BP Profit Falls on Lower Prices, Outage at Oil Refinery — Energy Comment

By Christian Moess Laursen

BP reported a fall in first-quarter earnings following weaker oil and gas prices, while it ramped up oil production. An unplanned outage at its biggest oil refinery and lower refining margins also hampered the results. Here what the British energy major had to say.

On gas and low-carbon energy:

BP's gas and low-carbon energy segment contributed $1.66 billion in underlying replacement-cost earnings before interest and tax in the quarter, down from $3.46 billion a year prior and from $1.88 billion in the preceding quarter.

"The first-quarter underlying result reflects lower realizations and foreign exchange losses on Egyptian pound balances, partially offset by lower exploration write-offs."

"Gas marketing and trading was strong following a strong result in the fourth quarter."

"Reported production for the quarter was 914,000 barrels of oil-equivalent a day, 5.7% lower than the same period in 2023. Underlying production was 3.5% lower, mainly due to base decline partially offset by major projects which started up in 2023."

On oil production and operations:

BP's oil production-and-operations segment booked $3.125 billion in underlying RC EBIT, down from $3.32 billion a year prior and from $3.55 billion in the fourth quarter.

"The first-quarter underlying result reflects lower realizations, partially offset by higher production."

"Reported production for the quarter was 1.463 million BOE a day, 7.6% higher than the first quarter of 2023. Underlying production for the quarter was 7.4% higher compared with the first quarter of 2023 reflecting BPX energy performance and major projects, partly offset by base performance."

On customer and products

BP's customers and products business reported $1.29 billion in underlying RC EBIT, down from $2.76 billion a year prior and up from $803 million in the fourth quarter.

"The customers' first-quarter underlying result was lower by $0.5 billion, reflecting significantly weaker fuels margin, seasonally lower volumes, and the absence of one-off positive effects that benefited the prior quarter, partly offset by lower costs.

"The products' first-quarter underlying result was higher by $1.0 billion, reflecting higher realized refining margins, a significantly lower level of turnaround activity and higher commercial optimization, partially offset by the impacts of the Whiting refinery outage.

"The oil trading contribution was strong following a weak result in the fourth quarter."

"BP-operated refining availability for the first quarter was 90.4%, lower compared with 96.1% for the same period in 2023, mainly due to the plant-wide power outage at the Whiting refinery."

On second-quarter guidance:

"Looking ahead, BP expects second-quarter 2024 reported upstream production to be slightly lower compared with first-quarter 2024."

"In its customers' business, BP expects seasonally higher volumes and fuels margin to remain sensitive to movements in the cost of supply."

"In products, BP expects realized margins to be impacted by narrower North American heavy crude oil differentials, and to remain sensitive to relative movements in product cracks."

"In addition, BP expects the absence of the first-quarter plant-wide power outage at the Whiting refinery to be partly offset by a higher level of turnaround activity."

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

May 07, 2024 05:35 ET (09:35 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.