BP post profit drop on lower prices

UK-based energy giant and LNG player BP reported a drop in its profit for the fourth quarter and the full year 2019. 

The said in its report that the underlying replacement cost profit, the company’s version of net profit, for the fourth quarter of 2019 reached $2.6 billion, dropping 25.7 percent compared to the fourth quarter of 2018.

Profit for 2019 reached $10 billion, BP said. This is a 21.2 percent drop from the $12.7 billion reported in 2018.

The company noted the results reflect the impact of a weaker environment.

The company has continued its divestment program with the divestment proceeds reaching $2.2 billion for the year.

Commenting on the results, BP’s chief financial officer, Brian Gilvary said, “we continue to make strong progress on our divestment program, with announced transactions totaling $9.4 billion since the start of 2019. We are ahead of our target of $10 billion of proceeds by end-2020, and now plan a further $5 billion of agreed disposals by mid-2021. Net debt fell $1 billion in the fourth quarter, and with further disposal proceeds expected, and assuming recent average oil prices, we continue to expect gearing to move towards the middle of the 20 to 30 percent range through this year.”

Reported oil and gas production averaged 3.8 million barrels of oil equivalent a day in 2019, 2.7 percent higher than in 2018.

Upstream production for the fourth quarter, which excludes Rosneft, was 2,698 mboe/d, 2.7 percent higher than a year earlier. For the full year, production was 2,637 mboe/d, 3.8 percent higher than 2018.

BP expects its full-year 2020 underlying production to be lower than 2019 due to declines in lower margin gas basins. The company expects first-quarter 2020 reported production to be lower than fourth-quarter 2019 due to the impact of our ongoing divestment program and planned seasonal maintenance and turnaround activities.