- Impairments linked mainly to gas and low carbon energy transition businesses.
- Group profits guidance unchanged despite asset write downs.
- Weaker oil trading and softer energy markets weigh on fourth quarter outlook.
BP has announced that it expects to write down between 4 billion and 5 billion dollars from the value of its green and transition focused energy businesses, as the company refocuses its strategy on oil and gas under new chair Albert Manifold.
The impairments are expected to fall largely within BP’s gas and low carbon energy segment and include assets held in equity accounted entities. The company said the charges will not affect its underlying replacement cost profit when it reports full year results in February 2026.
BP has struggled to deliver returns from parts of its energy transition portfolio. In recent months the company has sought to sell a stake in its solar business Lightsource and has cancelled hydrogen projects in the United Kingdom Oman and Australia. The latest move underlines a more cautious approach to capital allocation in renewables as BP prioritises cash flow and balance sheet strength.
In a trading statement covering the fourth quarter of 2025 BP said upstream production is expected to be broadly flat compared with the previous quarter. Oil production and operations are expected to remain stable while gas and low carbon energy production is forecast to be lower.
Realised prices in the gas and low carbon energy segment are expected to reduce earnings by between 0.1 billion and 0.3 billion dollars compared with the prior quarter, reflecting changes in global gas benchmarks. Gas marketing and trading performance is expected to be average.
In oil production and operations realised prices are expected to have a negative impact of between 0.2 billion and 0.4 billion dollars, partly due to pricing lags affecting production in the Gulf of America and the United Arab Emirates.
Within customers and products BP expects seasonally lower customer volumes and broadly flat fuel margins. Refining margins are expected to improve by around 0.1 billion dollars, although this will be offset by higher turnaround activity and reduced capacity following a fire at the Whiting refinery in the United States. Oil trading performance during the quarter is expected to be weak.
BP also reported that net debt at the end of the fourth quarter is expected to fall to between 22 billion and 23 billion dollars, down from 26.1 billion dollars at the end of the third quarter. This reduction includes divestment proceeds of around 3.5 billion dollars during the quarter, bringing total asset sales for the year to approximately 5.3 billion dollars.
The company’s shares fell by as much as 1.4 percent following the announcement before recovering some losses. The update follows similar warnings from sector peer Shell, which recently flagged weaker trading performance amid lower oil prices.
Author: Bryan Groenendaal
