Oil is having a poor outlook as major companies have been slashing dividends here and there. This week has been terrible for oil companies as far as earnings are concerned, and the analysts’ projections were on point.
The U.K. oil giant BP has reported an adjusted net loss of over US$6.68 billion [AU$9.37 billion] for the second quarter. In addition, they have cut their dividend to 5.25 cents a share.
Adding more tensions in the oil industry, Saudi Arabia may also cut its September official selling price (OSP) for crude sold in Asia as per Reuters.
When asked about the dividend cut, BP CEO Bernard Looney told Bloomberg:
“It’s very simple. The change is rooted in strategy, deeply rooted in strategy, and amplified by COVID.”
This crisis has given the CEO an opportunity to push the big changes needed to fulfill his vision of a low-carbon future.
All hope is not lost for the major U.K. oil giant as they have also announced to shift from being a traditional oil company to an “integrated energy company” and said it expects to achieve “net zero” carbon emissions by 2050, per BBC.
Despite the drop forecasts in oil and gas production, the U.K. giant assures its investors that it is doing their best to steer the company in the right direction.
This may be an opportunity for BP and the rest of the oil and gas giants to invest in what’s less harmful to the environment. As of this writing, the BP stock price increased by over 6%, and this might indicate a positive sentiment among investors.
Featured image courtesy of ddzphoto/Pixabay
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