Eni reported a 44% fall in profits several days earlier. 

 

BP's underlying profit was $791 million compared with $2.35 billion in 2019.

 

Operating cash flow was $1 billion for the first quarter, including a working capital release of $700 million, compared with $5.3 billion for the same period in 2019.

It expects worse pain in the following quarter given the oil price fall only seriously impacted March earnings.

 

"Looking ahead, we expect second-quarter reported production to be lower compared to the first quarter, and will be subject to significant uncertainties with regard to the implementation of OPEC+ restrictions, price impacts on PSA and TSC entitlement volumes, divestments, market restrictions given lack of demand for oil and COVID-19 operational impacts," it said.

 

"We expect a lower level of North American heavy crude oil discounts."

 

It will cut organic spending by 25% or $12 billion this year, and will delay exploration and appraisal work and cutting activity in lower margin areas.

 

All up it may cut production by 70,000 barrels of oil equivalent per day.

Downstream capex cuts will be around $1 billion.

 

In an interview with US TV station CNBC on the sidelines CEO Bernard Looney said "demand in the second quarter, we think, will be down around 16 million barrels per day worldwide this year. And that's about five times the previous demand destruction which we saw in the global financial crisis in 2008 to 2009."

 

Capital expenditure in the quarter was roughly level with the same time last year at $3.5 billion compared to $3.6 billion and inorganic capex was $300 million compared with $2 billion.

 

Production was 2.9% lower than the previous year, though when adjusted for portfolio changes was 0.7% higher "mainly due to reduced turnaround activities", it said.

 

However unlike Equinor which last week cut dividends by 67% BP will maintain a 10.5c dividend.

 

Gearing is up to 36%, higher than many of Australia's companies, and up compared the previous quarter's 31%.

 

"Gearing is expected to remain above the 20 to 30% target range into 2021," it said. 

 

Despite planned capex cuts BP has unlined the importance of its net-zero by 2050 ambition, will spend $500 million this year on its new energy sector and made special note of its planned investment in Santos' Moomba carbon capture and storage project in South Australia but did not cite a figure.

 

Previously, BP signed on for a possible A$20 million though the deal was contingent on sanction by Santos. The Adelaide company confirmed during its own recent outlook that planned spending cuts of 38% this year would not hit its flagship CCS project, for which it was hoping for government funding in some capacity.

 

BP will not cut staff for now but has flagged the [possibility for later in the year.