Energy behemoth BP informed investors on Tuesday that its oil and gas production likely surged in the first three months of this year, even as prices for these commodities experienced a downturn.
The oil major disclosed that production is projected to have exceeded levels recorded in the last quarter of 2023, with the official results slated for release on May 7.
Simultaneously, BP expects its gas and low-carbon energy production to see a “slight” uptick during this period.
However, despite the increase in production, the company cautioned investors about the impact of lower oil and gas prices in the quarter on its financial performance.
BP warned shareholders to brace for a US$200 to US$400 million hit to its underlying replacement cost profit before interest and tax due to the decline in gas prices and other factors. Additionally, the weakening Egyptian Pound is forecasted to incur an additional cost of around US$200 million.
Moreover, the company’s oil production unit anticipates a substantial hit of US$300 to US$600 million. It said this is attributed in part to price lags affecting production in the Gulf of Mexico and the United Arab Emirates.
Despite these challenges, bp highlighted a strong performance from its gas trading division, while expecting a turnaround from a “weak” performance to a “strong” one in its oil trading arm.
The announcement from bp follows a statement from rival oil producer Shell, which reported a decline in trading within its gas division. Nevertheless, Shell remains optimistic about the division’s performance and expects an increase in oil and oil equivalents production compared to the previous quarter.