BP posts record profit, dilutes green target

British energy giant BP on Tuesday announced record annual profit thanks to soaring oil and gas prices, as it watered down its target for cutting carbon emissions.

BP's underlying profit more than doubled to a record $27.7 billion last year, sparking renewed outrage from green groups and unions demanding far greater action on tackling climate change and a cost-of-living crisis.

The huge earnings mirror record profits by BP rivals after the invasion of Ukraine by major fossil-fuels producer Russia hit supplies and pushed the West into beefing up its energy security.

BP's exit from its 19.75-percent stake in Russian energy group Rosneft cost it more than $24 billion, however.

That pushed it into a loss after tax totalling $2.5 billion last year, compared with net profit of $7.6 billion in 2021.

BP on Tuesday also said its carbon emissions would not fall as quickly as anticipated.

The company expects carbon emissions from oil and gas production to fall by between 20-30 percent in 2030 compared to 2019.

This compared with its prior forecast for a drop of 25-40 percent.

"We need continuing near-term investment into today's energy system -- which depends on oil and gas -- to meet today's demands and to make sure the transition is an orderly one," said chief executive Bernard Looney.

"We will prioritise projects where we can deliver quickly, at low cost, using our existing infrastructure, allowing us to minimise additional emissions and maximise both value and our contribution to energy security and affordability."

Speaking later on an investor webcast, Looney said BP's "ambition and aims, taken together, are consistent with the goals of the Paris Agreement" which says global greenhouse emissions must drop 45 percent by 2030 to limit global warming to 1.5 degrees Celsius.

Environmentalists hit out the strategy update.

"Not only will BP's new strategy fail to deliver much-needed energy security in the UK but it will ensure that people across the globe already battling devastating droughts, floods and heatwaves, will continue losing their lives and livelihoods," said Kate Blagojevic, Greenpeace UK head of climate justice.

"It's time to stop drilling and start making polluters... pay the price for the climate damage they are causing all around the world."

The record profits come as consumers face soaring heating and electricity bills, which has triggered widespread calls for energy majors to pay more tax to ease a cost-of-living crisis.

Unions and members of the opposition Labour party again called on the Conservative government to increase its windfall tax on the likes of BP and British rival Shell.

"As millions struggle to heat their homes and put food on the table, BP are laughing all the way to the bank," said Paul Nowak, general secretary of the Trades Union Congress.

"Ministers are letting big oil and gas companies pocket billions in excess profits. But they are refusing to give nurses, teachers and other key workers a decent pay rise."

Britain is facing its biggest strikes in more than a decade as public and private sector workers demand that pay increases go some way to matching sky-high inflation.

Downing Street defended the government's current windfall tax policy on energy companies -- a 35-percent additional levy on profits until 2028.

"We think we are striking the balance between funding significant cost-of-living support for families and businesses while also encouraging investment into the North Sea (oil and gas) to boost things like the UK's energy security," Prime Minister Rishi Sunak's official spokesman said.

Markets cheered BP's record underlying profits -- and huge fourth-quarter net earnings that came in at almost $11 billion.

BP's shares jumped over six percent in afternoon deals, rising to the top on London's top-tier FTSE 100 index.

Energy majors are rewarding shareholders in the form of dividend hikes and share buybacks.

BP said its fourth-quarter dividend would rise 10 percent and announced a fresh buyback totalling $2.75 billion.

Oil majors have recovered massively since posting record losses in 2020 as Covid lockdowns shut factories and grounded planes.