British energy giant BP reported a $0.5 billion loss in the third quarter of 2020 due to the lack of significant exploration write-offs and impairment charges, according to its financial results statement released on Tuesday.
The figure is considerably lower compared to the net loss of approximately $16.8 billion recorded in the second quarter of this year, and also from the net loss of $4.4 billion in the first quarter.
The company explained that costs resulting from the novel coronavirus (COVID-19) outbreak reached around $0.1 billion in the third quarter and $0.2 billion in the second quarter.
BP CEO Bernard Looney said the company set out its new strategy as "performing while transforming" despite a challenging environment.
The company said the ongoing impacts of the COVID-19 pandemic are continuing to create a volatile and challenging trading environment amid the early signs of the global economic recovery, the pace of shape of which the company said is uncertain because of the possibility of the further spread of the pandemic.
Pointing to a gradual recovery in oil demand since the spring due to a rebound of demand in Asia, BP recalled the International Energy Agency's forecast of a demand increase of around six million barrels a day in 2021, as economies continue to open up.
The company said the inventories "are likely to reduce through 2021, although the pace at which they normalize will depend on the strength of economic recovery and the degree of continued OPEC+ compliance."
While the price of Brent crude averaged $40 per barrel in 2020, BP said it estimates the international benchmark would average $50 a barrel between 2021 and 2025, and then increase to an average of $60 a barrel between 2030 and 2040 before it drops to $50 a barrel again in 2050.
"BP now sees the prospect of an enduring impact on the global economy as a result of the COVID-19 pandemic, with the potential for weaker demand for energy for a sustained period," the company said.
By Sibel Morrow and Firdevs Yuksel