BP Sees Third-Quarter Net Debt Falling to $13.5-14.5 Billion

BP p.l.c. (BP ) published its third-quarter 2026 trading statement on 13 October 2026, stating that it expects net debt of $13.5 billion to $14.5 billion at the end of the quarter, compared with $22.3 billion at the end of the second quarter. The trading statement sets out bp’s current estimates and expectations for the period, and the group’s full third-quarter results are scheduled for publication on 30 October 2026.

The company said the information presented is not comprehensive of all factors which may impact group results for the quarter and is not an estimate of those results, and that all information provided is subject to the finalization of its financial reporting processes. Guidance items from bp’s second-quarter 2026 results announcement on 4 August 2026 continue to apply unless explicitly stated, and a summary of that guidance is restated in an appendix to the statement.

Reported upstream production in the third quarter is expected to be 2,190 to 2,240 thousand barrels of oil equivalent per day (mboe/d), compared with 2,201 mboe/d in the second quarter and with initial guidance of 2,100 to 2,250 mboe/d. bp said the expected level mainly reflects seasonal maintenance recovery, partly offset by its reduced equity interest in Latin America, and that the quarter includes the impact of continued disruption in the Middle East and no impact from weather events in the Gulf of America. Within the total, gas & low carbon energy production is expected at 775 to 795 mboe/d, against 765 mboe/d in the prior quarter, and oil production & operations at 1,415 to 1,445 mboe/d, against 1,436 mboe/d. The statement notes that, because of rounding, upstream production may not agree exactly with the sum of the two segments.

Segment Earnings Considerations

In the gas & low carbon energy segment, bp expects realizations, compared with the prior quarter, to have a positive impact in the range of $0.1 billion to $0.3 billion, including the impact of changes in non-Henry Hub natural gas markers. The gas marketing and trading result is expected to be significantly higher than in the second quarter.

In oil production & operations, realizations are expected to have a negative impact in the range of $0.2 billion to $0.4 billion, also including the impact of changes in non-Henry Hub natural gas markers. Exploration write-offs are expected to be significantly lower because the prior quarter included the impact of the Bay Du Nord sale, while depreciation, depletion and amortization (DD&A) is expected to be slightly higher due to a change in production mix. bp said second-quarter equity-accounted earnings benefited from higher contributions in Latin America, which are not expected to repeat in the third quarter.

In the customers & products segment, the customers business is expected to post a significantly lower result, driven by weaker fuels margins and higher base oil prices in Castrol, as well as a lower contribution from midstream, partly offset by slightly higher volumes due to seasonal effects. The products business is expected to reflect stronger realized refining margins in the range of $1.9 billion to $2.1 billion, with refining throughput of 1,375 to 1,405 thousand barrels per day, compared with 1,467 in the second quarter. bp said the throughput expectation reflects the completion of the Gelsenkirchen divestment on 31 July 2026 and a lower level of planned turnaround and maintenance activity, and the oil trading result is expected to be broadly flat compared with the second quarter.

Net Debt, Impairments and Full-Year Guidance

The group underlying effective tax rate for the third quarter is expected to be around 30%, which bp attributed to the geographical mix of profits. Updated full-year tax rate guidance will be provided within the third-quarter results; the appendix to the statement shows existing full-year guidance of 35% to 40%.

The expected net debt reduction includes the redemption of $1.0 billion of hybrid securities on 30 September 2026, with remaining hybrid bonds and securities expected to be around $12.0 billion at the end of the third quarter, compared with $13.0 billion at the end of the second. Also reflected in the movement are income taxes paid around $1.0 billion higher, a working capital release in the range of $0 to $1.0 billion and capital expenditure of around $3.0 billion. As a result, bp expects the combined total of net debt, hybrid bonds, leases and Gulf of America settlement liabilities to reduce by around $9.0 billion to $10.0 billion compared with the second quarter.

Third-quarter results are expected to include post-tax adjusting items relating to impairments in the range of $3.0 billion to $4.5 billion. bp said the charges are primarily attributable to transition businesses in the gas & low carbon energy segment and are excluded from underlying replacement cost profit.

On trading conditions, Brent crude averaged $96.99 per barrel in the third quarter, compared with $103.85 in the second quarter, and the US Henry Hub first-of-month index averaged $2.96 per million British thermal units (mmBtu), compared with $2.90. bp’s Refining Indicator Margin, a simple indicator of the weighted average of bp’s crude slate and product yield for each refinery, averaged $46.7 per barrel, compared with $29.6. The company said the marker prices and margins do not represent the actual prices or margins it realized during the periods.

bp’s full-year 2026 rules of thumb indicate an impact on pre-tax replacement cost operating profit of $340 million for each $1-per-barrel change in Brent, $40 million for each $0.10-per-mmBtu change in Henry Hub, and $450 million for each $1-per-barrel change in the refining indicator margin. The weighting of the Brent and Henry Hub indicators is an approximate split of 80% to oil production & operations and 20% to gas & low carbon energy. bp describes the rules of thumb as approximate directional indicators and cautions that the relationship between prices and results is not necessarily linear across a wide range of oil and gas prices.

The restated full-year 2026 guidance includes reported upstream production of 2,180 to 2,270 mboe/d, with underlying upstream production broadly flat versus 2025; capital expenditure of $13.5 billion to $14.0 billion; DD&A of $17.0 billion to $17.5 billion; and divestment and other proceeds of $8 billion to $9 billion, including $6 billion from the announced Castrol transaction. Full-year refining throughput is guided at 1,360 to 1,410 thousand barrels per day, and Gulf of America oil settlement payments for the full year are guided at $1.6 billion pre-tax, including $0.4 billion in the first quarter and $1.1 billion in the second.

The statement identifies underlying replacement cost profit before interest and tax, the underlying effective tax rate, net debt and working capital as non-IFRS measures. bp will also host a strategy and outlook update on 15 December 2026 in New York City.