BP reports its first loss in an entire year in a decade after the ‘brutal’ year

LONDON – Energy giant BP reported a weaker-than-expected net loss for the entire year on Tuesday after 12 tumultuous 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-round replacement cost loss, used as a proxy for net profit / loss, of $ 5.7 billion. This compares to a net profit of $ 10 billion in fiscal 2019.

Analysts polled by Refinitiv had expected a net loss of $ 4.8 billion for the entire year.

BP also posted a net profit of $ 115 in the fourth quarter million, losing analysts’ expectations of $ 285.5 million.

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

“It’s definitely a tough quarter at the end, I think, of a really tough year for everyone. And our full year results have been hit hard by Covid,” said Bernard Looney, CEO of BP, soon to “Squawk Box Europe” at CNBC after the publication of the results.

“We had the worst recession, I think, in the world since the 1940s. It was a brutal year, I think, for the oil business – negative prices, fuel demand fell 14%, aviation fell 50% and of course we had adjustments in our planning prices that resulted in losses and losses. “

BP’s latest figures come at a time when energy companies are trying to prove to investors that they have gained a more stable position with stronger commodity prices.

The oil and gas industry went into crisis last year, when the coronavirus pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write-offs and tens of thousands of job cuts.

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

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

Looney described 2020 as a “crucial year” for the company and the “most difficult of my career”.

“The good news is that the business continued to perform very, very well and I am extremely grateful to our team around the world for that. Strong security, great reliability, before the cost reduction plan … and net debt down $ 39 billion, “said Looney.

Net debt dropped $ 1.4 billion in the fourth quarter and $ 6.5 billion over 2020 to reach $ 39 billion. Looney said that this shows that the company is on track to achieve a net debt of $ 35 billion.

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

BP’s shares fell more than 3% on Tuesday morning. The company’s share price rose about 6% year-to-date, having plunged almost 46% last year.

Brent’s international benchmark oil futures traded at $ 56.85 a barrel on Tuesday morning, up about 0.9%, while US West Texas Intermediate oil futures stood at $ 54.11 , about 1% above.

Oil prices have been steadily improving since the beginning of the year, supported by continued production cuts and the mass launch of Covid vaccines.

However, major analysts, including the IEA and OPEC, warned that the 2021 outlook for the oil market is still obscured by pandemic fears.

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