BP's profits reached an eight-year high in 2021 as a result of high gas and oil prices, as the company increased share repurchases and fast-tracked de-carbonization plans with higher spending on low carbon energy.

BP's annual profit recovery of $12.85 billion after 2020’s heavy loss is likely to add to calls in Britain for higher taxes on energy producers to help reduce consumers' energy bills.

The impressive results are attributed to higher oil and gas prices and production, partly offset by weaker oil trading results and the impact of higher energy costs on operations such as refining, according to the company.

Natural gas and electricity prices around the world have risen since mid-2021 owing to tight gas supplies and higher demand as economies recovered from the pandemic slack.

In the fourth quarter of 2021, BP's underlying replacement cost profit, the company's definition of net earnings, reached $4.1 billion, exceeding analysts' expectations for a $3.93 billion profit –the largest profit BP recorded since early 2013.

For the year, BP's $12.85 billion profit compared with a loss of $5.7 billion in 2020, when BP wrote off the value of its oil and gas assets by $6.5 billion following a slump in energy demand.

BP's debt fell to $30.6 billion by the end of last year, down by $8.3 billion from a year earlier.

BP retained its dividend at 5.46 cents per share and boosted its share repurchases targets to $1.5 billion per quarter from $1.25 billion.

Capital spending will grow in 2022 to a range of $14 billion to $15 billion, up from $12.8 billion in 2021.

BP planned to cut carbon emissions in the coming decades by increasing its renewable power capacity 20-fold by 2030 and reducing its oil output by 40%, or more than 1 million barrels per day.

Sticking to its plan to spend $14-$16 billion per year until 2025, BP will increase the spending on low carbon energy, which includes retail and electric vehicle charging, to 40% of total spending by 2025 and 50% by 2030. These businesses are expected to generate earnings of $9-$10 billion by 2030, BP said, assuring investors over the returns of low carbon businesses in the long term.

BP aims to cut to net zero all greenhouse gas emissions from its operations, production and sales by 2050.