BP in new spending curbs as lower oil price takes toll

Oil major BP has taken another axe to investment plans as the blue-chip company’s profits took another beating on low crude prices and squeezed refining margins.

Profits for the April-June quarter slumped by 45% on last year to just $720 million (£550 million) — $120 million below City hopes and driving the shares down 6.15p, or more than 1%, to 434.25p.

Chief executive Bob Dudley said BP expects “the environment to remain challenging”. He added that full-year capital expenditure would come in below the $17 billion target that had previously been given.

BP’s margins per barrel of oil are down by a third on last year while the average cost of a barrel of Brent crude was $47.03 over the quarter compared with $63.50 in 2015.

The results also included a charge of $5.2 billion over the Deepwater Horizon catastrophe in the Gulf of Mexico in 2010, which killed 11 workers. The total costs of the disaster have now been largely capped at $62 billion.