BP PLC plunged into a net loss of almost US$16.85 billion in the second quarter, the British oil giant announced yesterday, as the COVID-19 pandemic ravaged demand for oil, sending prices tumbling.
“The ongoing severe impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment,” BP said in its earnings statement.
“Looking ahead, the outlook for commodity prices and product demand remains challenging and uncertain,” it added.
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The quarterly loss after tax of almost US$16.85 billion compared with a net profit of US$1.82 billion in the second quarter of last year, BP said.
“In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact,” chief executive officer Bernard Looney said.
Alongside its results, BP set out details on how it expects to achieve “net zero” carbon emissions for the company by 2050.
Switching from an international oil company to an “integrated energy company,” BP said that over the next decade its oil and gas production is expected to reduce by at least 1 million barrels of oil equivalent a day, or 40 percent when compared with last year’s levels.
“This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone,” Looney said.
The Irish national, who became chief executive of BP in February, had previously said that he wanted “net zero” carbon emissions for the company by the middle of the century.
In the immediate future, BP must rebuild its finances and Looney has already decided to cut about 10,000 jobs, or 15 percent of its global workforce owing to the coronavirus fallout on energy demand and prices.
After companies worldwide closed their doors and airlines grounded planes at the height of the COVID-19 outbreak toward the end of the first quarter, oil prices dropped off a cliff, causing them to briefly turn negative.
However, prices have rebounded sharply in the past few months as governments ease lockdowns and businesses slowly reopen.
To raise much-needed cash, BP recently announced the sale of its petrochemical business to privately owned rival Ineos AG for US$5.0 billion.
In the past year, the energy major also agreed to sell its Alaska operations to Hilcorp Alaska for US$5.6 billion.
Together the disposals were aimed at recouping US$10 billion to finance BP’s US$10.4 billion purchase of US oil and gas operations belonging to mining group BHP Billiton.
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