Environmental activists have criticized BP’s decision to increase shareholder returns following two years of substantial profits. The oil giant, alongside its competitor Shell, announced plans for additional share buybacks worth $3.5 billion (£2.8 billion) for the first half of the year, aiming for at least £14 billion (£11.1 billion) in buybacks over 2024-25.
Furthermore, BP raised its dividend by 10% year-on-year to 7.27 cents per share in the fourth quarter.
According to Global Witness, BP’s distributions to shareholders have risen by 43% compared to the five-year average, amounting to $12.7 billion (£10.2 billion) in 2023. The organization pointed out that these payouts could fund the estimated costs of natural disasters for several years in countries like the UK, Australia, and Germany.
Jonathan Noronha-Gant, a senior campaigner, commented:
BP’s shareholders are significantly benefiting from the Ukraine-Russia conflict. BP, holding a substantial stake in the Russian oil company Rosneft, gained considerably from the disruptions in energy markets caused by the war. Instead of investing in clean energy or aiding war victims, BP chose to distribute these profits to its investors.
He argued that shareholders should focus on safeguarding their long-term interests by advocating for a swift transition to clean energy in companies like BP. He criticized the current large payouts to shareholders as counterproductive to this goal.
BP’s shares surged by 5.4% following the announcement of higher-than-anticipated profits and a $3.5 billion share buyback plan. As the top performer on the FTSE 100, the oil company significantly contributed to the index’s rise, also positively impacting its competitor Shell with a 1% increase. This activity has led to a 0.9% uplift in the UK’s premier stock market in early trading sessions.
The FTSE 100 experienced a positive opening
Buoyed by a surge in energy stocks following impressive results from BP, a major player in the industry. This uplift puts the blue-chip index on course to break a four-day losing streak with a 1% increase. Meanwhile, the mid-cap FTSE 250 index saw a 0.3% rise.
BP’s shares jumped 6.2% after the company reported a fourth-quarter profit that exceeded expectations and accelerated its share buyback program. This news also spurred a broader advance in oil and gas stocks, which climbed as much as 3.1%, further supported by a rise in crude oil prices.
Additionally, the industrial metal miners index gained up to 1.5% following state-supported purchases of Chinese stocks.
Investors are now looking forward to the release of the S&P Global Purchasing Managers’ Index (PMI) for the UK’s economic output in January and the UK construction PMI, both expected later in the day.
In other news, a survey indicated that British retailers experienced slow sales in January, with consumers remaining cautious about spending.
In the financial sector, Prudential’s shares increased by 3.3% after Barclays raised its price target for the insurance company’s stock.
