BP Swings To $4.2bn Loss In First Half

Costs associated with the Gulf of Mexico disaster and falling oil prices pushed BP to a loss of $4.2bn (£2.7bn) in the first half of its financial year.

The group said the profit figure reflected a pre-tax charge of $9.8bn that it booked in the second quarter.

It was the result of a deal signed earlier this month to settle a series of legal cases related to the Gulf spill in 2010, taking the total to date to $54.6bn.

To give you an idea of the scale of the amount, that figure would almost be enough to buy Tesco three times over.

The company is still dealing with claims made by individuals and businesses in the US.

BP made a replacement cost profit of $6.7bn in the same period last year but, leaving the effects of the Deepwater Horizon accident aside, oil prices have fallen more than 50% over the past 12 months.

BP - like its rivals - has responded by scaling back production, investment and jobs.

In addition, it has sold assets worth $70bn over the past five years to help pay for the Gulf spill.

The oil price environment meant underlying profits, which reflect the day-to-day performance of the business, fell from $6.9bn in the first half of 2014 to $3.9bn in the first six months of this financial year.

Chief executive Bob Dudley said: "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."