OIL giant BP’s second-quarter profits slumped by nearly two-thirds from last year as it grappled with lower oil prices, a write-off in Libya and a $10.8 billion charge for the 2010 crude spill in the Gulf of Mexico.
Expecting a prolonged period of lower crude prices, the oil and gas company also cut its capital spending plans for this year for a second time to below $20bn from $22.9bn (£14.7bn) last year.
BP’s chief financial officer Brian Gilvary said he expected oil prices – which fell to their lowest since February at below $53 a barrel – to remain soft in the medium term because of a supply glut worldwide.
The firm reached an $18.7bn agreement with the US government and five states earlier this month to resolve most claims from the oil spill five years ago, the largest corporate settlement in US history.
Profits were also hit by a $600 million exploration write-off in Libya because of security issues.
Overall, BP’s underlying replacement cost profit, the company’s definition of net income, came in at $1.3bn, below analysts’ expectations of $1.64bn and down from $3.6bn a year earlier.
With oil prices languishing at less than half their 2014 peak, cost savings remain key for oil companies to weather the storm.
BP has already cut about 5,000 jobs this year from a total of 80,000 employees at the end of 2014.
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