BP on Tuesday reported its worst annual loss in at least 20 years and thousands more job cuts as the British oil and gas company grappled with a collapse in oil prices. The energy company reported an annual loss of $6.5 billion for 2015, even worse than its 2010 results when it counted the costs of the deadly Gulf of Mexico oil spill.

BP said it would cut 3,000 jobs in its downstream unit by the end of 2017 on top of 4,000 cuts already announced in oil and gas production as part of a $2.5 billion restructuring programme announced last year. "We are continuing to move rapidly to adapt and rebalance BP for the changing environment," chief executive Bob Dudley said in a statement.

Fourth-quarter underlying replacement cost profit, BP’s definition of net income, came in at $196 million, significantly lower than analysts’ expectations of $730 million. Fourth-quarter impairments reached $2.6 billion as its oil and gas production division was hit by weak energy prices, including fields in the Gulf of Mexico, the U.S. Utica shale acreage in Ohio and Libya.

BP's results are the latest in a round of weak fourth-quarter earnings in the sector. Chevron, the No. 2 US producer, last week reported its first quarterly loss in more than 13 years, while Royal Dutch Shell was expected to report a near halving of profits. Benchmark Brent oil prices averaged $43 a barrel in the fourth quarter of 2015, down from $76 a year earlier. As a rule, every $1 change in Brent crude oil prices impacts pre-tax replacement cost operating profit by $300 million, according to BP.

Reuters