7th Feb 2023 08:45
(Alliance News) - BP PLC on Tuesday said underlying replacement profit more than doubled in 2022 and was higher in the fourth quarter, in line with increasing natural gas and oil sales from rising prices.
The London-based oil major said 2022 underlying replacement cost profit was USD27.65 billion, multiplying from USD12.82 billion in 2021, or to USD46.04 billion from USD22.34 billion before interest and tax.
This was underpinned by rising underlying pretax RC profit in gas and low carbon energy to USD16.06 billion from USD7.53 billion, and to USD20.22 billion from USD10.29 billion in oil production and operations.
In the three months that ended December 31, underlying pretax RC profit was up 32% to USD9.32 billion from USD7.05 billion a year earlier; for gas and lower carbon energy, it rose 43% to USD3.15 billion from USD2.21 billion; and for oil production and operations, it was up 10% to USD4.43 billion from USD4.02 billion.
Across the full year, BP's performance soared, owing to rising natural gas and oil prices across the year.
For all of 2022, sales and other operating revenue was USD241.39 billion, up 53% from USD157.74 billion in 2021, while pretax profit ticked down to USD18.04 billion from USD18.08 billion, due to a net impairment and losses on sale of businesses and fixed asset, as well as higher purchases and other expenses.
Looking ahead, BP said it expects oil prices to be supported by recovering demand from China. For gas prices, BP said the outlook depends on the pace of Chinese demand recovery and weather in the Northern Hemisphere
BP also declared a quarterly dividend of 6.61 US cents per share, up 21% from 5.46 cents, taking its 2022 total dividend to 24.082 cents, rising 11% from 21.630 cents.
Fourth-quarter underlying pretax RC profit was down 32% from USD13.75 billion in the third quarter. BP said fourth-quarter profit was "impacted by a below-average gas marketing and trading result, after the exceptional result in the third quarter, lower oil and gas realizations, a higher level of refinery turnaround and maintenance activity, and lower marketing margins and seasonally lower volumes."
But this did not undermine overall 2022 performance, however, as soaring hydrocarbon prices benefited the oil major.
Total hydrocarbons average price was around USD56.34 per barrel of oil equivalent in 2022, up 67% from USD33.75 in 2021. Liquids rose 41% to USD89.86 per barrel from USD63.60, while natural gas was up to USD8.91 per thousand cubic feet from USD5.11.
BP said it paid USD1.83 billion in windfall tax in 2022, as part of the UK government's energy profits levy, a measure implemented to address rising consumer energy bills amid the cost of living crisis.
Looking ahead, BP said, during the first quarter of 2023, it expects oil prices to remain supported by recovering Chinese demand and ongoing uncertainty around the level of Russian exports and low inventory levels.
This is alongside industry refining margins remaining elevated due to sanctions against Russian crude and product by the international community, in response to the war in Ukraine.
BP said global gas prices will remain dependent on weather in the northern hemisphere and the pace of Chinese demand recovery.
Across 2023, BP expects both reported and underlying upstream production to be broadly flat compared with 2022.
"Throughout 2022, BP continued to focus on delivery of our 'integrated energy company' strategy. We are helping provide the energy the world needs today and - at the same time - investing with discipline into our transition and the energy transition - as demonstrated by the Archaea Energy acquisition," said Chief Executive Officer Bernard Looney, referring to acquisition of US renewable natural gas provider Archaea Energy Inc for USD3.3 billion in December.
"We are strengthening BP, with our strongest upstream plant reliability on record and our lowest production costs in 16 years, helping to generate strong returns and reducing debt for the 11th quarter in a row. Importantly, we are delivering for our shareholders - with buybacks and a growing dividend."
Shares in BP were up 4.2% to 498.27 pence each in London on Monday morning.
By Greg Rosenvinge, Alliance News reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
BP