BP Hit By 80% Profit Drop

CBJ — BP plans to further cut capital spending after reporting an 80% drop in profit in the first quarter of the year, when oil prices touched a near 13-year low.

The British oil company, the first major to report on one of the weakest quarters, lowered its 2016 spending target to $17-billion (12 billion pounds), from $17-19 billion, and said the marker could fall to $15-$17-billion next year if oil prices remain weak.

These cost reductions Bob Dudley said he expected crude prices to recover towards the end of the year as producers halt work on fields and fuel demand remains robust.

Faced with the worst downturn in the oil sector in at least three decades, BP reduced its capital spending three times in 2015 to $19-billion, slashed nearly 10% of its work force of about 80,000 and sharply lowered costs.

BP slipped to its biggest annual loss last year as a result of lower oil prices, costs related to the settlement of a deadly 2010 Gulf of Mexico oil spill and huge writedowns.