LONDON (Alliance News) - Weak oil prices caused BP PLC to swing to a loss in the first quarter of 2016 from a year before, the oil major said on Tuesday, but it kept its dividend flat as results improved on the fourth quarter of 2015.
BP shares were up 3.4% to 372.75 pence on Tuesday, the second best performer in the FTSE 100.
BP said its loss for the first quarter was USD583.0 million, compared to a USD2.6 billion profit a year earlier. The loss narrowed from the USD3.3 billion loss made in the fourth quarter of 2015.
Underlying replacement cost profit, the preferred measure for analysts, fell to USD532.0 million from USD2.58 billion a year earlier but again improved on the USD196.0 million profit in the fourth quarter.
BP said its replacement cost profit slipped in its downstream business to USD1.88 billion from USD2.08 billion a year earlier, while its upstream business swung to a loss of USD1.21 billion from a USD372.0 million profit.
BP said it would pay a 10.00 US cents dividend for the quarter, flat year-on-year.
The group said it booked a net pretax charge of USD917.0 million in the quarter, including costs related to the US settlement for the Gulf of Mexico oil spill in 2010.
Total capital expenditure in the quarter was USD4.0 billion, compared to USD4.5 billion in same period a year earlier.
Total production in the quarter was 2.43 billion barrels of oil equivalent per day, up 5.2% year-on-year. Though production increased, BP said it saw significantly lower liquids and gas sale prices in the quarter, which was only partially offset by the cost-cutting efforts made in the upstream business, lower rig cancellation costs and a reduced depreciation, depletion and amortisation cost.
BP expects production in the second quarter to fall against the first, reflecting seasonality and maintenance activity on its assets.
In the downstream business, underlying replacement cost profit declined year-on-year in the fuels business amid the weakest refining margins seen since 2010, BP said, and a lower contribution from its supply and trading arms against a very strong first comparative a year before.
These challenges were partially offset by benefits from BP's cost-cutting programme, robust refining operations and a higher retail fuel result, helped by volume growth.
Lubricants underlying replacement cost profit grew in the quarter from a year before, helped by margin growth and a strong premium brand performance, while petrochemicals profit grew substantially on a better operating performance, lower costs and a slight improvement in the margin environment, BP said.
For the downstream business, BP expects a higher level of turnaround activity, particularly in the US market, and some seasonal improvement in refining margins.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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