BP profit hit by weaker refining margins as ‘flat’ oil and gas production forecast
BP has forecast “broadly flat” oil and gas production in the third quarter, alongside a hit to profit from falling refining margins.
The oil giant also said it expects net debt to now come in higher, driven primarily by the impact of weaker refining margins and the rephasing of around $1bn (£766m) of divestment proceeds in the fourth quarter.
In a trading update, BP said it expected to take a hit of between $300m to $400m in third quarter profit due to a sharp drop in refining margins.
Oil trading will also be weak, according to the firm.
Realisations in its oil production and operations segment are expected to have an “unfavourable impact” of between $100m to $300m compared with the prior quarter.
A further $200m to $300m could be docked off from higher exploration write-offs.
It comes as global oil majors face a slowdown in profitability following years of post-pandemic highs.
Shell’s third quarter refining profit margins dropped by nearly a third on Monday, as global demand sagged. Exxon Mobil, the US oil group, warned last week a slump in oil prices would dent third quarter profit.
In its gas and low carbon energy segment, BP said realizations would have a favourable quarter-on-quarter impact of around $100m.
BP shares are down over 12 per cent this year to date.