Aker BP Braces for Q1 Loss
Norway's Aker BP warned on April 24 it expected to swing to a pre-tax loss in the first quarter, owing to $500-700mn in impairments on its assets as a result of the oil price collapse.
The company, 40% owned by Aker and 30% by BP, is due to report its full first-quarter numbers on May 6. In a trading update, it said it had produced 208,100 barrels of oil equivalent/day in the three-month period, up from 191,100 boe/d in the previous quarter, thanks to growth at the Equinor-operated Johan Sverdrup field. Around 85% was oil and 15% gas.
This gain was offset by a quarter-on-quarter slide in realised prices for liquids to $44.7/boe from $64.2/boe, and a decline in gas prices to $0.14/m³ from $0.17/m3. Aker BP has an oil price hedging programme in place, which it says should result in a $80mn benefit in the quarter. The company added it expected to suffer because of the impact of the weaker Norwegian krone on its overall finances, even if the currency's devaluation reduces its production costs.
Aker BP has scaled back its capital spending plan for 2020 by 20%, while putting all pre-sanction projects on hold, including the Hod redevelopment scheme. The company's one bright spot was the launch in the second quarter of the low-cost Aerfugl gas field three years ahead of schedule.