BG Group was the latest oil producer to be hit by the ongoing slump in crude prices, as it saw its annual profit plummet by almost 40%, while the profit for the fourth quarter declined by more than 20% on the back of lower revenues.
In the 12 months to the end of December, the FTSE 100 group posted a 39% year-on-year decline in earnings before interest, taxes, depreciation and amortisation (EBITDA) to $5.63bn (£3.87bn, €5.02bn), while earnings per share plummeted 58% to 49.7 cents.
In the fourth quarter, EBITDA slumped 22% year-on-year to $1.43bn, while revenue and other operating income decreased 2% to $4.3bn, on the back of the significant fall in sales prices, which negatively affected both the upstream and LNG shipping and marketing segments.
Oil prices have fallen by a quarter since the start of the year and have dropped 75% over the past 18 months amid growing concerns over a slowdown in the Chinese economy and fears over a global oversupply, which has been exacerbated by Iran's return to the global scene.
Earlier this week, fellow oil producer BP reported a sharp decline in underlying operating profit for the full year and for the fourth quarter as a result of impairment costs related to its upstream assets and the decline in crude prices, while Shell saw its profit plunge 80%.
Meanwhile, the group said it cut its capital expenditure by 32% over the past 12 months, achieving its target of saving $300m and group chief executive Helge Lund said the soon-to-be completed merger with Shell was expected to improve the company's fortunes.
"The addition of new low cash cost volumes in Brazil and Australia and delivery of our operating and capital cost savings has helped to partly mitigate the impact of lower commodity prices," he said.
"This strong operational performance is the result of the capability and commitment of our teams across the organisation and we will deliver a high-performing business into the combination with Shell."
The Anglo-Dutch company is expected to finalise its £35bn takeover of FTSE 100-listed BG later this month and, on 4 February, it confirmed it will cut 10,000 jobs across both companies once the deal is finalised.