BP Posts First Annual Loss Since 1992

Feb. 1, 2011
Company will sell two U.S. refineries

BP on Feb. 1 posted its first annual loss in almost two decades as a result of last year's devastating Gulf of Mexico oil spill, and raised the estimate of costs from the disaster to $40.9 billion.

The company said it posted a loss of $4.9 billion last year, which was the first shortfall since 1992 and followed the worst environmental catastrophe in U.S. history.

The loss compared with a profit of $13.955 billion in 2009, while the costs estimate was lifted from previous guidance of $40 billion.

However, the company will resume payment of its shareholder dividend at seven cents per share. The payout was suspended in the wake of the devastating spill, in the face of intense U.S. political pressure.

BP also said it would sell two major U.S. refineries -- including its Texas City facility which had suffered a deadly 2005 explosion that killed 15 workers and sparked safety concerns across its US operations.

"2010 will rightly be remembered for the tragic accident and oil spill in the Gulf of Mexico and it is clear that as a result BP is a company in transition," said Chief Executive Bob Dudley. "I am determined that we will emerge from this episode as a company that is safer, stronger, more sustainable, more trusted and also more valuable."

Dudley added: "2011 will be a year of recovery and consolidation as we implement the changes we have identified to reduce operational risk and meet our commitments arising from the spill."

The group also said that fourth-quarter profits stood at $4.6 billion in the fourth quarter, or three months to December, compared with $3.4 billion last time around.

BP is meanwhile expected to benefit after oil prices surged past $100 per barrel this week. Oil had rocketed beyond $100 for the first time since 2008 on Jan. 31, boosted by fears about the impact of the Egypt crisis on global crude supplies.

"BP remains on track to meet its target of up to $30 billion of divestments by the end of 2011, having concluded agreements for divestments totalling around $22 billion by the end of 2010," it said Tuesday.

Seeking to move on from the disaster, BP unveiled plans earlier this month to create a joint venture for Arctic oil exploration with Rosneft and take a cross-shareholding. But Russian shareholders in BP's other Russian joint venture, TNK-BP, have filed a complaint with a London court seeking to block the transaction. "The ground-breaking alliance between Rosneft and BP ... is a key step forward in BP's strategy to seek material positions in the world's leading hydrocarbon basins," the firm said on Feb. 1.

Copyright Agence France-Presse, 2011

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!