BP reports first full-year loss in decade after “brutal” year

LONDON – Energy giant BP reported lower-than-expected net losses for the full year on Tuesday after a tumultuous 12-month period in which the global oil and gas industry faced a torrent of bad news.

The UK oil and gas company recorded a year-on-year loss of underlying replacement costs, used as a proxy for net profit / loss of $ 5.7 billion. This is compared to a net profit of 10 billion dollars for fiscal year 2019.

Analysts surveyed by Refinitiv expected a year-round net loss of $ 4.8 billion.

BP also posted a net profit in the fourth quarter of $ 115 million, missing analysts’ expectations of $ 285.5 million.

The company said its full-year results were driven by falling oil and gas prices, significant reductions in exploration, pressure on refining margins and depressed demand. He warned that the ongoing coronavirus pandemic will continue to have an impact on its performance.

“It’s definitely a difficult quarter at the end, I think, of a really tough year for everyone. And our results for the whole year were hit hard by Covid,” Bernard Looney, CEO of BP, told shortly. Squawk Box Europe ”CNBC after the results are published.

“I think we’ve had the worst recession in the world since the 1940s. I think it was a brutal year for the oil industry – negative prices, fuel demand down 14%, aviation down 50% and of course we had adjustments to our planning prices, which led to depreciation and write-offs . “

BP’s latest figures come as energy companies are trying to prove to investors that they have gained a more stable base on higher commodity prices.

The oil and gas industry was shipped last year, as the coronavirus pandemic coincided with a historic shock to demand, falling commodity prices, evaporating profits, unprecedented cuts and tens of thousands of job cuts.

It will probably become known as the worst year in the history of oil markets, the head of the International Energy Agency said earlier.

The world’s largest oil and gas companies are now trying to leave it behind, pointing to the prospect of an economic recovery in 2021 and hoping for a recovery in fuel demand in the coming months.

Looney described 2020 as a “pivotal year” for the company and “the toughest of my career.”

“The good news is that the business has continued to operate very, very well and I am incredibly grateful to our staff around the world for this. Strong safety, strong reliability, ahead of the cost elimination plan … and net debt of less than 39 billions of dollars, “Looney said.

Net debt decreased by $ 1.4 billion in the fourth quarter and by $ 6.5 billion throughout 2020, to $ 39 billion. Looney said this showed that the company is on track to reach a net debt of $ 35 billion.

BP has gone through a “massive” strategic year, Looney said, adding that the mass launch of Covid vaccines “can only lead to a good outlook for next year.”

BP shares fell more than 3% on Tuesday morning. The company’s share price has risen by about 6% so far, after canceling almost 46% last year.

High morning, international Brent crude trading traded at $ 56.85 a barrel on Tuesday morning, up about 0.9%, while West Texas Intermediate gross futures were at $ 54.11, about 1% higher.

Oil prices have steadily improved since the beginning of the year, supported by continued reductions in production and the mass launch of Covid vaccines.

However, major forecasts, including the IEA and OPEC, have warned that the 2021 outlook for the oil market is still clouded by fears of a pandemic.

An increase in coronavirus cases in recent weeks has led to the renewal of blocking measures and travel restrictions in some countries.