British multinational oil & gas major, BP, has reported annual loss for first time in ten years after a challenging year during which the global oil market suffered a severe blow from coronavirus pandemic.

As per the credible sources, the oil giant reported a loss of $5.7 billion for last year, as compared to a profit of around $10 billion in 2019, as the demand for fossil fuels was axed by the pandemic and led to the decline in prices of oil on the international market.

Reportedly, the company was compelled to write off its oil & gas assets by approximately $6.5 billion last year after lowering its oil prices expectations in the long-term. BP also reduced its worldwide workforce by over 10,000 and decreased its shareholder dividend first time following last year’s Deepwater Horizon disaster, while prices of shares slid down to a 26-year low.

The firm’s annual loss counting the write off as well as other charges that are non-operating in nature was recorded as $18.1 billion for the year, which was its worst financial outcome since it recorded a loss of $4.9 billion after the Deepwater Horizon calamity.

Apparently, all the major oil companies faced difficulties last year as restrictions due to the pandemic constrained the gradually escalating global prices of oil, which have been endured by an agreement between the OPEC oil nations to limiting the oil production.

Brent crude prices has reportedly recovered from $20 per barrel back in April 2020 to over $55 per barrel, however the market still remains considerably below highs of around $75 a barrel back in 2019. Given that, BP has reduced its oil prices forecasts for the coming years to an average $55 per barrel over the span of 2021 to 2050, which is down by nearly a third than its forecasts prior to the pandemic.

During the final quarter of a difficult year for BP, the company registered a modest underlying profit of $115 million, much lower than analyst forecasts of $360 million profit and a fraction of the $2.5 billion reported in the same months in 2019.

In this regard, chief executive of BP, Bernard Looney has stated that the tough quarter at the end of an extremely challenging year was the most difficult time for the company and better days ahead in 2021 are expected.

Source credit: https://www.theguardian.com/business/2021/feb/02/bp-loss-covid-19-oil-demand