Proactive Investors - BP PLC (LON:BP) has warned that weak refining margins and lower oil prices have affected its third-quarter numbers.
Exploration write-offs in the region of US£200-300 million will also hit the figures, said the oil and gas giant.
Oil and gas production over the three months is now expected to be broadly flat compared to the prior quarter, with higher gas prices giving a US$100 million boost offset by a US$100-300 million drop from its operations in the Gulf of Mexico and UAE.
Like Shell (LON:SHEL) recently, BP also warned that refining margins had weakened causing a reduction of US$400-600 million while oil trading had also been weak.
As a result of all this, net debt will go up debt at the end of the quarter largely BP said primarily due to the lower refining contribution and also US$1 billion of divestment proceeds moving into the fourth quarter.
BP said it received an average Brent sale price of $80.34/bbl (barrel) in the third quarter of 2024 compared to $84.97/bbl in the preceding three months, Henry Hub gas prices averaged $2.15/mmBtu compared to $1.89/mmBtu while refining margins fell to $16.5/bbl in the third quarter 2024 compared to $20.6/bbl.
According to its rules of thumb, each US$1/bbl movement in the crude price adds to or reduces operating profits by US$340 million; each US$0.1/mmBtu movement on the Henry Hug gas price adds to/reduces profits by US$30 million while each US$1/bbl shift in refining margin adds to or reduces operating profits by US$400 million.