BP lifts oil and gas production guidance for first quarter

Oil giant BP has lifted expectations for oil and gas production in the first three months of this year, but warned of a hit from lower prices.

The FTSE 100 giant predicts that upstream production will be higher in the first quarter of 2024 than in the previous three months.

It expects a further boost of $100 million to $200 million (£79 million to £158 million) from improved oil refining margins in its customer and product segment.

Still, the company said lower oil and gas prices would have a “negative impact” of $200 million to $400 million on its gas and low-carbon energy business and $300 million to $600 million on 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, Henry Hub gas costs averaged $2.25 per million British thermal units, up from $2.88 in the previous three months.

BP expects its gas and low-carbon energy segment to suffer another $200 million due to the devalued Egyptian pound.

Falling oil and gas prices saw BP’s profits fall from a record $27.7 billion in 2022 to $13.8 billion last year, although this was still the second-highest annual profit in a decade.

The London-listed company also bought back $7.9 billion of shares and committed to buying back another $3.5 billion in the first half of 2024.

Its CEO, Murray Auchincloss, praised the 2023 performance as a “year of strong operational performance with real momentum in results across the business”.

Canadian-born Auchincloss became CEO last September following the resignation of Bernard Looney for failing to fully disclose relationships with BP staff.

Despite pressure from investors, he has committed to the company’s green energy targets to halve emissions from its operations by 2030, in part by cutting oil and gas production by 25 percent.

BP’s latest trading statement comes a few days after fellow oil giant Shell upgraded its first-quarter production forecasts.

BP shares were 1.7 percent higher at 518.4p on Tuesday morning and are up around 10 percent since the start of the year.