Global energy giant BP has issued a warning about weak oil trading performance in the fourth quarter. The company also flagged a significant impairment of up to $5 billion in its gas and low-carbon energy division.
BP Joins Shell in Warning About Oil Trading
BP, based in London, is not alone in facing challenges. British peer Shell issued a similar warning last week. Both companies expect weak oil trading to negatively impact their earnings for the final quarter of the year.
Details of the Impairment
BP anticipates booking an impairment between $4 billion and $5 billion. This impairment is primarily due to a write-down in the company's gas and low-carbon energy segment. The write-down reflects adjustments in asset valuations within this division.
Progress on Debt Reduction
Despite these financial headwinds, BP is making steady progress in cutting its net debt. This effort is part of a broader turnaround strategy. The strategy aims to strengthen the company's balance sheet and boost shareholder valuations.
Net debt at the end of the quarter is expected to fall within the range of $22 billion to $23 billion. This represents a notable decrease from the $26.1 billion recorded at the end of the third quarter. The reduction highlights BP's commitment to improving its financial health.
The energy sector continues to navigate volatile market conditions. BP's latest announcements underscore the ongoing pressures faced by major oil companies. Investors and analysts will closely monitor the company's full earnings report for further details.
