BP is the latest in a string of oil companies in recent weeks to report lower profits due to falling oil prices. As Sara Hemrajani reports, a new global report suggests confidence in the global industry has fallen dramatically.
Another petrol giant takes a hammering from plummeting oil prices. Today it was BP's turn. Underlying profit between October and December fell 20 percent from the same period the year before. That's forcing the company to slash spending on assets and investment by as much as six billion dollars. CMC Markets' Michael Hewson isn't surprised. SOUNDBITE: Michael Hewson, Chief Market Analyst, CMC Markets, saying (English): "It's going to have to keep a lid on costs, it's going to have to be very forensic in terms of future capital expenditure, and it's going to have to get used to, essentially, a much lower average oil price over the next 18 months to two years." BP's announcement comes after rivals ExxonMobil and Royal Dutch Shell announced plans of their own to streamline operations. A leading oil and gas advisor says workers in the sector are feeling increasingly pessimistic about the prospects for 2015. Hari Vamadevan is from DNV GL. SOUNDBITE: Hari Vamadevan, Vice President of UK and Sub-Saharan Africa, DNV GL, saying (English): "I think this drop has been due to surplus of oil and gas, which is unusual because previous downturns have been a result of financial crises. But the reality is these operators have to be in the short-term generating profits, and if the oil price is low, they have to react with cost reductions, even though everyone understands that oil and gas is a long-term play." DNV GL's survey shows the confidence outlook among oil and gas professionals has slumped from 65 percent to 28 percent in just three months. The group says the industry was caught off guard. SOUNDBITE: Hari Vamadevan, Vice President of UK and Sub-Saharan Africa, DNV GL, saying (English): "Certainly for the next one to two years, it is a balancing act between doing the right cost reductions to keep the investors happy over the short-term, but not cutting so far back that you lose the best talent, so that when the industry does return, and the oil and gas industry has always shown that it does ultimately return to growth, that you don't then lack the skills to develop the fields." With Brent crude currently trading at $56 a barrel and with no quick bounce back on the cards, there could be widespread pain for the oil majors for some time to come.