BP (LSE:BP.) said on Tuesday it expects third-quarter upstream production to increase from the previous quarter, supported by stronger performance in both its oil production and gas and low-carbon businesses. A significant boost in gas volumes from its U.S. shale arm, bpx energy, was highlighted as a key driver.
This marks a shift from BP’s earlier guidance, which had pointed to slightly lower output than the 2.3 million barrels of oil equivalent per day reported in Q2.
The company also cautioned that its oil trading performance for the period has been weak. Brent crude averaged $69.13 a barrel in the third quarter, up from $67.88 in the prior three months.
In its gas and low-carbon division, BP noted that weaker natural gas benchmarks outside Henry Hub will reduce realizations by about $100 million, while gas marketing and trading delivered what it described as an “average” result.
BP also expects to record roughly $0.1 billion in additional exploration write-offs compared with Q2. Realizations in oil production and operations are expected to remain broadly unchanged, with the company pointing to timing effects related to barrels from the Gulf of Mexico and the UAE.
The company flagged post-tax asset impairment charges between $200 million and $500 million across various business segments, which will be recorded as adjusting items outside underlying earnings.
The customers and products segment is projected to benefit from stronger seasonal demand in retail, although fuels margins are expected to remain stable.
Refining margins should contribute between $300 million and $400 million, supported by lower turnaround activity that will help offset seasonal compliance costs and weather-related disruptions at the Whiting refinery in the U.S.
BP anticipates net debt to remain near $26 billion, reflecting the planned redemption of $1.2 billion in hybrid bonds and approximately $1 billion in higher tax payments, partly offset by a working capital release.
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