BP records $4.9 billion loss in 2010

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LONDON: BP on Tuesday announced that it recorded a $4.9 billion loss in 2010 mainly due to the costs related to the oil spill in the Gulf of Mexico.

BP reported that its replacement cost loss was $4.914 billion 2010. The loss is a huge contrast to the $13.955 billion of profit earned in 2009. The loss was diminished as the fourth quarter had a replacement cost profit of $4.6 billion.

This profit was approximately three times more that in the third quarter of 2010 which was reported at $1.8 billion. The Q4 profit was also higher than the $3.44 billion registered in the period in 2009.

The group income statement for the fourth quarter and full year reflects a pre-tax charge of $1.0 billion and $40.9 billion respectively related to the Gulf of Mexico oil spill.

The charges related to the oil spill were reported as non-operating items. Such items and fair value accounting effects for the fourth quarter, on a post-tax basis, had a net favorable impact of $250 million compared with a net unfavorable impact of $937 million in the fourth quarter of 2009.

For the full year, the respective net unfavorable impacts were $25.43 billion and $622 million. Including the impact of the Gulf of Mexico oil spill, net cash used in operating activities for the Q4 was $0.2 billion and net cash provided by operating activities for the full year was $13.6 billion.

These amounts included a net cash outflow of $5.4 billion and $16.0 billion for the fourth quarter and full year respectively in relation to the Gulf of Mexico oil spill.

BP also announced that it will sell its Texas refinery and the southern part of its U.S. West Coast Fuels Value Chain, including the Carson refinery, by the end of 2012. These moves are part of BP's restructuring.

In November 2010, BP agreed to sell five southern African marketing businesses to Puma Energy for approximately $296 million. The decision was a result of a strategic review of BP's southern African refining and marketing businesses.

The five businesses supply commercial fuels, aviation fuel, lubricants, and a total of almost 190 service stations across Namibia, Botswana, Malawi, Tanzania and Zambia.

This month, BP and Russia's Rosneft Oil Company agreed on a strategic global alliance. BP and Rosneft formed a joint venture to explore and, if successful, develop three licence blocks on the Russian Arctic continental shelf.

In April 2010, a Deepwater Horizon rig exploded killing 11 people and causing the worst U.S. oil spill disaster in history. In September, BP finally sealed the well with cement 18,000 feet below the sea. BP was ordered to pay for the relief efforts caused by the oil spill.

(BNO NEWS )

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