Vitality big BP reported a major reduction for the second quarter on Tuesday, soon after downgrading the price of some of its property on expectations of decreased commodity prices.

2nd-quarter fundamental substitute charge profit, utilized as a proxy for web earnings, came in at a decline of $6.7 billion, assembly expectations of analysts polled by Refinitiv. That as opposed with a internet earnings of $800 million in the initial quarter of the 12 months.

BP also announced that it had halved its dividend to 5.25 cents for every share for the quarter, compared to 10.5 cents for each share for the very first three months of the yr.

The documented decline for the quarter was $16.8 billion, which includes a publish-tax cost of $10.9 billion for non-working goods. It compares to a loss of $4.4 billion about the first three months of 2020.

The breakdown of this figure integrated $9.2 billion in impairments throughout the group, largely because of to BP’s revised forecast for oil and gas costs more than the following 30 years, and $1.7 billion of exploration produce-offs.

The U.K.-based oil and fuel business stated previous month that it could incur non-funds impairment costs and publish-offs in the second quarter, estimating an mixture array of $13 billion to $17.5 billion right after tax. At the time, BP reported the “enduring” impact of the coronavirus pandemic experienced prompted the firm to reduce its oil and price forecasts as a result of to 2050.

“These headline final results have been pushed by a further really difficult quarter, but also by the deliberate actions we have taken as we continue to reimagine strength and reinvent bp,” Bernard Looney, CEO of BP, mentioned in a statement on Tuesday.

“In particular, our reset of extended-expression value assumptions and the similar impairment and exploration write-off rates experienced a important influence. Beneath these, even so, our functionality remained resilient, with excellent funds move and – most importantly – risk-free and reputable operations,” he additional.

Shares of BP are down more than 40% year-to-date.

Global benchmark Brent crude futures traded at $44.02 a barrel on Tuesday early morning, down far more than .3%, while West Texas Intermediate (WTI) crude futures stood at $40.89, all around .3% reduce.

Analysts had predicted that “Major Oil” companies, referring to the world’s largest vitality majors, were very likely to report “horrendous” next-quarter final results as coronavirus lockdown actions coincided with an unparalleled demand shock and substantially weaker oil and fuel rates.

Having said that, some firms have been in a position to limit the harm as their trading divisions have capitalized on heightened marketplace volatility.

Alongside BP’s second-quarter earnings, the power big introduced a new method that it claims will assistance the firm shift to clean electrical power in line with its strategy to turn into a net-zero-carbon firm by 2050 or faster. 

The organization reported that, in 10 decades, it options to raise its once-a-year low carbon financial investment 10-fold to all-around $5 billion a yr. It also aims to have developed around 50 gigawatts of web renewable generating capacity by 2030 – a 20-fold maximize from 2019.

“We think that what we are setting out nowadays offers a compelling and appealing lengthy-time period proposition for all investors — a reset and resilient dividend with a motivation to share buybacks rewarding growth and the option to commit in the power changeover,” BP’s Looney stated in a push release.

“I want to accept the effect the reset dividend will have on quite a few – irrespective of whether particular person retail investors or big holders,” Looney mentioned. “However, it is a final decision that we wholeheartedly believe is in the very long-phrase interest of our stakeholders.”

BP also fully commited to lessen oil and gas creation by 40% from present concentrations by the stop of the decade “as a result of energetic portfolio administration” and explained it would “start no exploration in new countries.”

In reaction to BP’s new tactic announcements, Mel Evans, senior weather campaigner for Greenpeace Uk, reported: “BP has woken up to the rapid want to cut carbon emissions this decade.”

“Slashing oil and gas generation and investing in renewable energy is what Shell and the rest of the oil industry requires to do for the world to stand a likelihood of meeting our global local weather targets,” Evans ongoing. “BP will have to go additional, and demands to account for or ditch its share in Russian oil business, Rosneft. But this is a necessary and encouraging begin.”

Shell was not promptly out there to comment when contacted by CNBC on Tuesday.