BP forecasts net debt of US$13.5B to US$14.5B as refining margins rise
BP flags US$3B to US$4.5B in total post-tax impairments, primarily attributable to transition businesses, ahead of Oct. 30 results.
Ines Halvorsen
Third-quarter net debt is forecast at US$13.5 billion to US$14.5 billion by BP p.l.c. LONBP NYSEBP, according to its 2026 trading statement released on Tuesday. The oil and gas producer reported US$22.3 billion of net debt at the end of the second quarter.
The third-quarter debt calculation includes capital expenditure of around US$3 billion and a working capital release of between zero and US$1 billion. BP also redeemed US$1 billion of hybrid securities on Sept. 30 and expects around US$12 billion of hybrid bonds and securities remaining.
Stronger realised refining margins are expected to add US$1.9 billion to US$2.1 billion to third-quarter 2026 underlying replacement cost profit before interest and tax compared with the second quarter. BP also forecasts US$3 billion to US$4.5 billion of post-tax impairment charges, primarily in transition businesses within gas and low-carbon energy.
BP's New York shares NYSEBP closed at US$46.73 on Oct. 12 at 4:00 p.m. EDT, before Tuesday's statement. Full third-quarter results are scheduled for Oct. 30.
BP Expects Lower Throughput Despite Stronger Refining Margins
BP's refining indicator margin averaged US$46.7 a barrel in the third quarter of 2026, compared with US$29.6 in the second quarter. The company cautioned that its indicator does not represent the margins it actually realised during the period.
Refinery throughput is expected at 1.375 million to 1.405 million barrels a day for the third quarter, compared with 1.467 million in the second. BP attributes the forecast to completion of the Gelsenkirchen divestment on July 31 and lower planned turnaround and maintenance activity.
The refining improvement accompanied a lower oil marker: Brent averaged US$96.99 a barrel in the third quarter of 2026, down from US$103.85 in the second. Those marker prices do not represent the actual prices BP received.
BP expects a significantly stronger gas marketing and trading result than in the second quarter. Its third-quarter 2026 guidance assigns a positive earnings impact of US$100 million to US$300 million to gas realisations. Oil production realisations are expected to reduce earnings by US$200 million to US$400 million.
Reported upstream production is expected at 2.19 million to 2.24 million barrels of oil equivalent a day for the third quarter of 2026. Recovery from seasonal maintenance is partly offset by BP's reduced equity interest in Latin America.
BP expects a significantly weaker customer-business result, reflecting weaker fuel margins, higher base oil prices and a lower midstream contribution. The forecast impairment charges are excluded from underlying replacement cost profit.
"The information presented is not comprehensive of all factors which may impact bp’s group results for the third quarter 2026 and is not an estimate of those results," BP said in the statement.
Shell plc LONSHEL NYSESHEL reported an indicative third-quarter refining margin of US$42 a barrel in its Oct. 7 update. Its second-quarter margin was US$24 a barrel. Shell said net debt would reflect acquisition cash payments and assumed debt, plus higher variable components of long-term shipping leases.
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BP has scheduled a strategy and outlook update in New York for Dec. 15. Its next financial report is due on Oct. 30.
