Oil and Gas News

BP focuses on net zero despite profit loss

BP remains determined to perform with purpose and is committed to delivering its net zero ambition despite rising cost pressures and profits being down compared with 2019.

The company outlined in its first quarter report that underlying replacement cost profit for the first quarter was $800 million, compared with $2.5 billion for the same period a year earlier.

BP stated that the result reflected lower prices, demand destruction in the downstream, a lower estimated result from the Rosneft joint venture and a lower contribution from oil trading.

The replacement cost loss for the quarter was $600 million, compared with a profit of $2.1 billion in 2019. Following the significant drop of oil prices, BP suffered a $3.7 billion loss in inventory holding.

Operating cash flow for the first quarter, excluding the Gulf of Mexico oil spill payments, was $1.2 billion, including a $3.7 billion working capital build driven by high downstream product balances.

However, BP recored a net debt of $51.4 billion at the end of the quarter, $6 billion higher than the previous quarter, which reflected lower equity.

BP chief executive officer Bernard Looney said this extraordinary time for the world has hit the industry’s supply and demand on a scale never seen before.

“BP, like many other companies, is stepping up and extending helping hand to those in need. We do it not because it is expected of us – but because we want to. That is consistent with our purpose,” Looney said.

“I am incredibly proud of the work that our people are doing in all three areas, particularly our colleagues in operations – from rigs to retail and everywhere in between – who are continuing to deliver energy and provide goods in the most difficult of circumstances.

“At the same time, we are taking decisive actions to strengthen our finances – reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower.”