BP Plc (LON:BP) has announced its third quarter 2024 trading statement.
The following Trading Statement provides a summary of BP’s current estimates and expectations for the third quarter of 2024, including data on the economic environment as well as group performance during the period.
The information presented is not comprehensive of all factors which may impact bp’s group results for the third quarter 2024 and is not an estimate of those results. Also refer to bp’s second quarter and first half 2024 group results announcement on 30 July 2024 for third quarter and full year 2024 guidance items which continue to apply unless explicitly stated. A summary of that guidance is also provided in the Appendix to this Trading Statement. All information provided is subject to the finalization of bp’s financial reporting processes and actual results may vary.
bp’s group results for the third quarter 2024 are expected to be published on 29 October 2024.
Updated 3Q24 guidancea
• Upstream productionb in the third quarter is now expected to be broadly flat compared to the prior quarter, with production broadly flat in oil production & operations and in gas & low carbon energy.
• In the gas & low carbon energy segment, realizationsc, compared to the prior quarter, are expected to have a favourable impact of around $0.1 billion, including changes in non-Henry Hub natural gas marker prices. The gas marketing and trading result is expected to be average.
• In the oil production & operations segment, realizationsc, compared to the prior quarter, are expected to have an unfavourable impact in the range of $0.1 – 0.3 billion, including the impact of price lags on bp’s production in the Gulf of Mexico and the UAE. There is also expected to be an unfavourable impact in the range of $0.2 – 0.3 billion, compared to the prior quarter, as a result of higher exploration write-offs.
• In the customers and products segment, compared to the prior quarter, results are expected to be impacted by the following factors:
◦ customers – broadly flat fuels margins, seasonally higher volumes partly offset by costs.
◦ products – weaker realized refining margins in the range of $0.4 – 0.6 billion and the oil trading result is expected to be weak.
• Other items: Net debt at the end of the quarter is now expected to be higher, driven primarily by the impact of weaker realized refining margins and by the rephasing of around $1 billion of divestment proceeds into the fourth quarter.
a All impacts influence bp’s underlying RC profit before interest and tax, unless stated otherwise.
b Includes bp’s share of production of equity-accounted entities.
c Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
Trading conditions
Brent averaged $80.34/bbl in the third quarter 2024 compared to $84.97/bbl in the second quarter 2024.
US gas Henry Hub first of month index averaged $2.15/mmBtu in the third quarter 2024 compared to $1.89/mmBtu in the second quarter 2024.
The bp RMM* averaged $16.5/bbl in the third quarter 2024 compared to $20.6/bbl in the second quarter 2024.
Appendix: Guidance issued in 2Q24 Stock Exchange Announcementa
| Guidance Area | Full Year 2024 | 3Q24 vs 2Q24 |
| Reported and underlying* upstream production | Slightly higher than 2023, of which Oil production & operations higher and Gas & low carbon energy lower | • lower, including in higher margin regions. |
| Customers | Growth from convenience, including TravelCenters of America; stronger Castrol, bp pulse margin growth; fuels margins to remain sensitive to movements in cost of supply | • fuels margins to remain sensitive to movements in cost of supply• expect seasonally higher volumes |
| Products | Lower level of industry refining margins, with realized margins impacted by narrower North American heavy crude oil differentials; turnaround activity broadly in line with 2023 but heavily weighted towards the second half | • realized refining margins to continue to be sensitive to relative movements in product cracks and North American heavy crude differentials• similar level of turnaround activity |
| Income taxes paid | • expected to be around $1bn higher mainly due to the timing of installment payments, which are typically higher in the third quarter each year | |
| OB&C | Around $1.0bn charge; quarterly charges may vary | |
| DD&A | Slightly higher than 2023 | |
| Underlying effective tax rate*b | Expected to be around 40% | |
| Capital expenditure* | Around $16bn, split broadly evenly between the first and second half | |
| Divestment and other proceeds | $2-3bn, weighted to the second half | |
| Gulf of Mexico oil spill payments | ~$1.2bn pre-tax, of which $1.1bn 2Q |
a Refer to bp’s second quarter and first half 2024 group results announcement and bp.com for full text.
b Underlying effective tax rate is sensitive to the impact that volatility in the current price environment may have on the geographical mix of the group’s profits and losses.
* See Glossary.
