BP expects sharp fall in third quarter debt and refining margin uplift

BP PLC on Tuesday said it expects to report a marked reduction in debt and stronger refining margins in the third quarter, although it also will book impairments of up to USD4.5 billion.

Shares in the London-based oil major were up 1.3% at 595.90 pence each in London on Tuesday morning. The FTSE 100 listing has risen more than 40% in the past 12 months.

In a pre-results trading update, BP said it expects to report third quarter upstream output of 2.190 million to 2.240 million barrels of oil equivalent per day, compared to 2.201 million in the second quarter and initial guidance for 2.100 million to 2.245 million. Full-year guidance is for 2.180 million to 2.270 million barrels per day.

The company put the outcome down to "seasonal maintenance recovery partly offset by BP's reduced equity interest in Latin America".

"[The] third quarter includes the impact of continued disruption in the Middle East and no impact from weather events in the Gulf of America," it added.

Upstream production in the third quarter of 2025 amounted to 2.362 million barrels of oil equivalent per day. In the Products arm, BP expects an underlying replacement cost profit boost from "stronger realised refining margins" to the tune of USD1.9 billion to USD2.1 billion, relative to the second quarter.

In Customers, however, it predicts a "significantly lower result, driven by weaker fuels margins and higher base oil prices in Castrol, as well as a lower contribution from midstream, partly offset by slightly higher volumes due to seasonal effects".

BP said its third-quarter results are to include adjusting items relating to impairments in the range of USD3.0 billion to USD4.5 billion.

"These charges are primarily attributable to transition businesses in the gas & low carbon energy segment and are excluded from underlying replacement cost profit," it explained.

BP also said it expects to report net debt as of the end of the third quarter on September 30 of between USD13.5 billion and USD14.5 billion, down from USD22.3 billion on June 30.

The reduction includes the redemption of USD1.0 billion of hybrid securities at the end of September 2026, working capital release in the range of USD0 to USD1.0 billion and capital expenditure of around USD3.0 billion, it said.

Capital expenditure compares to USD3.0 billion the quarter prior. Full-year capex guidance is USD13.5 billion to USD14.0 billion.

JPMorgan analyst Matthew Lofting said the debt reduction was better than his forecast for a reduction to USD18 billion.

BP releases half-year results on October 30 and further ahead, it will host a strategy and outlook update on December 15 in New York.

Copyright 2026 Alliance News Ltd. All Rights Reserved.