BP reports its first full-year loss in a decade after ‘brutal’ year

LONDON — Energy giant BP on Tuesday reported a weaker-than-expected full-year net loss, following a tumultuous 12-months in which the global oil and gas industry faced a torrent of bad news.

The U.K.-based oil and gas company posted a full-year underlying replacement cost loss, used as a proxy for net profit/loss, of $5.7 billion. That compared with a net profit of $10 billion for the 2019 fiscal year.

Analysts polled by Refinitiv had expected a full-year net loss of $4.8 billion.

BP also posted fourth-quarter net profit of $115 million, missing analyst expectations of $285.5 million.

The company said its full-year results were driven by lower oil and gas prices, significant exploration write-offs, pressure on refining margins and depressed demand. It warned the ongoing coronavirus pandemic would continue to impact its performance.

“2020 will forever be remembered for the pain and sadness caused by Covid-19. Lives were lost – livelihoods destroyed. Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margin,” Bernard Looney, CEO of BP, said in a statement.

BP’s latest figures come as energy companies attempt to prove to investors that they have gained a more stable footing on stronger commodity prices.

The oil and gas industry was sent into a tailspin last year, as the coronavirus pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write downs and tens of thousands of job cuts. It will likely become known as the worst year in the history of oil markets, the head of the International Energy Agency has previously said.

The world’s largest oil and gas companies are now seeking to put it behind them, pointing instead to the prospect of an economic rebound in 2021 and hopes for a fuel demand recovery in the coming months.

Looney described 2020 as a “pivotal year” for the company and the “toughest of his career.”

“We launched a net zero ambition, set a new strategy to become an integrated energy company and created an offshore wind business in the US. We began reinventing BP – with nearly 10 thousand people leaving the company,” Looney said.

“I appreciate our team’s commitment to deliver the energy the world needed and am grateful for the support we received from investors and the communities where we work. We expect much better days ahead for all of us in 2021,” he added.

Shares of BP are up more than 6% year-to-date, having tanked almost 46% last year.

International benchmark Brent crude futures traded at $56.94 a barrel on Tuesday morning, up over 1%, while U.S. West Texas Intermediate crude futures stood at $54.17, around 1.2% higher.