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 April 27, 2016
BP Reports $583 Million Loss in First Quarter

 BP, the first of the major oil companies to report earnings this week, said on Tuesday that it had lost $583 million in the first quarter of 2016, compared with a $2.6 billion profit in the same period last year.

Lower oil prices were behind the loss for BP, whose results were nonetheless better than analysts had expected. That, and the fact that the company said it would keep its dividend at 10 cents a share, helped buoy BP's share price, which was up more than 3 percent in midmorning trading in London.

In the current environment, analysts say an oil company's stock price is largely determined by the dividend. Sustaining it is "the first priority within our financial framework," BP's chief financial officer, Brian Gilvary, told analysts in a conference call on Tuesday.

BP said it had lost $1.2 billion in its key oil and gas exploration and production unit, which was a big money earner when prices were high. Oil prices for the quarter averaged $34 a barrel for Brent crude, more than a third lower than a year earlier.

"The entire industry is going to be loss-making in the first quarter," Oswald Clint, an analyst at Bernstein Research in London, wrote in an email.

To maintain the dividend despite low prices, BP has been cutting costs, which were $4.6 billion lower for the last four quarters combined than in full-year 2014. The company has not only been reducing its staff by thousands but also paring its sponsorship of the arts. This year, the company said it would end its support for the Tate museums in Britain.

BP's chief executive, Robert W. Dudley, who has been more pessimistic about oil prices than some industry colleagues, seemed to detect brightening prospects.

"Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year," Mr. Dudley said in a news release on Tuesday.

Exxon Mobil and Chevron, the two largest American oil companies, are expected to post their results on Friday.

Since dropping below $30 a barrel in January, oil prices have recovered to about $45 a barrel. That was in part because of the possibility that major producers from the Organization of the Petroleum Exporting Countries and Russia would cap production.

Those hopes were dashed this month at a meeting in Doha, Qatar, however, when Saudi Arabia refused to go along with a production ceiling unless Iran signed on as well.

The fading of OPEC as a force in the markets presents a problem for large international oil companies like BP. These companies have long benefited from OPEC's limiting oil supplies to keep prices high. Now that OPEC has lost cohesion, the expensive projects that made sense during the $100-a-barrel era often no longer add up economically, analysts say.

If OPEC is no longer effective, neither is the old business model of the international oil companies, Paul Stevens, an oil analyst at the London-based research institution Chatham House, wrote in a forthcoming article.

This month, BP shareholders dealt a symbolic rebuke to the company by voting against Mr. Dudley's $19.6 million compensation package for 2015. Investors were critical of giving him a 20 percent pay increase in a year when the company reported a $6.5 billion loss. The vote was nonbinding but may influence BP's treatment of future executive compensation, the company said.

The company also took a $917 million write-off for damage claims from the 2010 Gulf of Mexico oil disaster, bringing total provisions for liabilities from that accident to $56.4 billion.