BP BP Plc

By Selina Williams 

LONDON--BP PLC posted its third straight quarterly loss as the British oil giant reels from a two-year crude-price slump and remains haunted by the 2010 Gulf of Mexico spill.

BP said its replacement cost loss--a number analogous to the net income that U.S. oil companies report--was $2.25 billion, compared with a loss of $6.27 billion a year earlier.

Much of the loss could be attributed to a $5.2 billion pretax charge associated with the 2010 Deepwater Horizon blowout that killed 11 workers and flooded the Gulf with millions of barrels of oil. The company now estimates its final meaningful tab for the disaster is about $61.6 billion.

"We will always be mindful of what we have learned from that tragic accident. BP today is a stronger, more focused and more disciplined company," said BP Chief Executive Bob Dudley.

The company's share price opened down 2.4%. Analysts had expected better results. Even stripping out one-off charges such as the Deepwater Horizon losses, the company's underlying earnings of $720 million were around 45% lower than BP's underlying earnings of $1.31 billion in the second quarter a year ago.

Analysts' had predicted underlying earnings of $839 million.

BP's underlying second-quarter earnings were affected by oil prices that have stalled this year and are sharply down from $100 a barrel two years ago. The company's profits from its refineries--which normally do well during low oil prices periods--were down.

This was partly offset by the benefit of lower costs throughout the company, as well as lower exploration write-offs, BP said.

In the second quarter of 2016, Brent oil prices averaged $46 a barrel, compared with $62 a barrel in the same period a year earlier. Refining margins were the weakest for a second quarter since 2010, the company said.

In the same period a year earlier, BP's earnings included a pretax $9.8 billion charge relating to the company's agreement to settle U.S. federal and state claims over the Deepwater Horizon disaster.

BP is the first of the world's biggest Western oil companies to begin reporting quarterly results this week. Statoil ASA is scheduled to disclose earnings on Wednesday, Royal Dutch Shell PLC and Total SA go on Thursday, and Exxon Mobil Corp., Chevron Corp. and Eni SpA are set for Friday.

Write to Selina Williams at selina.williams@wsj.com

(END) Dow Jones Newswires

July 26, 2016 03:56 ET (07:56 GMT)

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