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BP expects Upstream production to drop quarter-on-quarter

Oil&Gas Materials 4 August 2020 11:31 (UTC +04:00)
BP expects Upstream production to drop quarter-on-quarter

BAKU, Azerbaijan, Aug.4

By Leman Zeynalova – Trend:

BP expects third-quarter 2020 reported production in Upstream to be lower than the second quarter reflecting price impacts on TSC (technical service contract) entitlement volumes, divestment of the Alaska business, and seasonal maintenance activities, Trend reports citing the company.

“Production for the second quarter was 2,525mboe/d, 3.8 percent lower than the second quarter of 2019. Underlying production for the quarter increased by 0.6 percent mainly due to ramp up of major projects. For the half year, production was 2,552mboe/d, 3.3 percent lower than the first half of 2019. Underlying production for the half year was 1 percent higher than 2019 mainly due to ramp up of major projects,” reads the BP report on the second quarter of 2020.

The replacement cost loss before interest and tax for the second quarter and half year was $22,008 million and $20,985 million respectively, compared with a profit of $2,469 million and $5,353 million for the same periods in 2019. The second quarter and half year included a net non-operating charge of $13,454 million and $14,525 million respectively, which principally relate to impairments associated with revisions to long-term price assumptions, compared with a net charge of $766 million and $770 million for the same periods in 2019.

Fair value accounting effects in the second quarter and half year had an adverse impact of $67 million and a favourable impact of $156 million respectively, compared with an adverse impact of $178 million and $218 million in the same periods of 2019.

After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost loss before interest and tax for the second quarter and half year was $8,487 million and $6,616 million respectively, compared with a profit of $3,413 million and $6,341 million for the same periods in 2019. The results for the second quarter and half year mainly reflect the impact of writing down certain exploration intangible carrying values, and lower liquids and gas realizations.

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