BP to reduce capital expenditure in 2015

LONDON, February 3, 2015 – BP used the publication of the fourth quarter and full year 2014 results on Tuesday to announce it would be reducing its capital expenditure from $22.9 billion over the past year to $20 billion in 2015. The company also said it would continue its divestment of assets, having sold assets with a cumulative value of $4.7 billion since 2013 already. By the end of 2015, BP expects to have disposed of another $10 billion worth in assets.

With falling oil prices in mind, analysts had expected underlying replacement cost profit to come out at $1.5 billion. However, BP beat expectations and reported $2.2 billion, sending the company’s stock up 5 percent. The oil major benefitted from better-than-expected results from Rosneft, in which BP holds a 19.75-percent stake. While lower than BP’s $1.1-billion income from the stake in 2013, $470 million over the past year was an unexpected profit nonetheless.

In commenting on the low oil prices, BP CEO Bob Dudley said that the company’s emphasis should be on “managing and rebalancing” its capital programme and cost base for the “new reality of lower prices,” essentially “resetting BP.”