BP swings to hefty annual loss but raises hope of ‘better days ahead’

BP has swung to a mammoth annual loss of 5.7 billion US dollars (£4.2 billion) after oil prices and demand tumbled amid the pandemic.

The oil giant’s hefty underlying replacement cost losses – its most watched measure – compare with profits of 10 billion US dollars (£7.3 billion) in 2019 and come despite a bounce-back in the second half of the year as oil prices started to recover.

On a reported basis, BP tumbled into the red with replacement cost losses of 18.1 billion US dollars (£13.2 billion) against profits of 3.5 billion US dollars (£2.6 billion) a year earlier after significant write-downs.

BP’s results for the final quarter of 2020 show it made underlying profits of 115 million US dollars (£84 million), having swung out of the red in the previous quarter, but the figures were worse than expected.

It said oil prices have risen since the end of October, helped by the rollout of the coronavirus vaccine worldwide, while it also expects demand to bounce back this year.

Chief executive Bernard Looney said: “2020 will forever be remembered for the pain and sadness caused by Covid-19. Lives were lost, livelihoods destroyed.

“Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins.”

He said 2020 was also a “pivotal year” for the company as it launched a net-zero goal and overhauled itself in a move that saw nearly 10,000 jobs go.

Mr Looney added: “We expect much better days ahead for all of us in 2021.”