BP has revealed its lowest quarterly revenue because the pandemic because the oil and fuel business braces for a tax raid within the Finances.
The oil big’s underlying income fell from $2.8bn (£2.2bn) within the second quarter to $2.3bn (£1.8bn) within the third quarter amid weak oil buying and selling and a droop in refining margins.
Though the income have been higher than analysts anticipated, earnings have been down 30pc from the $3.3bn (£2.5bn) reported this time final 12 months.
The slide in margins comes partly because of a extra common downturn in international demand for oil just lately. Brent crude has fallen from a excessive of round $91 a barrel in March to $71 at this time.
John Moore, senior funding supervisor at RBC Brewin Dolphin, mentioned: “In opposition to a backdrop of adverse buying and selling circumstances, this final quarter has not been plain crusing for BP and revenue is significantly decrease than it was this time final 12 months.
“Oil value circumstances, mixed with the prices related to simplification of the enterprise has put BP on the again foot.”
The downturn comes as BP and the remainder of the UK oil business braces for a tax raid within the funds.
Chancellor Rachel Reeves is predicted to announce a rise in windfall taxes on vitality giants and make sure the removing of funding allowances for oil and fuel firms from November.
Ashley Kelty, an analyst at Panmure Liberum, mentioned: “The precise influence of the windfall tax is more likely to be very, very small” on BP, given its restricted operations within the North Sea.
He mentioned: “The larger difficulty goes to be the removing of funding allowances, which goes to carry ahead decommissioning by about two years throughout the board.
“That’s extra more likely to make an influence on BP as a result of clearly the decommissioning prices [mean] their capital expenditure will go up.”
He pointed to analysis from Rystad Vitality, which confirmed that the removing of funding allowances will imply the North Sea will shut down no less than two years sooner than it in any other case would have.
“The windfall tax will find yourself costing UK plc greater than it is going to generate due to the elevated decommissioning,” mentioned Mr Kelty.
The Treasury gives tax aid on decommissioning, with the price to the state from the decline of the North Sea anticipated to run into the tens of billions of kilos.
