BP cuts another £1bn from investment budget as Q3 profits fall by half


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BP profits in its third-quarter this year fell by 48% from $1.8 billion to $933 million – but still managed to exceed expectations of $780 million.

This compares to $720 million profit for the previous quarter and $1.8 billion for the third quarter of 2015.

The oil giant also announced today that it is further cutting another £1 billion off its investment plans for this year as sluggish crude oil prices dragged down profits.

The Brent oil price averaged $46-barrel in the quarter, compared with $50-barrel in 3Q 2015.

Oil prices are now trading at around $49 a barrel, meaning BP is banking on a slight rise in prices going into next year.

The company – which plans to lay off around 7,000 workers by the end of next year –  said it was expecting further charges related to redundancies and other restructuring measures next year, adding to the $2.1 billion in charges incurred since the end of 2014.

Chief Financial Officer Brian Gilvary commented: “We remain on track to re-balance organic cash flows next year at $50 to $55 a barrel <for crude oil price>.”

During the quarter, In September, BP and Det Norske also completed the formation of their Norwegian joint venture. On completion of the sale of BP Norge, BP received a 30% equity interest in Aker BP.

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