BP Boasts Record Profits As Oil Giants Report Historic Windfalls

Topline

British energy giant BP on Tuesday reported its highest-ever annual profits, the latest in a series of bumper earnings reports from oil and gas companies reaping the rewards of soaring energy prices after Russia’s invasion of Ukraine.

Key Facts

British giant BP announced it was scaling back its climate goals after reporting record annual profits of nearly $28 billion in 2022, the biggest in the company’s 114-year history and more than double the year before.

Shell reported an annual profit of nearly $40 billion in 2022, the highest in the firm’s 115-year history and more than double the previous year.

U.S. giant ExxonMobil announced nearly $56 billion in profits last year, a record high for any U.S. or European oil firm.

Chevron’s profits more than doubled in 2022 and the company reported its highest ever takings of $36.5 billion.

Alaska’s biggest crude oil producer ConocoPhillips, in the midst of lobbying the Biden administration to approve a large drilling project in the state, reported $18.7 billion of profit in 2022, the highest since the company spun off refining operations in 2012.

Key Background

The world’s energy giants had a very strong year in 2022. Much of this was driven by the downstream consequences of Russia invading Ukraine. Western sanctions aimed at Moscow, as well as Russia’s reprisals, disrupted or eliminated oil and gas supplies from one of the world’s largest exporters and pushed global prices—and therefore oil and gas profits—sky-high. With energy influencing everything from transportation, production, heating and sales, prices rose everywhere and costs of living soared. With record profits sitting right alongside a growing cost of living crisis, governments and critics around the world have accused energy firms of profiteering, hoarding the gains stemming from rising energy costs rather than bringing prices down. Reports of record annual profits have revived debate over new windfall taxes directed in Europe and the U.K.

Tangent

Allegations of profiteering are far from a new thing for the energy industry, which has been accused of lining shareholder pockets over tackling the looming climate crisis driven by products it pedals. Despite record profits, oil and gas executives have claimed higher energy bills will likely be here to stay due to the costs of transitioning away from fossil fuels and towards greener energy sources. The work of energy giants in the field, particularly compared to their traditional fossil fuel operations, is divisive and disputed, however. While BP said it would up investment in renewables following its record profits, it also scaled back climate commitments and vowed to up its oil and gas targets. Shell has been accused by a non-profit group of misleadingly overstating how much it is actually spending on renewable energy. Most major companies face allegations—which are supported by scientific research—of “greenwashing,” where their climate claims do not match up with their actions.

What To Watch For

Other energy giants posting profits from 2022. French giant TotalEnergies will report on Wednesday and Canada’s Enbridge is set to report on Friday. Norwegian giant Equinor, which posted record quarterly profits in the year, will release its annual report on March 23.

Further Reading

Shell Reports Record Profits As Oil Giants—Including Exxon, Chevron—Cash In On Sky-High Prices After Russian Invasion Of Ukraine (Forbes)

Oil Industry’s Windfall Fails to Excite Wall Street (WSJ)