BP reports a $5.7 billion annual loss, its first in a decade.
BP on Tuesday reported its first loss in at least a decade, a loss of $ 5.7 billion compared to a $ 10 billion gain for 2019. The company said it posted a profit of $ 115 million in the fourth quarter of 2020, representing one year. – A decline of about 95 percent year-on-year.
Oswald Klimt, an analyst at Bernstein, a market research firm, called the quarterly results “terrible” in a note to customers.
Analysts said BP’s poor performance raised fears that the company’s chief executive, Bernard Loney, was struggling as he tried to bring about sweeping changes from oil and natural gas to clean energy. BP’s stock fell nearly 7 percent at one point after the earnings announcement.
BP attributed the decline to a host of factors, including low demand for its refined products, as the economic downturn hit by the epidemic, as well as lower prices for oil and natural gas.
Mr Lunney announced last year that he would aim to cut oil and gas production by 40 percent by 2030 and move the company to renewable energy sources such as wind, solar and hydrogen.
At the same time, he is leading a brutal overhaul of the company to prepare for this greener future. It is in the process of cutting at least 10,000 jobs from a workforce of about 70,000 people. He is selling some $ 25 billion in businesses that are no longer considered a necessity.
Analysts say Mr Loney may be right to reduce fossil fuel production, but his steps may take a long time to pay off.
Stuart Joyner, an analyst at market research firm Redburn, said, “It is right to do in the long term, but in the short term it can reduce earnings because these things take three, four, five years to grow.” , Referring to renewable energy projects.
On a call from analysts, Mr. Lunney acknowledged that some of these investments, such as hydrogen and offshore wind, where BP plans to invest heavily, may not come until the 2030s and the company will remain dependent on oil and gas . Profit for the next few years.
BP, based in London, is a major oil and gas producer in the United States, but Mr. Lunney said in an interview that he welcomed the Biden administration’s environmentally friendly approach.
President Biden’s new policies had raised questions about the impact on BP’s drilling for oil in the Gulf of Mexico, Mr. Lonnie said, but the administration’s interest in clean energy led to BP’s recent investment in offshore wind projects off the East Coast There was a possibility to help. United States of america.
“One of the good things about being a company in transition,” he said.