BP has announced a third round of spending cuts and more asset sales in the coming years to tackle an extended period of low oil prices after third-quarter profits slumped. Hayley Platt reports
It's the first time BP has reported quarterly results knowing the full extent of its Gulf of Mexico spill liabilities. And they were better than expected with net income at $1.8 billion. But with a $54 billion settlement to fund and low oil prices more cuts and asset sales are on the cards. A further $3-5 billion of divestments have been announced for 2016 - on top of the $50 billion already shed. And spending capital for 2015 will shrink again - its third adjustment. Justin Urquart Stewart from Seven Investment Management. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUART STEWART, SAYING): "The world has changed for all the oil companies and energy companies and it's not going to change back anytime soon. It's the real impact of the oil price now, so therefore everything has to be cut back and redesigned." BP ramped up production by 4.4 percent from a year earlier. Gains in its refining and trading division rose to $2.3 billion from $1.5 billion the previous year. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUART STEWART, SAYING): "For the longer term the oil prices is obviously going to be very dangerous indeed because all oil companies have designed themselves on the basis that oil was a finite resource and inevitability it was going to get more and more expensive and of course that sheer line of logic has been broken." Benchmark Brent oil prices averaged $50 a barrel in the third quarter of this year, down from just over $60 in the previous quarter. That's a halving from where it was a year earlier. BP will maintain a 10 cents dividend. And it's shares traded higher by 1 percent, suggesting investors believe BP can adapt to this tough period.