Oil major BP reported a pretax loss of US$865 million (S$1.17 billion) in the first quarter of 2016 as low oil prices continue to plague the company.
First-quarter replacement cost loss came in at US$485 million, compared with a profit of US$2.1 billion a year ago. The replacement cost loss came in well above expectations of US$140 million in a poll of analysts provided by the company.
Replacement cost profit is a common accounting measure to report profits in the oil industry which takes into account the fluctuations in the price of oil. Oil prices have seen something of a rebound since BP's last earnings when a barrel was trading around US$33 with Brent crude now fetching around US$44 a barrel but there is no sign of major producers curtailing output in a bid to support prices further.
In a statement accompanying the results, BP Chief Executive Bob Dudley said that despite the challenging environment, the company was "driving towards our near-term goal of rebalancing BP's cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track."
In February, BP announced its worst annual loss in 20 years, reporting a loss of US$6.5 billion for 2015 as a whole.
In the fourth quarter, the company took US$2.6 billion in non-operating post-tax charges, primarily related to impairments of upstream assets as well as restructuring charges for the group. Including these charges and other offsetting effects, BP reported a replacement cost loss for the fourth quarter of 2015 of US$2.2 billion.
On an underlying basis, replacement cost profit in the first quarter was US$532 million, compared with US$2.57 billion for the same period in 2015.
BP announced an unchanged dividend for the quarter of 10 cents per ordinary share, expected to be paid in June.
The group said that it had lowered costs and would continue to do so, expecting total organic capital expenditure in 2016 to be around US$17 billion and, "in the event of continued low oil prices," sees flexibility to move to US$15-17 billion in 2017, it said.