PART OF THE WEEK: BP will undoubtedly fan the flames of the windfall tax spat with another round of bumper gains due to high oil and gas prices
BP will no doubt fan the flames of the windfall tax row next week with another round of bumper gains due to high oil and gas prices.
Rival Shell posted a quarterly profit of more than £8 billion this week, which, although lower than the record in the second quarter, allowed it to hand out a further £3.5 billion in share buybacks, as well as a dividend increase from 15 percent.
BP investors hope the FTSE100 giant can replicate these payouts as the group is better able to take advantage of higher energy prices due to austerity and debt servicing.
But next Tuesday’s third-quarter figures are likely to spark new calls for a windfall tax on the industry.
There will be interest as to whether BP surpasses its second-quarter profit of £7.4bn.
Investors will also be watching for new share repurchases. BP has already unveiled £6.4 billion in share buybacks this year.
The focus on costs is likely to hold back production increases that, while good for green campaigners, may offer little comfort to households and motorists hoping for falling energy prices and lower bills.
Shareholders will also keep an eye on whether the group has been able to deleverage as a result of the oil price boom.
BP’s debt is now 60 per cent lower than the £50 billion peak reached in the first quarter of 2020.
Finally, activists and investors can look to BP boss Bernard Looney for updates on the company’s transition to renewable energy ahead of next month’s Cop27 climate summit in Egypt.