The effects of the sharp fall in oil prices are now also seeping through in the results of oil and gas giants. British BP saw underlying earnings drop two-thirds year-over-year to $ 800 million in the past quarter as oil demand has dried up as a result of the corona crisis.
These are extraordinary times, according to BP boss Bernard Looney. “Our industry has hit supply and demand changes on a scale never seen before,” he said in a comment. He announced that BP is taking “decisive” measures to strengthen its financial position. Among other things, the costs will be reduced. BP also puts the brakes on its expenditure.
In addition to lower oil prices, partly also due to the price war that had been launched by large oil countries Russia and Saudi Arabia, BP also had negative exchange rate effects. According to BP, they deducted $ 200 million from the result.
BP also suffered inventory losses of $ 3.7 billion as a result of the oil drop. This brought the total reported deficit for the period to $ 4.4 billion. BP announced withdrawal from Alaska in attempt to curb the deficit.
The company’s debt position increased by $ 6 billion to $ 51.4 billion. The company says it still has $ 32 billion in liquidity available. BP also announced a quarterly dividend of 10.5 cents per share.