LONDON (Alliance News) - BP PLC on Tuesday said its underlying profit in the first half of 2016 was down by more than two thirds amid a steep decline in revenue, as the oil and gas major said it should add around 500,000 barrels to daily production by the end of 2017.
The FTSE 100 heavyweight said underlying replacement cost profit, which excludes certain exceptional items, plummeted 68% in the first half of the year to USD1.25 billion from USD3.89 billion a year earlier, as revenue fell 28% to USD84.95 billion from USD117.57 billion.
After exceptional items are taken into account, BP reported a replacement cost loss of USD2.73 billion in the first half compared to the USD4.16 billion loss a year earlier. BP ultimately stayed in the red in the period at the pretax profit line, posting a pretax loss of USD3.34 billion compared to the USD5.61 billion loss a year earlier.
BP kept its second quarter dividend flat at 10.0 cents per share, making a first half interim payment of 20.0 cents per share.
As previously announced, BP booked a USD5.20 billion pretax charge in the second quarter in relation to the Deepwater Horizon oil spill in the Gulf of Mexico back in 2010, taking the total charge for the accident to USD61.60 billion. BP said it is satisfied that the dispute is settled and paid.
Capital expenditure in the half totalled USD8.10 billion, dropping from USD9.10 billion, whilst the cost base was reduced as expected.
BP said it generated USD1.60 billion worth of asset sales in the period compared to USD2.30 billion a year earlier.
Net debt rose to USD30.90 billion at the end of June from USD24.80 billion a year earlier. At the end of the second quarter, BP's gearing level was 24.7%, within the target range of 20-30%.
BP said it has projects that are already in development that should add 500,000 barrels to daily production by the end of 2017, and those projects are all on schedule and on budget, with a further 300,000 barrels being added by the end of 2020.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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