Member Info for meoryou

Enso
I don’t think a couple of good quarters should ever deserve a windfall tax especially in an industry that measures project success in multiple years.
However it’s being made a cause by the media.
Maybe a conversation to plan how future windfalls will be recognised and taxed is becoming likely.
I think it’s time we actually simplified the tax system so that none of these anomalies need to be looked at .
Profit will be taxed after allowances and not tax at one point , then something that’s a tax but called something else taxed at another point.
Eg national insurance or road tax that just are taxes spent wherever they want
BP pays many different taxes let’s just tax profits.

Monomania
Politicians only think about two things
1) how to take money from people and companies.
2) how to get re elected
Occasionally something else they want happens to coincide with doing some good

The papers and tv are determined that this will happen.
Sure for some people a drop of 17.5 p when shares went ex div is proof of what shareholders must be getting ( rather than the 4.3 p we will really get).

British oil and gas major bp has submitted bids for the Hollandse Kust (west) VI and VII offshore wind farm leases in the Netherlands.

The bids are said to underpin extensive and transformational plans for a series of further integrated clean energy investments by bp in the Netherlands, applying the breadth of its businesses and experience to support the decarbonisation goals of Rotterdam region and the country more widely.
Hollandse Kust (west) is located approximately 53 kilometres off the country’s west coast and contains two wind farm sites with a a combined capacity of around 1.4 GW and covering a total area of 176 square kilometres.

”Delivering a net zero future demands more than just generating renewable power offshore – we need to create an integrated energy system with renewables at its centre. We plan on doing just that in the Netherlands,” Anja-Isabel Dotzenrath, bp’s executive vice president of gas and low carbon energy, said.
We will apply bp’s integrated energy company strategy to integrate green energy supply and demand across the energy system. This includes using offshore wind power to electrify industry and mobility. And also using renewable power to produce green hydrogen, to help to decarbonize hard-to-electrify sectors such as aviation, refining and heavy-duty mobility. These clean energy developments support the Netherlands’ ambitious emissions reduction aims.”

BP p.l.c. (the "Company") announces that on 11 May 2022 it has purchased, in accordance with the authority granted by shareholders at the 2021 Annual General Meeting of the Company, a total of 19,095,430 of its ordinary shares of $0.25 each ("Shares") on the London Stock Exchange and Cboe (UK) as part of the buyback programme announced on 3 May 2022 (the "Programme") and as detailed below:
Highest price paid per Share (pence): 420.45
Lowest price paid per Share (pence): 403.
Volume weighted average price paid per Share (pence): 414.8301

I think psychologically tomorrow it will be important as we go ex div that £4 support level holds.
I think the buybacks will be huge again and lend some support.
Once again time will tell if it holds.
America is very volatile just now , just when you think it’s settled down off it goes again.
Only consolation is the ups are as wild as the downs

If you look back to beginning of thread it started because boss of Tesco said energy companies should get a windfall tax and I stated it was funny how he didn’t jump up wanting windfall tax on supermarkets when they were the only ones open during lockdown.
It then took on a life of its own

I do quickly check the figures, but I suspect you are better at reading a balance sheet than me.
I am getting there , but for many years the only important figure was the div.

Thanks Enso
I did not notice I was looking at net debt figures.
I have read that at 2.5 billion in buybacks per quarter we can potentially but back about 10% of shares in a full year.
I personally can’t see how that much would not start to move sp in a positive direction.
But as you say reducing share count , reducing debt what’s not to like

BP p.l.c. (the "Company") announces that on 10 May 2022 it has purchased, in accordance with the authority granted by shareholders at the 2021 Annual General Meeting of the Company, a total of 18,871,319 of its ordinary shares of $0.25 each ("Shares") on the London Stock Exchange and Cboe (UK) as part of the buyback programme announced on 3 May 2022 (the "Programme") and as detailed below
Highest price paid per Share (pence): 411.1
Lowest price paid per Share (pence): 400.2
Volume weighted average price paid per Share (pence): 407.2544

Harmonica.
I thought the debt was 27 billion at results day with 3 billion payed back in last quarter?
If I am correct that would take 9 quarters to pay all back.
Even less if money comes in from Rosneft.
In any case I would not expect them to pay off all debt as they usually say it’s efficient to keep some.
I’m not a fan of Windfall tax , my point was about improving our return , by accepting it won’t go away if we continue to make lots of cash.
Thanks for your comment

Theaky when the debt is payed down to a sensible level what else can they do with the cash except give it back to shareholders.
The buybacks can’t go up much more

My point was that in the next year or two debt will have been paid down to a low level.
That money must be then be diverted to pay shareholders.
If the div is increased ( probably to at least to 8p per quarter) then the windfall argument will have a lot of fuel to bash BP.
If we get windfall out of way and can then reward shareholder with at least double div ( 8 p or more). and sp somewhere above £5 then I can accept it as a price to pay.
I agree with all the arguments that we haven’t had a windfall, but some say div can’t be increased or we will get windfall tax .
I an saying maybe better to just get it over with and then give back to shareholders.
It’s just my opinion as politicians aren’t going to go away

i agree it’s getting to the point where we can afford to make a Windfall gesture.
And as you say make as much pr and political capital out of it as possible.
If we do it at end of year reporting , by then hopefully we will have paid a tonne of debt and can then use the money that would have paid debt to possibly double div without worrying about pr as we will have already paid a windfall tax bill.
Hopefully if we are first mover in accepting a Windfall tax we can make it as inclusive as possible and catch anyone making any windfalls .

Tesco chairman John Allan on Tuesday said there was an "overwhelming case" for a windfall tax on energy companies to help ease the cost-of-living crisis for most Britons.
Funny I don’t remember him calling for a windfall tax on super markets when they were the only ones open during lockdown

Upheaval resulting from the war in Ukraine and the growing isolation of Russia, the world’s biggest energy exporter, has stoked unprecedented volatility in commodity markets that has highlighted the need for the companies that keep commodities flowing, Looney said. “The role for a company like BP has never been clearer.”

It is not just the oil majors that are making bumper profits from trading. Glencore said last month its trading business was set for another strong year as it cashes in on the wild price swings and supply disruptions caused by the invasion of Ukraine.

Based on its performance in the first three months of the year, the FTSE 100 company expects earnings from its marketing unit to be “comfortably” above the top end of its guidance range of $2.2bn-$3.2bn.

If achieved, that would make it the third straight year the unit, a big trader of industrial metals and coal as well as oil, has exceeded its forecast profits.
Glencore’s performance suggests the big privately owned commodity traders — a group that includes Vitol, Trafigura, Mercuria and Gunvor — are also likely to score big profits this year. Speaking at the FT Commodities Global Summit in March, Trafigura executive chair Jeremy Weir said 2022 had “the potential to be a significant year again”.

Some of the privately owned traders provide greater transparency on their trading activities than either Shell or BP. These details come in the reports they publish for holders of their bonds, which are publicly listed. Gunvor’s recently published annual update weighed in at 84 pages.

But trading is not without risk. As the middlemen of the global economy, linking the suppliers of raw materials — often in developing countries — with consumers, their activities have drawn scrutiny from international prosecutors. Vitol and Gunvor have both settled oil trading corruption cases in the past two years, while Trafigura is facing a probe in Brazil and Glencore is under investigation in the UK, US and Brazil.

In March, more than two weeks into the war in Ukraine, Shell chief executive Ben van Beurden had to apologise after Shell traders acquired a heavily discounted cargo of Russian crude to supply one of its refineries. Like most of its peers, the company has now said it will not trade any more Russian products and will not renew long-term supply contracts once they expire.

Commodity analysts are predicting continued volatility as changing geopolitics reshape trade flows, and the energy system shifts to include more renewable power. In that new world, getting trading right and learning how to communicate that success to investors will be increasingly important, particularly as BP, Shell and Total build out their renewables businesses, said Bernstein’s Clint.

“It’s unique, it’s an edge and it deserves to be better valued,” he said. “The big question I have is, can they translate those skills, built up over the last two decades trading molecules, into trading electrons?”

As Europe’s biggest energy companies reported record profits for the first three months of the year, each singled out different parts of their business for praise. But there was one constant: trading.

BP’s highest quarterly earnings since 2008 were driven by “exceptional oil and gas trading”. TotalEnergies noted the “outperformance” of its oil trading activities and the “very good performance” of its gas and electricity dealers. At Shell, “higher trading and optimisation margins for gas and power, due to exceptional market environment”, resulted in the highest quarterly profit on record.
But beyond these qualitative statements none of the three provided any further breakdown of the financial performance of their various trading units or their contribution to overall group profits.

The companies say the traders are integrated into different parts of the business, making it difficult to strip out their performance. BP’s oil trading profits, for example, are attributed to the customers and products division, where the unit that refines and trades oil reported earnings before interest, taxes, depreciation and amortisation of $2.03bn.
The trading teams, however, are not only placing the company’s production with customers. They also buy and sell third-party volumes of oil, gas and other commodities for profit, making them significant revenue generators in their own right.

“BP, Shell and Total have an edge and it is unique to these three companies,” said Oswald Clint at Bernstein, adding that the US oil majors and other international oil companies had struggled to replicate that kind of trading capability.
The last time BP published a breakdown of trading revenue in its annual results was in 2005, when its profits from oil, gas and power dealing reached $2.97bn.
By comparing the delta between the revenues BP would have generated from selling its own production with the reported earnings for its different divisions, Clint calculates BP could have made as much as $1.2bn from gas trading and $400mn from oil trading in the first quarter.
Such returns can make traders among an oil company’s best paid staff. BP’s lead oil trader for West Africa was paid a $3.75mn bonus after his team of four traders made a profit of $72mn in 2016, according to court filings from a current employment tribunal.
Shell, the world’s largest trader of liquefied natural gas, produced 8mn tonnes of the fuel in the first three months of this year but sold 18.3mn tonnes. Prices for LNG cargoes have soared as European efforts to reduce dependence on piped gas from Russia have increased competition.
It’s certainly not luck, because if we rely on luck to run the business that means we can have bad luck as well,” BP chief executive Bernard Looney told the Financial Times. “The trading business’s first job is to make sure that molecules flow around the world and one of the things that’s been hugely challenging for the energy system today is the redirection of energy flows.”

I am sure that there is a very large chance of a recession happening , but will it happen properly before year end ?
I think we may limp along for months not sure if we end up in recession.
If definition of a recession is 3 quarters of negative growth we won’t know till next year.
Think as always there will be those who can still carry on as normal ( maybe even better than normal) , and those in great financial difficulty, and maybe a third class of those who are ok but have to chose what they don’t spend on.
Think what I am really saying is demand destruction might not be as bad as feared and some may be balanced by Russia.
BP trading thrives on volatility and I think there is going to be plenty of that.

BP p.l.c. (the "Company") announces that on 9 May 2022 it has purchased, in accordance with the authority granted by shareholders at the 2021 Annual General Meeting of the Company, a total of 18,767,415 of its ordinary shares of $0.25 each ("Shares") on the London Stock Exchange and Cboe (UK) as part of the buyback programme announced on 3 May 2022 (the "Programme") and as detailed below:

Highest price paid per Share (pence):
430.9500

Lowest price paid per Share (pence):
406.2500
Ave price
419.7878
That looks like a monster amount of shares bought.
Could have fallen a lot more without buybacks

Clean Planet Energy will process hard-to-recycle waste plastic into naphtha, a petrochemical feedstock that can be used in plastic production to support a circular supply chain. Clean Planet Energy will also be producing Ultra Low Sulphur Diesel
bp will receive the output of Clean Planet Energy’s first facility which is under construction in Teesside and the right to offtake from future plants globally
Clean Planet Energy's planned ecoPlant in Teesside
bp has signed a ten-year offtake agreement with Clean Planet Energy, a UK-based company that is developing facilities to convert hard-to-recycle waste plastics into circular petrochemical feedstocks and also into ultra-low sulphur diesel (ULSD). Clean Planet Energy designs and builds facilities — which they refer to as ecoPlants — that are expected to process plastics typically rejected by traditional recycling centres and so would otherwise be sent to landfill or incineration.
Under the new agreement bp will initially receive the output of Clean Planet Energy’s first facility, currently under construction in Teesside in the north-east of England. The Teesside facility is designed to have the capacity to process 20,000 tonnes a year of waste plastics into naphtha and ULSD. The naphtha can be utilised as feedstock into circular plastics value chains, which is aligned with bp’s aim of unlocking new sources of value through circularity, keeping products and materials in use for longer. Clean Planet Energy will provide bp with the opportunity to expand the relationship by offtaking products from its future plants beyond Teesside.
Should be no shortage of feedstock