices to remain elevated in the fourth quarter due to the recent OPEC+ supply cut and "ongoing uncertainty associated with Russian oil exports." It also expects gas prices to remain "elevated and volatile" due to a lack of supply in Europe "with the outlook heavily dependent on Russian pipeline flows or other supply disruptions."

— Phil Mattingly, Betsy Klein, Nikki Carvajal and Maegan Vazquez contributed reporting.