LONDON, April 14 (UPI) — British energy company BP said it expected the oil market to be on the road to recovery, but maintained it was keeping a close eye on its financial framework.
“Supply and demand should start to get back in balance as we go through the year and the oil price should respond positively,” BP Chairman Carl-Henric Svanberg said at an annual shareholder meeting Thursday. “There are already signs of that and we have therefore not adjusted the dividend.”
After posting its first loss in more than 16 years earlier this year, Australian mining and energy giant BHP Billiton said it adopted a new dividend policy in response to oil market weakness. German energy company RWE said later it was moving on a proposal to suspend dividends for common shares in order to move through “difficult times.”
Energy companies are trimming staff and unloading assets in an effort to streamline their operations during a market characterized by persistently low crude oil prices. In October, when crude oil prices were about 6 percent higher than current levels, BP said it was moving to divest about $10 billion in assets.
In January, the British company said an “inevitable outcome” of the market downturn was the planned reduction of around 600 positions from its North Sea division. The staff reductions were in line with efforts to cut as many as 4,000 people from its global portfolio by the end of 2017.
Svanberg said he was vetting concerns expressed by shareholders, but maintained the company was performing well in an otherwise challenging environment. The industry is working through a “tough environment,” he said, but the company is prepared to meet the challenges.
On dividends, the chairman said the goal is to find a balance between stability and future investments.
“Be assured that we keep this balance under regular review,” he said. “Should the oil price remain lower, longer than expected, we will need to revisit our financial framework.”