LONDON: BP fell into a hefty loss during the first quarter, hit by low crude prices and costs related to the 2010 Gulf of Mexico oil spill, the British energy giant said Tuesday.
BP announced a net loss of $583 million (517 million euros) for the first three months of the year, which compared with a profit after tax of $2.6 billion during the first quarter of 2015.
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The company noted that benchmark Brent oil prices averaged $34 in the quarter, down from $54 a year earlier.
"Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP's cash flows," chief executive Bob Dudley said in the group's earnings statement.
BP said it had set aside a further $917 million in the first quarter to meet compensation costs linked to the Gulf of Mexico disaster -- bringing the total charge to $56.4 billion.
"As a consequence of the Gulf of Mexico oil spill, BP continues to incur various costs and has also recognised liabilities for future costs," said the group statement.
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Stripping out exceptional costs and changes to the value of BP's oil stockpiles, the company reported a net profit of $532 in the first quarter, but down almost 80 percent from a year earlier.
Earlier this month, BP shareholders rejected a pay deal worth $19.6 million for Dudley, in a symbolic vote in the face heavy losses and job cuts at the oil giant.
Chairman Carl-Henric Svanberg had told investors that Dudley's pay packet was justified by a "seriously impressive performance" in volatile conditions but a majority of investors were not impressed.
The London-listed energy group clocked up a loss of $6.5 billion last year and recently announced plans to axe another 3,000 jobs, taking its total cull to 11,000 positions since the start of 2015.
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In morning trade, BP's share price was up 3.1 percent at 371.50 pence on London's benhcmark FTSE 100 index, which was rising 0.52 percent to 6,293.61 points.
Analysts put the jump down to BP's better-than-expected underlying performance and a generous dividend payment.
"Overall it's a good set of figures as it looks like BP is getting costs under control to cope with a new low average (oil) price," said Joe Rundle, head of trading at ETX Capital.
The global oil market had nosedived from above $100 in mid-2014 to 13-year lows of around $27 in February, plagued by the stubborn supply glut. But prices have since rebounded to trade above $40 a barrel.