BP was the first of the major oil companies to display interim results with Royal Dutch Shell and ExxonMobil set to release figures later this week.
Over the second quarter BP experienced a 44% decline in year-on-year profits, dropping from $1.3bn (£998m) to $720m (£547.2m). Between the first and second quarter, profits improved by approximately 35% though.
BP said that lower operating costs were not able to offset the impact of declining oil and gas prices or “significantly lower refining margins,” which were the weakest for a second quarter since 2010.
Shares in BP slipped 2.4% on the news to 429p.
Tuesday morning, oil prices slipped below $45 to $44.42, hitting their lowest level since May 10. By comparison, the average price of Brent crude was around $62 per barrel during the second quarter of last year.
Despite having to contend with falling oil prices, BP group chief executive, Bob Dudley, delivered an optimistic outlook in Tuesday’s update, remarking that the company had “finally drawn a line under the material liabilities for Deepwater Horizon.”
For one thing, BP estimates its cash costs or principal operating and overhead costs are on track to be $7bn lower in 2017 than in 2014. Over the past four quarters, these costs have already dropped by $5.6bn.
And before pre-tax Gulf of Mexico payments, the underlying operating cash flow for Q2 was $5.5bn (£4.18bn).
The company also said its dividend of 10 cents per ordinary shares remained unchanged and would be paid out in September.
Commenting on BP’s dividend, the company's chief financial officer, Brian Gilvary, said: “We continue to reset our capital and cost base and are moving steadily towards our aim of rebalancing organic sources and uses of cash by 2017 in a $50-55 per barrel oil price range. This underpins our confidence in sustaining our dividend going forward.”
However, BP’s Q2 figures revealed net debt of $30.9bn (£23.5bn) was considerably higher than the year before ($24.8bn).
Still, Dudley said the business was in a better position to weather future difficulties. “We are delivering significant improvements to the business that will stick at any oil price. We are now well down the path of transforming our business to compete, whatever the future holds. We now see a much stronger outlook for BP and are focused on growth, both for this decade and beyond,” he said.