Oil giant BP announces $5bn annual loss after year of ‘pain and sadness’

BP today announced losses of more than $5billion across 2020, a year described by CEO Bernard Looney as one of “pain and sadness” which saw lives lost, livelihoods destroyed and oil prices tumble. 

The oil giant has revealed it plunged to a full-year underlying replacement cost - its most watched measure - loss of $5.7 billion (£4.2 billion) against profits of $10 billion  (£7.3 billion) in 2019.

Fourth-quarter earnings fell short of analyst expectations as the Covid-19 pandemic continued to hurt sales and refining profit margins. Adjusted net income was $115 million, down from $2.57 billion a year earlier short of the average analyst estimate of $440 million.

It said oil prices have risen since the end of October, helped by the rollout of the coronavirus vaccine worldwide, while it also expects demand to bounce back this year.

Chief executive Bernard Looney said: "2020 will forever be remembered for the pain and sadness caused by Covid-19. Lives were lost, livelihoods destroyed.

"Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins."

He said 2020 was also a "pivotal year" for the company as it launched a net-zero goal and overhauled itself in a move that saw nearly 10,000 jobs go.

Mr Looney added: "We expect much better days ahead for all of us in 2021."

Murray Auchincloss, chief financial officer, said: "These results reflect a truly tough quarter, with a challenging price environment and COVID-19 related demand impacts. Nonetheless, we made strong progress in reducing net debt again, to $39 billion in the quarter. 

“We remain on track to meet our target of $35 billion between the fourth quarter of 2021 and first quarter of 2022, which will trigger the start of share buybacks, subject to maintaining a strong investment grade credit rating.”