ENERGY giant BP, which is investing heavily in Teesside's energy revolution, has recorded impressive profits in the wake of soaring oil and gas prices.

The oil giant said underlying replacement cost profits jumped to $3.3 billion (£2.4 billion) in the three months to September 30, up from $86 million a year earlier when oil prices had slumped due to the pandemic.

Its third-quarter profits also mark a steep rise on the previous three months, when it notched up profits of $2.8 billion.

It unveiled another 1.25 billion US dollars (£915 million) of share buybacks, which it said will be completed before its full-year results announcement.

But it had to report a $2.9 billion quarterly loss as it booked a $6.1 billion hit from the accounting treatment of soaring forward gas prices.

BP chief executive Bernard Looney said: “This has been another good quarter for BP – our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations.

“Rising commodity prices certainly helped, but I am most pleased that, quarter by quarter, we’re doing what we said we would – delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation.”

Mr Looney is leading two major projects in Teesside, the carbon capture, utilisation and storage plant Net Zero Teesside Power (NZT Power), and H2 Teesside, the energy firm’s plan to create the UK’s first ‘blue’ hydrogen production facility.

Read more: BP boss on why they are investing in Teesside

NZT Power aims to be up and running within the next five years and, when complete, will create 5,500 direct jobs during its construction and add £450million to the economy each year. The scheme plans to capture up to 10million tonnes of CO2 emissions each year, equivalent to the emissions associated with the annual energy use of up to three million UK homes.

H2 Teesside, announced in March this year, is targeting 1GW of hydrogen production by 2030. The project converts natural gas into hydrogen and carbon dioxide, with two million tonnes of CO2 per year captured and also taken for subsea storage.

The prices of crude and gas have rocketed amid surging demand as the global economy has rebounded from the early days of the pandemic, while oil cartel Opec has increased production slowly after deep cuts made last year as the crisis struck.

BP and FTSE 100 Index rival Royal Dutch Shell have both enjoyed a boost to profits and delivered cheer to investors by increasing dividends and buying back shares.

BP has already completed the 1.4 billion US dollar (£1 billion) share buybacks announced at its second-quarter results, with another tranche also due to be announced at its full-year results early next year.

It said that, if Brent crude oil remains above 60 US dollars a barrel, the group should be able to buy back around 1 billion US dollars (£732 million) of shares each quarter and increase the dividend by 4% annually through to 2025.

BP also said it has continued paying down its debt, which had jumped in early 2020 amid the oil price collapse.

Its net debt stood at 32 billion US dollars (£23 billion), down from 32.7 billion US dollars (£23.9 billion) at the end of the second quarter.


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