* BP reports $12.8 billion profit in 2021
* BP boosts share buybacks
* Fourth quarter profits hit $4.1 bln, beating forecasts
* BP expands greenhouse gas emission reduction plans
(Adds details, updates shares)
By Ron Bousso
LONDON, Feb 8 (Reuters) - BP's profits hit their
highest in eight years in 2021, lifted by soaring gas and oil
prices, as the company boosted share repurchases and accelerated
plans to cut emissions with increased spending on low carbon
energy.
BP's rebound to an annual profit of $12.85 billion after a
large loss in 2020, is likely to add to calls in Britain for
higher taxes on energy producers to help reduce consumers'
energy bills.
"It's all about one thing, one thing only - delivering the
strategy that we laid out. That's working," Chief Executive
Bernard Looney told Reuters.
The results were supported by higher oil and gas prices and
production, partly offset by weaker oil trading results and the
impact of higher energy costs on operations such as refining,
the company said.
Natural gas and electricity prices around the world have
soared since the middle of last year because of tight gas
supplies and higher demand as economies rebounded from pandemic
shutdowns. <LNG-AS>
In the fourth quarter of 2021, BP's underlying replacement
cost profit, the company's definition of net earnings, reached
$4.1 billion, exceeding analysts' expectations for a $3.93
billion profit.
That was the largest profit BP recorded since early 2013.
BP shares were up 0.75% by 1253 GMT, compared with a 0.2%
decline in the broader European energy index.
For the year, BP's $12.85 billion profit compared with a
loss https://www.reuters.com/article/us-bp-results-idUSKBN2A20M1
of $5.7 billion in 2020, when it wrote off the value of its oil
and gas assets by $6.5 billion following a slump in energy
demand.
BP's debt fell to $30.6 billion by the end of last year,
down by $8.3 billion from a year earlier.
The company maintained its dividend at 5.46 cents per share
and boosted its share repurchases targets to $1.5 billion per
quarter from $1.25 billion.
Capital spending will grow in 2022 to a range of $14 billion
to $15 billion, up from $12.8 billion in 2021.
Last week, Shell boosted its share buybacks and
dividend after fourth-quarter profits hit their highest in eight
years, helped by a strong gas trading performance.
LOW-CARBON SPENDING
Looney laid out plans in 2020 to cut BP's carbon emissions
in the coming decades by increasing its renewable power capacity
20-fold by 2030 and reducing its oil output by 40%, or more than
1 million barrels per day.
While maintaining its plan to spend $14-$16 billion per year
until 2025, in its strategy update on Tuesday BP said it will
increase the spending on low carbon energy, which includes
retail and electric vehicle charging, to 40% of total spending
by 2025 and 50% by 2030.
These businesses are expected to generate earnings of $9-$10
billion by 2030, BP said, seeking to assuage investor concerns
over the returns of low carbon businesses in the long term.
"We're not investing for growth" in oil and gas production,
Looney told analysts, even as BP expects fossil fuels to deliver
$33 billion in annual earnings until 2025.
BP also accelerated its carbon emissions reduction plans,
now aiming to cut to net zero all greenhouse gas emissions from
its operations, production and sales by 2050, catching up with
rivals including Shell and Norway's Equinor.
The new decarbonisation targets double the carbon emissions
BP will need to cut or offset to 2 billion tonnes, Looney said.
"We are accelerating the greening of BP. Our confidence is
growing in the opportunities that the energy transition offers,"
Looney said.
(Reporting by Ron Bousso, Editing by Louise Heavens, Barbara
Lewis, Kirsten Donovan)