BP swung to a $6.3 billion second quarter loss on Tuesday after write downs tied to the ongoing conflict in Libya and the company’s recent Deepwater Horizon settlement.
BP said, “The result reflected the impact of continued low oil and gas prices, a reduced contribution from Rosneft, and one-off charges arising from circumstances in Libya, but also continuing strong earnings from BP’s downstream businesses and lower cash costs throughout the Group.”
Earlier this month, BP agreed to settle all outstanding federal and state claims as well as claims made by more than 400 local government entities arising from the 2010 Deepwater Horizon oil spill for $18.7 billion.
The company took a $9.8 billion pre-tax charge in the second quarter tied to the Deepwater agreement.
BP also took about $600 million in exploration write-offs and other costs related to its activities in Libya, primarily “due to circumstances in the country,” BP said.
As a result of the charges, together with other non-operating items and fair value accounting effects, BP reported a replacement cost loss for the quarter of $6.3 billion, or a loss of $34.25 per share.
BP’s operating cash flow in the second quarter was $6.3 billion, down from $7.9 billion a year earlier.
The company’s upstream segment reported an underlying pre-tax replacement cost profit of $0.5 billion for the quarter, compared with $0.6 billion in the first quarter and $4.7 billion during the same quarter last year.
BP’s downstream segment reported an underlying pre-tax replacement cost profit of $1.9 billion, down from $2.2 billion in the first quarter but up from $0.7 billion in the second quarter 2014.
The company also confirmed that it has agreed to $7.4 billion in divestments as part of its current $10 billion divestment program.
BP announced a quarterly dividend of 10 cents per ordinary share, expected to be paid in September.
“In the past few weeks oil prices have fallen back in response to continued oversupply and market weakness and the recent agreements regarding Iran. I am confident that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future,” BP CEO Bob Dudley said.