BP sees refining margin triple, reaches debt target, but flags more impairments
BP•BP estimated its third-quarter refining margin at $46.7 per barrel, nearly triple the year-ago level, and said net debt would be $13.5 billion to $14.4 billion, reaching its target about a year early. It also flagged $3 billion to $4.5 billion in impairments in its gas and low-carbon energy segment.
1. Margins and impairments
BP estimated its third-quarter refining indicator margin at $46.7 per barrel, up from $29.6 in the second quarter and $15.8 a year earlier. The company said stronger margins would lift profit in its products segments by $1.9 billion to $2.1 billion from the previous quarter. It flagged $3 billion to $4.5 billion in impairments related to its gas and low-carbon energy segment, but declined to provide further details.
2. Debt target reached early
BP expects net debt of $13.5 billion to $14.4 billion for the quarter, reaching its target range of $14 billion to $18 billion about a year early. It estimated overall obligations, including hybrid bonds, leases and Deepwater Horizon liabilities, at $43.6 billion to $44.6 billion, down from $53.6 billion in the previous quarter.
3. Trading and outlook
BP expects its third-quarter gas marketing and trading result to significantly exceed the previous quarter, while its oil trading result is expected to be broadly flat. The company said upstream production was 2.19 million to 2.24 million barrels of oil equivalent per day, compared with 2.2 million in the second quarter. BP is due to report results on October 30 and plans a strategy and outlook update on December 15.
