If you want an illustration of the political dangers involved in making huge oil and gas profits in the UK, look no further than a £400 charitable donation from the head of BP.
That’s what Chief Executive Officer and Kerry man Bernard Looney had to offer in a quick piece of reputation management after it came out in an interview with The times Newspaper that he was unaware that the UK government is offering direct financial support to help families pay their soaring energy bills this winter.
Mr Looney, whose salary this year is £1.4million (€1.68million), has little need for the extra funds that will go to every household in the UK. Nonetheless, the incident is of paramount importance for a company like BP.
The rise in profits reported by the British company on Tuesday, which followed similar windfalls for other big oil and gas companies last week, is raising the temperature of policy debate over a cost-of-living crisis largely caused by higher energy prices.
Of the $8.45 billion in earnings BP posted for the second quarter, $3.5 billion will be used to buy back the company’s own stock and the dividend will increase by 10 percent increase. These handsome investor rewards sit awkwardly alongside the very real pain that many UK households will experience in the coming months.
Analysts at Cornwall Insight said they expect a typical household’s energy bill to be well over £3,000 by at least the end of 2023, an unprecedented rise that would push millions into poverty.
“I understand that people are under a lot of financial pressure here in the UK and around the world,” Mr Looney said in an interview. “We can all acknowledge that this is a very, very difficult situation. So the question is how can we help?”
BP is working flat out to solve the energy crisis, he said.
This could become the most important political issue for anyone who becomes the next UK Prime Minister. One of the candidates, former Chancellor of the Exchequer Rishi Sunak, has already imposed an unexpected tax on oil and gas companies to fund public support measures. That will cost BP’s North Sea business about $800 million in additional levies by the end of 2025, the company said.
If households need further financial support, the government may have to spend billions of pounds more. Calls for more taxes on the industry are getting louder.
“As households are plunged into poverty, with ramifications across the economy, fossil fuel companies are laughing to the bank,” Greenpeace UK senior scientist Doug Parr said in a statement. “The government needs to introduce a proper windfall tax on these monster profits.”
In addition to Mr. Looney’s donation, which will be matched by Chief Financial Officer Murray Auchincloss, the company highlighted its plans to raise up to $18 billion this decade. Those efforts are expected to create thousands of jobs across the country, the company said.
https://www.independent.ie/business/world/profit-surge-becoming-a-public-relations-problem-for-bp-executives-41886078.html Profit surge becomes a PR issue for BP executives