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| BP profits hit by lower oil price | BP profits hit by lower oil price |
| (35 minutes later) | |
| BP has reported lower profits and says it will cut spending on exploration because of the fall in oil prices. | BP has reported lower profits and says it will cut spending on exploration because of the fall in oil prices. |
| Underlying profits in the final three months of 2014 were down 20% on a year earlier at $2.2bn (£1.5bn). For the full year, profits fell 10% to $12.1bn. | Underlying profits in the final three months of 2014 were down 20% on a year earlier at $2.2bn (£1.5bn). For the full year, profits fell 10% to $12.1bn. |
| The oil giant also said it would be cutting capital expenditure plans by $4bn-$6bn this year. | The oil giant also said it would be cutting capital expenditure plans by $4bn-$6bn this year. |
| BP's share price is down 16% since last summer due to lower oil prices, which have fallen 50% in the past six months. | BP's share price is down 16% since last summer due to lower oil prices, which have fallen 50% in the past six months. |
| "We have now entered a new and challenging phase of low oil prices through the near and medium term," said BP chief Bob Dudley. | "We have now entered a new and challenging phase of low oil prices through the near and medium term," said BP chief Bob Dudley. |
| BP wrote down $3.6bn of assets to reflect the lower value of its operations and reserves given the weaker oil price. After taking account of this write-down and other one-off items, BP reported a loss for the quarter of $969m. | BP wrote down $3.6bn of assets to reflect the lower value of its operations and reserves given the weaker oil price. After taking account of this write-down and other one-off items, BP reported a loss for the quarter of $969m. |
| The company was also hit by lower income at Russian energy giant Rosneft, where estimated underlying profits fell to $470m in the final quarter of 2014 from $1.1bn a year earlier. This was due to sanctions against Russia following its actions in the Ukraine and the weak rouble. | The company was also hit by lower income at Russian energy giant Rosneft, where estimated underlying profits fell to $470m in the final quarter of 2014 from $1.1bn a year earlier. This was due to sanctions against Russia following its actions in the Ukraine and the weak rouble. |
| BP owns a 20% stake in Rosneft. | BP owns a 20% stake in Rosneft. |
| The UK-based company also took a further hit of $477m in the final quarter from legal and clean up costs relating to the Gulf of Mexico oil spill in 2010. The total cost of the spill now stands at $43.5bn. | The UK-based company also took a further hit of $477m in the final quarter from legal and clean up costs relating to the Gulf of Mexico oil spill in 2010. The total cost of the spill now stands at $43.5bn. |
| 'Resetting BP' | |
| BP said the average oil price between October and December last year was $77 a barrel, compared with $109 a year earlier. So far this year, the average price has been $48. | |
| Oil prices have fallen due to rise in supply, largely from US shale producers, and a fall in demand, mainly due to China's slowing economic growth. | |
| Many experts believe oil prices will remain low - below $80 a barrel - for the next two to three years. | |
| "Our focus must now be on resetting BP - managing and rebalancing our capital programme and cost base for the new reality of lower prices," said Mr Dudley. | |
| Part of this process is cutting back on investment - the company said capital expenditure would be about $20bn in 2015, compared with its original forecast of $24bn-$26bn. |