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BP profits triple to $8.4bn as millions face rising energy bills

File photo dated 10/03/22 of a BP sign, as BP has swung to a quarterly loss after taking a mammoth 25.5 billion US dollar (�20.4 billion) hit following its move to quit Russia, but soaring oil prices saw underlying profits hit their highest for more than a decade.
BP saw underlying profits hit $8.45bn (£6.9bn) – its biggest profit since 2008 – as it cashed in on soaring energy prices amid the ongoing cost of living crisis. (PA) (PA)

BP (BP.L) has posted its biggest profit since 2008 as it cashed in on soaring energy prices, just as families face winter energy bill pain.

The energy giant saw underlying profits hit $8.45bn (£6.9bn) – more than triple the amount it made at the same time last year.

The figure is the second highest in the firm's history and takes its half-year profits to $14.6bn.

It came as consultancy Cornwall Insight said energy bills in the UK could reach £3,615 in the new year – hundreds more than previously predicted.

Read more: FTSE 100: Shell reveals record profit and launches $6bn share buyback scheme

The average annual bill stood at just £1,400 in October 2021, but that figure has climbed as the price cap continues to rise alongside surging wholesale costs.

BP chief executive Bernard Looney said: "Today's results show that BP continues to perform while transforming.

"Our people have continued to work hard throughout the quarter helping to solve the energy trilemma – secure, affordable and lower carbon energy.

"We do this by providing the oil and gas the world needs today – while at the same time, investing to accelerate the energy transition."

The group increased its dividend by 10% to $0.06 a share and committed to buying back $3.5bn of shares in the third quarter of 2022 after completing $2.5bn of share buybacks between April and July.

BP's share price jumped following the announcement it would boost shareholder payout.

Richard Hunter, head of markets at Interactive Investor, said: "An increase of 10% to the dividend leaves the yield at a projected level of 4.7%, with the likelihood of more increases given the current backdrop.

"A further share buyback programme of $3.5bn has also been announced, which should provide some support to the share price, while net debt has been reduced by a significant 30% over the half-year to now stand at $22.8bn.

"Of course, the oil price has been a major factor in enabling this largesse. Despite a recent dip relating to demand concerns in the event of a global recession, the price of oil remains up by 27% in the year to date, and the current level of Brent at around $100 per barrel compares to what BP describes as its 'cash balance point' of $40."

Looney has committed to share buybacks of at least $1bn a quarter as long as oil prices are above $60 a barrel, and has pledged to increase the dividend by 4 per cent a year until 2025.

It also comes days after record profits were reported by rival Shell (SHEL.L), as well as the two largest US oil companies – Exxon Mobil (XOM) and Chevron (CVX).

Jamie Maddock, equity research analyst at Quilter Cheviot, said: "Like peers, BP was able to capture the benefit of high oil, gas and product prices that translated into strong second quarter results that positively surprised.

"While the buyback was lifted, as it was for peers, it was the dividend increase that most unexpectedly surprised, as BP elected to raise it 10% or above the long-run guidance growth rate.

"Profitability was such that while the dividend was hiked and the third quarter buybacks was increased, debt reduction also continued apace."

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Labour's shadow chancellor Rachel Reeves said: "People are worried sick about energy prices rising again in the autumn, but yet again we see eye-watering profits for oil and gas producers.

Looney, who previously called BP a “cash machine”, could pocket as much as £11.7m, while finance head Murray Auchincloss, who said in February it had “more cash than we know what to do with”, could net up to £6.3m in pay and bonuses.

Neil Wilson, chief market analyst for, said: "Good refining margins and oil trading delivering strong underlying cash growth. Or you could just say oil and gas prices are so high it’s like printing money. The quarterly dividend was raised 10% - the usual suspects will complain.

"BP said the windfall tax introduced last month on profits through to the end of 2025 will result in a one-off deferred tax charge of $0.8bn – a drop in the ocean by today’s numbers it would seem."

Friends of the Earth campaigner Sana Yusuf said: “Ministers must impose a much tougher windfall tax on massive oil and gas firm profits. It beggars belief that these companies are raking in such huge sums in the midst of a cost-of-living crisis.

“The money raised should be used to help hard-up households with soaring energy bills and provide funding for a free home insulation programme - focusing on those most in need.

Brexit opportunities minister Jacob Rees-Mogg has voiced opposition to a fresh windfall tax as BP’s profits soar amid the cost-of-living crisis.

He told LBC radio: “I’m not in favour of windfall taxes. The energy industry is enormously cyclical.

“You need to have a profitable oil sector so it can invest in extracting energy.”

Watch: Why are gas prices rising