BP, the UK oil major, said on Monday it expected President Trump's tax reforms to have a positive impact on its business in the US, but would be liable for a one-off charge.
BP said that the lowering of the US corporate tax rate to 21% from 35% would require a revaluation of its US deferred tax assets that would likely result in a one-off charge of around $1.5bn that will hit its fourth-quarter results.
Future post-tax earnings would be "positively impacted", however, thanks to the lower corporate tax rate.
Oil companies have experienced declining profitability and cash flow in the last two or three years due to weakening crude and other commodity prices.
In the full-year 2016, BP's adjusted earnings per share was $0.83, compared with $4.23 three years previously. In 2013, Nymex West Texas Intermediate, the benchmark US oil price averaged close to $100 a barrel, while in 2016 the average was closer to $40 a barrel.
"The ultimate impact of the change in the US corporate income tax rate is subject to a number of complex provisions in the legislation which BP is reviewing," the company said in a statement.
Investors appeared unconcerned by the one-off charge and pushed shares in BP higher at the open on the London Stock Exchange. BP rose 3.5% in opening trade to 524.3p.