By Adam Whittaker

BP could book up to $1.5 billion in after-tax impairments across its portfolio as it warned lower gas and oil prices will drag on its results.

The British energy major said Friday that it anticipates booking $500 million to $1.5 billion in after-tax impairment charges alongside its second-quarter earnings. These charges are considered adjusting items and will be excluded from its underlying replacement cost profit, a key metric similar to net income its U.S. peers report.

While upstream production is expected to rise quarter-on-quarter, lower oil sales could hurt earnings by up to $800 million and lower gas sales could drag earnings by as much as $300 million.

Brent crude averaged $67.88 a barrel in the second quarter compared with $75.73 a barrel in the first quarter, BP said. U.S. gas prices averaged $3.44 a million British thermal unit over the quarter, down from $3.65.

Production mix effects and price lags in its oil production in the Gulf of America and the United Arab Emirates also hit earnings in its oil unit, BP said. Its gas marketing and trading result is expected to be average while its oil trading result is expected to be strong, BP said.

BP's customers and products divisions benefited from higher margins in the second quarter. This could deliver up to $500 million boost to its products unit where BP said it delivered significantly higher levels of turnaround activity.

BP expects net debt to end the quarter slightly below the $27.0 billion it reported at the end of the prior quarter.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

July 11, 2025 03:01 ET (07:01 GMT)

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