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* Quarterly results hit by weak demand, trading
* Debt expected to rise in first half of year
* CEO says renewable energy plans on track
* BP's annual profits: https://tmsnrt.rs/3atzysX
(Adds details on spending, updates shares)
By Ron Bousso and Shadia Nasralla
LONDON, Feb 2 (Reuters) - BP plunged to a $5.7
billion loss last year, its first in a decade, as the pandemic
took a heavy toll on oil demand, and the energy company warned
of a tough start to 2021 amid widespread travel restrictions.
Despite the weak environment, however, CEO Bernard Looney
told Reuters the company's transition to a greener future
remained on track. It is aiming to ramp up renewable power
generation to 50 gigawatts (GW) by 2030 from 3.3 GW currently,
while slashing oil output to reduce greenhouse gas emissions.
Capital expenditure is set to rise to $13 billion this year,
of which $9 billion will still go to oil and gas, $2 billion to
low-carbon projects and $2 billion to mobility, Chief Financial
Officer Murray Auchincloss said. That compared with a budget of
$12 billion in 2020.
For the last quarter of 2020, BP reported a profit of $115
million, falling short of analysts' forecasts due to weak oil
and gas sales and subdued trading, it said on Tuesday.
"A tough quarter at the end of a tough year," Looney said in
an analyst call.
At 0920 GMT, BP shares were down 3.5% at 258.9 pence.
Flagging a weak start to 2021, BP said: "We expect renewed
COVID-19 restrictions to have a greater impact on product
demand, with January retail volumes down by around 20% year on
year, compared with a decline of 11% in the fourth quarter."
Oil demand is nevertheless expected to recover in 2021, with
global inventories expected to return to their five-year average
by the middle of the year, Looney told Reuters.
Tighter global natural gas markets are expected to further
support profits, BP said.
Adjusted profit at its downstream - or refining and
marketing - business in the fourth quarter collapsed to $126
million, less than a tenth of what it was a year earlier.
BP's shares have lost over 40% of their value over the past
year and remain near 25-year lows, battered by concerns over oil
demand due to the pandemic as well as investor doubts over BP's
ability to successfully carry out its an ambitious plan to shift
away from fossil fuels to renewable energy.
Rivals including Royal Dutch Shell and Exxon Mobil
have also seen their market values sink in recent
months.
BP's overall fourth-quarter underlying replacement cost
profit, its definition of net income, of $115 million fell short
of the $360 million seen in a company-provided poll of analysts.
That compared with an $86 million profit in the third
quarter and a profit of $2.6 billion a year earlier.
For the year, BP reported an underlying loss of $5.69
billion, compared with a profit of $10 billion in 2019.
BP's debt pile of $39 billion is expected to rise in the
first half of this year as it continues to struggle with a weak
business environment, but the company said it remained on track
to reduce it to $35 billion by early 2022.
At that debt level, BP plans to start share buybacks.
BP's dividend remained at 5.25 cents per share.
(Reporting by Ron Bousso and Shadia Nasralla. Editing by Jason
Neely and Mark Potter)
