BP has cut its dividend for the first time in a decade, after reporting a record $6.7 billion loss in the second quarter as the Covid-19 crisis hammered energy demand.
The London-based company separately outlined plans to sharply reduce its oil and gas output by 2030 and boost its renewable power generation under CEO Bernard Looney's strategy to "reinvent" BP in line with a global transition to low-carbon energy.
The net loss, which was in line with analysts' expectations, was largely a result of BP's decision to wipe $6.5 billion off the value of oil and gas exploration assets after it revised sharply lower its oil and gas price forecasts.
"These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to re-imagine energy and reinvent BP," Looney said in a statement.
"In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact."
Looney, who took the helm in February, avoided a dividend cut in the first quarter of the year despite worsening market conditions.
But the 50% dividend cut to 5.25 cents per share, which was larger than the 40% cut forecast by analysts, appeared inevitable given a large debt pile, the collapse in oil and gas demand due to the COVID-19 pandemic and growing expectations for a sluggish recovery in global economic activity.
BP said in its strategy update it aimed to "reset a resilient dividend" of 5.25 cents per share per quarter and return at least 60% of future surplus cash as share buybacks
It said it would increase its low-carbon spending by 2030 to $5 billion a year and boost its renewable power generation to 50 gigawatts, while shrinking its oil and gas production by 40% compared with 2019.