British energy giant BP said Tuesday that it plunged into a second-quarter net loss, hit by lower output, falling oil prices and a near $5.0-billion (4.1-billion-euro) write-down on the value of assets.
BP made a loss after tax of $1.39 billion in the three months to June, compared with net profit of $5.72 billion in the year-earlier period, it said in a results statement.
The energy major was hit by an impairment charge of $4.78 billion on the value of US assets, including certain refineries, shale gas assets and its decision to suspend the Liberty offshore oil project in Alaska.
Total production fell 7.4 percent to 2.28 million barrels of oil equivalent a day on the back of asset sales and a heavy maintenance program in the Gulf of Mexico. Revenue dipped 8.0 percent to $94.89 billion.
“We recognize this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically,” chief executive Bob Dudley said in the statement.
“The effects of price movements have impacted our earnings in the quarter,” he added.
Adjusted earnings, stripping out changes in the value of inventories and other exceptional items like writedowns, sank 35 percent to $3.69 billion.
That was far below market expectations for $4.49 billion, according to analysts polled by Dow Jones Newswires.
“Compared to the previous quarter, the underlying results were depressed by weaker oil and US gas prices together with reductions in output due to extensive planned maintenance, particularly affecting high-margin production from the Gulf of Mexico, and lower net income from (Russian joint-venture) TNK-BP,” BP said.
The results were badly received. Investors sent BP shares sliding 3.88 percent to 427.22 pence on the London’s benchmark FTSE 100 index, which was down 0.10 percent at 5,687.72 points in morning deals.
“Weaker oil and gas prices, impairments including a major writedown on US shale assets and reduced production due to planned maintenance have all conspired to depress profits and shareholders alike,” noted analyst Richard Hunter at Hargreaves Lansdown Stockbrokers.
The London-listed company is still attempting to turn around its fortunes around after the devastating Gulf of Mexico oil spill disaster in 2010.
“Our extensive turnaround and maintenance programme, which will continue into the third quarter, is also affecting some aspects of our near term results,” Dudley said.
“All of this will take time but it is important investment that will enhance safety and reliability for the long term. As we deliver this major transformation, we are also committed to generating sustainable efficiencies in our operations.”
The group also forecast that its third-quarter production would drop, partly due to the ongoing $38-billion divestment program that is aimed at meeting the bill for the Gulf of Mexico spill.
“Looking ahead we expect third-quarter reported production to be slightly lower than the second quarter as a result of ongoing seasonal turnaround activity across the portfolio, including in higher margin regions such as the UK North Sea, and the continuation of the divestment programme.”
The Gulf of Mexico oil disaster was caused by an explosion on the BP-leased Deepwater Horizon rig that killed 11 workers, spewed millions of barrels of crude into the sea and left the group with huge compensation costs.
The blast on April 20, 2010, sparked what is widely acknowledged to be the worst environmental catastrophe in US history.
WATCH: Trump blurts out a massive lie about Dem congresswomen — after being asked about Melania
President Donald Trump on Friday falsely accused Democratic congresswomen of using the phrase "evil Jews."
Trump ignited a firestorm over the weekend after saying that the congresswomen of color should "go back" to their countries of origin. At a rally on Wednesday, his supporters chanted "send her back" after Trump attacked one of them, Rep. Ilhan Omar (D-MN).
But on Friday, Trump insisted the congresswomen were the real racists.
"You know what is racist to me? When somebody goes out and says the horrible things about our country, the people of our country, that are anti-Semitic, that hate everybody, that speak with scorn and hate -- that to me is really a very dangerous thing," Trump said.
Iran says it has seized British oil tanker
Iran's Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, further raising tensions along a vital international oil shipping route.
Britain said it was urgently seeking information about the Stena Impero after the tanker, which had been heading to a port in Saudi Arabia, suddenly changed course after passing through the Strait of Hormuz at the mouth of the Gulf.
The Revolutionary Guards said they seized the tanker at the request of Iranian maritime authorities for "not following international maritime regulations," state television reported.
Former FBI Director James Comey outlines the burning questions he’d ask Robert Mueller
Former FBI Director James Comey has written a lengthy post at the Lawfare blog outlining the most important questions that Democrats need to ask of former special counsel Robert Mueller.
Although many of the questions outlined by Comey are simply asking Mueller to rehash the findings of his final report on Russian interference in the 2016 presidential election, he does ask some questions designed to get Mueller to offer up his own analysis of President Donald Trump's actions, such as, "Did you find substantial evidence that the president had committed obstruction of justice crimes?" and "Did you reach a judgment as to whether the president had committed obstruction of justice crimes?"