BP plunges into net loss in second quarter

July 31, 2012 | 15:02

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British energy giant BP said Tuesday that it plunged into a net loss in the second quarter of 2012, hit by lower oil prices and a vast $5.0-billion (4.1-billion-euro) writedown on the value of assets.

British energy giant BP said Tuesday that it plunged into a net loss in the second quarter of 2012, hit by lower oil prices and a huge impairment charge. (AFP Photo/Andrew Yates)

BP made a loss after taxation of $1.385 billion in the three months to the end of June, it said in a results statement. That compared with a net profit of $5.915 billion in the same part of last year.

The company took a vast impairment charge of $4.782 billion on the value of US assets, including certain refineries, shale gas assets and its decision to suspend the Liberty offshore oil project in Alaska.

Adjusted earnings, stripping out movements in the value of inventories and other exceptional items like writedowns, sank 35 percent to $3.69 billion in the reporting period compared with $5.72 billion last time around.

Output slid 7.4 percent to 2.275 million barrels of oil equivalent a day on the back of asset sales and an extended maintenance program in the Gulf of Mexico. Revenue meanwhile dipped eight percent to $94.89 billion.

"We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically," said chief executive Bob Dudley in the earnings release.

"The effects of price movements have impacted our earnings in the quarter," he added.

BP is still attempting to turn its fortunes around after the devastating Gulf of Mexico oil spill disaster in 2010. Dudley added that the ongoing turnaround programme was hampering its performance.

AFP

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