British oil major BP reported a lower than expected profit for the second quarter due to weak refining margins and oil prices, prompting another cut to its 2016 investment budget to below $17 billion.
The London-listed energy company said second-quarter underlying replacement cost profit, its definition of net income, was $720 million, down from $1.3 billion in the same quarter last year and $120 million below an analyst consensus provided by the company.
BP's refining margins were the weakest for a second quarter in six years at $13.8 a barrel, down from $19.4 a year ago. Low global oil prices also weighed, with Brent prices a quarter below levels seen in the same period in 2015.
"As we look forward we expect the external environment to remain challenging," said BP Chief Executive Bob Dudley.
As the company continues to reduce costs, it now expects full-year capital expenditure to come in below the $17 billion target it had previously given.
BP also incurred a pre-tax charge of $5.2 billion in the second quarter relating to settling further Deepwater Horizon liabilities. Including these charges and other non-operating items, BP made a loss of $1.4 billion over the period. This compares with a loss of $5.8 billion in the second quarter of 2015.
BP's total costs for the 2010 Gulf of Mexico explosion and oil spill, which killed 11 workers, have now climbed to $62 billion.
(Reporting by Karolin Schaps, editing by Louise Heavens)