BP PLC (LSE:BP.) has announced bumper financials for the fourth quarter, amidst soaring oil prices, and looks set to ‘sustain earnings from resilient hydrocarbons out to 2030’.
Today, BP reported a jump in replacement cost profit (its preferred metric for profitability) to US$1.9bn for the fourth quarter, versus US$825mln in the same period a year ago and US$3bn in the preceding quarter.
For the full year, BP turned a US$4.7bn profit versus an US$18.1bn loss in 2020.
Operating cash flow nearly tripled to US$6.1bn for the three-months ended December 31, whilst over the full year it more than doubled to US$23.6bn from US$12.1bn. And some US$4.15bn is to be returned to shareholders through dividends and share buy-backs.
“2021 shows bp doing what we said we would - performing while transforming,” said chief executive Bernard Looney.
“We've made strong progress in our transformation to an integrated energy company: focusing and high grading our hydrocarbons business, growing in convenience and mobility and building with discipline a low carbon energy business.”
BP’s separate statement to update on its transition strategy, meanwhile, added some detail to the firm’s intended move to ‘net zero’ by 2050. It says it is confident in delivering its 2025 targes and aims to grow EBITDA to 2030, sustaining resilient hydrocarbons business out to 2030.
The company said it now expects to generation US$33bn of EBITDA from hydrocarbons until 2025, then continuing at US$30bn to US$35bn a year until the end of the decade.
It noted that eleven new hydrocarbon projects have begun production since 2020, completing a six-year programme that kicked off 35 major new projects.
Looking ahead, it said that oil and gas production levels would reduce by 40% by 2030 (compared to 2019’s volumes) and it will focus on costs, performance, and high margin opportunities.
At the same time it pledges to be investing more than 40% of its capex into the transition business by 2025, and, aims for that unit to be generating US$9bn to US$10bn of EBITDA by 2030.
BP said it expects to be ‘net zero’ across operations, production and sales by 2050 or sooner.
"Over the past two years we have set a new purpose, direction and strategy for bp, and completed the largest re-organisation in our history,” Bernard Looney said.
“With this period of change fully behind us, we are now solely focused on driving value through the safe, efficient delivery of our strategy.
"We enter 2022 with growing confidence. The past two years have reinforced our belief in the opportunities that the energy transition presents - to create value for our shareholders and to get to net zero.”