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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. |
| Separately, fellow UK energy company BG Group said it was writing down assets worth almost $6bn due to the weaker oil price. | Separately, fellow UK energy company BG Group said it was writing down assets worth almost $6bn due to the weaker oil price. |
| Russian troubles | Russian troubles |
| "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. |
| Analysts said that given the tough market conditions, BP's results proved the company's resilience. | Analysts said that given the tough market conditions, BP's results proved the company's resilience. |
| "Set against headwinds which would have blown lesser forces off course, BP has continued its steady, if treacherous, recovery," said Richard Hunter from Hargreaves Lansdown Stockbrokers. | "Set against headwinds which would have blown lesser forces off course, BP has continued its steady, if treacherous, recovery," said Richard Hunter from Hargreaves Lansdown Stockbrokers. |
| He added that the company's commitment to making dividend payments the "first priority" would reassure investors. | He added that the company's commitment to making dividend payments the "first priority" would reassure investors. |
| BP's share price was up 2% in afternoon trading in London, having been 3.5% up straight after the results were announced. | |
| Analysis: Kamal Ahmed, BBC business editor | Analysis: Kamal Ahmed, BBC business editor |
| As Bob Dudley, BP's chief executive, told me at the World Economic Forum at Davos, the oil major expects the oil price to remain low for up to three years. | As Bob Dudley, BP's chief executive, told me at the World Economic Forum at Davos, the oil major expects the oil price to remain low for up to three years. |
| Now, that may be a little pessimistic. The price of Brent crude has been creeping up over the last week and American production of shale oil is being cut, which will tighten supply. | Now, that may be a little pessimistic. The price of Brent crude has been creeping up over the last week and American production of shale oil is being cut, which will tighten supply. |
| But Mr Dudley is making the "low price for a long time" argument for a reason. | But Mr Dudley is making the "low price for a long time" argument for a reason. |
| He wants to push BP on costs, demanding that it becomes an oil major fashioned for an oil price between $50 and $100 a barrel rather than one only comfortable when oil is over $100 a barrel. | He wants to push BP on costs, demanding that it becomes an oil major fashioned for an oil price between $50 and $100 a barrel rather than one only comfortable when oil is over $100 a barrel. |
| Read Kamal's blog in full | Read Kamal's blog in full |
| 'Resetting BP' | '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. | 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. | 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. | 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. | "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. | 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. |
| A number of oil majors have announced big cuts in spending this year. Shell, for example, has said it will cut expenditure by $15bn over the next three years. | A number of oil majors have announced big cuts in spending this year. Shell, for example, has said it will cut expenditure by $15bn over the next three years. |