BP posted on July 26, 2016, a lower profit for the second quarter of 2016 of $720 million on an underlying replacement cost basis, compared with $1.3 billion for the second quarter of 2015.
BP chief executive Bob Dudley said: «Compared with a year earlier, the underlying second-quarter result was impacted by lower oil and gas prices and significantly lower refining margins, but this was partly offset by the benefit of lower cash costs throughout the group as well as lower exploration write-offs.»
The Brent oil marker price averaged $46 a barrel in the second quarter, up from $34 in the first quarter but still significantly lower than $62 a year earlier. While improved from the previous quarter, refining margins were the weakest for a second quarter since 2010, BP said.
Total revenues and other income were $47.276 billion, substantially down from $63.205 billion in the previous year. Earnings from joint ventures were significantly up, while earnings from associates were almost halved from the comparable last year period. Currency translation had an impact of $35 million for the second quarter, while it was a gain of $698 million in the prior year.
BP estimates its share of Rosneft’s underlying net income to be $246 million for the quarter, compared with $66 million in the first quarter and $510 million a year ago. BP expects to receive an annual dividend payment from Rosneft of its share of 35% of Rosneft’s 2015 IFRS net income, around $335 million after tax.
Such a sad results demonstrating how difficult it is for BP to turn the corner on the Deepwater Horizon explosion, which cost the company another $5.2 billion pretax accounting charge in the second quarter.
The company said its total bill is now $61.6 billion for a disaster that was killing 11 workers and causing an oil spill that became the worst environmental disaster in US history.
Bob Dudley, said: «We are very pleased to have finally drawn a line under the material liabilities for Deepwater Horizon. We will always be mindful of what we have learned from that tragic accident. BP today is a stronger, more focused and more disciplined company.»
BP’s quarterly results are likely to be an indication of how the other oil majors will perform. Shell and Total are scheduled to publish earnings on Thursday, and ExxonMobil and Chevron the following day.