BP Flags $1 Billion Impairment for Transition Businesses; Oil Trading Results Poised to Grow in Second Quarter
British oil an gas giant BP (BP.L) on Tuesday flagged $1 billion in impairments relating to transition businesses in its gas and low carbon energy segments as it signaled lower debt and positive oil trading results in the second quarter. "BP is putting through a further $1bn of impairments in its transition businesses, although it is not disclosing which assets this relates to. Call it pre-divestment window dressing...better to take the hit now than show explicit value destruction at the point of sale. We believe both LightsourceBP and Archaea could face the chopping block (although not formally announced by the company as far) and see no place for either in BP's portfolio long term," RBC Capital Markets said in a quick-take note following the trading update. The group disclosed the impairments amid a bullish outlook for oil trading in the second quarter. For the three months ended June 30, the company expects oil trading results to be "slightly higher" than the first quarter, when it reported an exceptional contribution compared with the prior-year period. Citing seasonal maintenance primarily in the Gulf of America and the effects of the ongoing disruption in the Middle.
British oil an gas giant BP (BP.L) on Tuesday flagged $1 billion in impairments relating to transition businesses in its gas and low carbon energy segments as it signaled lower debt and positive oil trading results in the second quarter. "BP is putting through a further $1bn of impairments in its transition businesses, although it is not disclosing which assets this relates to.
Call it pre-divestment window dressing...better to take the hit now than show explicit value destruction at the point of sale.
We believe both LightsourceBP and Archaea could face the chopping block (although not formally announced by the company as far) and see no place for either in BP's portfolio long term," RBC Capital Markets said in a quick-take note following the trading update.
The group disclosed the impairments amid a bullish outlook for oil trading in the second quarter.
For the three months ended June 30, the company expects oil trading results to be "slightly higher" than the first quarter, when it reported an exceptional contribution compared with the prior-year period.
Citing seasonal maintenance primarily in the Gulf of America and the effects of the ongoing disruption in the Middle.