BP declares $5.7bn loss amid low oil prices, COVID-19 pandemic

BP, a British oil and gas multinational company, has announced a $5.7 billion loss for the 2020 full year.

This is as a result of low oil prices and weakened demand as the COVID-19 pandemic ravaged the world and caused countries to impose movement restrictions to curb the spread of the virus.

In 2019, BP posted a profit of $10 billion.

Figures released on Tuesday showed that the company returned to profit in the third quarter of 2020 as countries lifted varying degrees of lockdowns and crude prices and demand recovered.

BP posted a profit of $115 million in the fourth quarter, falling short of the $285.5 million projected by analysts.

Net debt also fell $1.4 billion in the fourth quarter and $6.5 billion throughout 2020 to reach $39 billion.

The company said its full-year performance was affected by low oil and gas prices, significant exploration write-offs, pressure on refining margins and depressed demand.

Commenting on the result, Bernard Looney, BP chief executive officer, said the company is on its way to reducing its $35 billion debt.

“2020 will forever be remembered for the pain and sadness caused by COVID. Lives were lost – livelihoods destroyed. Our sector was hit hard as well. It was also a pivotal year for the company,” Looney said.

“We launched a net-zero ambition and set a new strategy to become an integrated energy company. We strengthened our finances – taking out costs and closing major divestments.”

The company is repositioning into green energy and is currently divesting from assets.

Looney said this showed the company was on its way to reaching net debt of $35 billion.