LONDON – BP slumped to its worst annual loss in over 20 years in 2015, the British oil and gas company announced on Tuesday, and said it would cut thousands more jobs in the face of a deep rout in oil prices.
The company, which is still grappling with the huge costs from the deadly 2010 Gulf of Mexico oil spill, said it would cut 7 000 jobs by 2017, nearly 9% of its workforce.
BP maintained its dividend at 10 cents per share but the weak results and outlook are bound to pile pressure on the company which has had to increase borrowing.
It reported a 2015 loss of US$6,5 billion, even worse than its 2010 results when it counted the costs of the Gulf of Mexico oil spill for which the total bill for criminal and civil penalties and clean-up costs reached around US$55 billion.
Fourth-quarter underlying replacement cost profit, BP’s definition of net income, came in at US$196 million, significantly below analysts’ expectations of US$730 million.
“The company will need to focus on cost base and capex in order to return to profitability, with the increase in net debt a concern in the current environment,’ analysts at Cenkos Securities said.
A 70% slide in oil prices since mid-2014 has forced the oil and gas sector to cut tens of thousands of jobs and make deep spending cuts.
BP said its 2015 capital spending totalled US$18,7 billion, down from a planned US$24-US$26 billion. BP said it expected its 2016 capex to be at the lower end of a range of US$17-19 billion.
BP in 2015 reduced operating costs by US$3,5 billion and said it expected savings to reach US$7 billion by 2017.
It said it would cut 3 000 jobs in its downstream unit by the end of 2017 on top of 4 000 cuts already announced in oil and gas production as part of a US$2,5 billion restructuring programme announced last year.
–Nampa-Reuters
