BP writes off $25.5 billion on its Russia pullout, but oil and gas profits soar.

Credit…Pool photo by Andy Buchanan

BP, the London-based energy giant, on Tuesday reported its highest profit in a decade. The company said that its underlying replacement cost profits were $6.2 billion for the first quarter of 2022, more than double the $2.6 billion of the same period a year earlier.

BP attributed the results to higher oil and natural gas prices as well as “exceptional” performance in the buying and selling of those fuels.

In a move that had been anticipated after BP announced its withdrawal from Russia in February after the invasion of Ukraine, the company also wrote off about $25.5 billion on its nearly 20 percent holding in Rosneft, Russia’s state-controlled oil company, and other ventures in that country.

That charge, though, is considered by analysts a paper loss with little relevance to continuing performance. BP without Russia “is a lower risk investment and the rest of the businesses are performing well,” Oswald Clint, an analyst at Bernstein, wrote in a note to clients on Tuesday.

Although many investors thought Rosneft was a liability for BP, the Russian holding earned the company $745 million in the last quarter of 2021.

With earnings strong, BP said it would keep its dividend unchanged at 5.46 cents a share. It also said that the money it spends buying back shares — a way to increase the share price — would increase to $2.5 billion in the second quarter, compared with $1.6 billion in the first quarter.

With opposition politicians in Britain calling for a windfall tax on oil companies to help consumers pay soaring energy bills, BP said that it would invest 18 billion pounds, or about $23 billion, on British energy by 2030.

The spending, which was mostly already on the cards, would include not only green energy initiatives such as offshore wind farms and hydrogen-making facilities but also oil and gas drilling in the North Sea “to support near-term security of supply,” BP said.

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