BP set for profit drop

BP is not alone in facing challenges in the oil industry
BP is not alone in facing challenges in the oil industry

The latest results from the beleaguered oil industry will dominate the headlines during another busy week for corporate results.

BP will reveal how far collapsing oil prices have dented profits and investment plans when it posts its annual results tomorrow.

The City expects to find full year underlying replacement cost profits down by more than a quarter to $9.9 billion (£6.5bn) compared to a year ago, following oil prices that have fallen by more than half since last summer.

BP in common with most of the industry has been cutting costs to weather the new low price environment of around $50 a barrel.

The firm, which employs 15,000 people in the UK, said earlier this month it would cut 300 jobs in the North Sea following a review of its operations.

Last month BP warned that plans to streamline its business will cost it $1bn (£638m) over the next year.

The restructuring bill reflects the need to slim down its operations following $43bn (£27.5bn) worth of divestments since the Gulf of Mexico disaster in 2010.

It still faces litigation as a result of the disaster that has so far cost it around $40bn (£26.5bn). Shares remain a third below their level at the time of the Deepwater Horizon spill.