For the first time since the Deepwater Horizon disaster in 2010, BP (NYSE: BP) slashed its dividend, halving the payout to shareholders after reporting a US$16.8-billion loss for the second quarter on the back of low oil prices and billions of US dollars in impairments.  

BP will pay a dividend of 5.25 cents per share for the quarter, compared to 10.5 cents per share for the previous quarter, the UK-based company said on Tuesday in an announcement of a dividend cut that was expected by analysts, after similar dividend cuts from Shell and Equinor.

During the second quarter, BP’s net debt was cut by US$10.5 billion to US$40.9 billion, mostly due to the issue of US$11.9 billion in hybrid bonds.

“These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent bp. In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact. Beneath these, however, our performance remained resilient, with good cash flow and – most importantly – safe and reliable operations,” chief executive officer Bernard Looney said in a statement.

BP wraps up a particularly dismal earnings reporting season for the oil majors, many of which reported heavy losses, including the worst losses at Exxon and Chevron in decades.

While BP’s losses and dividend cut were widely expected, the UK supermajor also announced today that it is speeding up efforts to reinvent itself over the next ten years through its energy transition, focusing its oil and gas business on value, reducing production by 40 percent, with no exploration in new countries.

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“We believe this new strategy provides a comprehensive and coherent approach to turn our net zero ambition into action,” Looney said.

Following the results and the new strategy announcement, shares in BP were rallying by 7 percent in the early afternoon in London and were up 6.5 percent in New York in pre-market trade.  

By Tsvetana Paraskova for Oilprice.com

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