BP confirmed on Tuesday that higher commodity prices were set to boost second-quarter earnings, despite a fall in upstream production.
Updating on trading, the British energy major said it expects oil production and operations to come in between 1.42m to 1.45m barrels of oil equivalent per day in the three months to June end, below the first quarter’s 1.54m boe/d. Gas and low carbon energy forecasts were 750m to 770m boe/d, down from 798m boe/d.
The blue chip attributed the lower production forecasts to seasonal maintenance, primarily in the Gulf of America, and ongoing disruption in the Middle East.
As a result, overall reported upstream production is slated to come in between 2.17m and 2.22m boe/d, compared to the first-quarter’s 2.34m boe/d. However, despite the fall in production, higher commodity prices continued to underpin earnings.
Realizations in the gas and low carbon energy segment are expected to have added between $500m and $700m during the three-month period, due to the impact of price lags and changes in non-Henry Hub natural gas marker prices.
In oil production and operations, realizations are expected to add between $1.8bn and $2.1bn, although exploration write-offs were slated to come in around $500m.
The customers and products division was also poised to benefit from higher prices, with stronger realized refining margins in the range of $1.2bn to $1.4bn.
Net debt was flagged to come in between $22bn and $23bn, down on the previous quarter’s $25.31bn.
BP is due to published second-quarter results on 4 August.
Source: Original Article
