BP has reported a loss for the first months of the year because of the collapse of global oil prices following the coronavirus outbreak.
The oil multinational said “exceptionally challenging” market conditions had led to a loss of $628m (£502m) for the first quarter, compared with a profit of $2bn in the first months of 2019.
On a replacement cost basis – its preferred measure – profits tumbled by two-thirds to $791m for the quarter compared with $2.35bn last year.
The bottom line was better than analysts had expected, after coronavirus lockdown restrictions caused oil prices to collapse.
BP said there was an “exceptional level of uncertainty” over the near-term impact of Covid-19 on the global oil market, and a risk of “more sustained consequences” for the company.
The average oil price in the first quarter of 2020 was $50 a barrel, compared with $63 in the first quarter of 2019. In the past week the price of Brent crude, the international oil price benchmark, fell to 21-year lows of $16.
Despite the unprecedented oil market collapse, BP will maintain its shareholder dividend for the quarter at 10.5 cents a share, up 2.4% from last year’s first-quarter payout, amid rising speculation that big oil companies will need to break with convention by cutting dividends to survive the crisis.
BP has cut its dividend only twice in the past 30 years; the last time was after the Deepwater Horizon tragedy in 2010, in which 11 people died and which caused multibillion-dollar damage to the environment.
“We are taking decisive actions to strengthen our finances – reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower. We are determined to perform with purpose and remain committed to delivering our net-zero ambition.”