BP Eyeing Additional Spending Cuts Following Drop of 80% in Profit

BP announced on Tuesday it might cut its capital spending even further after it reported a drop of 80% in profit for its 2016 first quarter, as oil prices came close to lows of 13 years.

The oil company based in Britain, the first major oil company to report in what was one of the weakest quarters, has lowered its spending target for 2016 to $17 million from its previous of between $17 and $19 billion.

The company also said that amount could even fall further to between $15 billion and $17 billion in 2017 if the price of oil remains weak.

These reductions in cost have helped the oil company to forecast a balancing of the books when the price of oil reaches to between $50 and $55 per barrel in 2017.

Previously the price had to be $60 per barrel to balance the books.

BP shares were 3% higher at the open in London on Tuesday, which was the second largest gainer for the FTSE 100 Index.

Bob Dudley the CEO said he expects the price of crude to recover at the end of this year when work on fields is halted and fuel demand continues to be robust.

Market fundamentals are continuing to suggest that a combination of strong demand and weak growth in supply will move oil markets nearer to a balance by the end of 2016, said Dudley.

The CEO at BP suffered an embarrassing revolt by shareholders earlier in April when company investors rejected his remuneration package of $20 million.

Faced with its worst downturn in the industry in over three decades, BP reduced capital spending on three occasions during 2015, slashed close to 10% of the workforce of 80,000 and lowered its costs sharply.

BP dropped to its largest yearly loss in 2015 due to lower prices of oil, costs that were related to the 2010 deadly oil spill in the Gulf of Mexico and massive writedowns.

Latest News

Nike Suspends Relationship with Maria Sharapova
Nike Suspends Relationship with Maria Sharapova
Rob Bironas Ex-Titans Kicker Dies in Car Crash
Rob Bironas Ex-Titans Kicker Dies in Car Crash
Ron Washington Leaves Texas Rangers Due to an Affair
Ron Washington Leaves Texas Rangers Due to an Affair
Jonathan Dwyer Falls in Line with Other Banned NFL Players
Jonathan Dwyer Falls in Line with Other Banned NFL Players
Tony Stewart Case Going to the Grand Jury
Tony Stewart Case Going to the Grand Jury
Oscar Pistorius “Blade Runner” Found Not Guilty of Murder
Oscar Pistorius “Blade Runner” Found Not Guilty of Murder


Leave a Reply

 
© 2006-2017 Web Breaking News.