Oil giant BP has revealed that profits tumbled by more than two-thirds over the latest quarter, falling below expectations.
The company said on Tuesday that it will hand more cash to investors through higher dividends and a further share buyback despite the weaker performance.
The FTSE 100 giant posted underlying replacement cost profit – the firm’s preferred measure – of US$2.59bn (£2bn) for the second quarter of 2023.
That compares with an US$8.45bn (£6.6bn) profit over the same period last year, when it was boosted by a surge in oil and gas prices.
BP blamed the decline in profits on planned maintenance work and lower margins in its refining business.
It comes a week after rival oil major Shell also delivered weaker-than-expected profits for its latest quarter.
BP said the performance takes its total profits for the first half of 2023 to US$7.5bn (£5.9bn).
The company added that its North Sea business paid US$970 (£755m) in tax over the half-year, with US$460m (£358m) due to the energy profit levy windfall tax.
The update comes a day after Prime Minister Rishi Sunak insisted he wants to “max out” developments in the North Sea and claimed Labour’s refusal to support new oil and gas fields would be “bad for the British economy”.
BP chief executive Bernard Looney said: “Another quarter of performing while transforming.
“Our underlying performance was resilient with good cash delivery during a period of significant turnaround activity and weaker margins in our refining business.
“We’re delivering our strategy at pace – we’ve started up two major oil and gas projects to help keep energy flowing today and we’re accelerating our transformation through our five transition growth engines.
“And we’re delivering for shareholders, growing our dividend and announcing a further share buyback.”
Scottish Greens climate spokesperson Mark Ruskell said: “This is shameless and climate-wrecking profiteering. We are on the verge of environmental breakdown but oil giants like BP are making billions of pounds of profit and cashing in every step of the way.
“If we are to have a sustainable future then we need to fundamentally change our energy system so that it works for people and the planet rather than polluters.
“Yet, at a time when we need to be investing in a green recovery, anti-climate governments like the one in Downing Street are doubling down on fossil fuels.
“July was the world’s hottest month on record, but only yesterday we saw the Prime Minister announcing another 100 new oil and gas exploration licences.
“Rishi Sunak should be listening to the United Nations and the many scientists who are calling for an end to new fossil fuel exploration.
“Renewable energy is the cheapest and cleanest energy available. If we are to build a greener and better future then that is what we need to be investing in.
“A windfall tax full of loopholes is not good enough. We urgently need major investment in renewables and a just transition away from dirty and polluting industries.
“We are taking vital steps here in Scotland, but we are constantly being held back by a Tory Party that is more interested in maximising the profits of its friends in the oil and gas industry than it is with the future of our environment.”