New Delhi, Jan 14 (IANS) British oil major BP said on Wednesday that it expects to see $4 billion to $5 billion of impairments in the fourth quarter, largely tied to its energy‑transition businesses, as the oil major pivots spending back to oil and gas.

The announcement follows a strategic reallocation of capital away from lower‑carbon ventures, under Chair Albert Manifold as BP seeks to simplify its portfolio. Meg O’Neill will take over as chief executive officer in April, replacing interim boss Carol Howle, following the abrupt exit of Murray Auchincloss last month.

The company said the impairments would not affect underlying replacement cost profit, its version of net income, though it did not identify specific projects.

“The fourth quarter results are expected to include post-tax adjusting items relating to impairments, including impairments within our equity-accounted entities, in the range of $4 to 5 billion, primarily related to our transition businesses. These charges are primarily attributable to the gas and low carbon energy segment and are excluded from underlying replacement cost profit,” the release said.

BP said oil and gas production in the fourth quarter was broadly flat compared to the third quarter’s 2.4 million barrels of oil equivalent per day, in line with prior expectations. However, weaker realisations are expected to dent its gas business with oil likely to reduce previous quarter’s earnings by $200 million to $400 million, and gas by $100 million to $300 milion.

The quarterly results will be impacted “by stronger realised refining margins of around $0.1 billion, offset by a higher impact from turnaround activity and the temporary impact of reduced capacity following a fire at the Whiting refinery. The oil trading result is expected to be weak,” the company flagged.

Global benchmark Brent crude prices averaged around $63.73 a barrel during the October to December quarter, compared with $69.13 in the third quarter, the release ‍said.

—IANS

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