BP p.l.c. / Key word(s): Quarterly / Interim Statement
BP PLC: 1Q24
07.05.2024 / 08:10 CET/CEST
The issuer is solely responsible for the content of this
announcement.
Top of page 1
FOR IMMEDIATE RELEASE |
|
London 7 May 2024 |
|
BP p.l.c. Group results |
First quarter 2024 |
“For a printer friendly version of this announcement please
click on the link below to open a PDF version of the
announcement”
http://www.rns-pdf.londonstockexchange.com/rns/3361N_1-2024-5-6.pdf
Resilient performance, committed distributions |
Financial summary |
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit for the period attributable to bp
shareholders |
|
2,263 |
371 |
8,218 |
Inventory holding (gains) losses*, net of tax |
|
(657) |
1,155 |
452 |
Replacement cost (RC) profit* |
|
1,606 |
1,526 |
8,670 |
Net (favourable) adverse impact of adjusting
items*, net of tax |
|
1,117 |
1,465 |
(3,707) |
Underlying RC profit* |
|
2,723 |
2,991 |
4,963 |
Operating cash flow* |
|
5,009 |
9,377 |
7,622 |
Capital expenditure* |
|
(4,278) |
(4,711) |
(3,625) |
Divestment and other proceeds(a) |
|
413 |
300 |
800 |
Net issue (repurchase) of shares |
|
(1,750) |
(1,350) |
(2,448) |
Net debt*(b) |
|
24,015 |
20,912 |
21,232 |
Adjusted EBITDA* |
|
10,306 |
10,568 |
13,066 |
Announced dividend per ordinary share (cents per
share) |
|
7.270 |
7.270 |
6.610 |
Underlying RC profit per ordinary share*
(cents) |
|
16.24 |
17.77 |
27.74 |
Underlying RC profit per ADS* (dollars) |
|
0.97 |
1.07 |
1.66 |
Highlights
- Resilient financial and operational performance:
Adjusted EBITDA $10.3 billion; underlying RC profit $2.7 billion;
upstream* production grew +2.1% vs 1Q23; start up of new Azeri
Central East (ACE) platform in Caspian Sea
- Growing shareholder distributions: 1Q24 $1.75 billion
share buyback announced as part of our $3.5 billion commitment for
the first half of 2024; Dividend per ordinary share of 7.270
cents
- Focus on delivering our six priorities: announcement
to simplify organizational structure; target to deliver at least $2
billion of cash cost* savings by the end of 2026
We've delivered another resilient quarter
financially and continued to make progress on our strategy. Oil
production was up and our ACE platform in the Caspian is now
producing. We are simplifying and reducing complexity across bp and
plan to deliver at least $2 billion of cash cost savings by the end
of 2026 through high grading our portfolio, digital transformation,
supply chain efficiencies and global capability hubs. |
|
Murray Auchincloss
Chief executive officer |
|
- Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. There were no other proceeds for all
periods stated.
- See Note 9 for more information.
RC profit, underlying RC profit, net debt, adjusted EBITDA,
underlying RC profit per ordinary share and underlying RC profit
per ADS are non-IFRS measures. Inventory holding (gains) losses and
adjusting items are non-IFRS adjustments.
* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page 30.
Top of page 2
|
bp reported solid financial performance in the
first quarter with adjusted EBITDA* of $10.3 billion and underlying
replacement cost profit of $2.7 billion. Our financial frame is
unchanged, and we are delivering competitive shareholder
distributions, announcing a $1.75 billion share buyback for the
first quarter as part of our commitment of $3.5 billion for the
first half of 2024. |
Kate Thomson Chief financial
officer |
|
|
Highlights |
|
|
1Q24 underlying replacement cost
(RC) profit* $2.7 billion |
|
|
|
Underlying RC profit for the quarter was $2.7
billion, compared with $3.0 billion for the previous quarter.
Compared with the fourth quarter 2023, the result reflects lower
oil and gas realizations, the impacts of the Whiting refinery
outage and significantly weaker fuels margin, partially offset by
significantly lower level of turnaround activity, a strong oil
trading result and higher realized refining margins. The underlying
effective tax rate (ETR)* in the quarter was 43%. |
|
|
|
Reported profit for the quarter was $2.3 billion,
compared with $0.4 billion for the fourth quarter 2023. The
reported result for the first quarter is adjusted for inventory
holding gains* of $0.7 billion (net of tax) and a net adverse
impact of adjusting items* of $1.1 billion (net of tax) to derive
the underlying RC profit. Adjusting items pre-tax include net
impairment charges of $0.6 billion, largely as a result of
regulatory and portfolio changes, and adverse fair value accounting
effects* of $0.2 billion. |
|
|
Segment results |
|
|
|
Gas & low carbon energy: The RC profit before
interest and tax for the first quarter 2024 was $1.0 billion,
compared with $2.2 billion for the previous quarter. After
adjusting RC profit before interest and tax for a net adverse
impact of adjusting items of $0.6 billion, the underlying RC
profit before interest and tax* for the first quarter was
$1.7 billion, compared with $1.8 billion in the fourth
quarter 2023. The first quarter underlying result reflects lower
realizations and foreign exchange losses on Egyptian pound
balances, partially offset by lower exploration write-offs. Gas
marketing and trading was strong following a strong result in the
fourth quarter. |
|
|
|
Oil production & operations: The RC profit
before interest and tax for the first quarter 2024 was
$3.1 billion, compared with $1.9 billion for the previous
quarter. After adjusting RC profit before interest and tax for a
net adverse impact of adjusting items of $0.1 billion, the
underlying RC profit before interest and tax for the first quarter
was $3.1 billion, compared with $3.5 billion in the
fourth quarter 2023. The first quarter underlying result reflects
lower realizations, partially offset by higher
production. |
|
|
|
Customers & products: The RC profit before
interest and tax for the first quarter 2024 was $1.0 billion,
compared with a loss of $0.6 billion for the previous quarter.
After adjusting RC profit before interest and tax for a net adverse
impact of adjusting items of $0.3 billion, the underlying RC
profit before interest and tax for the first quarter was
$1.3 billion, compared with $0.8 billion in the fourth
quarter 2023. The customers first quarter underlying result was
lower by $0.5 billion, reflecting significantly weaker fuels
margin, seasonally lower volumes, and the absence of one-off
positive effects that benefited the prior quarter, partly offset by
lower costs. The products first quarter underlying result was
higher by $1.0 billion, reflecting higher realized refining
margins, a significantly lower level of turnaround activity and
higher commercial optimization, partially offset by the impacts of
the Whiting refinery outage. The oil trading contribution was
strong following a weak result in the fourth quarter. |
|
|
Operating cash flow* $5.0
billion |
|
|
|
Operating cash flow in the quarter of $5.0 billion
includes a working capital* build (after adjusting for inventory
holding gains, fair value accounting effects and other adjusting
items) of $2.4 billion, reflecting seasonal inventory effects,
timing of various payments and the price environment. (see page
27). |
|
|
Delivering the next wave of
efficiencies - at least $2 billion cash cost* savings |
|
|
|
bp has a target to deliver at least $2 billion of
cash cost savings by the end of 2026 relative to 2023. The
reduction is expected to result from cost-saving measures across
bp’s business underpinned by high-grading the portfolio, digital
transformation, supply chain efficiencies and global capability
hubs. Some of these cost savings may have associated restructuring
charges. |
|
|
Further $1.75 billion share buyback
announced for 1Q24; $3.5 billion for first half 2024
unchanged |
|
|
|
The $1.75 billion share buyback programme
announced with the fourth quarter results was completed on 3 May
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 first quarter, bp has
announced a dividend per ordinary share of 7.270 cents. |
|
|
|
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 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. |
|
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
36. |
Top of page 3
Financial results
In addition to the highlights on page 2:
- Profit attributable to bp shareholders in the first quarter was
$2.3 billion, compared with a profit of $8.2 billion in
the same period of 2023.
- After adjusting profit attributable to bp shareholders for
inventory holding gains* and net impact of adjusting items*,
underlying replacement cost (RC) profit* for the first quarter was
$2.7 billion, compared with $5.0 billion for the same
period of 2023. This reduction in underlying RC profit for the
first quarter mainly reflects lower realizations, lower industry
refining margins, a strong gas marketing and trading result
compared with an exceptional result in the first quarter in 2023
and the impacts of the Whiting refinery outage.
- Adjusting items in the first quarter had a net adverse pre-tax
impact of $1.2 billion, compared with a net favourable pre-tax
impact of $3.9 billion in the same period of 2023.
- Adjusting items for the first quarter of 2024 include an
adverse impact of pre-tax fair value accounting effects*, relative
to management's internal measure of performance, of $0.2 billion,
compared with a favourable pre-tax impact of $4.3 billion in
the same period of 2023. This difference is primarily due to a
small decline in the forward price of LNG over the quarter compared
to a large decline in this price during the first quarter of
2023.
- The effective tax rate (ETR) on RC profit or loss* for the
first quarter was 54%, compared with 29% for the same period in
2023. Excluding adjusting items, the underlying ETR* for the first
quarter was 43%, compared with 39% for the same period a year ago.
The higher underlying ETR for the first quarter reflects foreign
exchange impacts which are not tax deductible. ETR on RC profit or
loss and underlying ETR are non-IFRS measures.
- Operating cash flow* for the first quarter was
$5.0 billion, compared with $7.6 billion for the same
period in 2023, reflecting the difference in the underlying RC
profit for the respective periods.
- Capital expenditure* in the first quarter was
$4.3 billion, compared with $3.6 billion in the same
period of 2023.
- Total divestment and other proceeds for the first quarter were
$0.4 billion, compared with $0.8 billion for the same
period in 2023. There were no other proceeds for both periods.
- At the end of the first quarter, net debt* was $24.0 billion,
compared with $20.9 billion at the end of the fourth quarter
2023 and $21.2 billion at the end of the first quarter 2023.
The increase in the net debt is mainly attributable to a working
capital* build.
Top of page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
RC profit (loss) before interest and
tax |
|
|
|
|
gas & low carbon energy |
|
1,036 |
2,169 |
7,347 |
oil production & operations |
|
3,060 |
1,879 |
3,317 |
customers & products |
|
988 |
(554) |
2,680 |
other businesses & corporate |
|
(300) |
(16) |
(90) |
Consolidation adjustment – UPII* |
|
32 |
95 |
(22) |
RC profit before interest and tax |
|
4,816 |
3,573 |
13,232 |
Finance costs and net finance expense relating to
pensions and other post-retirement benefits |
|
(1,034) |
(977) |
(785) |
Taxation on a RC basis |
|
(2,030) |
(1,005) |
(3,573) |
Non-controlling interests |
|
(146) |
(65) |
(204) |
RC profit attributable to bp shareholders* |
|
1,606 |
1,526 |
8,670 |
Inventory holding gains (losses)* |
|
851 |
(1,497) |
(600) |
Taxation (charge) credit on inventory holding
gains and losses |
|
(194) |
342 |
148 |
Profit for the period attributable to bp
shareholders |
|
2,263 |
371 |
8,218 |
Analysis of underlying RC profit (loss) before interest and
tax
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Underlying RC profit (loss) before interest and
tax |
|
|
|
|
gas & low carbon energy |
|
1,658 |
1,777 |
3,456 |
oil production & operations |
|
3,125 |
3,549 |
3,319 |
customers & products |
|
1,289 |
803 |
2,759 |
other businesses & corporate |
|
(154) |
(97) |
(296) |
Consolidation adjustment – UPII |
|
32 |
95 |
(22) |
Underlying RC profit before interest and tax |
|
5,950 |
6,127 |
9,216 |
Finance costs and net finance expense relating to
pensions and other post-retirement benefits |
|
(942) |
(891) |
(681) |
Taxation on an underlying RC basis |
|
(2,139) |
(2,180) |
(3,368) |
Non-controlling interests |
|
(146) |
(65) |
(204) |
Underlying RC profit attributable to bp
shareholders* |
|
2,723 |
2,991 |
4,963 |
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.
Operating Metrics
Operating metrics |
|
First quarter 2024 |
|
vs First quarter 2023 |
Tier 1 and tier 2 process safety
events* |
|
14 |
|
+5 |
Reported recordable injury frequency* |
|
0.218 |
|
+8.9% |
upstream*
production(a) (mboe/d) |
|
2,378 |
|
+2.1% |
upstream unit production
costs*(b) ($/boe) |
|
6.00 |
|
+4.7% |
bp-operated upstream plant
reliability* |
|
94.9% |
|
-0.6 |
bp-operated refining
availability*(a) |
|
90.4% |
|
-5.7 |
- 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.
- Mainly reflecting portfolio mix.
Top of page 5
Outlook & Guidance
2Q 2024 guidance
- Looking ahead, bp expects second quarter 2024 reported
upstream* production to be slightly lower compared with
first-quarter 2024.
- In its customers business, bp expects seasonally higher volumes
and fuels margin to remain sensitive to movements in the cost of
supply.
- In products, bp expects realized margins to be impacted by
narrower North American heavy crude oil differentials, and to
remain sensitive to relative movements in product cracks. In
addition, bp expects the absence of the first quarter plant-wide
power outage at the Whiting refinery to be partly offset by a
higher level of turnaround activity.
2024 guidance
In addition to the guidance on page 2:
- bp continues to expect both reported and underlying upstream
production* to be slightly higher compared with 2023. Within this,
bp continues to expect underlying production from oil production
& operations to be higher and production from gas & low
carbon energy to be lower.
- In its customers business, bp continues to expect 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 continues to
expect fuels margin to remain sensitive to the cost of supply.
- In products, bp continues to expect a lower level of industry
refining margins, with realized margins impacted by narrower North
American heavy crude oil differentials. bp continues to expect
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 continues to expect the other businesses & corporate
underlying annual charge to be around $1.0 billion for 2024. The
charge may vary from quarter to quarter.
- bp continues to expect the depreciation, depletion and
amortization to be slightly higher than 2023.
- bp continues to expect 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 continues to expect capital expenditure* for 2024 to be
around $16 billion, but now expects the phasing to be split broadly
evenly between the first half and the second half.
- bp continues to expect divestment and other proceeds of $2-3
billion in 2024, weighted towards the second half. Having realized
$18.2 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 continues to expect Gulf of Mexico oil spill payments for
the year to be around $1.2 billion pre-tax including $1.1 billion
pre-tax paid during the second quarter.
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
36. |
Top of page 6
gas & low carbon energy*
Financial results
- The replacement cost (RC) profit before interest and tax for
the first quarter was $1,036 million, compared with $7,347 million
for the same period in 2023. The first quarter is adjusted by an
adverse impact of net adjusting items* of $622 million, compared
with a favourable impact of net adjusting items of $3,891 million
for the same period in 2023. Adjusting items include impacts of
fair value accounting effects*, relative to management's internal
measure of performance, which are a favourable impact of $113
million for the first quarter in 2024 and a favourable impact of
$3,934 million for the same period in 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.
- After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the
first quarter was $1,658 million, compared with $3,456 million for
the same period in 2023.
- The underlying RC profit for the first quarter, compared with
the same period in 2023, reflects lower realizations, foreign
exchange losses on Egyptian pound balances, higher exploration
write-offs, and a strong gas marketing and trading result compared
with an exceptional result in the first quarter in 2023.
Operational update
- Reported production for the quarter was 914mboe/d, 5.7% lower
than the same period in 2023. Underlying production* was 3.5%
lower, mainly due to base decline partially offset by major
projects* which started up in 2023. Reported production includes
the effect of the disposal of the Algeria business in 2023.
- Renewables pipeline* at the end of the quarter was 58.5GW (bp
net), including 20.4GW bp net share of Lightsource bp's (LSbp's)
pipeline. The renewables pipeline increased by 0.2GW net during the
quarter. In addition, there is over 9.5GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
- On 14 February, ADNOC and bp announced that they have agreed to
form a new joint venture (JV) in Egypt. The JV (51% bp and 49%
ADNOC) will combine the pair’s deep technical capabilities and
proven track records as it aims to grow a highly competitive gas
portfolio. As part of the agreement, bp will contribute its
interests in three development concessions, as well as exploration
agreements, in Egypt to the new JV. ADNOC will make a proportionate
cash contribution which can be used for future growth
opportunities. Subject to regulatory approvals and clearances, the
formation of the JV is expected to complete during the second half
of 2024.
- On 15 February, the floating liquefied natural gas (FLNG)
vessel that is a core component of the Greater Tortue Ahmeyim (GTA)
LNG project arrived at its destination on the Mauritania and
Senegal maritime border. GTA Phase 1 is operated by bp (56%) with
partners Kosmos Energy, SociétéMauritaniennedesHydrocarbures
andSociété desPétrolesdu Sénégal.
- In April bp and the Korea Gas Corporation signed an agreement
for bp to supply up to 9.8 million tonnes of LNG over an 11 year
period starting in 2026 from bp's global LNG portfolio.
low carbon energy
- Following the announcement in January that bp and Equinor
had signed an agreement under which they would restructure their
investments in their US offshore wind projects, on 4 April, bp
announced it has received all the necessary regulatory approvals
and it is now 100% owner of the Beacon US offshore wind projects
and Equinor the Empire projects.
- On March 15, our UK joint ventures Net Zero Teesside Power (bp
75%, Equinor 25%) and the Northern Endurance Partnership (bp 45%,
Equinor 45%, Total Energies 10%) announced the selection of
contractors for engineering, procurement, and construction
contracts with a combined value of around $5 billion. The final
award of contracts is subject to the receipt of relevant regulatory
clearances and positive Final Investment Decisions (FID) by the
projects and the UK government.
Top of page 7
gas & low carbon energy (continued)
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit before interest and tax |
|
1,036 |
2,169 |
7,348 |
Inventory holding (gains) losses* |
|
— |
— |
(1) |
RC profit before interest and tax |
|
1,036 |
2,169 |
7,347 |
Net (favourable) adverse impact of adjusting
items |
|
622 |
(392) |
(3,891) |
Underlying RC profit before interest and
tax |
|
1,658 |
1,777 |
3,456 |
Taxation on an underlying RC basis |
|
(518) |
(746) |
(961) |
Underlying RC profit before interest |
|
1,140 |
1,031 |
2,495 |
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Depreciation, depletion and
amortization |
|
|
|
|
Total depreciation, depletion and
amortization |
|
1,293 |
1,290 |
1,440 |
|
|
|
|
|
Exploration write-offs |
|
|
|
|
Exploration write-offs |
|
203 |
349 |
(1) |
|
|
|
|
|
Adjusted EBITDA* |
|
|
|
|
Total adjusted EBITDA |
|
3,154 |
3,416 |
4,895 |
|
|
|
|
|
Capital expenditure* |
|
|
|
|
gas |
|
639 |
848 |
647 |
low carbon energy |
|
659 |
478 |
366 |
Total capital expenditure |
|
1,298 |
1,326 |
1,013 |
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
Production (net of
royalties)(a) |
|
|
|
|
Liquids* (mb/d) |
|
102 |
99 |
114 |
Natural gas (mmcf/d) |
|
4,708 |
4,637 |
4,962 |
Total hydrocarbons* (mboe/d) |
|
914 |
899 |
969 |
|
|
|
|
|
Average realizations*(b) |
|
|
|
|
Liquids ($/bbl) |
|
76.92 |
78.87 |
79.44 |
Natural gas ($/mcf) |
|
5.45 |
6.18 |
7.41 |
Total hydrocarbons* ($/boe) |
|
36.64 |
40.17 |
46.95 |
- Includes bp’s share of production of equity-accounted entities
in the gas & low carbon energy segment.
- Realizations are based on sales by consolidated subsidiaries
only – this excludes equity-accounted entities.
Top of page 8
gas & low carbon energy (continued)
|
|
31 March |
31 December |
31 March |
low carbon
energy(c) |
|
2024 |
2023 |
2023 |
|
|
|
|
|
Renewables (bp net, GW) |
|
|
|
|
Installed renewables capacity* |
|
2.7 |
2.7 |
2.2 |
|
|
|
|
|
Developed renewables to FID* |
|
6.2 |
6.2 |
5.9 |
Renewables pipeline |
|
58.5 |
58.3 |
38.8 |
of which by geographical area: |
|
|
|
|
Renewables pipeline – Americas |
|
18.1 |
18.8 |
17.5 |
Renewables pipeline – Asia Pacific |
|
21.3 |
21.3 |
12.2 |
Renewables pipeline – Europe |
|
15.7 |
14.6 |
8.9 |
Renewables pipeline – Other |
|
3.5 |
3.5 |
0.1 |
of which by technology: |
|
|
|
|
Renewables pipeline – offshore wind |
|
9.6 |
9.3 |
5.3 |
Renewables pipeline – onshore wind |
|
12.7 |
12.7 |
6.3 |
Renewables pipeline – solar |
|
36.2 |
36.3 |
27.2 |
Total Developed renewables to FID and
Renewables pipeline |
|
64.7 |
64.5 |
44.7 |
- 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 first quarter was $3,060 million, compared with $3,317 million
for the same period in 2023. The first quarter is adjusted by an
adverse impact of net adjusting items* of $65 million, compared
with an adverse impact of net adjusting items of $2 million for the
same period in 2023.
- After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the
first quarter was $3,125 million, compared with $3,319 million for
the same period in 2023.
- The underlying RC profit for the first quarter, compared with
the same period in 2023, primarily reflects lower realizations and
increased depreciation charges partly offset by increased
volume.
Operational update
- Reported production for the quarter was 1,463mboe/d, 7.6%
higher than the first quarter of 2023. Underlying production* for
the quarter was 7.4% higher compared with the first quarter of 2023
reflecting bpx energy performance and major projects* partly offset
by base performance.
Strategic Progress
- On 16 April, bp, as operator of the Azeri-Chirag-Gunashli (ACG)
project, announced the start-up of oil production from the new
Azeri Central East (ACE) platform as part of the ACG field
development in the Azerbaijan sector of the Caspian Sea, which is
the first remotely operated offshore platform in the Caspian (bp
share 30.37%).
- In April bpx energy successfully brought online 'Checkmate',
its third central processing facility in the Permian Basin. It is a
low-emission, electrified facility that will enable further
production growth for bpx energy in the basin (bp 100%
operator).
- Final investment decision taken on the Atlantis Drill Center
Expansion which will be a two well tie back to the Atlantis
facility in the Gulf of Mexico (bp share 56%).
- bp has been awarded a licence for two blocks in the central
North Sea, consolidating our position around our Eastern Trough
Area Project (ETAP) central processing facility. The award aligns
with our strategic focus on oil and gas opportunities that can be
developed through established production facilities.
- Aker BP was awarded interest in 27 licences (of which it will
operate 17) in the North Sea and Norwegian Sea (bp interest in Aker
BP 15.9%).
- In May Azule Energy announced it had agreed to acquire a 42.5%
interest in exploration block 2914A (PEL85), Orange Basin, offshore
Namibia. Completion of the deal is subject to customary third-party
approvals from the Namibian authorities and JV parties. Azule
Energy is a 50:50 joint venture between bp and Eni, based in
Angola.
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit before interest and tax |
|
3,059 |
1,879 |
3,318 |
Inventory holding (gains) losses* |
|
1 |
— |
(1) |
RC profit before interest and tax |
|
3,060 |
1,879 |
3,317 |
Net (favourable) adverse impact of adjusting
items |
|
65 |
1,670 |
2 |
Underlying RC profit before interest and
tax |
|
3,125 |
3,549 |
3,319 |
Taxation on an underlying RC basis |
|
(1,509) |
(1,433) |
(1,766) |
Underlying RC profit before interest |
|
1,616 |
2,116 |
1,553 |
Top of page 10
oil production & operations (continued)
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Depreciation, depletion and
amortization |
|
|
|
|
Total depreciation, depletion and
amortization |
|
1,657 |
1,563 |
1,327 |
|
|
|
|
|
Exploration write-offs |
|
|
|
|
Exploration write-offs |
|
3 |
32 |
51 |
|
|
|
|
|
Adjusted EBITDA* |
|
|
|
|
Total adjusted EBITDA |
|
4,785 |
5,144 |
4,697 |
|
|
|
|
|
Capital expenditure* |
|
|
|
|
Total capital expenditure |
|
1,776 |
1,636 |
1,520 |
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
Production (net of
royalties)(a) |
|
|
|
|
Liquids* (mb/d) |
|
1,056 |
1,024 |
1,005 |
Natural gas (mmcf/d) |
|
2,364 |
2,305 |
2,060 |
Total hydrocarbons* (mboe/d) |
|
1,463 |
1,421 |
1,360 |
|
|
|
|
|
Average realizations*(b) |
|
|
|
|
Liquids ($/bbl) |
|
70.53 |
76.22 |
71.63 |
Natural gas ($/mcf) |
|
2.66 |
3.65 |
6.57 |
Total hydrocarbons* ($/boe) |
|
54.11 |
59.69 |
62.36 |
- Includes bp’s share of production of equity-accounted entities
in the oil production & operations segment.
- 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) profit before interest and tax for
the first quarter was $988 million, compared with a profit of
$2,680 million for the same period in 2023. The first quarter is
adjusted by an adverse impact of net adjusting items* of $301
million, compared with an adverse impact of net adjusting items of
$79 million for the same period in 2023. Adjusting items include
impacts of fair value accounting effects*, relative to management's
internal measure of performance, which are an adverse impact of
$144 million for the quarter in 2024, compared with a favourable
impact of $77 million for the same period in 2023.
- After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the
first quarter was $1,289 million, compared with $2,759 million for
the same period in 2023.
- The customers & products result for the first quarter was
significantly lower than the same period in 2023, primarily
reflecting a lower refining result.
- customers – the convenience and mobility
result, excluding Castrol, for the first quarter was lower than the
same period in 2023. The first quarter result benefited from higher
retail fuels margin and continued strong growth in convenience,
more than offset by a weaker performance in midstream and biofuels.
The contribution of TravelCenters of America was impacted by the
ongoing US freight recession.
Castrol result for the first quarter was higher compared with the
same period in 2023, primarily due to higher margins partly offset
by adverse foreign exchange impacts.
- products – the products result for the first
quarter was significantly lower compared with the same period in
2023. In refining, the result for the first quarter reflected lower
industry refining margins, with realized margins impacted by
narrower North American heavy crude oil differentials. In addition,
the first quarter was significantly impacted by the plant-wide
power outage at the Whiting refinery. The oil trading contribution
for the first quarter was strong, consistent with the result in the
same period last year.
Operational update
- bp-operated refining availability* for the first quarter was
90.4%, lower compared with 96.1% for the same period in 2023,
mainly due to the plant-wide power outage at the Whiting
refinery.
Strategic progress
- In March, bp announced plans to transform the Gelsenkirchen
refinery site by the end of the decade. The plans include
simplification of the site to improve competitiveness, including a
controlled reduction in total production capacity from 2025 and
increased production of lower-emission fuels using
co-processing.
- In April, bp’s Archaea Energy announced it had brought online
in March its largest Archaea Modular Design (AMD) renewable natural
gas (RNG) plant in Kansas City, Missouri. The plant can convert
9,600 standard cubic feet of landfill gas per minute into
lower-carbon RNG. In addition, on 4 April, Archaea Energy completed
the purchase of Sunshine Gas Producers and now fully owns and
operates the current landfill-gas-to-electric facility in
California, with plans to develop an RNG plant.
- In April, bp launched its new hydrotreated vegetable oil (HVO)
bioenergy brand, commencing with roll out at sites across the UK
and the Netherlands. Marketed as “bp bioenergy HVO”, it joins bp
pulse as customers & products' second transition growth engine
brand.
- In March, bp acquired the freehold of one of the largest truck
stops in Europe, Ashford International Truckstop in Kent. The
acquisition presents bp with the opportunity to help meet the
comprehensive needs of UK and European HGV operators transitioning
to EVs. In addition, in April, bp opened its first bp pulse branded
Gigahub in Houston, Texas, with 24 ultra-fast charge points,
building momentum in our US charging business offering.
- In February, bp New Zealand was announced as a foundation
partner for Woolworths' loyalty programme, “Everyday Rewards”. The
loyalty scheme enables current customers and over one million new
customers to collect points and obtain instant rewards at bp retail
sites.
Top of page 12
customers & products (continued)
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit (loss) before interest and tax |
|
1,840 |
(2,051) |
2,078 |
Inventory holding (gains) losses* |
|
(852) |
1,497 |
602 |
RC profit (loss) before interest and tax |
|
988 |
(554) |
2,680 |
Net (favourable) adverse impact of adjusting
items |
|
301 |
1,357 |
79 |
Underlying RC profit before interest and
tax |
|
1,289 |
803 |
2,759 |
Of which:(a) |
|
|
|
|
customers – convenience & mobility |
|
370 |
882 |
391 |
Castrol – included in customers |
|
184 |
213 |
161 |
products – refining & trading |
|
919 |
(79) |
2,368 |
Taxation on an underlying RC basis |
|
(333) |
(239) |
(777) |
Underlying RC profit before interest |
|
956 |
564 |
1,982 |
- A reconciliation to RC profit before interest and tax by
business is provided on page 28.
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Adjusted
EBITDA*(b) |
|
|
|
|
customers – convenience & mobility |
|
854 |
1,348 |
732 |
Castrol – included in customers |
|
226 |
256 |
200 |
products – refining & trading |
|
1,379 |
397 |
2,824 |
|
|
2,233 |
1,745 |
3,556 |
|
|
|
|
|
Depreciation, depletion and
amortization |
|
|
|
|
Total depreciation, depletion and
amortization |
|
944 |
942 |
797 |
|
|
|
|
|
Capital expenditure* |
|
|
|
|
customers – convenience & mobility |
|
566 |
790 |
458 |
Castrol – included in customers |
|
43 |
90 |
68 |
products – refining & trading |
|
554 |
813 |
532 |
Total capital expenditure |
|
1,120 |
1,603 |
990 |
- A reconciliation to RC profit before interest and tax by
business is provided on page 28.
Retail(c) |
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
bp retail sites* – total (#) |
|
21,150 |
21,100 |
20,700 |
Strategic convenience sites* |
|
2,900 |
2,850 |
2,450 |
- Reported to the nearest 50.
Marketing sales of refined products
(mb/d) |
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
US |
|
1,080 |
1,205 |
1,078 |
Europe |
|
940 |
1,037 |
973 |
Rest of World |
|
469 |
465 |
462 |
|
|
2,489 |
2,707 |
2,513 |
Trading/supply sales of refined products |
|
352 |
355 |
333 |
Total sales volume of refined products |
|
2,841 |
3,062 |
2,846 |
Top of page 13
customers & products (continued)
Refining marker margin* |
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
bp average refining marker margin (RMM)
($/bbl) |
|
20.6 |
18.5 |
28.1 |
Refinery throughputs (mb/d) |
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
US |
|
525 |
634 |
686 |
Europe |
|
830 |
678 |
832 |
Total refinery throughputs |
|
1,355 |
1,312 |
1,518 |
bp-operated refining availability*
(%) |
|
90.4 |
96.1 |
96.1 |
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.
Financial results
- The replacement cost (RC) loss before interest and tax for the
first quarter was $300 million, compared with a loss of $90 million
for the same period in 2023. The first quarter is adjusted by an
adverse impact of net adjusting items* of $146 million, compared
with a favourable impact of net adjusting items of $206 million for
the same period in 2023. Adjusting items include impacts of fair
value accounting effects* which are an adverse impact of $193
million for the quarter in 2024, and a favourable impact of $245
million for the same period in 2023.
- After adjusting RC loss before interest and tax for adjusting
items, the underlying RC loss before interest and tax* for the
first quarter was $154 million, compared with a loss of $296
million for the same period in 2023.
Strategic progress
- In March, bp launchpad divested all of its 100% shareholding in
Insight Analytics Solutions Holdings Limited (“Onyx”) to Macquarie
Capital.
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit (loss) before interest and tax |
|
(300) |
(16) |
(90) |
Inventory holding (gains) losses* |
|
— |
— |
— |
RC profit (loss) before interest and tax |
|
(300) |
(16) |
(90) |
Net (favourable) adverse impact of adjusting
items(a) |
|
146 |
(81) |
(206) |
Underlying RC profit (loss) before interest and
tax |
|
(154) |
(97) |
(296) |
Taxation on an underlying RC basis |
|
99 |
121 |
29 |
Underlying RC profit (loss) before
interest |
|
(55) |
24 |
(267) |
- Includes fair value accounting effects relating to hybrid
bonds. See page 31 for more information.
Top of page 15
Financial statements
Group income statement
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
|
|
|
|
|
Sales and other operating revenues (Note
5) |
|
48,880 |
52,141 |
56,182 |
Earnings from joint ventures – after
interest and tax |
|
178 |
(290) |
195 |
Earnings from associates – after
interest and tax |
|
298 |
156 |
173 |
Interest and other income |
|
381 |
599 |
248 |
Gains on sale of businesses and fixed
assets |
|
224 |
(20) |
153 |
Total revenues and other income |
|
49,961 |
52,586 |
56,951 |
Purchases |
|
27,647 |
31,062 |
29,122 |
Production and manufacturing expenses |
|
6,847 |
5,751 |
6,982 |
Production and similar taxes |
|
444 |
445 |
474 |
Depreciation, depletion and amortization (Note
6) |
|
4,150 |
4,060 |
3,800 |
Net impairment and losses on sale of businesses
and fixed assets (Note 3) |
|
737 |
3,958 |
88 |
Exploration expense |
|
247 |
501 |
106 |
Distribution and administration expenses |
|
4,222 |
4,733 |
3,747 |
Profit (loss) before interest and taxation |
|
5,667 |
2,076 |
12,632 |
Finance costs |
|
1,075 |
1,038 |
843 |
Net finance (income) expense relating to
pensions and other post-retirement benefits |
|
(41) |
(61) |
(58) |
Profit (loss) before taxation |
|
4,633 |
1,099 |
11,847 |
Taxation |
|
2,224 |
663 |
3,425 |
Profit (loss) for the period |
|
2,409 |
436 |
8,422 |
Attributable to |
|
|
|
|
bp shareholders |
|
2,263 |
371 |
8,218 |
Non-controlling interests |
|
146 |
65 |
204 |
|
|
2,409 |
436 |
8,422 |
|
|
|
|
|
Earnings per share (Note 7) |
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders |
|
|
|
|
Per ordinary share (cents) |
|
|
|
|
Basic |
|
13.57 |
2.20 |
45.93 |
Diluted |
|
13.25 |
2.15 |
45.06 |
Per ADS (dollars) |
|
|
|
|
Basic |
|
0.81 |
0.13 |
2.76 |
Diluted |
|
0.80 |
0.13 |
2.70 |
Top of page 16
Condensed group statement of comprehensive income
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
|
|
|
|
|
Profit (loss) for the period |
|
2,409 |
436 |
8,422 |
Other comprehensive income |
|
|
|
|
Items that may be reclassified subsequently to
profit or loss |
|
|
|
|
Currency translation differences |
|
(448) |
711 |
453 |
Cash flow hedges and costs of hedging |
|
(115) |
125 |
546 |
Share of items relating to equity-accounted
entities, net of tax |
|
(8) |
13 |
(203) |
Income tax relating to items that may be
reclassified |
|
(4) |
64 |
(76) |
|
|
(575) |
913 |
720 |
Items that will not be reclassified to profit
or loss |
|
|
|
|
Remeasurements of the net pension and other
post-retirement benefit liability or asset |
|
(66) |
(1,209) |
(87) |
Remeasurements of equity investments |
|
(13) |
51 |
— |
Cash flow hedges that will subsequently be
transferred to the balance sheet |
|
(3) |
16 |
— |
Income tax relating to items that will not be
reclassified(a) |
|
674 |
357 |
23 |
|
|
592 |
(785) |
(64) |
Other comprehensive income |
|
17 |
128 |
656 |
Total comprehensive income |
|
2,426 |
564 |
9,078 |
Attributable to |
|
|
|
|
bp shareholders |
|
2,303 |
461 |
8,861 |
Non-controlling interests |
|
123 |
103 |
217 |
|
|
2,426 |
564 |
9,078 |
- First quarter 2024 includes a $658-million credit in respect of
the reduction in the deferred tax liability on defined benefit
pension plan surpluses following the reduction in the rate of the
authorized surplus payments tax charge in the UK from 35% to
25%.
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 2024 |
|
70,283 |
13,566 |
1,644 |
85,493 |
|
|
|
|
|
|
Total comprehensive income |
|
2,303 |
154 |
(31) |
2,426 |
Dividends |
|
(1,222) |
— |
(126) |
(1,348) |
Cash flow hedges transferred to the balance
sheet, net of tax |
|
(2) |
— |
— |
(2) |
Repurchase of ordinary share capital |
|
(1,751) |
— |
— |
(1,751) |
Share-based payments, net of tax |
|
154 |
— |
— |
154 |
Issue of perpetual hybrid bonds(a) |
|
(4) |
1,300 |
— |
1,296 |
Redemption of perpetual hybrid bonds, net of
tax(a) |
|
9 |
(1,300) |
— |
(1,291) |
Payments on perpetual hybrid bonds |
|
— |
(84) |
— |
(84) |
Transactions involving non-controlling
interests, net of tax |
|
— |
— |
47 |
47 |
At 31 March 2024 |
|
69,770 |
13,636 |
1,534 |
84,940 |
|
|
|
|
|
|
|
|
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 |
|
8,861 |
142 |
75 |
9,078 |
Dividends |
|
(1,189) |
— |
(68) |
(1,257) |
Repurchase of ordinary share capital |
|
(3,421) |
— |
— |
(3,421) |
Share-based payments, net of tax |
|
(29) |
— |
— |
(29) |
Issue of perpetual hybrid bonds |
|
— |
45 |
— |
45 |
Payments on perpetual hybrid bonds |
|
— |
(80) |
— |
(80) |
Transactions involving non-controlling
interests, net of tax |
|
— |
— |
(145) |
(145) |
At 31 March 2023 |
|
71,775 |
13,497 |
1,909 |
87,181 |
- During the first quarter 2024 BP Capital Markets PLC issued
$1.3 billion of US dollar perpetual subordinated hybrid bonds with
a coupon fixed for an initial period up to 2034 of 6.45% and
voluntarily bought back $1.3 billion of the non-call 2025 4.375% US
dollar hybrid bond issued in 2020. Taken together these
transactions had no significant impact on net debt or gearing.
Top of page 18
Group balance sheet
|
|
31 March |
31 December |
$ million |
|
2024 |
2023 |
Non-current assets |
|
|
|
Property, plant and equipment |
|
102,744 |
104,719 |
Goodwill |
|
12,378 |
12,472 |
Intangible assets |
|
10,008 |
9,991 |
Investments in joint ventures |
|
12,467 |
12,435 |
Investments in associates |
|
7,932 |
7,814 |
Other investments |
|
2,267 |
2,189 |
Fixed assets |
|
147,796 |
149,620 |
Loans |
|
2,113 |
1,942 |
Trade and other receivables |
|
1,735 |
1,767 |
Derivative financial instruments |
|
9,686 |
9,980 |
Prepayments |
|
665 |
623 |
Deferred tax assets |
|
4,227 |
4,268 |
Defined benefit pension plan surpluses |
|
7,804 |
7,948 |
|
|
174,026 |
176,148 |
Current assets |
|
|
|
Loans |
|
219 |
240 |
Inventories |
|
24,310 |
22,819 |
Trade and other receivables |
|
29,908 |
31,123 |
Derivative financial instruments |
|
10,150 |
12,583 |
Prepayments |
|
2,247 |
2,520 |
Current tax receivable |
|
766 |
837 |
Other investments |
|
615 |
843 |
Cash and cash equivalents |
|
31,510 |
33,030 |
|
|
99,725 |
103,995 |
Assets classified as held for sale (Note
2) |
|
1,684 |
151 |
|
|
101,409 |
104,146 |
Total assets |
|
275,435 |
280,294 |
Current liabilities |
|
|
|
Trade and other payables |
|
58,621 |
61,155 |
Derivative financial instruments |
|
4,772 |
5,250 |
Accruals |
|
5,189 |
6,527 |
Lease liabilities |
|
2,628 |
2,650 |
Finance debt |
|
4,665 |
3,284 |
Current tax payable |
|
2,804 |
2,732 |
Provisions |
|
3,579 |
4,418 |
|
|
82,258 |
86,016 |
Liabilities directly associated with assets
classified as held for sale (Note 2) |
|
30 |
62 |
|
|
82,288 |
86,078 |
Non-current liabilities |
|
|
|
Other payables |
|
9,914 |
10,076 |
Derivative financial instruments |
|
11,140 |
10,402 |
Accruals |
|
1,286 |
1,310 |
Lease liabilities |
|
8,429 |
8,471 |
Finance debt |
|
48,348 |
48,670 |
Deferred tax liabilities |
|
8,980 |
9,617 |
Provisions |
|
14,835 |
14,721 |
Defined benefit pension plan and other
post-retirement benefit plan deficits |
|
5,275 |
5,456 |
|
|
108,207 |
108,723 |
Total liabilities |
|
190,495 |
194,801 |
Net assets |
|
84,940 |
85,493 |
Equity |
|
|
|
bp shareholders’ equity |
|
69,770 |
70,283 |
Non-controlling interests |
|
15,170 |
15,210 |
Total equity |
|
84,940 |
85,493 |
Top of page 19
Condensed group cash flow statement
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Operating activities |
|
|
|
|
Profit (loss) before taxation |
|
4,633 |
1,099 |
11,847 |
Adjustments to reconcile profit (loss) before
taxation to net cash provided by operating activities |
|
|
|
|
Depreciation, depletion and amortization and
exploration expenditure written off |
|
4,356 |
4,441 |
3,850 |
Net impairment and (gain) loss on sale of
businesses and fixed assets |
|
513 |
3,978 |
(65) |
Earnings from equity-accounted entities, less
dividends received |
|
(96) |
803 |
1 |
Net charge for interest and other finance
expense, less net interest paid |
|
192 |
202 |
63 |
Share-based payments |
|
161 |
97 |
(22) |
Net operating charge for pensions and other
post-retirement benefits, less contributions and benefit payments
for unfunded plans |
|
(32) |
(63) |
(43) |
Net charge for provisions, less payments |
|
(683) |
(819) |
(1,099) |
Movements in inventories and other current and
non-current assets and liabilities |
|
(2,131) |
1,942 |
(3,755) |
Income taxes paid |
|
(1,904) |
(2,303) |
(3,155) |
Net cash provided by operating activities |
|
5,009 |
9,377 |
7,622 |
Investing activities |
|
|
|
|
Expenditure on property, plant and equipment,
intangible and other assets |
|
(3,718) |
(4,247) |
(3,129) |
Acquisitions, net of cash acquired |
|
(106) |
(38) |
52 |
Investment in joint ventures |
|
(353) |
(347) |
(540) |
Investment in associates |
|
(101) |
(79) |
(8) |
Total cash capital expenditure |
|
(4,278) |
(4,711) |
(3,625) |
Proceeds from disposal of fixed assets |
|
66 |
31 |
15 |
Proceeds from disposal of businesses, net of
cash disposed |
|
347 |
269 |
785 |
Proceeds from loan repayments |
|
16 |
16 |
6 |
Cash provided from investing activities |
|
429 |
316 |
806 |
Net cash used in investing activities |
|
(3,849) |
(4,395) |
(2,819) |
Financing activities |
|
|
|
|
Net issue (repurchase) of shares (Note 7) |
|
(1,750) |
(1,350) |
(2,448) |
Lease liability payments |
|
(694) |
(722) |
(555) |
Proceeds from long-term financing |
|
2,259 |
1,522 |
2,395 |
Repayments of long-term financing |
|
(674) |
(11) |
(799) |
Net increase (decrease) in short-term debt |
|
16 |
87 |
(529) |
Issue of perpetual hybrid bonds(a) |
|
1,296 |
13 |
45 |
Redemption of perpetual hybrid bonds(a) |
|
(1,288) |
— |
— |
Payments relating to perpetual hybrid
bonds |
|
(256) |
(264) |
(236) |
Payments relating to transactions involving
non-controlling interests (Other interest) |
|
— |
(7) |
(180) |
Receipts relating to transactions involving
non-controlling interests (Other interest) |
|
16 |
10 |
7 |
Dividends paid - bp shareholders |
|
(1,219) |
(1,224) |
(1,183) |
- non-controlling interests |
|
(126) |
(77) |
(68) |
Net cash provided by (used in) financing
activities |
|
(2,420) |
(2,023) |
(3,551) |
Currency translation differences relating to cash and cash
equivalents |
|
(260) |
145 |
(14) |
Increase (decrease) in cash and cash
equivalents |
|
(1,520) |
3,104 |
1,238 |
Cash and cash equivalents at beginning of period |
|
33,030 |
29,926 |
29,195 |
Cash and cash equivalents at end of period |
|
31,510 |
33,030 |
30,433 |
- See Condensed group statement of changes in equity -
footnote (a) for further information.
Top of page 20
Notes
Note 1. Basis of preparation
The interim financial information included in this report has
been prepared in accordance with IAS 34 'Interim Financial
Reporting'.
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 2023 included in bp Annual
Report and Form 20-F 2023.
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 2024 which are the same as those used in
preparing bp Annual Report and Form 20-F 2023.
There are no other new or amended standards or interpretations
adopted from 1 January 2024 onwards 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 2023. These have
been subsequently considered at the end of this quarter to
determine if any changes were required to those judgements and
estimates. No significant changes were identified.
Note 2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 31
March 2024 is $1,684 million, with associated liabilities of
$30 million. These relate to the transactions described
below.
On 14 February 2024, bp and ADNOC announced that they had agreed
to form a new joint venture (JV) in Egypt (51% bp and 49% ADNOC).
As part of the agreement, bp will contribute its interests in three
development concessions, as well as exploration agreements, in
Egypt to the new JV. ADNOC will make a proportionate cash
contribution. Subject to regulatory approvals and clearances, the
formation of the JV is expected to complete during the second half
of 2024. The carrying amount of assets classified as held for sale
at 31 March 2024 is $1,583 million, with associated liabilities of
$23 million.
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 March
2024 is $101 million, with associated liabilities of $7 million.
Cumulative foreign exchange losses within reserves of approximately
$900 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 first quarter were $737 million, compared
with net charges of $88 million for the same period in 2023
and include net impairment charges for the first quarter of
$649 million, compared with net impairment reversals of
$41 million for the same period in 2023.
Top of page 21
Note 4. Analysis of replacement cost profit (loss) before
interest and tax and reconciliation to profit (loss) before
taxation
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
gas & low carbon energy |
|
1,036 |
2,169 |
7,347 |
oil production & operations |
|
3,060 |
1,879 |
3,317 |
customers & products |
|
988 |
(554) |
2,680 |
other businesses & corporate |
|
(300) |
(16) |
(90) |
|
|
4,784 |
3,478 |
13,254 |
Consolidation adjustment – UPII* |
|
32 |
95 |
(22) |
RC profit (loss) before interest and tax |
|
4,816 |
3,573 |
13,232 |
Inventory holding gains (losses)* |
|
|
|
|
gas & low carbon energy |
|
— |
— |
1 |
oil production & operations |
|
(1) |
— |
1 |
customers & products |
|
852 |
(1,497) |
(602) |
Profit (loss) before interest and tax |
|
5,667 |
2,076 |
12,632 |
Finance costs |
|
1,075 |
1,038 |
843 |
Net finance expense/(income) relating to
pensions and other post-retirement benefits |
|
(41) |
(61) |
(58) |
Profit (loss) before taxation |
|
4,633 |
1,099 |
11,847 |
|
|
|
|
|
RC profit (loss) before interest and
tax* |
|
|
|
|
US |
|
1,610 |
1,154 |
3,075 |
Non-US |
|
3,206 |
2,419 |
10,157 |
|
|
4,816 |
3,573 |
13,232 |
Top of page 22
Note 5. Sales and other operating revenues
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
By segment |
|
|
|
|
gas & low carbon energy |
|
8,675 |
11,670 |
17,886 |
oil production & operations |
|
6,432 |
6,749 |
6,153 |
customers & products |
|
39,895 |
40,374 |
38,882 |
other businesses & corporate |
|
606 |
657 |
738 |
|
|
55,608 |
59,450 |
63,659 |
|
|
|
|
|
Less: sales and other operating revenues
between segments |
|
|
|
|
gas & low carbon energy |
|
270 |
65 |
536 |
oil production & operations |
|
5,913 |
6,464 |
6,261 |
customers & products |
|
293 |
(105) |
144 |
other businesses & corporate |
|
252 |
885 |
536 |
|
|
6,728 |
7,309 |
7,477 |
|
|
|
|
|
External sales and other operating
revenues |
|
|
|
|
gas & low carbon energy |
|
8,405 |
11,605 |
17,350 |
oil production & operations |
|
519 |
285 |
(108) |
customers & products |
|
39,602 |
40,479 |
38,738 |
other businesses & corporate |
|
354 |
(228) |
202 |
Total sales and other operating revenues |
|
48,880 |
52,141 |
56,182 |
|
|
|
|
|
By geographical area |
|
|
|
|
US |
|
19,858 |
20,920 |
19,160 |
Non-US |
|
39,208 |
40,808 |
46,350 |
|
|
59,066 |
61,728 |
65,510 |
Less: sales and other operating revenues
between areas |
|
10,186 |
9,587 |
9,328 |
|
|
48,880 |
52,141 |
56,182 |
|
|
|
|
|
Revenues from contracts with
customers |
|
|
|
|
Sales and other operating revenues include the
following in relation to revenues from contracts with
customers: |
|
|
|
|
Crude oil |
|
548 |
760 |
637 |
Oil products |
|
29,840 |
32,124 |
30,141 |
Natural gas, LNG and NGLs |
|
5,751 |
7,660 |
9,644 |
Non-oil products and other revenues from
contracts with customers |
|
2,928 |
2,911 |
1,872 |
Revenue from contracts with customers |
|
39,067 |
43,455 |
42,294 |
Other operating revenues(a) |
|
9,813 |
8,686 |
13,888 |
Total sales and other operating revenues |
|
48,880 |
52,141 |
56,182 |
- Principally relates to commodity derivative transactions
including sales of bp own production in trading books.
Top of page 23
Note 6. Depreciation, depletion and amortization
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Total depreciation, depletion and
amortization by segment |
|
|
|
|
gas & low carbon energy |
|
1,293 |
1,290 |
1,440 |
oil production & operations |
|
1,657 |
1,563 |
1,327 |
customers & products |
|
944 |
942 |
797 |
other businesses & corporate |
|
256 |
265 |
236 |
|
|
4,150 |
4,060 |
3,800 |
Total depreciation, depletion and
amortization by geographical area |
|
|
|
|
US |
|
1,570 |
1,547 |
1,254 |
Non-US |
|
2,580 |
2,513 |
2,546 |
|
|
4,150 |
4,060 |
3,800 |
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 2023 annual general meeting, 292 million ordinary
shares repurchased for cancellation were settled during the first
quarter 2024 for a total cost of $1,750 million. A further
115 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 $747 million. This
amount has been accrued at 31 March 2024. 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.
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Results for the period |
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders |
|
2,263 |
371 |
8,218 |
Less: preference dividend |
|
— |
— |
— |
Less: (gain) loss on redemption of perpetual
hybrid bonds(a) |
|
(10) |
— |
— |
Profit (loss) attributable to bp ordinary
shareholders |
|
2,273 |
371 |
8,218 |
|
|
|
|
|
Number of shares
(thousand)(b) |
|
|
|
|
Basic weighted average number of shares
outstanding |
|
16,751,887 |
16,834,354 |
17,891,455 |
ADS equivalent(c) |
|
2,791,981 |
2,805,725 |
2,981,909 |
|
|
|
|
|
Weighted average number of shares outstanding
used to calculate diluted earnings per share |
|
17,153,505 |
17,269,574 |
18,238,522 |
ADS equivalent(c) |
|
2,858,917 |
2,878,262 |
3,039,753 |
|
|
|
|
|
Shares in issue at period-end |
|
16,687,850 |
16,824,651 |
17,703,285 |
ADS equivalent(c) |
|
2,781,308 |
2,804,108 |
2,950,547 |
- See Condensed group statement of changes in equity -
footnote (a) for further information.
- Excludes treasury shares and includes certain shares that will
be issued in the future under employee share-based payment
plans.
- One ADS is equivalent to six ordinary shares.
Top of page 24
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 June 2024 to
ordinary shareholders and American Depositary Share (ADS) holders
on the register on 17 May 2024. The ex-dividend date will be 16 May
2024. The corresponding amount in sterling is due to be announced
on 11 June 2024, calculated based on the average of the market
exchange rates over three dealing days between 5 June 2024 and 7
June 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 first quarter 2024 dividend.
Ordinary shareholders and ADS holders (subject to certain
exceptions) will be able to participate in a dividend reinvestment
programme. Details of the first quarter dividend and timetable are
available at bp.com/dividends and further details of the
dividend reinvestment programmes are available at
bp.com/drip.
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
Dividends paid per ordinary share |
|
|
|
|
cents |
|
7.270 |
7.270 |
6.610 |
pence |
|
5.692 |
5.737 |
5.551 |
Dividends paid per ADS (cents) |
|
43.62 |
43.62 |
39.66 |
Note 9. Net debt
Net debt* |
|
31 March |
31 December |
31 March |
$ million |
|
2024 |
2023 |
2023 |
Finance debt(a) |
|
53,013 |
51,954 |
48,595 |
Fair value (asset) liability of hedges related
to finance debt(b) |
|
2,512 |
1,988 |
3,070 |
|
|
55,525 |
53,942 |
51,665 |
Less: cash and cash equivalents |
|
31,510 |
33,030 |
30,433 |
Net debt(c) |
|
24,015 |
20,912 |
21,232 |
Total equity |
|
84,940 |
85,493 |
87,181 |
Gearing* |
|
22.0% |
19.7% |
19.6% |
- The fair value of finance debt at 31 March 2024 was
$49,263 million (31 December 2023 $48,795 million, 31 March
2023 $45,071 million).
- Derivative financial instruments entered into for the purpose
of managing foreign currency exchange risk associated with net debt
with a fair value liability position of $96 million at
31 March 2024 (fourth quarter 2023 liability of
$73 million and first quarter 2023 liability of
$97 million) are not included in the calculation of net debt
shown above as hedge accounting is not applied for these
instruments.
- 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.
Note 10. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 6 May 2024, is unaudited and
does not constitute statutory financial statements. Audited
financial information will be published in bp Annual Report and
Form 20-F 2024. bp Annual Report and Form 20-F 2023 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 25
Additional information
Capital expenditure*
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Capital expenditure |
|
|
|
|
Organic capital expenditure* |
|
3,979 |
4,673 |
3,495 |
Inorganic capital expenditure* |
|
299 |
38 |
130 |
|
|
4,278 |
4,711 |
3,625 |
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Capital expenditure by segment |
|
|
|
|
gas & low carbon energy |
|
1,298 |
1,326 |
1,013 |
oil production & operations |
|
1,776 |
1,636 |
1,520 |
customers & products |
|
1,120 |
1,603 |
990 |
other businesses & corporate |
|
84 |
146 |
102 |
|
|
4,278 |
4,711 |
3,625 |
Capital expenditure by geographical
area |
|
|
|
|
US |
|
1,776 |
2,164 |
1,697 |
Non-US |
|
2,502 |
2,547 |
1,928 |
|
|
4,278 |
4,711 |
3,625 |
Top of page 26
Adjusting items*
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
gas & low carbon energy |
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
2 |
3 |
15 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(536) |
(937) |
(2) |
Environmental and other provisions |
|
— |
— |
— |
Restructuring, integration and rationalization
costs |
|
— |
— |
— |
Fair value accounting
effects(a)(b) |
|
113 |
1,887 |
3,934 |
Other(c) |
|
(201) |
(561) |
(56) |
|
|
(622) |
392 |
3,891 |
oil production & operations |
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
184 |
(55) |
137 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(120) |
(1,635) |
8 |
Environmental and other provisions |
|
(77) |
48 |
(49) |
Restructuring, integration and rationalization
costs |
|
— |
— |
— |
Fair value accounting effects |
|
— |
— |
— |
Other |
|
(52) |
(28) |
(98) |
|
|
(65) |
(1,670) |
(2) |
customers & products |
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
5 |
23 |
1 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(96) |
(1,396) |
(83) |
Environmental and other provisions |
|
— |
(86) |
(10) |
Restructuring, integration and rationalization
costs |
|
1 |
— |
(2) |
Fair value accounting
effects(b) |
|
(144) |
144 |
77 |
Other |
|
(67) |
(42) |
(62) |
|
|
(301) |
(1,357) |
(79) |
other businesses & corporate |
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
32 |
1 |
— |
Net impairment and losses on sale of businesses
and fixed assets |
|
26 |
19 |
(6) |
Environmental and other
provisions(d) |
|
(9) |
(565) |
(14) |
Restructuring, integration and rationalization
costs |
|
11 |
51 |
(10) |
Fair value accounting
effects(b) |
|
(193) |
579 |
245 |
Gulf of Mexico oil spill |
|
(11) |
(11) |
(9) |
Other |
|
(2) |
7 |
— |
|
|
(146) |
81 |
206 |
Total before interest and taxation |
|
(1,134) |
(2,554) |
4,016 |
Finance costs(e) |
|
(92) |
(86) |
(104) |
Total before taxation |
|
(1,226) |
(2,640) |
3,912 |
Taxation on adjusting items(f) |
|
109 |
1,175 |
(205) |
Total after taxation for period |
|
(1,117) |
(1,465) |
3,707 |
- 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.
- For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and
31.
- Fourth quarter 2023 includes $600 million of impairment charges
recognized through equity-accounted earnings relating to our US
offshore wind projects.
- Fourth quarter 2023 includes charges related to the control,
abatement, clean-up or elimination of environmental pollution and
legal settlements.
- Includes the unwinding of discounting effects relating to Gulf
of Mexico oil spill payables and the income statement impact of
temporary valuation differences associated with the group’s
interest rate and foreign currency exchange risk management of
finance debt.
- 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.
Top of page 27
Net debt including leases
Net debt including leases* |
|
31 March |
31 December |
31 March |
$ million |
|
2024 |
2023 |
2023 |
Net debt |
|
24,015 |
20,912 |
21,232 |
Lease liabilities |
|
11,057 |
11,121 |
8,605 |
Net partner (receivable) payable for leases
entered into on behalf of joint operations |
|
(130) |
(131) |
19 |
Net debt including leases |
|
34,942 |
31,902 |
29,856 |
Total equity |
|
84,940 |
85,493 |
87,181 |
Gearing including leases* |
|
29.1% |
27.2% |
25.5% |
Gulf of Mexico oil spill
|
|
31 March |
31 December |
$ million |
|
2024 |
2023 |
Gulf of Mexico oil spill payables and
provisions |
|
(8,826) |
(8,735) |
Of which - current |
|
(1,138) |
(1,133) |
|
|
|
|
Deferred tax asset |
|
1,334 |
1,320 |
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 2023 - Financial statements - Notes
7, 22, 23, 29, and 33.
Working capital* reconciliation
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Movements in inventories and other current and
non-current assets and liabilities as per condensed group cash flow
statement(a) |
|
(2,131) |
1,942 |
(3,755) |
Adjusted for inventory holding gains (losses)*
(Note 4) |
|
851 |
(1,497) |
(600) |
Adjusted for fair value accounting effects*
relating to subsidiaries |
|
(274) |
2,610 |
4,242 |
Other adjusting items(b) |
|
(834) |
(966) |
(1,298) |
Working capital release (build) after adjusting
for net inventory gains (losses), fair value accounting effects and
other adjusting items |
|
(2,388) |
2,089 |
(1,411) |
- The movement in working capital includes outflows relating to
the Gulf of Mexico oil spill on a pre-tax basis of $7 million
in the first quarter 2024 (fourth quarter 2023 nil, first quarter
2023 $12 million).
- 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 28
Adjusted earnings before interest, taxation, depreciation and
amortization (adjusted EBITDA)*
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
Profit for the period |
|
2,409 |
436 |
8,422 |
Finance costs |
|
1,075 |
1,038 |
843 |
Net finance (income) expense relating to
pensions and other post-retirement benefits |
|
(41) |
(61) |
(58) |
Taxation |
|
2,224 |
663 |
3,425 |
Profit before interest and tax |
|
5,667 |
2,076 |
12,632 |
Inventory holding (gains) losses*, before
tax |
|
(851) |
1,497 |
600 |
RC profit before interest and tax |
|
4,816 |
3,573 |
13,232 |
Net (favourable) adverse impact of adjusting
items*, before interest and tax |
|
1,134 |
2,554 |
(4,016) |
Underlying RC profit before interest and
tax |
|
5,950 |
6,127 |
9,216 |
Add back: |
|
|
|
|
Depreciation, depletion and amortization |
|
4,150 |
4,060 |
3,800 |
Exploration expenditure written off |
|
206 |
381 |
50 |
Adjusted EBITDA |
|
10,306 |
10,568 |
13,066 |
Reconciliation of customers & products RC profit before
interest and tax to underlying RC profit before interest and tax*
to adjusted EBITDA* by business
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
$ million |
|
2024 |
2023 |
2023 |
RC profit before interest and tax for
customers & products |
|
988 |
(554) |
2,680 |
Less: Adjusting items* gains (charges) |
|
(301) |
(1,357) |
(79) |
Underlying RC profit before interest and
tax for customers & products |
|
1,289 |
803 |
2,759 |
By business: |
|
|
|
|
customers – convenience & mobility |
|
370 |
882 |
391 |
Castrol – included in customers |
|
184 |
213 |
161 |
products – refining & trading |
|
919 |
(79) |
2,368 |
|
|
|
|
|
Add back: Depreciation, depletion and
amortization |
|
944 |
942 |
797 |
By business: |
|
|
|
|
customers – convenience & mobility |
|
484 |
466 |
341 |
Castrol – included in customers |
|
42 |
43 |
39 |
products – refining & trading |
|
460 |
476 |
456 |
|
|
|
|
|
Adjusted EBITDA for customers &
products |
|
2,233 |
1,745 |
3,556 |
By business: |
|
|
|
|
customers – convenience & mobility |
|
854 |
1,348 |
732 |
Castrol – included in customers |
|
226 |
256 |
200 |
products – refining & trading |
|
1,379 |
397 |
2,824 |
Top of page 29
Realizations* and marker prices
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
Average realizations(a) |
|
|
|
|
Liquids* ($/bbl) |
|
|
|
|
US |
|
62.20 |
67.66 |
62.66 |
Europe |
|
85.00 |
81.02 |
79.26 |
Rest of World |
|
79.83 |
87.27 |
82.55 |
bp average |
|
71.24 |
76.50 |
72.58 |
Natural gas ($/mcf) |
|
|
|
|
US |
|
1.69 |
2.04 |
2.47 |
Europe |
|
10.27 |
15.12 |
26.83 |
Rest of World |
|
5.45 |
6.18 |
7.41 |
bp average |
|
4.62 |
5.45 |
7.20 |
Total hydrocarbons* ($/boe) |
|
|
|
|
US |
|
41.50 |
45.68 |
45.00 |
Europe |
|
76.65 |
83.21 |
107.07 |
Rest of World |
|
46.61 |
50.74 |
54.63 |
bp average |
|
46.42 |
50.90 |
54.96 |
Average oil marker prices ($/bbl) |
|
|
|
|
Brent |
|
83.16 |
84.34 |
81.17 |
West Texas Intermediate |
|
77.01 |
78.60 |
75.97 |
Western Canadian Select |
|
59.45 |
55.06 |
56.67 |
Alaska North Slope |
|
81.33 |
84.23 |
79.02 |
Mars |
|
76.90 |
78.35 |
74.24 |
Urals (NWE – cif) |
|
68.34 |
72.48 |
46.19 |
Average natural gas marker prices |
|
|
|
|
Henry Hub gas price(b)($/mmBtu) |
|
2.25 |
2.88 |
3.44 |
UK Gas – National Balancing Point
(p/therm) |
|
68.72 |
98.68 |
130.81 |
- Based on sales of consolidated subsidiaries only – this
excludes equity-accounted entities.
- Henry Hub First of Month Index.
Exchange rates
|
|
First |
Fourth |
First |
|
|
quarter |
quarter |
quarter |
|
|
2024 |
2023 |
2023 |
$/£ average rate for the period |
|
1.27 |
1.24 |
1.21 |
$/£ period-end rate |
|
1.26 |
1.28 |
1.24 |
|
|
|
|
|
$/€ average rate for the period |
|
1.09 |
1.07 |
1.07 |
$/€ period-end rate |
|
1.08 |
1.11 |
1.09 |
|
|
|
|
|
$/AUD average rate for the period |
|
0.66 |
0.65 |
0.68 |
$/AUD period-end rate |
|
0.65 |
0.69 |
0.67 |
|
|
|
|
|
Top of page 30
Legal proceedings
For a full discussion of the group’s material legal proceedings,
see pages 242-243 of bp Annual Report and Form 20-F
2023.
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 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 28 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 28 for the group.
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 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 26.
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.
Cash costs is a non-IFRS measure and a subset of
production and manufacturing expenses plus distribution and
administration expenses and excludes costs that are classified as
adjusting items. They represent the substantial majority of the
remaining expenses in these line items but exclude certain costs
that are variable, primarily with volumes (such as freight costs).
Management believes that cash costs is a performance measure that
provides investors with useful information regarding the company’s
financial performance because it considers these expenses to be the
principal operating and overhead expenses that are most directly
under their control although they also include certain foreign
exchange and commodity price effects.
Consolidation adjustment – UPII is unrealized profit in
inventory arising on inter-segment transactions.
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 at the time of FID). If asset is subsequently sold bp will
continue to record capacity as developed to 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.
Top of page 31
Glossary (continued)
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.
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.
Top of page 32
Glossary (continued)
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 24.
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.
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 27.
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 25.
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:
- 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
- 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.
Low carbon activity – An activity relating to low carbon
including: renewable electricity; bioenergy; electric vehicles and
other future mobility solutions; trading and marketing low carbon
products; blue or green hydrogen* and carbon capture, use and
storage (CCUS).
Note that, while there is some overlap of activities, these
terms do not mean the same as bp’s strategic focus area of low
carbon energy or our low carbon energy sub-segment, reported within
the gas & low carbon energy segment.
Top of page 33
Glossary (continued)
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 25.
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.
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.
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.
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.
Top of page 34
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.
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 – Activities, represented by a set of
transition growth engines, that transition bp toward its objective
to be an integrated energy company, and that comprise our low
carbon activity* alongside other businesses that support
transition, such as our power trading and marketing business and
convenience.
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 – 2024 underlying production, when
compared with 2023, 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 33) after excluding net
adjusting items and related taxation. See page 26 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 35
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
ordinary 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 ordinary 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, Thorntons and
Gigahub
Top of page 36
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, including sensitivity of
fuels margin to costs of supply; expectations regarding the
simplification of bp’s organizational structure and related cash
cost savings; expectations regarding underlying effective tax rate;
expectations regarding turnaround and maintenance activity;
expectations regarding financial performance, results of operations
and cash flows; expectations regarding future project start-ups;
expectations regarding bp’s customers & products businesses,
including TravelCenters of America, Castrol and bp pulse; 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 regarding
LNG sales; plans and expectations the sale of its investments,
including those relating to the sale of its Türkiye ground fuels
business; plans and expectations regarding investments,
collaborations and partnerships in electric vehicle (EV) charging
infrastructure; plans and expectations related to bp’s transition
growth engines, including expected capital expenditures; 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
timing and amount of future payments relating to the Gulf of Mexico
oil spill; plans and expectations regarding bp’s guidance for 2024
and the second quarter of 2024, including expected growth, margins,
other businesses & corporate underlying annual charge,
depreciation, depletion and amortization; plans and expectations
regarding capital expenditure for 2024 and 2025; expectations
regarding greenhouse gas emissions; and plans and expectations
regarding bp-operated projects and ventures, including plans for
the Gelsenkirchen refinery site, and its projects, joint ventures,
partnerships and agreements with commercial entities and other
third party partners.
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 governmental authorities or any other relevant
persons may impact bp’s ability to sell its interests in Rosneft,
or the price for which bp 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 “Risk factors” in bp’s Annual
Report and Form 20-F for fiscal year 2023 as filed with the US
Securities and Exchange Commission.
Top of page 37
Contacts
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+44 (0) 7831 095541 |
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Investor Relations |
Craig Marshall |
Graham Collins |
bp.com/investors |
+44 (0) 203 401 5592 |
+1 832 753 5116 |
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