BP said on Tuesday it anticipates net impairments of between $3.0 billion and $4.5 billion, post tax, in the third quarter ending September 30, attributable to transitions within its gas and low-carbon energy units.
Alongside the impairment guidance, the company signalled a marked decrease in net debt for the period. Net debt at the end of September is expected to be in a range of $13.5 billion to $14.5 billion, down from $22.3 billion at the end of June.
BP attributed the reduction in net debt to a package of factors that included the redemption of hybrid securities, higher income taxes paid, releases of working capital, and capital expenditure during the quarter.
Production guidance and prices
The company marginally tightened its reported upstream production guidance for the third quarter to a range of 2,190 to 2,240 million barrels of oil equivalent a day (mboe/d), versus reported production of 2,201 mboe/d in the second quarter. BP retained its full-year production guidance at 2,180 to 2,270 mboe/d.
BP reported that it realised average Brent prices of $96.99 a barrel in Q3, down from $103.85 a barrel in Q2.
Refining and trading
Refining performance showed improvement in the quarter, with realised refining margins in the range of $1.9 billion to $2.1 billion and throughput reported at 1,375 to 1,405 million barrels per day. The company also said its gas marketing and trading result for Q3 is expected to be "significantly higher" than in Q2.
BP confirmed it will publish a full set of third-quarter results on October 30.
Market context cited by the company
BP noted that it has benefited this year from a sharp rise in oil prices and stronger refining margins, which the company linked to supply effects from the U.S.-Iran conflict and damage to refining capacity in the Middle East. It added that continued attacks on Russian facilities in recent months have amplified refinery shortages, a development that the company said supports margins for BP and its peers.
The company did not provide further quantitative detail beyond the ranges and figures disclosed in the trading update.