BP Struggles With Oil Prices, Deepwater Horizon

BP REPORTS ANOTHER LOSS AMID LOW OIL PRICES

BP PLC made small gains in the final quarter of 2016, even as the downturn in oil and the burden of the 2010 Deepwater Horizon disaster continued to depress the firm’s results.

“The company reported a small profit in the fourth quarter of $72 million, compared with a loss of $2.2 billion in the same period of 2015,” writes Sarah Kent.

The companies underlying results missed analysts’ expectations and BP’s shares tumbled 2.4% in early London trading.

The two-year downturn in oil prices has proved challenging for global oil firms.

Chevron Corp. and Exxon Mobil Corp. posted disappointing earnings and Royal Dutch Shell PLC surprised with a cash surge, despite reporting weak profits.

BP lagged its peers in both profits and cash flow, in part because it is weighed down with costs associated with Deepwater Horizon.

The well blowout killed 11 workers and sent millions of barrels of oil surging into the Gulf of Mexico, sparking lawsuits and cleanup costs that have added up to over $62 billion for BP.

Last year, the company was encumbered with $7.1 billion in pretax payments related to the spill.

The company posted its second consecutive annual loss in 2016 and said it now needs an oil price of $60 a barrel by the end of 2017 for its cash flow to cover spending and dividends.

PIPELINE COMPANIES STRUGGLE TO CONTEND WITH REINVIGORATED PROTESTS

Pipeline companies are searching for ways to handle an expected surge in protests following President Donald Trump’s decision to greenlight highly controversial projects such as Keystone XL and Dakota Access, reports Christopher M. Matthews.

Pipeline companies are considering more robust public outreach to groups like Native American tribes that have protested such projects.

Company advisers are urging better messaging to head off protests before they start, while others are under taking research efforts to form a strategy.

“Virginia-based Dominion Resources Inc. conducted polling, organized focus groups of customers and sought support from local governments, unions and others to garner support for the Atlantic Coast Pipeline, a 550-mile conduit that will transport natural gas from West Virginia to the East Coast,” Mr. Matthews writes.

“Executives at two competitors pointed to Dominion’s efforts as the model for what they should be doing but aren’t.”

INSPECTORS FIND SAFETY FLAWS REMAIN A CONCERN AT FRENCH NUCLEAR SUPPLIER

International inspectors say a major French supplier for the global nuclear sector failed to address findings that faulty manufacturing was covered up at one of its factories.

Areva SA is operating under a cloud of suspicion following reports that workers at its Creusot Forge factory, located in central France, falsified records for critical components that have wound up in nuclear plants there and in other countries, including the U.S.

The French Nuclear Safety Authority sent a letter to the firm saying “management had neither analyzed why the coverup had gone undetected for years, nor could guarantee that similar problems wouldn’t recur,” writes Matthew Dalton.

Areva said it would respond to the letter from the inspectors.

MARKETS

Crude prices fell Tuesday, weighed down by an appreciating dollar, investor speculation and concerns that rising U.S. shale oil production may offset a move by major oil producers to cut global supply.

The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.59% to 90.94 on Tuesday. Because oil is priced in dollars, a stronger greenback makes oil more expensive for holders of other currencies and depressed demand.

Brent crude, the global oil benchmark, fell 0.56% to $55.41 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.49% at $52.75 a barrel.