BP has cut its 2020 organic capital spend 25% from prior full-year guidance to $12 billion.
For the upstream segment, the cuts include a $1.0-billion reduction in short-cycle onshore activity, including in BPX Energy, as well as deferral of certain exploration and appraisal activity. The expected result is a reduction of 70,000 boe/d attributable to BPX Energy. Full year 2020 underlying upstream production is expected to be lower than in 2019.
In the downstream segment, the company expects a $1.0-billion reduction across the fuels marketing, refining, and petrochemicals businesses. The company expects its existing divestment program to deliver $15 billion of announced transactions by mid-2021. The phasing of receipt of $10 billion of divestment proceeds by the end of 2020 may be revised as transactions complete, particularly while volatile market conditions persist, including the sale of its Alaskan business to Hilcorp, the company said, noting it currently expects the deal to close this year, subject to regulatory approvals. To date, $9.6 billion of transactions have been announced since the start of 2019, with around $3.4 billion of cash proceeds received.
BP’s first-quarter 2020 results are scheduled to be reported Apr. 28. Production in the quarter is expected to be lower than fourth-quarter 2019, near 2.55-2.60 MMboe/d.
BP’s first-quarter downstream refining availability is expected to be 95-96%, with some reduction seen in utilization towards quarter-end due to reducing fuel demand.
The company currently anticipates a first quarter non-cash, non-operating charge of $1 billion.