BP cuts investment as sliding oil prices hit profits

BP today joined a list of energy giants planning to slash investment this year as tumbling oil prices bite into group profits.
Spending in 2015 was expected to total about USD 20 billion, down from a previous guidance of USD 24-26 billion, BP said in a results statement.
And smaller British rival BG Group revealed it would cut investment by about USD 3.0 billion this year.
"We have now entered a new and challenging phase of low oil prices through the near and medium term," BP chief executive Bob Dudley said in the earnings statement.
"Our focus must now be on resetting BP: managing and rebalancing our capital programme and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations."

BP said underlying replacement cost profit -- a measure of earnings watched by the market -- dropped almost 10 percent to USD 12.1 billion in 2014 compared with a year earlier.

BP booked a USD 3.6 billion net charge in the fourth quarter, which it said reflected "the impact of the near-term lower oil price environment, revisions to reserves and other factors".
As a result it reported a replacement cost loss of USD 969 million for the final three months of last year.
BP's annual net profit tumbled to USD 3.78 billion from USD 23.45 billion in 2013 but the figure was skewed by a huge one-off gain the previous year earned from the sale of its interest in joint venture TNK-BP to Russia's Rosneft.

The group's share price rallied despite the results, winning 2.54 per cent to 448.80 pence on London's FTSE 100 index, which was up 1.18 per cent at 6,862.85 points in late morning trade.
"Shares in BP have bounced higher after the oil titan posted a dip in profits that nonetheless was ahead of estimates," said David Madden, market analyst at IG trading group.
Energy giants are slashing spending and cutting jobs following a plunge in oil prices since June.