(Alliance News) - A combination of lower prices, bad weather, and maintenance work has sent BP PLC to a quarterly loss, the FTSE 100 oil major reported on Tuesday.
BP posted a replacement cost loss for the third quarter of 2019 of USD351 million, after a USD1.78 billion profit in the second quarter and USD3.09 billion in the third quarter last year.
On an underlying basis, BP's RC profit fell to USD2.25 billion, down 20% on a quarterly basis and 41% year-on-year.
The company was hit by "significantly" lower earnings in the Upstream division due to lower commodity prices, maintenance work, and the impact of poor weather in the Gulf of Mexico. Downstream, BP said, had a "strong" quarter operationally.
Upstream posted a RC loss of USD1.05 billion for the quarter after profits both in the second quarter and the third quarter of 2018. On an underlying basis, Upstream RC profit figure fell 37% quarterly and 47% year-on-year.
The Downstream unit delivered a 57% quarterly rise in RC profit, but it posted a 10% decline year-on-year.
Over the first nine months of the year BP is still in profit. RC profit has more than halved, however, to USD3.52 billion with the underlying figure down 20%.
Upstream production for the third quarter was 3.7 million barrels of oil equivalent per day, up from 3.6 million barrels a year before. However, underlying production, excluding BP's stake in Russia's Rosneft, fell 2.5%.
BP expects fourth-quarter production to improve on the third quarter as maintenance is completed.
BP has declared a 10.25 US cent dividend for the quarter, unchanged from the second quarter payout, while removing the scrip dividend alternative.
Net debt at the end of the quarter was USD46.5 billion, 21% higher than the same time a year before, with gearing rising to 31.7% from 27.1%. BP is on track with its divestment programme, and expects the total amount completed in 2019 to reach USD10 billion by the end of the year.
"BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts. Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP," said Chief Executive Bob Dudley.
"We're also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia."
By George Collard; georgecollard@alliancenews.com
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