BP sees 60% refining margin jump, debt fall, but flags more impairments

Adds details throughout

By Stephanie Kelly and Shadia Nasralla

LONDON, Oct 13 (Reuters) - BP BP.L estimated on Tuesday its refining margins jumped nearly 60% in the third quarter as the Iran war boosts profits for oil majors, but also flagged $3 billion to $4.5 billion in impairments relating to its gas and low-carbon energy segment.

This is the second time in a year that the British firm has booked large write-downs in its low-carbon business after writing down over $4 billion related to its solar, biogas and offshore wind businesses as the main reasons.

The group declined to provide details of the latest impairments.

BP estimated its refining indicator margin for the July-September quarter at $46.7 per barrel, up from $29.6 per barrel in the second quarter and $15.8 per barrel a year ago. The Iran war has disrupted global oil supplies, driving up prices and oil majors' margins.

A boost to refining margins will lift BP's profit in the products segments by $1.9 billion to $2.1 billion compared with the previous quarter, the group said in a trading statement ahead of results due on October 30.

BP in recent years has changed its methodology for calculating refining margins, making historic comparisons difficult. Rival Shell SHEL.L said last week it expected its third-quarter refining margin to jump to $42 a barrel, a record high and sharply above $24 a barrel in the previous quarter.

BP expects its third-quarter gas marketing and trading result to significantly exceed that from the previous quarter. The oil trading result is expected to be broadly flat compared with the second quarter, in what has been a strong year in trading for its oil desk.

NET DEBT TARGET HIT

Helped by a pause in its buyback programme this year, high prices and asset sales, BP expects its net debt to stand at between $13.5 billion and $14.4 billion in the third quarter, hitting its target of between $14 billion to $18 billion about a year early.

Together with hybrid bonds, leases and its Deepwater Horizon oil spill liabilities, BP estimated its overall obligations at between $43.6 billion and $44.6 billion in the third quarter, down from $53.6 billion in the previous three months. This does not include its $6 billion sale of a stake in its Castrol lubricants business.

BP put its upstream production at 2.19 million to 2.24 million barrels of oil equivalent per day, compared with 2.2 million in the previous quarter.

The firm will provide a strategy and outlook update on December 15 in New York, which will "set out the next phase of delivering a simpler, stronger and more valuable BP," a spokesperson said.

(Reporting by Stephanie Kelly and Shadia Nasralla; Editing by Kirsten Donovan and Tomasz Janowski)

((Stephanie.Kelly@tr.com))