The oil-and-gas group on Wednesday said it expects to see lower first-quarter upstream production compared with the previous quarter, in the range of 2.55 million to 2.6 million barrels of oil equivalent a day.
BP also said it expects a "significant and growing decline in demand for fuels, jet fuel and lubricants" in the first quarter due to the massive and unprecedented decline in global economic activity, specifically in travel, transportation and other energy-intensive industries.
“We are now acting quickly and decisively to further strengthen our financial frame in response to the currently volatile and extremely challenging market conditions,” the company said in a statement. “We will continue to review these actions, and any further actions that may be appropriate, in response to changes in prevailing market conditions.”
The company further said its $15 billion divestment program remains on track toward its completion in mid-2021, but that the receipt of $10 billion in divestment proceeds by the end of this year may be revised as transactions are finalized.
In terms of cost-cutting, BP said it was reducing capital expenditures and other costs to approximately $12 billion, “around 25% below our prior full-year guidance.”
That figure includes a reduction in “upstream,” or what the company pulls out of the ground, of $1 billion, including in BPX Energy, “as well as deferral of certain exploration and appraisal activity and optimization of our major project spend,” BP said.
In “downstream,” or what it refines and sells, “we expect a reduction in spend of around $1 billion, which includes reduced spending across our fuels marketing, refining and petrochemicals businesses.”
Shares of BP were up 2.67% at $25.04 in trading in New York on Wednesday.