BP reported a 91 per cent decline in fourth-quarter earnings after average crude oil prices dropped to the lowest in more than a decade.
Profit adjusted for one-time items and inventory changes totalled $196 million, the London-based company said Tuesday in a statement. That missed the $814.7m average estimate of 10 analysts surveyed by Bloomberg, and compares with year-earlier profit of $2.24 billion.
Crude’s collapse has driven BP’s market value below $100bn for the first time since the Gulf of Mexico oil spill in 2010. Chief executive Bob Dudley has cut billions of dollars of spending, removed thousands of jobs and deferred projects in an attempt to protect the balance sheet. Mr Dudley was one of the first of his peers to start preparing for a prolonged slump and that puts BP in a better position, according to Barclays.
Profit has been lower year-on-year for six consecutive quarters as oil prices tumbled. The average price of benchmark Brent crude slumped 42 per cent in the fourth quarter from a year earlier to $44.69 a barrel, the lowest since 2004.
PetroChina said last week it expects 2015 profit to fall at least 60 per cent. Chevron on Friday reported its first quarterly loss since 2002, while Royal Dutch Shell said last month that fourth-quarter profit is likely to drop at least 42 per cent. The European oil major is scheduled to report full earnings on Thursday.
BP started cutting costs and selling assets following the 2010 oil spill. In October, it lowered its 2015 capital-spending forecast to about $19bn after investing about $23bn in 2014. The company said then it expects to spend $17bn to $19bn a year through 2017.
BP’s shares have increased 3.7 per cent this year following last year’s 14 per cent decline, a second straight year of losses. It’s the best performer on the eight-member FTSE 350 Oil & Gas Producers Index after BG Group.
Follow The National’s Business section on Twitter