fredrocko
BP (NYSE:BP) expects to book impairment charges of $1B-$2B for Q2, and warned of weak oil trading earnings amid “significantly lower” refining margins, sending its shares falling 3.8% in premarket trade on Tuesday.
The after-tax asset impairments and one-off contract provisions include charges relating to the ongoing review of its Gelsenkirchen refinery in Germany.
Lower realized refining margins are expected to have an adverse impact of $500M-$700M, driven by weaker middle distillate margins, narrower North American heavy crude oil differentials, and a higher level of turnaround activity.
BP (BP) expects Q2 upstream production to be broadly flat sequentially, with production largely flat in oil production & operations and slightly lower in gas & low carbon energy.
In the gas & low carbon energy segment, realizations are expected to have an adverse impact of around $100M compared to Q1, including declines in non-Henry Hub natural gas marker prices.
In oil production & operations, realizations are projected to have a favorable impact of $100M-$300M compared to Q1. The British oil and gas giant will report Q2 results on July 30.
BP’s (BP) forecast comes just a day after Exxon Mobil (XOM) warned of weaker gas prices weighing on its Q2 upstream earnings, as well as a big drop in refining margins.