BP's share price opened up this morning after the oil and gas giant reported better than expected results for the year.
The oil price fall has been taking its toll.
Underlying profits in the final three months of 2014 were down 20 per cent on a year earlier at $2.2bn (£1.5bn). Including a $3.6bn write-down, reflecting the lower value of its operations and reserves in light of the oil price, BP reported a loss for the quarter of $969m.
For the full year, profits fell 10 per cent to $12.1bn.
It is also cutting capital expenditure by $4bn-$6bn this year.
The figures were better than expected, however. The share price opened around four per cent higher this morning.
Why it's interesting
The global oil price slide is putting an immense amount of pressure on the oil industry. In the UK, industry leaders have called for tax cuts to prevent expedited platform closures and protect the 440,000 people employed in the industry in the country. BP is not the only company cutting expenditure either: rival Shell said it would cut its expenditure by around 4.5 per cent and Chevron said it would reduce spending by 13 per cent.
What BP said
Chief executive Bob Dudley said:
We have now entered a new and challenging phase of low oil prices through the near and medium term Our focus must now be on resetting BP: managing and rebalancing our capital programme and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations.
These are trying times for the oil industry and for BP in particular. Litigation over the deep water horizon spill continues, and if oil prices keep dropping their could be tougher times ahead.