BP profits slump to lowest level in four years as the oil and gas industry brace for a Budget tax raid

BP profits slump to lowest level in four years as the oil and gas industry brace for a Budget tax raid By Jessica Clark Updated: 18:22 EDT, 29 October 2024 e-mail View comments BP yesterday posted its lowest quarterly profits since the pandemic as the oil and gas industry braced for a Budget tax raid. The energy giant’s third quarter earnings fell 30 per cent to £1.8billion – the lowest level in four years – amid a slowdown in global economic activity and oil demand, particularly in China.

While profits beat analyst expectations, the drop places further scrutiny on boss Murray Auchincloss who has come under pressure to improve BP’s performance. Oil slump: BP's third quarter earnings fell 30% to £1.8bn – the lowest level in four years – amid a slowdown in global economic activity and oil demand, particularly in China Auchincloss, who took over from disgraced former chief executive Bernard Looney this year, did not shine any light on the oil giant’s future strategy following reports that BP is rowing back on its shift to green energy.



It comes as Chancellor Rachel Reeves is today expected to increase the windfall tax on energy company profits – taking the overall levy on the industry to 78 per cent, among the highest in the world. The windfall tax, which was originally introduced in response to soaring energy prices following Russia’s invasion of Ukraine, will also be extended until the end of the decade. And in a further setback for the oil and gas sector, the Government is also preparing to scrap tax incentives for investment and block new exploration licences.

Analysts said the impact of the windfall tax will be very small on BP due to its limited operations in the North Sea. RELATED ARTICLES Previous 1 Next Takeover looms over Hargreaves as investment platform..

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. Share this article Share HOW THIS IS MONEY CAN HELP How to choose the best (and cheapest) stocks and shares Isa and the right DIY investing account But the business will be hit by the removal of investment allowances which could accelerate decommissioning and push up its capital expenditure. It comes as investors seek clarity on BP’s strategy amid concerns that the energy giant has underperformed London-listed rival Shell and US competitors Chevron and ExxonMobil.

Auchincloss, who was previously BP’s finance chief, sought to reassure shareholders, saying: ‘I am absolutely clear that the actions we are taking will grow the value of BP.’ And the company announced a £1.35billion share buyback, sticking to its pledge to repurchase £2.

7billion of shares in the second half of the year. Russ Mould at AJ Bell said the earnings reports ‘will have done little to alleviate the pressure’ on the Canadian-born businessman. ‘While better than nothing, buybacks on their own clearly won’t be enough to win the market over, particularly against a backdrop of lower profit and cash flow and mounting debt,’ he said.

‘Ultimately, BP has lots of work to do to convince investors it has a clear strategy for the future.’ John Moore at wealth manager RBC Brewin Dolphin said the share buybacks and dividends would be ‘welcome by the market’ but he said ‘there has been a feeling of uncertainty around the company’s strategic financial priorities’. DIY INVESTING PLATFORMS AJ Bell AJ Bell Easy investing and ready-made portfolios Learn More Learn More Hargreaves Lansdown Hargreaves Lansdown Free fund dealing and investment ideas Learn More Learn More interactive investor interactive investor Flat-fee investing from £4.

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