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Aug. 4, 2020, 5:24 a.m. EDT

BP sets new low-carbon goals as it slashes dividend in half and reports $16.8 billion loss

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By Steve Goldstein

Oil giant BP on Tuesday cut its dividend in half after reporting a $16.8 billion loss for the second quarter, as it outlined its effort to become less environmentally harmful.

BP /zigman2/quotes/202286639/delayed UK:BP -3.95% /zigman2/quotes/207305210/composite BP -2.97% said it lost $16.8 billion after taking a charge of $10.9 billion, mostly for writing down the value of various projects after the steep fall in oil prices. Analysts polled by FactSet expected an $11.6 billion loss. BP had earned $1.8 billion in the year-earlier quarter.

Its underlying replacement cost loss was $6.7 billion, compared with profit of $2.8 billion in the year-ago quarter.

BP set a new distribution policy after cutting its dividend to 5.25 cents per share. BP said it would keep the dividend at that level, and then return at least 60% of surplus cash to shareholders through share buybacks, once its balance sheet has been deleveraged and subject to maintaining a strong investment grade credit rating.

BP also announced a new green strategy, saying it won’t explore in any new countries, as it said there will be a 10-fold increase in low carbon investment by 2030. It said oil and gas production is expected to reduce by at least one million barrels of oil equivalent a day, or 40%, from 2019 levels, which BP said it would accomplish via “active portfolio management.”

“On paper the promise is more aggressive than being seen at other European [integrated oil companies], although at the same time key peers have targets that look a little more tangible around the near-term (to 2025),” said Alastair Syme, an analyst at Citi. “With energy now occupying an almost pariah status in the mind-set of many investors, BP’s attempts to shift should at least attract some interest and analysis.”

BP shares rose nearly 7% in London trade. The stock has dropped 40% this year, compared with the 20% drop for the broader FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -3.38% .

/zigman2/quotes/202286639/delayed
UK : U.K.: London
236.05 p
-9.70 -3.95%
Volume: 50.88M
Sept. 21, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
6.92%
Market Cap
£49.40 billion
Rev. per Employee
N/A
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 18.32
-0.56 -2.97%
Volume: 17.00M
Sept. 21, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
11.84%
Market Cap
$64.03 billion
Rev. per Employee
$4.03M
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
5,804.29
-202.76 -3.38%
Volume: 970,186
Sept. 21, 2020 4:55p
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