Egypt, Elsewedy review progress on Ain Sokhna phosphate complex    US employment cost index 3.6% up in year to June 2025    Egypt welcomes Canada, Malta's decision to recognise Palestinian state    Pakistan says successfully concluded 'landmark trade deal' with US    Sterling set for sharpest monthly drop since 2022    Egypt, Brazil sign deal to boost pharmaceutical cooperation    Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



BP swings to US$6 billion loss on Deepwater hit
Published in Amwal Al Ghad on 28 - 07 - 2015

BP PLC swung Tuesday to a loss in the second quarter, as earnings were hit by lower oil prices and a multibillion-dollar charge relating to the deal it reached earlier this month to settle U.S. federal and state claims over the 2010 Deepwater Horizon disaster.
The U.K. oil giant said its replacement cost loss--a number analogous to the net income that U.S. oil companies report--was $6.27 billion, compared with a profit of $3.18 billion a year earlier. The sharp decline includes a $9.8 billion pretax charge that BP recorded as part of an $18.7 billion agreement with the U.S. government and five states to settle legal claims relating to its Deepwater Horizon fatal oil spill in the Gulf of Mexico. The net charge recorded by the company for nonoperating items amounted to $7.5 billion.
It was the second time in the past six months that BP posted a quarterly loss, reflecting how deeply the oil-price slide has affected its operations and the mounting cost the Deepwater Horizon spill continues to exact. The company has slashed spending this year, delaying projects with reserves of over 3.5 billion barrels of oil and gas--more than any other big independent energy company, according to Wood Mackenzie.
The last five years have taken their toll on the company, which sold off more than $40 billion in assets to raise cash for oil-spill cleanup and legal costs. So far the incident has cost the oil giant nearly $55 billion in pretax charges and it remains embroiled in lawsuits relating to the spill, but the deal struck earlier this month settles the largest claims against the oil giant and gives BP far more certainty over the ultimate size of its liabilities.
While the settlement will give the company more room to maneuver, the weak oil price will keep the pressure on. Crude prices have already reversed much of the gains made in the second quarter with Brent crude sinking to a four-month low this week.
BP's upstream arm, which focuses on oil production, reported pretax earnings of $0.2 billion in the second quarter, down from $4 billion in the same period a year earlier. Lower prices had a particular impact on BP's earnings from its stake in state-controlled Russian oil company OAO Rosneft. Its underlying net income from the company fell by nearly 50% in the second quarter of 2015 to $510 million from $1 billion a year earlier. The company's upstream results were also affected by a $600 million charge relating to its exploration activities in Libya, where the company has been unable to operate because of political upheaval amid an ongoing armed conflict.
"The external environment remains challenging, but BP moved quickly in response and we continue to do so," said Chief Executive Bob Dudley. "I am confident that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future."
The company has already announced plans to cut spending in response to lower prices and organic capital expenditure for the whole year is now expected to be below $20 billion. Meanwhile, the company continues to maintain its focus on simplification and efficiency programs intended to help control costs. Its total cash costs to date this year are estimated to be around $1.7 billion lower than in the same period of 2014. Its gearing, the ratio of debt to equity, also remains within the company's 10%-20% target band and net debt fell to $24.8 billion at the end of the second quarter, $293 million lower than at the end of the first three months of the year. The company maintained its dividend at 10 cents per ordinary share.
"We can see clear progress in our capital programme and from our work to reset and reduce cash costs. Our focus remains on rebalancing the company's sources and uses of cash in a lower price environment," said Chief Financial Officer Brian Gilvary.
Despite the tough environment created by low oil prices, BP did receive some support over the last quarter from its refining arm. Refineries have enjoyed months of extraordinarily high margins thanks to weak crude prices and rising demand. BP's downstream business, which includes refining and marketing, saw pretax earnings increase by nearly 75% in the second quarter to $1.6 billion compared with $933 million a year earlier.
Source: MarketWatch


Clic here to read the story from its source.