A BP company logo is displayed on a fuel pump in the forecourt of a filling station operated by BP Plc in London, UK.
Chris Ratcliffe | Bloomberg | Getty Images
LONDON – Energy giant BP on Tuesday reported a weaker net loss than expected annual report after a turbulent twelve months in which the global oil and gas industry had a shower of bad news.
The UK-based oil and gas company has an underlying full-year replacement loss, which was used as a proxy for net profit / loss, of $ 5.7 billion. This compares with a net profit of $ 10 billion for the 2019 financial year.
Analysts polled by Refinitiv expected a net loss of $ 4.8 billion for the year.
BP also posted a net profit of $ 115 in the fourth quarter million, missing analyst expectations of $ 285.5 million.
The company said its full-year results were driven by lower oil and gas prices, significant write-offs on the reconnaissance period, pressure on refining margins and a depressed demand. It warned that the ongoing coronavirus pandemic would affect its performance.
“This is definitely a difficult term at the end, I think, a very difficult year for everyone. And our full annual results have been hit hard by Covid,” BP CEO Bernard Looney told the Squawk Box Europe soon “told CNBC. after the results have been published.
“We had the worst recession in the world since the 1940s. I think it was a cruel year for the oil industry – negative prices, fuel demand by 14%, aviation by 50% and of course we adjusted our planning prices, which led to impairments and write-offs. ‘
BP’s latest figures come as energy companies try to prove to investors that they have gained a more stable position from stronger commodity prices.
2020 was the ‘most difficult year of my career’
The oil and gas industry was hit last year as the coronavirus pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write-offs and tens of thousands of job cuts.
The head of the International Energy Agency has previously said that it will probably be the worst year in the oil market.
The world’s largest oil and gas companies are now trying to put it behind them and instead point to the prospect of an economic boom in 2021 and hope for the recovery of fuel demand in the coming months.
A general view of BP (British Petroleum) refinery in the port of Rotterdam, where other large companies producing petrol, diesel and oil, including Guvnor Petroleum, VPR Engery, Exxonmobil, ESSO, Shell and Vopakat, all remain active during the coronavirus. (COVID-19) pandemic on 23 April 2020 in Rotterdam, the Netherlands.
Dean Mouhtaropoulos
Looney described 2020 as an ‘important year’ for the company and the ‘most difficult of my career’.
“The good news is that the business has really, very well continued to perform, and I’m incredibly grateful for that to our staff around the world. Strong safety, strong reliability, above the plan to take out costs … and the net debt below $ 39 billion, ‘Looney said.
Net debt fell $ 1.4 billion in the fourth quarter and $ 6.5 billion in 2020 to $ 39 billion. Looney said it shows the company is on track to reach $ 35 billion in net debt.
BP has strategically undergone a “massive” year, Looney said, adding that the mass rollout of Covid vaccines “can only lead to a good outlook for the coming year.”
The shares in BP are more than 6% higher than the previous year, and rose almost 46% last year.
Oil prices
International standard Brent crude futures traded at $ 56.85 a barrel on Tuesday morning, about 0.9%, while US West Texas Intermediate crude futures stood at $ 54.11, about 1% higher.
Oil prices have steadily improved since the beginning of the year, supported by continued production cuts and the massive deployment of Covid vaccines.
However, major forecasters, including the IEA and OPEC, have warned that the outlook for the oil market in 2021 is still clouded by pandemic fears.
A resurgence in cases of coronavirus has led to renewed lock-in measures and travel restrictions in some countries in recent weeks.