BP has rebounded strongly from the pandemic with hefty annual profits of £9.5bn ($12.8bn), its best yearly result since 2013.
The oil and gas giant has benefitted from highly favourable market conditions such as sustained oil market rallies which has seen prices surge above $90 per barrel on both major benchmarks, and historically high wholesale gas prices which increased five-fold over the course of last year.
It has also reported cash flows of $6.1bn, while BP’s net debt has dropped to $30.6bn at the end of the fourth quarter – a reduction of $8.3bn compared to this time last year.
The results reflect a remarkable recovery for the firm, which suffered from crippling conditions during the pandemic, when declining demand and turbulent economic conditions meant BP recorded a yearly loss of $5.7bn in 2020.
Tightening supplies and sustained demand as pandemic conditions ease are likely to maintain BP’s recovery over the course of 2022.
Assuming an oil price of $60 per barrel, the group plans to increase its dividend by four per cent and deliver around $4bn in buybacks each year to 2025.
Alongside impressive results in oil and gas, it has also bolstered its net zero plans, with BP set to double the amount of money it invests in the UK through the middle of the decade.
The vast majority of the investment will be in energy transition sources such as offshore wind and hydrogen power.
Chief executive Bernard Looney said: “2021 shows BP doing what we said we would – performing while transforming.”