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BP profit slides 49% on weaker oil refining
[LONDON] BP Plc reported a 49 percent decline in third-quarter earnings after crude prices fell and refining margins shrank.
Profit adjusted for one-time items and inventory changes dropped to US$933 million from US$1.8 billion a year earlier, the London-based company said Tuesday in a statement. That beat the US$719.2 million average estimate of 14 analysts surveyed by Bloomberg.
BP's earnings have fallen year-on-year for nine consecutive quarters, piling pressure on Chief Executive Officer Bob Dudley to rein in spending and sell assets without jeopardizing future growth. Oil's rally following the Organization of Petroleum Exporting Countries' September decision to cut output is fading and BP and its peers will need to continue cutting spending so they can maintain dividend payouts.
Brent averaged US$46.99 a barrel in the quarter, down from US$51.30 a year earlier and US$47.03 in the prior three months. The decline that began in mid-2014 has forced explorers to delay projects, cancel billions of dollars of investments and eliminate thousands of jobs. Prices have increased about 7 per cent since OPEC's surprise U-turn in Algiers on Sept 28.
BP is renegotiating contracts and reducing the size of projects to lower costs, and plans to maintain 75 per cent of all cost cuts even when prices rise in the future.
Exxon Mobil Corp, the world's biggest oil company by market value, said Oct 28 its production sank to a seven-year low. The company warned it may be facing the biggest reserves revision in its history as it extended a run of profit declines. Chevron Corp posted its first profit in a year though production fell short of expectations. While cost cuts helped Total SA beat estimates, Eni SpA reported wider-than-expected losses and Statoil ASA posted a surprise loss.