BP has reported a large fall in profits this week and have accused the current low oil prices and sanctions on Russia as being responsible.
The company have reported a sharp decline in underlying profits by 19 per cent within the last three months alone, operating at profits of only $2.58bn, a substantial fall from its 2014 equivalent of $3.2bn.
The current sanctions that have been imposed on Russia have certainly had an impact on BP, who own nearly 20 per cent of the Russian oil company Rosneft, whose own profits have decreased by more than 65 per cent over the course of the year.
However the company have argued that the biggest contributing factor to their profit falls was the low oil price that has been affecting the entire industry for several months now. The extremes of this were certainly shown in the first three months of 2015 when oil averaged out at $54 a barrel, an extreme low in comparison to the $108 per barrel in 2014.
In attempts to counter against these financial difficulties, BP has introduced a number of practices in order to cut costs, promising to cut project costs by 20 per cent over the next few months.
Bob Dudley, chief executive, said: “We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response.
“We are continuing to progress our planned divestment programme, we are resting our level of capital spending, and we are addressing costs through focusing on simplification and efficiency throughout BP.”
BP is the first big company to announce their losses following oil price decline- click here to follow us on twitter and receive updates if other companies follow suit.
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