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BP (A1/A-/A+) Trading Update

ENERGY SECTOR
  • Q2 2024 upstream production seen broadly flat QoQ; broadly flat oil production, gas & low carbon energy slightly down.
  • Adverse impact of USD ~0.1bn in gas & low carbon energy realizations offset by favourable oil production realisations of USD 0.1-0.3bn.
  • Customers segment to see lower realised refining margins with an adverse impact of USD 0.5-0.7bn.
  • Impairments and onerous contract provisions expected between USD 1-2bn
  • Update seems slightly credit negative but more of a non-event until earnings on 30 July.
  • Like with Shell, the impairments likely have limited short-term credit impact given non-cash and likely expected given that production cuts at the Gelsenkirchen refinery were announced back in March.

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