BP profits have plunged 44% to $720m (£550m) in the second quarter of 2016, as low crude prices continue to affect the energy sector.
Oil companies have rushed to cut costs after oil prices fell to a 12-year low in January, resulting in thousands of job losses in the UK.
BP boss Bob Dudley said: “Compared with a year earlier, the underlying second-quarter result was impacted by lower oil and gas prices.”
Referring to BP’s cost-cutting programme, he added: “We are delivering significant improvements to the business that will stick at any oil price. We are now well down the path of transforming our business to compete, whatever the future holds. We now see a much stronger outlook for BP and are focused on growth, both for this decade and beyond.”
BP also booked a $2.8bn charge linked to costs associated with the Deepwater Horizon oil spill. The total cost of the 2010 disaster in the Gulf of Mexico now stands at around $61.6bn, with BP saying it has drawn a line under the payouts.
The group has also been slashing costs and axing jobs, cutting around 10% of its workforce to offset tough trading.
Oil prices fell to a three-month low on Monday amid concerns of a global oversupply of crude and natural gas. Brent crude fell 2.1% to $44.75 per barrel.
“The sigh of relief emanating from BP HQ is almost palpable as the Gulf of Mexico spill is finally consigned to the history books,” said Richard Hunter, head of research at Wilson King Investment Management in London.
“This is not to say that the challenges are over, not least of which is an underlying oil price still markedly short of the level which would provide comfort for the company.”
Bernard Looney, BP’s new chief of exploration and production, told investors recently that the company planned to deliver new production of 800,000 barrels of oil equivalent a day by 2020, which includes 500,000 barrels by the end of 2017.
“As we look forward we expect the external environment to remain challenging, but we have a strong pipeline of new projects,” said Dudley.
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