British energy giant BP said today that it slumped into a vast loss in 2015, ravaged by the dramatic collapse in oil prices.
BP suffered a loss after taxation of USD 6.48 billion (5.97 billion euros) last year, compared with a net profit of USD 3.78 billion in 2014, it said in a results statement.
Annual earnings were hit by a USD 2.6-billion charge in the fourth quarter that was mostly linked to impairments in the upstream division, or exploration and production, as well as restructuring costs.
Underlying replacement-cost profit—which excludes fluctuations in the value of crude oil inventories—more than halved to USD 5.9 billion.
The earnings measure tumbled to just USD 196 million in the fourth quarter, from $2.2 billion a year earlier.
“The lower underlying result was predominantly driven by the impact of steeply lower oil and gas prices on BP’s upstream segment,” the company said.
Oil prices have crashed about 75 per cent since mid-2014, hit by the slowing global economy, the strong US dollar—and a chronic supply glut that has been exacerbated by OPEC’s refusal to curb output.
The energy sector has meanwhile slashed jobs and investment in response to the oil price collapse.
BP plans to axe 4,000 jobs this year in its upstream division, and up to 3,000 positions in its downstream business by the end of 2017.
“We are continuing to move rapidly to adapt and rebalance BP for the changing environment,” said chief executive Bob Dudley.
“We’re making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations and continuing disciplined investment into the future of our portfolio.”