BP gas and oil production volumes are expected to have jumped over the second quarter as the energy giant continues to refocus efforts on fossil fuels at the expense of renewables.
But BP told investors on Friday that lower oil and gas prices between April and June compared with the previous three months mean profits will come under pressure for the quarter.
The group, whose ongoing share price woes have sparked rumours of a looming takeover bid from rival Shell, said upstream production – incorporating oil, gas and low carbon energy production – is expected to be slightly higher.
Brent crude oil prices averaged $67.88 a barrel in the second quarter, down sharply from $75.73/bl in the first, after OPEC+ members started to unwind self-imposed production cuts.
Similarly, BP’s US gas Henry Hub first of month index averaged $3.44million British Thermal Units in the second quarter compared to $3.65/mmBtu in the first.
Lower prices received for oil production are expected to impact results by up to $800million (£591 million), according to BP, while its gas and low carbon energy segment will take a hit of $100million to $300million.
Lower oil and gas prices will hurt BP’s quarterly profits
However, its customers and products business is set to benefit from the higher refining margins to the tune of $300million to $500million compared to the previous quarter, despite higher maintenance activity at its plants.
Its net debt is expected to be slightly lower than the previous quarter’s $27billion.
BP shares were up 2.6 per cent to 398.8p in early trading, bringing 2025 losses to 1.2 per cent.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said trade uncertainty is expected ‘to keep a lid’ on oil prices in the months ahead, marking a fresh ‘headache’ for BP.
She added: ‘However, net debt is coming down, refining margin is improving and there will be comfort from the upstream production increases showing that the strategy reset is bearing some fruit.
‘The company’s future profits remain intrinsically linked to oil and gas prices, over which it has no control.
‘It shows the importance of BP not completely abandoning ambitions in the green energy space whilst being selective in its approach.’
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