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BP posts $16.9 billion second-quarter loss in wake of Gulf oil spill

Text by News Wires

Latest update : 2010-07-27

BP said on Tuesday that it had suffered a loss of 16.9 billion dollars in the second quarter of 2010 in the wake of a massive oil spill in the Gulf of Mexico, adding that it would sell off 30 billion dollars in assets over the next 18 months.

REUTERS - BP Plc named American Bob Dudley as its next CEO on Tuesday, saying Tony Hayward would stand down after his gaffe-prone handling of the worst oil spill in U.S. history that triggered a $17 billion quarterly loss.
Dudley, the U.S. executive managing BP's response to the spill in the Gulf of Mexico, will get the top job on Oct. 1, a move that could soften U.S. criticism of the British oil major.

"I believe that it is not possible for the company to move on in the United States with me remaining as the face to BP," Hayward told reporters on a conference call. "So I think that for the good of BP, and particularly for the good of BP in the United States, it is right for me to... step down."
BP said it planned to sell assets worth up to $30 billion over the next 18 months and would cut its net debt to between $10 billion and $15 billion in that period.
The company said it would consider its position on future dividend payments at the time of its fourth-quarter results.

Analysts had expected BP to set aside tens of billions of dollars to cover the cost of the April 20 oil rig explosion that killed 11 people, ruined the Gulf's fishing and tourism industries, and polluted the Gulf shoreline with slimy goo.
BP Chairman Carl-Henric Svanberg said the company would take a "hard look" at itself in the aftermath of the spill: "BP... will be a different company going forward".
However, Dudley denied BP's culture, which investors and analysts say encourages greater risk taking than some rivals, contributed to the disaster in the Gulf of Mexico.
Excluding a $32.2 billion charge for the oil spill and other non-operating costs, the replacement cost profit was $4.98 billion, in line with the average forecast from a Reuters poll of 11 analysts and up 77 percent on the same period of 2009.

Replacement cost profit strips out gains or losses related to changes in the value of fuel inventories and as such is comparable with net income under U.S. accounting rules.

BP shares, which lost more than $100 billion in value at the height of the crisis, eased 0.2 percent in early London trading.
"It's basically a kitchen sink job and we've got the way forward," said Panmure analyst Peter Hitchens.

"They've taken all the charges at once and we're seeing the first way forward -- how they're going to deal with the balance sheet -- which is the key thing ... I think it's the board trying to wipe the slate clean."

Date created : 2010-07-27


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