|
Highlights
|
|
|
Underlying replacement cost profit* $3.0
billion
|
|
|
• Underlying
replacement cost profit for the quarter was $3.0
billion, compared with $3.3 billion
for the previous quarter. Compared to the third quarter 2023, the
result reflects a strong gas marketing and trading result, higher
oil realizations including the favourable impact of price-lags on
Gulf of Mexico and UAE realizations, higher gas realizations,
significantly lower industry refining margins albeit with a smaller
decrease in realized refining margins, a weak oil trading result,
higher exploration write-offs, and a higher level of refining
turnaround activity. An underlying effective tax rate (ETR)* of
42% in the fourth quarter brings the full
year underlying ETR to 39%.
• Reported
profit for the quarter was $0.4 billion,
compared with $4.9 billion for the third
quarter 2023. The reported result for the fourth quarter is
adjusted for inventory holding losses* of $1.2 billion (net of tax)
and a net adverse impact of adjusting items* of $1.5 billion (net of tax) to derive the underlying
replacement cost profit. Adjusting items pre-tax include
impairments of $4.6 billion, largely as a result of changes in the
group's price and discount rate assumptions, activity phasing,
economic forecasts (in particular related to the Gelsenkirchen
refinery) and portfolio composition, and favourable fair value
accounting effects* of $2.6 billion.
|
|
|
Operating cash flow* $9.4 billion and
net debt* reduced to $20.9
billion
|
|
|
• Operating
cash flow in the quarter of $9.4 billion
includes a working capital* release (after adjusting for inventory
holding losses, fair value accounting effects and other adjusting
items) of $2.1 billion (see page 28).
• Capital
expenditure* in the fourth quarter was
$4.7 billion and total 2023 capital
expenditure, including inorganic capital expenditure* was
$16.3 billion.
• The $1.5
billion share buyback programme announced with the third quarter results was completed on 2 February
2024.
• Net debt
was reduced by $1.4 billion to $20.9
billion at the end of the fourth
quarter.
|
|
|
Further $1.75 billion share buyback announced for 4Q23; $3.5
billion for first half 2024
|
|
|
• A
resilient dividend is bp's first priority within its disciplined
financial frame, underpinned by a cash balance point* of
around $40 per barrel Brent, $11 per
barrel RMM and $3 per mmBtu Henry Hub (all 2021 real). For the
fourth quarter, bp has announced a dividend
per ordinary share of 7.270 cents, up 10% from the fourth quarter
of 2022.
• bp is
committed to maintaining a strong investment grade credit rating.
Through the cycle, we are targeting to further improve our credit
metrics within an 'A' grade credit range.
• bp
continues to invest with discipline and a returns focused approach
in our transition growth engines* and in our oil, gas and refining
businesses. For 2024 and 2025 we expect capital expenditure of
around $16 billion per annum, in line with our medium term target
of $14-18 billion.
• Related to
the fourth quarter results, bp intends to execute a $1.75 billion
share buyback prior to reporting first quarter results.
Furthermore, bp is committed to announcing $3.5 billion for the
first half of 2024. At current market conditions and subject to
maintaining a strong investment grade credit rating, bp plans share
buybacks of at least $14 billion through 2025 as part of our
commitment, on a point forward basis, to returning at least 80% of
surplus cash flow* to shareholders.
• In setting
the dividend per ordinary share and buyback each quarter, the board
will continue to take into account factors including the cumulative
level of and outlook for surplus cash flow, the cash balance point
and maintaining a strong investment grade credit rating.
|
|
|
Continued progress in transformation to an integrated energy
company
|
|
|
• In
resilient hydrocarbons, bp announced the start-up of major project*
Seagull, expected to add around 15 thousand barrels of oil
equivalent per day of net production by 2025. In Gulf of Mexico bp
sanctioned Argos Southwest Expansion project and expansion of the
Great White development project. In Brazil, bp was awarded the
Tupinambá block located in the Santos pre-salt basin.Under aim 4,
we met our first goal of deploying our methane measurement approach
to all our operated upstream oil and gas assets by the end of
2023.
• In
convenience and mobility, bp continued to progress its convenience
strategy, delivering a record convenience gross margin* for a
fourth quarter, bringing full year to 9%(a) excluding
TravelCenters of America, underpinned by customer offers driving
stronger margin mix, continued roll-out of strategic conveniences
sites*, and strategic convenience partnerships. bp and Iberdrola
formed a joint venture to accelerate EV charging infrastructure
roll-out in Spain and Portugal, with plans to invest up to €1
billion and install 5,000 fast EV charge points* by 2025 and around
11,700 by 2030.
• In low
carbon energy, bp has agreed to acquire the 50.03% interest it does
not already own in Lightsource bp, one of the world's leading
developers and operator of utility-scale solar and battery storage
assets. This transaction is expected to complete in the second half
of 2024, subject to regulatory approvals.
• In
November, bp announced that it will be expanding the use of
generative AI through the use of Copilot for Microsoft 365 - bp is
one of the first companies globally to act as a launch partner for
'intelligent AI assistant'.
|
|
|
(a) Nearest equivalent IFRS measure:
Replacement cost profit (loss) before interest and tax for the
customers & products segment is -52% for 2023 compared with
2022. Convenience gross margins are at constant foreign exchange -
values are at end 2023 foreign exchange rates, excluding
TravelCenters of America and adjusting for other portfolio
changes.
|
|
![](https://dw6uz0omxro53.cloudfront.net/2958061/962b767b-5257-4b3e-a602-53651d439569.jpg)
|
bp delivered strong underlying
financial performance in 2023 - we raised dividend per ordinary
share by 10% and bought back $7.9 billion of shares. We remain
focused on strengthening the balance sheet, with net debt falling
to $20.9 billion, the lowest level over the past decade. As we look
forward, we are staying disciplined, tightening our capital
expenditure frame and simplifying and enhancing our share buyback
guidance through 2025. ![](https://dw6uz0omxro53.cloudfront.net/2958061/962b767b-5257-4b3e-a602-53651d439569.jpg)
|
Kate Thomson Chief financial
officer
|
![](https://dw6uz0omxro53.cloudfront.net/2958061/5f8e3399-919b-4c58-b999-6472f15521b3.jpg)
|
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
41.
|
Top of
page 3
Financial results
In addition to the highlights on
page 2:
• Profit attributable to bp
shareholders in the fourth quarter and
full year was $0.4 billion and $15.2 billion respectively, compared with a profit
of $10.8 billion and a loss of
$2.5 billion in the same periods of
2022.
- After adjusting profit
attributable to bp shareholders for inventory holding losses* and
net impact of adjusting items*, underlying replacement cost profit*
for the fourth quarter and full year was $3.0 billion
and $13.8 billion respectively,
compared with $4.8 billion and
$27.7 billion for the same periods of
2022. This reduction in underlying
replacement cost profit for the fourth
quarter mainly reflects lower realizations and the impact of
significantly lower refining margins, partially offset by a strong
gas marketing and trading result. For the full
year, the reduction reflects lower realizations, the impact
of portfolio changes, the impact of lower refining margins and a
lower oil trading performance.
- Adjusting items in the
fourth quarter and full year had a net
adverse pre-tax impact of $2.6 billion
and a net favourable pre-tax impact of $1.1 billion respectively, compared with a
favourable pre-tax impact of $9.7 billion and an adverse pre-tax impact of
$29.8 billion in the same periods of
2022.
- Adjusting items for the
fourth quarter and full year of
2023 include a favourable impact of pre-tax
fair value accounting effects*, relative to management's internal
measure of performance, of $2.6 billion and
$9.4 billion respectively, compared with a
favourable pre-tax impact of $13.2 billion and an adverse pre-tax impact of
$3.5 billion in the same periods of
2022. This is primarily due to a decline in
the forward price of LNG during 2023. Under IFRS, reported earnings
include the mark-to-market value of the hedges used to risk-manage
LNG contracts, but not of the LNG contracts themselves. The
underlying result includes the mark-to-market value of the hedges
but also recognizes changes in value of the LNG contracts being
risk managed.
- Adjusting items for the
fourth quarter and full year of
2023 also include net
impairment charges (including impairment charges reported
through equity-accounted earnings) of $4.6 billion and $7.0
billion, compared with net impairment charges of $3.8 billion and
$18.6 billion in the same periods of 2022. The fourth quarter 2023
impairments have arisen largely as a result of changes in the
group's price and discount rate assumptions, activity phasing,
economic forecasts (in particular related to the
Gelsenkirchen refinery) and portfolio composition. For
further details on the impairment charges see Note
3.
- Adjusting items for the
full year 2022
include a pre-tax charge of $24.0 billion relating to bp's
decision to exit its 19.75% shareholding in Rosneft. A further $1.5
billion pre-tax charge relating to bp's decision to exit its other
businesses with Rosneft in Russia is also included.
• The effective tax rate (ETR) on RC
profit or loss* for the fourth quarter and full
year was 39% and 33% respectively, compared with 33% and 117% for the same
periods in 2022. Excluding adjusting items,
the underlying ETR* for the fourth quarter and
full year was 42% and 39% respectively, compared with 40% and 34% for the same
periods a year ago. The higher underlying ETR for the full year reflects changes in the geographical mix of
profits and the increased impact of the UK Energy Profits Levy. ETR
on RC profit or loss and underlying ETR are non-IFRS
measures.
• Operating cash flow* for the
fourth quarter and full year was
$9.4 billion and $32.0 billion respectively, compared with
$13.6 billion and $40.9 billion for the same periods in 2022 driven by the movements in underlying replacement
cost profit and working capital in the periods.
• Capital expenditure* in the
fourth quarter and full year was
$4.7 billion and $16.3 billion respectively, compared with
$7.4 billion and $16.3 billion in the same periods of 2022. The full year 2023
reflected the inorganic capital expenditure* of $1.1 billion for
the acquisition of TravelCenters of America in the second quarter
2023. Full year 2022 included $3.0 billion
in respect of the Archaea Energy acquisition.
• Total divestment and other
proceeds for the fourth quarter and full
year were $0.3 billion and
$1.8 billion respectively, compared
with $0.6 billion and $3.1 billion for the same periods in 2022. Other proceeds for full
year 2023 were $0.5 billion of
proceeds from the sale of a 49% interest in a controlled affiliate
holding certain midstream assets onshore US. Other proceeds for
full year 2022 were
$0.6 billion of proceeds from the disposal of a loan note related
to the Alaska divestment.
• At the end of the fourth quarter, net debt* was $20.9
billion, compared with $22.3 billion at the end of the third quarter 2023 and
$21.4 billion at the end of the
fourth quarter 2022.
Top of
page 4
Analysis of RC profit (loss) before
interest and tax and reconciliation to profit (loss) for the
period
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
RC
profit (loss) before interest and tax
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
2,169
|
2,275
|
16,439
|
|
14,080
|
14,696
|
oil production &
operations
|
|
1,879
|
3,427
|
1,688
|
|
11,191
|
19,721
|
customers & products
|
|
(554)
|
1,549
|
771
|
|
4,230
|
8,869
|
other businesses &
corporate
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(26,737)
|
Of which:
|
|
|
|
|
|
|
|
other businesses & corporate
excluding Rosneft
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(2,704)
|
Rosneft
|
|
-
|
-
|
-
|
|
-
|
(24,033)
|
Consolidation adjustment -
UPII*
|
|
95
|
(57)
|
147
|
|
(14)
|
139
|
RC profit before interest and
tax
|
|
3,573
|
6,694
|
19,148
|
|
28,584
|
16,688
|
Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
|
|
(977)
|
(978)
|
(818)
|
|
(3,599)
|
(2,634)
|
Taxation on a RC basis
|
|
(1,005)
|
(1,859)
|
(6,103)
|
|
(8,161)
|
(16,430)
|
Non-controlling interests
|
|
(65)
|
(211)
|
(358)
|
|
(641)
|
(1,130)
|
RC profit (loss) attributable to bp
shareholders*
|
|
1,526
|
3,646
|
11,869
|
|
16,183
|
(3,506)
|
Inventory holding gains
(losses)*
|
|
(1,497)
|
1,593
|
(1,428)
|
|
(1,236)
|
1,351
|
Taxation (charge) credit on
inventory holding gains and losses
|
|
342
|
(381)
|
362
|
|
292
|
(332)
|
Profit (loss) for the period
attributable to bp shareholders
|
|
371
|
4,858
|
10,803
|
|
15,239
|
(2,487)
|
Analysis of underlying RC profit
(loss) before interest and tax
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Underlying RC profit (loss) before interest and
tax
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
1,777
|
1,256
|
3,148
|
|
8,722
|
16,063
|
oil production &
operations
|
|
3,549
|
3,136
|
4,428
|
|
12,781
|
20,224
|
customers & products
|
|
803
|
2,055
|
1,902
|
|
6,413
|
10,789
|
other businesses &
corporate
|
|
(97)
|
(303)
|
(306)
|
|
(866)
|
(1,171)
|
Of which:
|
|
|
|
|
|
|
|
other businesses & corporate
excluding Rosneft
|
|
(97)
|
(303)
|
(306)
|
|
(866)
|
(1,171)
|
Rosneft
|
|
-
|
-
|
-
|
|
-
|
-
|
Consolidation adjustment -
UPII
|
|
95
|
(57)
|
147
|
|
(14)
|
139
|
Underlying RC profit before interest
and tax
|
|
6,127
|
6,087
|
9,319
|
|
27,036
|
46,044
|
Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
|
|
(891)
|
(882)
|
(649)
|
|
(3,194)
|
(2,209)
|
Taxation on an underlying RC
basis
|
|
(2,180)
|
(1,701)
|
(3,505)
|
|
(9,365)
|
(15,052)
|
Non-controlling interests
|
|
(65)
|
(211)
|
(358)
|
|
(641)
|
(1,130)
|
Underlying RC profit attributable to
bp shareholders*
|
|
2,991
|
3,293
|
4,807
|
|
13,836
|
27,653
|
Reconciliations of underlying RC
profit attributable to bp shareholders to the nearest equivalent
IFRS measure are provided on page 1 for the
group and on pages 6-14 for the
segments.
Top of
page 5
Operating Metrics
Operating metrics
|
|
Year
2023
|
|
vs
Year 2022
|
Tier 1 and tier 2 process safety
events*(a)
|
|
39
|
|
-11
|
Reported recordable injury
frequency*(a)
|
|
0.274
|
|
+46.7%
|
upstream* production(b) (mboe/d)
|
|
2,313
|
|
+2.6%
|
upstream unit production costs*(c)
($/boe)
|
|
5.78
|
|
-4.8%
|
bp-operated upstream plant reliability*
|
|
95.0%
|
|
-1.0
|
bp-operated refining
availability*(b)
|
|
96.1%
|
|
1.6
|
(a) In
2023, bp acquired the US-based TravelCenters of America (TA)
business. At the time of publication, TA reporting processes were
still being integrated into bp's reporting processes and as such,
TA performance data is not included in reported data for
2023.
(b) See
Operational updates on pages 6,
9 and 11. Because
of rounding, upstream production may not agree exactly with the sum
of gas & low carbon energy and oil production &
operations.
(c)
Mainly reflecting impact of portfolio changes.
Reserves replacement ratio*
The organic reserves replacement
ratio on a combined basis of subsidiaries and equity-accounted
entities was 47% for the year (2022 20%). The increase is largely
due to additions in BPX Energy in the US and in the Middle
East.
Outlook & Guidance
1Q24 guidance
• Looking ahead, bp expects first
quarter 2024 reported upstream* production to be higher compared to
fourth-quarter 2023.
• In its customers business, bp
expects seasonally lower volumes across most businesses and the
absence of one-off positive effects from the fourth quarter. In
addition, bp expects fuels margins to remain sensitive to movements
in cost of supply.
• In products, bp expects a
significantly lower level of refinery turnaround activity compared
to the fourth quarter. In addition, bp expects lower industry
refining margins, with a larger reduction in realized margins due
to narrower North American heavy crude oil
differentials.
2024 guidance
In addition to the guidance on
page 2:
• bp expects both reported and
underlying upstream production* to be slightly higher compared with
2023. Within this, bp expects underlying production from oil
production & operations to be higher and production from gas
& low carbon energy to be lower.
• In its customers business, bp
expects continued growth from convenience, including a full year
contribution from TravelCenters of America; a stronger contribution
from Castrol underpinned by volume growth in focus markets; and
continued margin growth from bp pulse driven by higher energy sold.
In addition, bp expects fuels margins to remain sensitive to the
cost of supply.
• In products, bp expects a lower
level of industry refining margins, with realized margins impacted
by narrower North American heavy crude oil differentials. bp
expects refinery turnaround activity to have a similar impact on
both throughput and financial performance compared to 2023, with
phasing of activity in 2024 heavily weighted towards the second
half.
• bp expects the other businesses
& corporate underlying annual charge to be around $1.0 billion
for 2024. The charge may vary from quarter to quarter.
• bp expects the depreciation,
depletion and amortization to be slightly higher than
2023.
• bp expects the underlying ETR* for
2024 to be around 40% but it is sensitive to the impact that
volatility in the current price environment may have on the
geographical mix of the group's profits and losses.
• bp expects capital expenditure* of
around $16 billion, weighted to the first half.
• bp expects divestment and other
proceeds of $2-3 billion in 2024, weighted towards the second half.
Having realized $17.8 billion of divestment and other proceeds
since the second quarter of 2020, bp continues to expect to reach
$25 billion of divestment and other proceeds between the second
half of 2020 and 2025.
• bp expects Gulf of Mexico oil
spill payments for the year to be around $1.2 billion pre-tax
including $1.1 billion pre-tax to be paid during the second
quarter.
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
41.
|
Top of
page 6
gas & low carbon
energy*
Financial results
• The replacement cost (RC) profit
before interest and tax for the fourth quarter and
full year was $2,169 million and
$14,080 million respectively, compared with
$16,439 million and $14,696 million for the same periods in 2022. The fourth quarter and full
year are adjusted by a favourable impact of net adjusting
items* of $392 million and $5,358 million respectively, compared with a favourable
impact of net adjusting items of $13,291
million and an adverse impact of $1,367
million for the same periods in 2022. Adjusting items include impacts of fair value
accounting effects*, relative to management's internal measure of
performance, which are a favourable impact of $1,887 million and $8,859
million for the fourth quarter and full
year in 2023 and a favourable impact
of $12,502 million and an adverse impact of
$1,811 million for the same periods in
2022. Under IFRS, reported earnings include
the mark-to-market value of the hedges used to risk-manage LNG
contracts, but not of the LNG contracts themselves. The underlying
result includes the mark-to-market value of the hedges but also
recognizes changes in value of the LNG contracts being risk
managed. Adjusting items also include net
impairment charges, see Note 3 for further
information.
•
After adjusting RC profit before interest
and tax for adjusting items, the underlying RC profit before interest and tax* for the fourth quarter and full year was $1,777 million and $8,722
million respectively, compared with $3,148
million and $16,063 million for the
same periods in 2022.
• The
underlying RC profit for the fourth
quarter, compared with the same period in 2022, reflects lower realizations and lower production,
partially offset by a strong gas marketing and trading result. The
underlying RC profit for the full year,
compared with 2022, reflects lower
realizations, and a higher depreciation, depletion and amortization
charge.
Operational update
•
Reported production for the quarter was 899mboe/d, 6.0% lower than
the same period in 2022. Underlying
production* was 3.8% lower, mainly due to base decline,
particularly in Egypt, partly offset by major project*
delivery.
•
Reported production for the full year was
929mboe/d, 2.9% lower than the same period in 2022. Underlying production was 2.3% lower, mainly due
to base decline, partly offset by major project
delivery.
•
Renewables pipeline* at the end of the quarter was 58.3GW (bp net), including 19.3GW bp net share of
Lightsource bp's (LSbp's) pipeline. The renewables pipeline
increased by 21.1GW net during the
full year, including bp being awarded the rights to develop two North Sea
offshore wind projects in Germany (4GW), increases to LSbp's
pipeline (5.3GW), and an increase in dedicated hydrogen renewables (12.4GW). In
addition, there is over 12GW (bp net) of
early stage opportunities in LSbp's hopper.
Strategic progress
gas
• On 5 December, bp
announced the restructuring of the ownership and commercial
framework of the Atlantic LNG joint venture with its partners Shell
and the National Gas Company of Trinidad & Tobago. The restructuring helps provide the certainty required for
sanctioning the next wave of upstream gas projects and
secures the long term LNG equity offtake for shareholders including
bp.
• On 18 January the government of the Republic of Senegal
approved bp's exit from the Cayar Offshore Profond
production sharing contract and designation of Kosmos Energy as the
Operator of the Yakaar-Teranga gas resource.
• On 16 November, bp signed a 9-year sales and purchase
agreement (SPA) with State-owned Oman LNG to buy one million metric
tonnes per annum of LNG starting 2026.
low
carbon energy
•
During the quarter, we secured US Department of
Energy funding confirmation for the MachH2 Hub hydrogen project in
the US Midwest.
• On 25 January 2024
bp and Equinor announced they had signed an agreement under which
they will restructure their investments in their US offshore wind
projects. Subject to approvals, bp will assume full ownership of
the Beacon projects and Equinor the Empire projects. bp will
independently pursue future US offshore wind
opportunities.
•
On 30 November bp announced it has agreed to
acquire the remaining 50.03% of Lightsource bp. LSbp is one of the
world's leading developers and operator of utility-scale solar and
battery storage assets, with 1,200 employees in 19 countries.
The acquisition includes LSbp's hopper of 38GW
renewables pipeline and an additional 25GW of early stage
opportunities. The transaction is expected to close in the second
half of 2024, subject to regulatory approvals.
•
On 17 January 2024 bp announced it has agreed to
acquire GETEC ENERGIE GmbH, a leading independent supplier of
energy to commercial and industrial customers in
Germany.
Top of
page 7
gas & low carbon energy
(continued)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit before interest and
tax
|
|
2,169
|
2,275
|
16,429
|
|
14,081
|
14,688
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
10
|
|
(1)
|
8
|
RC profit before interest and
tax
|
|
2,169
|
2,275
|
16,439
|
|
14,080
|
14,696
|
Net (favourable) adverse impact of
adjusting items
|
|
(392)
|
(1,019)
|
(13,291)
|
|
(5,358)
|
1,367
|
Underlying RC profit before interest
and tax
|
|
1,777
|
1,256
|
3,148
|
|
8,722
|
16,063
|
Taxation on an underlying RC
basis
|
|
(746)
|
(448)
|
(1,163)
|
|
(2,730)
|
(4,367)
|
Underlying RC profit before
interest
|
|
1,031
|
808
|
1,985
|
|
5,992
|
11,696
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,290
|
1,543
|
1,373
|
|
5,680
|
5,008
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
349
|
15
|
(6)
|
|
362
|
2
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
3,416
|
2,814
|
4,515
|
|
14,764
|
21,073
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
gas
|
|
848
|
833
|
1,032
|
|
3,025
|
3,227
|
low carbon energy
|
|
478
|
222
|
577
|
|
1,256
|
1,024
|
Total capital expenditure
|
|
1,326
|
1,055
|
1,609
|
|
4,281
|
4,251
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
99
|
106
|
121
|
|
105
|
118
|
Natural gas (mmcf/d)
|
|
4,637
|
4,875
|
4,844
|
|
4,778
|
4,866
|
Total hydrocarbons*
(mboe/d)
|
|
899
|
946
|
956
|
|
929
|
957
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
78.87
|
76.69
|
80.50
|
|
77.03
|
89.86
|
Natural gas ($/mcf)
|
|
6.18
|
5.38
|
9.40
|
|
6.13
|
8.91
|
Total hydrocarbons*
($/boe)
|
|
40.17
|
36.82
|
57.60
|
|
40.21
|
56.34
|
(a)
Includes bp's share of production of equity-accounted entities in
the gas & low carbon energy segment.
(b)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of
page 8
gas & low carbon energy
(continued)
|
|
31 December
|
30
September
|
31 December
|
low
carbon energy(c)
|
|
2023
|
2023
|
2022
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
Installed renewables
capacity*
|
|
2.7
|
2.5
|
2.2
|
|
|
|
|
|
Developed renewables to
FID*
|
|
6.2
|
6.1
|
5.8
|
Renewables pipeline
|
|
58.3
|
43.9
|
37.2
|
of
which by geographical area:
|
|
|
|
|
Renewables pipeline -
Americas
|
|
18.8
|
18.4
|
17.0
|
Renewables pipeline - Asia
Pacific
|
|
21.3
|
12.1
|
11.8
|
Renewables pipeline -
Europe
|
|
14.6
|
13.4
|
8.3
|
Renewables pipeline -
Other
|
|
3.5
|
-
|
0.1
|
of
which by technology:
|
|
|
|
|
Renewables pipeline - offshore
wind
|
|
9.3
|
9.3
|
5.2
|
Renewables pipeline - onshore
wind
|
|
12.7
|
6.1
|
6.3
|
Renewables pipeline -
solar
|
|
36.3
|
28.5
|
25.7
|
Total Developed renewables to FID and Renewables
pipeline
|
|
64.5
|
50.0
|
43.0
|
(c)
Because of rounding, some totals may not agree exactly with the sum
of their component parts.
Top of
page 9
oil production &
operations
Financial results
• The
replacement cost (RC) profit before
interest and tax for the fourth quarter and full
year was $1,879 million and
$11,191 million respectively, compared with
$1,688 million and $19,721
million for the same periods in 2022. The fourth quarter and full
year are adjusted by an adverse impact of net adjusting
items* of $1,670 million and $1,590 million respectively, mainly relating to net
impairment charges (see Note 3), compared
with an adverse impact of net adjusting items of $2,740 million and $503 million
for the same periods in 2022.
•
After adjusting items, the underlying RC profit before interest and tax* for the fourth quarter and full year was $3,549 million and $12,781
million respectively, compared with $4,428
million and $20,224 million for the
same periods in 2022.
• The
underlying RC profit for the fourth quarter, compared with the same
period in 2022, primarily reflects the impact of lower
realizations. The underlying RC profit for the full year, compared
with the same period in 2022, reflects
lower realizations, and the impact of portfolio changes, partly
offset by higher volumes.
Operational update
•
Reported production for the quarter was 1,421mboe/d, 8.6% higher
than the fourth quarter of 2022. Underlying production* for the quarter was 8.5%
higher compared with the fourth quarter of
2022 reflecting bpx energy performance and
major projects*.
•
Reported production for the full year was
1,383mboe/d, 6.7% higher than the same period of 2022. Underlying
production for the full year was 6.3%
higher compared with the same period of 2022 reflecting bpx energy
performance and major projects and base performance.
Strategic Progress
•
In October bp, with partners Neptune Energy
and JAPEX, successfully started production from the Seagull oil and
gas field in the UK North Sea. Seagull is a four-well development
tied back to the Eastern Trough Area Project (ETAP) hub (bp 50%
operator).
• The
first of two wells for the Murlach oil and gas field in the UK
North Sea were spudded in October,
following regulatory approval of the field development plan in
September (bp 80% operator).
•
bp and its partners approved the development of
the Argos Southwest Extension project in the Gulf of Mexico
which will be a three well subsea tie-back to the Argos platform
(bp operator 60.5%).
•
Partners approved the expansion of the Shell operated Great White
development in the Gulf of Mexico through a phased three well
campaign (bp 33.33%).
• In
November, bpx energy production surpassed
400mboe/d, up more than 25% versus fourth-quarter 2022
levels with contributions across each operating basin. bpx energy
remains on track to deliver 2025 volumes 30 to 40% higher than 2022
levels.
•
bp was the apparent high bidder on 24 lease blocks
in the Gulf of Mexico lease sale 261 held on 20 December
2023.
• In
December bp was awarded operatorship of the Tupinamba block, in the
Santos Pre Salt Basin, in Brazil.
• Our
Angolan 50:50 joint venture with Eni, Azule Energy, progressed with four new exploration agreements in
blocks adjacent to existing operations (46,
47, 14/23 and 18/15).
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit before interest and
tax
|
|
1,879
|
3,426
|
1,686
|
|
11,191
|
19,714
|
Inventory holding (gains)
losses*
|
|
-
|
1
|
2
|
|
-
|
7
|
RC profit before interest and
tax
|
|
1,879
|
3,427
|
1,688
|
|
11,191
|
19,721
|
Net (favourable) adverse impact of
adjusting items
|
|
1,670
|
(291)
|
2,740
|
|
1,590
|
503
|
Underlying RC profit before interest
and tax
|
|
3,549
|
3,136
|
4,428
|
|
12,781
|
20,224
|
Taxation on an underlying RC
basis
|
|
(1,433)
|
(1,386)
|
(2,015)
|
|
(5,998)
|
(9,143)
|
Underlying RC profit before
interest
|
|
2,116
|
1,750
|
2,413
|
|
6,783
|
11,081
|
Top of
page 10
oil production & operations
(continued)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,563
|
1,432
|
1,383
|
|
5,692
|
5,564
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
32
|
59
|
73
|
|
384
|
383
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
5,144
|
4,627
|
5,884
|
|
18,857
|
26,171
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,636
|
1,644
|
1,430
|
|
6,278
|
5,278
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
1,024
|
1,011
|
966
|
|
1,010
|
952
|
Natural gas (mmcf/d)
|
|
2,305
|
2,155
|
1,989
|
|
2,165
|
1,998
|
Total hydrocarbons*
(mboe/d)
|
|
1,421
|
1,382
|
1,309
|
|
1,383
|
1,297
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
76.22
|
71.10
|
80.43
|
|
72.09
|
89.62
|
Natural gas ($/mcf)
|
|
3.65
|
3.44
|
10.20
|
|
4.17
|
10.46
|
Total hydrocarbons*
($/boe)
|
|
59.69
|
56.76
|
74.60
|
|
58.34
|
82.23
|
(a)
Includes bp's share of production of equity-accounted entities in
the oil production & operations segment.
(b)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of
page 11
customers & products
Financial results
•
The replacement cost (RC) result before interest
and tax for the fourth quarter and full year
was a loss of $554 million and a profit of $4,230
million respectively, compared with a
profit of $771 million and $8,869 million for the same periods in 2022. The fourth quarter and full
year are adjusted by an adverse impact of net adjusting
items* of $1,357 million and $2,183 million respectively, mainly relating to an
impairment of the Gelsenkirchen refinery (see Note
3), compared with an adverse impact of net adjusting items
of $1,131 million and $1,920 million for the same periods in 2022. Adjusting items include impacts of fair value
accounting effects*, relative to management's internal measure of
performance, which are a favourable impact of $144
million for the quarter and an adverse impact of
$86 million for the full
year in 2023, compared with a
favourable impact of $189 million and an
adverse impact of $309 million for the same
periods in 2022.
•
After adjusting items, the underlying RC profit before interest and tax* for the fourth quarter and full year was $803
million and $6,413 million
respectively, compared with $1,902 million
and $10,789 million for the same periods in
2022.
• The
customers & products result for the fourth quarter was lower
than the same period in 2022, primarily reflecting the impact of
significantly lower refining margins and a lower contribution from
oil trading, partly offset by significantly lower turnaround impacts and a stronger
customers performance. The result for the full year was
significantly lower than the same period in 2022, primarily
reflecting the impact of lower refining
margins and a lower oil trading performance.
• customers
- the convenience and mobility result, excluding
Castrol, for the fourth quarter was higher
than the same period in 2022, with the benefit of higher fuels
margins, a strong aviation result underpinned by higher volumes and
margins, and continued strong growth in convenience. The fourth
quarter and full year results were also
impacted by higher costs, including increased
expenditure in our transition growth engines*, inflationary impacts and increased
depreciation.
The Castrol result for the fourth
quarter was higher compared to the same period in 2022, primarily
due to higher margins underpinned by lower cost of supply and
higher volumes, with the fourth quarter of 2022 impacted by COVID
restrictions, notably in China.
•
products - the
products results for the fourth quarter and full
year were lower compared with the same periods in 2022. In
refining, the result for the fourth quarter reflected significantly
lower industry refining margins, partially offset by a
significantly lower impact from turnaround and maintenance
activity. The full year result was primarily impacted by
significantly lower industry refining
margins, higher turnaround activity albeit with a lower margin
impact, partly offset by a lower level of maintenance activity. The
oil trading contribution for the fourth quarter was weak compared
to the average result in the same period last year. The full year
result was also lower, as the first half of 2022 benefited from an
exceptionally strong oil trading performance.
Operational update
• bp-operated refining availability* for the fourth quarter and full year was 96.1%, higher compared
with 95.0% and 94.5% for the same periods in 2022 due to a lower level of maintenance activity.
Utilization for the fourth quarter and full year, adjusted for
portfolio changes, was lower than the same periods in 2022, with
the fourth quarter utilization impacted by higher turnaround
activity.
Strategic progress
•
Strong underlying convenience gross margin*
delivery with around 9%(a)(b) year over year growth,
underpinned by customer offers driving stronger margin mix,
continued roll-out of strategic convenience sites*, and strategic
convenience partnerships.
• In
November, bp entered into an agreement to sell its Türkiye ground
fuels business to Petrol Ofisi. This includes the group's interest
in three joint venture terminals in Türkiye. Completion of the sale
is subject to regulatory
approvals.
• EV
charge points* installed and energy sold in
the year grew by around 35% and 150% respectively, compared to
2022, with charge points now over 29,000. In addition, on 1
December bp and Iberdrola formed a joint venture to accelerate EV
charging infrastructure roll-out in Spain and Portugal, with plans to invest up to €1 billion and install 5,000
fast(c) EV charge points by 2025 and around 11,700 by
2030; and in China, bp continues to invest in fast growing southern
districts, and in January acquired 3,000 charge points through the
bp Xiajou joint venture.
• In
November, Air bp collaborated with Virgin Atlantic, Rolls Royce,
Boeing, and others, to fuel the first 100% sustainable aviation
fuel (SAF) transatlantic flight by a commercial airline. The SAF
was a blend derived from inputs supplied by Air bp and Virent.
Together, this enabled up to 70% lifecycle carbon emission savings
compared to the conventional jet fuel it replaces.
• In
Castrol, our market leading position in advanced EV-fluids was
further strengthened, now three out of four of the world's major
vehicle manufacturers use Castrol
ON products as part of their factory fill(d). In
addition, Castrol has continued to grow its
independent branded workshops, adding around 4,500 workshops in
2023, compared to 2022, with workshops now over 34,000 in
total.
• In
December, bp's Archaea Energy announced it had brought two more
renewable natural gas plants online, the Monty plant in Kentucky
and the Red Top plant in California.
(a) Nearest equivalent IFRS
measure: Replacement cost profit
before interest and tax for the customers & products segment is
-52% for 2023 compared with 2022.
(b) At constant foreign
exchange - values are at end 2023 foreign exchange rates, excluding
TravelCenters of America and adjusted for other portfolio
changes.
(c) "fast charging"
includes rapid charging ≥50kW and ultra-fast charging
≥150kW.
(d) Based on GlobalData
report for 2023 for top 20 selling global OEMs (total new vehicles
sales).
Top of
page 12
customers & products
(continued)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit (loss) before interest and
tax
|
|
(2,051)
|
3,143
|
(645)
|
|
2,993
|
10,235
|
Inventory holding (gains)
losses*
|
|
1,497
|
(1,594)
|
1,416
|
|
1,237
|
(1,366)
|
RC profit (loss) before interest and
tax
|
|
(554)
|
1,549
|
771
|
|
4,230
|
8,869
|
Net (favourable) adverse impact of
adjusting items
|
|
1,357
|
506
|
1,131
|
|
2,183
|
1,920
|
Underlying RC profit before interest
and tax
|
|
803
|
2,055
|
1,902
|
|
6,413
|
10,789
|
Of which:(a)
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
882
|
670
|
628
|
|
2,644
|
2,966
|
Castrol - included in customers
|
|
213
|
185
|
70
|
|
730
|
700
|
products - refining &
trading
|
|
(79)
|
1,385
|
1,274
|
|
3,769
|
7,823
|
Taxation on an underlying RC
basis
|
|
(239)
|
(167)
|
(400)
|
|
(1,454)
|
(2,308)
|
Underlying RC profit before
interest
|
|
564
|
1,888
|
1,502
|
|
4,959
|
8,481
|
(a) A
reconciliation to RC profit before interest and tax by business is
provided on page 31.
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
1,348
|
1,151
|
962
|
|
4,380
|
4,252
|
Castrol - included in customers
|
|
256
|
228
|
110
|
|
897
|
853
|
products - refining &
trading
|
|
397
|
1,819
|
1,681
|
|
5,581
|
9,407
|
|
|
1,745
|
2,970
|
2,643
|
|
9,961
|
13,659
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
942
|
915
|
741
|
|
3,548
|
2,870
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
790
|
435
|
694
|
|
3,135
|
1,779
|
Castrol - included in customers
|
|
90
|
60
|
98
|
|
262
|
235
|
products - refining &
trading(c)
|
|
813
|
367
|
3,455
|
|
2,118
|
4,473
|
Total capital expenditure
|
|
1,603
|
802
|
4,149
|
|
5,253
|
6,252
|
(b) A
reconciliation to RC profit before interest and tax by business is
provided on page 31.
(c)
Fourth quarter and full year 2022 include $3,030 million in respect
of the Archaea Energy acquisition.
Retail(d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
bp retail sites* - total
(#)
|
|
21,100
|
21,150
|
20,650
|
|
21,100
|
20,650
|
Strategic convenience
sites*
|
|
2,850
|
2,750
|
2,400
|
|
2,850
|
2,400
|
(d) Reported
to the nearest 50.
Marketing sales of refined products (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
US
|
|
1,205
|
1,280
|
1,126
|
|
1,210
|
1,136
|
Europe
|
|
1,037
|
1,093
|
1,069
|
|
1,040
|
1,021
|
Rest of World
|
|
465
|
474
|
461
|
|
468
|
456
|
|
|
2,707
|
2,847
|
2,656
|
|
2,718
|
2,613
|
Trading/supply sales of refined
products
|
|
355
|
392
|
325
|
|
358
|
350
|
Total sales volume of refined
products
|
|
3,062
|
3,239
|
2,981
|
|
3,076
|
2,963
|
Top of
page 13
customers & products
(continued)
Refining marker margin*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
bp average refining marker margin
(RMM)(e) ($/bbl)
|
|
18.5
|
31.8
|
32.2
|
|
25.8
|
33.1
|
(e)
The RMM in the quarter is calculated based on bp's
current refinery portfolio. On a comparative basis, the fourth
quarter and full year 2022 RMM would be $32.2/bbl and
$33.1/bbl respectively.
Refinery throughputs (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
US
|
|
634
|
690
|
615
|
|
662
|
678
|
Europe
|
|
678
|
760
|
763
|
|
749
|
804
|
Rest of World
|
|
-
|
-
|
-
|
|
-
|
22
|
Total refinery
throughputs
|
|
1,312
|
1,450
|
1,378
|
|
1,411
|
1,504
|
bp-operated refining availability* (%)
|
|
96.1
|
96.3
|
95.0
|
|
96.1
|
94.5
|
Top of
page 14
other businesses &
corporate
Other businesses & corporate
comprises innovation & engineering, bp ventures, Launchpad,
regions, corporates & solutions, our corporate activities &
functions and any residual costs of the Gulf of Mexico oil spill.
It also includes Rosneft results up to 27 February 2022.
Financial results
• The
replacement cost (RC) loss before interest
and tax for the fourth quarter and full
year was $16 million and
$903 million respectively, compared with a
profit of $103 million and a loss of
$26,737 million for the same periods in
2022. The fourth quarter
and full year are adjusted by a favourable impact of net
adjusting items* of $81 million and an
adverse impact of $37 million respectively,
compared with a favourable impact of net adjusting items of
$409 million and an adverse impact of
$25,566 million for the same periods in
2022. Adjusting
items include impacts of fair value accounting effects*
which are a favourable impact of
$579 million for the quarter and a
favourable impact of $630 million for the
full year in 2023,
and a favourable impact of $515 million and an adverse impact of $1,381 million for the same periods in 2022. Adjusting items also include impacts of
environmental charges which are an adverse
impact of $565 million for the quarter. The adjusting items for the
full year in 2022 mainly relate to
Rosneft.
•
After adjusting RC loss for net adjusting items,
the underlying RC loss before interest and tax* for the fourth
quarter and full year was $97 million and $866 million
respectively, compared with a loss of $306 million and $1,171
million for the same periods in 2022, mainly reflecting foreign
exchange impacts for the fourth quarter and increased interest
income for the full year.
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit (loss) before interest and
tax
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(26,737)
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
RC profit (loss) before interest and
tax
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(26,737)
|
Net (favourable) adverse impact of
adjusting items(a)
|
|
(81)
|
197
|
(409)
|
|
37
|
25,566
|
Underlying RC profit (loss) before
interest and tax
|
|
(97)
|
(303)
|
(306)
|
|
(866)
|
(1,171)
|
Taxation on an underlying RC
basis
|
|
121
|
162
|
43
|
|
322
|
439
|
Underlying RC profit (loss) before
interest
|
|
24
|
(141)
|
(263)
|
|
(544)
|
(732)
|
(a)
Includes fair value accounting effects relating to the hybrid bonds
that were issued on 17 June 2020. See page
35 for more information.
other businesses & corporate
(excluding Rosneft)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit (loss) before interest and
tax
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(2,704)
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
RC profit (loss) before interest and
tax
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(2,704)
|
Net (favourable) adverse impact of
adjusting items
|
|
(81)
|
197
|
(409)
|
|
37
|
1,533
|
Underlying RC profit (loss) before
interest and tax
|
|
(97)
|
(303)
|
(306)
|
|
(866)
|
(1,171)
|
Taxation on an underlying RC
basis
|
|
121
|
162
|
43
|
|
322
|
439
|
Underlying RC profit (loss) before
interest
|
|
24
|
(141)
|
(263)
|
|
(544)
|
(732)
|
other businesses & corporate
(Rosneft)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit (loss) before interest and
tax
|
|
-
|
-
|
-
|
|
-
|
(24,033)
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
RC profit (loss) before interest and
tax
|
|
-
|
-
|
-
|
|
-
|
(24,033)
|
Net (favourable) adverse impact of
adjusting items
|
|
-
|
-
|
-
|
|
-
|
24,033
|
Underlying RC profit (loss) before
interest and tax
|
|
-
|
-
|
-
|
|
-
|
-
|
Taxation on an underlying RC
basis
|
|
-
|
-
|
-
|
|
-
|
-
|
Underlying RC profit (loss) before
interest
|
|
-
|
-
|
-
|
|
-
|
-
|
Top of
page 15
Financial statements
Group income statement
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
Sales and other operating revenues
(Note 5)
|
|
52,141
|
53,269
|
69,257
|
|
210,130
|
241,392
|
Earnings from joint
ventures - after interest and tax
|
|
(290)
|
(198)
|
189
|
|
67
|
1,128
|
Earnings from
associates - after interest and tax
|
|
156
|
271
|
129
|
|
831
|
1,402
|
Interest and other income
|
|
599
|
410
|
608
|
|
1,635
|
1,103
|
Gains on sale of businesses and
fixed assets
|
|
(20)
|
264
|
173
|
|
369
|
3,866
|
Total revenues and other
income
|
|
52,586
|
54,016
|
70,356
|
|
213,032
|
248,891
|
Purchases
|
|
31,062
|
29,951
|
34,101
|
|
119,307
|
141,043
|
Production and manufacturing
expenses
|
|
5,751
|
6,080
|
6,841
|
|
25,044
|
28,610
|
Production and similar
taxes
|
|
445
|
456
|
557
|
|
1,779
|
2,325
|
Depreciation, depletion and
amortization (Note 6)
|
|
4,060
|
4,145
|
3,714
|
|
15,928
|
14,318
|
Net impairment and losses on sale of
businesses and fixed assets (Note
3)
|
|
3,958
|
542
|
3,629
|
|
5,857
|
30,522
|
Exploration expense
|
|
501
|
97
|
140
|
|
997
|
585
|
Distribution and administration
expenses
|
|
4,733
|
4,458
|
3,654
|
|
16,772
|
13,449
|
Profit (loss) before interest and
taxation
|
|
2,076
|
8,287
|
17,720
|
|
27,348
|
18,039
|
Finance costs
|
|
1,038
|
1,039
|
834
|
|
3,840
|
2,703
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(61)
|
(61)
|
(16)
|
|
(241)
|
(69)
|
Profit (loss) before
taxation
|
|
1,099
|
7,309
|
16,902
|
|
23,749
|
15,405
|
Taxation
|
|
663
|
2,240
|
5,741
|
|
7,869
|
16,762
|
Profit (loss) for the
period
|
|
436
|
5,069
|
11,161
|
|
15,880
|
(1,357)
|
Attributable to
|
|
|
|
|
|
|
|
bp shareholders
|
|
371
|
4,858
|
10,803
|
|
15,239
|
(2,487)
|
Non-controlling interests
|
|
65
|
211
|
358
|
|
641
|
1,130
|
|
|
436
|
5,069
|
11,161
|
|
15,880
|
(1,357)
|
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
|
|
|
|
|
|
Per ordinary share
(cents)
|
|
|
|
|
|
|
|
Basic
|
|
2.20
|
28.24
|
59.43
|
|
87.78
|
(13.10)
|
Diluted
|
|
2.15
|
27.59
|
58.36
|
|
85.85
|
(13.10)
|
Per ADS (dollars)
|
|
|
|
|
|
|
|
Basic
|
|
0.13
|
1.69
|
3.57
|
|
5.27
|
(0.79)
|
Diluted
|
|
0.13
|
1.66
|
3.50
|
|
5.15
|
(0.79)
|
Top of
page 16
Condensed group statement of
comprehensive income
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
Profit (loss) for the
period
|
|
436
|
5,069
|
11,161
|
|
15,880
|
(1,357)
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss
|
|
|
|
|
|
|
|
Currency translation
differences(a)
|
|
711
|
(590)
|
2,142
|
|
585
|
(3,786)
|
Exchange (gains) losses on
translation of foreign operations reclassified to gain or loss on
sale of businesses and fixed assets(b)
|
|
-
|
(2)
|
(32)
|
|
(2)
|
10,759
|
Cash flow hedges and costs of
hedging
|
|
125
|
(56)
|
584
|
|
559
|
763
|
Share of items relating to
equity-accounted entities, net of tax
|
|
13
|
25
|
392
|
|
(192)
|
402
|
Income tax relating to items that
may be reclassified
|
|
64
|
(69)
|
(108)
|
|
(10)
|
(334)
|
|
|
913
|
(692)
|
2,978
|
|
940
|
7,804
|
Items that will not be reclassified
to profit or loss
|
|
|
|
|
|
|
|
Remeasurements of the net pension
and other post-retirement benefit liability or
asset(c)
|
|
(1,209)
|
(111)
|
(1,508)
|
|
(2,262)
|
340
|
Remeasurements of equity
investments
|
|
51
|
-
|
-
|
|
51
|
-
|
Cash flow hedges that will
subsequently be transferred to the balance sheet
|
|
16
|
(1)
|
1
|
|
15
|
(4)
|
Income tax relating to items that
will not be reclassified
|
|
357
|
57
|
538
|
|
745
|
68
|
|
|
(785)
|
(55)
|
(969)
|
|
(1,451)
|
404
|
Other comprehensive
income
|
|
128
|
(747)
|
2,009
|
|
(511)
|
8,208
|
Total comprehensive
income
|
|
564
|
4,322
|
13,170
|
|
15,369
|
6,851
|
Attributable to
|
|
|
|
|
|
|
|
bp shareholders
|
|
461
|
4,140
|
12,760
|
|
14,702
|
5,782
|
Non-controlling interests
|
|
103
|
182
|
410
|
|
667
|
1,069
|
|
|
564
|
4,322
|
13,170
|
|
15,369
|
6,851
|
(a)
Fourth quarter 2022 is principally affected by movements in the
Pound Sterling against the US dollar. Full year 2022 is principally
affected by movements in the Russian rouble and Pound Sterling
against the US dollar.
(b) Full
year 2022 predominantly relates to the loss of significant
influence over Rosneft.
(c)
See Note 1 Basis of preparation - Pensions and other post-retirement
benefits for further information.
Top of
page 17
Condensed group statement of changes
in equity
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2023
|
|
67,553
|
13,390
|
2,047
|
82,990
|
|
|
|
|
|
|
Total comprehensive
income
|
|
14,702
|
586
|
81
|
15,369
|
Dividends
|
|
(4,831)
|
-
|
(403)
|
(5,234)
|
Cash flow hedges transferred to the
balance sheet, net of tax
|
|
(1)
|
-
|
-
|
(1)
|
Repurchase of ordinary share
capital
|
|
(8,167)
|
-
|
-
|
(8,167)
|
Share-based payments, net of
tax
|
|
669
|
-
|
-
|
669
|
Share of equity-accounted entities'
changes in equity, net of tax
|
|
1
|
-
|
-
|
1
|
Issue of perpetual hybrid
bonds
|
|
(1)
|
176
|
-
|
175
|
Payments on perpetual hybrid
bonds
|
|
(5)
|
(586)
|
-
|
(591)
|
Transactions involving
non-controlling interests, net of tax
|
|
363
|
-
|
(81)
|
282
|
At 31 December 2023
|
|
70,283
|
13,566
|
1,644
|
85,493
|
|
|
|
|
|
|
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity(a)
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2022
|
|
75,463
|
13,041
|
1,935
|
90,439
|
|
|
|
|
|
|
Total comprehensive
income
|
|
5,782
|
519
|
550
|
6,851
|
Dividends
|
|
(4,365)
|
-
|
(294)
|
(4,659)
|
Cash flow hedges transferred to the
balance sheet, net of tax
|
|
1
|
-
|
-
|
1
|
Issue of ordinary share
capital(b)
|
|
820
|
-
|
-
|
820
|
Repurchase of ordinary share
capital
|
|
(10,493)
|
-
|
-
|
(10,493)
|
Share-based payments, net of
tax
|
|
847
|
-
|
-
|
847
|
Issue of perpetual hybrid
bonds
|
|
(4)
|
374
|
-
|
370
|
Payments on perpetual hybrid
bonds
|
|
15
|
(544)
|
-
|
(529)
|
Transactions involving
non-controlling interests, net of tax
|
|
(513)
|
-
|
(144)
|
(657)
|
At 31 December 2022
|
|
67,553
|
13,390
|
2,047
|
82,990
|
(a) In
2022 $9.2 billion of the opening foreign currency translation
reserve has been moved to the profit and loss account reserve as a
result of bp's decision to exit its shareholding in Rosneft and its
other businesses with Rosneft in Russia.
(b) Relates
to ordinary shares issued as non-cash consideration for the
acquisition of the public units of BP Midstream Partners
LP.
Top of
page 18
Group balance sheet
|
|
31 December
|
31 December
|
$
million
|
|
2023
|
2022
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
|
104,719
|
106,044
|
Goodwill
|
|
12,472
|
11,960
|
Intangible assets
|
|
9,991
|
10,200
|
Investments in joint
ventures
|
|
12,435
|
12,400
|
Investments in associates
|
|
7,814
|
8,201
|
Other investments
|
|
2,189
|
2,670
|
Fixed assets
|
|
149,620
|
151,475
|
Loans
|
|
1,942
|
1,271
|
Trade and other
receivables
|
|
1,767
|
1,092
|
Derivative financial
instruments
|
|
9,980
|
12,841
|
Prepayments
|
|
623
|
576
|
Deferred tax assets
|
|
4,268
|
3,908
|
Defined benefit pension plan
surpluses
|
|
7,948
|
9,269
|
|
|
176,148
|
180,432
|
Current assets
|
|
|
|
Loans
|
|
240
|
315
|
Inventories
|
|
22,819
|
28,081
|
Trade and other
receivables
|
|
31,123
|
34,010
|
Derivative financial
instruments
|
|
12,583
|
11,554
|
Prepayments
|
|
2,520
|
2,092
|
Current tax receivable
|
|
837
|
621
|
Other investments
|
|
843
|
578
|
Cash and cash equivalents
|
|
33,030
|
29,195
|
|
|
103,995
|
106,446
|
Assets classified as held for sale
(Note 2)
|
|
151
|
1,242
|
|
|
104,146
|
107,688
|
Total assets
|
|
280,294
|
288,120
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
61,155
|
63,984
|
Derivative financial
instruments
|
|
5,250
|
12,618
|
Accruals
|
|
6,527
|
6,398
|
Lease liabilities
|
|
2,650
|
2,102
|
Finance debt
|
|
3,284
|
3,198
|
Current tax payable
|
|
2,732
|
4,065
|
Provisions
|
|
4,418
|
6,332
|
|
|
86,016
|
98,697
|
Liabilities directly associated with
assets classified as held for sale (Note
2)
|
|
62
|
321
|
|
|
86,078
|
99,018
|
Non-current liabilities
|
|
|
|
Other payables
|
|
10,076
|
10,387
|
Derivative financial
instruments
|
|
10,402
|
13,537
|
Accruals
|
|
1,310
|
1,233
|
Lease liabilities
|
|
8,471
|
6,447
|
Finance debt
|
|
48,670
|
43,746
|
Deferred tax liabilities
|
|
9,617
|
10,526
|
Provisions
|
|
14,721
|
14,992
|
Defined benefit pension plan and
other post-retirement benefit plan deficits
|
|
5,456
|
5,244
|
|
|
108,723
|
106,112
|
Total liabilities
|
|
194,801
|
205,130
|
Net assets
|
|
85,493
|
82,990
|
Equity
|
|
|
|
bp shareholders' equity
|
|
70,283
|
67,553
|
Non-controlling interests
|
|
15,210
|
15,437
|
Total equity
|
|
85,493
|
82,990
|
Top of
page 19
Condensed group cash flow
statement
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Operating activities
|
|
|
|
|
|
|
|
Profit (loss) before
taxation
|
|
1,099
|
7,309
|
16,902
|
|
23,749
|
15,405
|
Adjustments to reconcile profit
(loss) before taxation to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization and exploration expenditure written off
|
|
4,441
|
4,219
|
3,781
|
|
16,674
|
14,703
|
Net impairment and (gain) loss on
sale of businesses and fixed assets
|
|
3,978
|
278
|
3,456
|
|
5,488
|
26,656
|
Earnings from equity-accounted
entities, less dividends received
|
|
803
|
421
|
582
|
|
1,194
|
(830)
|
Net charge for interest and other
finance expense, less net interest paid
|
|
202
|
136
|
186
|
|
503
|
396
|
Share-based payments
|
|
97
|
298
|
166
|
|
616
|
795
|
Net operating charge for pensions
and other post-retirement benefits, less contributions and benefit
payments for unfunded plans
|
|
(63)
|
(40)
|
(60)
|
|
(193)
|
(257)
|
Net charge for provisions, less
payments
|
|
(819)
|
(342)
|
(1,013)
|
|
(2,481)
|
440
|
Movements in inventories and other
current and non-current assets and liabilities
|
|
1,942
|
(783)
|
(6,847)
|
|
(3,338)
|
(6,270)
|
Income taxes paid
|
|
(2,303)
|
(2,749)
|
(3,582)
|
|
(10,173)
|
(10,106)
|
Net cash provided by operating
activities
|
|
9,377
|
8,747
|
13,571
|
|
32,039
|
40,932
|
Investing activities
|
|
|
|
|
|
|
|
Expenditure on property, plant and
equipment, intangible and other assets
|
|
(4,247)
|
(3,456)
|
(3,696)
|
|
(14,285)
|
(12,069)
|
Acquisitions, net of cash
acquired
|
|
(38)
|
(9)
|
(3,522)
|
|
(799)
|
(3,530)
|
Investment in joint
ventures
|
|
(347)
|
(102)
|
(107)
|
|
(1,039)
|
(600)
|
Investment in associates
|
|
(79)
|
(36)
|
(44)
|
|
(130)
|
(131)
|
Total cash capital
expenditure
|
|
(4,711)
|
(3,603)
|
(7,369)
|
|
(16,253)
|
(16,330)
|
Proceeds from disposal of fixed
assets
|
|
31
|
59
|
27
|
|
133
|
709
|
Proceeds from disposal of
businesses, net of cash disposed
|
|
269
|
79
|
587
|
|
1,193
|
1,841
|
Proceeds from loan
repayments
|
|
16
|
12
|
7
|
|
55
|
67
|
Cash provided from investing
activities
|
|
316
|
150
|
621
|
|
1,381
|
2,617
|
Net cash used in investing
activities
|
|
(4,395)
|
(3,453)
|
(6,748)
|
|
(14,872)
|
(13,713)
|
Financing activities
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares
(Note 7)
|
|
(1,350)
|
(2,047)
|
(3,240)
|
|
(7,918)
|
(9,996)
|
Lease liability payments
|
|
(722)
|
(663)
|
(513)
|
|
(2,560)
|
(1,961)
|
Proceeds from long-term
financing
|
|
1,522
|
8
|
10
|
|
7,568
|
2,013
|
Repayments of long-term
financing
|
|
(11)
|
(264)
|
(2,197)
|
|
(3,902)
|
(11,697)
|
Net increase (decrease) in
short-term debt
|
|
87
|
(71)
|
190
|
|
(861)
|
(1,392)
|
Issue of perpetual hybrid
bonds
|
|
13
|
30
|
48
|
|
175
|
370
|
Payments relating to perpetual
hybrid bonds
|
|
(264)
|
(258)
|
(219)
|
|
(1,008)
|
(708)
|
Payments relating to transactions
involving non-controlling interests (Other interest)
|
|
(7)
|
-
|
(1)
|
|
(187)
|
(9)
|
Receipts relating to transactions
involving non-controlling interests (Other interest)
|
|
10
|
527
|
1
|
|
546
|
11
|
Dividends paid - bp
shareholders
|
|
(1,224)
|
(1,249)
|
(1,088)
|
|
(4,809)
|
(4,358)
|
- non-controlling
interests
|
|
(77)
|
(191)
|
(100)
|
|
(403)
|
(294)
|
Net cash provided by (used in)
financing activities
|
|
(2,023)
|
(4,178)
|
(7,109)
|
|
(13,359)
|
(28,021)
|
Currency translation differences
relating to cash and cash equivalents
|
|
145
|
(104)
|
177
|
|
27
|
(684)
|
Increase (decrease) in cash and cash
equivalents
|
|
3,104
|
1,012
|
(109)
|
|
3,835
|
(1,486)
|
Cash and cash equivalents at
beginning of period
|
|
29,926
|
28,914
|
29,304
|
|
29,195
|
30,681
|
Cash and cash equivalents at end of
period
|
|
33,030
|
29,926
|
29,195
|
|
33,030
|
29,195
|
Top of
page 20
Notes
Note 1. Basis of
preparation
The results for the interim periods
are unaudited and, in the opinion of management, include all
adjustments necessary for a fair presentation of the results for
each period. All such adjustments are of a normal recurring nature.
This report should be read in conjunction with the consolidated
financial statements and related notes for the year ended
31 December 2022 included in BP Annual Report and Form 20-F 2022.
bp prepares its consolidated
financial statements included within BP Annual Report and Form 20-F
on the basis of International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB),
IFRS as adopted by the UK, and European Union (EU), and in
accordance with the provisions of the UK Companies Act 2006 as
applicable to companies reporting under international accounting
standards. IFRS as adopted by the UK does not differ from IFRS as
adopted by the EU. IFRS as adopted by the UK and EU differ in
certain respects from IFRS as issued by the IASB. The differences
have no impact on the group's consolidated financial statements for
the periods presented. The financial information presented herein
has been prepared in accordance with the accounting policies
expected to be used in preparing BP Annual Report and Form 20-F
2023 which are the same as those used in preparing BP Annual Report
and Form 20-F 2022.
In May 2023, the IASB issued
International Tax Reform - Pillar Two Model Rules - Amendments to
IAS 12 Income Taxes to clarify the application of IAS 12 to tax
legislation enacted or substantively enacted to implement Pillar
Two of the Organisation for Economic Co-operation and Development's
Base Erosion and Profit Shifting project, which aims to address the
tax challenges arising from the digitalisation of the economy. The
amendments include a mandatory temporary exception from accounting
for deferred tax on such tax law. In July 2023, the UK government
enacted legislation to implement the Pillar Two rules. The
legislation is effective for bp from 1 January 2024 and includes an
income inclusion rule and a domestic minimum tax, which together
are designed to ensure a minimum effective tax rate of 15% in each
country in which the group operates. Similar legislation is being
enacted by other governments around the world. In line with the
amendments to IAS 12, the exception from accounting for deferred
tax for the Pillar Two rules has been applied and there are no
impacts on the financial information for 2023. Based on an
assessment of historic data and forecasts for the year ending 31
December 2024, the Group does not expect a material exposure to
Pillar Two income taxes for the year ending 31 December
2024.
There are no other new or amended
standards or interpretations adopted from 1 January 2023 onwards,
including IFRS 17 'Insurance Contracts,' that have a significant
impact on the financial information.
Significant accounting judgements and
estimates
bp's significant accounting
judgements and estimates were disclosed in BP Annual Report and
Form 20-F 2022. These have been subsequently considered at the end
of each quarter to determine if any changes were required to those
judgements and estimates.
Impairment testing assumptions
The group's value-in-use impairment
testing price assumptions for Brent oil and Henry Hub gas were
revised during the fourth quarter from those disclosed in the BP
Annual Report and Form 20-F 2022. Prices disclosed are in real 2022
terms. The near term Brent oil assumption was held constant at $70
per barrel to reflect near term supply constraints before steadily
declining after 2030 to $50 per barrel by 2050 continuing to reflect the assumption that as the energy system
decarbonises, falling oil demand will cause oil prices to decline.
The price assumptions for Henry Hub gas up to 2050 were held
constant at $4 per mmBtu reflecting an assumption that declining
domestic demand in the US is offset by higher LNG exports. A
summary of the group's price assumptions for value-in-use
impairment testing, in real 2022 terms, is provided
below:
|
|
|
2024
|
2025
|
2030
|
2040
|
2050
|
Brent oil ($/bbl)
|
|
|
70
|
70
|
70
|
63
|
50
|
Henry Hub gas ($/mmBtu)
|
|
|
4.00
|
4.00
|
4.00
|
4.00
|
4.00
|
The post-tax discount rate used for
value-in-use impairment testing of assets other than certain low
carbon energy assets was increased to 8% (31 December 2022: 7%)
reflecting higher costs of capital.
Provisions
The nominal risk-free discount rate
applied to provisions is reviewed on a quarterly basis. The
discount rate applied to the group's provisions was revised to 4.0%
in the fourth quarter (31 December 2022 3.5%) to reflect higher US
Treasury yields. The principal impact of this rate increase was a
$0.9 billion decrease in the decommissioning provision with a
corresponding decrease in the carrying amount of property, plant
and equipment of $0.7 billion in the fourth quarter.
Pensions and other post-retirement benefits
The group's defined benefit plans
are reviewed quarterly to determine any changes to the fair value
of the plan assets or present value of the defined benefit
obligations. As a result of the review during the fourth quarter of
2023, the group's total net defined benefit plan surplus as at 31
December 2023 is $2.5 billion, compared to a surplus of $3.4
billion at 30 September 2023 and $4.0 billion at 31 December 2022.
The movement for the year principally reflects net actuarial losses
reported in other comprehensive income arising from decreases in
the UK, US and Eurozone discount rates, UK asset performance and an
increase in Eurozone inflation. The current environment is likely
to continue to affect the values of the plan assets and obligations
resulting in potential volatility in the amount of the net defined
benefit pension plan surplus/deficit recognized.
Top of
page 21
Deferred tax related to pensions and other post-retirement
benefits
In November 2023 the UK Government
announced a reduction in the authorised surplus payments charge
applicable to defined benefit pension schemes from 35% to 25%. The
legislation has not yet been enacted or substantively enacted, but
is expected to be effective from 6 April 2024. The change is
expected to reduce deferred tax liabilities by around $0.7 billion
with the related gain recognised in other comprehensive income when
the legislation is substantively enacted.
Investment in Rosneft
Since the first quarter 2022, bp
accounts for its interest in Rosneft and its other businesses with
Rosneft within Russia, as financial assets measured at fair value
within 'Other investments'. It is considered by management that any
measure of fair value, other than nil, would be subject to such
high measurement uncertainty that no estimate would provide useful
information even if it were accompanied by a description of the
estimate made in producing it and an explanation of the
uncertainties that affect the estimate. Accordingly, it is not currently possible to estimate any
carrying value other than zero when determining the measurement of
the interest in Rosneft and the other businesses with
Rosneft within Russia as at 31 December
2023.
Note 2. Non-current assets held for
sale
On 16 November 2023, bp entered into
an agreement to sell its Türkiye ground fuels business to Petrol
Ofisi. This includes the group's interest in three joint venture
terminals in Türkiye. Completion of the sale is subject to
regulatory approvals. The carrying amount of assets classified as
held for sale at 31 December 2023 is $151 million, with associated liabilities of
$62 million. Cumulative foreign exchange losses within
reserves of approximately $850 million are expected to be recycled
to the group income statement at completion.
Note 3. Impairment and losses on
sale of businesses and fixed assets
Net impairment charges and losses on sale of businesses and fixed assets for
the fourth quarter and full year were
$3,958 million and $5,857 million
respectively, compared with net charges of $3,629 million and $30,522 million for the
same periods in 2022 and include net
impairment charges for the fourth quarter and full
year of $3,922 million and
$5,701 million respectively, compared
with net impairment charges of $3,564 million and $18,341 million for the same periods in
2022.
Gas & low carbon energy
Fourth quarter and full year 2023
impairments include a net impairment charge of $928 million
and $2,212 million respectively, compared with net reversals
of $1,111 million and $588 million for the same periods
in 2022 in the gas & low carbon energy segment. 2023 includes
amounts in Trinidad and Mauritania & Senegal. The recoverable
amounts of the cash generating units within these businesses were
based on value-in-use calculations. In addition, following the
announcement on 25 January that bp and Equinor will restructure
their offshore US wind investments, a further $600 million pre-tax
impairment charge has been recognised in the fourth quarter 2023
(full year 2023 $1,140 million) through equity-accounted
earnings.
Oil production & operations
Fourth quarter and full year 2023
impairments include a net impairment charge of $1,636 million
and $1,814 million respectively, compared with net charges of
$3,251 million and $3,587 million for the same periods in
2022 in the oil production & operations segment. 2023 includes
amounts in the North Sea and BPX Energy. The recoverable amounts of
the cash generating units within these businesses were based on
value-in-use calculations or, in the case of expected portfolio
changes, based on fair value less costs to sell.
Customers & products
Fourth quarter and full year 2023
impairments include a net impairment charge of $1,367 million
and $1,614 million respectively, compared with net charges of
$1,380 million and $1,806 million for the same periods in
2022 in the customers & products segment. This principally
arises from changes in economic assumptions in the products
business impacting the Gelsenkirchen refinery. The recoverable
amount of this cash generating unit was based on value-in-use
calculations.
The impairment charge and the loss
on sale of businesses and fixed assets for 2022 mainly relates to bp's investment in Rosneft,
which has been reported in other businesses and
corporate.
Top of
page 22
Note 4. Analysis of replacement cost
profit (loss) before interest and tax and reconciliation to profit
(loss) before taxation
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
gas & low carbon
energy
|
|
2,169
|
2,275
|
16,439
|
|
14,080
|
14,696
|
oil production &
operations
|
|
1,879
|
3,427
|
1,688
|
|
11,191
|
19,721
|
customers & products
|
|
(554)
|
1,549
|
771
|
|
4,230
|
8,869
|
other businesses &
corporate
|
|
(16)
|
(500)
|
103
|
|
(903)
|
(26,737)
|
|
|
3,478
|
6,751
|
19,001
|
|
28,598
|
16,549
|
Consolidation
adjustment - UPII*
|
|
95
|
(57)
|
147
|
|
(14)
|
139
|
RC profit (loss) before interest and
tax
|
|
3,573
|
6,694
|
19,148
|
|
28,584
|
16,688
|
Inventory holding gains
(losses)*
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
-
|
-
|
(10)
|
|
1
|
(8)
|
oil production &
operations
|
|
-
|
(1)
|
(2)
|
|
-
|
(7)
|
customers & products
|
|
(1,497)
|
1,594
|
(1,416)
|
|
(1,237)
|
1,366
|
Profit (loss) before interest and
tax
|
|
2,076
|
8,287
|
17,720
|
|
27,348
|
18,039
|
Finance costs
|
|
1,038
|
1,039
|
834
|
|
3,840
|
2,703
|
Net finance expense/(income)
relating to pensions and other post-retirement benefits
|
|
(61)
|
(61)
|
(16)
|
|
(241)
|
(69)
|
Profit (loss) before
taxation
|
|
1,099
|
7,309
|
16,902
|
|
23,749
|
15,405
|
|
|
|
|
|
|
|
|
RC
profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
US
|
|
1,154
|
1,467
|
1,404
|
|
7,940
|
10,957
|
Non-US
|
|
2,419
|
5,227
|
17,744
|
|
20,644
|
5,731
|
|
|
3,573
|
6,694
|
19,148
|
|
28,584
|
16,688
|
Top of
page 23
Note 5. Sales and other operating
revenues
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
By
segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
11,670
|
10,313
|
26,793
|
|
50,297
|
56,255
|
oil production &
operations
|
|
6,749
|
6,225
|
6,932
|
|
24,904
|
33,193
|
customers & products
|
|
40,374
|
42,908
|
43,072
|
|
160,215
|
188,623
|
other businesses &
corporate
|
|
657
|
672
|
779
|
|
2,657
|
2,299
|
|
|
59,450
|
60,118
|
77,576
|
|
238,073
|
280,370
|
|
|
|
|
|
|
|
|
Less: sales and other operating
revenues between segments
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
65
|
367
|
(441)
|
|
1,808
|
5,913
|
oil production &
operations
|
|
6,464
|
5,747
|
6,916
|
|
23,708
|
30,294
|
customers & products
|
|
(105)
|
508
|
610
|
|
367
|
1,418
|
other businesses &
corporate
|
|
885
|
227
|
1,234
|
|
2,060
|
1,353
|
|
|
7,309
|
6,849
|
8,319
|
|
27,943
|
38,978
|
|
|
|
|
|
|
|
|
External sales and other operating
revenues
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
11,605
|
9,946
|
27,234
|
|
48,489
|
50,342
|
oil production &
operations
|
|
285
|
478
|
16
|
|
1,196
|
2,899
|
customers & products
|
|
40,479
|
42,400
|
42,462
|
|
159,848
|
187,205
|
other businesses &
corporate
|
|
(228)
|
445
|
(455)
|
|
597
|
946
|
Total sales and other operating
revenues
|
|
52,141
|
53,269
|
69,257
|
|
210,130
|
241,392
|
|
|
|
|
|
|
|
|
By
geographical area
|
|
|
|
|
|
|
|
US
|
|
20,920
|
22,032
|
18,563
|
|
82,177
|
87,497
|
Non-US
|
|
40,808
|
43,382
|
61,593
|
|
169,032
|
203,832
|
|
|
61,728
|
65,414
|
80,156
|
|
251,209
|
291,329
|
Less: sales and other operating
revenues between areas
|
|
9,587
|
12,145
|
10,899
|
|
41,079
|
49,937
|
|
|
52,141
|
53,269
|
69,257
|
|
210,130
|
241,392
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
Sales and other operating revenues
include the following in relation to revenues from contracts with
customers:
|
|
|
|
|
|
|
|
Crude oil
|
|
760
|
496
|
809
|
|
2,413
|
6,309
|
Oil products
|
|
32,124
|
35,486
|
34,800
|
|
128,969
|
149,854
|
Natural gas, LNG and NGLs
|
|
7,660
|
6,396
|
11,040
|
|
29,541
|
41,770
|
Non-oil products and other revenues
from contracts with customers
|
|
2,911
|
2,765
|
1,459
|
|
10,298
|
7,896
|
Revenue from contracts with
customers
|
|
43,455
|
45,143
|
48,108
|
|
171,221
|
205,829
|
Other operating
revenues(a)
|
|
8,686
|
8,126
|
21,149
|
|
38,909
|
35,563
|
Total sales and other operating
revenues
|
|
52,141
|
53,269
|
69,257
|
|
210,130
|
241,392
|
(a)
Principally relates to commodity derivative transactions including
sales of bp own production in trading books.
Top of
page 24
Note 6. Depreciation, depletion and
amortization
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
1,290
|
1,543
|
1,373
|
|
5,680
|
5,008
|
oil production &
operations
|
|
1,563
|
1,432
|
1,383
|
|
5,692
|
5,564
|
customers & products
|
|
942
|
915
|
741
|
|
3,548
|
2,870
|
other businesses &
corporate
|
|
265
|
255
|
217
|
|
1,008
|
876
|
|
|
4,060
|
4,145
|
3,714
|
|
15,928
|
14,318
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
US
|
|
1,547
|
1,479
|
1,202
|
|
5,618
|
4,624
|
Non-US
|
|
2,513
|
2,666
|
2,512
|
|
10,310
|
9,694
|
|
|
4,060
|
4,145
|
3,714
|
|
15,928
|
14,318
|
Note 7. Earnings per share and
shares in issue
Basic earnings per ordinary share
(EpS) amounts are calculated by dividing the profit (loss) for the
period attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
Against the authority granted at bp's 2022 annual general meeting,
217 million ordinary shares
repurchased for cancellation were settled during the fourth quarter 2023 for a total cost of $1,350 million. A further 128 million ordinary shares were repurchased
between the end of the reporting period and the date when the
financial statements are authorised for issue for a total cost of
$746 million. This amount has been accrued
at 31 December 2023. The number of shares in issue is reduced when
shares are repurchased, but is not reduced in respect of the
period-end commitment to repurchase shares subsequent to the end of
the period.
The calculation of EpS is performed
separately for each discrete quarterly period, and for the
year-to-date period. As a result, the sum of the discrete quarterly
EpS amounts in any particular year-to-date period may not be equal
to the EpS amount for the year-to-date period.
For the diluted EpS calculation the
weighted average number of shares outstanding during the period is
adjusted for the number of shares that are potentially issuable in
connection with employee share-based payment plans using the
treasury stock method.
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Results for the period
|
|
|
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
371
|
4,858
|
10,803
|
|
15,239
|
(2,487)
|
Less: preference dividend
|
|
-
|
-
|
-
|
|
1
|
1
|
Profit (loss) attributable to bp
ordinary shareholders
|
|
371
|
4,858
|
10,803
|
|
15,238
|
(2,488)
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
Basic weighted average number of
shares outstanding
|
|
16,834,354
|
17,204,488
|
18,178,821
|
|
17,360,288
|
18,987,936
|
ADS
equivalent(c)
|
|
2,805,725
|
2,867,414
|
3,029,803
|
|
2,893,381
|
3,164,656
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding used to calculate diluted earnings per share
|
|
17,269,574
|
17,609,601
|
18,509,421
|
|
17,750,078
|
18,987,936
|
ADS
equivalent(c)
|
|
2,878,262
|
2,934,933
|
3,084,903
|
|
2,958,346
|
3,164,656
|
|
|
|
|
|
|
|
|
Shares in issue at
period-end
|
|
16,824,651
|
17,061,004
|
17,974,112
|
|
16,824,651
|
17,974,112
|
ADS
equivalent(c)
|
|
2,804,108
|
2,843,500
|
2,995,685
|
|
2,804,108
|
2,995,685
|
(a)
Excludes treasury shares and includes certain shares that will be
issued in the future under employee share-based payment
plans.
(b) If the
inclusion of potentially issuable shares would decrease loss per
share, the potentially issuable shares are excluded from the
weighted average number of shares outstanding used to calculate
diluted earnings per share. The numbers of potentially issuable
shares that have been excluded from the calculation for the full
year 2022 are 242,289 thousand (ADS equivalent 40,381
thousand).
(c)
One ADS is equivalent to six ordinary shares.
Top of
page 25
Note 8. Dividends
Dividends payable
BP today announced an interim
dividend of 7.270 cents per ordinary share
which is expected to be paid on 28 March
2024 to ordinary shareholders and American Depositary Share
(ADS) holders on the register on 16 February
2024. The ex-dividend date will be 15
February 2024. The corresponding amount in sterling is due
to be announced on 12 March 2024,
calculated based on the average of the market exchange rates over
three dealing days between 6 March 2024 and
8 March 2024. Holders of ADSs are expected
to receive $0.43620 per ADS (less applicable fees). The board has decided not to offer a scrip dividend
alternative in respect of the fourth quarter 2023 dividend.
Ordinary shareholders and ADS holders (subject to certain
exceptions) will be able to participate in a dividend reinvestment
programme. Details of the fourth quarter
dividend and timetable are available at bp.com/dividends and further details
of the dividend reinvestment programmes are available at
bp.com/drip.
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
cents
|
|
7.270
|
7.270
|
6.006
|
|
27.760
|
22.932
|
pence
|
|
5.737
|
5.732
|
4.940
|
|
22.328
|
18.624
|
Dividends paid per ADS
(cents)
|
|
43.62
|
43.62
|
36.04
|
|
166.56
|
137.59
|
Note 9. Net debt
Net
debt*
|
|
31 December
|
30
September
|
31 December
|
$
million
|
|
2023
|
2023
|
2022
|
Finance
debt(a)
|
|
51,954
|
48,810
|
46,944
|
Fair value (asset) liability of
hedges related to finance debt(b)
|
|
1,988
|
3,440
|
3,673
|
|
|
53,942
|
52,250
|
50,617
|
Less: cash and cash
equivalents
|
|
33,030
|
29,926
|
29,195
|
Net debt(c)
|
|
20,912
|
22,324
|
21,422
|
Total equity
|
|
85,493
|
87,676
|
82,990
|
Gearing*
|
|
19.7%
|
20.3%
|
20.5%
|
(a)
The fair value of finance debt at 31 December 2023 was $48,795 million (30 September
2023 $43,387 million, 31 December 2022 $42,590
million).
(b)
Derivative financial instruments entered into for the purpose of
managing interest rate and foreign currency exchange risk
associated with net debt with a fair value liability position of
$73 million at 31 December 2023
(third quarter 2023
liability of $102 million and
fourth quarter 2022
liability of $91 million) are not
included in the calculation of net debt shown above as hedge
accounting is not applied for these instruments.
(c)
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement.
As part of actively managing its
debt portfolio, year to date the group has bought back a total of
$1.7 billion equivalent of finance debt ($7.4 billion for the
comparative period in 2022). Derivatives associated with non-US
dollar debt bought back were also terminated. These transactions
have no significant impact on net debt or gearing.
Note 10. Statutory
accounts
The financial information shown in
this publication, which was approved by the Board of Directors on 5
February 2024, is unaudited and does not constitute statutory
financial statements. Audited financial information will be
published in BP Annual Report and
Form 20-F 2023. BP Annual Report and Form
20-F 2022 has been filed with the
Registrar of Companies in England and Wales. The report of the
auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and did not contain a
statement under section 498(2) or section 498(3) of the UK
Companies Act 2006.
Top of
page 26
Additional information
Capital expenditure*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Capital expenditure
|
|
|
|
|
|
|
|
Organic capital
expenditure*
|
|
4,673
|
3,597
|
3,861
|
|
14,998
|
12,470
|
Inorganic capital
expenditure*(a)
|
|
38
|
6
|
3,508
|
|
1,255
|
3,860
|
|
|
4,711
|
3,603
|
7,369
|
|
16,253
|
16,330
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
1,326
|
1,055
|
1,609
|
|
4,281
|
4,251
|
oil production &
operations
|
|
1,636
|
1,644
|
1,430
|
|
6,278
|
5,278
|
customers &
products(a)
|
|
1,603
|
802
|
4,149
|
|
5,253
|
6,252
|
other businesses &
corporate
|
|
146
|
102
|
181
|
|
441
|
549
|
|
|
4,711
|
3,603
|
7,369
|
|
16,253
|
16,330
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
US
|
|
2,164
|
1,583
|
4,929
|
|
8,105
|
8,656
|
Non-US
|
|
2,547
|
2,020
|
2,440
|
|
8,148
|
7,674
|
|
|
4,711
|
3,603
|
7,369
|
|
16,253
|
16,330
|
(a)
Full year 2023 includes $1.1 billion, net of
adjustments, in respect of the TravelCenters of America
acquisition. Fourth quarter and full year 2022 include
$3,030 million in respect of the Archaea Energy
acquisition.
Top of
page 27
Adjusting items*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
gas
& low carbon energy
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
3
|
-
|
33
|
|
19
|
45
|
Net impairment and losses on sale of
businesses and fixed assets(a)
|
|
(937)
|
(224)
|
1,111
|
|
(2,221)
|
588
|
Environmental and other
provisions
|
|
-
|
-
|
-
|
|
-
|
-
|
Restructuring, integration and
rationalization costs
|
|
-
|
(1)
|
3
|
|
-
|
8
|
Fair value accounting
effects(b)(c)
|
|
1,887
|
1,816
|
12,502
|
|
8,859
|
(1,811)
|
Other(d)
|
|
(561)
|
(572)
|
(358)
|
|
(1,299)
|
(197)
|
|
|
392
|
1,019
|
13,291
|
|
5,358
|
(1,367)
|
oil
production & operations
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets(e)
|
|
(55)
|
246
|
68
|
|
297
|
3,446
|
Net impairment and losses on sale of
businesses and fixed assets(a)
|
|
(1,635)
|
(52)
|
(3,246)
|
|
(1,819)
|
(4,508)
|
Environmental and other
provisions
|
|
48
|
99
|
420
|
|
54
|
518
|
Restructuring, integration and
rationalization costs
|
|
-
|
-
|
3
|
|
(1)
|
(11)
|
Fair value accounting
effects
|
|
-
|
-
|
-
|
|
-
|
-
|
Other
|
|
(28)
|
(2)
|
15
|
|
(121)
|
52
|
|
|
(1,670)
|
291
|
(2,740)
|
|
(1,590)
|
(503)
|
customers & products
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
23
|
18
|
72
|
|
44
|
374
|
Net impairment and losses on sale of
businesses and fixed assets(a)
|
|
(1,396)
|
(242)
|
(1,451)
|
|
(1,757)
|
(1,983)
|
Environmental and other
provisions
|
|
(86)
|
-
|
(65)
|
|
(97)
|
(101)
|
Restructuring, integration and
rationalization costs
|
|
-
|
1
|
12
|
|
-
|
18
|
Fair value accounting
effects(c)
|
|
144
|
(198)
|
189
|
|
(86)
|
(309)
|
Other
|
|
(42)
|
(85)
|
112
|
|
(287)
|
81
|
|
|
(1,357)
|
(506)
|
(1,131)
|
|
(2,183)
|
(1,920)
|
other businesses & corporate
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
1
|
-
|
1
|
|
1
|
1
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
19
|
(23)
|
(1)
|
|
(41)
|
(17)
|
Environmental and other
provisions(f)
|
|
(565)
|
(8)
|
(67)
|
|
(604)
|
(92)
|
Restructuring, integration and
rationalization costs
|
|
51
|
(3)
|
3
|
|
38
|
19
|
Fair value accounting
effects(c)
|
|
579
|
(146)
|
515
|
|
630
|
(1,381)
|
Rosneft
|
|
-
|
-
|
-
|
|
-
|
(24,033)
|
Gulf of Mexico oil spill
|
|
(11)
|
(19)
|
(23)
|
|
(57)
|
(84)
|
Other
|
|
7
|
2
|
(19)
|
|
(4)
|
21
|
|
|
81
|
(197)
|
409
|
|
(37)
|
(25,566)
|
Total before interest and
taxation
|
|
(2,554)
|
607
|
9,829
|
|
1,548
|
(29,356)
|
Finance
costs(g)
|
|
(86)
|
(96)
|
(169)
|
|
(405)
|
(425)
|
Total before taxation
|
|
(2,640)
|
511
|
9,660
|
|
1,143
|
(29,781)
|
Taxation on adjusting
items(h)
|
|
1,175
|
(158)
|
(1,542)
|
|
972
|
456
|
Taxation - tax rate change effect of
UK energy profits levy(i)
|
|
-
|
-
|
(1,056)
|
|
232
|
(1,834)
|
Total after taxation for
period(j)
|
|
(1,465)
|
353
|
7,062
|
|
2,347
|
(31,159)
|
(a)
See Note 3 for further
information.
(b) Under
IFRS bp marks-to-market the value of the hedges used to risk-manage
LNG contracts, but not the contracts themselves, resulting in a
mismatch in accounting treatment. The fair value accounting effect
includes the change in value of LNG contracts that are being risk
managed, and the underlying result reflects how bp risk-manages its
LNG contracts.
(c)
For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and 35.
(d) Fourth
quarter and full year 2023 include $600 million and $1,140 million
respectively of impairment charges recognized through
equity-accounted earnings relating to our US offshore wind projects.
(e)
Full year 2022 includes a non-taxable gain of $1,951 million
arising from the contribution of bp's Angolan business to Azule
Energy; gains of $904 million related to the deemed disposal of 12%
of the group's interest in Aker BP, an associate of bp, following
completion of Aker BP's acquisition of Lundin Energy; and $361
million in relation to the disposal of the group's interest in the
Rumaila field in Iraq to Basra Energy Company, an associate of
bp.
(f) Fourth quarter and
full year 2023 include charges related to the control, abatement,
clean-up or elimination of environmental pollution and legal
settlements.
(g)
Includes the unwinding of discounting effects relating to Gulf of
Mexico oil spill payables, the income statement impact associated
with
the buyback of finance debt (see
Note 9 for further information) and
temporary valuation differences associated with the group's
interest rate and foreign currency exchange risk management of
finance debt.
Top of
page 28
(h) Includes
certain foreign exchange effects on tax as adjusting items. These
amounts represent the impact of: (i) foreign exchange on deferred
tax balances arising from the conversion of local currency tax base
amounts into functional currency, and (ii) taxable gains and losses
from the retranslation of US dollar-denominated intra-group loans
to local currency.
(i) Full year 2023
includes a revision to the deferred tax impact of the introduction
of the UK Energy Profits Levy (EPL) on temporary differences
existing at 31 December 2022 that are expected to unwind over the
period 1 January 2023 to 31 March 2028. Fourth quarter and full
year 2022 includes the deferred tax impact of the introduction of
the EPL. The EPL increases the headline rate of tax to 75% and
applies to taxable profits from bp's North Sea business made from 1
January 2023 until 31 March 2028.
(j) Fourth quarter and
full year 2023 include a $25-million charge and a $146-million
charge respectively for the EU Solidarity Contribution. Fourth
quarter and full year 2022 include a $505-million
charge.
Net debt including leases
Net
debt including leases*
|
|
31 December
|
30
September
|
31 December
|
$
million
|
|
2023
|
2023
|
2022
|
Net debt
|
|
20,912
|
22,324
|
21,422
|
Lease liabilities
|
|
11,121
|
10,879
|
8,549
|
Net partner (receivable) payable for
leases entered into on behalf of joint operations
|
|
(131)
|
(124)
|
19
|
Net debt including leases
|
|
31,902
|
33,079
|
29,990
|
Total equity
|
|
85,493
|
87,676
|
82,990
|
Gearing including leases*
|
|
27.2%
|
27.4%
|
26.5%
|
Gulf of Mexico oil spill
|
|
31 December
|
31 December
|
$
million
|
|
2023
|
2022
|
Gulf of Mexico oil spill payables
and provisions
|
|
(8,735)
|
(9,566)
|
Of which - current
|
|
(1,133)
|
(1,216)
|
|
|
|
|
Deferred tax asset
|
|
1,320
|
1,444
|
During the second quarter pre-tax
payments of $1,204 million were made relating to the 2016 consent
decree and settlement agreement with the United States and the five
Gulf coast states. Payables and provisions presented in the table
above reflect the latest estimate for the remaining costs
associated with the Gulf of Mexico oil spill. Where amounts have
been provided on an estimated basis, the amounts ultimately payable
may differ from the amounts provided and the timing of payments is
uncertain. Further information relating to the Gulf of Mexico oil
spill, including information on the nature and expected timing of
payments relating to provisions and other payables, is provided in
BP Annual Report and Form 20-F
2022 - Financial statements - Notes 7, 22, 23, 29, and
33.
Working capital*
reconciliation
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Movements in inventories and other
current and non-current assets and liabilities as per condensed
group cash flow statement(a)
|
|
1,942
|
(783)
|
(6,847)
|
|
(3,338)
|
(6,270)
|
Adjusted for inventory holding gains
(losses)* (Note 4)
|
|
(1,497)
|
1,593
|
(1,428)
|
|
(1,236)
|
1,351
|
Adjusted for fair value accounting
effects relating to subsidiaries
|
|
2,610
|
1,443
|
13,288
|
|
9,348
|
(3,273)
|
Other adjusting
items(b)
|
|
(966)
|
(300)
|
(815)
|
|
(2,006)
|
1,279
|
Working capital release (build)
after adjusting for net inventory gains (losses), fair value
accounting effects and other adjusting items
|
|
2,089
|
1,953
|
4,198
|
|
2,768
|
(6,913)
|
(a)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis of $1,222 million in the full year 2023 (fourth
quarter 2023 nil). For the full year 2022
the amount was an outflow of $1,286 million (fourth quarter 2022 $1 million).
(b) Other
adjusting items relate to the non-cash movement of US emissions
obligations carried as a provision that will be settled by
allowances held as inventory.
Top of
page 29
Surplus cash flow*
reconciliation
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Sources:
|
|
|
|
|
|
|
|
Net cash provided by operating
activities
|
|
9,377
|
8,747
|
13,571
|
|
32,039
|
40,932
|
Cash provided from investing
activities
|
|
316
|
150
|
621
|
|
1,381
|
2,617
|
Other(a)
|
|
(78)
|
503
|
(94)
|
|
324
|
360
|
Cash inflow
|
|
9,615
|
9,400
|
14,098
|
|
33,744
|
43,909
|
|
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
|
|
|
Lease liability payments
|
|
(722)
|
(663)
|
(513)
|
|
(2,560)
|
(1,961)
|
Payments on perpetual hybrid
bonds
|
|
(264)
|
(258)
|
(219)
|
|
(1,008)
|
(708)
|
Dividends paid - BP
shareholders
|
|
(1,224)
|
(1,249)
|
(1,088)
|
|
(4,809)
|
(4,358)
|
- non-controlling
interests
|
|
(77)
|
(191)
|
(100)
|
|
(403)
|
(294)
|
Total capital
expenditure*
|
|
(4,711)
|
(3,603)
|
(7,369)
|
|
(16,253)
|
(16,330)
|
Net repurchase of shares relating to
employee share schemes
|
|
-
|
(225)
|
-
|
|
(675)
|
(500)
|
Payments relating to transactions
involving non-controlling interests
|
|
(7)
|
-
|
(1)
|
|
(187)
|
(9)
|
Currency translation differences
relating to cash and cash equivalents
|
|
145
|
(104)
|
177
|
|
27
|
(684)
|
Cash outflow
|
|
(6,860)
|
(6,293)
|
(9,113)
|
|
(25,868)
|
(24,844)
|
|
|
|
|
|
|
|
|
Surplus cash flow
|
|
2,755
|
3,107
|
4,985
|
|
7,876
|
19,065
|
|
|
|
|
|
|
|
|
(a)
Other includes adjustments for net operating cash received or paid
which is held on behalf of third parties for medium-term deferred
payment and prior periods have been adjusted accordingly. Third
quarter and full year 2023 include $517 million of proceeds from
the sale of a 49% interest in a controlled affiliate holding
certain midstream assets onshore US. Other proceeds for the year
2022 include $573 million of proceeds from the disposal of a loan
note related to the Alaska divestment. The cash was received in the
fourth quarter 2021, was reported as a financing cash flow and was
not included in other proceeds at the time due to potential
recourse from the counterparty. The proceeds were recognized as the
potential recourse reduces and by end second quarter 2022 all were
recognized.
Top of
page 30
Adjusted earnings before interest,
taxation, depreciation and amortization (adjusted
EBITDA)*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Profit (loss) for the
period
|
|
436
|
5,069
|
11,161
|
|
15,880
|
(1,357)
|
Finance costs
|
|
1,038
|
1,039
|
834
|
|
3,840
|
2,703
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(61)
|
(61)
|
(16)
|
|
(241)
|
(69)
|
Taxation
|
|
663
|
2,240
|
5,741
|
|
7,869
|
16,762
|
Profit before interest and
tax
|
|
2,076
|
8,287
|
17,720
|
|
27,348
|
18,039
|
Inventory holding (gains) losses*,
before tax
|
|
1,497
|
(1,593)
|
1,428
|
|
1,236
|
(1,351)
|
RC profit (loss) before interest and
tax
|
|
3,573
|
6,694
|
19,148
|
|
28,584
|
16,688
|
Net (favourable) adverse impact of
adjusting items*, before interest and tax
|
|
2,554
|
(607)
|
(9,829)
|
|
(1,548)
|
29,356
|
Underlying RC profit before interest
and tax
|
|
6,127
|
6,087
|
9,319
|
|
27,036
|
46,044
|
Add back:
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization
|
|
4,060
|
4,145
|
3,714
|
|
15,928
|
14,318
|
Exploration expenditure written
off
|
|
381
|
74
|
67
|
|
746
|
385
|
Adjusted EBITDA
|
|
10,568
|
10,306
|
13,100
|
|
43,710
|
60,747
|
Adjusted earnings before interest,
depreciation and amortization (adjusted EBIDA)*
|
|
Year
|
Year
|
$
million
|
|
2023
|
2022
|
Profit (loss) for the
period
|
|
15,880
|
(1,357)
|
Finance costs
|
|
3,840
|
2,703
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(241)
|
(69)
|
Taxation
|
|
7,869
|
16,762
|
Profit before interest and
tax
|
|
27,348
|
18,039
|
Inventory holding (gains) losses*,
before tax
|
|
1,236
|
(1,351)
|
RC profit before interest and
tax
|
|
28,584
|
16,688
|
Net (favourable) adverse impact of
adjusting items*, before interest and tax
|
|
(1,548)
|
29,356
|
Underlying RC profit before interest
and tax
|
|
27,036
|
46,044
|
Taxation on an underlying RC
basis
|
|
(9,365)
|
(15,052)
|
|
|
17,671
|
30,992
|
Add back:
|
|
|
|
Depreciation, depletion and
amortization
|
|
15,928
|
14,318
|
Exploration expenditure written
off
|
|
746
|
385
|
Adjusted EBIDA
|
|
34,345
|
45,695
|
Top of
page 31
Return on average capital employed
(ROACE)*
|
|
Year
|
Year
|
$
million
|
|
2023
|
2022
|
Profit (loss) for the year
attributable to bp shareholders
|
|
15,239
|
(2,487)
|
Inventory holding (gains) losses*,
net of tax
|
|
944
|
(1,019)
|
Net (favourable) adverse impact of
adjusting items*, after taxation
|
|
(2,347)
|
31,159
|
Underlying replacement cost (RC)
profit*
|
|
13,836
|
27,653
|
Interest expense, net of
tax(a)
|
|
1,908
|
1,336
|
Non-controlling interests
|
|
641
|
1,130
|
Adjusted underlying RC
profit
|
|
16,385
|
30,119
|
Total equity
|
|
85,493
|
82,990
|
Finance debt
|
|
51,954
|
46,944
|
Capital employed
|
|
137,447
|
129,934
|
Less: Goodwill
|
|
12,472
|
11,960
|
Cash and cash equivalents
|
|
33,030
|
29,195
|
|
|
91,945
|
88,779
|
Average capital employed (excluding
goodwill and cash and cash equivalents)
|
|
90,362
|
98,670
|
ROACE
|
|
18.1%
|
30.5%
|
(a)
Finance costs, as reported in the Group income statement, were
$3,840 million (2022 $2,703 million). Interest expense which totals
$2,569 million (2022 $1,632 million) on a
pre-tax basis is finance costs excluding lease interest of $346
million (2022 $257 million), unwinding of
discount on provisions and other payables of $912 million
(2022 $808 million) and other adjusting
items related to finance costs of $13 million (2022 $6 million). Interest expense included above is
calculated on a post-tax basis.
Reconciliation of customers &
products RC profit before interest and tax to underlying RC profit
before interest and tax* to adjusted EBITDA* by business
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
$
million
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
RC profit before interest and
tax for customers & products
|
|
(554)
|
1,549
|
771
|
|
4,230
|
8,869
|
Less: Adjusting items* gains
(charges)
|
|
(1,357)
|
(506)
|
(1,131)
|
|
(2,183)
|
(1,920)
|
Underlying RC profit before interest
and tax for customers & products
|
|
803
|
2,055
|
1,902
|
|
6,413
|
10,789
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
882
|
670
|
628
|
|
2,644
|
2,966
|
Castrol - included in customers
|
|
213
|
185
|
70
|
|
730
|
700
|
products - refining &
trading
|
|
(79)
|
1,385
|
1,274
|
|
3,769
|
7,823
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion
and amortization
|
|
942
|
915
|
741
|
|
3,548
|
2,870
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
466
|
481
|
334
|
|
1,736
|
1,286
|
Castrol - included in customers
|
|
43
|
43
|
40
|
|
167
|
153
|
products - refining &
trading
|
|
476
|
434
|
407
|
|
1,812
|
1,584
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers
& products
|
|
1,745
|
2,970
|
2,643
|
|
9,961
|
13,659
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
1,348
|
1,151
|
962
|
|
4,380
|
4,252
|
Castrol - included in customers
|
|
256
|
228
|
110
|
|
897
|
853
|
products - refining &
trading
|
|
397
|
1,819
|
1,681
|
|
5,581
|
9,407
|
Top of
page 32
Reconciliation of customers &
products RC profit before interest and tax to convenience gross
margin*
|
|
|
|
|
|
Year
|
Year
|
$
million
|
|
2023
|
2022
|
RC profit (loss) before interest
and tax for customers & products
|
|
4,230
|
8,869
|
Subtract RC profit (loss) before
interest and tax for refining & trading
|
|
1,943
|
6,008
|
RC profit before interest and tax
for convenience & mobility
|
|
2,287
|
2,861
|
Net (favourable) adverse impact of
adjusting items for convenience & mobility
|
|
357
|
105
|
Underlying RC profit before
interest and tax for convenience & mobility
|
|
2,644
|
2,966
|
Subtract underlying RC profit
before interest and tax for Castrol
|
|
730
|
700
|
Add back convenience & mobility
(excluding Castrol) depreciation, depletion and
amortization
|
|
1,569
|
1,133
|
Subtract convenience & mobility
(excluding Castrol) production and manufacturing, distribution and
administration expenses and adjusted for retail fuels, EV charging,
aviation, B2B and midstream gross margin(a)
|
|
1,363
|
1,655
|
Subtract earnings from
equity-accounted entities in convenience & mobility (excluding
Castrol)
|
|
457
|
225
|
Convenience gross
margin(b)
|
|
1,663
|
1,519
|
Foreign exchange effects
|
|
n/a
|
7
|
Convenience gross margin at constant
foreign exchange(c)
|
|
1,663
|
1,526
|
|
|
|
|
Convenience gross margin growth*
(%)
|
|
9%
|
|
(a)
Adjusted for TravelCenters of America and other portfolio
changes.
(b)
Excluding TravelCenters of America and adjusted for other portfolio
changes.
(c) Values are at end 2023 foreign exchange rates. This requires a
calculation of the comparative convenience gross margin ($ million)
at current period foreign exchange rates (constant foreign
exchange) to compare the current period value with the restated
comparative period value.
Top of
page 33
Realizations* and marker
prices
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
Average realizations(a)
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
US
|
|
67.66
|
63.95
|
71.21
|
|
63.81
|
78.40
|
Europe
|
|
81.02
|
90.76
|
86.62
|
|
80.70
|
99.90
|
Rest of World
|
|
87.27
|
78.34
|
89.38
|
|
81.78
|
97.03
|
BP Average
|
|
76.50
|
71.85
|
80.44
|
|
72.69
|
89.65
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
US
|
|
2.04
|
2.24
|
4.84
|
|
2.08
|
5.61
|
Europe
|
|
15.12
|
11.22
|
35.56
|
|
16.71
|
33.45
|
Rest of World
|
|
6.18
|
5.38
|
9.40
|
|
6.13
|
8.91
|
BP Average
|
|
5.45
|
4.88
|
9.59
|
|
5.60
|
9.29
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
US
|
|
45.68
|
45.39
|
55.67
|
|
44.29
|
61.21
|
Europe
|
|
83.21
|
80.61
|
130.61
|
|
86.36
|
133.48
|
Rest of World
|
|
50.74
|
45.61
|
64.73
|
|
49.23
|
67.49
|
BP Average
|
|
50.90
|
47.28
|
66.18
|
|
49.84
|
69.95
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
Brent
|
|
84.34
|
86.75
|
88.87
|
|
82.64
|
101.32
|
West Texas Intermediate
|
|
78.60
|
82.54
|
82.82
|
|
77.67
|
94.58
|
Western Canadian Select
|
|
55.06
|
65.42
|
53.52
|
|
59.34
|
73.28
|
Alaska North Slope
|
|
84.23
|
87.95
|
87.89
|
|
82.36
|
98.76
|
Mars
|
|
78.35
|
82.99
|
78.81
|
|
77.19
|
91.74
|
Urals (NWE - cif)
|
|
72.48
|
73.62
|
61.04
|
|
61.79
|
74.16
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
Henry Hub gas price(b)
($/mmBtu)
|
|
2.88
|
2.54
|
6.26
|
|
2.74
|
6.65
|
UK Gas - National Balancing Point
(p/therm)
|
|
98.68
|
82.04
|
166.54
|
|
98.93
|
203.81
|
(a)
Based on sales of consolidated subsidiaries only
- this excludes
equity-accounted entities.
(b) Henry
Hub First of Month Index.
Exchange rates
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
$/£ average rate for the
period
|
|
1.24
|
1.27
|
1.17
|
|
1.24
|
1.23
|
$/£ period-end rate
|
|
1.28
|
1.22
|
1.21
|
|
1.28
|
1.21
|
|
|
|
|
|
|
|
|
$/€ average rate for the
period
|
|
1.07
|
1.09
|
1.02
|
|
1.08
|
1.05
|
$/€ period-end rate
|
|
1.11
|
1.06
|
1.07
|
|
1.11
|
1.07
|
|
|
|
|
|
|
|
|
$/AUD average rate for the
period
|
|
0.65
|
0.65
|
0.66
|
|
0.66
|
0.69
|
$/AUD period-end rate
|
|
0.69
|
0.64
|
0.68
|
|
0.69
|
0.68
|
|
|
|
|
|
|
|
|
Top of
page 34
Legal proceedings
For a full discussion of the group's
material legal proceedings, see pages
258-259 of bp Annual
Report and Form 20-F 2022 and page 35 of BP p.l.c. Group
results second quarter and half-year 2023 results announcement. The
following discussion sets out the material developments in the
group's material legal proceedings in the period following the
second quarter and half-year 2023 results announcement.
Louisiana Coastal restoration
Six coastal parishes and the State
of Louisiana have filed over 40 separate lawsuits in state courts
in Louisiana against various oil and gas companies seeking damages
for coastal erosion. bp entities were named defendants in 17 of
these cases. The lawsuits allege that the defendants' historical
operations in oil and gas fields within the Louisiana onshore
coastal zone failed to comply with state permits and/or were
conducted without the required coastal use permits. The scope and
scale of plaintiffs' damages demands are significant and
unprecedented, including substantial remediation costs and the
claimed costs for restoring coastal wetlands allegedly impacted by
oil and gas field operations.
Defendants removed all of these
lawsuits to federal court and the removals were contested by
plaintiffs, eventually resulting in a decision from the US Fifth
Circuit Court of Appeals rejecting defendants' "federal officer"
jurisdiction removal grounds in one of two lead cases - Plaquemines
Parish v. Riverwood, et al. Defendants' petition for writ of
certiorari to the US Supreme Court seeking review of the US Fifth
Circuit's Riverwood decision was denied in early 2023. There is a
small subset of the removed cases in which the defendants continue
to contest jurisdiction and await a final ruling from the Fifth
Circuit on a related "federal officer" removal jurisdiction
theory.
Following remand, the state court in
the other lead case of Cameron Parish v. Auster et al., in which bp
was the principal defendant, had established a November 2023 trial
date. Before trial commenced during the fourth quarter 2023, bp
entered into a settlement agreement and release with the plaintiffs
in respect of all claims arising within Cameron Parish. The terms
of the settlement agreement and release are confidential and bp
does not expect those terms to have a significant effect on the
company's financial position or profitability.
In addition, four private landowners
have filed separate claims in the state courts in Jefferson and
Plaquemines Parishes of Louisiana for restoration damages related
to alleged impacts to their marshlands associated with historic oil
field operations. bp entities are defendants in two of these
private landowner cases.
All of the other remanded cases
remain at early stages in the litigation. While it is not possible
to predict the outcomes of these novel legal actions, bp believes
that it has valid defences, and it intends to defend such actions
vigorously.
Glossary
Non-IFRS measures are provided for
investors because they are closely tracked by management to
evaluate bp's operating performance and to make financial,
strategic and operating decisions. Non-IFRS measures are sometimes
referred to as alternative performance measures.
Adjusted EBIDA is a non-IFRS
measure and is defined as profit or loss for the period, adjusting
for finance costs and net finance (income) or expense relating to
pensions and other post-retirement benefits and taxation, inventory
holding gains or losses before tax, net adjusting items before
interest and tax, and taxation on an underlying RC basis, and
adding back depreciation, depletion and amortization (pre-tax) and
exploration expenditure written-off (net of adjusting items,
pre-tax). bp believes that adjusted EBIDA is a useful measure for
investors because it is a measure closely tracked by management to
evaluate bp's operating performance and to make financial,
strategic and operating decisions and because it may help investors
to understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period. The nearest equivalent measure on an IFRS
basis is profit or loss for the period. A reconciliation of profit
or loss for the period to adjusted EBIDA is provided on
page 30.
Adjusted EBITDA is a non-IFRS
measure presented for bp's operating segments and is defined as
replacement cost (RC) profit before interest and tax, excluding net
adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs
(net of adjusting items). Adjusted EBITDA by business is a further
analysis of adjusted EBITDA for the customers & products
businesses. bp believes it is helpful to disclose adjusted EBITDA
by operating segment and by business because it reflects how the
segments measure underlying business delivery. The nearest
equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or
loss that is required to be disclosed for each operating segment
under IFRS. A reconciliation to IFRS
information is provided on page 31 for the
customers & products businesses.
Adjusted EBITDA for the group is
defined as profit or loss for the period, adjusting for finance
costs and net finance (income) or expense relating to pensions and
other post-retirement benefits and taxation, inventory holding
gains or losses before tax, net adjusting items before interest and
tax, and adding back depreciation, depletion and amortization
(pre-tax) and exploration expenditure written-off (net of adjusting
items, pre-tax). The nearest equivalent measure on an IFRS basis
for the group is profit or loss for the period. A reconciliation to IFRS information is provided on
page 30 for the group.
Top of
page 35
Glossary (continued)
Adjusting items are items that
bp discloses separately because it considers such disclosures to be
meaningful and relevant to investors. They are items that
management considers to be important to period-on-period analysis
of the group's results and are disclosed in order to enable
investors to better understand and evaluate the group's reported
financial performance. Adjusting items include gains and losses on
the sale of businesses and fixed assets, impairments, environmental
and other provisions and charges, restructuring, integration and
rationalization costs, fair value accounting effects, financial
impacts relating to Rosneft for the 2022 financial reporting period
and costs relating to the Gulf of Mexico oil spill and other items.
Adjusting items within equity-accounted earnings are reported net
of incremental income tax reported by the equity-accounted entity.
Adjusting items are used as a reconciling adjustment to derive
underlying RC profit or loss and related underlying measures which
are non-IFRS measures. An analysis of adjusting items by segment
and type is shown on page
27.
Blue hydrogen - Hydrogen made
from natural gas in combination with carbon capture and storage
(CCS).
Capital expenditure is total
cash capital expenditure as stated in the condensed group cash flow
statement. Capital expenditure for the operating segments, gas
& low carbon energy businesses and customers & products
businesses is presented on the same basis.
Cash balance point is
defined as the implied Brent oil price 2021 real
to balance bp's sources and uses of cash assuming an average bp
refining marker margin around $11/bbl and Henry Hub at $3/mmBtu in
2021 real terms.
Consolidation adjustment - UPII is unrealized profit in inventory arising on inter-segment
transactions.
Convenience gross margin is a
non-IFRS measure. It is calculated as RC profit before interest and
tax for the customers & products segment, excluding RC profit
before interest and tax for the refining & trading business (a
non-IFRS measure), and adjusting items* (as defined above) for the
convenience & mobility business to derive underlying RC profit
before interest and tax for the convenience & mobility
business; subtracting underlying RC profit before interest and tax
for the Castrol business; adding back depreciation, depletion and
amortization, production and manufacturing, distribution and
administration expenses for convenience & mobility (excluding
Castrol); subtracting earnings from equity-accounted entities in
the convenience & mobility business (excluding Castrol) and
gross margin for the retail fuels, EV charging, aviation, B2B and
midstream businesses. bp believes it is helpful because this
measure may help investors to understand and evaluate, in the same
way as management, our progress against our strategic objectives of
convenience growth. The nearest IFRS measure is RC profit before
interest and tax for the customers & products segment. A
reconciliation of RC profit before interest and tax for the
customers & products segment to convenience gross margin is
provided on page
32.
Convenience gross margin growth - convenience gross margin growth at constant foreign exchange
is a non-IFRS measure. This metric requires a calculation of the
comparative convenience gross margin ($ million) at current period
foreign exchange rates (constant foreign exchange) and compares the
current period value with the restated comparative period value,
which results in the growth % at constant foreign exchange rates.
bp believes the convenience gross margin growth at constant foreign
exchange are useful measures because these measures may help
investors to understand and evaluate, in the same way as
management, our progress against our strategic objectives of
redefining convenience. The nearest IFRS measure to convenience
gross margin is RC profit before interest and tax for the customer
& products segment.
Developed renewables to final investment decision
(FID) - Total generating capacity
for assets developed to FID by all entities where bp has an equity
share (proportionate to equity share). If asset is subsequently
sold bp will continue to record capacity as developed to FID. If bp
equity share increases developed capacity to FID will increase
proportionately to share increase for any assets where bp held
equity at the point of FID.
Divestment proceeds are
disposal proceeds as per the condensed group cash flow
statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-IFRS measure. The ETR
on RC profit or loss is calculated by dividing taxation on a RC
basis by RC profit or loss before tax. Taxation on a RC basis for
the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and
losses. Information on RC profit or loss is provided below. bp
believes it is helpful to disclose the ETR on RC profit or loss
because this measure excludes the impact of price changes on the
replacement of inventories and allows for more meaningful
comparisons between reporting periods. Taxation on a RC basis and
ETR on RC profit or loss are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss
for the period.
Electric vehicle charge points / EV charge
points are defined as the number of
connectors on a charging device, operated by either bp or a bp
joint venture as adjusted to be reflective of bp's accounting share
of joint arrangements.
Fair value accounting effects are non-IFRS adjustments to our IFRS profit (loss). They
reflect the difference between the way bp manages the economic
exposure and internally measures performance of certain activities
and the way those activities are measured under IFRS. Fair value
accounting effects are included within adjusting items. They relate
to certain of the group's commodity, interest rate and currency
risk exposures as detailed below. Other than as noted below, the
fair value accounting effects described are reported in both the
gas & low carbon energy and customer & products
segments.
bp uses derivative instruments to
manage the economic exposure relating to inventories above normal
operating requirements of crude oil, natural gas and petroleum
products. Under IFRS, these inventories are recorded at historical
cost. The related derivative instruments, however, are required to
be recorded at fair value with gains and losses recognized in the
income statement. This is because hedge accounting is either not
permitted or not followed, principally due to the impracticality of
effectiveness-testing requirements. Therefore, measurement
differences in relation to recognition of gains and losses occur.
Gains and losses on these inventories, other than net realizable
value provisions, are not recognized until the commodity is sold in
a subsequent accounting period. Gains and losses on the related
derivative commodity contracts are recognized in the income
statement, from the time the derivative commodity contract is
entered into, on a fair value basis using forward prices consistent
with the contract maturity.
Top of
page 36
Glossary (continued)
bp enters into physical commodity
contracts to meet certain business requirements, such as the
purchase of crude for a refinery or the sale of bp's gas
production. Under IFRS these physical contracts are treated as
derivatives and are required to be fair valued when they are
managed as part of a larger portfolio of similar transactions.
Gains and losses arising are recognized in the income statement
from the time the derivative commodity contract is entered
into.
IFRS require that inventory held for
trading is recorded at its fair value using period-end spot prices,
whereas any related derivative commodity instruments are required
to be recorded at values based on forward prices consistent with
the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices,
resulting in measurement differences.
bp enters into contracts for
pipelines and other transportation, storage capacity, oil and gas
processing, liquefied natural gas (LNG) and certain gas and power
contracts that, under IFRS, are recorded on an accruals basis.
These contracts are risk-managed using a variety of derivative
instruments that are fair valued under IFRS. This results in
measurement differences in relation to recognition of gains and
losses.
The way that bp manages the economic
exposures described above, and measures performance internally,
differs from the way these activities are measured under IFRS. bp
calculates this difference for consolidated entities by comparing
the IFRS result with management's internal measure of performance.
We believe that disclosing management's estimate of this difference
provides useful information for investors because it enables
investors to see the economic effect of these activities as a
whole.
These include:
•
Under management's internal measure of performance the inventory,
transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end
of the period.
• Fair
value accounting effects also include changes in the fair value of
the near-term portions of LNG contracts that fall within bp's risk
management framework. LNG contracts are not considered derivatives,
because there is insufficient market liquidity, and they are
therefore accrual accounted under IFRS. However, oil and natural
gas derivative financial instruments used to risk manage the
near-term portions of the LNG contracts are fair valued under IFRS.
The fair value accounting effect, which is reported in the gas and
low carbon energy segment, represents the change in value of LNG
contacts that are being risk managed and which is reflected in the
underlying result, but not in reported earnings. Management
believes that this gives a better representation of performance in
each period.
Furthermore, the fair values of
derivative instruments used to risk manage certain other oil, gas,
power and other contracts, are deferred to match with the
underlying exposure. The commodity contracts for business
requirements are accounted for on an accruals basis.
In addition, fair value accounting
effects include changes in the fair value of derivatives entered
into by the group to manage currency exposure and interest rate
risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which were issued on 17 June 2020
are classified as equity instruments and were recorded in the
balance sheet at that date at their USD equivalent issued value.
Under IFRS these equity instruments are not remeasured from period
to period, and do not qualify for application of hedge accounting.
The derivative instruments relating to the hybrid bonds, however,
are required to be recorded at fair value with mark to market gains
and losses recognized in the income statement. Therefore,
measurement differences in relation to the recognition of gains and
losses occur. The fair value accounting effect, which is reported
in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial
instruments that are recognized in the income statement. We
believe that this gives a better representation of performance, by
more appropriately reflecting the economic effect of these risk
management activities, in each period.
Gas & low carbon energy segment comprises our gas and low carbon businesses. Our gas
business includes regions with upstream activities that
predominantly produce natural gas, integrated gas and power, and
gas trading. Our low carbon business includes solar, offshore and
onshore wind, hydrogen and CCS and power trading. Power trading
includes trading of both renewable and non-renewable
power.
Gearing and net debt are
non-IFRS measures. Net debt is calculated as finance debt, as shown
in the balance sheet, plus the fair value of associated derivative
financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for
which hedge accounting is applied, less cash and cash equivalents.
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement. Gearing is defined as
the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors.
Net debt enables investors to see the economic effect of finance
debt, related hedges and cash and cash equivalents in total.
Gearing enables investors to see how significant net debt is
relative to total equity. The derivatives are reported on the
balance sheet within the headings 'Derivative financial
instruments'. The nearest equivalent measures on an IFRS basis are
finance debt and finance debt ratio. A reconciliation of finance
debt to net debt is provided on page
25.
We are unable to present
reconciliations of forward-looking information for net debt or
gearing to finance debt and total equity, because without
unreasonable efforts, we are unable to forecast accurately certain
adjusting items required to present a meaningful comparable IFRS
forward-looking financial measure. These items include fair value
asset (liability) of hedges related to finance debt and cash and
cash equivalents, that are difficult to predict in advance in order
to include in an IFRS estimate.
Top of
page 37
Glossary (continued)
Gearing including leases and net debt including
leases are non-IFRS measures. Net
debt including leases is calculated as net debt plus lease
liabilities, less the net amount of partner receivables and
payables relating to leases entered into on behalf of joint
operations. Gearing including leases is defined as the ratio of net
debt including leases to the total of net debt including leases
plus total equity. bp believes these measures provide useful
information to investors as they enable investors to understand the
impact of the group's lease portfolio on net debt and gearing. The
nearest equivalent measures on an IFRS basis are finance debt and
finance debt ratio. A reconciliation of finance debt to net debt
including leases is provided on page
28.
Green hydrogen - Hydrogen
produced by electrolysis of water using renewable power.
Hydrocarbons - Liquids and
natural gas. Natural gas is converted to oil equivalent at 5.8
billion cubic feet = 1 million barrels.
Hydrogen pipeline - Hydrogen
projects which have not been developed to final investment decision
(FID) but which have advanced to the concept development
stage.
Inorganic capital expenditure is a subset of capital expenditure on a cash basis and a
non-IFRS measure. Inorganic capital expenditure comprises
consideration in business combinations and certain other
significant investments made by the group. It is reported on a cash
basis. bp believes that this measure provides useful information as
it allows investors to understand how bp's management invests funds
in projects which expand the group's activities through
acquisition. The nearest equivalent measure on an IFRS basis is
capital expenditure on a cash basis. Further information and a
reconciliation to IFRS information is provided on page 26.
Installed renewables capacity is bp's share of capacity for operating assets owned by
entities where bp has an equity share.
Inventory holding gains and losses are non-IFRS adjustments to our IFRS profit (loss) and
represent:
a. the
difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
b. an
adjustment relating to certain trading inventories that are not
price risk managed which relate to a minimum inventory volume that
is required to be held to maintain underlying business activities.
This adjustment represents the movement in fair value of the
inventories due to prices, on a grade by grade basis, during the
period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not
separately reflected in the financial statements as a gain or loss.
No adjustment is made in respect of the cost of inventories held as
part of a trading position and certain other temporary inventory
positions that are price risk-managed. See Replacement cost (RC)
profit or loss definition below.
Liquids - Liquids comprises
crude oil, condensate and natural gas liquids. For the oil
production & operations segment, it also includes
bitumen.
Major projects have a bp net
investment of at least $250 million, or are considered to be of
strategic importance to bp or of a high degree of
complexity.
Operating cash flow is net cash
provided by (used in) operating activities as stated in the
condensed group cash flow statement.
Organic capital expenditure is
a non-IFRS measure. Organic capital expenditure comprises capital
expenditure on a cash basis less inorganic capital expenditure. bp
believes that this measure provides useful information as it allows
investors to understand how bp's management invests funds in
developing and maintaining the group's assets. The nearest
equivalent measure on an IFRS basis is capital expenditure on a
cash basis and a reconciliation to IFRS information is provided on
page 26.
We are unable to present
reconciliations of forward-looking information for organic capital
expenditure to total cash capital expenditure, because without
unreasonable efforts, we are unable to forecast accurately the
adjusting item, inorganic capital expenditure, that is difficult to
predict in advance in order to derive the nearest IFRS
estimate.
Production-sharing agreement/contract (PSA/PSC)
is an arrangement through which an oil and gas
company bears the risks and costs of exploration, development and
production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of
hydrocarbons, representing recovery of the costs incurred and a
stipulated share of the production remaining after such cost
recovery.
Top of
page 38
Glossary (continued)
Realizations are the result of
dividing revenue generated from hydrocarbon sales, excluding
revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes.
Revenue generating hydrocarbon production reflects the bp share of
production as adjusted for any production which does not generate
revenue. Adjustments may include losses due to shrinkage, amounts
consumed during processing, and contractual or regulatory host
committed volumes such as royalties. For the gas & low carbon
energy and oil production & operations segments, realizations
include transfers between businesses.
Refining availability represents Solomon Associates' operational availability for
bp-operated refineries, which is defined as the percentage of the
year that a unit is available for processing after subtracting the
annualized time lost due to turnaround activity and all planned
mechanical, process and regulatory downtime.
The Refining marker margin
(RMM) is the average of regional indicator margins
weighted for bp's crude refining capacity in each region. Each
regional marker margin is based on product yields and a marker
crude oil deemed appropriate for the region. The regional indicator
margins may not be representative of the margins achieved by bp in
any period because of bp's particular refinery configurations and
crude and product slate.
Renewables pipeline - Renewable
projects satisfying the following criteria until the point they can
be considered developed to final investment decision (FID): Site
based projects that have obtained land exclusivity rights, or for
power purchase agreement based projects an offer has been made to
the counterparty, or for auction projects pre-qualification
criteria has been met, or for acquisition projects post a binding
offer being accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of inventories sold in the
period and is calculated as profit or loss attributable to bp
shareholders, adjusting for inventory holding gains and losses (net
of tax). RC profit or loss for the group is not a recognized IFRS
measure. bp believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our
reported result under IFRS can be significant. Inventory holding
gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order
for investors to understand the operating performance of the group
excluding the impact of price changes on the replacement of
inventories, and to make comparisons of operating performance
between reporting periods, bp's management believes it is helpful
to disclose this measure. The nearest equivalent measure on an IFRS
basis is profit or loss attributable to bp shareholders. A
reconciliation to IFRS information is provided on
page 1. RC profit or loss before interest and tax is bp's measure of
profit or loss that is required to be disclosed for each operating
segment under IFRS.
Reported recordable injury frequency
measures the number of reported work-related
employee and contractor incidents that result in a fatality or
injury per 200,000 hours worked. This represents reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported incidents are investigated
throughout the year and as a result there may be changes in
previously reported incidents. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of
such investigations, rather than the previously reported
comparative period, as this represents a more up to date reflection
of the safety environment.
Reserves replacement ratio -
the extent to which the year's production has been replaced by
proved reserves added to our reserve base. The ratio is expressed
in oil-equivalent terms and includes changes resulting from
discoveries, improved recovery and extensions and revisions to
previous estimates, but excludes changes resulting from
acquisitions and disposals.
Retail sites include sites
operated by dealers, jobbers, franchisees or brand licensees or
joint venture (JV) partners, under the bp brand. These may move to
and from the bp brand as their fuel supply agreement or brand
licence agreement expires and are renegotiated in the normal course
of business. Retail sites are primarily branded bp, ARCO, Amoco, Aral, Thorntons and TravelCenters of America and also
includes sites in India through our Jio-bp JV.
Return on average capital employed (ROACE)
is a non-IFRS measure and is defined as underlying
replacement cost profit, which is defined as profit or loss
attributable to bp shareholders adjusted for inventory holding
gains and losses, adjusting items and related taxation on inventory
holding gains and losses and adjusting items total taxation, after
adding back non-controlling interest and interest expense net of
tax, divided by the average of the beginning and ending balances of
total equity plus finance debt, excluding cash and cash equivalents
and goodwill as presented on the group balance sheet over the
periods presented. Interest expense before tax is finance
costs as presented on the group income statement, excluding lease
interest, the unwinding of the discount on provisions and other
payables and other adjusting items reported in finance costs. bp
believes it is helpful to disclose the ROACE because this measure
gives an indication of the company's capital efficiency. The
nearest IFRS measures of the numerator and denominator are profit
or loss for the period attributable to bp shareholders and total
equity respectively. The reconciliation of the numerator and
denominator is provided on page 31.
Solomon availability - See
Refining availability definition.
Strategic convenience sites are
retail sites, within the bp portfolio, which sell bp-supplied
vehicle energy (e.g. bp,
Aral, Arco, Amoco, Thorntons, bp pulse, TA and PETRO) and
either carry one of the strategic convenience brands (e.g. M&S,
Rewe to Go) or a differentiated bp-controlled convenience offer. To
be considered a strategic convenience site, the convenience offer
should have a demonstrable level of differentiation in the market
in which it operates. Strategic convenience site count includes
sites under a pilot phase.
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Glossary (continued)
Surplus cash flow does not
represent the residual cash flow available for discretionary
expenditures. It is a non-IFRS financial measure that should be
considered in addition to, not as a substitute for or superior to,
net cash provided by operating activities, reported in accordance
with IFRS. bp believes it is helpful to disclose the surplus cash
flow because this measure forms part of bp's financial
frame.
Surplus cash flow refers to the net
surplus of sources of cash over uses of cash, after reaching the
$35 billion net debt target. Sources of cash include net cash
provided by operating activities, cash provided from investing
activities and cash receipts relating to transactions involving
non-controlling interests. Uses of cash include lease liability
payments, payments on perpetual hybrid bond, dividends paid, cash
capital expenditure, the cash cost of share buybacks to offset the
dilution from vesting of awards under employee share schemes, cash
payments relating to transactions involving non-controlling
interests and currency translation differences relating to cash and
cash equivalents as presented on the condensed group cash flow
statement.
For the full year of 2022, the
sources of cash includes other proceeds related to the proceeds
from the disposal of a loan note related to the Alaska divestment.
The cash was received in the fourth quarter 2021, was reported as a
financing cash flow and was not included in other proceeds at the
time due to potential recourse from the counterparty. The proceeds
are being recognized as the potential recourse reduces.
See page 29 for the
components of our sources of cash and uses of cash.
Technical service contract (TSC) - Technical service contract is an arrangement through which
an oil and gas company bears the risks and costs of exploration,
development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin
which reflects incremental production added to the
oilfield.
Tier 1 and tier 2 process safety events
- Tier 1 events are losses of primary containment
from a process of greatest consequence - causing harm to a member
of the workforce, damage to equipment from a fire or explosion, a
community impact or exceeding defined quantities. Tier 2 events are
those of lesser consequence. These represent reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported process safety events are
investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this represents a more up to date
reflection of the safety environment.
Transition growth engine(s) -
means, as applicable, one or more of bp's five transition growth
engines which are bioenergy, convenience, EV charging, hydrogen and
renewables and power. Bioenergy, convenience and EV charging are
reported within the customers & products segment, and hydrogen
and renewables and power are reported within the gas & low
carbon energy segment.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR is calculated by
dividing taxation on an underlying replacement cost (RC) basis by
underlying RC profit or loss before tax. Taxation on an underlying
RC basis for the group is calculated as taxation as stated on the
group income statement adjusted for taxation on inventory holding
gains and losses and total taxation on adjusting items. Information
on underlying RC profit or loss is provided below. Taxation on an
underlying RC basis presented for the operating segments is
calculated through an allocation of taxation on an underlying RC
basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to
understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period. Taxation on an underlying RC basis and
underlying ETR are non-IFRS measures. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
We are unable to present
reconciliations of forward-looking information for underlying ETR
to ETR on profit or loss for the period, because without
unreasonable efforts, we are unable to forecast accurately certain
adjusting items required to present a meaningful comparable IFRS
forward-looking financial measure. These items include the taxation
on inventory holding gains and losses and adjusting items, that are
difficult to predict in advance in order to include in an IFRS
estimate.
Underlying production - 2023
underlying production, when compared with 2022, is production after
adjusting for acquisitions and divestments, curtailments, and
entitlement impacts in our production-sharing agreements/contracts
and technical service contract*.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a
non-IFRS measure and is RC profit or loss* (as defined on
page 38) after excluding net adjusting
items and related taxation. See page 27 for
additional information on the adjusting items that are used to
arrive at underlying RC profit or loss in order to enable a full
understanding of the items and their financial impact.
Underlying RC profit or loss before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating
segments and excluding net adjusting items for the respective
operating segment or business.
bp believes that underlying RC
profit or loss is a useful measure for investors because it is a
measure closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions and because it may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp's operational performance on a comparable basis, period on
period, by adjusting for the effects of these adjusting items. The
nearest equivalent measure on an IFRS basis for the group is profit
or loss attributable to bp shareholders. The nearest equivalent
measure on an IFRS basis for segments and businesses is RC profit
or loss before interest and taxation. A
reconciliation to IFRS information is provided on page 1 for the group and pages
6-14 for the segments.
Top of
page 40
Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit
or loss per ADS is a non-IFRS
measure. Earnings per share is defined in Note
7. Underlying RC profit or loss per ordinary share is
calculated using the same denominator as earnings per share as
defined in the consolidated financial statements. The numerator
used is underlying RC profit or loss attributable to bp
shareholders rather than profit or loss attributable to bp
shareholders. Underlying RC profit or loss per ADS is calculated as
outlined above for underlying RC profit or loss per share except
the denominator is adjusted to reflect one ADS equivalent to six
ordinary shares. bp believes it is helpful to disclose the
underlying RC profit or loss per ordinary share and per ADS because
these measures may help investors to understand and evaluate, in
the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period.
The nearest equivalent measure on an IFRS basis is basic earnings
per share based on profit or loss for the period attributable to bp
shareholders.
upstream includes oil and
natural gas field development and production within the gas &
low carbon energy and oil production & operations
segments.
upstream/hydrocarbon plant reliability
(bp-operated) is calculated taking 100% less the
ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and bpx energy.
Unplanned plant deferrals are associated with the topside plant and
where applicable the subsea equipment (excluding wells and
reservoir). Unplanned plant deferrals include breakdowns, which
does not include Gulf of Mexico weather related
downtime.
upstream unit production costs are calculated as production cost divided by units of
production. Production cost does not include ad valorem and
severance taxes. Units of production are barrels for liquids and
thousands of cubic feet for gas. Amounts disclosed are for bp
subsidiaries only and do not include bp's share of equity-accounted
entities.
Working capital is movements in
inventories and other current and non-current assets and
liabilities as reported in the condensed group cash flow
statement.
Change in working capital adjusted
for inventory holding gains/losses, fair value accounting effects
relating to subsidiaries and other adjusting items is a non-IFRS
measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period; fair value accounting effects
relating to subsidiaries reported within adjusting items for the
period; and other adjusting items relating to the non-cash movement
of US emissions obligations carried as a provision that will be
settled by allowances held as inventory. This represents what would
have been reported as movements in inventories and other current
and non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been
underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities.
bp utilizes various arrangements in
order to manage its working capital including discounting of
receivables and, in the supply and trading business, the active
management of supplier payment terms, inventory and
collateral.
Trade marks
Trade marks of the bp group appear
throughout this announcement. They include:
bp, Amoco, Aral, bp pulse, Castrol, PETRO, TA and Thorntons
Top of
page 41
Cautionary statement
In
order to utilize the 'safe harbor' provisions of the United States
Private Securities Litigation Reform Act of 1995 (the 'PSLRA') and
the general doctrine of cautionary statements, bp is providing the
following cautionary statement:
The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is,
statements related to future, not past events and circumstances -
with respect to the financial condition, results of operations and
businesses of bp and certain of the plans and objectives of bp with
respect to these items. These statements may generally, but not
always, be identified by the use of words such as 'will',
'expects', 'is expected to', 'aims', 'should', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we
see' or similar expressions.
In
particular, the following, among other statements, are all forward
looking in nature: plans, expectations and assumptions regarding
oil and gas demand, supply, prices or volatility; expectations
regarding reserves; expectations regarding production and volumes;
expectations regarding bp's customers & products business;
expectations regarding margins; expectations regarding turnaround
and maintenance activity; expectations regarding financial
performance, results of operations and cash flows; expectations
regarding future project start-ups; bp's plans regarding
transforming to an IEC; price assumptions used in accounting
estimates; bp's plans and expectations regarding the amount and
timing of share buybacks and dividends; plans and expectations
regarding bp's credit rating, including in respect of maintaining a
strong investment grade credit rating and targeting further
improvements in credit metrics; plans and expectations regarding
the allocation of surplus cash flow to share buybacks and
strengthening the balance sheet; plans and expectations with
respect to the total depreciation, depletion and amortization and
the other businesses & corporate underlying annual charge for
2024; plans and expectations regarding LNG sales; plans and
expectations regarding investments, collaborations and partnerships
in electric vehicle (EV) charging infrastructure and generative
artificial intelligence; plans and expectations related to bp's
transition growth engines, including expected capital expenditures;
expectations relating to bp's development of its wind pipeline,
including pursuit of US offshore wind opportunities; plans and
expectations regarding the amount or timing of payments related to
divestment and other proceeds, and the timing, quantum and nature
of certain acquisitions and divestments; expectations regarding the
underlying effective tax rate for 2024, exposure to Pillar Two
income taxes and the tax impacts of UK regulations, including the
UK Energy Profits Levy and the reduction in the authorized surplus
payments charge applicable to defined benefit pension schemes;
expectations regarding the timing and amount of future payments
relating to the Gulf of Mexico oil spill; plans and expectations
regarding capital expenditure for 2024; expectations regarding
greenhouse gas emissions; expectations regarding legal proceedings,
including those related to the Louisiana coastal restoration and
climate change; plans and expectations regarding bp-operated
projects and ventures, and its projects, joint ventures,
partnerships and agreements with commercial entities and other
third party partners, including expectations related to the
restructuring of the Atlantic LNG joint venture.
By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp.
Actual results or outcomes, may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the effects of
bp's plan to exit its shareholding in Rosneft and other investments
in Russia, overall global economic and business conditions
impacting bp's business and demand for bp's products as well as the
specific factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and
societal expectations; the pace of development and adoption of
alternative energy solutions; developments in policy, law,
regulation, technology and markets, including societal and investor
sentiment related to the issue of climate change; the receipt of
relevant third party and/or regulatory approvals; the timing and
level of maintenance and/or turnaround activity; the timing and
volume of refinery additions and outages; the timing of bringing
new fields onstream; the timing, quantum and nature of certain
acquisitions and divestments; future levels of industry product
supply, demand and pricing, including supply growth in North
America and continued base oil and additive supply shortages; OPEC+
quota restrictions; PSA and TSC effects; operational and safety
problems; potential lapses in product quality; economic and
financial market conditions generally or in various countries and
regions; political stability and economic growth in relevant areas
of the world; changes in laws and governmental regulations and
policies, including related to climate change; changes in social
attitudes and customer preferences; regulatory or legal actions
including the types of enforcement action pursued and the nature of
remedies sought or imposed; the actions of prosecutors, regulatory
authorities and courts; delays in the processes for resolving
claims; amounts ultimately payable and timing of payments relating
to the Gulf of Mexico oil spill; exchange rate fluctuations;
development and use of new technology; recruitment and retention of
a skilled workforce; the success or otherwise of partnering; the
actions of competitors, trading partners, contractors,
subcontractors, creditors, rating agencies and others; bp's access
to future credit resources; business disruption and crisis
management; the impact on bp's reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major
uninsured losses; the possibility that international sanctions or
other steps taken by competent authorities or any other relevant
persons may impact bp's ability to sell its interests in Rosneft,
or the price for which it could sell such interests; the actions of
contractors; natural disasters and adverse weather conditions;
changes in public expectations and other changes to business
conditions; wars and acts of terrorism; cyber-attacks or sabotage;
and those factors discussed under "Principal risks and
uncertainties" in bp's Report on Form 6-K regarding results for the
six-month period ended 30 June 2023 as filed with the US Securities
and Exchange Commission (the "SEC") as well as those factors
discussed under "Risk factors" in bp's Annual Report and Form 20-F
for fiscal year 2022 as filed with the SEC.
This
announcement contains inside information. The person responsible
for arranging the release of this announcement on behalf of BP
p.l.c. is Ben Mathews, Company Secretary.
Top of
page 42
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