Energy group BP said it expects first-quarter production to decline from the previous quarter, with lower gas output and asset sales in Egypt and Trinidad offsetting gains in oil.
The trading update offers an early glimpse into BP’s quarterly performance as it comes under investor pressure over capital discipline, share buybacks and the pace of energy transition – scrutiny that has intensified since activist investor Elliott Management bought a stake in the company.
BP expects earnings from its oil production and operations segment to be broadly flat from the previous quarter, due in part to price lags in the Gulf of Mexico and the UAE.
Gas and low-carbon energy pricing is expected to remain largely unchanged, but BP flagged weakness in the gas marketing and trading business.
The British oil major also expects net debt to increase from the previous quarter to about $4 billion, citing seasonal builds in inventories and the timing of payments including annual bonuses and costs related to low-carbon asset sales.
Stronger refining margins are expected to contribute between $100-$300m to first-quarter earnings while oil trading is expected to be flat, the company added.
BP is scheduled to report full first-quarter results on April 29.
