BP sees refining margin triple, reaches debt target early, flags more impairments
BP•BP estimated its third-quarter refining indicator margin at $46.7 per barrel, up from $15.8 a year earlier, and expects net debt of $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 July-September refining indicator margin at $46.7 per barrel, compared with $29.6 in the second quarter and $15.8 a year earlier. The company said higher refining margins are expected to lift profit in its products segments by $1.9 billion to $2.1 billion versus the previous quarter. BP also 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 and trading
BP expects net debt of $13.5 billion to $14.4 billion, reaching its target range of $14 billion to $18 billion about a year early. It 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. Upstream production is estimated at 2.19 million to 2.24 million barrels of oil equivalent per day, compared with 2.2 million in the previous quarter.
3. Results and outlook
BP is due to report its results on October 30 and plans to provide a strategy and outlook update on December 15 in New York. RBC analysts raised their net profit forecast for the quarter to $7.6 billion from $6.9 billion; Citi analysts expect net profit of $6.9 billion.
