BP says oil and gas production set to rise after renewing focus on fossil fuels
BP has said it expects to report higher oil and gas production for the second quarter, after the energy giant renewed its focus on fossil fuels to help boost profits.
The London-listed company told investors that upstream production is now expected to be higher between April and June, compared with the previous three months.
This incorporates its oil production and operations, as well as gas and low carbon energy production coming in slightly higher.
However, the oil business said lower prices received for its oil production were expected to impact results by up to $800m dollars (£591m).
BP also told investors that its net debt at the end of the second quarter was expected to be slightly lower compared with the end of the first quarter.
The business earlier this year revealed a new growth strategy focused on extracting more oil and gas, following pressure from some investors to boost its profits.
At the time, bosses said the firm went “too far, too fast” on green energy and confirmed plans to heavily reduce spending on renewables.
Meanwhile, reports that Shell was exploring a possible offer to buy BP were quashed last month – with Shell telling investors that no talks had taken place and it had “no intention” of putting forward a bid.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The tariff turmoil unleashed by President Trump, which caused global energy prices to fall, has caused a headache for BP.
“The oil major released forecasts in its trading update that lower prices will hit its second quarter results.
"In its oil production and operations business, it is set to have an impact in the range of between $600 to $800 million, while its gas and low carbon energy segment will take a hit of between $100 and $300 million.
“However, net debt is coming down, refining margin is improving and there will be comfort from the upstream production increases showing that the strategy reset is bearing some fruit.
"This has reassured investors with the share price up 1.4 per cent in early trade.
“The company’s future profits remain intrinsically linked to oil and gas prices, over which it has no control.
“It shows the importance of BP not completely abandoning ambitions in the green energy space whilst being selective in its approach.”
Dan Coatsworth, investment analyst at AJ Bell, said: “A big slump in the oil price following Trump’s Liberation Day tariff plan has done no favours to BP. It has flagged up to $1.5bn of potential asset impairments, despite ramping up production in the second quarter. The market doesn’t seem too fussed, instead focusing on good news from its oil trading business and higher refining margins."