BP warns about lower production in the first quarter and weak gas sales

Energy group BP said that it expects the first-quarter production of oil and gas to be lower than in the previous quarter. Lower gas output in Egypt and Trinidad and asset sales will offset gains in oil.

The trading update provides an early look at BP's performance in its first quarter, as the company faces investor pressure on capital discipline, share repurchases and energy transition. This scrutiny has increased since activist investor Elliott Management purchased a stake.

BP expects its earnings in the oil production and operation segment to remain roughly flat compared to the previous quarter. This is due to the price lags experienced in the Gulf of Mexico, and in the UAE.

The price of gas and low-carbon energies is expected to stay largely the same, but BP has flagged weakness in its gas marketing and trading businesses.

The British oil giant also expects its net debt to rise from the previous quarter, to around $4 billion. It cites seasonal increases in inventories as well as the timing of payments such annual bonuses and costs associated with low-carbon asset sale.

The company said that it expects the first-quarter earnings to be between $100 and $300 million higher due to stronger refining margins, while oil trading will remain flat.

BP will report its full first quarter results on the 29th of April. Reporting by Chandini monnappa in Bengaluru and Arunima kumar in Mumbai Editing by Varun h k and David Goodman

(source: Reuters)