BP announced plans to boost spending and increase returns to shareholders after its profits more than doubled to almost $28bn in 2022, the highest annual earnings in the company’s 114-year history.
The group’s underlying profits for last year were $27.7bn, eclipsing the $26.3bn it made in 2008, and more than double the $12.8bn it reported after a strong 2021.
Underlying profits for the final three months of the year were $4.8bn, up from $3.3bn a year earlier but just under analysts’ average estimates of $5bn.
In response, BP increased its dividend for the fourth quarter by 10 per cent and announced plans to buy back a further $2.75bn in shares.
Capital expenditure in 2022 was $16.3bn. This year it plans to spend $16bn to $18bn, an increase on its previous target of $14bn to 16bn per year until 2025.
“It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon,” said chief executive Bernard Looney.
BP is in the middle of a strategic overhaul after previously committing to cut oil and gas production by 40 per cent by 2030 and produce an extra 50 gigawatts of renewable power.
But in what will be seen as a major U-turn, BP trimmed its plans to cut production, indicating that output in 2030 was now expected to be only 25 per cent lower.
The group said it would spend $8bn more on its “transition” businesses between now and 2030 than previously planned, but also increase its oil and gas investments by the same amount.
In oil and gas, BP will target “short-cycle fast-payback opportunities with lower additional operational emissions”, it said.