In a group results statement for Q1 2021, BP said second quarter production will be even lower than the first quarter in both its conventional operations and newly created ‘gas and low carbon’ unit. This is due to a combination of asset sales and maintenance, the latter in the North Sea, Gulf of Mexico as well as Trinidad and Tobago.
“For full year 2021 we expect reported upstream production to be lower than 2020 due to the impact of the ongoing divestment programme,” BP said. “However, underlying production should be slightly higher than 2020 with the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets.”
BP said it expects higher product demand across its customer businesses in the second quarter as restrictions begin to ease and vaccination rollouts continue. “This should help provide some support to industry refining margins. However, realized refining margins are expected to show a smaller improvement due to the slower recovery in diesel and jet demand and a narrower North American heavy crude oil differential. In addition, we expect a higher level of turnaround activity in our refining portfolio.”
The UK major now expects disposal proceeds for the year to reach $5-6 billion during the latter stages of 2021. As a result of this quarter’s divestments, the company’s target of $25 billion of disposal and other proceeds between the second half of 2020 and 2025 is now underpinned by agreed or completed transactions of around $14.7 billion with approximately $10 billion of proceeds received.
“For full year 2021 we expect reported upstream production to be lower than 2020 due to the impact of the ongoing divestment programme,” BP said. “However, underlying production should be slightly higher than 2020 with the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets.”
The company said its future financial performance, including cash flows and net debt, will be impacted by the extent and duration of the current market conditions and the effectiveness of the actions that it and others take, including its financial interventions.
