British Petroleum has reported its worst loss in more than 20 years in the wake of the oil price collapse, pushing the group to axe thousands more jobs

The severe downturn in the oil market has left BP nursing its worst annual loss in at least 20 years and forced the group to slash thousands of jobs.

In 2015, the oil major posted an annual loss of $5.2bn, compared to the $8.1bn profit the oil major recorded in the previous year.

BP will axe 3,000 jobs in its downstream unit - which refines and markets crude oil - by the end of 2017 on top of the 4,000 job cuts already announced last year in its upstream unit as part of the group’s $2.5bn restructuring programme.

Bob Dudley, chief executive, said: “We are continuing to move rapidly to adapt and rebalance BP for the changing environment.

“We’re making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations and continuing disciplined investment into the future of our portfolio.”

In the fourth quarter, underlying replacement cost profit - BP’s definition of net income, which strips out one-off charges - slumped to $196m from $2.2bn in the same period last year and well below market expectations of $730m.

The sharp decline in profit comes as the oil major grapples with a collapse in the price of crude, resulting in significant writedowns and restructuring costs of $2.6bn in the final quarter of the year.

Brent crude oil prices averaged at $44 a barrel in the three months to December 31, compared with $77 in 2014.

“The lower underlying result was predominantly driven by the impact of steeply lower oil and gas prices on BP's upstream segment, which reported a pre-tax loss for the quarter,” the FTSE 100 company said

Underlying operating cash flow sank from $32.8bn in 2014 to $20.3bn. It also said its dividend would remain unchanged at 10 cents per share.

Meanwhile, organic capital expenditure for the year was $18.7bn and the group expects capital expenditure to remain between $17bn and $19bn for the next two years.

Chief financial officer Brian Gilvary said: “We will keep the capital frame under review as we move through 2016 and beyond.”

However, he warned that if “current conditions persist” for longer than expected, action will be taken to “capture more deflation.”

The group also took a charge of $443m relating to the Gulf of Mexico oil spill, which takes its cumulative pre-tax charge for the incident to $55.5bn.

BP expects production for this year to be “broadly flat” with 2015.

“We expect first-quarter 2016 reported production to be broadly flat with the fourth quarter 2015. Oil prices continue to be challenging in the near term,” it added.

Shares slumped to the bottom of the FTSE 100 in the wake of the results, down 6.4pc to 343.5p. (The Telegraph)

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