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BP’s operating cash flow drops significantly

Oil&Gas Materials 28 April 2020 13:15 (UTC +04:00)
BP’s operating cash flow drops significantly

BAKU, Azerbaijan, April 28

By Leman Zeynalova – Trend:

Operating cash flow for the first quarter of 2020, excluding Gulf of Mexico oil spill payments, was $1.2 billion, as compared to $5.9 billion in the same period of 2019, Trend reports citing BP.

Gulf of Mexico oil spill payments in the first quarter of 2020 were $0.3 billion on a post-tax basis.

“Underlying replacement cost profit for the first quarter was $0.8 billion, compared with $2.4 billion for the same period a year earlier. The result reflected lower prices, demand destruction in the Downstream particularly in March, a lower estimated result from Rosneft and a lower contribution from oil trading. It was also impacted by $0.2 billion non-cash underlying foreign exchange (FX) effects in other businesses and corporate, including FX translation impacts of finance debt in the BP Bunge Bioenergia joint venture,” said BP in its report on Q1 2020.

Replacement cost loss for the first quarter was $0.6 billion, compared with a profit of $2.1 billion for the same period a year earlier, including a $1.4 billion net adverse impact of non-operating items and fair value accounting effects, reads the report.

“Inventory holding losses of $3.7 billion, as a result of the dramatic drop in oil prices at the quarter end, were the main driver of the reported historical cost loss of $4.4 billion. Receipts from divestments and other proceeds were $0.7 billion in the first quarter,” said BP.

The company’s net debt at the end of the quarter was $51.4 billion, $6.0 billion higher than a quarter earlier.

“Also reflecting lower equity including FX impacts, gearing at quarter end was 36.2 percent. At the end of the quarter BP had around $32 billion of liquidity available,” reads the report.

A dividend of 10.5 cents per share was announced for the quarter.

Bernard Looney, BP chief executive officer, said the company is taking decisive actions to strengthen its finances – reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower.

“We are determined to perform with purpose and remain committed to delivering our net zero ambition,” he noted.

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