Sparks - bp

bp announced in its Q326 trading statement that it expects Q3 underlying earnings to benefit from stronger refining margins and gas marketing and trading, partly offset by weaker customer performance and lower oil realisations. Reported upstream production is guided to 2,190–2,240mboed versus 2,201mboed in Q226, reflecting seasonal maintenance recovery, partly offset by a reduced Latin American equity interest and continued Middle East disruption. Gas and low carbon energy production is expected at 775–795mboed versus 765mboed, while oil production and operations is guided to 1,415–1,445mboed versus 1,436mboed. Relative to Q226, gas and low carbon energy realisations are expected to benefit underlying replacement cost profit (RC profit) before interest and tax by $0.1–0.3bn, while oil production and operations realisations are expected to have a $0.2–0.4bn adverse impact. Gas marketing and trading is expected to be significantly higher quarter-on-quarter, while customers is expected to be significantly lower due to weaker fuels margins, higher Castrol base oil prices and lower midstream contribution, partly offset by slightly higher seasonal volumes. Products should benefit from $1.9–2.1bn of stronger realised refining margins, although throughput is guided to 1,375–1,405mbbld versus 1,467mbbld. Brent averaged $96.99/bbl versus $103.85/bbl in Q226, Henry Hub $2.96/mmBtu versus $2.90/mmBtu and bp’s refining indicator margin (RIM) $46.7/bbl versus $29.6/bbl.

Net debt is expected to decline to $13.5–14.5bn from $22.3bn at Q226, including the $1.0bn redemption of hybrid securities, c $1.0bn higher income tax payments, a $0–1.0bn working capital release and c $3.0bn of capex. Remaining hybrid bonds and securities are expected to fall to c $12.0bn from $13.0bn, while the combined total of net debt, hybrids, leases and Gulf of America settlement liabilities is expected to reduce by $9.0–10.0bn q-o-q. Exploration write-offs are expected to be significantly lower than Q226; depreciation, depletion and amortisation slightly higher due to production mix; and prior-quarter higher Latin American equity-accounted earnings are not expected to repeat. The underlying effective tax rate is expected at c 30% versus 34% in Q226, while Q326 results are expected to include $3.0–4.5bn of post-tax impairments, primarily relating to transition businesses and excluded from underlying RC profit. bp will report Q326 results on 30 October and host a strategy and outlook update on 15 December 2026.