BP sees profits dive amid plunging oil prices

Oil Prices Drag BP to Worst Annual Loss

BP laid bare the impact of plunging oil prices as it slumped into the red by 5.2 billion US dollars (£3.6 billion) last year.

The blue chip giant revealed losses of 2.2 billion US dollars (£1.5 billion) for the fourth quarter alone after its upstream business - exploration, drilling and well operations - suffered in the face of the tumbling cost of crude.

On an underlying basis, replacement cost profits tumbled by 51% to 5.91 billion US dollars (£4.1 billion) in 2015.

BP's annual loss compared with profits of 8.1 billion US dollars (£5.6 billion) in 2014 and came as it also took another 12 billion US dollar (£8.3 billion) hit for the Gulf of Mexico oil spill in 2010.

In the fourth quarter, BP said underlying replacement cost profits dropped to 196 million US dollars (£136 million) from 2.2 billion US dollars (£1.5 billion) a year earlier after its upstream business saw losses of 728 million US dollars (£506 million).

The group added that hefty restructuring charges of 450 million US dollars (£313 million) also pushed the group into the red at the end of the year.

The cost of crude slumped below 28 US dollars a barrel at one stage last month and has collapsed by more than 70% since a peak of around 115 US dollars a barrel in the summer of 2014.

But despite the losses, BP - a mainstay of UK pension funds - announced that dividend payouts would remain unchanged at 10 cents a share for the fourth quarter.

Bob Dudley, BP group chief executive, said: "We are continuing to move rapidly to adapt and rebalance BP for the changing environment.

"We're making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations."

The group added that oil prices are expected to remain "challenging".