Oil giant reforms
BP slumps in ‘pivotal year’ as pandemic batters demand
Oil giant BP saw its fourth quarter profit slump as it plunged to a $5.7 billion (£4.2bn) loss in a “pivotal year” for the company.
Fourth-quarter adjusted net income was $115 million, down from $2.57 billion a year earlier and only a slight improvement from the preceding three months. The company fell short of the average analyst estimate of $440 million.
The full-year underlying replacement cost loss compares to a profit of $10bn (£7.3bn) in 2019 after the company wrote down the value of oil and gas assets by $6.5bn in response to lower long-term energy price forecasts
Bernard Looney, chief executive, said: “Road and air travel are down, as are oil demand, prices and margins.
“It was also a pivotal year for the company. We launched a net zero ambition, set a new strategy to become an integrated energy company and created an offshore wind business in the US.
“We began reinventing BP – with nearly 10,000 people leaving the company. We strengthened our finances – taking out costs and closing major divestments.
“And through all of this, the underlying operations of the company remained safe – one of our safest years – and reliable, and major new projects were brought on line.
Bernard Looney: ‘we expect better days ahead’
“I appreciate our team’s commitment to deliver the energy the world needed and am grateful for the support we received from investors and the communities where we work. We expect much better days ahead for all of us in 2021.”
Murray Auchincloss, chief financial officer, said: “These results reflect a truly tough quarter, with a challenging price environment and COVID-19 related demand impacts. Nonetheless, we made strong progress in reducing net debt again, to $39 billion in the quarter.
“We remain on track to meet our target of $35 billion between the fourth quarter of 2021 and first quarter of 2022, which will trigger the start of share buybacks, subject to maintaining a strong investment grade credit rating.”