July 9 (Reuters) -

British energy giant BP said on Tuesday that weak

refining margins and oil trading were likely to dent its

second-quarter profit, sending its shares down 3% in morning

trading.

While its refining margins will take a hit of $500

million to $700 million, the London-based company also expects

to record $1 billion to $2 billion in charges in the second

quarter, mainly tied to its review of Gelsenkirchen refinery in

Germany.

Last week, rival Shell had said it would take an

impairment charge of up to $2 billion relating to the sale of

its Singapore refinery and the pause of construction at one of

Europe's largest biofuel plants in the Netherlands.

BP's earnings snapshot comes after U.S. oil major Exxon

Mobil ( XOM ) signalled on Monday that lower refining margins

and natural gas prices would hurt its second-quarter profit.

BP, which is set to post its quarterly results on July 30,

said its upstream production in the second quarter is expected

to be broadly flat compared with the prior three months.

Oil and gas production stood at 2.38 million barrels of oil

equivalent per day (boepd) in the first quarter, thanks to field

start-ups in Azerbaijan and the United States.

Investors expect BP's second-quarter underlying replacement

cost profit, the company's definition of net income, to come in

at $3.13 billion, according to LSEG data.

(Reporting by Arunima Kumar in Bengaluru; editing by Jason

Neely and Arun Koyyur)