BP says it could cut capital spending further after reporting an 80 percent drop in profits in the first quarter of the year, when oil prices touched a near 13-year low. As Hayley Platt reports, the British oil company is the first major to report on one of the weakest quarters.
The crash in crude oil prices has left the industry reeling. BP showing a profit drop of 80 percent in the first quarter (reveal to $532 million) That's down from $2.6 billion last year. But better than the $140 million loss forecast. It's refining and trading segment came to the rescue with a quarterly profit of $1.8 billion - offsetting smaller losses in oil and gas. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "What we're seeing now is a belief that a move to the thinking that this oil price may not recover much form current levels. We may have seen a hugh structural change in the global oil market which has been happening over the last 5-10 years in terms of shale, in terms of new production techniques etc which are making oil fields more feasible that weren't so in the past. That's a huge adjustment that companies are having to make and I think they're facing up to that now that the good old days are now over." BP has been cutting costs and selling assets. And this year's capital spending will be further reduced by $2 billion to $17 billion. Further cuts next year can't be ruled out as BP continues to try and recover from the Macondo oil spill disaster. The bill for that currently stands at $56 billion. Last week shareholders showed their displeasure at the CEO's $20 mln pay package. BP is unlikely to be the only oil major feeling the impact of record low oil prices. Results from Total, Statoil and Eni are still to come this week and Shell's on May 4.