Yesterday saw BP join Shell and Exxon in reporting record profits of $19.3bn (£11bn).

What the three company results highlight is the fundamental flaw of how they are valued by city investors. As both Shell and BP posted record profits their share price actually went down as the profits were not as large as some had expected.

But the real reason that city investors were disappointed is that they felt that both BP and Shell had underperformed in key areas. Shell had not replaced as much reserves as the city analysts had hoped. BP also disappointed mainly through its refining operations. To keep the city happy the companies must keep on finding new reserves and keep on refining so we can all carry on driving. And as the oil prices rises, the more we drive the more money the oil giants make.

To offset some of the criticism of BP’s vast profits, Sir John Browne yesterday pledged to hand back up to $65 billion (£37 billion) to shareholders over the next three years. According to Browne this huge injection of cash will help offset the pension crisis in the UK. Dividends from BP make up 17 per cent of all income received by UK pension funds from FTSE companies.

With all this money from BP we can all retire happy, although the slight problem is that the climate fries in the process. To highlight this dichotomy the British think tank the New Economics Foundation used a model designed by the Government to calculate that, if the full environmental damage caused by its activities were included, BP would have made an £18bn loss rather than a profit.

This was picked up by the Independent today. “So here are two very different views of BP. One paints BP as a polluter, the other as a vital cash cow at the heart of the British economy” said the Independent, which went on to add: “From a moral perspective, some would see it as indefensible to be propping up our pensions by polluting the planet”.

Indefensible indeed. What oil companies does your pension invest in?