BP back in the black with headline profit of $115m in 2016 after cutting cash costs by $7bn
BP said today that it's back in the black, after slashing costs during 2016.
The figures
Headline profit was $115m (£92.5m), compared with a loss of $6.5bn in 2015. The oil major said this year's results included a total of $4bn non-operating charges relating to the 2010 Gulf of Mexico oil spill.
The group made a total of $7.1bn in pre-tax payments connected to the 2010 disaster throughout 2016.
Underlying replacement costs profit, which is "adjusted for non-operating items and fair value accounting effects" dropped to $2.6bn from $5.9bn the previous year.
BP said its full year cash costs were $7bn lower than in 2014, meaning the company reached its cost-cutting target a year earlier than previously expected. Organic capital expenditure was $16bn last year, below the range of $17-19bn expected.
Shares in the oil firm dropped 2.5 per cent at the open.
Read more: What the analysts had to say about BP's results
Why it's interesting
BP pulled its numbers up but a "challenging" full year price environment – the average Brent crude price of $44 per barrel was the lowest it's been for 12 years – meant the company missed its forecasts.
The group said it expects production in 2017 to be higher than last year, but added that this is dependent on the timing of project start-ups, deals activity and Opec output quotas.
What BP said
"We have delivered solid results in tough conditions – and are well prepared for any volatility in oil pricing," said chief executive Bob Dudley.
"We have adapted by cutting our controllable cash costs by $7bn from 2014 – a full year earlier than planned. Continued tight discipline on costs remains essential. Everything we have done during the year has made us a more resilient and competitive company.
"With our Deepwater Horizon financial liabilities now substantially behind us, BP is fully focused on the future. You have seen that focus in the string of strategic portfolio additions during the last two months of the year. From increasing gas interests and renewing long-term low-cost oil to expanding our retail operations – these investments will generate significant long term value for our shareholders. We start this year with considerable momentum – and a sense of disciplined ambition. We have laid the foundations for BP to be back to growth."