BP reigns in losses
LONDON, July 26, 2016 – BP announced its quarterly results on Tuesday, revealing a loss of USD 1.4 billion over the second quarter of 2016. Curtailed expenses helped counter a USD 15.9-billion year-on-year drop in revenue.
BP’s quarterly revenue came out at USD 47.3 billion, down from USD 62.3 billion in the second quarter of 2015. Lower expenses related to production and manufacturing, as well as those associated with purchases helped to offset the decline in revenue. Costs were down by USD 6.8 billion and USD 13.4 billion, respectively.
On July 14, the company said it was expecting an after-tax non-operating charge of tied to Deepwater Horizon liabilities of some USD 2.5 billion in its results over Q2 of 2016, which contributed to BP’s negative results. “We are very pleased to have finally drawn a line under the material liabilities for Deepwater Horizon,” Chief Executive Bod Dudley said. “We will always be mindful of what we have learned from that tragic accident,” he added.
While the lower oil prices continue to put a strain on the company’s balance sheet, Dudley also said that BP is targeting an additional 500,000 boepd in production by the end of 2017 through new projects. The company recorded an average crude price of USD 46 per barrel over the second quarter, up from USD 34 per barrel over the previous quarter but still lower than the USD 62 per barrel recorded over the same period last year. As a result, BP said the refining margins were at their weakest in six years.
The company’s downstream business reported an underlying pre-tax replacement cost profit of $1.5 billion, down USD 100 million from the previous quarter and USD 400 million lower than the same period in 2015. BP’s upstream business reported a pre-tax replacement cost profit of $29 million. “We are delivering significant improvements to the business that will stick at any oil price. We are now well down the path of transforming our business to compete, whatever the future holds,” Dudley also said.
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