BP reports its first year-long loss in a decade after a “brutal” year

LONDON – Energy giant BP reported a weaker-than-expected net loss for the full year on Tuesday after the tumultuous 12 months in which the global oil and gas industry faced a torrent of bad news.

The UK-based oil and gas company recorded an underlying year-over-year replacement cost loss, which was used as a substitute for the $ 5.7 billion net profit / loss. This compares to a net profit of $ 10 billion for fiscal year 2019.

Analysts surveyed by Refinitiv had expected a net loss of $ 4.8 billion year-over-year.

BP also made a fourth quarter net profit of $ 115 million, missing analysts ’expectations of $ 285.5 million.

The company said its full-year results were driven by lower oil and gas prices, significant exploration cancellations, pressure on refining margins and depressed demand. He warned that the ongoing coronavirus pandemic would continue to affect its performance.

“It’s definitely a tough quarter at the end, I guess, of a very tough year for everyone. And our full-year results were badly affected by Covid,” Bernard Looney, CEO of BP, said shortly. on CNBC’s “Squawk Box Europe” after the results were released.

“I guess we’ve had the worst recession in the world since the 1940s. I think it was a brutal year for the oil business: negative prices, fuel demand fell 14%, aviation fell 50%, and , of course, we had adjustments in our planning prices that caused deterioration and cancellations. “

The latest BP figures come as energy companies try to show investors that they have gained a more stable base on higher commodity prices.

The oil and gas industry became a negative problem last year, as the coronavirus pandemic coincided with a historic shock to demand, falling commodity prices, evaporation of profits, unprecedented downloads and the reduction of dozens of jobs.

It will probably be known as the worst year in the history of oil markets, the head of the International Energy Agency said earlier.

The world’s largest oil and gas companies are trying to leave it behind, pointing to the prospect of an economic recovery in 2021 and expecting a recovery in fuel demand in the coming months.

Looney described 2020 as a “pivotal year” for the company and the “hardest of my career”.

“The good news is that the company continued to operate very, very well and I am incredibly grateful to our staff around the world for that. Strong security, great reliability, ahead of cost contract plan … and net debt less than $ 39 billion, ”Looney said.

Net debt fell $ 1.4 billion during the fourth quarter and $ 6.5 billion over 2020 to reach $ 39 billion. Looney said this showed the company was on track to reach $ 35 billion in net debt.

BP has experienced a “massive” year strategically, Looney said, adding that the massive launch of Covid vaccines “can only lead to a good outlook for next year”.

TA shares fell more than 3% on Tuesday morning. The firm’s share price has risen around 6% to date, having fallen by almost 46% last year.

Brent international crude oil futures traded on Tuesday morning at $ 56.85 a barrel, up 0.9%, while West Texas (US) crude oil futures traded at 54.11. dollars, about 1% more.

Oil prices have steadily improved since the beginning of the year, thanks to continued support for production and the massive deployment of Covid vaccines.

However, major forecasts, including the IEA and OPEC, have warned that the oil market outlook for 2021 is still clouded by pandemics.

An increase in coronavirus cases in recent weeks has led to the renewal of blocking measures and travel restrictions in some countries.