BP profits spike at eight-year high in 2021

Profit at BP surged to an eight-year high in 2021, as high oil and gas prices and strong energy demand lifted earnings across all its main business segments, according to company results published on February 8.

Underlying replacement cost (RC) profit came to $12.8bn during the year, versus a $5.69bn loss BP endured in 2020 as a result of the coronavirus pandemic. 

BP's best performing segment was its oil production and operations, which generated $10.3bn in underlying RC profit before interest and tax, compared with a $5.89bn loss in the previous year. Its gas and low carbon energy division earned $7.53bn in 2021, up from $689mn, while profits from BP's minority share in Russian oil firm Rosneft grew to $2.72bn, from $56mn.

CEO Bernard Looney said the results showed that BP was "performing while transforming." The company unveiled an ambitious transition strategy in 2020, under which it is targeting a 40% reduction in its oil and gas production over the next decade, mostly through divestments, and a 20-fold increase in its clean energy capacity over the same period.

"We've strengthened the balance sheet and grown returns," Looney said. "We're delivering distributions to shareholders with $4.15bn of buybacks announced and the dividend increase. And we're investing for the future."

BP has announced a dividend of $0.0546/share for the fourth quarter that will be paid in March. Assuming Brent trades on average at $60/barrel, BP expects to buy back $4bn of shares annually, and increase dividends each year through 2025.

The company brought its net debt to $30.6bn by the end of December, down $8.3bn from a year earlier.