British multinational oil and gas company BP has announced one of the largest first-quarter profits in its history, reporting earnings of $5bn (£4bn) for the first three months of 2021. In response to these impressive financial results, the company increased dividend payouts and revealed plans to buy back $1.75bn worth of its own shares as a reward for investors.
This development has reignited discussions surrounding whether oil and gas firms should face increased windfall taxes on their profits—a measure that the Labour party has advocated for in the past. During this quarter alone, BP faced $3.4bn worth of taxes worldwide, including $650m imposed on its UK North Sea operations.
Last week, American oil giants ExxonMobil and Chevron also posted substantial profits; Shell is expected to report similar gains during their first-half trading announcement later this week.
Although BP's Q1 profit exceeded forecasts at $5bn (£4bn), it fell short compared to last year's figures—$6.2 billion recorded during the same period—due mainly to declines in oil and gas prices. The energy giant has garnered additional criticism after scaling back targets aimed at reducing emissions by decade's end.
Nick Butler, former BP executive and current visiting professor at King’s College London attributed these robust results not only to "a good internal business performance," but also "high prices around the world."
In 2020, an initiative led by the UK government saw a windfall tax levied on profits generated from extracting domestic oil and gas resources introduced; revenues from this tax will be directed towards alleviating high electricity bills incurred by households throughout Britain. Consequently, total taxation rates applied within this sector now stand at approximately 75%.