BP slumped to its worst annual loss in over 20 years in 2015, the British oil and gas company announced on Tuesday February 02,2016, and said it would cut thousands more jobs in the face of a deep rout in oil prices.
BP reported a 2015 loss of $6.5 billion, even worse than its 2010 results when it counted the costs of the Gulf of Mexico oil spill for which the total bill for criminal and civil penalties and clean-up costs reached around $55 billion
BP said its 2015 capital spending totalled $18.7 billion, down from a planned $24-$26 billion. BP said it expected its 2016 capex to be at the lower end of a range of $17-19 billion
BP in 2015 reduced operating costs by $3.5 billion and said it expected savings to reach $7 billion by 2017
BP said that if the current downturn persists for longer than anticipated, it would be able to further reduce its costs to allow its balance sheet to break even below $60 a barrel.
The company, which is still grappling with the huge costs from the deadly 2010 Gulf of Mexico oil spill, said it would cut 7,000 jobs by 2017, nearly 9 per cent of its workforce.
BP shares fell on the news, dropping by around 7 per cent in London to lead losers on the pan-European FTSEurofirst 300 index.
BP maintained its dividend at 10 cents per share but the weak results and outlook are bound to pile pressure on the company which has had to increase borrowing.
Fourth-quarter underlying replacement cost profit, BP's definition of net income, came in at $196 million, significantly below analysts' expectations of $730 million.
BP's results are the latest in a round of weak fourth-quarter earnings in the sector. Chevron, the No. 2 US producer, last week reported its first quarterly loss in more than 13 years, while Royal Dutch Shell was expected to report a near halving of profits.
BP in 2015 reduced operating costs by $3.5 billion and said it expected savings to reach $7 billion by 2017.
BP said it would cut 3,000 jobs in its downstream unit by the end of 2017 on top of 4,000 cuts already announced in oil and gas production as part of a $2.5 billion restructuring programme announced last year.
BP on Monday February 01,2016 announced the appointment of Lamar McKay as deputy chief executive in a reshuffle aimed at simplifying top decision making
Benchmark Brent oil prices averaged $43 a barrel in the fourth quarter of 2015, down from $76 a year earlier.
A 70 % slide in oil prices since mid-2014 has forced the oil and gas sector to cut tens of thousands of jobs and make deep spending cuts.
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