BP Oil Gas Station Sign
BP reported Tuesday that it lost more than $4.9 billion in 2010, the company’s first annual loss since 1992, and it raised the estimate on costs related to the oil spill in the Gulf of Mexico to $40.9 billion.
The loss is in comparison with nearly $14 billion in profits in 2009, while the new cost estimate was an increase from an earlier forecast of $40 billion. The company would have been profitable if it were not for the losses associated to the Gulf oil spill.
“For the full year, the reported result was a loss of $4.9 billion, including a total pre-tax charge related to the Gulf of Mexico oil spill of $40.9 billion,” the company said in an official statement.
BP also announced that it would again make quarterly dividend payments to shareholders, which were stopped in the aftermath of the devastating oil spill last year. Fourth quarter dividends are payable of 7 cents per share and 42 cents per American depositaries. Analysts expected the dividend resumption but it is only half its dividend it was paying before the oil spill disaster.
The disaster was started by an explosion on the Deepwater Horizon rig, which was operated by Transocean Energy and leased by BP, on April 20, killing 11 workers.
By the time the broken well was prepared, about 4.9 million gallons of oil has spilled into the Gulf of Mexico.
Along with destroying hundreds of miles of US coastlines, the spill sent BP’s share price plummeting down and hurt the company’s reputation around the world.
The spill eventually led to the resignation of BP’s chief executive Tony Hayward and led the company to being selling as much as $30 billion in assets.
This week the company also revealed that it wants to sell two major oil refineries, including one a Texas City refinery where 15 workers died in an explosion in 2005. BP is trying to cut its refining capacity in the US in half.