Oil supermajor BP has lifted guidance for oil and gas output during the opening three months of this year, but warned of a hit from lower prices.
The FTSE 100 giant forecasts upstream production to be larger in the first quarter of 2024 than in the previous three months.
It expects a further boost of $100million to $200million (£79million to £158million) from improved oil refining margins in its customers and products segment.
Outlook: Oil supermajor BP forecasts upstream production to be larger in the first quarter of 2024 than in the previous three months
Yet the company said lower oil and gas prices would cause an ‘adverse impact’ of $200million to $400million to its gas and low carbon energy arm and $300million to $600million to its oil production business.
Brent Crude averaged $83.16 per barrel in the first quarter, compared to $84.34 per barrel in the fourth quarter of 2023.
At the same time, the cost of Henry Hub gas averaged $2.25 per million British thermal units, against $2.88 in the prior three months.
BP anticipates an additional $200million hit to its gas and low-carbon energy segment due to the devalued Egyptian Pound.
Falling oil and gas prices caused BP’s profits to slump from a record $27.7billion (£22.1billion) in 2022 to $13.8billion (£11billion) last year, although this was still the second-highest annual profit in a decade.
The London-listed company also bought back $7.9billion of its shares and vowed to $3.5billion of further share repurchases in the first half of 2024.
Its chief executive, Murray Auchincloss, hailed the 2023 performance as a ‘year of strong operational performance with real momentum in delivery right across the business’.
Canadian-born Auchincloss became CEO last September following Bernard Looney’s resignation for failing to fully disclose relationships with BP staff.
Despite pressure from investors, he has committed to pursue the company’s green energy targets to halve emissions across its operations by 2030, partly by reducing oil and gas output by 25 per cent.
BP’s latest trading statement comes a few days after fellow oil supermajor Shell raised its first-quarter production forecasts.
BP shares were 1.7 per cent up at 518.4p on Tuesday morning and have risen by around 10 per cent since the year started.
