Shares in oil giant BP took a beating yesterday after the firm announced pre-tax losses of £1billion for the second quarter of this year.
Profits were hit by weak oil and US gas prices together with a fall in production, blamed on extensive planned maintenance, particularly in the Gulf of Mexico.
The firm also suffered a £445million fall in income from its Russian joint venture TNK-BP, which it is still trying to sell out of, and a £2.9billion write-off on the value of certain refineries, US shale assets and a decision to drop its Alaskan Liberty project.
BP is also still paying off costs relating to the 2010 Macondo disaster in the US gulf, now at £24.1billion.
Shares were trading down more than 4% yesterday at 425.1p.
Chief executive Bob Dudley said: “We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically.
“The effects of price movements have impacted our earnings in the quarter. Our extensive turnaround and maintenance programme, all of which will continue into the third quarter, is also affecting some aspects of our near-term results.
“All of this will take time, but it is important investment for the long term. Moving into 2013, we expect earnings momentum to build as we complete payments into the (Gulf of Mexico) trust fund, as high-value production comes back on line and as the impact of new projects ramps up.”
Analyst Richard Griffiths, of Oriel Securities, said the figures were testing the faith of investors and on a divisional basis missed at every level.
BP’s pre-tax losses for the second quarter were £1billion, compared with profits of £5.6billion in the same period last year.
Group revenue dropped by £8billion year-on-year to £60.3billion in the three months to the end of June.
Adjusted replacement-cost profits – an industry-favoured figure which strips out non-operating items – fell to £151.5million compared with £3.4billion in the second quarter last year.
Group production was down at an average of 2.2million barrels of oil equivalent (boe) per day, against 2.4million boe for the same period last year.
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