BAKU, Azerbaijan, October 13. British energy
major bp expects its net debt to decline to between $13.5 billion
and $14.5 billion in the third quarter of 2026, down from $22.3
billion in the previous quarter, according to the company's latest
trading statement published October 12.
The reduction is expected to reflect the redemption of $1
billion in hybrid securities on September 30, a working capital
release of up to $1 billion, and other financial movements. bp also
expects to pay around $1 billion in higher income taxes and incur
capital expenditure of approximately $3 billion during the
quarter.
The company expects the combined total of net debt, hybrid
bonds, leases and Gulf of America settlement liabilities to
decrease by around $9 billion to $10 billion compared with the
second quarter.
bp forecasts reported upstream production of 2.19 million to
2.24 million barrels of oil equivalent per day (boe/d), compared
with 2.201 million boe/d in the second quarter. The outlook
reflects the recovery of seasonal maintenance activity, partly
offset by a reduction in its equity interest in Latin America. The
forecast also accounts for continued disruption in the Middle East,
with no impact expected from weather events in the Gulf of
America.
Production in the gas and low-carbon energy segment is expected
to reach 775,000 to 795,000 boe/d, up from 765,000 boe/d in the
previous quarter. Oil production and operations are forecast at
1.415 million to 1.445 million boe/d, compared with 1.436 million
boe/d in the second quarter.
In the gas and low-carbon energy segment, bp expects quarterly
realizations to improve by $100 million to $300 million compared
with the previous quarter. The gas marketing and trading result is
also expected to be significantly higher.
However, realizations in the oil production and operations
segment are expected to decline by $200 million to $400 million
quarter-on-quarter. Exploration write-offs are forecast to be
significantly lower, reflecting the impact of the Bay du Nord sale
in the second quarter. Depreciation, depletion and amortization
expenses are expected to increase slightly due to changes in the
production mix.
In the customers and products segment, bp anticipates a
significantly weaker result from its customers business, reflecting
lower fuels margins, higher base oil prices at Castrol and reduced
midstream contributions. These factors are expected to be partly
offset by a seasonal increase in volumes.
By contrast, the products business is expected to benefit from
stronger realized refining margins, contributing an estimated $1.9
billion to $2.1 billion improvement compared with the second
quarter.
Refinery throughput is forecast at 1.375 million to 1.405
million barrels per day, down from 1.467 million barrels per day in
the previous quarter. The outlook reflects the completion of the
Gelsenkirchen divestment on July 31 and lower planned turnaround
and maintenance activity. The oil trading result is expected to
remain broadly unchanged.
bp expects its underlying effective tax rate for the third
quarter to be around 30%, reflecting the geographical distribution
of profits. Updated full-year guidance for the effective tax rate
will be provided alongside the company's third-quarter results.
The results are also expected to include post-tax adjusting
items related to impairments of $3 billion to $4.5 billion. These
charges are primarily associated with transition businesses in the
gas and low-carbon energy segment and are excluded from underlying
replacement cost profit.
