BP sees $2.1 billion oil earnings boost

• BP expects stronger oil prices to add US$1.8 billion–US$2.1 billion to second-quarter upstream earnings.
• BP shares rose about 4.2% to US$40.83 after the trading update.
• The company expects net debt to fall to US$22 billion–US$23 billion despite lower production and several major payments.

BP (NYSE:BP) expects stronger oil realizations to add US$1.8 billion–US$2.1 billion to second-quarter upstream earnings despite production falling to 2.17 million–2.22 million boe/d.

The production forecast is below the first quarter’s 2.339 million boe/d, while Brent averaged US$103.85 per barrel compared with US$81.13 previously.

Gas and low-carbon energy realizations are expected to add US$500 million–US$700 million, while gas marketing and trading should remain broadly unchanged.

BP expects refining gains of US$1.2 billion–US$1.4 billion, alongside US$500 million in exploration write-offs and approximately US$1 billion in post-tax impairments.

BP also expects net debt to fall to US$22 billion–US$23 billion from US$25.3 billion.

Combined net debt, hybrid capital and Gulf of America settlement liabilities are expected to decline by US$6.3 billion–US$7.3 billion despite US$4 billion in bond and settlement payments.

BP will publish its full second-quarter results on August 4, when investors will assess whether higher prices and refining margins offset reduced production and impairment charges.