LONDON  - Oil ⁠major BP expects to book $4 billion to $5 billion in fourth-quarter impairments, mainly tied to its energy transition ⁠businesses, as ‌it reroutes spending to oil and gas to boost returns under new leadership including Chair Albert Manifold.

The British company said in a trading statement on Wednesday ahead ⁠of its results on February 10 that the impairments are excluded from underlying replacement cost profit, its version of net income. A spokesperson declined to say which projects were affected.

New CEO Meg O'Neill will replace interim chief Carol Howle in April after Murray Auchincloss's ⁠abrupt exit last month.

LOWER OIL ​PRICES, TRADING TO WEIGH ON EARNINGS

BP warned that weaker oil trading and falling prices will weigh on fourth-quarter earnings. It ‍expects lower oil prices to reduce quarterly earnings by $200 million to $400 million while weaker gas prices could trim another $100 ​million to $300 million.

European benchmark gas prices fell 9% in the period, and Brent crude < averaged $63.73 a barrel, down from $69.13 in the third quarter, as oversupply fears hit markets. BP shares were down 1.1% by 0841 GMT versus a 0.4% dip in a broader index of European energy companies.

NET DEBT FALLING DUE TO DIVESTMENTS

BP expects net debt to have dropped to $22 billion–$23 billion by the end of 2025 from $26.1 billion in the third quarter, helped by divestments of about $5.3 billion, above earlier guidance.

The figure excludes $6 billion from selling a majority stake in its Castrol ⁠lubricants unit. BP aims to cut debt to $14 billion–$18 billion ‌by 2027.

Refining margins slipped to $15.20 a barrel from $15.80 in the previous quarter. BP’s 440,000-barrel-per-day Whiting refinery in the U.S. suffered outages after an October fire, adding to earlier disruptions from flooding ‌and a ⁠major 2024 outage.

BP also raised its expected tax rate for 2025 to 42% from 40%.

(Reporting by ⁠Shadia Nasralla and Stephanie Kelly; Editing by Jan Harvey and Emelia Sithole-Matarise)