Shares in BP dipped as the oil giant revealed profits that tumbled by more than two-thirds over the latest quarter.
The company also said it will hand more cash to investors through higher dividends and a further share buyback despite the weaker performance.
Opposition parties said that the UK Government was failing to act as oil companies continue to rake in massive profits even though oil and gas as prices have come down from last year's highs.
Despite it being more than two-thirds lower than last year's results, it sparked further criticism of how the Government has handled an industry which has benefited significantly from Vladimir Putin's full-scale war on Ukraine and the spike in world energy prices that followed.
READ MORE: Oil giant Shell's shares down as earnings miss expectation
However, Michael Hewson, chief market analyst at CMC Markets UK, warned: “The BP share price, much like its peer Shell, has probably seen the highs of the year, given how far energy prices have fallen over the past 12 months.”
While Jamie Maddock, equity research analyst at Quilter Cheviot, said that “BP's latest earnings report has not met the expectations set by analysts, with results that fell significantly short of the consensus prediction”. He also said: “However, it wasn't all bad news for investors.
"Despite the underwhelming earnings, BP's approach to shareholder distributions came as a pleasant surprise.”
READ MORE: Sunak slammed over windfall tax as energy firms cash in
The FTSE 100 giant posted underlying replacement cost profit - the firm's preferred measure - of $2.59 billion (£2bn) for the second quarter of 2023.
That compares with an $8.45bn (£6.6bn) profit over the same period last year, when it was boosted by a surge in oil and gas prices. BP blamed the decline in profits on planned maintenance work and lower margins in its refining business.
It comes a week after rival oil major Shell also delivered weaker-than-expected profits for its latest quarter.
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BP said the performance takes its total profits for the first half of 2023 to $7.5bn (£5.9bn).
The company added that its North Sea business paid $970 million (£755m) in tax over the half-year, with $460m (£358mn) because of the energy profit levy windfall tax.
The update comes a day after Prime Minister Rishi Sunak insisted he wants to "max out" developments in the North Sea and claimed Labour's refusal to support new oil and gas fields would be "bad for the British economy".
Ed Miliband, Labour's shadow climate and net zero secretary, said: "These figures demonstrate the continuing scandal of the Tory failure to act on the windfalls of war being pocketed by the oil and gas producers."
Bernard Looney, BP chief executive, said: "Another quarter of performing while transforming.
"Our underlying performance was resilient with good cash delivery during a period of significant turnaround activity and weaker margins in our refining business.
"We're delivering our strategy at pace - we've started up two major oil and gas projects to help keep energy flowing today and we're accelerating our transformation through our five transition growth engines.
"And we're delivering for shareholders, growing our dividend and announcing a further share buyback."
Shares in BP closed slightly down - 1.25p or 0.26% - at 481.75p.
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