BP posts record 2022 earnings to join Big Oil profit bonanza
Oil major BP on Tuesday reported record annual profits, more than doubling last year’s total as fossil fuel prices soared following Russia’s full-scale invasion of Ukraine.
The British energy giant posted underlying replacement cost profit, used as a proxy for net profit, of $27.7 billion for 2022. That compared with $12.8 billion for the previous year.
Analysts polled by Refinitiv had expected net profit of $27.6 billion for full-year 2022. BP said its previous annual profit record was $26.3 billion in 2008.
For the fourth quarter, BP posted net profit of $4.8 billion, narrowly beating analyst expectations of $4.7 billion.
BP announced a further $2.75 billion share buyback, which it expects to complete prior to announcing its first-quarter 2023 results in early May. It also boosted its dividend by 10% to 6.61 cents per ordinary share.
BP CEO Bernard Looney described the earnings as “a good set of results.”
“First of all, I hope you can see a company that is performing well, performing while transforming. We had our highest operations reliability in our history, we had the lowest production cost in 16 years so the business itself is running very well,” Looney told CNBC’s “Squawk Box Europe” Tuesday.
“Secondly, we’re leaning into our strategy today. We’re announcing up to $8 billion more investment into the energy transition this decade and up to $8 billion more into oil and gas in support of energy security and energy affordability this decade,” he added. “And thirdly, it’s about making sure we return to our shareholders.”
BP said fourth-quarter net debt was reduced to $21.4 billion, down from $30.6 billion when compared to the same period a year earlier.
Shares of BP rose over 4% during early morning deals in London.
The extraordinary scale of the oil and gas industry’s earnings has renewed criticism and sparked calls for higher taxes.
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The results see BP join Big Oil’s profit bonanza.
British rival Shell on Thursday posted its highest-ever annual profit of nearly $40 billion. Before that, U.S. oil giant Exxon Mobil reported a $56 billion profit for 2022, marking a historic high for the Western oil industry. Chevron‘s 2022 profits came in at a record $36.5 billion.
The West’s largest fossil fuel companies are expected to have raked in combined profits of almost $200 billion for the year, according to Refinitiv data. France’s TotalEnergies is slated to report full-year earnings on Wednesday.
The extraordinary scale of the earnings has renewed criticism of the oil and gas industry and sparked calls for higher taxes.
“People across the country need look no further than their own front door – one of Britain’s own oil companies – which has been making records profit while so many Brits face hardship through no fault of their own,” said Jonathan Noronha-Gant, senior campaigner at advocacy group Global Witness.
“Implementing a windfall tax to aid those struggling financially, paired with a significant increase in renewable energy and home insulation, could be the start of the end to the damaging fossil fuel era, both for people and the planet. BP is richer because you’re poorer,” Noronha-Gant said.
John Moore, senior investment manager at RBC Brewin Dolphin, said BP’s record results underpinned the dividend increase and additional share buybacks.
“It’s fair to say that following the period covered by these results the oil price has weakened, while BP is also emphasising its investment in renewables and its commitment to changing how the company operates,” Moore said.
“But, even allowing for these factors, there will inevitably be a backlash against today’s results in the current climate. They will only add to calls for political intervention at some point in the near future.”
‘Energy trilemma’
In recent quarters, Big Oil executives have sought to defend their rising profits and said the significant disruption to global energy markets due to the war in Ukraine has reaffirmed the importance of solving “the energy trilemma.”
According to a statement to investors from BP’s Looney late last year, this refers to “secure, affordable and lower carbon energy.”
BP, which in 2020 set out its ambition to become a net zero company “by 2050 or sooner,” recently predicted that oil and gas would become a dramatically smaller part of the global energy mix by the middle of the century.
In its latest annual energy outlook, published on Jan. 30, the company said it sees the share of fossil fuels as a primary energy source falling from 80% in 2019 to between 55% and 20% by 2050. The share of renewables in primary energy, meanwhile, was projected to grow from 10% to between 35% and 65% over the same time period.
The wide range of outcomes reflects several possible paths for the energy transition. But in each of BP’s three scenarios, the pace with which renewables enter the global energy system is “quicker than any previous fuel in history,” the report said.
— CNBC’s Catherine Clifford contributed to this report.
On today’s fleet-focused episode of Quick Charge, we talk about a hot topic in today’s trucking industry called, “the messy middle,” explore some of the ways legacy truck brands are working to reduce fuel consumption and increase freight efficiency. PLUS: we’ve got ReVolt Motors’ CEO and founder Gus Gardner on-hand to tell us why he thinks his solution is better.
You know, for some people.
We’ve also got a look at the Kenworth Supertruck 2 concept truck, revisit the Revoy hybrid tandem trailer, and even plug a great article by CCJ’s Jeff Seger, who is asking some great questions over there. All this and more – enjoy!
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Thanks to Trump’s repeated executive order attacks on US clean energy policy, nearly $8 billion in investments and 16 new large-scale factories and other projects were cancelled, closed, or downsized in Q1 2025.
The $7.9 billion in investments withdrawn since January are more than three times the total investments cancelled over the previous 30 months, according to nonpartisan policy group E2’s latest Clean Economy Works monthly update.
However, companies continue to invest in the US renewable sector. Businesses in March announced 10 projects worth more than $1.6 billion for new solar, EV, and grid and transmission equipment factories across six states. That includes Tesla’s plan to invest $200 million in a battery factory near Houston that’s expected to create at least 1,500 new jobs. Combined, the projects are expected to create at least 5,000 new permanent jobs if completed.
Michael Timberlake of E2 said, “Clean energy companies still want to invest in America, but uncertainty over Trump administration policies and the future of critical clean energy tax credits are taking a clear toll. If this self-inflicted and unnecessary market uncertainty continues, we’ll almost certainly see more projects paused, more construction halted, and more job opportunities disappear.”
March’s 10 new projects bring the overall number of major clean energy projects tracked by E2 to 390 across 42 states and Puerto Rico. Companies have said they plan to invest more than $133 billion in these projects and hire 122,000 permanent workers.
Since Congress passed federal clean energy tax credits in August 2022, 34 clean energy projects have been cancelled, downsized, or shut down altogether, wiping out more than 15,000 jobs and scrapping $10 billion in planned investment, according to E2 and Atlas Public Policy.
However, in just the first three months of 2025, after Trump started rolling back clean energy policies, 13 projects were scrapped or scaled back, totaling more than $5 billion. That includes Bosch pulling the plug on its $200 million hydrogen fuel cell plant in South Carolina and Freyr Battery canceling its $2.5 billion battery factory in Georgia.
Republican-led districts have reaped the biggest rewards from Biden’s clean energy tax credits, but they’re also taking the biggest hits under Trump. So far, more than $6 billion in projects and over 10,000 jobs have been wiped out in GOP districts alone.
And the stakes are high. Through March, Republican districts have claimed 62% of all clean energy project announcements, 71% of the jobs, and a staggering 83% of the total investment.
A full map and list of announcements can be seen on E2’s website here. E2 says it will incorporate cancellation data in the coming weeks.
Read more: FREYR kills plans to build a $2.6 billion battery factory in Georgia
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Tesla has reportedly delayed the launch of its new “affordable EV,” which is believed to be a stripped-down Model Y, in the United States.
Last year, Tesla CEO Elon Musk made a pivotal decision that altered the automaker’s direction for the next few years.
The CEO canceled Tesla’s plan to build a cheaper new “$25,000 vehicle” on its next-generation “unboxed” vehicle platform to focus solely on the Robotaxi, utilizing the latest technology, and instead, Tesla plans to build more affordable EVs, though more expensive than previously announced, on its existing Model Y platform.
Musk has believed that Tesla is on the verge of solving self-driving technology for the last few years, and because of that, he believes that a $25,000 EV wouldn’t make sense, as self-driving ride-hailing fleets would take over the lower end of the car market.
However, he has been consistently wrong about Tesla solving self-driving, which he first said would happen in 2019.
In the meantime, Tesla’s sales have been decreasing and the automaker had to throttle down production at all its manufacturing facilities.
That’s why, instead of building new, more affordable EVs on new production lines, Musk decided to greenlight new vehicles built on the same production lines as Model 3 and Model Y – increasing the utilization rate of its existing manufacturing lines.
Those vehicles have been described as “stripped-down Model Ys” with fewer features and cheaper materials, which Tesla said would launch in “the first half of 2025.”
Reuters is now reporting that Tesla is seeing a delay of “at least months” in launching the first new “lower-cost Model Y” in the US:
Tesla has promised affordable vehicles beginning in the first half of the year, offering a potential boost to flagging sales. Global production of the lower-cost Model Y, internally codenamed E41, is expected to begin in the United States, the sources said, but it would be at least months later than Tesla’s public plan, they added, offering a range of revised targets from the third quarter to early next year.
Along with the delay, the report also claims that Tesla aims to produce 250,000 units of the new model in the US by 2026. This would match Tesla’s currently reduced production capacity at Gigafactory Texas and Fremont factory.
The report follows other recent reports coming from China that also claimed Tesla’s new “affordable EVs” are “stripped-down Model Ys.”
The Chinese report references the new version of the Model 3 that Tesla launched in Mexico last year. It’s a regular Model 3, but Tesla removed some features, like the second-row screen, ambient lighting strip, and it uses fabric interior material rather than Tesla’s usual vegan leather.
The new Reuters report also said that Tesla planned to follow the stripped-down Model Y with a similar Model 3.
In China, the new vehicle was expected to come in the second half of 2025, and Tesla was waiting to see the impact of the updated Model Y, which launched earlier this year.
Electrek’s Take
These reports lend weight to what we have been saying for a year now: Tesla’s “more affordable EVs” will essentially be stripped-down versions of the Model Y and Model 3.
While they will enable Tesla to utilize its currently underutilized factories more efficiently, they will also cannibalize its existing Model 3 and Y lineup and significantly reduce its already dwindling gross margins.
I think Musk will sell the move as being good in the long term because it will allow Tesla to deploy more vehicles, which will later generate more revenue through the purchase of the “Full Self-Driving” (FSD) package.
However, that has been his argument for years, and it has yet to pan out as FSD still requires driver supervision and likely will for years to come, resulting in an extremely low take-rate for the $8,000 package.
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