Engineering news
BP has reported a 20% drop in first-quarter profits after it was hit by a sharp slump in oil and gas prices.
The energy giant said underlying replacement cost profit fell to $2.6 billion (£1.7 billion) from $3.2 billion in the same period of 2014, but this was not as bad as expected.
The 20% fall in profits was on an underlying basis but, when one-off items are included, replacement cost profit was 39% lower.
BP suffered a 57% slump in underlying profits for its upstream arm - which includes exploration, production storage and processing - driven by lower oil and gas prices.
Underlying profits from downstream – which includes refineries, product manufacturing and petrol stations – more than doubled, helped by a "stronger overall refining environment" as well as efficiency programmes reducing costs.
Meanwhile, BP was still counting the cost of the 2010 Deepwater Horizon disaster, adding another $332 million charge for the first quarter, taking its total charge to date for the spill to $43.8 billion.
Chief executive Bob Dudley said: "We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response.
"We are continuing to progress our planned divestment programme, we are resetting our capital spending, and we are addressing costs through focusing on simplification and efficiency throughout BP."
"We will also look to take advantage of any opportunities presented by the lower price environment to further reduce capital expenditure or costs," Dudley added.
The results come amid speculation about whether BP will become a takeover target after rival Royal Dutch Shell agreed to snap up exploration firm BG in a £47 billion deal.