OIL major BP unveiled a 20 per cent slide in profits in the first three months of 2015 as it was hit by the worldwide slump in energy prices.
Underlying replacement cost profit fell to $2.6 billion (about £1.7bn) from $3.2bn in the same period in 2014. Replacement cost profits strip out gains and losses due to changes in the value of oil stocks held by energy companies.
We are resetting BP to meet the challengesBob Dudley, BP chief executive
BP said Brent crude averaged $54 per barrel during the quarter, half of the level of a year ago, while gas was 40 per cent lower.
The trading picture was worse when one-off items, including restructuring costs, were included, with profits coming in nearly 40 per cent lower.
However, the latest performance was well above City consensus expectations of $1.2bn and a sharp improvement on the final three months of 2014 when the group fell to a $969 million (£645m) loss.
Richard Hunter, head of equities at stockbroker Hargreaves Lansdown, said: “[The group’s] exposure to Russia remains something of a drag on prospects, while the historic Gulf of Mexico costs cannot yet be consigned to the history books.”
Bob Dudley, BP’s chief executive, told investors: “We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response.
“We are continuing to progress our planned divestment programme, we are resetting our capital spending, and we are addressing costs through focusing on simplification and efficiency throughout BP.”
The group confirmed an announcement made at the time of its annual results in February that it expected investment to total $20bn this year, which was 20 per cent lower than earlier guidance.