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BP hit with $2.2billion loss

February 2, 2016

Oil major BP posted a loss of $2.2billion in the fourth quarter of last year after being hit by restructuring charges and writedowns amid the lower oil price.

Last month the company said it would be reducing its global headcount, including 600 staff from its North Sea operations.

The announcement of the company’s results comes a day after First Minister Nicola Sturgeon visited Aberdeen and spoke with BP executives.

In a statement BP said it expects its full-year 2016 underlying production to be “broadly flat” with 2015.

BP also said it expects to reduce the number of staff and contractor roles in the upstream by around 4,000 during 2016 and by up to 3,000 from the downstream arm by the end of 2017.

The underlying replacement costs profit for the period fells to $196m compared with a $2.2billion profit from the same time a year ago.

Meanwhile the unadjusted loss of $2.2billion compared with a previous loss of $969million the previous year.

Bob Dudley, BP group chief executive, said: “We are continuing to move rapidly to adapt and rebalance BP for the changing environment. We’re making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations and continuing disciplined investment into the future of our portfolio.

“Our plans set out a clear course for BP for the medium term and will allow us to deliver growth in the longer term. All of this underpins our commitment to sustaining our dividend and then growing free cash flow and shareholder distributions over the long term.”

Restructuring charges which began in the fourth quarter of 2014 totalled $1.5billion by the end of 2015.

BP said a further $1billion of restructuring charges were also expected to be incurred in 2016.

The company added that a charge of $443 million related to the Gulf of Mexico oil spill was taken in the quarter, primarily reflecting additional business economic loss claims. This takes the cumulative pre-tax charge for the incident to $55.5 billion.

A court hearing to consider approval of the proposed consent decree in connection with the agreements in principle reached by BP Exploration & Production Inc to settle all federal and state claims arising from the oil spill is scheduled for March 23 this year.

By Niamh Forrest

Source: Energy Voice

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