• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 10 hours Could Venezuela become a net oil importer?
  • 2 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 13 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 19 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 10 hours Gazprom Exports to EU Hit Record
  • 13 hours Why is permian oil "locked in" when refineries abound?
  • 3 hours Oil prices going down
  • 11 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 10 hours Could oil demand collapse rapidly? Yup, sure could.
  • 9 hours Oil Buyers Club
  • 13 hours EVs Could Help Coal Demand
  • 8 hours Saudi Arabia turns to solar
  • 1 day Teapots Cut U.S. Oil Shipments
  • 19 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 51 mins Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 1 day Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
Alt Text

Energy Efficiency Adds Value To Home Prices

A new study has suggested…

Alt Text

The Fed Is Driving Down Oil Prices

The hawkish U.S. Federal Reserve…

Alt Text

U.S.-China Trade War Will Hurt Shale Drillers

The latest escalation in the…

Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

More Info

Trending Discussions

BP Surpasses Profit Expectations, Still Wallowing In Debt

BP

It’s been a complicated and contradictory quarter for oil giant British Petroleum. The struggling corporation has failed to reduce debt in the second quarter, with total profits falling by 5 percent compared with last year. Despite these lackluster numbers, BP has actually exceeded analysts’ projections by a wide margin, recovering more quickly than expected despite a plethora of project failures and major expenditures.

In response to their failure to decrease or even stabilize their ballooning debt, the company has now slashed its market forecasts to $50 a barrel over the next five years. This is a considerable cut from their previous projection, which optimistically saw oil returning to $60 a barrel before the end of 2017. While the global market did peak at over $56 a barrel earlier this year, this number has been stymied by high production of shale gas in the U.S. and a global supply glut, bringing prices back below $50.

Part of BP’s woes is their continued and costly struggle to bounce back from 2010’s devastating Gulf of Mexico oil spill, on which they’re still making hefty payments. Thanks in large part to the accident, the company’s debt has now risen to a reported $39.8bn at the end of June as compared to $30.9bn at that time last year. Related: Did The Arab Spring Disarm OPEC?

In addition to the continued financial hardships relating to the Gulf spill, BP recently took a huge hit when they cancelled a massive project in Angola, causing their profits to plunge by more than 50 percent since the beginning of the year. Profits on a replacement cost basis dropped from $1.5bn in the first quarter to $684m, but this actually exceeds average analyst expectations, which hovered around $500m thanks to June’s Angola fiasco, when BP gave up its 50 percent stake in gas exploration of the coast of the African nation after it was decided to be commercially unattractive.

Despite these major setbacks, BP has a lot of new projects underway, and shares this quarter were actually buoyed by a 10 percent increase in oil and gas production. BP is also trying hard to push into new markets, including an effort to move away from its dependence on fossil fuels in the context of an increasingly unpredictable market that shows no sign of stabilizing in the future.

This initiative has included talks with producers of electric vehicles as part of a plan to establish battery re-charging docks at its fuel service stations across the globe. Like many other oil giants, BP is threatened by the looming rise of electric cars and instead of fighting the changing tides, are trying to cash in on the movement. According to industry estimates, demand for some fossil fuels may plateau before 2030.

BP’s case is a prime example of the conflict rocking the entire industry. Across the market, numbers and expectations are low and the future is uncertain. BP isn’t the only oil giant that beat out analyst forecasts this quarter -  Total and Royal Dutch Shell also surpassed expectations by a comfortable margin - showing that the oil industry continues to be marked by uncertainty and volatility that even the experts just can’t get a handle on. In light of this, it’s really no surprise that the oil industry is turning more and more to embrace a future where oil becomes virtually obsolete.

By Haley Zaremba for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News