BP is expected to announce a near 70% collapse in underlying profits on Tuesday as low oil prices continue to take their toll.
The headline figures will be even worse once one-off charges are included.
City energy analysts predict the British oil company will report that earnings in the last quarter of 2015 fell to $730m (£514m), from $2.2bn a year earlier.
But the full impact of the oil price fall could be much heavier as BP takes one-off writedowns on the value of its reserves. It may also take further charges connected to the Deepwater Horizon accident from 2011, in which 11 workers died.
For 2015 as a whole, BP is expected to report underlying profits of $6.4bn – almost half what they were in 2014. The average price of Brent crude fell the last quarter from around $77 a barrel to $44, a 43% fall, but the BP results have also been hit by other factors.
Despite the problems, analysts at Barclays Capital said BP was already doing well to cut its costs and could easily further trim them if the price of oil, currently at $34, were to remain close to $40.
“BP could respond by reducing [capital expenditure] by a further 20% to $14bn, which would allow management to balance the books by 2018 with the current level of dividend maintained,” said Barclays in an investment note.
Meanwhile Shell, which reports its fourth-quarter results on Thursday, warned in a trading statement last week that its underlying profits could be halved.
Concerns about the damage being done to Britain’s oil and gas industry has led the British prime minister, David Cameron, to pledge £250m to Aberdeen. About 70,000 jobs direct and indirect jobs have been lost around the UK due to the crude price slump.
Shell has already promised to cut 10,500 more jobs worldwide once the BG deal is consummated on 15 February. Some job cuts could come in Aberdeen.