3rd February, 2015 :Â
BP has reported lower profits and says it will cut spending on exploration because of the fall in oil prices.
Underlying profits in the final three months of 2014 were down 20% on a year earlier at $2.2bn (Â£1.5bn). For the full year, profits fell 10% to $12.1bn.
The oil giant also said it would be cutting capital expenditure plans by $4bn-$6bn this year.
BP’s share price is down 16% since last summer due to lower oil prices, which have fallen 50% in the past six months.
“We have now entered a new and challenging phase of low oil prices through the near and medium term,” said BP chief Bob Dudley.
BP wrote down $3.6bn of assets to reflect the lower value of its operations and reserves given the weaker oil price. After taking account of this write-down and other one-off items, BP reported a loss for the quarter of $969m.
The company was also hit by lower income at Russian energy giant Rosneft, where estimated underlying profits fell to $470m in the final quarter of 2014 from $1.1bn a year earlier. This was due to sanctions against Russia following its actions in the Ukraine and the weak rouble.
BP owns a 20% stake in Rosneft.
The UK-based company also took a further hit of $477m in the final quarter from legal and clean up costs relating to the Gulf of Mexico oil spill in 2010. The total cost of the spill now stands at $43.5bn
Source : BBC