BP quarterly profits collapse on tumbling oil prices

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BP profits collapsed in the third quarter as oil prices halved on back of the stubborn global supply glut, forcing the British energy giant to scale back investment and sell more assets.
The company, which was ravaged by the catastrophic 2010 Gulf of Mexico oil spill, added that it would manage both its US commitments and a prolonged period of low oil prices.
Net profit dived 64 percent to $46 million (42 million euros) in the three months through September, compared with $1.29 billion a year earlier, BP said in a statement.
Profit adjusted to reflect the value change in oil inventories sank 40 percent to $1.82 billion from $3.04 billion. That however beat market expectations of $1.26 billion and sent BP’s share price higher.
The group lowered its full-year 2015 capital-spending forecast to $19 billion. The company had invested $23 billion in 2014.
Capital expenditure was then predicted to drop to a range between $17 billion-19 billion per year through to 2017.
“Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well,” said CEO Bob Dudley.
“We are now in action to rebalance our financial framework in this new price environment.”
With oil prices plunging on the back of a global glut, energy majors like BP and Anglo-Dutch rival Shell have been slashing investment and jobs.
Brent oil prices averaged $50.47 per barrel in the third quarter, down more than 50 percent from $101.93 a year earlier, according to the group.
BP has meanwhile been forced to sell off billions of dollars of assets to meet the clean-up bill for the devastating Gulf of Mexico oil disaster.
The energy giant added Tuesday that it would sell another $3.0 billion-5.0 billion of assets in 2016, before returning to a rate of about $2.0 billion-3.0 billion of annual sales in subsequent years.
“Divestment proceeds are expected to provide flexibility to help manage both continuing oil price volatility and BP’s commitments in the US,” the company added.
BP took another $426-million charge for the US oil disaster in the third quarter, taking its total charge to $55 billion.
The group added its current divestment program was “nearing completion.”
In October 2013, BP had unveiled plans to sell another $10 billion of assets, having already offloaded $38 billion.
The company will meanwhile pay a record $20.8 billion to settle US government claims for damages stemming from the deadly 2010 Gulf of Mexico oil spill, US Attorney General Loretta Lynch said earlier this month.
An explosion on the Deepwater Horizon rig killed 11 men off the coast of Louisiana and unleashed 134 million gallons of oil into Gulf waters.

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