BP, which announced in 2020 its ambition to become a net zero company “by 2050 or earlier”, has drawn heavy criticism for scaling back its emissions reduction targets following record profits.
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oil major PB reported stronger-than-expected first-quarter earnings on Tuesday, but down from the exceptional levels seen during a blockbuster in 2022 when fossil fuel prices surged following the large-scale invasion of the Ukraine by Russia.
The British energy giant posted an underlying replacement cost profit, used as a proxy for net profit, of $4.96 billion for the first quarter as lower oil and gas prices dragged down havoc.
This compared to a profit of $4.8 billion in the fourth quarter and $6.2 billion for the first quarter of 2022. Analysts had expected BP to report a profit of $4.3 billion in the first quarter, according to Refinitiv.
Shares of London-listed stocks are up 12.5% year-to-date.
The first quarter results come after a year of huge profits for Big Oil. Energy majors broke previous annual records in 2022 during a period of volatile oil and gas prices.
For its part, BP posted annual profits of $27.7 billion last year, more than double the profits recorded in 2021. The oil major’s previous record annual profit was $26.3 billion. in 2008.
Big oil executives have since sought to defend their windfall profits amid a barrage of criticism, generally stressing the importance of energy security in the transition from fossil fuels and suggesting that higher taxes could discourage investment.
BP, which was one of the first energy giants to announce an ambition to achieve net zero emissions”by 2050 or earlier“, said following its record annual profits it now plans to scale back its emissions reduction targets.
The move set the stage for a contentious annual meeting of shareholders last week, with analysts commenting that there was “clearly a very deep frustration“among some of the largest pension funds in the UK.
Indeed, a 17% group of shareholders – down from 15% last year, but down from 21% in 2021 – voted in favor of a resolution proposed by Dutch group Follow This. The resolution called on the company to align its 2030 emissions reduction targets with historic Paris agreement.
The burning of fossil fuels such as coal, oil and gas is the main driver of the climate emergency.
Last week, the French oil major TotalEnergies kicked off Big Oil’s earnings season with first quarter results in line with analysts’ expectations. The company reported a 27% drop in net profit to $6.5 billion in the first three months of 2023, in part due to lower fossil fuel prices.