BP warns of third-quarter charges as it spurs US$10 billion divestment target

BP warns of third-quarter charges as it spurs US$10 billion divestment target

FILE PHOTO: Logo of BP is seen at a petrol station in Kloten
FILE PHOTO: The logo of BP is seen at a petrol station in Kloten, Switzerland October 3, 2017. REUTERS/Arnd Wiegmann/File Photo

LONDON: BP will take charges of US$2 to US$3 billion in the third quarter, the British energy firm said on Friday, as it looks to reach divestments worth US$10 billion by the end of 2019, a year ahead of schedule.

In a statement, London-based BP said it expects to agree asset sales of US$10 billion by end-year after its US$5.6 billion sale of its Alaskan business to Hilcorp and divestments in U.S. shale gas.

BP shares were down 1.1per cent by 0948 GMT compared with a 1.3per cent gain in the broader European energy index.

The non-cash, non-operating, after-tax charge will impact the company's headline profit figure but not its underlying cashflow, a spokesman said.

BP announced the disposal program following its US$10.25 billion acquisition of BHP's shale business last year, its largest purchase in three decades.

The planned third-quarter impairment charges are expected to increase BP's gearing - the ratio between debt and market capitalization - to the top end of the 20per cent to 30per cent target, BP said.

Debt levels and gearing are expected to move to the middle of the range through 2020.

BP's third-quarter oil and gas production will be impacted by maintenance in some high-margin regions, BP said.

Output in the U.S. Gulf of Mexico was "significantly disrupted" by Hurricane Barry, with facilities shut down for around 14 days.

BP is scheduled to report its results on October 29.

(Reporting by Ron Bousso; editing by Jason Neely)

Source: Reuters

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