On underlying parameters, the UK oil outfit showed advances, but a hefty impairment related to the company’s decision to relinquish its stake in Russian oil outfit Rosneft leads to a massive loss of USD 20bn.
On paper, 2022 should so far have been a prosperous time for any oil or gas company, as prices have skyrocketed. But as is often the case, reality looks quite different when all nuances are brought to the fore.
This is certainly the case for British supermajor BP, which comes out of the first quarter of the year with a deficit of USD 20.38bn. In comparison, the first quarter of 2021 came with a profit of USD 4.9bn.
The major difference is that BP made the decision in February to sell its 19.75% stake in Russian oil outfit Rosneft. The accounts reveal that the loss related to Rosneft amounts to a whopping USD 25.52bn.
”In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, bp’s focus has been on supplying the reliable energy our customers need. Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today,” says Chief Executive Officer of BP Bernard Looney in a comment on the fiscal results:
”But it has not changed our strategy, our financial frame, or our expectations for shareholder distributions. Importantly bp continues to perform and step-by-step we are making progress executing our IEC strategy – producing resilient hydrocarbons to provide energy security while investing with discipline in the energy transition.”
Deducting costs related to Rosneft, the underlying replacement cost profit comes to USD 6.2bn. In the same period last year, this item showed USD 2.63bn.
The top line also showed growth with total revenue amounting to USD 51.22bn against USD 36.49bn in Q1 2021. However, this is USD 1bn less in revenue than the Q4 2021 result of USD 52.23bn.
BP also reports lowering net debt to USD 27.5bn against USD 30.6bn at the end of 2021.
During Q1, divestments came to USD 1.2bn, and the UK supermajor expects total proceeds from divestment of between USD 2bn and USD 3bn in 2022.
Meanwhile, in the renewables division, BP reports that the pipeline has grown by 1.8GW to 24.9GW. This is primarily an upshot of BP and partner EnBW being awarded a lease in the ScotWind tender for an offshore wind project of 2.9GW.
