BP Writes Off $25.5 Billion After Russia Pullout, but Profits Soar

BP, the London-based power large, on Tuesday reported its highest revenue in a decade. The corporate mentioned that its underlying substitute value earnings had been $6.2 billion for the primary quarter of 2022, greater than double the $2.6 billion of the identical interval a yr earlier.

BP attributed the outcomes to increased oil and pure gasoline costs in addition to “distinctive” efficiency within the shopping for and promoting of these fuels.

In a transfer that had been anticipated after BP introduced its withdrawal from Russia in February after the invasion of Ukraine, the corporate additionally wrote off about $25.5 billion on its practically 20 % holding in Rosneft, Russia’s state-controlled oil firm, and different ventures in that nation.

That cost, although, is taken into account by analysts a paper loss with little relevance to persevering with efficiency. BP with out Russia “is a decrease danger funding and the remainder of the companies are performing nicely,” Oswald Clint, an analyst at Bernstein, wrote in a word to purchasers on Tuesday.

Though many traders thought Rosneft was a legal responsibility for BP, the Russian holding earned the corporate $745 million within the final quarter of 2021.

With earnings sturdy, BP mentioned it could preserve its dividend unchanged at 5.46 cents a share. It additionally mentioned that the cash it spends shopping for again shares — a option to enhance the share worth — would enhance to $2.5 billion within the second quarter, in contrast with $1.6 billion within the first quarter.

With opposition politicians in Britain calling for a windfall tax on oil firms to assist customers pay hovering power payments, BP mentioned that it could make investments 18 billion kilos, or about $23 billion, on British power by 2030.

The spending, which was largely already on the playing cards, would come with not solely inexperienced power initiatives reminiscent of offshore wind farms and hydrogen-making services but additionally oil and gasoline drilling within the North Sea “to assist near-term safety of provide,” BP mentioned.