BP on Tuesday reported a record profit of $28 billion for 2022, lifted by the surge in energy prices since Russia's invasion of Ukraine, while boosting its dividend in a sign of confidence as it scaled back plans to reduce oil and gas output by 2030.
BP's announcement of a record profit follows similar reports from rivals Shell, Exxon Mobil and Chevron last week.
"We are strengthening BP, with our strongest upstream plant reliability on record and our lowest production costs in 16 years, helping to generate strong returns and reducing debt for the eleventh quarter in a row," Bernard Looney, chief executive said in a statement.
BP's fourth-quarter underlying replacement cost profit, the company's definition of net income, reached $4.8 billion, narrowly missing a $5 billion forecast in a company-provided survey of analysts.
That compared with $4 billion a year earlier and $8.2 billion in the third quarter of 2022.
For the year, BP's profit of $27.6 billion exceeded the previous record of $26 billion in 2008.
The results were impacted by weaker gas trading activity after an 'exceptional' third quarter, higher refinery maintenance and lower oil and gas prices.
BP shares rose 3.4% after trading opened in London.
BP boosted its dividend by 10% to 6.610 cents per share. It halved its dividend to 5.25 cents in July 2020 for the first time in a decade in the wake of the pandemic.
The company also announced plans to repurchase $2.75 billion worth of shares over the next three months after buying $11.7 billion in 2022.
Looney took the helm three years ago with an ambitious plan to pivot BP away from oil and gas towards renewables and low-carbon energy in an effort to slash greenhouse gas emissions.
While many investors backed Looney's strategy, BP's shares have been the worst performers among top Western energy companies since he took office, remaining largely flat compared with 17% gain for Shell and a nearly 80% gain in Exxon shares.
In a strategy update, BP said it now aims to produce 2 million barrels of oil equivalent per day by 2030, down 25% from 2019 levels, but less ambitious than previous plans to cut output by 40% over the period.
BP said it will increase spending on its oil and gas business by $1 billion a year, or up to a cumulative $8 billion by 2030.
At the same time, the company also increased spending plans for its energy transition investments by $1 billion a year over the same period.
It increased the upper range of its forecast overall annual investments to 2030 to $14 billion to $18 billion from $14-$16 billion previously.
The company said it will increase its focus on low-carbon bio-energy and also set a target to produce 0.5 million-0.7 million tonnes a year of low or zero-carbon hydrogen to initially supply its own refineries.