BP and Total are first off the starting block in a heavy week of results for oil majors - both reporting a lower-than-expected slide in profits in a sector still struggling to contend with slumping crude prices. David Pollard reports.
How the mighty can fall. Crude oil's price crash slashing profits - and sending the industry into a frenzy of cuts. The latest sector snapshot comes from BP. Its net income is down nearly a fifth on the same period last year. But that hides some good news: it's up 15 per cent on the previous quarter. And - best of all for investors - there's a dividend of 10 cents per share. BGC market analyst, Mike Ingram. SOUNDBITE: BGC MARKET ANALYST, MIKE INGRAM, SAYING (English): ''The statement that accompanied the release this morning specifically said 'we're going to keep paying dividends', cash flow is king in this business, and so shareholders shouldn't worry about that yield, they will deliver on that.'' BP's fightback has seen a 13 per cent cut in 2015 capital spending - and a large restructuring programme. The upstream picture's weak, say analysts. Profits slumped to 604 million dollars from 4.4 billion a year earlier. Refining, though: that's doing well. Pretax profit there jumped to 2.2 billion dollars from one billion previously. And one rival may be saying its own silent 'merci' to refining. French major Total has reported a 22 per cent drop in Q1 net profit overall. But, like BP, it's better than expected thanks to a rise in refining margins. And there's hope new projects could kick-start a year of strong output. That's according to CEO Patrick Pouyanné - who sees the challenges as opportunity - to clean up the industry. Something easier to sell to stakeholders when prices are at $50 a barrel, rather than $100. Fat Prophet's Sarbjit Chahal is one analyst who see more cuts coming. SOUNDBITE: SARBJIT CHAHAL, SENIOR EQUITIES ANALYST, FAT PROPHET, SAYING (English): "There is a knock on effect, when the underlying commodity falls it does mean that everyone has to tighten their belts from suppliers through to the end user, to some degree. It all depends on how long the low oil price environment continues for. If we do get to a point towards the end of the year, if we reach our price target of between $75-$80 bucks a barrel, suddenly the landscape is a very different one from where we are today." The pressure's on to move fast to take advantage of low prices. Brent crude hit a 4-1/2 month high of 65 dollars 80 a barrel last week. And Barclays has just become the latest of several banks to revise up its price forecast for this year, and next.