For the first time since the Deepwater Horizon disaster, BP announced it will slash its dividend pay-out after reporting a multibillion-dollar loss. BP will cut its shareholder pay-out by 50% from 10.5 cents to 5.25 cents per share for the second quarter after reporting the loss, which included a post-tax charge of nearly USD11bn for non-operating items. BP’s decision to cut its dividend was pretty much unavoidable in the current climate, especially after its European rival Royal Dutch Shell cut its pay-out in May. The business reported an adjusted net loss of just over USD6.50bn for the second quarter, following a profit of about USD2.8bn a year earlier. However, this was a narrower loss than anticipated as BP said its trading division performed strongly.
CEO of BP, Bernard Looney, said in a statement ‘These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent BP’ adding ‘In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact. Beneath these, however, our performance remained resilient, with good cash flow and – most importantly – safe and reliable operations’.
As well as its second-quarter earnings, BP announced a new strategy that it believes will help the giant shift to clean energy in line with its plan to become a net-zero-carbon company by 2050 or sooner. It was expected that the new strategy would be unveiled next month. Within 10 years it plans to raise its annual low carbon investment 10-fold from around USD500m a year, currently. It also aims to have developed around 50 gigawatts of net renewable generating capacity by 2030 – a massive 20-fold increase from last year as well as committing to lowering its gas and oil production by 40% from the current levels by 2030 and would not begin any exploration in new countries.