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BP Profits Fall 39% On Oil Price Collapse

BP Profits Fall 39% On Oil Price Collapse

BP has confirmed a drop of almost 40% in first quarter profits, blaming oil price weakness and its actions to address the issue.

The company said its replacement cost profit in the first quarter came in at $2.1bn (£1.38bn) - a fall of 39% on the same period a year ago.

The financial performance follows a collapse of up to 60% in world oil prices since June last year.

They have now recovered some of that ground but have resulted in BP and its competitors looking to save costs by cutting back on non-core operations .

Chief executive Bob Dudley said: "We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower (oil) prices.

"Our results today reflect both this weaker environment and the actions we are taking in response."

The company's exposure to sanctions-hit Russia - it has a near 20% stake in Russian oil giant Rosneft - added to BP's woes.

Its profits from Rosneft slid 65% to $183m.

BP also announced a further charge of $332m arising from the Gulf of Mexico disaster five years ago , with its cumulative pre-tax charge recognised to date amounting to $43.8bn.

Its biggest immediate challenge is overcoming the fall in world oil costs.

BP said Brent crude averaged $54 per barrel in the quarter compared with $108 in the same period in 2014.

It was, the firm said, the lowest quarterly average Brent price since Q1 2009.

Mr Dudley added: "We are continuing to progress our planned divestment programme, we are resetting our level of capital spending, and we are addressing costs through focusing on simplification and efficiency throughout BP."

Despite the cutbacks, BP confirmed a quarterly dividend of 10 cents per ordinary share, expected to be paid in June.

Its share price is yet to recover from the impact of the Gulf spill five years ago, remaining 26.4% down ahead of trading on Tuesday.