TIDMBP.
RNS Number : 7730R
BP PLC
31 October 2023
Top of page 1
FOR IMMEDIATE RELEASE
London 31 October 2023
BP p.l.c. Group results
Third quarter and nine months 2023
-----------------------------------
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Performing while transforming
Financial summary Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- -------- --------
Profit (loss) for the period attributable
to bp shareholders 4,858 1,792 (2,163) 14,868 (13,290)
Inventory holding (gains) losses*, net
of tax (1,212) 549 2,186 (211) (2,085)
---------------------------------------------- ------- ------- ------- -------- --------
Replacement cost (RC) profit (loss)* 3,646 2,341 23 14,657 (15,375)
Net (favourable) adverse impact of adjusting
items*, net of tax (353) 248 8,127 (3,812) 38,221
---------------------------------------------- ------- ------- ------- -------- --------
Underlying RC profit* 3,293 2,589 8,150 10,845 22,846
---------------------------------------------- ------- ------- ------- -------- --------
Operating cash flow* 8,747 6,293 8,288 22,662 27,361
Capital expenditure* (3,603) (4,314) (3,194) (11,542) (8,961)
---------------------------------------------- ------- ------- ------- -------- --------
Divestment and other proceeds(a) 655 88 606 1,543 2,509
---------------------------------------------- ------- ------- ------- -------- --------
Surplus cash flow* 3,107 (269) 3,496 5,121 14,080
---------------------------------------------- ------- ------- ------- -------- --------
Net issue (repurchase) of shares (2,047) (2,073) (2,876) (6,568) (6,756)
---------------------------------------------- ------- ------- ------- -------- --------
Net debt*(b) 22,324 23,660 22,002 22,324 22,002
Adjusted EBITDA* 10,306 9,770 17,407 33,142 47,647
Announced dividend per ordinary share
(cents per share) 7.270 7.270 6.006 21.150 17.472
Underlying RC profit per ordinary share*
(cents) 19.14 14.77 43.15 61.83 118.61
---------------------------------------------- ------- ------- ------- -------- --------
Underlying RC profit per ADS* (dollars) 1.15 0.89 2.59 3.71 7.12
---------------------------------------------- ------- ------- ------- -------- --------
-- Underlying RC -- Further $1.5bn -- Delivering resilient -- Continued progress
profit $3.3bn; share buyback announced hydrocarbons - start to an IEC - first
Operating cash up of major project* Archaea modular
flow $8.7bn; Net - Tangguh Expansion; biogas plant; Woodfibre
debt reduced to North Sea Murlach and OMV LNG agreements
$22.3bn project gets regulatory
approval; bpx energy
brings online 'Bingo'
facility
This has been a solid quarter supported by strong underlying operational
performance demonstrating our continued focus on delivery. Momentum continues
to build across our businesses, with recent start-ups including Tangguh
Expansion, bpx energy's 'Bingo' central processing facility and Archaea
Energy's first modular biogas plant in Indiana. As we laid out at our
investor update in Denver, we remain committed to executing our strategy,
expect to grow earnings through this decade, and on track to deliver
strong returns for our shareholders.
Murray Auchincloss
Chief executive officer (Interim)
(a) Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement. See page 3 for more
information on other proceeds.
(b) See Note 9 for more information.
RC profit (loss), underlying RC profit (loss), surplus cash
flow, 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 31.
Top of page 2
Highlights
Underlying replacement cost profit* $3.3 billion
* Underlying replacement cost profit for the quarter
was $3.3 billion, compared with $2.6 billion for the
previous quarter. Compared to the second quarter
2023, the result reflects: higher realized refining
margins, lower level of refining turnaround activity,
a very strong oil trading result, higher oil and gas
production, partly offset by a weak gas marketing and
trading result.
* Reported profit for the quarter was $4.9 billion,
compared with $1.8 billion for the second quarter
2023. The reported result for the third quarter is
adjusted for inventory holding gains* of $1.2 billion
(net of tax) and a net favourable impact of adjusting
items* of $0.4 billion (net of tax) to derive the
underlying replacement cost profit. Adjusting items
include impairments of $1.2 billion and favourable
fair value accounting effects* of $1.5 billion.
Operating cash flow* $8.7 billion and net debt* reduced to $22.3
billion
* Operating cash flow in the quarter of $8.7 billion
includes a working capital* release (after adjusting
for inventory holding gains, fair value accounting
effects and other adjusting items) of $2.0 billion
(see page 27).
* Capital expenditure* in the third quarter was $3.6
billion. bp now expects capital expenditure,
including inorganic capital expenditure* to be around
$16 billion in 2023.
* During the third quarter, bp completed $2.0 billion
of share buybacks. This included $225 million as part
of the $675 million programme announced on 7 February
2023 to offset the expected full-year dilution from
the vesting of awards under employee share schemes in
2023. bp completed the $675 million buyback programme
on 1 September 2023.
* The $1.5 billion share buyback programme announced
with the second quarter results was completed on 27
October 2023.
* Net debt was reduced by $1.3 billion to $22.3 billion
at the end of the third quarter.
Further $ 1.5 billion share buyback within a disciplined financial
frame
* 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 third quarter, bp has announced a dividend
per ordinary share of 7.270 cents.
* bp remains committed to using 60% of 2023 surplus
cash flow* for share buybacks, subject to maintaining
a strong investment grade credit rating.
* bp intends to execute a further $1.5 billion share
buyback prior to reporting fourth quarter results.
* 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 the maintenance of a strong
investment grade credit rating.
* bp's guidance for distributions remains unchanged.
Based on bp's current forecasts, at around $60 per
barrel Brent and subject to the board's discretion
each quarter, bp expects to be able to deliver share
buybacks of around $4.0 billion per annum, at the
lower end of its $14-18 billion capital expenditure
range, and have capacity for an annual increase in
the dividend per ordinary share of around 4%.
Continued progress in transformation to an integrated energy company
* In resilient hydrocarbons, bp has announced the
start-up of Tangguh Expansion - the third major
project* in 2023 - adding around 3.8mtpa of producing
capacity to the existing 7.6mtpa facility. It has
safely produced the first commercial cargo. In August,
bpx energy successfully brought online 'Bingo', its
second central processing facility in the Permian
Basin. In September, a regulatory approval was
received for the Murlach oil and gas development in
the North Sea, a two well redevelopment of the
Marnock-Skua field back to the ETAP (Eastern Trough
Area Project) hub. bp has accelerated its biogas
strategy - part of its bioenergy transition growth*
engine - bp's Archaea Energy announced the start-up
of its original Archaea Modular Design (AMD)
renewable natural gas plant in Medora, Indiana.
* In convenience and mobility, bp continued to advance
its growth strategy in EV charging and convenience:
announcing an agreement in October with Tesla for the
future purchase of $100 million of ultra-fast
chargers in the US - this is part of the approved
$500 million of investment in the US; and expanding
its successful strategic convenience partnership with
Auchan in Poland, with plans to add more than 100
EasyAuchan stores to its retail network by the end of
2025.
* In low carbon energy, bp has strengthened its
renewables pipeline to 43.9GW net to bp from the
rights awarded to develop two offshore wind projects,
with total potential generating capacity of 4GW, in
the German tender round.
bp delivered robust operating cash flow in the quarter as we continue
to execute against our unchanged financial frame. Net debt reduced by
$1.3 billion to $22.3 billion; we are investing with discipline; and
we are delivering on our commitment to shareholder distributions, announcing
a further $1.5 billion share buyback programme.
Kate Thomson
Chief financial officer (Interim)
The commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page 37.
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Top of page 3
Financial results
In addition to the highlights on page 2:
-- Profit attributable to bp shareholders in the third quarter
and nine months was $4.9 billion and $14.9 billion respectively,
compared with a loss of $2.2 billion and $13.3 billion in the same
periods of 2022.
- After adjusting profit attributable to bp shareholders for
inventory holding gains* and net impact of adjusting items*,
underlying replacement cost profit* for the third quarter and nine
months was $3.3 billion and $10.8 billion respectively, compared
with $8.2 billion and $22.8 billion for the same periods of 2022.
This reduction in underlying replacement cost profit for the third
quarter mainly reflects lower oil and gas realizations and a weak
gas marketing and trading result. For the nine months, the
reduction reflects lower oil and gas realizations; the impact of
portfolio changes in oil production & operations; a lower
refining and oil trading performance; and a weak gas marketing and
trading result in the third quarter.
- Adjusting items in the third quarter and nine months had a net
favourable pre-tax impact of $0.5 billion and $3.8 billion
respectively, compared with an adverse pre-tax impact of $8.3
billion and $39.4 billion in the same periods of 2022.
- Adjusting items for the third quarter and nine months of 2023
include a favourable impact of pre-tax fair value accounting
effects*, relative to management's internal measure of performance,
of $1.5 billion and $6.8 billion respectively, compared with an
adverse pre-tax impact of $10.1 billion and $16.7 billion in the
same periods of 2022. This is primarily due to a decline in the
forward price of LNG during the 2023 periods, but an increase in
the 2022 comparative periods. Under IFRS, reported earnings include
the mark-to-market value of the hedges used to risk-manage LNG
contracts, but not of the LNG contracts themselves. The underlying
result includes the mark-to-market value of the hedges but also
recognizes changes in value of the LNG contracts being risk
managed.
- Adjusting items for the nine months 2022 include a pre-tax
charge of $24.0 billion relating to bp's decision to exit its
19.75% shareholding in Rosneft. A further $1.5 billion pre-tax
charge relating to bp's decision to exit its other businesses with
Rosneft in Russia is also included.
-- The effective tax rate (ETR) on RC profit or loss* for the
third quarter and nine months was 33% and 32% respectively,
compared with 96% and -242% for the same periods in 2022. Excluding
adjusting items, the underlying ETR* for the third quarter and nine
months was 33% and 39% respectively, compared with 37% and 33% for
the same periods a year ago. The lower underlying ETR for the third
quarter reflects adjustments in respect of prior periods. The
higher underlying ETR for the nine months reflects changes in the
geographical mix of profits and the increased impact of the UK
Energy Profits Levy. ETR on RC profit or loss and underlying ETR
are non-IFRS measures.
-- Operating cash flow* for the third quarter and nine months
was $8.7 billion and $22.7 billion respectively, compared with $8.3
billion and $27.4 billion for the same periods in 2022 driven by
the movements in underlying replacement cost profit and working
capital in the periods.
-- Capital expenditure* in the third quarter and nine months was
$3.6 billion and $11.5 billion respectively, compared with $3.2
billion and $9.0 billion in the same periods of 2022. The nine
months 2023 reflected the inorganic $1.1 billion spend on the
acquisition of TravelCenters of America in the second quarter
2023.
-- Total divestment and other proceeds for the third quarter and
nine months were $0.7 billion and $1.5 billion respectively,
compared with $0.6 billion and $2.5 billion for the same periods in
2022. Other proceeds for the third quarter and nine months of 2023
were $0.5 billion of proceeds from the sale of a 49% interest in a
controlled affiliate holding certain midstream assets onshore US.
Other proceeds for the nine months of 2022 were $0.6 billion of
proceeds from the disposal of a loan note related to the Alaska
divestment.
-- At the end of the third quarter, net debt* was $22.3 billion,
compared with $23.7 billion at the end of the second quarter 2023
and $22.0 billion at the end of the third quarter 2022.
Top of page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
--------------------------------------------------- ------- ------- ------- ------- --------
RC profit (loss) before interest and
tax
gas & low carbon energy 2,275 2,289 (2,956) 11,911 (1,743)
oil production & operations 3,427 2,568 6,965 9,312 18,033
customers & products 1,549 555 2,586 4,784 8,098
other businesses & corporate (500) (297) (1,093) (887) (26,840)
Of which:
other businesses & corporate excluding
Rosneft (500) (297) (1,093) (887) (2,807)
Rosneft - - - - (24,033)
Consolidation adjustment - UPII* (57) (30) (21) (109) (8)
--------------------------------------------------- ------- ------- ------- ------- --------
RC profit (loss) before interest and
tax 6,694 5,085 5,481 25,011 (2,460)
Finance costs and net finance expense
relating to pensions and other post-retirement
benefits (978) (859) (633) (2,622) (1,816)
Taxation on a RC basis (1,859) (1,724) (4,646) (7,156) (10,327)
Non-controlling interests (211) (161) (179) (576) (772)
--------------------------------------------------- ------- ------- ------- ------- --------
RC profit (loss) attributable to bp shareholders* 3,646 2,341 23 14,657 (15,375)
Inventory holding gains (losses)* 1,593 (732) (2,868) 261 2,779
Taxation (charge) credit on inventory
holding gains and losses (381) 183 682 (50) (694)
--------------------------------------------------- ------- ------- ------- ------- --------
Profit (loss) for the period attributable
to bp shareholders 4,858 1,792 (2,163) 14,868 (13,290)
--------------------------------------------------- ------- ------- ------- ------- --------
Analysis of underlying RC profit (loss) before interest and
tax
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------- ------- ------- ------- ------- --------
Underlying RC profit (loss) before interest
and tax
gas & low carbon energy 1,256 2,233 6,240 6,945 12,915
oil production & operations 3,136 2,777 5,211 9,232 15,796
customers & products 2,055 796 2,725 5,610 8,887
other businesses & corporate (303) (170) (405) (769) (865)
Of which:
other businesses & corporate excluding
Rosneft (303) (170) (405) (769) (865)
Rosneft - - - - -
Consolidation adjustment - UPII (57) (30) (21) (109) (8)
------------------------------------------------- ------- ------- ------- ------- --------
Underlying RC profit before interest
and tax 6,087 5,606 13,750 20,909 36,725
Finance costs and net finance expense
relating to pensions and other post-retirement
benefits (882) (740) (565) (2,303) (1,560)
Taxation on an underlying RC basis (1,701) (2,116) (4,856) (7,185) (11,547)
Non-controlling interests (211) (161) (179) (576) (772)
------------------------------------------------- ------- ------- ------- ------- --------
Underlying RC profit attributable to
bp shareholders* 3,293 2,589 8,150 10,845 22,846
------------------------------------------------- ------- ------- ------- ------- --------
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 Nine months vs Nine
2023 months 2022
------------------------------------------- ----------- ------------
Tier 1 and tier 2 process safety events* 29 -7
Reported recordable injury frequency* 0.255 +31.8%
upstream* production(a) (mboe/d) 2,310 +2.7%
upstream unit production costs*(b) ($/boe) 5.88 -5.9%
bp-operated upstream plant reliability* 95.7% -0.1
bp-operated refining availability*(a) 96.0% 1.6
-------------------------------------------- ----------- ------------
(a) 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.
(b) Mainly reflecting impact of portfolio changes.
Top of page 5
Outlook & Guidance
Macro outlook
In the fourth quarter:
-- bp expects oil prices to be supported by OPEC+ production
restrictions and the continued demand rebound;
-- European gas and Asian LNG prices will be driven by weather,
demand recovery in Europe and China and ongoing geopolitical
tension. In the US, weather is also a risk factor, but higher than
normal storage levels and higher production should help to dampen
volatility; and
-- bp expects industry refining margins to be significantly
lower than the third quarter.
4Q23 guidance
-- Looking ahead, we expect fourth-quarter 2023 reported
upstream* production to be broadly flat compared to third-quarter
2023.
-- In its customers business, bp expects seasonally lower
volumes with marketing margins to remain sensitive to movements in
the cost of supply. In refining, we expect significantly lower
realized refining margins and a higher level of turnaround activity
in the fourth quarter.
2023 guidance
In addition to the guidance on page 2:
-- bp expects both reported and underlying upstream production
to be higher compared with 2022. Within this, bp expects underlying
production from oil production & operations to be higher and
production from gas & low carbon energy to be slightly lower.
bp continues to expect four major project start-ups during
2023.
-- bp expects the other businesses & corporate underlying
annual charge to be at the lower end of the range $1.1-1.3 billion
for 2023. The charge may vary from quarter to quarter.
-- bp continues to expect the depreciation, depletion and
amortization to be slightly above 2022.
-- bp continues to expect the underlying ETR* for 2023 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.
-- Having realized $17.5 billion of divestment and other
proceeds since the second quarter of 2020, bp continues to expect
divestment and other proceeds of $2-3 billion in 2023 and 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 $1.3 billion pre-tax including the $1.2
billion pre-tax payment made during the second quarter.
-- bp now expects capital expenditure* of around $16 billion in
2023 including inorganic capital expenditure*.
-- bp is committed to maintaining a strong investment grade
credit rating, targeting further progress within an 'A' grade
credit rating. For 2023 bp continues to intend to allocate 40% of
surplus cash flow* to further strengthen the balance sheet.
-- For 2023 and subject to maintaining a strong investment grade
credit rating, bp remains committed to using 60% of surplus cash
flow for share buybacks.
-- 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 the maintenance of a strong
investment grade credit rating.
-- Based on bp's current forecasts, at around $60 per barrel
Brent and subject to the board's discretion each quarter, bp
continues to expect to be able to deliver share buybacks of around
$4.0 billion per annum, at the lower end of its $14-18 billion
capital expenditure range, and have capacity for an annual increase
in the dividend per ordinary share of around 4%.
Adjusted EBITDA* aims (a)
-- bp has increased its 2030 Adjusted EBITDA aims for resilient
hydrocarbons and group by $2 billion to a range of $41-44 billion
and $53-58 billion respectively.
(a) Brent $70/bbl 2021 real, at bp planning assumptions, and at
the upper end of the respective expected capital expenditure*
ranges.
The commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page 37.
----------------------------------------------------------------------
Top of page 6
gas & low carbon energy*
Financial results
-- The replacement cost (RC) profit before interest and tax for
the third quarter and nine months was $2,275 million and $11,911
million respectively, compared with a loss of $2,956 million and
$1,743 million for the same periods in 2022. The third quarter and
nine months are adjusted by a favourable impact of net adjusting
items* of $1,019 million and $4,966 million respectively, compared
with an adverse impact of net adjusting items of $9,196 million and
$14,658 million for the same periods in 2022. Adjusting items
include impacts of fair value accounting effects*, relative to
management's internal measure of performance, which are a
favourable impact of $1,816 million and $6,972 million for the
third quarter and nine months in 2023 and an adverse impact of
$9,224 million and $14,313 million for the same periods in 2022.
Under IFRS, reported earnings include the mark-to-market value of
the hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. The underlying result includes the
mark-to-market value of the hedges but also recognizes changes in
value of the LNG contracts being risk managed, which decreased as
forward prices fell during the nine months. Adjusting items also
include a net impairment charge of $224 million and $1,284 million
respectively, compared with net charges of $6 million and $523
million for the same periods in 2022.
-- After adjusting RC profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax*
for the third quarter and nine months was $1,256 million and $6,945
million respectively, compared with $6,240 million and $12,915
million for the same periods in 2022.
-- The underlying RC profit for the third quarter and nine
months, compared with the same periods in 2022, both reflect lower
realizations, a higher depreciation, depletion and amortization
charge, and a weak gas marketing and trading result in the third
quarter.
Operational update
-- Reported production for the quarter was 946mboe/d, 3.6% lower
than the same period in 2022. Underlying production* was 2.6%
lower, mainly due to base decline and increased planned maintenance
offset by major project* delivery.
-- Reported production for the nine months was 940mboe/d, 1.8%
lower than the same period in 2022. Underlying production was 2.2%
lower, mainly due to base decline partly offset by major project
delivery.
-- Renewables pipeline* at the end of the quarter was 43.9GW (bp
net), including 17.7GW bp net share of Lightsource bp's (LSbp's)
pipeline. The renewables pipeline increased by 6.7GW during the
nine months due to bp being awarded the rights to develop two North
Sea offshore wind projects in Germany (4GW) and increases to LSbp's
pipeline. In addition, there is over 13GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
-- On 19 October bp, on behalf of the Tangguh production-sharing
contract* partners (bp 40.22% operator), announced that the first
cargo of liquefied natural gas (LNG) produced by the new third
liquefaction train at the Tangguh LNG facility, in Papua Barat,
Indonesia, has safely been loaded and sailed. The start-up of
Tangguh Train 3 will add 3.8 million tonnes per annum (mtpa) of
gross LNG production capacity to the existing facility, bringing
total plant capacity to 11.4mtpa gross.
-- On 26 September bp announced that a bp and Shell joint
venture (bp 50%, Shell 50%) had been awarded three deepwater
exploration blocks off Trinidad's east coast.
-- bp continues to work towards its aim of building an LNG
portfolio of 30 million tonnes per year (mpta) by 2030:
On July 28, bp and OMV announced the signing of a long-term
agreement to supply of up to 1mtpa of LNG for 10 years from 2026.
This builds on bp in May 2023 agreeing 2bcm per year of
regasification capacity for 20 years at the Gate terminal in
Rotterdam.
On 5 September, bp announced its third long-term LNG offtake
contract from Woodfibre's British Columbia LNG facility with firm
offtake totalling 1.95mtpa and any additional production on a
flexible offtake basis.
low carbon energy
-- Hydrogen and CCS
On 13 October the Midwest Alliance for Clean Hydrogen (MachH2),
of which bp is a member, announced it has been selected by the U.S.
Department of Energy's Office of Clean Energy Demonstrations to
develop a Regional Clean Hydrogen Hub. Under the proposals, it
would include blue hydrogen* production at or near bp's Whiting
refinery and a potential hydrogen mobility corridor across Indiana
and neighbouring states.
Hydrogen pipeline* at the end of the third quarter was 2.9mtpa,
an increase of 1.1mtpa compared with the start of the year.
-- Offshore wind
bp and its partner Equinor continue to work on options for their
US offshore wind projects to mitigate the effect of inflationary
pressures and permitting delays. A filing on 7 June with the New
York Public Services Commission (PSC) requesting to renegotiate the
power purchase agreements associated with three wind farms off the
coast of New York (Empire Wind 1 and 2, Beacon Wind 1) was rejected
on 12 October. Equinor and bp are assessing the impact of the
decision on these projects and future development plans. We have
recognized a pre-tax impairment charge of $540 million in the third
quarter related to these assets. The pre-tax charge is recorded
through equity-accounted earnings and is classified as an 'other'
adjusting item.
Top of page 7
gas & low carbon energy (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------- -------
Profit (loss) before interest and tax 2,275 2,289 (2,970) 11,912 (1,741)
Inventory holding (gains) losses* - - 14 (1) (2)
---------------------------------------------- ------- ------- ------- ------- -------
RC profit (loss) before interest and
tax 2,275 2,289 (2,956) 11,911 (1,743)
Net (favourable) adverse impact of adjusting
items (1,019) (56) 9,196 (4,966) 14,658
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 1,256 2,233 6,240 6,945 12,915
Taxation on an underlying RC basis (448) (575) (1,478) (1,984) (3,204)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 808 1,658 4,762 4,961 9,711
---------------------------------------------- ------- ------- ------- ------- -------
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- ------- ------ ------
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,543 1,407 1,177 4,390 3,635
------------------------------------------------ ------- ------- ------- ------ ------
Exploration write-offs
----------------------------------------------- ------- ------- ------- ------ ------
Exploration write-offs 15 (1) 10 13 8
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*
----------------------------------------------- ------- ------- ------- ------ ------
Total adjusted EBITDA 2,814 3,639 7,427 11,348 16,558
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
gas 833 697 872 2,177 2,195
low carbon energy 222 190 86 778 447
------------------------------------------------ ------- ------- ------- ------ ------
Total capital expenditure 1,055 887 958 2,955 2,642
------------------------------------------------ ------- ------- ------- ------ ------
Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
Production (net of royalties)(a)
Liquids* (mb/d) 106 103 117 107 117
Natural gas (mmcf/d) 4,875 4,641 5,011 4,826 4,873
Total hydrocarbons* (mboe/d) 946 903 981 940 957
---------------------------------- ------- ------- ------- ------ ------
Average realizations* (b)
Liquids ($/bbl) 76.69 73.57 88.03 76.51 92.93
Natural gas ($/mcf) 5.38 5.53 9.85 6.11 8.74
Total hydrocarbons* ($/boe) 36.82 36.96 60.80 40.23 55.91
---------------------------------- ------- ------- ------- ------ ------
(a) Includes bp's share of production of equity-accounted
entities in the gas & low carbon energy segment.
(b) Realizations are based on sales by consolidated subsidiaries
only - this excludes equity-accounted entities.
Top of page 8
gas & low carbon energy (continued)
30 September 30 June 30 September
low carbon energy(c) 2023 2023 2022
Renewables (bp net, GW)
Installed renewables capacity* 2.5 2.4 2.0
-------------------------------------------------- ------------ ------- ------------
Developed renewables to FID* 6.1 6.1 4.6
Renewables pipeline 43.9 39.6 26.9
of which by geographical area:
================================================= ------------ ------- ------------
Renewables pipeline - Americas 18.4 17.8 17.5
Renewables pipeline - Asia Pacific(d) 12.1 12.2 1.7
Renewables pipeline - Europe 13.4 9.5 7.6
Renewables pipeline - Other - 0.1 0.1
================================================== ------------ ------- ------------
of which by technology:
================================================= ------------ ------- ------------
Renewables pipeline - offshore wind 9.3 5.3 5.2
Renewables pipeline - onshore wind 6.1 6.3 -
Renewables pipeline - solar 28.5 28.1 21.7
================================================== ------------ ------- ------------
Total Developed renewables to FID and Renewables
pipeline 50.0 45.7 31.5
-------------------------------------------------- ------------ ------- ------------
(c) Because of rounding, some totals may not agree exactly with
the sum of their component parts.
(d) 30 September 2023 and 30 June 2023 include 10.3GW of onshore
wind and solar pipeline in support of hydrogen.
Top of page 9
oil production & operations
Financial results
-- The replacement cost (RC) profit before interest and tax for
the third quarter and nine months was $3,427 million and $9,312
million respectively, compared with $6,965 million and $18,033
million for the same periods in 2022. The third quarter and nine
months are adjusted by a favourable impact of net adjusting items*
of $291 million and $80 million respectively, compared with a
favourable impact of net adjusting items of $1,754 million and
$2,237 million for the same periods in 2022.
-- After adjusting items, the underlying RC profit before
interest and tax* for the third quarter and nine months was $3,136
million and $9,232 million respectively, compared with $5,211
million and $15,796 million for the same periods in 2022.
-- The underlying RC profit for the third quarter and nine
months compared to the same periods in 2022, reflects lower
realizations, and the impact of portfolio changes, partly offset by
higher volumes.
Operational update
-- Reported production for the quarter was 1,382mboe/d, 5.0%
higher than the third quarter of 2022. Underlying production* for
the quarter was 5.1% higher compared with the third quarter of 2022
reflecting reduced seasonal maintenance, major projects* and bpx
energy performance.
-- Reported production for the nine months was 1,371mboe/d, 6.1%
higher than the same period of 2022. Underlying production for the
nine months was 5.6% higher compared with the same period of 2022
reflecting bpx energy performance, reduced seasonal maintenance and
major projects.
Strategic Progress
-- In August bpx energy successfully brought online 'Bingo', its
second 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).
-- During the third quarter the Azeri Central East (ACE)
platform topsides were safely installed in the field. This is the
9th and most automated platform installed in the giant Azeri Chirag
Gunashli (ACG) field with approximately 90,000 barrels a day
installed capacity (bp 30.37% operator).
-- Regulatory approval was received on 8 September 2023 for the
Murlach oil and gas development in the North Sea, a two well
redevelopment of the Marnock-Skua field back to the ETAP (Eastern
Trough Area Project) hub (bp 80% operator).
-- In September, bp and its coventurers in the Clair joint
venture, made the final investment decision to proceed with the
construction and operation of the Shetland Crossover Pipeline,
reinforcing the gas export network and supporting UK security of
supply (bp 45% operator).
-- Moving forward with concept selection for a bp-operated Tiber
development project in the Gulf of Mexico.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------- -------
Profit before interest and tax 3,426 2,568 6,966 9,312 18,028
Inventory holding (gains) losses* 1 - (1) - 5
---------------------------------------------- ------- ------- ------- ------- -------
RC profit before interest and tax 3,427 2,568 6,965 9,312 18,033
Net (favourable) adverse impact of adjusting
items (291) 209 (1,754) (80) (2,237)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 3,136 2,777 5,211 9,232 15,796
Taxation on an underlying RC basis (1,386) (1,413) (2,921) (4,565) (7,128)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 1,750 1,364 2,290 4,667 8,668
---------------------------------------------- ------- ------- ------- ------- -------
Top of page 10
oil production & operations (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- ------- ------ ------
Depreciation, depletion and amortization
----------------------------------------------- ------- ------- ------- ------ ------
Total depreciation, depletion and amortization 1,432 1,370 1,381 4,129 4,181
------------------------------------------------ ------- ------- ------- ------ ------
Exploration write-offs
----------------------------------------------- ------- ------- ------- ------ ------
Exploration write-offs 59 242 180 352 310
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*
----------------------------------------------- ------- ------- ------- ------ ------
Total adjusted EBITDA 4,627 4,389 6,772 13,713 20,287
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
----------------------------------------------- ------- ------- ------- ------ ------
Total capital expenditure 1,644 1,478 1,386 4,642 3,848
------------------------------------------------ ------- ------- ------- ------ ------
Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
Production (net of royalties)(a)
Liquids* (mb/d) 1,011 1,000 959 1,005 947
Natural gas (mmcf/d) 2,155 2,140 2,075 2,118 2,001
Total hydrocarbons* (mboe/d) 1,382 1,369 1,317 1,371 1,292
---------------------------------- ------- ------- ------- ------ ------
Average realizations* (b)
Liquids ($/bbl) 71.10 69.19 93.14 70.65 92.35
Natural gas(c) ($/mcf) 3.44 3.23 12.12 4.37 10.54
Total hydrocarbons*(c) ($/boe) 56.76 54.57 86.83 57.86 84.57
---------------------------------- ------- ------- ------- ------ ------
(a) Includes bp's share of production of equity-accounted
entities in the oil production & operations segment.
(b) Realizations are based on sales by consolidated subsidiaries
only - this excludes equity-accounted entities.
(c) Realizations calculation methodology has been changed to
reflect gas price fluctuations within the North Sea region. Third
quarter 2022 and nine months 2022 were restated. There is no impact
on financial results.
Top of page 11
customers & products
Financial results
-- The replacement cost (RC) profit before interest and tax for
the third quarter and nine months was $1,549 million and $4,784
million respectively, compared with $2,586 million and $8,098
million for the same periods in 2022. The third quarter and nine
months are adjusted by an adverse impact of net adjusting items* of
$506 million and $826 million respectively, compared with an
adverse impact of net adjusting items of $139 million and $789
million for the same periods in 2022. Adjusting items include
impacts of fair value accounting effects*, relative to management's
internal measure of performance, which are an adverse impact of
$198 million for the quarter and $230 million for the nine months
in 2023, compared with an adverse impact of $59 million and $498
million for the same periods in 2022.
-- After adjusting items, the underlying RC profit before
interest and tax* for the third quarter and nine months was $2,055
million and $5,610 million respectively, compared with $2,725
million and $8,887 million for the same periods in 2022.
-- The customers & products result for the third quarter was
lower than the same period in 2022, with lower results in both
customers and refining. The result for the nine months was
significantly lower than the same period in 2022, primarily
reflecting a lower refining and oil trading performance.
-- customers - the convenience and mobility results, excluding
Castrol, for the third quarter and nine months were lower than the
same periods in 2022. In the third quarter, the benefits of a
strong convenience performance and higher volumes were more than
offset by a weaker retail performance, compared with the same
period last year, which had benefited from higher margins as a
result of falling cost of supply. In addition, the result included
higher costs, including increased expenditure in our transition
growth* engines, inflationary impacts and increased
depreciation.
Castrol result for the third quarter was higher than the same
period in 2022, primarily due to higher margins. The result for the
nine months was lower, with higher margins more than offset by
higher costs and adverse foreign exchange impacts.
-- products - the products results for the third quarter and
nine months were lower compared with the same periods in 2022,
primarily due to lower industry refining margins. In refining, the
result for the third quarter reflected lower realized refining
margins, including the impact of narrower North American heavy
crude differentials, and lower commercial optimization
opportunities compared to the strong performance in the same period
last year. This was partially offset by lower maintenance activity.
In addition, the result for the nine months was impacted by higher
turnaround activity. The oil trading contribution for the third
quarter was very strong compared to the average result in the same
period last year. The result for the nine months however was lower,
as the first half of 2022 benefited from an exceptionally strong
oil trading performance.
Operational update
-- bp-operated refining availability* for the third quarter and
nine months was 96.3% and 96.0% respectively, higher compared with
94.3% and 94.4% for the same periods in 2022.
Strategic progress
-- In support of bp's convenience transition growth engine
delivery, bp signed an agreement in August with Auchan to extend
its successful strategic convenience partnership in Poland, with
plans to add more than 100 EasyAuchan stores to its retail network
by the end of 2025. In addition, in September, bp strengthened its
BPme Rewards loyalty scheme with the launch of loyalty pricing,
giving customers exclusive discounts on retail store products at
around 300 bp company-owned retail sites across the UK.
-- In August, bp announced it had approved $500 million of
investment in the US to begin building its EV network over the next
two to three years. As part of this investment, in October, bp
announced it had entered into an agreement with Tesla for the
future purchase of $100 million of ultra-fast chargers.
-- In September, bp pulse, The EV Network and NEC Group,
launched the UK's largest public EV charging hub at the NEC campus
in Birmingham, UK. The new Gigahub(TM) at the NEC boasts 30
ultra-fast 150KW and 150 fast 7kW charge points enabling 180 EVs to
charge simultaneously.
-- In September, Castrol opened the Castrol Americas Technology
Center, in Wayne, New Jersey. This is a 12,000 square foot,
state-of-the-art laboratory to develop and test fluids for electric
vehicles, engine and driveline oils and industrial lubricants.
-- In October, bp's Archaea Energy announced the official
start-up of its original Archaea Modular Design (AMD) renewable
natural gas plant in Medora, Indiana, located next to a landfill
site owned by Rumpke Waste and Recycling.
Top of page 12
customers & products (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------- -------
Profit (loss) before interest and tax 3,143 (177) (269) 5,044 10,880
Inventory holding (gains) losses* (1,594) 732 2,855 (260) (2,782)
---------------------------------------------- ------- ------- ------- ------- -------
RC profit before interest and tax 1,549 555 2,586 4,784 8,098
Net (favourable) adverse impact of adjusting
items 506 241 139 826 789
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 2,055 796 2,725 5,610 8,887
Of which:(a)
customers - convenience & mobility 670 701 1,137 1,762 2,338
Castrol - included in customers 185 171 151 517 630
products - refining & trading 1,385 95 1,588 3,848 6,549
Taxation on an underlying RC basis (167) (271) (725) (1,215) (1,908)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 1,888 525 2,000 4,395 6,979
---------------------------------------------- ------- ------- ------- ------- -------
(a) A reconciliation to RC profit before interest and tax by business is provided on page 29.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*(b)
customers - convenience & mobility 1,151 1,149 1,448 3,032 3,290
Castrol - included in customers 228 213 187 641 743
products - refining & trading 1,819 541 1,974 5,184 7,726
2,970 1,690 3,422 8,216 11,016
------- ------- ------- ------ ------
Depreciation, depletion and amortization
----------------------------------------------- ------- ------- ------- ------ ------
Total depreciation, depletion and amortization 915 894 697 2,606 2,129
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
customers - convenience & mobility 435 1,452 404 2,345 1,085
Castrol - included in customers 60 44 42 172 137
products - refining & trading 367 406 309 1,305 1,018
Total capital expenditure 802 1,858 713 3,650 2,103
------------------------------------------------ ------- ------- ------- ------ ------
(b) A reconciliation to RC profit before interest and tax by business is provided on page 29.
Retail(c) Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
bp retail sites* - total (#) 21,150 21,100 20,550 21,150 20,550
Strategic convenience sites* 2,750 2,750 2,250 2,750 2,250
-------------------------------- ------- ------- ------- ------ ------
(c) Reported to the nearest 50.
Marketing sales of refined products Third Second Third Nine Nine
(mb/d)
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
US 1,280 1,275 1,143 1,212 1,140
Europe 1,093 1,056 1,098 1,041 1,005
Rest of World 474 472 451 469 454
------------------------------------------ ------- ------- ------- ------ ------
2,847 2,803 2,692 2,722 2,599
Trading/supply sales of refined products 392 353 355 359 359
------------------------------------------ ------- ------- ------- ------ ------
Total sales volume of refined products 3,239 3,156 3,047 3,081 2,958
------------------------------------------ ------- ------- ------- ------ ------
Top of page 13
customers & products (continued)
Refining marker margin* Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
bp average refining marker margin (RMM)(d)
($/bbl) 31.8 24.7 35.5 28.2 33.4
-------------------------------------------- ------- ------- ------- ------ ------
(d) The RMM in the quarter is calculated based on bp's current
refinery portfolio. On a comparative basis, the third quarter and
nine months 2022 RMM would be $35.4/bbl and $33.4/bbl
respectively.
Refinery throughputs (mb/d) Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
US 690 638 703 671 700
Europe 760 726 809 773 818
Rest of World - - - - 29
---------------------------------------- ------- ------- ------- ------ ------
Total refinery throughputs 1,450 1,364 1,512 1,444 1,547
---------------------------------------- ------- ------- ------- ------ ------
bp-operated refining availability* (%) 96.3 95.7 94.3 96.0 94.4
---------------------------------------- ------- ------- ------- ------ ------
Top of page 14
other businesses & corporate
Other businesses & corporate comprises innovation &
engineering, bp ventures, Launchpad, regions, corporates &
solutions, our corporate activities & functions and any
residual costs of the Gulf of Mexico oil spill. It also includes
Rosneft results up to 27 February 2022.
Financial results
-- The replacement cost (RC) loss before interest and tax for
the third quarter and nine months was $500 million and $887 million
respectively, compared with a loss of $1,093 million and $26,840
million for the same periods in 2022. The third quarter and nine
months are adjusted by an adverse impact of net adjusting items* of
$197 million and $118 million respectively, compared with an
adverse impact of net adjusting items of $688 million and $25,975
million for the same periods in 2022. Adjusting items include
impacts of fair value accounting effects* which are an adverse
impact of $146 million for the quarter and a favourable impact of
$51 million for the nine months in 2023, an adverse impact of $785
million and $1,896 million for the same periods in 2022. The
adjusting items for the nine months in 2022 mainly relate to
Rosneft.
-- After adjusting RC loss for net adjusting items, the
underlying RC loss before interest and tax* for the third quarter
and nine months was $303 million and $769 million respectively,
compared with a loss of $405 million and $865 million for the same
periods in 2022.
Strategic progress
-- In August bp ventures invested $5 million in Advanced Ionics,
a company developing a new category of hydrogen electrolyzers,
supporting the expansion of green hydrogen* production.
-- In August bp ventures announced that it had invested $5
million in Dynamon, which provides advanced data analytics and AI
tools helping the road transport industry maximize
sustainability.
-- In July bp ventures invested $30 million in Electric
Hydrogen, a company which is developing high efficiency and lower
cost electrolyzers with the aim of delivering its first 100MW
product in 2024.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------ --------
Profit (loss) before interest and tax (500) (297) (1,093) (887) (26,840)
Inventory holding (gains) losses* - - - - -
--------------------------------------------- ------- ------- ------- ------ --------
RC profit (loss) before interest and
tax (500) (297) (1,093) (887) (26,840)
Net (favourable) adverse impact of adjusting
items(a) 197 127 688 118 25,975
---------------------------------------------- ------- ------- ------- ------ --------
Underlying RC profit (loss) before interest
and tax (303) (170) (405) (769) (865)
Taxation on an underlying RC basis 162 10 206 201 396
---------------------------------------------- ------- ------- ------- ------ --------
Underlying RC profit (loss) before interest (141) (160) (199) (568) (469)
---------------------------------------------- ------- ------- ------- ------ --------
(a) Includes fair value accounting effects relating to the
hybrid bonds that were issued on 17 June 2020. See page 32 for more
information.
other businesses & corporate (excluding Rosneft)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------ -------
Profit (loss) before interest and tax (500) (297) (1,093) (887) (2,807)
Inventory holding (gains) losses* - - - - -
--------------------------------------------- ------- ------- ------- ------ -------
RC profit (loss) before interest and
tax (500) (297) (1,093) (887) (2,807)
Net (favourable) adverse impact of adjusting
items 197 127 688 118 1,942
---------------------------------------------- ------- ------- ------- ------ -------
Underlying RC profit (loss) before interest
and tax (303) (170) (405) (769) (865)
Taxation on an underlying RC basis 162 10 206 201 396
---------------------------------------------- ------- ------- ------- ------ -------
Underlying RC profit (loss) before interest (141) (160) (199) (568) (469)
---------------------------------------------- ------- ------- ------- ------ -------
other businesses & corporate (Rosneft)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------- ------- ------- ------- ------ --------
Profit (loss) before interest and tax - - - - (24,033)
Inventory holding (gains) losses* - - - - -
--------------------------------------------- ------- ------- ------- ------ --------
RC profit (loss) before interest and
tax - - - - (24,033)
Net (favourable) adverse impact of adjusting
items - - - - 24,033
---------------------------------------------- ------- ------- ------- ------ --------
Underlying RC profit (loss) before interest
and tax - - - - -
Taxation on an underlying RC basis - - - - -
---------------------------------------------- ------- ------- ------- ------ --------
Underlying RC profit (loss) before interest - - - - -
---------------------------------------------- ------- ------- ------- ------ --------
Top of page 15
Financial statements
Group income statement
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------- ------- ------- ------- ------- --------
Sales and other operating revenues (Note
5) 53,269 48,538 55,011 157,989 172,135
Earnings from joint ventures - after interest
and tax (198) 360 498 357 939
Earnings from associates - after interest
and tax 271 231 275 675 1,273
Interest and other income 410 378 159 1,036 495
Gains on sale of businesses and fixed assets 264 (28) 1,866 389 3,693
------------------------------------------------- ------- ------- ------- ------- --------
Total revenues and other income 54,016 49,479 57,809 160,446 178,535
Purchases 29,951 29,172 39,993 88,245 106,942
Production and manufacturing expenses 6,080 6,231 7,193 19,293 21,769
Production and similar taxes 456 404 639 1,334 1,768
Depreciation, depletion and amortization
(Note 6) 4,145 3,923 3,467 11,868 10,604
Net impairment and losses on sale of businesses
and fixed assets (Note 3) 542 1,269 417 1,899 26,893
Exploration expense 97 293 225 496 445
Distribution and administration expenses 4,458 3,834 3,262 12,039 9,795
------------------------------------------------- ------- ------- ------- ------- --------
Profit (loss) before interest and taxation 8,287 4,353 2,613 25,272 319
Finance costs 1,039 920 649 2,802 1,869
Net finance (income) expense relating to
pensions and other post-retirement benefits (61) (61) (16) (180) (53)
------------------------------------------------- ------- ------- ------- ------- --------
Profit (loss) before taxation 7,309 3,494 1,980 22,650 (1,497)
Taxation 2,240 1,541 3,964 7,206 11,021
------------------------------------------------- ------- ------- ------- ------- --------
Profit (loss) for the period 5,069 1,953 (1,984) 15,444 (12,518)
------------------------------------------------- ------- ------- ------- ------- --------
Attributable to
bp shareholders 4,858 1,792 (2,163) 14,868 (13,290)
Non-controlling interests 211 161 179 576 772
------------------------------------------------- ------- ------- ------- ------- --------
5,069 1,953 (1,984) 15,444 (12,518)
------- ------- ------- ------- --------
Earnings per share (Note 7)
Profit (loss) for the period attributable
to bp shareholders
Per ordinary share (cents)
Basic 28.24 10.22 (11.45) 84.77 (69.01)
Diluted 27.59 10.01 (11.45) 82.99 (69.01)
Per ADS (dollars)
Basic 1.69 0.61 (0.69) 5.09 (4.14)
Diluted 1.66 0.60 (0.69) 4.98 (4.14)
------------------------------------------------- ------- ------- ------- ------- --------
Top of page 16
Condensed group statement of comprehensive income
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
----------------------------------------------- ------- ------- ------- ------- --------
Profit (loss) for the period 5,069 1,953 (1,984) 15,444 (12,518)
----------------------------------------------- ------- ------- ------- ------- --------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Currency translation differences(a) (590) 11 (1,725) (126) (5,928)
Exchange (gains) losses on translation
of foreign operations reclassified to
gain or loss on sale of businesses and
fixed assets(b) (2) - - (2) 10,791
Cash flow hedges and costs of hedging (56) (56) (142) 434 179
Share of items relating to equity-accounted
entities, net of tax 25 (27) (134) (205) 10
Income tax relating to items that may
be reclassified (69) 71 (54) (74) (226)
----------------------------------------------- ------- ------- ------- ------- --------
(692) (1) (2,055) 27 4,826
------- ------- ------- ------- --------
Items that will not be reclassified to
profit or loss
Remeasurements of the net pension and
other post-retirement benefit liability
or asset (111) (855) 112 (1,053) 1,848
Cash flow hedges that will subsequently
be transferred to the balance sheet (1) - (1) (1) (5)
Income tax relating to items that will
not be reclassified 57 308 19 388 (470)
----------------------------------------------- ------- ------- ------- ------- --------
(55) (547) 130 (666) 1,373
------- ------- ------- ------- --------
Other comprehensive income (747) (548) (1,925) (639) 6,199
----------------------------------------------- ------- ------- ------- ------- --------
Total comprehensive income 4,322 1,405 (3,909) 14,805 (6,319)
----------------------------------------------- ------- ------- ------- ------- --------
Attributable to
bp shareholders 4,140 1,240 (4,042) 14,241 (6,978)
Non-controlling interests 182 165 133 564 659
----------------------------------------------- ------- ------- ------- ------- --------
4,322 1,405 (3,909) 14,805 (6,319)
------- ------- ------- ------- --------
(a) Third quarter 2022 is principally affected by movements in
the Pound Sterling against the US dollar. Nine months 2022 is
principally affected by movements in the Russian rouble and Pound
Sterling against the US dollar.
(b) Nine months 2022 predominantly relates to the loss of significant influence over Rosneft.
Top of page 17
Condensed group statement of changes in equity
bp shareholders' Non-controlling interests Total
Hybrid
$ million equity bonds Other interest equity
--------------------------------------- ---------------- -------- ----------------- -------
At 1 January 2023 67,553 13,390 2,047 82,990
Total comprehensive income 14,241 438 126 14,805
Dividends (3,598) - (326) (3,924)
Repurchase of ordinary share
capital (6,666) - - (6,666)
Share-based payments, net of
tax 531 - - 531
Issue of perpetual hybrid bonds (1) 163 - 162
Payments on perpetual hybrid
bonds (5) (494) - (499)
Transactions involving non-controlling
interests, net of tax 363 - (86) 277
---------------------------------------- ---------------- -------- ----------------- -------
At 30 September 2023 72,418 13,497 1,761 87,676
---------------------------------------- ---------------- -------- ----------------- -------
bp shareholders' Non-controlling interests Total
Hybrid
$ million equity(a) bonds Other interest equity
--------------------------------------- ---------------- -------- ----------------- -------
At 1 January 2022 75,463 13,041 1,935 90,439
Total comprehensive income (6,978) 383 276 (6,319)
Dividends (3,267) - (194) (3,461)
Issue of ordinary share capital(b) 820 - - 820
Repurchase of ordinary share
capital (7,988) - - (7,988)
Share-based payments, net of
tax 631 - - 631
Issue of perpetual hybrid bonds (3) 325 - 322
Payments on perpetual hybrid
bonds 15 (462) - (447)
Transactions involving non-controlling
interests, net of tax (512) - (152) (664)
---------------------------------------- ---------------- -------- ----------------- -------
At 30 September 2022 58,181 13,287 1,865 73,333
---------------------------------------- ---------------- -------- ----------------- -------
(a) In 2022 $9.2 billion of the opening foreign currency
translation reserve has been moved to the profit and loss account
reserve as a result of bp's decision to exit its shareholding in
Rosneft and its other businesses with Rosneft in Russia.
(b) Relates to ordinary shares issued as non-cash consideration
for the acquisition of the public units of BP Midstream Partners
LP.
Top of page 18
Group balance sheet
30 September 31 December
$ million 2023 2022
-------------------------------------------------------- ------------ -----------
Non-current assets
Property, plant and equipment 107,163 106,044
Goodwill 12,283 11,960
Intangible assets 9,997 10,200
Investments in joint ventures 12,635 12,400
Investments in associates 7,954 8,201
Other investments 2,337 2,670
-------------------------------------------------------- ------------ -----------
Fixed assets 152,369 151,475
Loans 1,656 1,271
Trade and other receivables 1,066 1,092
Derivative financial instruments 9,495 12,841
Prepayments 600 576
Deferred tax assets 3,470 3,908
Defined benefit pension plan surpluses 8,173 9,269
-------------------------------------------------------- ------------ -----------
176,829 180,432
------------ -----------
Current assets
Loans 363 315
Inventories 25,671 28,081
Trade and other receivables 31,558 34,010
Derivative financial instruments 12,950 11,554
Prepayments 1,333 2,092
Current tax receivable 674 621
Other investments 932 578
Cash and cash equivalents 29,926 29,195
-------------------------------------------------------- ------------ -----------
103,407 106,446
Assets classified as held for sale (Note 2) - 1,242
-------------------------------------------------------- ------------ -----------
103,407 107,688
------------ -----------
Total assets 280,236 288,120
-------------------------------------------------------- ------------ -----------
Current liabilities
Trade and other payables 60,440 63,984
Derivative financial instruments 6,542 12,618
Accruals 5,958 6,398
Lease liabilities 2,536 2,102
Finance debt 2,872 3,198
Current tax payable 3,054 4,065
Provisions 4,193 6,332
-------------------------------------------------------- ------------ -----------
85,595 98,697
Liabilities directly associated with assets classified
as held for sale (Note 2) - 321
-------------------------------------------------------- ------------ -----------
85,595 99,018
------------ -----------
Non-current liabilities
Other payables 9,465 10,387
Derivative financial instruments 11,409 13,537
Accruals 1,273 1,233
Lease liabilities 8,343 6,447
Finance debt 45,938 43,746
Deferred tax liabilities 10,293 10,526
Provisions 15,497 14,992
Defined benefit pension plan and other post-retirement
benefit plan deficits 4,747 5,244
-------------------------------------------------------- ------------ -----------
106,965 106,112
------------ -----------
Total liabilities 192,560 205,130
-------------------------------------------------------- ------------ -----------
Net assets 87,676 82,990
-------------------------------------------------------- ------------ -----------
Equity
bp shareholders' equity 72,418 67,553
Non-controlling interests 15,258 15,437
-------------------------------------------------------- ------------ -----------
Total equity 87,676 82,990
-------------------------------------------------------- ------------ -----------
Top of page 19
Condensed group cash flow statement
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
-------------------------------------------------- ------- ------- ------- -------- --------
Operating activities
Profit (loss) before taxation 7,309 3,494 1,980 22,650 (1,497)
Adjustments to reconcile profit (loss) before
taxation to net cash provided by operating
activities
Depreciation, depletion and amortization
and exploration expenditure written off 4,219 4,164 3,657 12,233 10,922
Net impairment and (gain) loss on sale of
businesses and fixed assets 278 1,297 (1,449) 1,510 23,200
Earnings from equity-accounted entities,
less dividends received 421 (31) (391) 391 (1,412)
Net charge for interest and other finance
expense, less net interest paid 136 102 72 301 210
Share-based payments 298 243 251 519 629
Net operating charge for pensions and other
post-retirement benefits, less contributions
and benefit payments for unfunded plans (40) (47) (15) (130) (197)
Net charge for provisions, less payments (342) (221) 173 (1,662) 1,453
Movements in inventories and other current
and non-current assets and liabilities (783) (742) 6,764 (5,280) 577
Income taxes paid (2,749) (1,966) (2,754) (7,870) (6,524)
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash provided by operating activities 8,747 6,293 8,288 22,662 27,361
-------------------------------------------------- ------- ------- ------- -------- --------
Investing activities
Expenditure on property, plant and equipment,
intangible and other assets (3,456) (3,453) (3,105) (10,038) (8,373)
Acquisitions, net of cash acquired (9) (804) (3) (761) (8)
Investment in joint ventures (102) (50) (40) (692) (493)
Investment in associates (36) (7) (46) (51) (87)
-------------------------------------------------- ------- ------- ------- -------- --------
Total cash capital expenditure (3,603) (4,314) (3,194) (11,542) (8,961)
Proceeds from disposal of fixed assets 59 28 12 102 682
Proceeds from disposal of businesses, net
of cash disposed 79 60 594 924 1,254
Proceeds from loan repayments 12 21 15 39 60
================================================== ======= ======= ======= ======== ========
Cash provided from investing activities 150 109 621 1,065 1,996
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash used in investing activities (3,453) (4,205) (2,573) (10,477) (6,965)
-------------------------------------------------- ------- ------- ------- -------- --------
Financing activities
Net issue (repurchase) of shares (Note 7) (2,047) (2,073) (2,876) (6,568) (6,756)
Lease liability payments (663) (620) (478) (1,838) (1,448)
Proceeds from long-term financing 8 3,643 1 6,046 2,003
Repayments of long-term financing (264) (2,828) (4,035) (3,891) (9,500)
Net increase (decrease) in short-term debt (71) (348) (618) (948) (1,582)
Issue of perpetual hybrid bonds 30 87 194 162 322
Payments relating to perpetual hybrid bonds (258) (250) (180) (744) (489)
Payments relating to transactions involving
non-controlling interests (Other interest) - - (2) (180) (8)
Receipts relating to transactions involving
non-controlling interests (Other interest) 527 2 3 536 10
Dividends paid - bp shareholders (1,249) (1,153) (1,140) (3,585) (3,270)
- non-controlling interests (191) (67) (66) (326) (194)
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash provided by (used in) financing
activities (4,178) (3,607) (9,197) (11,336) (20,912)
-------------------------------------------------- ------- ------- ------- -------- --------
Currency translation differences relating
to cash and cash equivalents (104) - (322) (118) (861)
-------------------------------------------------- ------- ------- ------- -------- --------
Increase (decrease) in cash and cash equivalents 1,012 (1,519) (3,804) 731 (1,377)
-------------------------------------------------- ------- ------- ------- -------- --------
Cash and cash equivalents at beginning of
period 28,914 30,433 33,108 29,195 30,681
Cash and cash equivalents at end of period 29,926 28,914 29,304 29,926 29,304
-------------------------------------------------- ------- ------- ------- -------- --------
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 2022 included in BP Annual
Report and Form 20-F 2022.
The directors consider it appropriate to adopt the going concern
basis of accounting in preparing these interim financial
statements. 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 except for
the Pillar Two amendments noted below. IFRS as adopted by the UK
and EU differ in certain respects from IFRS as issued by the IASB.
The differences have no impact on the group's consolidated
financial statements for the periods presented. The financial
information presented herein has been prepared in accordance with
the accounting policies expected to be used in preparing BP Annual
Report and Form 20-F 2023 which are the same as those used in
preparing BP Annual Report and Form 20-F 2022.
In May 2023 the IASB issued International Tax Reform - Pillar
Two Model Rules - Amendments to IAS 12 Income Taxes to clarify the
application of IAS 12 to tax legislation enacted or substantively
enacted to implement Pillar Two of the Organisation for Economic
Co-operation and Development's Base Erosion and Profit Shifting
project, which aims to address the tax challenges arising from the
digitalisation of the economy. The amendments include a mandatory
temporary exception from accounting for deferred tax on such tax
law. The amendments were adopted by the UK in July and are yet to
be adopted by the EU, however no impact is expected on the
financial statements for 2023.
In July 2023 the UK government enacted legislation to implement
the Pillar Two rules. The legislation is effective for bp from 1
January 2024 and includes an income inclusion rule and a domestic
minimum tax, which together are designed to ensure a minimum
effective tax rate of 15% in each country in which the group
operates. Similar legislation is being enacted by other governments
around the world. As a result of the amendments to IAS 12, no
impact is expected on the financial statements in 2023, and work is
ongoing to assess the potential impact in the 2024 financial
statements.
There are no other new or amended standards or interpretations
adopted from 1 January 2023 onwards, including IFRS 17 'Insurance
Contracts,' that have a significant impact on the financial
information.
Significant accounting judgements and estimates
bp's significant accounting judgements and estimates were
disclosed in BP Annual Report and Form 20-F 2022. These have been
subsequently considered at the end of each quarter to determine if
any changes were required to those judgements and estimates. No
significant changes were identified.
Investment in Rosneft
Since the first quarter 2022, bp accounts for its interest in
Rosneft and its other businesses with Rosneft within Russia, as
financial assets measured at fair value within 'Other investments'.
It is considered by management that any measure of fair value,
other than nil, would be subject to such high measurement
uncertainty that no estimate would provide useful information even
if it were accompanied by a description of the estimate made in
producing it and an explanation of the uncertainties that affect
the estimate. Accordingly, it is not currently possible to estimate
any carrying value other than zero when determining the measurement
of the interest in Rosneft and the other businesses with Rosneft
within Russia as at 30 September 2023.
Top of page 21
Note 2. Non-current assets held for sale
There were no assets or liabilities classified as held for sale
at 30 September 2023.
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 third quarter and nine months were $542
million and $1,899 million respectively, compared with net charges
of $417 million and $26,893 million for the same periods in 2022
and include net impairment charges for the third quarter and nine
months of $612 million and $1,779 million respectively, compared
with net impairment reversals of $11 million and charges of $14,777
million for the same periods in 2022.
Third quarter and nine months of 2023 impairments includes a net
impairment charge of $224 million and $1,284 million respectively,
compared with net charges of $6 million and $523 million for the
same periods in 2022 in the gas & low carbon energy segment. A
further $540 million pre-tax impairment charge relating to our
offshore US wind assets has been recognised in the third quarter
2023 through equity-accounted earnings.
The impairment charge and the loss on sale of businesses and
fixed assets for 2022 mainly relates to bp's investment in Rosneft,
which has been reported in other businesses and corporate.
Note 4. Analysis of replacement cost profit (loss) before
interest and tax and reconciliation to profit (loss) before
taxation
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------- ------- ------- ------- ------ --------
gas & low carbon energy 2,275 2,289 (2,956) 11,911 (1,743)
oil production & operations 3,427 2,568 6,965 9,312 18,033
customers & products 1,549 555 2,586 4,784 8,098
other businesses & corporate (500) (297) (1,093) (887) (26,840)
---------------------------------------- ------- ------- ------- ------ --------
6,751 5,115 5,502 25,120 (2,452)
Consolidation adjustment - UPII* (57) (30) (21) (109) (8)
---------------------------------------- ------- ------- ------- ------ --------
RC profit (loss) before interest and
tax 6,694 5,085 5,481 25,011 (2,460)
Inventory holding gains (losses)*
gas & low carbon energy - - (14) 1 2
oil production & operations (1) - 1 - (5)
customers & products 1,594 (732) (2,855) 260 2,782
Profit (loss) before interest and tax 8,287 4,353 2,613 25,272 319
Finance costs 1,039 920 649 2,802 1,869
Net finance expense/(income) relating
to pensions and other post-retirement
benefits (61) (61) (16) (180) (53)
---------------------------------------- ------- ------- ------- ------ --------
Profit (loss) before taxation 7,309 3,494 1,980 22,650 (1,497)
---------------------------------------- ------- ------- ------- ------ --------
RC profit (loss) before interest and
tax*
US 1,467 2,244 3,954 6,786 9,553
Non-US 5,227 2,841 1,527 18,225 (12,013)
---------------------------------------- ------- ------- ------- ------ --------
6,694 5,085 5,481 25,011 (2,460)
------- ------- ------- ------ --------
Top of page 22
Note 5. Sales and other operating revenues
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
---------------------------------------------------- ------- ------- ------- ------- -------
By segment
gas & low carbon energy 10,313 10,428 8,053 38,627 29,462
oil production & operations 6,225 5,777 8,599 18,155 26,261
customers & products 42,908 38,051 47,831 119,841 145,551
other businesses & corporate 672 590 552 2,000 1,520
---------------------------------------------------- ------- ------- ------- ------- -------
60,118 54,846 65,035 178,623 202,794
------- ------- ------- ------- -------
Less: sales and other operating revenues between
segments
gas & low carbon energy 367 840 2,785 1,743 6,354
oil production & operations 5,747 5,236 7,589 17,244 23,378
customers & products 508 (180) (276) 472 808
other businesses & corporate 227 412 (74) 1,175 119
---------------------------------------------------- ------- ------- ------- ------- -------
6,849 6,308 10,024 20,634 30,659
------- ------- ------- ------- -------
External sales and other operating revenues
gas & low carbon energy 9,946 9,588 5,268 36,884 23,108
oil production & operations 478 541 1,010 911 2,883
customers & products 42,400 38,231 48,107 119,369 144,743
other businesses & corporate 445 178 626 825 1,401
---------------------------------------------------- ------- ------- ------- ------- -------
Total sales and other operating revenues 53,269 48,538 55,011 157,989 172,135
---------------------------------------------------- ------- ------- ------- ------- -------
By geographical area
US 22,032 20,065 22,451 61,257 68,934
Non-US 43,382 38,492 45,111 128,224 142,239
---------------------------------------------------- ------- ------- ------- ------- -------
65,414 58,557 67,562 189,481 211,173
Less: sales and other operating revenues between
areas 12,145 10,019 12,551 31,492 39,038
---------------------------------------------------- ------- ------- ------- ------- -------
53,269 48,538 55,011 157,989 172,135
------- ------- ------- ------- -------
Revenues from contracts with customers
Sales and other operating revenues include
the following in relation to revenues from
contracts with customers:
Crude oil 496 520 1,322 1,653 5,500
Oil products 35,486 31,218 40,036 96,845 115,054
Natural gas, LNG and NGLs 6,396 5,841 11,106 21,881 30,730
Non-oil products and other revenues from contracts
with customers 2,765 2,750 2,267 7,387 6,437
---------------------------------------------------- ------- ------- ------- ------- -------
Revenue from contracts with customers 45,143 40,329 54,731 127,766 157,721
---------------------------------------------------- ------- ------- ------- ------- -------
Other operating revenues(a) 8,126 8,209 280 30,223 14,414
---------------------------------------------------- ------- ------- ------- ------- -------
Total sales and other operating revenues 53,269 48,538 55,011 157,989 172,135
---------------------------------------------------- ------- ------- ------- ------- -------
(a) 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
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- ------- ------ ------
Total depreciation, depletion and amortization
by segment
gas & low carbon energy 1,543 1,407 1,177 4,390 3,635
oil production & operations 1,432 1,370 1,381 4,129 4,181
customers & products 915 894 697 2,606 2,129
other businesses & corporate 255 252 212 743 659
------------------------------------------------ ------- ------- ------- ------ ------
4,145 3,923 3,467 11,868 10,604
------- ------- ------- ------ ------
Total depreciation, depletion and amortization
by geographical area
US 1,479 1,338 1,180 4,071 3,422
Non-US 2,666 2,585 2,287 7,797 7,182
------------------------------------------------ ------- ------- ------- ------ ------
4,145 3,923 3,467 11,868 10,604
------- ------- ------- ------ ------
Note 7. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated
by dividing the profit (loss) for the period attributable to
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period. Against the authority granted
at bp's 2022 annual general meeting, 331 million ordinary shares
repurchased for cancellation were settled during the third quarter
2023 for a total cost of $2,047 million. A further 92 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 $595 million. This amount has been
accrued at 30 September 2023. The number of shares in issue is
reduced when shares are repurchased, but is not reduced in respect
of the period-end commitment to repurchase shares subsequent to the
end of the period.
The calculation of EpS is performed separately for each discrete
quarterly period, and for the year-to-date period. As a result, the
sum of the discrete quarterly EpS amounts in any particular
year-to-date period may not be equal to the EpS amount for the
year-to-date period.
For the diluted EpS calculation the weighted average number of
shares outstanding during the period is adjusted for the number of
shares that are potentially issuable in connection with employee
share-based payment plans using the treasury stock method.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Results for the period
Profit (loss) for the period attributable
to bp shareholders 4,858 1,792 (2,163) 14,868 (13,290)
Less: preference dividend - 1 - 1 1
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit (loss) attributable to
bp ordinary shareholders 4,858 1,791 (2,163) 14,867 (13,291)
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Number of shares (thousand) (a)(b)
Basic weighted average number
of shares outstanding 17,204,488 17,523,778 18,885,725 17,537,170 19,260,486
ADS equivalent(c) 2,867,414 2,920,629 3,147,620 2,922,861 3,210,081
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Weighted average number of shares
outstanding used to calculate
diluted earnings per share 17,609,601 17,900,984 18,885,725 17,914,383 19,260,486
ADS equivalent(c) 2,934,933 2,983,497 3,147,620 2,985,730 3,210,081
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Shares in issue at period-end 17,061,004 17,379,366 18,566,848 17,061,004 18,566,848
ADS equivalent(c) 2,843,500 2,896,561 3,094,474 2,843,500 3,094,474
------------------------------------------- ---------- ---------- ---------- ---------- ----------
(a) Excludes treasury shares and includes certain shares that
will be issued in the future under employee share-based payment
plans.
(b) If the inclusion of potentially issuable shares would
decrease loss per share, the potentially issuable shares are
excluded from the weighted average number of shares outstanding
used to calculate diluted earnings per share. The numbers of
potentially issuable shares that have been excluded from the
calculation for the third quarter 2022 and nine months 2022 are
274,005 thousand (ADS equivalent 45,668 thousand) and 217,311
thousand (ADS equivalent 36,218 thousand).
(c) 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 19 December 2023 to
ordinary shareholders and American Depositary Share (ADS) holders
on the register on 10 November 2023. The ex-dividend date will be 9
November 2023. The corresponding amount in sterling is due to be
announced on 6 December 2023, calculated based on the average of
the market exchange rates over three dealing days between 30
November 2023 and 4 December 2023. 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
third quarter 2023 dividend. Ordinary shareholders and ADS holders
(subject to certain exceptions) will be able to participate in a
dividend reinvestment programme. Details of the third quarter
dividend and timetable are available at bp.com/dividends and
further details of the dividend reinvestment programmes are
available at bp.com/drip.
Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
Dividends paid per ordinary share
cents 7.270 6.610 6.006 20.490 16.926
pence 5.732 5.309 5.168 16.592 13.683
Dividends paid per ADS (cents) 43.62 39.66 36.04 122.94 101.56
----------------------------------- ------- ------- ------- ------ ------
Note 9. Net debt
Net debt* 30 September 30 June 30 September
$ million 2023 2023 2022
------------------------------------------------ ---------------- ---------------- ----------------
Finance debt(a) 48,810 49,738 46,560
Fair value (asset) liability of hedges related
to finance debt(b) 3,440 2,836 4,746
------------------------------------------------ ---------------- ---------------- ----------------
52,250 52,574 51,306
Less: cash and cash equivalents 29,926 28,914 29,304
------------------------------------------------ ---------------- ---------------- ----------------
Net debt(c) 22,324 23,660 22,002
------------------------------------------------ ---------------- ---------------- ----------------
Total equity 87,676 85,603 73,333
Gearing* 20.3% 21.7% 23.1%
------------------------------------------------ ---------------- ---------------- ----------------
(a) The fair value of finance debt at 30 September 2023 was
$43,387 million (30 June 2023 $45,580 million, 30 September 2022
$41,414 million).
(b) Derivative financial instruments entered into for the
purpose of managing interest rate and foreign currency exchange
risk associated with net debt with a fair value liability position
of $102 million at 30 September 2023 (second quarter 2023 liability
of $98 million and third quarter 2022 liability of $116 million)
are not included in the calculation of net debt shown above as
hedge accounting is not applied for these instruments.
(c) Net debt does not include accrued interest, which is
reported within other receivables and other payables on the balance
sheet and for which the associated cash flows are presented as
operating cash flows in the group cash flow statement.
In the third quarter the group bought back $nil equivalent of
finance debt (second quarter 2023 $1.7 billion, third quarter 2022
$2.9 billion). As part of actively managing its debt portfolio,
year to date the group has bought back a total of $1.7 billion
equivalent of finance debt ($7.4 billion for the comparative period
in 2022). Derivatives associated with non-US dollar debt bought
back were also terminated. These transactions have no significant
impact on net debt or gearing.
Note 10. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 30 October 2023, is unaudited
and does not constitute statutory financial statements. Audited
financial information will be published in BP Annual Report and
Form 20-F 2023. BP Annual Report and Form 20-F 2022 has been filed
with the Registrar of Companies in England and Wales. The report of
the auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and did not contain a
statement under section 498(2) or section 498(3) of the UK
Companies Act 2006.
Top of page 25
Additional information
Capital expenditure*
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
----------------------------------- ------- ------- ------- ------ ------
Capital expenditure
Organic capital expenditure* 3,597 3,233 3,191 10,325 8,609
Inorganic capital expenditure*(a) 6 1,081 3 1,217 352
----------------------------------- ------- ------- ------- ------ ------
3,603 4,314 3,194 11,542 8,961
------- ------- ------- ------ ------
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------- ------- ------- ------- ------ ------
Capital expenditure by segment
gas & low carbon energy 1,055 887 958 2,955 2,642
oil production & operations 1,644 1,478 1,386 4,642 3,848
customers & products(a) 802 1,858 713 3,650 2,103
other businesses & corporate 102 91 137 295 368
------- ------- ------- ------ ------
3,603 4,314 3,194 11,542 8,961
------- ------- ------- ------ ------
Capital expenditure by geographical
area
US 1,583 2,661 1,377 5,941 3,727
Non-US 2,020 1,653 1,817 5,601 5,234
------------------------------------- ------- ------- ------- ------ ------
3,603 4,314 3,194 11,542 8,961
------- ------- ------- ------ ------
(a) Second quarter and nine months 2023 include $1.1 billion,
net of adjustments, in respect of the TravelCenters of America
acquisition.
Top of page 26
Adjusting items*
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- ------- ------- --------
gas & low carbon energy
Gains on sale of businesses and fixed
assets - 1 3 16 12
Net impairment and losses on sale of
businesses and fixed assets(a) (224) (1,058) (6) (1,284) (523)
Environmental and other provisions - - - - -
Restructuring, integration and rationalization
costs (1) 1 - - 5
Fair value accounting effects(b)(c) 1,816 1,222 (9,224) 6,972 (14,313)
Other(d) (572) (110) 31 (738) 161
------------------------------------------------ ------- ------- ------- ------- --------
1,019 56 (9,196) 4,966 (14,658)
------- ------- ------- ------- --------
oil production & operations
Gains on sale of businesses and fixed
assets(e) 246 (31) 1,851 352 3,378
Net impairment and losses on sale of
businesses and fixed assets (52) (140) (326) (184) (1,262)
Environmental and other provisions 99 (44) 244 6 98
Restructuring, integration and rationalization
costs - (1) 3 (1) (14)
Fair value accounting effects - - - - -
Other (2) 7 (18) (93) 37
------------------------------------------------ ------- ------- ------- ------- --------
291 (209) 1,754 80 2,237
------- ------- ------- ------- --------
customers & products
Gains on sale of businesses and fixed
assets 18 2 10 21 302
Net impairment and losses on sale of
businesses and fixed assets (242) (36) (85) (361) (532)
Environmental and other provisions - (1) (1) (11) (36)
Restructuring, integration and rationalization
costs 1 1 (4) - 6
Fair value accounting effects(c) (198) (109) (59) (230) (498)
Other (85) (98) - (245) (31)
------------------------------------------------ ------- ------- ------- ------- --------
(506) (241) (139) (826) (789)
------- ------- ------- ------- --------
other businesses & corporate
Gains on sale of businesses and fixed
assets - - 1 - -
Net impairment and losses on sale of
businesses and fixed assets (23) (31) - (60) (16)
Environmental and other provisions (8) (17) 67 (39) (25)
Restructuring, integration and rationalization
costs (3) - 6 (13) 16
Fair value accounting effects(c) (146) (48) (785) 51 (1,896)
Rosneft - - - - (24,033)
Gulf of Mexico oil spill (19) (18) (21) (46) (61)
Other 2 (13) 44 (11) 40
------------------------------------------------ ------- ------- ------- ------- --------
(197) (127) (688) (118) (25,975)
Total before interest and taxation 607 (521) (8,269) 4,102 (39,185)
Finance costs(f) (96) (119) (68) (319) (256)
------------------------------------------------ ------- ------- ------- ------- --------
Total before taxation 511 (640) (8,337) 3,783 (39,441)
Taxation on adjusting items(g) (158) 160 988 (203) 1,998
Taxation - tax rate change effect of
UK energy profits levy(h) - 232 (778) 232 (778)
------------------------------------------------ ------- ------- ------- ------- --------
Total after taxation for period(i) 353 (248) (8,127) 3,812 (38,221)
------------------------------------------------ ------- ------- ------- ------- --------
(a) See Note 3 for further information.
(b) Under IFRS bp marks-to-market the value of the hedges used
to risk-manage LNG contracts, but not the contracts themselves,
resulting in a mismatch in accounting treatment. The fair value
accounting effect includes the change in value of LNG contracts
that are being risk managed, and the underlying result reflects how
bp risk-manages its LNG contracts.
(c) For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and
32.
(d) Third quarter and nine months 2023 include a $540 million
impairment charge recognized through equity-accounted earnings
relating to US offshore wind projects.
(e) Third quarter and nine months 2022 include a non-taxable
gain of $1,951 million arising from the contribution of bp's
Angolan business to Azule Energy. Nine months 2022 also includes
gains of $904 million related to the deemed disposal of 12% of the
group's interest in Aker BP, an associate of bp, following
completion of Aker BP's acquisition of Lundin Energy, and $361
million in relation to the disposal of the group's interest in the
Rumaila field in Iraq to Basra Energy Company, an associate of
bp.
(f) Includes the unwinding of discounting effects relating to
Gulf of Mexico oil spill payables, the income statement impact
associated with
the buyback of finance debt (see Note 9 for further information)
and temporary valuation differences associated with the group's
interest rate and foreign currency exchange risk management of
finance debt.
(g) 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.
(h) Second quarter and nine months 2023 include a revision to
the deferred tax impact of the introduction of the UK Energy
Profits Levy (EPL) on temporary differences existing at 31 December
2022 that are expected to unwind over the period 1 January 2023 to
31 March 2028. The EPL increases the headline rate of tax to 75%
and applies to taxable profits from bp's North Sea business made
from 1 January 2023 until 31 March 2028.
Top of page 27
Third quarter and nine months 2022 included the deferred tax
impact of the introduction of the original UK EPL on existing
temporary differences unwinding over the period 1 October 2022 to
31 December 2025. The original levy increased the headline rate of
tax from 40% to 65% on profits from bp's North Sea business made
from 26 May 2022 until 31 December 2025.
(i) Third quarter and nine months 2023 include a $43 million
charge and a $121 million charge respectively for the EU Solidarity
Contribution.
Net debt including leases
Net debt including leases* 30 September 30 June 30 September
$ million 2023 2023 2022
--------------------------------------------- ---------------- ---------------- ----------------
Net debt 22,324 23,660 22,002
Lease liabilities 10,879 10,961 7,895
Net partner (receivable) payable for leases
entered into on behalf of joint operations (124) (136) 22
Net debt including leases 33,079 34,485 29,919
--------------------------------------------- ---------------- ---------------- ----------------
Total equity 87,676 85,603 73,333
Gearing including leases* 27.4% 28.7% 29.0%
--------------------------------------------- ---------------- ---------------- ----------------
Gulf of Mexico oil spill
30 September 31 December
$ million 2023 2022
Gulf of Mexico oil spill payables and provisions (8,639) (9,566)
-------------------------------------------------- ------------ -----------
Of which - current (1,122) (1,216)
Deferred tax asset 1,306 1,444
-------------------------------------------------- ------------ -----------
During the second quarter pre-tax payments of $1,204 million
were made relating to the 2016 consent decree and settlement
agreement with the United States and the five Gulf coast states.
Payables and provisions presented in the table above reflect the
latest estimate for the remaining costs associated with the Gulf of
Mexico oil spill. Where amounts have been provided on an estimated
basis, the amounts ultimately payable may differ from the amounts
provided and the timing of payments is uncertain. Further
information relating to the Gulf of Mexico oil spill, including
information on the nature and expected timing of payments relating
to provisions and other payables, is provided in BP Annual Report
and Form 20-F 2022 - Financial statements - Notes 7, 22, 23, 29,
and 33.
Working capital* reconciliation
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------ ------- ------- -------- ------- --------
Movements in inventories and other current
and non-current assets and liabilities
as per condensed group cash flow statement(a) (783) (742) 6,764 (5,280) 577
Adjusted for inventory holding gains
(losses)* (Note 4) 1,593 (732) (2,868) 261 2,779
Adjusted for fair value accounting effects
relating to subsidiaries 1,443 1,053 (10,068) 6,738 (16,561)
Other adjusting items(b) (300) 558 645 (1,040) 2,094
------------------------------------------------ ------- ------- -------- ------- --------
Working capital release (build) after
adjusting for net inventory gains (losses),
fair value accounting effects and other
adjusting items 1,953 137 (5,527) 679 (11,111)
------------------------------------------------ ------- ------- -------- ------- --------
(a) The movement in working capital includes outflows relating
to the Gulf of Mexico oil spill on a pre-tax basis of $6 million
and $1,222 million in the third quarter and nine months of 2023
respectively. For the same periods in 2022 the amount was an
outflow of $29 million and $1,285 million respectively.
(b) Other adjusting items relate to the non-cash movement of US
emissions obligations carried as a provision that will be settled
by allowances held as inventory.
Top of page 28
Surplus cash flow* reconciliation
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------------- ------- ------- ------- -------- --------
Sources:
Net cash provided by operating activities 8,747 6,293 8,288 22,662 27,361
Cash provided from investing activities 150 109 621 1,065 1,996
Other(a) 503 (42) (31) 402 454
Cash inflow 9,400 6,360 8,878 24,129 29,811
------------------------------------------------- ------- ------- ------- -------- --------
Uses:
Lease liability payments (663) (620) (478) (1,838) (1,448)
Payments on perpetual hybrid bonds (258) (250) (180) (744) (489)
Dividends paid - BP shareholders (1,249) (1,153) (1,140) (3,585) (3,270)
- non-controlling interests (191) (67) (66) (326) (194)
Total capital expenditure* (3,603) (4,314) (3,194) (11,542) (8,961)
Net repurchase of shares relating to
employee share schemes (225) (225) - (675) (500)
Payments relating to transactions involving
non-controlling interests - - (2) (180) (8)
Currency translation differences relating
to cash and cash equivalents (104) - (322) (118) (861)
------------------------------------------------- ------- ------- ------- -------- --------
Cash outflow (6,293) (6,629) (5,382) (19,008) (15,731)
------------------------------------------------- ------- ------- ------- -------- --------
Surplus cash flow 3,107 (269) 3,496 5,121 14,080
------------------------------------------------- ------- ------- ------- -------- --------
(a) Other includes adjustments for net operating cash received
or paid which is held on behalf of third parties for medium-term
deferred payment and prior periods have been adjusted accordingly.
Third quarter and nine months 2023 include $517 million of proceeds
from the sale of a 49% interest in a controlled affiliate holding
certain midstream assets onshore US. Nine months 2022 includes $573
million of proceeds from the disposal of a loan note related to the
Alaska divestment. The cash was received in the fourth quarter
2021, was reported as a financing cash flow and was not included in
other proceeds at the time due to potential recourse from the
counterparty. The proceeds were recognized as the potential
recourse reduces and by end second quarter 2022 all were
recognized.
Top of page 29
Adjusted earnings before interest, taxation, depreciation and
amortization (adjusted EBITDA)*
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
Profit (loss) for the period 5,069 1,953 (1,984) 15,444 (12,518)
Finance costs 1,039 920 649 2,802 1,869
Net finance (income) expense relating
to pensions and other post-retirement
benefits (61) (61) (16) (180) (53)
Taxation 2,240 1,541 3,964 7,206 11,021
---------------------------------------------- ------- ------- ------- ------- --------
Profit before interest and tax 8,287 4,353 2,613 25,272 319
Inventory holding (gains) losses*, before
tax (1,593) 732 2,868 (261) (2,779)
---------------------------------------------- ------- ------- ------- ------- --------
RC profit (loss) before interest and
tax 6,694 5,085 5,481 25,011 (2,460)
Net (favourable) adverse impact of adjusting
items*, before interest and tax (607) 521 8,269 (4,102) 39,185
---------------------------------------------- ------- ------- ------- ------- --------
Underlying RC profit before interest
and tax 6,087 5,606 13,750 20,909 36,725
Add back:
Depreciation, depletion and amortization 4,145 3,923 3,467 11,868 10,604
Exploration expenditure written off 74 241 190 365 318
---------------------------------------------- ------- ------- ------- ------- --------
Adjusted EBITDA 10,306 9,770 17,407 33,142 47,647
---------------------------------------------- ------- ------- ------- ------- --------
Reconciliation of customers & products RC profit before
interest and tax to underlying RC profit before interest and tax*
to adjusted EBITDA* by business
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2023 2023 2022 2023 2022
------------------------------------------ ------- ------- ------- ------ ------
RC profit before interest and tax for
customers & products 1,549 555 2,586 4,784 8,098
Less: Adjusting items* gains (charges) (506) (241) (139) (826) (789)
Underlying RC profit before interest
and tax for customers & products 2,055 796 2,725 5,610 8,887
By business:
customers - convenience & mobility 670 701 1,137 1,762 2,338
Castrol - included in customers 185 171 151 517 630
products - refining & trading 1,385 95 1,588 3,848 6,549
Add back: Depreciation, depletion and
amortization 915 894 697 2,606 2,129
By business:
customers - convenience & mobility 481 448 311 1,270 952
Castrol - included in customers 43 42 36 124 113
products - refining & trading 434 446 386 1,336 1,177
Adjusted EBITDA for customers & products 2,970 1,690 3,422 8,216 11,016
By business:
customers - convenience & mobility 1,151 1,149 1,448 3,032 3,290
Castrol - included in customers 228 213 187 641 743
products - refining & trading 1,819 541 1,974 5,184 7,726
------------------------------------------ ------- ------- ------- ------ ------
Top of page 30
Realizations* and marker prices
Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
Average realizations (a)
Liquids* ($/bbl)
US 63.95 60.53 82.23 62.44 81.05
Europe 90.76 75.14 94.21 80.59 104.12
Rest of World 78.34 79.35 101.82 80.05 98.93
BP Average 71.85 69.76 92.44 71.40 92.42
--------------------------------------------- ------- ------- ------- ------ ------
Natural gas ($/mcf)
US 2.24 1.58 7.25 2.09 5.88
Europe(b) 11.22 12.46 36.72 17.20 32.73
Rest of World 5.38 5.53 9.85 6.11 8.74
BP Average(b) 4.88 4.91 10.41 5.66 9.18
--------------------------------------------- ------- ------- ------- ------ ------
Total hydrocarbons* ($/boe)
US 45.39 40.84 66.82 43.77 63.19
Europe(b) 80.61 74.20 137.66 87.43 134.42
Rest of World 45.61 45.97 71.19 48.73 68.34
BP Average(b) 47.28 46.27 74.08 49.47 71.17
--------------------------------------------- ------- ------- ------- ------ ------
Average oil marker prices ($/bbl)
Brent 86.75 78.05 100.84 82.07 105.51
West Texas Intermediate 82.54 73.56 91.63 77.36 98.46
Western Canadian Select 65.42 60.07 69.02 60.72 79.72
Alaska North Slope 87.95 78.26 98.84 81.74 102.34
Mars 82.99 73.17 89.54 76.80 96.01
Urals (NWE - cif) 73.62 54.56 71.24 58.20 78.58
--------------------------------------------- ------- ------- ------- ------ ------
Average natural gas marker prices
Henry Hub gas price(c) ($/mmBtu) 2.54 2.09 8.20 2.69 6.78
UK Gas - National Balancing Point (p/therm) 82.04 83.18 281.01 99.01 216.37
--------------------------------------------- ------- ------- ------- ------ ------
(a) Based on sales of consolidated subsidiaries only - this
excludes equity-accounted entities.
(b) Realizations calculation methodology has been changed to
reflect gas price fluctuations within the North Sea region. Third
quarter 2022 and nine months 2022 were restated. There is no impact
on financial results.
(c) Henry Hub First of Month Index.
Exchange rates
Third Second Third Nine Nine
quarter quarter quarter months months
2023 2023 2022 2023 2022
------- ------- ------- ------ ------
$/GBP average rate for the period 1.27 1.25 1.18 1.24 1.25
$/GBP period-end rate 1.22 1.26 1.12 1.22 1.12
$/EUR average rate for the period 1.09 1.09 1.01 1.08 1.06
$/EUR period-end rate 1.06 1.09 0.98 1.06 0.98
$/AUD average rate for the period 0.65 0.67 0.68 0.67 0.71
$/AUD period-end rate 0.64 0.66 0.65 0.64 0.65
Top of page 31
Legal proceedings
For a full discussion of the group's material legal proceedings,
see pages 258-259 of bp Annual Report and Form 20-F 2022 and page
35 of BP p.l.c. Group results second quarter and half-year 2023
results announcement. The following discussion sets out the
material developments in the group's material legal proceedings in
the period following the second quarter and half-year 2023 results
announcement.
Louisiana Coastal restoration
Six coastal parishes and the State of Louisiana have filed over
40 separate lawsuits in state courts in Louisiana against various
oil and gas companies seeking damages for coastal erosion. bp
entities are defendants in 17 of these cases. The lawsuits allege
that the defendants' historical operations in oil and gas fields
within the Louisiana onshore coastal zone failed to comply with
state permits and/or were conducted without the required coastal
use permits. The scope and scale of plaintiffs' damages demands are
significant and unprecedented, including substantial remediation
costs and the claimed costs for restoring coastal wetlands
allegedly impacted by oil and gas field operations.
Defendants removed all of these lawsuits to federal court and
the removals were contested by plaintiffs, eventually resulting in
a decision from the US Fifth Circuit Court of Appeals rejecting
defendants' "federal officer" jurisdiction removal in the lead test
case. Defendants' petition for writ of certiorari to the US Supreme
Court seeking review of the US Fifth Circuit's decision was denied
in early 2023. On remand from the US District Court, the state
court in the case of Cameron Parish v. Auster et al. has
established a November 2023 trial date. bp is the lead defendant in
Auster. A subset of the removed cases remain in federal court
pending further Fifth Circuit rulings on a related "federal
officer" removal jurisdiction theory.
In addition, four private landowners have filed separate claims
in the state courts in Jefferson and Plaquemines Parishes of
Louisiana for restoration damages related to alleged impacts to
their marshlands associated with historic oil field operations. bp
entities are defendants in two of these private landowner
cases.
With the exception of the Auster case, which is nearing
completion of the expert discovery stage and final pre-trial
activity, all of the other remanded cases remain at early stages in
the litigation. While it is not possible to predict the outcomes of
these novel legal actions, bp believes that it has valid defences,
and it intends to defend such actions vigorously.
Glossary
Non-IFRS measures are provided for investors because they are
closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions. Non-IFRS measures are sometimes referred to as
alternative performance measures.
Adjusted 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 29 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 29 for the group.
We are unable to present reconciliations of forward-looking
information for adjusted EBITDA for the group or resilient
hydrocarbons, because without unreasonable efforts, we are unable
to forecast accurately certain adjusting items required to
calculate a meaningful comparable IFRS forward-looking financial
measure. These items include inventory holding gains or losses,
adjusting items and exploration expenditure written off that are
difficult to predict in advance in order to include in an IFRS
estimate.
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,
restructuring, integration and rationalization costs, fair value
accounting effects, financial impacts relating to Rosneft for the
2022 financial reporting period and costs relating to the Gulf of
Mexico oil spill and other items. Adjusting items within
equity-accounted earnings are reported net of incremental income
tax reported by the equity-accounted entity. Adjusting items are
used as a reconciling adjustment to derive underlying RC profit or
loss and related underlying measures which are non-IFRS measures.
An analysis of adjusting items by segment and type is shown on page
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.
Consolidation adjustment - UPII is unrealized profit in
inventory arising on inter-segment transactions.
Top of page 32
Glossary (continued)
Developed renewables to final investment decision (FID) - Total
generating capacity for assets developed to FID by all entities
where bp has an equity share (proportionate to equity share). If
asset is subsequently sold bp will continue to record capacity as
developed to FID. If bp equity share increases developed capacity
to FID will increase proportionately to share increase for any
assets where bp held equity at the point of FID.
Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement.
Effective tax rate (ETR) on replacement cost (RC) profit or loss
is a non-IFRS measure. The ETR on RC profit or loss is calculated
by dividing taxation on a RC basis by RC profit or loss before tax.
Taxation on a RC basis for the group is calculated as taxation as
stated on the group income statement adjusted for taxation on
inventory holding gains and losses. Information on RC profit or
loss is provided below. bp believes it is helpful to disclose the
ETR on RC profit or loss because this measure excludes the impact
of price changes on the replacement of inventories and allows for
more meaningful comparisons between reporting periods. Taxation on
a RC basis and ETR on RC profit or loss are non-IFRS measures. The
nearest equivalent measure on an IFRS basis is the ETR on profit or
loss for the period.
Electric vehicle charge points / EV charge points are defined as
the number of connectors on a charging device, operated by either
bp or a bp joint venture.
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
Top of page 33
Glossary (continued)
application of hedge accounting. The derivative instruments
relating to the hybrid bonds, however, are required to be recorded
at fair value with mark to market gains and losses recognized in
the income statement. Therefore, measurement differences in
relation to the recognition of gains and losses occur. The fair
value accounting effect, which is reported in the other businesses
& corporate segment, eliminates the fair value gains and losses
of these derivative financial instruments that are recognized in
the income statement. We believe that this gives a better
representation of performance, by more appropriately reflecting the
economic effect of these risk management activities, in each
period.
Gas & low carbon energy segment comprises our gas and low
carbon businesses. Our gas business includes regions with upstream
activities that predominantly produce natural gas, integrated gas
and power, and gas trading. Our low carbon business includes solar,
offshore and onshore wind, hydrogen and CCS and power trading.
Power trading includes trading of both renewable and non-renewable
power.
Gearing and net debt are non-IFRS measures. Net debt is
calculated as finance debt, as shown in the balance sheet, plus the
fair value of associated derivative financial instruments that are
used to hedge foreign currency exchange and interest rate risks
relating to finance debt, for which hedge accounting is applied,
less cash and cash equivalents. Net debt does not include accrued
interest, which is reported within other receivables and other
payables on the balance sheet and for which the associated cash
flows are presented as operating cash flows in the group cash flow
statement. Gearing is defined as the ratio of net debt to the total
of net debt plus total equity. bp believes these measures provide
useful information to investors. Net debt enables investors to see
the economic effect of finance debt, related hedges and cash and
cash equivalents in total. Gearing enables investors to see how
significant net debt is relative to total equity. The derivatives
are reported on the balance sheet within the headings 'Derivative
financial instruments'. The nearest equivalent measures on an IFRS
basis are finance debt and finance debt ratio. A reconciliation of
finance debt to net debt is provided on page 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:
a. the difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
b. an adjustment relating to certain trading inventories that
are not price risk managed which relate to a minimum inventory
volume that is required to be held to maintain underlying business
activities. This adjustment represents the movement in fair value
of the inventories due to prices, on a grade by grade basis, during
the period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not separately reflected in the
financial statements as a gain or loss. No adjustment is made in
respect of the cost of inventories held as part of a trading
position and certain other temporary inventory positions that are
price risk-managed. See Replacement cost (RC) profit or loss
definition below.
Top of page 34
Glossary (continued)
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.
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 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 and Thorntons, and also
includes sites in India through our Jio-bp JV.
Solomon availability - See Refining availability definition.
Top of page 35
Glossary (continued)
Strategic convenience sites are retail sites, within the bp
portfolio, which sell bp-branded vehicle energy (e.g. bp, Aral,
Arco, Amoco, Thorntons, TravelCenters of America and bp pulse) and
either carry one of the strategic convenience brands (e.g. M&S,
Rewe to Go) or a differentiated 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.
Surplus cash flow does not represent the residual cash flow
available for discretionary expenditures. It is a non-IFRS
financial measure that should be considered in addition to, not as
a substitute for or superior to, net cash provided by operating
activities, reported in accordance with IFRS. bp believes it is
helpful to disclose the surplus cash flow because this measure
forms part of bp's financial frame.
Surplus cash flow refers to the net surplus of sources of cash
over uses of cash, after reaching the $35 billion net debt target.
Sources of cash include net cash provided by operating activities,
cash provided from investing activities and cash receipts relating
to transactions involving non-controlling interests. Uses of cash
include lease liability payments, payments on perpetual hybrid
bond, dividends paid, cash capital expenditure, the cash cost of
share buybacks to offset the dilution from vesting of awards under
employee share schemes, cash payments relating to transactions
involving non-controlling interests and currency translation
differences relating to cash and cash equivalents as presented on
the condensed group cash flow statement.
For the nine months of 2022, the sources of cash includes other
proceeds related to the proceeds from the disposal of a loan note
related to the Alaska divestment. The cash was received in the
fourth quarter 2021, was reported as a financing cash flow and was
not included in other proceeds at the time due to potential
recourse from the counterparty. The proceeds are being recognized
as the potential recourse reduces. See page 28 for the components
of our sources of cash and uses of cash.
Technical service contract (TSC) - Technical service contract is
an arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return,
the oil and gas company receives entitlement to variable physical
volumes of hydrocarbons, representing recovery of the costs
incurred and a profit margin which reflects incremental production
added to the oilfield.
Tier 1 and tier 2 process safety events - Tier 1 events are
losses of primary containment from a process of greatest
consequence - causing harm to a member of the workforce, damage to
equipment from a fire or explosion, a community impact or exceeding
defined quantities. Tier 2 events are those of lesser consequence.
These represent reported incidents occurring within bp's
operational HSSE reporting boundary. That boundary includes bp's
own operated facilities and certain other locations or situations.
Reported process safety events are investigated throughout the year
and as a result there may be changes in previously reported events.
Therefore comparative movements are calculated against internal
data reflecting the final outcomes of such investigations, rather
than the previously reported comparative period, as this 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 & 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 - 2023 underlying production, when
compared with 2022, is production after adjusting for acquisitions
and divestments, curtailments, and entitlement impacts in our
production-sharing agreements/contracts and technical service
contract*.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a non-IFRS measure and is RC
profit or loss* (as defined on page 34) 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.
Top of page 36
Glossary (continued)
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.
Underlying RC profit or loss per share / underlying RC profit or
loss per ADS is a non-IFRS measure. Earnings per share is defined
in Note 7. Underlying RC profit or loss per ordinary share is
calculated using the same denominator as earnings per share as
defined in the consolidated financial statements. The numerator
used is underlying RC profit or loss attributable to bp
shareholders rather than profit or loss attributable to bp
shareholders. Underlying RC profit or loss per ADS is calculated as
outlined above for underlying RC profit or loss per share except
the denominator is adjusted to reflect one ADS equivalent to six
ordinary shares. bp believes it is helpful to disclose the
underlying RC profit or loss per ordinary share and per ADS because
these measures may help investors to understand and evaluate, in
the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period.
The nearest equivalent measure on an IFRS basis is basic earnings
per share based on profit or loss for the period attributable to bp
shareholders.
upstream includes oil and natural gas field development and
production within the gas & low carbon energy and oil
production & operations segments.
upstream/hydrocarbon plant reliability (bp-operated) is
calculated taking 100% less the ratio of total unplanned plant
deferrals divided by installed production capacity, excluding
non-operated assets and bpx energy. Unplanned plant deferrals are
associated with the topside plant and where applicable the subsea
equipment (excluding wells and reservoir). Unplanned plant
deferrals include breakdowns, which does not include Gulf of Mexico
weather related downtime.
upstream unit production cost is 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 and Thorntons
Top of page 37
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;
expectations regarding bp's customers & products business;
expectations regarding refining margins; expectations regarding
turnaround and maintenance activity; expectations regarding
financial performance, results of operations and cash flows, and
Adjusted EBITDA; expectations regarding future project start-ups;
expectations with regards to bp's transformation 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; plans and expectations regarding the allocation of
surplus cash flow to share buybacks and strengthening the balance
sheet; plans and expectations with respect to the total
depreciation, depletion and amortization and the other businesses
& corporate underlying annual charge for 2023; plans and
expectations regarding bp's development of its LNG portfolio; plans
and expectations regarding investments, collaborations and
partnerships in electric vehicle (EV) charging infrastructure;
plans and expectations related to bp's transition growth engines of
bioenergy, convenience, EV charging, renewables and power, and
hydrogen; expectations relating to bp's development of its wind
pipeline; plans and expectations regarding the amount or timing of
payments related to divestment and other proceeds, and the timing,
quantum and nature of certain acquisitions and divestments;
expectations regarding the underlying effective tax rate for 2023;
expectations regarding the timing and amount of future payments
relating to the Gulf of Mexico oil spill; plans and expectations
regarding capital expenditure; expectations regarding greenhouse
gas emissions; expectations regarding legal proceedings, including
those related to the Louisiana coastal restoration and climate
change; plans and expectations regarding bp-operated projects and
ventures, and its projects, joint ventures, partnerships and
agreements with commercial entities and other third party partners,
including those related to Advanced Ionics, Dynamon, Electric
Hydrogen, Midwest Alliance for Clean Hydrogen and Auchan.
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, the impact of COVID-19, 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 any competent
authorities or any other relevant persons may impact or limit bp's
ability to sell its interests in Rosneft, or the price for which it
could sell such interests; the actions of contractors; natural
disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and
acts of terrorism; cyber-attacks or sabotage; and those factors
discussed under "Principal risks and uncertainties" in bp's Report
on Form 6-K regarding results for the six-month period ended 30
June 2023 as filed with the US Securities and Exchange Commission
(the "SEC") as well as those factors discussed under "Risk factors"
in bp's Annual Report and Form 20-F 2022 as filed with the SEC.
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of BP p.l.c. is Ben Mathews, Company Secretary.
Top of page 38
Contacts
London Houston
Press Office David Nicholas Megan Baldino
+44 (0) 7831 095541 +1 907 529 9029
Investor Relations Craig Marshall Graham Collins
bp.com/investors +44 (0) 203 401 5592 +1 832 753 5116
BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
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