BP Plc said on Tuesday that net debt at the end of the third quarter is expected to fall to between $13.5 billion and $14.5 billion, down sharply from $22.3 billion at the end of the second quarter.
The London-listed oil major flagged post-tax adjusting items relating to impairments of between $3.0 billion and $4.5 billion in the quarter, primarily attributable to transition businesses within its gas & low carbon energy segment, which will be excluded from underlying replacement cost profit.
Reported upstream production is expected to come in at 2,190 to 2,240 thousand barrels of oil equivalent per day, up from 2,201 mboe/d in the second quarter, reflecting seasonal maintenance recovery partly offset by BP's reduced equity interest in Latin America.
The company said the quarter includes continued disruption in the Middle East and no impact from weather events in the Gulf of America.
Within the customers & products segment, BP expects a significantly lower result in its customers business, driven by weaker fuels margins and higher base oil prices in its Castrol lubricants unit, alongside a lower contribution from midstream.
Products performance should be stronger, with realised refining margins expected to add between $1.9 billion and $2.1 billion compared with the prior quarter.
Refining throughput is guided at 1,375 to 1,405 thousand barrels per day, down from 1,467 mb/d in the second quarter, reflecting the completion of the Gelsenkirchen refinery divestment on 31 July and lower planned turnaround activity.
The group's underlying effective tax rate for the quarter is expected to be around 30%, down from 34% in the second quarter, which BP attributed to the geographical mix of profits; updated full-year guidance will follow with third-quarter results.
In the oil production & operations segment, BP said prior-quarter equity-accounted earnings had benefited from higher contributions in Latin America that are not expected to repeat, while exploration write-offs should be significantly lower following the prior quarter's Bay Du Nord sale impact.
Brent crude averaged $96.99 per barrel in the third quarter, down from $103.85 in the second quarter, while BP's refining indicator margin rose to $46.7 per barrel from $29.6.
BP's third-quarter group results are scheduled for publication on 30 October.