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Energy giant BP has announced that its profits have fallen sharply due to the drop in oil prices last year.
Profit for 2023 was $13.8bn (£11bn), down from the previous year's record of $27.7bn.
Energy companies reported huge profits as oil and gas prices soared due to supply concerns in the aftermath of Russia's invasion of Ukraine.
Household utility costs have been falling since 2022, but remain high.
The results are the first announced by BP since the company announced Murray Auchincloss as its new chief executive.
BP's profit decline mirrors results from rival Shell, whose profit last week was $28.2 billion, down from $39.9 billion in 2022.
Despite the drop, BP's profits remain – with the exception of last year – the highest since 2012.
The company plans to return $1.75 billion to investors in the first three months of this year through stock buybacks. It added that it had committed to buyback $3.5 billion in stock in the first half of 2024.
BP also said it expected “primary production from oil production and operations to increase” this year, but production from gas and low-carbon energy to decline.
BP came under fire from environmental groups last year after it scaled back plans to cut oil and gas production by 2030.
Following the latest results, campaign group Global Witness said BP was on the wrong path.
“Shareholders will want to protect their long-term positions, and that means demanding companies like BP to rapidly transition to clean energy,” said the group's Jonathan Noronha Gantt. It's counterproductive,” he said.
But last week it emerged that one of the investor groups, Bluebell Capital Partners, had demanded that BP completely withdraw its oil and gas output cut targets, calling them “irrational.”
Energy prices started rising after the coronavirus lockdown ended, but soared in March 2022 when Russia launched an attack on Ukraine. Concerned about disruptions to energy supplies, many countries, including the UK, imposed sanctions banning the import of all oil and petroleum products from Russia.
The price of benchmark Brent crude, which reached nearly $128 per barrel immediately after the invasion, is now just below $80.
Due to the price hike in 2022, all energy companies made huge profits. In response, the UK government has introduced a windfall tax called Energy Profits Tax (EPL) on companies' 'extra' profits from UK operations to help fund schemes to subsidize gas and electricity prices. introduced.
BP has announced that its North Sea operations will pay $1.5 billion (£1.2 billion) in UK tax in 2023, of which $720 million will come from EPL. Last year, the company paid $2.2 billion in taxes for its North Sea operations, including $700 million from EPL.
There were fears that oil prices would rise as a result of Houthi rebels' attacks on shipping in the Red Sea, but so far little has changed.
The attack caused many companies, including BP, to divert ships from the Suez Canal route. It is the fastest shipping route between Asia and Europe and is particularly important for the transport of oil and liquefied natural gas.
