BP warns of weak gas trading and climbing debt

By Shadia Nasralla

(Reuters) -Energy group BP expects first-quarter gas marketing and trading earnings to be weak while net debt will rise, the company said on Thursday, sending its shares lower.

The update offers an early glimpse into BP's quarterly performance at a time when scrutiny of its debt and spending is intensifying with activist investor Elliott Management's move to build up a stake in the company in recent months.

BP did not give further details on its gas trading result. Energy companies rarely reveal details of their trading divisions.

BP shares were down about 2.6% by 1321 GMT, compared with a 1.4% fall in a broader index of energy companies.

The company is due to report first-quarter results on April 29.

The British oil major said it expects net debt to increase from the previous quarter's $23 billion by about $4 billion, citing seasonal builds in inventories and the timing of payments, including annual bonuses and costs related to low-carbon asset sales. It had previously flagged a net debt increase in the first half of 2025.

In a strategy revamp in February, BP CEO Murray Auchincloss pledged to cut net debt to between $14 billion and $18 billion by the end of 2027.

BP, meanwhile, expects earnings from its oil production and operations segment to be broadly flat from the previous quarter while upstream production will dip as asset sales in Egypt and Trinidad dent gas output.

Stronger refining margins are expected to contribute between $100 million and $300 million to first-quarter earnings while oil trading is expected to be flat, the company added.

"We still expect refining & trading earnings to be negative in Q1, for the third quarter in a row," said RBC analyst Biraj Borkhataria.

BP plans to spend about $15 billion in 2025, at the upper end of its guided range through 2027, and expects to take in $3 billion from asset sales, mainly in the second half of the year. It has a $20 billion divestment programme running to the end of 2027.

Refinery maintenance will be focused in the second quarter.

(Reporting by Shadia Nasralla in London, Chandini Monnappa and Arunima Kumar in BengaluruEditing by David Goodman and Joe Bavier, Kirsten Donovan)