11th Oct 2024 09:05
(Corrects some figures to millions from thousands.)
(Alliance News) - BP PLC on Friday said it expects net debt to be higher at the end of the third quarter, primarily due to less profitable refining activities.
In a trading update, the London-based oil major said weaker refining margins will hit earnings in the customers and products segment by between USD400 million to USD600 million compared to the prior quarter, and that the oil trading result is expected to be weak.
Brent prices were weaker over the course of the third quarter, BP noted. The North Sea benchmark averaged USD80.34 a barrel in the third-quarter, down 5.4% from USD84.97 in the second.
Net debt will also be increased by the re-phasing of around USD1 billion of divestment proceeds into the fourth quarter, the firm said.
Upstream production in the third quarter is now expected to be broadly flat compared to the prior quarter, with production broadly flat in oil production & operations and in gas & low carbon energy. BP had previously expected output to be lower than the second-quarter's.
In the gas & low carbon energy segment, realizations, compared to the prior quarter, are expected to have a favourable impact of around USD100 million. The gas marketing and trading result is expected to be average.
BP expects a USD100 million to USD300 million hit in the oil production & operations segment compared to the prior quarter. This includes the impact of price lags on BP's production in the Gulf of Mexico and the United Arab Emirates.
BP also expects a USD200 million to USD300 million impact from higher exploration write-offs quarter-on-quarter.
BP will release its full third-quarter results on October 29.
Shares in BP slipped 0.3% to 409.48 pence each in London on Friday morning. The wider FTSE 100 index was marginally higher.
By Jeremy Cutler, Alliance News reporter
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