BP raised Aug. 3 its 2025 oil price assumption by $5/b to $60/b to reflect an expected supply constraint, while promising a recovery in its own production volumes following a maintenance-related slump in the second quarter.
In its Q2 results statement, the UK oil company spoke of an “improving outlook” in the industry environment and said its own performance was “resilient,” even as production in its upstream oil production and operations unit fell nearly 25% on the year at 1.25 million b/d of oil equivalent. Its upstream production slump was offset by more stable production in the company’s LNG-focused gas and low-carbon energy unit and at Rosneft, in which BP holds a near 20% stake.
BP said its third-quarter production should be higher due to the completion of maintenance, which has held back many of the major producers in recent months, as well as the ramp-up of key new projects.
Production is expected to get a boost from the startup of four main projects in Q2, in India, Egypt, Angola and the US Gulf of Mexico, the company added.
BP said the oil market was rebalancing and global stocks should revert to historical levels in the first half of 2022. It consequently set out new Brent oil price assumptions, raising its 2025 forecast to $60/b, maintaining its 2030 forecast at $60/b, but lowering its 2040 forecast to $55/b from $60/b to reflect an acceleration in the transition to low-carbon energy. BP also lowered its 2050 price assumption to $45/b from $50/b.
In downstream, where the company struggled to capitalize on broadly improved margins in Q2, “realized refining margins are expected to improve slightly supported by stronger demand and wider North American heavy crude oil differentials,” BP said.
“We’ve delivered disciplined strategic progress right across BP — including building a high-quality offshore wind business, making great strides in our electrification agenda and setting ourselves up for further growth in the Gulf of Mexico,” CEO Bernard Looney said about the company’s ambitious energy transition goals.
Source: Platts