Market Environment Takes Toll On BP, BASF, Maersk Oil
UK-headquartered BP reported underlying replacement cost profit of $1.8 billion for the quarter, compared with $1.3 billion for the previous quarter and $3.0 billion for the third quarter of 2014, proving once more that the current market conditions are taking a toll on energy companies around the world.
‘Compared with a year earlier, the result primarily showed the impact of sharply lower oil and gas prices but also the benefits of a continuing strong downstream environment and performance and steadily lower cash costs throughout the Group’ reads a note released by the British company on Tuesday.
BP said that its capital expenditure in the next two years should be lower than in 2015.
‘BP expects organic capital expenditure will be in the range of $17-19 billion a year through to 2017, closer to $19 billion in 2015. Expectations for 2015 capital expenditure were $24-26 billion a year ago and under $20 billion in the second quarter of 2015.’
The British company said it divested assets for $7.8 billion so far, while its 2015 target was $10 billion.
‘BP expects to agree a further $3-5 billion divestments in 2016 before returning to a rate of around $2-3 billion a year thereafter.’
BP expects a $60 per barrel Brent oil price environment in 2016.
“We are now in action to rebalance our financial framework in this new price environment” Group chief executive Bob Dudley commented.
Other energy-related companies posted similar results on Tuesday.
BASF
Germany’s BASF reported sales for €17.4 billion in the third quarter of the year, which represents a 5% decrease with respect to the same period in 2014.
‘It is unlikely that the BASF Group will achieve the slight sales growth forecast for 2015. BASF now expects sales to decline slightly’ the company wrote on Tuesday.
PA RESOURCES
Also on Tuesday, Sweden-headquartered PA Resources held an extraordinary general meeting. The company then said it will continue operations.
‘The board of the company has prepared a second balance sheet for liquidation purposes which shows that the company's registered share capital has been restored. The general meeting resolved that the company must not go into liquidation’ PA Resources said.
MAERSK OIL
On Monday, Maersk Oil announced its intention to implement workforce reductions amounting to 10-12% of roles across its business.
“We are operating in a materially changed oil price environment and have taken necessary decisions to reduce activity levels through 2015, and ensure we focus where we can see adequate returns from our most robust projects” Maersk Oil CEO Jakob Thomasen stated on Monday.