In the News
Energy Economics - BP makes record profits
Yet more news of supernormal profits in the oil and gas industry. BP has announced a surge in profits making $7 billion in the 3rd quarter of 2022.
We find that BP breaks even on their oil production when the world price of crude is around $40 per barrel whereas a price in excess of $80 per barrel they effectively become a “cash machine.”
In the UK, energy companies such as BP and Shell pay a total tax rate of 65% on their profits, including the windfall levy.
BP expects to pay £2.17 billion in tax on its North Sea operations this year. Around £700 million of this will be the Energy Profits Levy that came into force earlier this year.
The business has made £20 billion profit so far this year and - in common with many other oil and gas giants - billions have been handed out in dividends and allocated to share buyback programmes for investors. (A share buy-back increases the share price ceteris paribus).
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