British energy giant BP on Tuesday said annual net profit slumped 57 percent to $4.0 billion last year, hit by weaker oil prices, as long-time chief executive Bob Dudley bowed out.
The figure, equivalent to 3.6 billion euros, compared with profit after tax of $9.38 billion in 2018, the company said in a statement marking the end of American Dudley’s decade at the helm.
It was announced in October that Irish national Bernard Looney would replace Dudley, who steps down after a 40-year career at BP.
Looney joined BP in 1991 as a drilling engineer, rising to lead its upstream division that comprises exploration and production.
“After almost ten years, this is now my last quarter as CEO,” Dudley said in Tuesday’s statement.
“In that time, we have achieved a huge amount together and I am proud to be handing over a safer and stronger BP to Bernard and his team.
“I am confident that under their leadership, BP will continue to successfully navigate the rapidly-changing energy landscape,” he added.
Despite the dive in annual net profit, BP’s share price surged 4.0 percent in London morning deals.
“BP boosted its dividend... despite a substantial fall in profits because of weaker crude prices,” noted Neil Wilson, chief market analyst at Markets.com.
“The worry for the oil majors now is that we see ongoing demand destruction in Asia from the coronavirus outbreak that bleeds into Brent crude prices throughout the year.” BP noted that average Brent crude prices slid last year to below $65 per barrel from above $71 in 2018.
Benchmark Brent was trading at around $55 on Tuesday after massive falls over the past week linked to the impact of coronavirus on global energy demand should the economy tank.
While traditional energy companies remain massively dependent on income from fossil fuels, in the latter years of Dudley’s reign BP increasingly moved into cleaner energies, fuelled by changing public attitudes and government policies towards carbon emissions and climate change.
BP snapped up Britain’s largest electric vehicle charging firm Chargemaster in 2018, as it bets on booming demand for electric cars in the coming decades.
The company predicts that renewable sources could account for 15 percent of global energy consumption by 2040.
BP on Tuesday added that it took a further $2.4 billion-hit last year from the 2010 Gulf of Mexico oil spill disaster, while it expects a $1.0 billion bill this year.
That would take BP’s total clean-up and compensation costs close to an eye-watering $75 billion.
Dudley was parachuted into BP in October 2010 after his predecessor Tony Hayward was forced out over his handling of the deadly disaster.
The BP-leased Deepwater Horizon oil rig exploded off the coast of Louisiana while drilling a well 5,000 feet (1,500 meters) below sea level on April 20, 2010.
Eleven rig workers were killed in the blast that caused 134 million gallons (507 million litres) of oil to spew into Gulf waters.
It took 87 days to cap the out of control well, and the oil slick stretched across an area the size of the state of Virgina, blackening beaches across five US states and hitting tourism and fishing.
The spill, one of the worst environmental disasters to strike the United States, prompted Dudley to improve its safety procedures and overhaul its structure.
Also under Dudley, BP in 2018 bought mining giant BHP Billiton’s US shale oil and gas operations in a landmark $10.5-billion deal.