This is the first time since 1992 that the company have made a loss and compares with a profit of $13.9bn that BP recorded in 2009.
However, Robert Dudley, the company's chief executive, who took over from Tony Hayward in the wake of the oil spill, said BP would restore its dividend payment to shareholders, paying 7 cents a share.
The dividend payments had been suspended in the wake of the Gulf of Mexico oil spill and cost shareholders an estimated £4.9bn.
Despite the loss, BP's profits during the fourth quarter of 2010 were $4.6bn, a third higher than in the same quarter in 2009.
BP is currently restructuring its business, planning to significantly increse investment in exploration.
The company has sold interests in North America, Argentina, Venezuela, Vietnam, Colombia and Egypt.
It is planning to sell two US oil refineries, including Texas City, where 15 workers were killed and 170 injured in an explosion in 2005.
More details on BP's future strategy are expected to be revealed later today.
Last month BP announced a $10bn partnership with the Russian state-controlled oil firm Rosneft to explore for oil in the Russian Arctic.
Existing Russian investors in TNK-BP - another Russian joint venture - are taking BP to the High Court in London, arguing that their relationshipwith BP should mean that exploration should not be done with rival companies, such as Rosneft.
BP has not given any details of the Rosneft alliance, saying only that TNK-BP continues to perform strongly.