The British oil giant’s revenue declined by 9.5% to $359 billion last year, as price volatility proved to be a drag on the energy industry. BP’s profits also plummeted to $3.8 billion after doubling to $23.4 billion the previous year. BP chair Carl-Henric Svanberg reflected on 2015 by saying his company started the year confidently only to end it “with significant uncertainties.” At least one uncertainty became more clear recently with the nearly $19 billion settlement of claims arising from the 2010 Gulf of Mexico oil spill. Though the black eye BP suffered as a result of that accident isn’t going away anytime soon.
- BP’s diverse portfolio of businesses help isolate the giant company from market volatility to some degree.
- BP has a balance sheet with more than $280 billion in total assets (even after a massive sell-off to cover costs of the 2010 oil spill).
- Poor environmental and safety reputation in the wake of the Deepwater Horizon explosion and oil spill.
- Still recovering from years of litigation and payouts related to the 2010 oil spill, including the recent multi-billion dollar settlement.
- BP is still the largest energy investor and acreage holder in the Gulf of Mexico, where the company launched three new projects in 2014 and formed a strategic partnership with Chevron.
- BP expects the world’s energy demand to increase as much as 37% between 2013 and 2035.
- Global oil oversupply depresses demand for products.
- Oil spills result in more attention from regulators.