BP PLC said Tuesday it expects a quarter-on-quarter increase in upstream production, sales volumes and refining margins in the third quarter.
Volumes are set to increase “in both oil production & operations, primarily higher gas production in bpx energy, and in gas & low carbon energy”, the British energy giant said in a trading update on its website.
However, BP forecasts a $100-million negative impact, including changes in non-Henry Hub gas marker prices, on “gas and low-carbon energy” segment realizations. BP based realizations on sales by consolidated subsidiaries, excluding equity entities.
“The gas marketing and trading result is expected to be average”, BP said.
It projects realizations in the “oil production and operations” segment to be “broadly flat” compared to the prior three months. Segment realizations are impacted by “price lags on bp’s production in the Gulf of America and the UAE”, BP said.
It expects a sequential increase of $100 million in exploration write-offs.
In the “customers and products” segment, BP expects “seasonally higher volumes with broadly flat fuels margins”.
Meanwhile refining margins look to be higher at $300-400 million, while turnaround activity would be “significantly lower”. These would be partly offset by seasonal effects of environmental compliance costs and weather-induced outage at BP’s biggest refinery, in Whiting, Indiana, the company said.
Q3 results are also expected to include “post-tax adjusting items relating to asset impairments in the range of $0.2 to $0.5 billion, attributable across the segments”, BP added.
“Net debt at the end of the third quarter is expected to be broadly flat compared to the end of the second quarter at around $26 billion including the impact of the redemption of $1.2 billion perpetual hybrid bonds on 1 September as planned, higher income taxes paid of around $1 billion and a working capital release”.
BP expects to publish its full operational and financial results on November 4.
Earlier BP rival Shell PLC similarly posted higher expected upstream production and refining margins for Q3 compared to Q2.
Shell projects its upstream output in Q3 to be 1.79-1.89 million barrels of oil equivalent a day (MMboed), compared to 1.73 MMboed in Q2, it said in an online statement October 7.
“Adjusted [upstream] earnings are expected to reflect a $0.2-0.4 billion hurt related to the rebalancing of participation interests in Brazil”, Shell said, referring to the finalization of the redetermination proposal for the unitized Tupi field.
Production in the integrated gas segment, which includes liquefied natural gas (LNG) and liquid fuels converted from gas, is expected to be 910,000-950,000 boed in Q3, compared to 913,000 boed in Q2. LNG production is expected to increase from 6.7 million metric tons in Q2 to 7-7.4 million metric tons in Q3.
In the marketing segment, Shell expects sales volumes of 2.65-3.05 million barrels per day (MMbd) in Q3, compared to 2.81 MMbd in Q2. “Marketing adjusted earnings are expected to be higher than Q2’25”, it said.
Shell expects refining and chemicals utilization of 94-98 percent and 79-83 percent respectively.
It expects an indicative refining margin of $11.6 per barrel, up from $8.9 per barrel in Q2, and an indicative chemicals margin of $160 per metric ton, down from $166 per metric ton in Q2. Shell expects a net loss from the chemicals sub-segment.
“Trading & Optimization is expected to be higher than Q2’25”, it said.
Shell plans to publish its full Q3 results October 30.
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