BP has announced record annual profits of $21.2 billion (£14.7 billion) for 2008 despite the falling price of oil. The figure, announced today, compared to profits of $20.8 billion (£14.4 billion) for the oil giant in 2007.
BP also reported its first quarterly loss in more than seven years – the $3.3 billion (£2.2 billion) fourth-quarter loss compared with a $4.4 billion (£3 billion) profit the previous year.
BP chief executive Tony Hayward said the depressed fourth quarter result mainly reflected the recent dramatic fall in the world price of crude oil. He added that BP was continuing to cut costs, saying: "Our cash costs fell in the fourth quarter despite higher energy bills and inflation in the industry that was running at 15 per cent in mid-2008.
"Across the group we are beginning to see the impact of our cost-cutting drive, with costs falling year on year upstream and downstream and, above all, in our overheads which were down by $500 million in the fourth quarter.”
He added there were 3,000 job cuts in 2008 and he expected staff reductions "to exceed the original target of 5,000 by the middle of 2009".
He said: “We have made good progress in slimming and simplifying the organisation while at the same time strengthening the front line, but we’re not being complacent. In the current climate we especially need to maintain the momentum we have established in the drive to make BP more efficient. The mantra in BP today is: ‘Every dollar counts, every seat counts’.”
The announcement came days after Exxon Mobil revealed record profits for the full year of $45.2bn (£31.8bn), up from $40.6bn (£28.6bn) the previous year. However, quarterly profits fell 33 percent for the final quarter of 2008 to $7.8bn (£5.4bn) compared to the same period the previous year.
Fellow oil company Chevron announced fourth quarter profits had risen to $4.9bn (£3.5bn). For the full year, it posted profits of $23.93bn (£16.9bn), up from $18.69bn (£13.2) in 2007.
Chevron also said there would be a $22.8 billion (£16bn) "capital and exploratory spending program for 2009, unchanged from the level of expenditures in 2008".
As part of the statement on Friday, chairman and CEO Dave O’Reilly said: "Our company’s financial strength enables the funding of attractive investments consistent with our long-term strategies."
He added that about 75 percent of the 2009 spending program was for upstream oil and gas exploration and production projects worldwide. Another 20 percent was associated with the company’s downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products.
O’Reilly said: "Much of our 2009 spending continues to be on large, multiyear projects aimed at increasing energy supplies to meet global demand and also improving operating efficiency and reliability. About 10 percent of the budget is for large, one-time payments related to upstream production concessions outside the United States."
In addition, more than 100 employees walked out of the Esso refinery in Fawley on February 2nd as part of protests taking place around the country about the use of foreign labour. The action followed workers striking at the Lindsey Oil Refinery in Lincolnshire on Friday after the refinery’s owner Total gave a major contract to an Italian firm.