BP’s net debt at the end of the quarter is projected to be lower than the previous quarter. Credit: Jonathan Weiss/Shutterstock.

BP has indicated that its Q4 results will be adversely affected by several factors including reduced oil and gas production, refining margins and trading performance.

In the upstream segment, bp expects lower production in Q4 compared with the previous quarter, affecting both oil production and operations and gas and low-carbon energy.

The gas and low-carbon energy segment may see a slight positive impact from non-Henry Hub natural gas marker prices, with an anticipated favourable effect of between $100m (£81.29m) and $200m.

The oil production and operations segment is forecasted to experience an unfavourable impact ranging from $200m to $400m, including price lag effects on bp’s production in the Gulf of Mexico and the United Arab Emirates. Exploration write-offs are expected to be $100m–200m lower compared with the prior quarter.

In the customers and products segment, bp anticipates challenges such as seasonally lower volumes, reduced fuels margins, foreign exchange losses and a one-off inventory purchase price adjustment due to a bioethanol acquisition.

Additionally, weaker realised refining margins, estimated at between $100m and $300m, and greater turnaround activity are expected to impact results. The oil trading result is also expected to be weak.

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BP’s net debt at the end of the quarter is projected to be lower than the previous quarter, taking into account proceeds from divestments of around $2.8bn, the issuance of approximately $2.5bn in perpetual hybrid bonds and acquired net debt of around $3bn from completing transactions with bp Bunge Bioenergia and Lightsource bp.

The company also anticipates non-cash, post-tax charges related to impairments of $1bn–2bn across the segments, which will be excluded from underlying replacement cost profit.

The underlying effective tax rate for the full year is now expected to be around 42%, up from the previously forecasted 40%, mainly due to changes in the geographical mix of profits.

Furthermore, bp has revised its other businesses and corporate underlying annual charge for 2024 to approximately $600m, an increase from the earlier range of $300m–400m, due to foreign exchange losses.

The company’s CEO, Murray Auchincloss, who took over after Bernard Looney’s resignation in September 2023, is currently recovering from a medical procedure and will return to the office in February.

Consequently, bp has rescheduled its capital markets event from 11 February in New York to 26 February in London.