BP reports 91 per cent drop in 4th quarter earnings

LONDON - British oil company BP said fourth-quarter earnings plunged 91 per cent because of sharp declines in oil prices.

See Full Article

BP reported Tuesday that underlying replacement cost profit fell to $196 million from $2.2 billion in the same quarter a year earlier. The figures were reported using an oil industry accounting standard that takes into account fluctuations in the price of oil and excludes non-operating items.

The company also set aside an additional $443 million in the quarter to cover costs related to the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Total charges for the spill now total $55.5 billion.

Oil companies are slashing jobs and delaying investments as crude prices plummet. Brent crude, the benchmark for North Sea oil, fell 34 per cent last year and hit a 12-year low of $27.10 a barrel in January. Brent traded at $34.13 on Monday and traded over $100 a barrel as recently as September 2014.

"We are continuing to move rapidly to adapt and rebalance BP for the changing environment," CEO Bob Dudley said in a statement. "We're making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations."

The company said it reduced controllable cash costs by $3.4 billion last year, and estimated future cuts at almost $3.6 billion. It also forecast asset sales as much as $5 billion this year.

BP also announced 3,000 job cuts globally by the end of 2017. That is in addition to 4,000 cuts planned in exploration and production - including some 600 in North Sea operations. European rival Royal Dutch Shell, which reports earnings later this week, told investors in January that streamlining and integration from a planned merger with British gas producer BG Group would claim some 10,000 staff and contractor jobs across both companies.

BP says its net loss narrowed to $3.3 billion from $4.4 billion a year earlier.

Oil prices have plunged because global supply is high at a time when consumption is growing more slowly than expected. Demand is weakening in China, and investors are jittery because economic turmoil there is expected to slow the growth in demand further.

OPEC members, meanwhile, are refusing to cut production for fear of losing market share to non-members such as the U.S. and Russia. Iran, which is trying to emerge from decades of sanctions, wants to start pumping more, adding to global supplies.

All this means prices are unlikely to bounce back soon. Some analysts have forecast they will drop to near $10 a barrel before rebounding.

"BP CEO Bob Dudley will be particularly keen to ensure that the dividend remains untouched having finally restored it in the wake of the Gulf of Mexico disaster, having made the company much leaner since taking over the reins," said Michael Hewson, an analyst at CMC Markets. "But with average oil prices still trading at multi-year lows so far this year the question now needs to be asked in how long can BP sustain the dividend at current levels, without an imminent pick up in oil prices."



Advertisements

Latest Economic News

  • 'So many questions': Shopper puzzled by snow globe 'May cause cancer!' warning

    Economic CTV News
    For years, cancer-causing products such as cigarettes have come with warning labels, but consumers at a Calgary-area hardware store were left scratching their heads when they picked up a home d├ęcor product and found a label warning of its possible health risks. Source
  • EU starts legal action against four countries over VW emissions

    Economic CTV News
    BRUSSELS -- The European Union is starting legal action against Britain, Germany, Spain and Luxembourg for not imposing penalties against Volkswagen for using illegal software to hide vehicle emissions. The European Commission also said Thursday that it believes Britain and Germany "broke the law by refusing to disclose, when requested by the Commission, all the technical information" they gathered on Volkswagen emissions. Source
  • Who knew? Canada is home to the multi-billion dollar toy company behind Hatchimals

    Economic CBC News
    Quick. Can you name the Canadian toy company that's growing faster than Mattel, Hasbro and Lego? No need to worry if you can't. But ask any child between three and nine years old and they probably can. Source
  • Announcement today on first Canadian woman to feature on front of banknote

    Economic CTV News
    TORONTO - The Bank of Canada and the federal finance minister will announce later today which Canadian woman will grace the front of the country's next banknote. The five women in contention for the honour are activist Viola Desmond, poet Emily Pauline Johnson, engineer Elizabeth (Elsie) MacGill, athlete Fanny (Bobbie) Rosenfeld and suffragette Idola Saint-Jean. Source
  • Viola Desmond to appear on new Canadian banknote

    Economic CTV News
    OTTAWA -- Viola Desmond, often described as Canada's Rosa Parks for her 1946 decision to sit in a whites-only section of a Nova Scotia movie theatre, will be the first woman to be celebrated on the face of a Canadian banknote. Source
  • Urban business leaders push government to improve Canadian airport policies

    Economic CTV News
    MONTREAL - A coalition of business leaders in Canada's largest cities is putting pressure on Ottawa to reduce security screening times and cut travelling costs to bolster a prime engine of the country's economy. In its first political foray, the Canadian Global Cities Council is pushing to make airports more internationally competitive in order to attract more tourists, enhance economic activity and improve the travelling experience. Source
  • Asian stocks rise ahead of European Central Bank decision

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian shares rose on Thursday after an overnight surge on U.S. markets. Investors were focused on the European Central Bank's meeting later in the day. KEEPING SCORE: Japan's Nikkei 225 rose 0.9 per cent to 18,654.93 while South Korea's Kospi jumped 1.3 per cent to 2,016.99. Source
  • Economists meet with Alberta officials, say worst appears to be over

    Economic CTV News
    EDMONTON - Alberta Finance Minister Joe Ceci met with key economists to look ahead to 2017, with the consensus being the worst is over for the provincial economy. But Avery Shenfeld, chief economist of CIBC, says how much things will improve is still up in the air and tied to the price of oil. Source
  • Dow Jones, S&P 500 rallies to record highs; TSX racks up 100 points

    Economic CTV News
    TORONTO -- Major North American stock markets pushed higher, with the Dow Jones and S&P 500 hitting record levels, as anticipation builds over the corporate policies of U.S. president-elect Donald Trump. In New York, the Dow Jones industrial average surged 297.84 points at 19,549.62, while the S&P 500 added 29.12 points at 2,241.35. Source
  • Bovine TB: More cattle quarantined, but officials 'optimistic' worst is over

    Economic CTV News
    OTTAWA - The quarantine of cattle in a western Canada bovine tuberculosis outbreak continues to grow, even as no new confirmed cases of the disease have been found. Officials say, however, they are cautiously optimistic that the number of animals quarantined may have peaked. Source