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page 1
FOR IMMEDIATE RELEASE
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London 30 July 2024
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BP
p.l.c. Group results
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Second quarter and first half
2024(a)
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"For a
printer friendly version of this announcement please click on the
link below to open a PDF version of the announcement"
http://www.rns-pdf.londonstockexchange.com/rns/2882Y_1-2024-7-29.pdf
Strong cash generation, growing
distributions
Financial summary
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Second
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First
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Second
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First
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First
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quarter
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quarter
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quarter
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half
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half
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$ million
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2024
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2024
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2023
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2024
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2023
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Profit (loss) for the period
attributable to bp shareholders
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(129)
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2,263
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1,792
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2,134
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10,010
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Inventory holding (gains) losses*,
net of tax
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113
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(657)
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549
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(544)
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1,001
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Replacement cost (RC) profit
(loss)*
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(16)
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1,606
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2,341
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1,590
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11,011
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Net (favourable) adverse impact of
adjusting items*, net of tax
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2,772
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1,117
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248
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3,889
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(3,459)
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Underlying RC profit*
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2,756
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2,723
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2,589
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5,479
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7,552
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Operating cash flow*
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8,100
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5,009
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6,293
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13,109
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13,915
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Capital expenditure*
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(3,691)
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(4,278)
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(4,314)
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(7,969)
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(7,939)
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Divestment and other
proceeds(b)
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760
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413
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88
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1,173
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888
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Net issue (repurchase) of
shares
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(1,751)
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(1,750)
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(2,073)
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(3,501)
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(4,521)
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Net debt*(c)
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22,614
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24,015
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23,660
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22,614
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23,660
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Adjusted EBITDA*
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9,639
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10,306
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9,770
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19,945
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22,836
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Announced dividend per ordinary
share (cents per share)
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8.000
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7.270
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7.270
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15.270
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13.880
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Underlying RC profit per ordinary
share* (cents)
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16.61
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16.24
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14.77
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32.86
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42.65
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Underlying RC profit per ADS*
(dollars)
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1.00
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0.97
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0.89
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1.97
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2.56
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Highlights
• Strong operating cash flow and lower
net debt: underlying RC profit $2.8
billion; strong operating cash flow of $8.1 billion; net debt
reduced to $22.6 billion.
• Robust operations:
2Q24 bp-operated upstream plant reliability*
96.1%; 2Q24 bp-operated refining availability* 96.4%.
• Growing shareholder
distributions: Dividend per ordinary
share of 8 cents; $1.75 billion share buyback announced for 2Q24,
delivering on our commitment to announce $3.5 billion for the first
half of 2024; committed to announcing $3.5 billion share buyback
for the second half of 2024.
• Six priorities in
action: Advancing growth projects,
taking FID on Kaskida in Gulf of Mexico; re-focusing bioenergy
business with agreement to take full ownership of bp Bunge
Bioenergia and high grading biofuels portfolio.
![](https://dw6uz0omxro53.cloudfront.net/3124601/9e931e62-4699-4314-a9c0-62837a1b4a1f.jpg)
Our businesses continue to operate
safely and efficiently. We are driving focus across the business
and reducing costs, all while building momentum in our drive to
2025. Our recent go-ahead of the Kaskida development in the Gulf of
Mexico business, and decision to take full ownership of bp Bunge
Bioenergia while scaling back plans for new biofuels projects,
demonstrate our commitment to delivering as a simpler, more focused
and higher value company. This all supports growing returns for
shareholders, as we have announced today.
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![](https://dw6uz0omxro53.cloudfront.net/3124601/632d592f-b3e6-4454-bd3c-8f32abec71f2.jpg)
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Murray Auchincloss
Chief executive officer
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![](https://dw6uz0omxro53.cloudfront.net/3124601/4693dbb7-372f-424e-b9e6-2b48b6363957.jpg)
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(a)
This results announcement also represents
bp's half-yearly financial report (see page 15).
(b)
Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more information on other
proceeds.
(c)
See Note 9 for more information.
RC profit (loss), underlying RC
profit, net debt, adjusted EBITDA, underlying RC profit per
ordinary share and underlying RC profit per ADS are non-IFRS
measures. Inventory holding (gains) losses and adjusting items are
non-IFRS adjustments.
*
For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
33.
Top of
page 2
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We generated strong operating cash
flow* in the quarter, which helped reduce net debt* to $22.6
billion. Our decision to increase our dividend by 10%, and extend
our buyback programme commitment to 4Q 2024, reflects the
confidence we have in our performance and outlook for cash
generation. We are maintaining a disciplined financial frame and
remain committed to growing value and returns for bp.
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![](https://dw6uz0omxro53.cloudfront.net/3124601/5bf7efc1-1ec2-4fe4-982c-1344d28b267f.jpg)
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Kate Thomson Chief financial
officer
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![](https://dw6uz0omxro53.cloudfront.net/3124601/0a68e6c8-345c-4376-820e-5317ee06face.jpg)
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Highlights
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2Q24 underlying replacement cost (RC) profit* $2.8
billion
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•
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Underlying RC profit for the quarter
was $2.8 billion, compared with $2.7 billion for the previous
quarter. Compared with the first quarter 2024, the result reflects
an average gas marketing and trading result, significantly lower
realized refining margins, stronger fuels margins and lower
taxation. The underlying effective tax rate (ETR)* in the quarter
was 33% which reflects the impact of the reassessment of the
recognition of deferred tax assets.
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•
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Reported loss for the quarter was
$0.1 billion, compared with a profit of $2.3 billion for the first
quarter 2024. The reported result for the second quarter is
adjusted for inventory holding losses* of $0.1 billion (net of
tax) and a net adverse impact of adjusting items* of $2.8 billion
(net of tax) to derive the underlying RC profit. Adjusting items
post-tax include a net charge of $1.5 billion relating to asset
impairments and associated onerous contract provisions, including
those relating to the ongoing review of the Gelsenkirchen refinery
and adverse post-tax fair value accounting effects* of $0.9
billion.
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Segment results
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Gas & low carbon energy: The RC
loss before interest and tax for the second quarter 2024 was
$0.3 billion, compared with a profit of $1.0 billion for
the previous quarter. After adjusting RC loss before interest and
tax for a net adverse impact of adjusting items of
$1.7 billion, the underlying RC profit before interest and
tax* for the second quarter was $1.4 billion, compared with
$1.7 billion in the first quarter 2024. The second quarter
underlying result reflects an average gas marketing and trading
result compared with a strong result in the first quarter,
partially offset by the absence of foreign exchange losses from the
devaluation of the Egyptian pound and lower exploration
write-offs.
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•
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Oil production & operations: The
RC profit before interest and tax for the second quarter 2024 was
$3.3 billion, compared with $3.1 billion for the previous
quarter. After adjusting RC profit before interest and tax for a
net favourable impact of adjusting items of $0.2 billion, the
underlying RC profit before interest and tax for the second quarter
was $3.1 billion, compared with $3.1 billion in the first
quarter 2024. The second quarter underlying result reflects higher
realizations partially offset by higher exploration
write-offs.
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•
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Customers & products: The RC
loss before interest and tax for the second quarter 2024 was
$0.1 billion, compared with a profit of $1.0 billion for
the previous quarter. After adjusting RC loss before interest and
tax for a net adverse impact of adjusting items of
$1.3 billion, the underlying RC profit before interest and tax
for the second quarter was $1.1 billion, compared with
$1.3 billion in the first quarter 2024. The customers second
quarter underlying result was higher by $0.4 billion,
reflecting stronger fuels margins, convenience performance and
seasonal volumes, and continued quarter on quarter momentum in
Castrol. The products second quarter underlying result was lower by
$0.6 billion, reflecting significantly lower realized refining
margins mainly relating to weaker middle distillate margins and
narrower North American heavy crude oil differentials, and a higher
level of turnaround activity, partially offset by the absence of
the first quarter impacts of the Whiting refinery outage. The oil
trading contribution was weak following a strong result in the
first quarter.
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Operating cash flow* $8.1 billion and net debt* reduced to
$22.6 billion
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•
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Operating cash flow in the quarter
of $8.1 billion was strong. This includes a working capital*
release of $0.5 billion (after adjusting for inventory holding
losses, fair value accounting effects and other adjusting items).
This largely reflects a partial unwind of previous quarters'
working capital build, partially offset by the settlement payment
for the Gulf of Mexico (see page 29). Net debt reduced to $22.6
billion, largely driven by strong operating cash flow.
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Growing distributions within an unchanged financial
frame
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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 second
quarter, bp has announced a dividend per ordinary share of 8
cents.
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•
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bp is committed to maintaining a
strong investment grade credit rating. Through the cycle, we are
targeting to further improve our credit metrics within an 'A' grade
credit range.
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•
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bp continues to invest with
discipline and a returns focused approach in our transition growth*
engines and in our oil, gas and refining businesses. For 2024 and
2025 we expect capital expenditure of around $16 billion per
annum.
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•
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The $1.75 billion share buyback
programme announced with the first quarter results was completed on
26 July 2024. Related to the second quarter results, bp intends to
execute a $1.75 billion share buyback prior to reporting the third
quarter results. Furthermore, bp is committed to announcing $3.5
billion for the second half of 2024. At current market conditions
and subject to maintaining a strong investment grade credit rating,
bp plans share buybacks of at least $14 billion through 2025 as
part of our commitment, on a point forward basis, to returning at
least 80% of surplus cash flow* to shareholders.
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•
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In setting the dividend per ordinary
share and buyback each quarter, the board will continue to take
into account factors including the cumulative level of and outlook
for surplus cash flow, the cash balance point and maintaining a
strong investment grade credit rating.
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The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
39.
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Top of
page 3
Financial results
In addition to the highlights on
page 2:
• Profit or loss attributable to bp
shareholders in the second quarter and half year was a loss of
$0.1 billion and a profit of $2.1 billion respectively,
compared with a profit of $1.8 billion and $10.0 billion
in the same periods of 2023.
- After
adjusting loss or profit attributable to bp shareholders for
inventory holding losses or gains* and net impact of adjusting
items*, underlying replacement cost (RC) profit* for the second
quarter and half year was $2.8 billion and $5.5 billion
respectively, compared with $2.6 billion and
$7.6 billion for the same periods of
2023. The underlying RC profit for the second quarter mainly
reflects an average gas marketing and trading result compared with
an exceptional result in the second quarter 2023, lower industry
refining margins, a significantly lower level of turnaround
activity in customers & products, increased volume in oil
production & operations, and lower taxation. For the half year,
the reduction mainly reflects a lower gas marketing and trading
result, lower industry refining margins and lower gas realizations,
partially offset by increased volume in oil production &
operations and lower taxation.
- Adjusting items in the second
quarter and half year had a net adverse pre-tax impact of
$3.1 billion and $4.3 billion respectively, compared with
a net adverse pre-tax impact of $0.6 billion and a net
favourable pre-tax impact of $3.3 billion in the same periods
of 2023.
- Adjusting items for the second
quarter and half year of 2024 include an adverse impact of pre-tax
fair value accounting effects*, relative to management's internal
measure of performance, of $1.0 billion and $1.2 billion
respectively, compared with a favourable pre-tax impact of
$1.1 billion and $5.3 billion in the same periods of
2023. This is primarily due to an increase in the forward price of
LNG over the quarter and half year 2024, compared to a decline in
the comparative periods of 2023.
- Adjusting items for the
second quarter and half year of 2024 include an adverse pre-tax
impact of asset impairments of $1.3 billion and $1.9 billion
respectively, compared with an adverse pre-tax impact of $1.2
billion and $1.2 billion in the same
periods of 2023. In second quarter and half year 2024 there was
also an adverse impact of $0.7 billion and $0.9 billion
respectively of onerous contract provisions associated with those
impairments.
• The effective tax rate (ETR) on RC
profit or loss* for the second quarter and half year was 87% and
63% respectively, compared with 41% and 32% for the same periods in
2023. Excluding adjusting items, the underlying ETR* for the second
quarter and half year was 33% and 38%, compared with 43% and 41%
for the same periods a year ago. The lower underlying ETR for the
second quarter and half year reflects the impact of the
reassessment of the recognition of deferred tax assets. ETR on RC
profit or loss and underlying ETR are non-IFRS measures.
• Operating cash flow* for the
second quarter and half year was $8.1 billion and
$13.1 billion respectively, compared with $6.3 billion
and $13.9 billion for the same periods in 2023. The
quarter-on-quarter variance has arisen as a result of a higher
working capital* release and timings of payments relating to
provisions, and the year-on-year variance is driven by the lower
underlying profit partly offset by lower tax payments.
• Capital expenditure* in the second
quarter and half year was $3.7 billion and $8.0 billion
respectively, compared with $4.3 billion and $7.9 billion
in the same periods of 2023. Second quarter and half year 2023
include $1.1 billion in respect of the TravelCenters of America
acquisition.
• Total divestment and other
proceeds for the second quarter and half year were
$0.8 billion and $1.2 billion respectively, compared with
$0.1 billion and $0.9 billion for
the same periods in 2023. Other proceeds for the second quarter and
half year 2024 were $0.5 billion of proceeds from the sale of a 49%
interest in a controlled affiliate holding certain midstream assets
offshore US. There were no other proceeds for the same periods in
2023.
• At the end of the second quarter,
net debt* was $22.6 billion, compared with $24.0 billion at
the end of the first quarter 2024 and $23.7 billion at the end
of the second quarter 2023 reflecting strong operating cash
flow.
Top of
page 4
Analysis of RC profit (loss) before
interest and tax and reconciliation to profit (loss) for the
period
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Second
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First
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Second
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First
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First
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|
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quarter
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quarter
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quarter
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|
half
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half
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$
million
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2024
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2024
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2023
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2024
|
2023
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RC
profit (loss) before interest and tax
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gas & low carbon
energy
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(315)
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1,036
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2,289
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721
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9,636
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oil production &
operations
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3,267
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3,060
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2,568
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6,327
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5,885
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customers & products
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(133)
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988
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555
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855
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3,235
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other businesses &
corporate
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(180)
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(300)
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(297)
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(480)
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(387)
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Consolidation adjustment -
UPII*
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(73)
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32
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(30)
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(41)
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(52)
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RC profit before interest and
tax
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2,566
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4,816
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5,085
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7,382
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18,317
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Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
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(1,176)
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(1,034)
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(859)
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(2,210)
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(1,644)
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Taxation on a RC basis
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(1,207)
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(2,030)
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(1,724)
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(3,237)
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(5,297)
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Non-controlling interests
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(199)
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(146)
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(161)
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(345)
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(365)
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RC profit (loss) attributable to bp
shareholders*
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(16)
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1,606
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2,341
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1,590
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11,011
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Inventory holding gains
(losses)*
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(136)
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851
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(732)
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|
715
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(1,332)
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Taxation (charge) credit on
inventory holding gains and losses
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23
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(194)
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183
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|
(171)
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331
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Profit (loss) for the period
attributable to bp shareholders
|
|
(129)
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2,263
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1,792
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2,134
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10,010
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Analysis of underlying RC profit
(loss) before interest and tax
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
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$
million
|
|
2024
|
2024
|
2023
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|
2024
|
2023
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Underlying RC profit (loss) before interest and
tax
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|
|
|
|
|
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gas & low carbon
energy
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1,402
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1,658
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2,233
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|
3,060
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5,689
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oil production &
operations
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3,094
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3,125
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2,777
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6,219
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6,096
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customers & products
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1,149
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1,289
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796
|
|
2,438
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3,555
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other businesses &
corporate
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|
(158)
|
(154)
|
(170)
|
|
(312)
|
(466)
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Consolidation adjustment -
UPII
|
|
(73)
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32
|
(30)
|
|
(41)
|
(52)
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Underlying RC profit before interest
and tax
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|
5,414
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5,950
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5,606
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|
11,364
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14,822
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Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
|
|
(971)
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(942)
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(740)
|
|
(1,913)
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(1,421)
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Taxation on an underlying RC
basis
|
|
(1,488)
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(2,139)
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(2,116)
|
|
(3,627)
|
(5,484)
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Non-controlling interests
|
|
(199)
|
(146)
|
(161)
|
|
(345)
|
(365)
|
Underlying RC profit attributable to
bp shareholders*
|
|
2,756
|
2,723
|
2,589
|
|
5,479
|
7,552
|
Reconciliations of underlying RC
profit attributable to bp shareholders to the nearest equivalent
IFRS measure are provided on page 1 for the group and on pages 6-14
for the segments.
Operating Metrics
Operating metrics
|
|
First half
2024
|
|
vs First
half 2023
|
Tier 1 and tier 2 process safety events*
|
|
23
|
|
+3
|
Reported recordable injury frequency*
|
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0.262
|
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+2.7%
|
upstream* production(a) (mboe/d)
|
|
2,379
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+3.4%
|
upstream unit production costs*(b)
($/boe)
|
|
6.17
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|
+4.0%
|
bp-operated upstream plant reliability*
|
|
95.5%
|
|
+0.5
|
bp-operated refining
availability*(a)
|
|
93.4%
|
|
-2.5
|
(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 portfolio mix.
Top of
page 5
Outlook & Guidance
3Q
2024 guidance
• Looking ahead, bp expects third
quarter 2024 reported upstream* production to be lower compared
with second-quarter 2024, including in higher margin
regions.
• In its customers business, bp
expects fuels margins to remain sensitive to movements in cost of
supply, and seasonally higher volumes compared to the second
quarter.
• In products, bp expects realized
refining margins to continue to be sensitive to relative movements
in product cracks and North American heavy crude oil differentials.
In addition bp expects a similar level of turnaround activity to
the second quarter.
• bp expects income taxes paid in
the third quarter to be around $1 billion higher than the second
quarter 2024 mainly due to the timing of instalment payments, which
are typically higher in the third quarter each year.
2024 guidance
In addition to the guidance on page
2:
• bp continues to expect both
reported and underlying upstream production* to be slightly higher
compared with 2023. Within this, bp continues to expect underlying
production from oil production & operations to be higher and
production from gas & low carbon energy to be lower.
• In its customers business, bp
continues to expect growth from convenience, including a full year
contribution from TravelCenters of America; a stronger contribution
from Castrol underpinned
by volume growth in focus markets; and continued margin growth from
bp pulse driven by higher energy sold. In addition, bp continues to
expect fuels margins to remain sensitive to the cost of
supply.
• In products, bp continues to
expect a lower level of industry refining margins relative to 2023,
with realized margins impacted by narrower North American heavy
crude oil differentials. bp now expects refinery turnaround
activity to have a lower financial impact compared to 2023
reflecting the lower margin environment, with phasing of activity
in 2024 heavily weighted towards the second half, with a higher
impact in the fourth quarter.
• bp continues to expect the other
businesses & corporate underlying annual charge to be around
$1.0 billion for 2024. The charge may vary from quarter to
quarter.
• bp continues to expect the
depreciation, depletion and amortization to be slightly higher than
2023.
• bp continues to expect the
underlying ETR* for 2024 to be around 40% but it is sensitive to
the impact that volatility in the current price environment may
have on the geographical mix of the group's profits and
losses.
• bp continues to expect capital
expenditure* for 2024 to be around $16 billion, and continues to
expect the phasing to be split broadly evenly between the first
half and the second half.
• bp continues to expect divestment
and other proceeds of $2-3 billion in 2024, weighted towards the
second half. Having realized $18.9 billion of divestment and other
proceeds since the second quarter of 2020, bp continues to expect
to reach $25 billion of divestment and other proceeds between the
second half of 2020 and 2025.
• bp continues to expect Gulf of
Mexico settlement payments for the year to be around $1.2 billion
pre-tax including $1.1 billion pre-tax paid during the second
quarter.
bp expects to update on our
medium-term plans at the same time as our full year results in
February 2025.
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
39.
|
Top of
page 6
gas & low carbon
energy*
Financial results
• The replacement cost (RC) result before interest and tax for
the second quarter and half year was a loss of $315 million and a
profit of $721 million respectively, compared with a profit of
$2,289 million and $9,636 million for the same periods in 2023. The
second quarter and half year are adjusted by an adverse impact of
net adjusting items* of $1,717 million and $2,339 million
respectively, compared with a favourable impact of net adjusting
items of $56 million and $3,947 million for the same periods in
2023. Adjusting items include impacts of fair value accounting
effects*, relative to management's internal measure of performance,
which are an adverse impact of $1,011 million and $898 million for
the second quarter and half year in 2024 and a favourable impact of
$1,222 million and $5,156 million for the same periods in 2023.
Under IFRS, reported earnings include the mark-to-market value of
the hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. The underlying result includes the
mark-to-market value of the hedges but also recognizes changes in
value of the LNG contracts being risk managed.
•
After adjusting RC loss or profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax*
for the second quarter and half year was $1,402 million and $3,060
million respectively, compared with $2,233 million and $5,689
million for the same periods in 2023.
• The
underlying RC profit for the second quarter compared with the same
period in 2023, reflects an average gas marketing and trading
result compared with an exceptional result in the second quarter
2023, partly offset by a lower depreciation, depletion and
amortization charge. The underlying RC profit for the half year,
compared with the same period in 2023, reflects a lower gas
marketing and trading result and lower realizations, partly offset
by a lower depreciation, depletion and amortization
charge.
Operational update
•
Reported production for the quarter was 899mboe/d, 0.5% lower than
the same period in 2023. Underlying production* was 0.4% higher,
mainly due to ramp-up of major projects*, partially offset by base
decline.
•
Reported production for the half year was 907mboe/d, 3.2% lower
than the same period in 2023. Underlying production was 1.6% lower,
mainly due to base decline partially offset by major projects.
Reported production includes the effect of the disposal of the
Algeria business in 2023.
•
Renewables pipeline* at the end of the quarter was 59.0GW (bp net),
including 21.1GW bp net share of Lightsource bp's (LSbp's)
pipeline. The renewables pipeline increased by 0.7GW net during the
half year. In addition, there is over 10GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
• On 4 June bp
announced that the floating production storage and offloading
(FPSO) vessel, a key component of the Greater Tortue Ahmeyim (GTA)
Phase 1 LNG development, has arrived at its final location offshore
on the maritime border of Mauritania and Senegal, following the
arrival of the FLNG vessel in the first quarter.
• On 4 June bp
signed a new five-year gas agreement with Turkish state-owned
pipeline company BOTAS. This is the fourth contract between Shah
Deniz and BOTAS stretching back to the start of production from the
Caspian Sea field in 2006.
• On 21 June bp
approved the final investment decision for the Coconut project
offshore Trinidad and Tobago.
• On 24 July bp and
its partner the National Gas Company of Trinidad and Tobago Limited
were awarded an exploration and production licence by the
Bolivarian Republic of Venezuela for the development of the Cocuina
gas discovery. Cocuina is the Venezuelan portion of the
cross-border Manakin-Cocuina gas field.
• These events build
on the progress announced in our first-quarter results, which
comprised the following:
ADNOC and bp announced that they
have agreed to form a new joint venture (JV) in Egypt (bp 51%,
ADNOC 49%). Subject to regulatory approvals and clearances, the
formation of the JV is expected to complete during the second half
of 2024; and bp and the Korea Gas Corporation signed an agreement
for bp to supply up to 9.8 million tonnes of LNG over an 11 year
period starting in 2026 from bp's global LNG portfolio.
low
carbon energy
• On 13 June bp
signed an agreement with OQ and Dredging, Environmental and Marine
Engineering NV (DEME) to acquire a 49% stake and operatorship in
the Hyport green hydrogen* project in Duqm, Oman, subject to
regulatory approvals, which could produce around 57,000 tonnes per
annum of green hydrogen.
• On 15 July bp
announced its 100MW industrial-scale green hydrogen project has
been awarded funding as part of the European IPCEI (Important
Projects of Common European interest) Hy2Infra wave. The project,
located next to bp's Lingen refinery in Germany, is expected to be
bp's first fully owned and operated large-scale green hydrogen
plant.
• These events build
on the progress announced in our first-quarter results, which
comprised the following:
bp announced it has received all the
necessary regulatory approvals and it is now 100% owner of the
Beacon US offshore wind projects and Equinor the Empire projects;
and our UK joint ventures Net Zero Teesside Power (bp 75%, Equinor
25%) and the Northern Endurance Partnership (bp 45%, Equinor 45%,
Total Energies 10%) announced the selection of contractors for
engineering, procurement, and construction contracts with a
combined value of around $5 billion. The final award of contracts
is subject to the receipt of relevant regulatory clearances and
positive FID by the projects and the UK government.
Top of
page 7
gas & low carbon energy
(continued)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Profit (loss) before interest and
tax
|
|
(315)
|
1,036
|
2,289
|
|
721
|
9,637
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
|
-
|
(1)
|
RC profit (loss) before interest and
tax
|
|
(315)
|
1,036
|
2,289
|
|
721
|
9,636
|
Net (favourable) adverse impact of
adjusting items
|
|
1,717
|
622
|
(56)
|
|
2,339
|
(3,947)
|
Underlying RC profit before interest
and tax
|
|
1,402
|
1,658
|
2,233
|
|
3,060
|
5,689
|
Taxation on an underlying RC
basis
|
|
(369)
|
(518)
|
(575)
|
|
(887)
|
(1,536)
|
Underlying RC profit before
interest
|
|
1,033
|
1,140
|
1,658
|
|
2,173
|
4,153
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,209
|
1,293
|
1,407
|
|
2,502
|
2,847
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
28
|
203
|
(1)
|
|
231
|
(2)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
2,639
|
3,154
|
3,639
|
|
5,793
|
8,534
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
gas
|
|
869
|
639
|
697
|
|
1,508
|
1,344
|
low carbon energy
|
|
136
|
659
|
190
|
|
795
|
556
|
Total capital expenditure
|
|
1,005
|
1,298
|
887
|
|
2,303
|
1,900
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
98
|
102
|
103
|
|
100
|
108
|
Natural gas (mmcf/d)
|
|
4,648
|
4,708
|
4,641
|
|
4,678
|
4,801
|
Total hydrocarbons*
(mboe/d)
|
|
899
|
914
|
903
|
|
907
|
936
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
79.92
|
76.92
|
73.57
|
|
78.38
|
76.42
|
Natural gas ($/mcf)
|
|
5.47
|
5.45
|
5.53
|
|
5.46
|
6.49
|
Total hydrocarbons
($/boe)
|
|
36.85
|
36.64
|
36.96
|
|
36.75
|
42.01
|
(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 June
|
31 March
|
30 June
|
low
carbon energy(c)
|
|
2024
|
2024
|
2023
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
Installed renewables
capacity*
|
|
2.7
|
2.7
|
2.4
|
|
|
|
|
|
Developed renewables to
FID*
|
|
6.5
|
6.2
|
6.1
|
Renewables pipeline
|
|
59.0
|
58.5
|
39.6
|
of
which by geographical area:
|
|
|
|
|
Renewables pipeline -
Americas
|
|
18.4
|
18.1
|
17.8
|
Renewables pipeline - Asia
Pacific
|
|
21.5
|
21.3
|
12.2
|
Renewables pipeline -
Europe
|
|
15.5
|
15.7
|
9.5
|
Renewables pipeline -
Other
|
|
3.5
|
3.5
|
0.1
|
of
which by technology:
|
|
|
|
|
Renewables pipeline - offshore
wind
|
|
9.6
|
9.6
|
5.3
|
Renewables pipeline - onshore
wind
|
|
12.7
|
12.7
|
6.3
|
Renewables pipeline -
solar
|
|
36.7
|
36.2
|
28.1
|
Total Developed renewables to FID and Renewables
pipeline
|
|
65.5
|
64.7
|
45.7
|
(c)
Because of rounding, some totals may not agree exactly with the sum
of their component parts.
Top of
page 9
oil production &
operations
Financial results
• The
replacement cost (RC) profit before interest and tax for the second
quarter and half year was $3,267 million and $6,327 million
respectively, compared with $2,568 million and $5,885 million for
the same periods in 2023. The second quarter and half year are
adjusted by a favourable impact of net adjusting items* of $173
million and $108 million respectively, compared with an adverse
impact of net adjusting items of $209 million and $211 million for
the same periods in 2023.
•
After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the
second quarter and half year was $3,094 million and $6,219 million
respectively, compared with $2,777 million and $6,096 million for
the same periods in 2023.
• The
underlying RC profit for the second quarter and half year, compared
with the same periods in 2023, primarily reflect increased volume,
higher liquids realizations and lower exploration write-offs partly
offset by increased depreciation charges and higher
costs.
Operational update
•
Reported production for the quarter was 1,481mboe/d, 8.2% higher
than the second quarter of 2023. Underlying production* for the
quarter was 8.3% higher compared with the second quarter of 2023
reflecting bpx energy performance and major projects* partly offset
by base performance.
•
Reported production for the half year was 1,472mboe/d, 7.9% higher
than the half year of 2023. Underlying production for the quarter
was 7.9% higher compared with the half year of 2023 reflecting bpx
energy performance and major projects* partly offset by base
performance.
Strategic Progress
• In
the Gulf of Mexico bp acquired a 30% interest in the Hess operated
Vancouver prospect.
• bp
has been awarded a 10% interest in the ADNOC-operated LNG facility
in Abu Dhabi, ADNOC and its partners approved the final investment
decision in June. Subject to obtaining necessary regulatory
approvals, the project is expected to have an LNG production
capacity of 9.6mmt per annum.
• bp
made the final investment decision on the Kaskida project in the
deepwater Gulf of Mexico. Kaskida will be bp's sixth hub in the
Gulf of Mexico and is expected to have a production capacity of
80,000 barrels of crude oil per day (bp 100%).
•
These events build on the progress announced in our first-quarter
results:
The start-up of oil production from
the new Azeri Central East (ACE) platform in the Azerbaijan sector
of the Caspian Sea; bpx energy brought online 'Checkmate', its
third central processing facility in the Permian Basin; Final
investment decision on the Atlantis Drill Center Expansion which
will be a two well tie back to the Atlantis facility in the Gulf of
Mexico; the award of a licence for two blocks in the central North
Sea, consolidating our position around our Eastern Trough Area
Project (ETAP) central processing facility; Aker BP was awarded
interest in 27 licences (of which it will operate 17) in the North
Sea and Norwegian Sea; and Azule Energy announced it had agreed to
acquire a 42.5% interest in exploration block 2914A (PEL85), Orange
Basin.
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Profit before interest and
tax
|
|
3,268
|
3,059
|
2,568
|
|
6,327
|
5,886
|
Inventory holding (gains)
losses*
|
|
(1)
|
1
|
-
|
|
-
|
(1)
|
RC profit before interest and
tax
|
|
3,267
|
3,060
|
2,568
|
|
6,327
|
5,885
|
Net (favourable) adverse impact of
adjusting items
|
|
(173)
|
65
|
209
|
|
(108)
|
211
|
Underlying RC profit before interest
and tax
|
|
3,094
|
3,125
|
2,777
|
|
6,219
|
6,096
|
Taxation on an underlying RC
basis
|
|
(1,171)
|
(1,509)
|
(1,413)
|
|
(2,680)
|
(3,179)
|
Underlying RC profit before
interest
|
|
1,923
|
1,616
|
1,364
|
|
3,539
|
2,917
|
Top of
page 10
oil production & operations
(continued)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,698
|
1,657
|
1,370
|
|
3,355
|
2,697
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
99
|
3
|
242
|
|
102
|
293
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
4,891
|
4,785
|
4,389
|
|
9,676
|
9,086
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,534
|
1,776
|
1,478
|
|
3,310
|
2,998
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
1,085
|
1,056
|
1,000
|
|
1,071
|
1,003
|
Natural gas (mmcf/d)
|
|
2,292
|
2,364
|
2,140
|
|
2,328
|
2,100
|
Total hydrocarbons*
(mboe/d)
|
|
1,481
|
1,463
|
1,369
|
|
1,472
|
1,365
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
73.01
|
70.53
|
69.19
|
|
71.79
|
70.40
|
Natural gas ($/mcf)
|
|
2.02
|
2.66
|
3.23
|
|
2.35
|
4.90
|
Total hydrocarbons
($/boe)
|
|
55.78
|
54.11
|
54.57
|
|
54.94
|
58.40
|
(a)
Includes bp's share of production of equity-accounted entities in
the oil production & operations segment.
(b)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of
page 11
customers & products
Financial results
• The
replacement cost (RC) result before interest and tax for the second
quarter and half year was a loss of $133
million and a profit of $855 million respectively, compared with a
profit of $555 million and $3,235 million for the same periods in 2023. The second quarter and half year
are adjusted by an adverse impact of net adjusting items* of $1,282
million and $1,583 million respectively, mainly related to an
impairment of the Gelsenkirchen refinery and associated onerous
contract provisions, compared with an adverse impact of net
adjusting items of $241 million and $320 million for the same
periods in 2023.
•
After adjusting RC loss or profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax*
for the second quarter and half year was $1,149 million and $2,438
million respectively, compared with $796 million and $3,555 million
for the same periods in 2023.
• The
customers & products result for the second quarter was higher
than the same period in 2023. The result for the half year was
significantly lower than the same period in 2023, primarily
reflecting a lower refining result.
• customers
- the customers result for the second quarter and
first half was stronger compared to the same periods in 2023. The
result benefited from higher retail fuels margins, a stronger
Castrol result driven by
higher volumes and margins, continued growth in convenience, and
favourable foreign exchange movements. This was partly offset by a
weaker European midstream performance driven by biofuels margins.
The contribution of TravelCenters of America continues to be
impacted by the US freight recession.
• products
- the products result for the second quarter was
higher compared with the same period last year. In refining, the
result for the second quarter was impacted by lower industry
refining margins and benefited from a significantly lower level of
turnaround activity. The oil trading contribution for the second
quarter was weak. The products result for the first half was
significantly lower compared with the same period in 2023,
primarily reflecting a lower refining result. In refining, in
addition to the second quarter factors noted above, the first
quarter result was impacted by lower industry refining margins and
the plant-wide power outage at the Whiting refinery.
Operational update
• bp-operated refining availability* for the second quarter and
half year was 96.4% and 93.4%, compared with 95.7% and 95.9% for
the same periods in 2023, with the half year lower mainly due to
the first quarter Whiting refinery power outage.
Strategic progress
• On
22 May bp entered into a binding agreement to acquire fuel and
convenience retailer, X Convenience, expanding its network with the
addition of over 50 sites in South and Western Australia. Subject
to customary regulatory approvals, the transaction is currently
anticipated to close in the first half of 2025.
• On
24 May, bp Southern Africa (Pty) Ltd (bpSA) and Shell Downstream
South Africa (Pty) Ltd (SDSA) agreed the sale of their respective
50% ownership assets to the South African state-owned entity,
Central Energy Fund SOC Ltd (CEF). The sale is subject to
regulatory approvals and currently anticipated to close by the end
of fourth quarter 2024.
• On
19 June 2024 bp completed the sale of its 8.3% shareholding in
Channel Infrastructure, which owns and operates New Zealand's
Marsden Point fuel import terminal. Our long-term terminal storage
agreements with Channel Infrastructure to meet bp's foreseeable
import and supply requirements are unaffected by the sale of these
shares.
• On
20 June bp agreed to acquire Bunge's 50% holding interest in its bp
Bunge Bioenergia joint venture, one of Brazil's leading
biofuels-producing companies, with capacity to produce around
50,000 barrels a day of ethanol equivalent from sugarcane. Subject
to regulatory approvals, the transaction is currently anticipated
to close by end 2024.
• In
June bp also announced it was scaling back plans for development of
new SAF and renewable diesel biofuels projects at its existing
sites, pausing planning for two potential projects while continuing
to assess three for progression.
• In
June Castrol announced an
investment of up to $50 million in Gogoro Inc., a global technology
leader in two-wheeler battery-swapping ecosystems that enable smart
mobility solutions for cities, as part of diversification
opportunities beyond its core lubricants and fluids business under
its new 'Onward, Upward, Forward' strategy.
• EV
charge points* installed and energy sold in the first half grew by
around 30% and around two-fold respectively, compared to the same
period last year, with charge points now at around 35,700. In July,
bp pulse signed a deal with Simon Property Group to install and
operate up to 900 ultra-fast(a) charging bays at up to
75 sites across the US, with initial sites expected to open to the
public in early 2026. In addition, ADAC, the leading automobile
association in Germany with over 20 million members, announced bp
pulse as their new exclusive EV charging partner from 1
August.
•
During the second quarter bp's Archaea Energy started up three
renewable natural gas (RNG) landfill plants with total capacity of
more than 2 million mmBtu per annum, and also will be commissioning
four additional plants targeting start-up in the third
quarter.
•
These events build on the progress announced in our first quarter
results, including:
◦ bp
announced plans to transform the Gelsenkirchen refinery site by the
end of the decade.
◦ bp's
Archaea Energy brought online its largest Archaea Modular Design
(AMD) RNG plant in Kansas City, Missouri and completed the purchase
of Sunshine Gas Producers with its facility in
California.
(a)
"ultra-fast" includes charger capacity of ≥150kW.
Top of
page 12
customers & products
(continued)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Profit (loss) before interest and
tax
|
|
(270)
|
1,840
|
(177)
|
|
1,570
|
1,901
|
Inventory holding (gains)
losses*
|
|
137
|
(852)
|
732
|
|
(715)
|
1,334
|
RC profit (loss) before interest and
tax
|
|
(133)
|
988
|
555
|
|
855
|
3,235
|
Net (favourable) adverse impact of
adjusting items
|
|
1,282
|
301
|
241
|
|
1,583
|
320
|
Underlying RC profit before interest
and tax
|
|
1,149
|
1,289
|
796
|
|
2,438
|
3,555
|
Of which:(a)
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
790
|
370
|
701
|
|
1,160
|
1,092
|
Castrol - included in customers
|
|
211
|
184
|
171
|
|
395
|
332
|
products - refining &
trading
|
|
359
|
919
|
95
|
|
1,278
|
2,463
|
Taxation on an underlying RC
basis
|
|
(125)
|
(333)
|
(271)
|
|
(458)
|
(1,048)
|
Underlying RC profit before
interest
|
|
1,024
|
956
|
525
|
|
1,980
|
2,507
|
(a) A
reconciliation to RC profit before interest and tax by business is
provided on page 30.
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
1,281
|
854
|
1,149
|
|
2,135
|
1,881
|
Castrol - included in customers
|
|
253
|
226
|
213
|
|
479
|
413
|
products - refining &
trading
|
|
807
|
1,379
|
541
|
|
2,186
|
3,365
|
|
|
2,088
|
2,233
|
1,690
|
|
4,321
|
5,246
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
939
|
944
|
894
|
|
1,883
|
1,691
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
497
|
566
|
1,452
|
|
1,063
|
1,910
|
Castrol - included in customers
|
|
74
|
43
|
44
|
|
117
|
112
|
products - refining &
trading
|
|
548
|
554
|
406
|
|
1,102
|
938
|
Total capital expenditure
|
|
1,045
|
1,120
|
1,858
|
|
2,165
|
2,848
|
(b) A
reconciliation to RC profit before interest and tax by business is
provided on page 30.
Top of
page 13
customers & products
(continued)
Retail(c)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
bp retail sites* - total
(#)
|
|
21,200
|
21,150
|
21,100
|
|
21,200
|
21,100
|
Strategic convenience
sites*
|
|
2,950
|
2,900
|
2,750
|
|
2,950
|
2,750
|
(c)
Reported to the nearest 50.
Marketing sales of refined products (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
US
|
|
1,271
|
1,080
|
1,275
|
|
1,177
|
1,177
|
Europe
|
|
1,077
|
940
|
1,056
|
|
1,008
|
1,015
|
Rest of World
|
|
462
|
469
|
472
|
|
465
|
467
|
|
|
2,810
|
2,489
|
2,803
|
|
2,650
|
2,659
|
Trading/supply sales of refined
products
|
|
387
|
352
|
353
|
|
370
|
343
|
Total sales volume of refined
products
|
|
3,197
|
2,841
|
3,156
|
|
3,020
|
3,002
|
Refining marker margin*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
bp average refining marker margin
(RMM) ($/bbl)
|
|
20.6
|
20.6
|
24.7
|
|
20.6
|
26.4
|
Refinery throughputs (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
US
|
|
670
|
525
|
638
|
|
598
|
662
|
Europe
|
|
722
|
830
|
726
|
|
775
|
779
|
Total refinery
throughputs
|
|
1,392
|
1,355
|
1,364
|
|
1,373
|
1,441
|
bp-operated refining availability* (%)
|
|
96.4
|
90.4
|
95.7
|
|
93.4
|
95.9
|
Top of
page 14
other businesses &
corporate
Other businesses & corporate
comprises technology, bp ventures, launchpad, regions, corporates
& solutions, our corporate activities & functions and any
residual costs of the Gulf of Mexico oil spill.
Financial results
• The
replacement cost (RC) loss before interest and tax for the second
quarter and half year was $180 million and $480 million
respectively, compared with a loss of $297 million and $387 million
for the same periods in 2023. The second quarter and half year are
adjusted by an adverse impact of net adjusting items* of $22
million and $168 million respectively, compared with an adverse
impact of net adjusting items of $127 million and a favourable
impact of $79 million for the same periods in 2023. Adjusting items
include impacts of fair value accounting effects* which are an
adverse impact of $29 million for the quarter and $222 million for
the half year in 2024, and an adverse impact of $48 million and a
favourable impact of $197 million for the
same periods in 2023.
•
After adjusting RC loss before interest and tax for adjusting
items, the underlying RC loss before interest and tax* for the
second quarter and half year was $158 million and $312 million
respectively, compared with a loss of $170 million and $466 million
for the same periods in 2023.
Strategic progress
• In
May bp ventures announced the investment of $10 million in Hysata
to expand the production of its high efficiency electrolyser
technology.
• This
event builds on the progress announced in our first-quarter results
in which bp launchpad divested all of its 100% shareholding in
Insight Analytics Solutions Holdings Limited ("Onyx") to Macquarie
Capital.
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Profit (loss) before interest and
tax
|
|
(180)
|
(300)
|
(297)
|
|
(480)
|
(387)
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
RC profit (loss) before interest and
tax
|
|
(180)
|
(300)
|
(297)
|
|
(480)
|
(387)
|
Net (favourable) adverse impact of
adjusting items(a)
|
|
22
|
146
|
127
|
|
168
|
(79)
|
Underlying RC profit (loss) before
interest and tax
|
|
(158)
|
(154)
|
(170)
|
|
(312)
|
(466)
|
Taxation on an underlying RC
basis
|
|
3
|
99
|
10
|
|
102
|
39
|
Underlying RC profit (loss) before
interest
|
|
(155)
|
(55)
|
(160)
|
|
(210)
|
(427)
|
(a)
Includes fair value accounting effects relating to hybrid bonds.
See page 34 for more information.
Top of
page 15
This results announcement also
represents BP's half-yearly financial report for the purposes of
the Disclosure Guidance and Transparency Rules made by the UK
Financial Conduct Authority. In this context: (i) the condensed set
of financial statements can be found on pages 17-26; (ii) pages
1-14, and 27-39 comprise the interim management report; and (iii)
the directors' responsibility statement and auditors' independent
review report can be found on pages 15-16.
Statement of directors'
responsibilities
The directors confirm that, to the
best of their knowledge, the condensed set of financial statements
on pages 17-26 has been prepared in accordance with United Kingdom
adopted IAS 34 'Interim Financial Reporting', and that the interim
management report on pages 1-14, and 27-39 includes a fair review
of the information required by the Disclosure Guidance and
Transparency Rules.
The directors of BP p.l.c. are
listed on pages 83-85 of bp
Annual Report and Form 20-F 2023, with the following
exceptions: Paula Rosput Reynolds and Sir John Sawers retired at
the 2024 Annual General Meeting on 25 April 2024.
By order of the board
Murray Auchincloss
|
Kate Thomson
|
Chief Executive Officer
|
Chief Financial Officer
|
29 July 2024
|
29 July 2024
|
Top of
page 16
Independent review report to BP
p.l.c.
Conclusion
We have been engaged by the company
to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2024
which comprises the group income statement, condensed group
statement of comprehensive income, condensed group statement of
changes in equity, group balance sheet, condensed cash flow
statement and related notes 1 to 10.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 30 June 2024 is not prepared, in all material
respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct
Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual
financial statements of the group are prepared in accordance with
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. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, 'Interim Financial
Reporting'.
Conclusion Relating to Going Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately
disclosed.
This Conclusion is based on the
review procedures performed in accordance with ISRE (UK) 2410;
however, future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly
financial report, we are responsible for expressing to the company
a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use
of our report
This report is made solely to the
company in accordance with ISRE (UK) 2410. Our work has been
undertaken so that we might state to the company those matters we
are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company,
for our review work, for this report, or for the conclusions we
have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
29 July 2024
The maintenance and integrity of the
BP p.l.c. website are the responsibility of the directors; the
review work carried out by the statutory auditors does not involve
consideration of these matters and, accordingly, the statutory
auditors accept no responsibility for any changes that may have
occurred to the financial information since it was initially
presented on the website.
Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Top of
page 17
Financial statements
Group income statement
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
Sales and other operating revenues
(Note 5)
|
|
47,299
|
48,880
|
48,538
|
|
96,179
|
104,720
|
Earnings from joint
ventures - after interest and tax
|
|
250
|
178
|
360
|
|
428
|
555
|
Earnings from
associates - after interest and tax
|
|
266
|
298
|
231
|
|
564
|
404
|
Interest and other income
|
|
414
|
381
|
378
|
|
795
|
626
|
Gains on sale of businesses and
fixed assets
|
|
21
|
224
|
(28)
|
|
245
|
125
|
Total revenues and other
income
|
|
48,250
|
49,961
|
49,479
|
|
98,211
|
106,430
|
Purchases
|
|
28,891
|
27,647
|
29,172
|
|
56,538
|
58,294
|
Production and manufacturing
expenses
|
|
6,692
|
6,847
|
6,231
|
|
13,539
|
13,213
|
Production and similar
taxes
|
|
484
|
444
|
404
|
|
928
|
878
|
Depreciation, depletion and
amortization (Note 6)
|
|
4,098
|
4,150
|
3,923
|
|
8,248
|
7,723
|
Net impairment and losses on sale of
businesses and fixed assets (Note 3)
|
|
1,309
|
737
|
1,269
|
|
2,046
|
1,357
|
Exploration expense
|
|
179
|
247
|
293
|
|
426
|
399
|
Distribution and administration
expenses
|
|
4,167
|
4,222
|
3,834
|
|
8,389
|
7,581
|
Profit (loss) before interest and
taxation
|
|
2,430
|
5,667
|
4,353
|
|
8,097
|
16,985
|
Finance costs
|
|
1,216
|
1,075
|
920
|
|
2,291
|
1,763
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(40)
|
(41)
|
(61)
|
|
(81)
|
(119)
|
Profit (loss) before
taxation
|
|
1,254
|
4,633
|
3,494
|
|
5,887
|
15,341
|
Taxation
|
|
1,184
|
2,224
|
1,541
|
|
3,408
|
4,966
|
Profit (loss) for the
period
|
|
70
|
2,409
|
1,953
|
|
2,479
|
10,375
|
Attributable to
|
|
|
|
|
|
|
|
bp shareholders
|
|
(129)
|
2,263
|
1,792
|
|
2,134
|
10,010
|
Non-controlling interests
|
|
199
|
146
|
161
|
|
345
|
365
|
|
|
70
|
2,409
|
1,953
|
|
2,479
|
10,375
|
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
|
|
|
|
|
|
Per ordinary share
(cents)
|
|
|
|
|
|
|
|
Basic
|
|
(0.78)
|
13.57
|
10.22
|
|
12.85
|
56.53
|
Diluted
|
|
(0.78)
|
13.25
|
10.01
|
|
12.54
|
55.40
|
Per ADS (dollars)
|
|
|
|
|
|
|
|
Basic
|
|
(0.05)
|
0.81
|
0.61
|
|
0.77
|
3.39
|
Diluted
|
|
(0.05)
|
0.80
|
0.60
|
|
0.75
|
3.32
|
Top of
page 18
Condensed group statement of
comprehensive income
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
Profit (loss) for the
period
|
|
70
|
2,409
|
1,953
|
|
2,479
|
10,375
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss
|
|
|
|
|
|
|
|
Currency translation
differences
|
|
(142)
|
(448)
|
11
|
|
(590)
|
464
|
Cash flow hedges and costs of
hedging
|
|
(100)
|
(115)
|
(56)
|
|
(215)
|
490
|
Share of items relating to
equity-accounted entities, net of tax
|
|
10
|
(8)
|
(27)
|
|
2
|
(230)
|
Income tax relating to items that
may be reclassified
|
|
40
|
(4)
|
71
|
|
36
|
(5)
|
|
|
(192)
|
(575)
|
(1)
|
|
(767)
|
719
|
Items that will not be reclassified
to profit or loss
|
|
|
|
|
|
|
|
Remeasurements of the net pension
and other post-retirement benefit liability or asset
|
|
(240)
|
(66)
|
(855)
|
|
(306)
|
(942)
|
Remeasurements of equity
investments
|
|
(17)
|
(13)
|
-
|
|
(30)
|
-
|
Cash flow hedges that will
subsequently be transferred to the balance sheet
|
|
-
|
(3)
|
-
|
|
(3)
|
-
|
Income tax relating to items that
will not be reclassified(a)
|
|
59
|
674
|
308
|
|
733
|
331
|
|
|
(198)
|
592
|
(547)
|
|
394
|
(611)
|
Other comprehensive
income
|
|
(390)
|
17
|
(548)
|
|
(373)
|
108
|
Total comprehensive
income
|
|
(320)
|
2,426
|
1,405
|
|
2,106
|
10,483
|
Attributable to
|
|
|
|
|
|
|
|
bp shareholders
|
|
(520)
|
2,303
|
1,240
|
|
1,783
|
10,101
|
Non-controlling interests
|
|
200
|
123
|
165
|
|
323
|
382
|
|
|
(320)
|
2,426
|
1,405
|
|
2,106
|
10,483
|
(a)
First quarter and first half 2024 include a $658-million credit in
respect of the reduction in the deferred tax liability on defined
benefit pension plan surpluses following the reduction in the rate
of the authorized surplus payments tax charge in the UK from 35% to
25%.
Top of
page 19
Condensed group statement of changes
in equity
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2024
|
|
70,283
|
13,566
|
1,644
|
85,493
|
|
|
|
|
|
|
Total comprehensive
income
|
|
1,783
|
310
|
13
|
2,106
|
Dividends
|
|
(2,431)
|
-
|
(186)
|
(2,617)
|
Cash flow hedges transferred to the
balance sheet, net of tax
|
|
(4)
|
-
|
-
|
(4)
|
Repurchase of ordinary share
capital
|
|
(3,502)
|
-
|
-
|
(3,502)
|
Share-based payments, net of
tax
|
|
654
|
-
|
-
|
654
|
Issue of perpetual hybrid
bonds(a)
|
|
(4)
|
1,300
|
-
|
1,296
|
Redemption of perpetual hybrid
bonds, net of tax(a)
|
|
9
|
(1,300)
|
-
|
(1,291)
|
Payments on perpetual hybrid
bonds
|
|
-
|
(419)
|
-
|
(419)
|
Transactions involving
non-controlling interests, net of tax
|
|
236
|
-
|
247
|
483
|
At 30 June 2024
|
|
67,024
|
13,457
|
1,718
|
82,199
|
|
|
|
|
|
|
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2023
|
|
67,553
|
13,390
|
2,047
|
82,990
|
|
|
|
|
|
|
Total comprehensive
income
|
|
10,101
|
288
|
94
|
10,483
|
Dividends
|
|
(2,348)
|
-
|
(135)
|
(2,483)
|
Repurchase of ordinary share
capital
|
|
(5,166)
|
-
|
-
|
(5,166)
|
Share-based payments, net of
tax
|
|
205
|
-
|
-
|
205
|
Issue of perpetual hybrid
bonds
|
|
(1)
|
133
|
-
|
132
|
Payments on perpetual hybrid
bonds
|
|
(5)
|
(409)
|
-
|
(414)
|
Transactions involving
non-controlling interests, net of tax
|
|
-
|
-
|
(144)
|
(144)
|
At 30 June 2023
|
|
70,339
|
13,402
|
1,862
|
85,603
|
(a)
During the first quarter 2024 BP Capital Markets PLC issued $1.3
billion of US dollar perpetual subordinated hybrid bonds with a
coupon fixed for an initial period up to 2034 of 6.45% and
voluntarily bought back $1.3 billion of the non-call 2025 4.375% US
dollar hybrid bond issued in 2020. Taken together these
transactions had no significant impact on net debt or
gearing.
Top of
page 20
Group balance sheet
|
|
30 June
|
31 December
|
$
million
|
|
2024
|
2023
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
|
100,293
|
104,719
|
Goodwill
|
|
12,390
|
12,472
|
Intangible assets
|
|
10,301
|
9,991
|
Investments in joint
ventures
|
|
12,346
|
12,435
|
Investments in associates
|
|
7,852
|
7,814
|
Other investments
|
|
1,943
|
2,189
|
Fixed assets
|
|
145,125
|
149,620
|
Loans
|
|
2,162
|
1,942
|
Trade and other
receivables
|
|
1,971
|
1,767
|
Derivative financial
instruments
|
|
10,262
|
9,980
|
Prepayments
|
|
661
|
623
|
Deferred tax assets
|
|
5,060
|
4,268
|
Defined benefit pension plan
surpluses
|
|
7,520
|
7,948
|
|
|
172,761
|
176,148
|
Current assets
|
|
|
|
Loans
|
|
212
|
240
|
Inventories
|
|
23,345
|
22,819
|
Trade and other
receivables
|
|
28,890
|
31,123
|
Derivative financial
instruments
|
|
7,940
|
12,583
|
Prepayments
|
|
2,147
|
2,520
|
Current tax receivable
|
|
978
|
837
|
Other investments
|
|
708
|
843
|
Cash and cash equivalents
|
|
34,891
|
33,030
|
|
|
99,111
|
103,995
|
Assets classified as held for sale
(Note 2)
|
|
1,512
|
151
|
|
|
100,623
|
104,146
|
Total assets
|
|
273,384
|
280,294
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
57,660
|
61,155
|
Derivative financial
instruments
|
|
4,339
|
5,250
|
Accruals
|
|
5,703
|
6,527
|
Lease liabilities
|
|
2,593
|
2,650
|
Finance debt
|
|
4,142
|
3,284
|
Current tax payable
|
|
2,894
|
2,732
|
Provisions
|
|
4,016
|
4,418
|
|
|
81,347
|
86,016
|
Liabilities directly associated with
assets classified as held for sale (Note 2)
|
|
31
|
62
|
|
|
81,378
|
86,078
|
Non-current liabilities
|
|
|
|
Other payables
|
|
8,913
|
10,076
|
Derivative financial
instruments
|
|
12,032
|
10,402
|
Accruals
|
|
1,096
|
1,310
|
Lease liabilities
|
|
8,104
|
8,471
|
Finance debt
|
|
50,844
|
48,670
|
Deferred tax liabilities
|
|
9,125
|
9,617
|
Provisions
|
|
14,571
|
14,721
|
Defined benefit pension plan and
other post-retirement benefit plan deficits
|
|
5,122
|
5,456
|
|
|
109,807
|
108,723
|
Total liabilities
|
|
191,185
|
194,801
|
Net assets
|
|
82,199
|
85,493
|
Equity
|
|
|
|
bp shareholders' equity
|
|
67,024
|
70,283
|
Non-controlling interests
|
|
15,175
|
15,210
|
Total equity
|
|
82,199
|
85,493
|
Top of
page 21
Condensed group cash flow
statement
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Operating activities
|
|
|
|
|
|
|
|
Profit (loss) before
taxation
|
|
1,254
|
4,633
|
3,494
|
|
5,887
|
15,341
|
Adjustments to reconcile profit
(loss) before taxation to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization and exploration expenditure written off
|
|
4,225
|
4,356
|
4,164
|
|
8,581
|
8,014
|
Net impairment and (gain) loss on
sale of businesses and fixed assets
|
|
1,288
|
513
|
1,297
|
|
1,801
|
1,232
|
Earnings from equity-accounted
entities, less dividends received
|
|
19
|
(96)
|
(31)
|
|
(77)
|
(30)
|
Net charge for interest and other
finance expense, less net interest paid
|
|
524
|
192
|
102
|
|
716
|
165
|
Share-based payments
|
|
507
|
161
|
243
|
|
668
|
221
|
Net operating charge for pensions
and other post-retirement benefits, less contributions and benefit
payments for unfunded plans
|
|
(34)
|
(32)
|
(47)
|
|
(66)
|
(90)
|
Net charge for provisions, less
payments
|
|
764
|
(683)
|
(221)
|
|
81
|
(1,320)
|
Movements in inventories and other
current and non-current assets and liabilities
|
|
1,556
|
(2,131)
|
(742)
|
|
(575)
|
(4,497)
|
Income taxes paid
|
|
(2,003)
|
(1,904)
|
(1,966)
|
|
(3,907)
|
(5,121)
|
Net cash provided by operating
activities
|
|
8,100
|
5,009
|
6,293
|
|
13,109
|
13,915
|
Investing activities
|
|
|
|
|
|
|
|
Expenditure on property, plant and
equipment, intangible and other assets
|
|
(3,463)
|
(3,718)
|
(3,453)
|
|
(7,181)
|
(6,582)
|
Acquisitions, net of cash
acquired
|
|
(116)
|
(106)
|
(804)
|
|
(222)
|
(752)
|
Investment in joint
ventures
|
|
(95)
|
(353)
|
(50)
|
|
(448)
|
(590)
|
Investment in associates
|
|
(17)
|
(101)
|
(7)
|
|
(118)
|
(15)
|
Total cash capital
expenditure
|
|
(3,691)
|
(4,278)
|
(4,314)
|
|
(7,969)
|
(7,939)
|
Proceeds from disposal of fixed
assets
|
|
35
|
66
|
28
|
|
101
|
43
|
Proceeds from disposal of
businesses, net of cash disposed
|
|
219
|
347
|
60
|
|
566
|
845
|
Proceeds from loan
repayments
|
|
24
|
16
|
21
|
|
40
|
27
|
Cash provided from investing
activities
|
|
278
|
429
|
109
|
|
707
|
915
|
Net cash used in investing
activities
|
|
(3,413)
|
(3,849)
|
(4,205)
|
|
(7,262)
|
(7,024)
|
Financing activities
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares
(Note 7)
|
|
(1,751)
|
(1,750)
|
(2,073)
|
|
(3,501)
|
(4,521)
|
Lease liability payments
|
|
(679)
|
(694)
|
(620)
|
|
(1,373)
|
(1,175)
|
Proceeds from long-term
financing
|
|
2,736
|
2,259
|
3,643
|
|
4,995
|
6,038
|
Repayments of long-term
financing
|
|
(623)
|
(674)
|
(2,828)
|
|
(1,297)
|
(3,627)
|
Net increase (decrease) in
short-term debt
|
|
49
|
16
|
(348)
|
|
65
|
(877)
|
Issue of perpetual hybrid
bonds(a)
|
|
-
|
1,296
|
87
|
|
1,296
|
132
|
Redemption of perpetual hybrid
bonds(a)
|
|
-
|
(1,288)
|
-
|
|
(1,288)
|
-
|
Payments relating to perpetual
hybrid bonds
|
|
(271)
|
(256)
|
(250)
|
|
(527)
|
(486)
|
Payments relating to transactions
involving non-controlling interests (Other interest)
|
|
-
|
-
|
-
|
|
-
|
(180)
|
Receipts relating to transactions
involving non-controlling interests (Other interest)
|
|
508
|
16
|
2
|
|
524
|
9
|
Dividends paid - bp
shareholders
|
|
(1,204)
|
(1,219)
|
(1,153)
|
|
(2,423)
|
(2,336)
|
- non-controlling
interests
|
|
(60)
|
(126)
|
(67)
|
|
(186)
|
(135)
|
Net cash provided by (used in)
financing activities
|
|
(1,295)
|
(2,420)
|
(3,607)
|
|
(3,715)
|
(7,158)
|
Currency translation differences
relating to cash and cash equivalents
|
|
(11)
|
(260)
|
-
|
|
(271)
|
(14)
|
Increase (decrease) in cash and cash
equivalents
|
|
3,381
|
(1,520)
|
(1,519)
|
|
1,861
|
(281)
|
Cash and cash equivalents at
beginning of period
|
|
31,510
|
33,030
|
30,433
|
|
33,030
|
29,195
|
Cash and cash equivalents at end of
period
|
|
34,891
|
31,510
|
28,914
|
|
34,891
|
28,914
|
(a)
See Condensed group statement of changes in equity - footnote (a) for further
information.
Top of
page 22
Notes
Note 1. Basis of
preparation
The interim financial information
included in this report has been prepared in accordance with IAS 34
'Interim Financial Reporting'.
The results for the interim periods
are unaudited and, in the opinion of management, include all
adjustments necessary for a fair presentation of the results for
each period. All such adjustments are of a normal recurring nature.
This report should be read in conjunction with the consolidated
financial statements and related notes for the year ended 31
December 2023 included in bp
Annual Report and Form 20-F 2023.
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. IFRS as adopted by the UK and EU differ in
certain respects from IFRS as issued by the IASB. The differences
have no impact on the group's consolidated financial statements for
the periods presented. The financial information presented herein
has been prepared in accordance with the accounting policies
expected to be used in preparing bp Annual Report and Form 20-F
2024 which are the same as those used in preparing bp Annual Report
and Form 20-F 2023.
There are no other new or amended
standards or interpretations adopted from 1 January 2024 onwards
that have a significant impact on the financial
information.
Significant accounting judgements and
estimates
bp's significant accounting
judgements and estimates were disclosed in bp Annual Report and Form 20-F 2023.
These have been subsequently considered at the end of this quarter
to determine if any changes were required to those judgements and
estimates.
Provisions
The nominal risk-free discount rate
applied to provisions is reviewed on a quarterly basis. The
discount rate applied to the group's provisions was revised to 4.5%
in the second quarter (31 December 2023 4.0%) to reflect higher US
Treasury yields. The principal impact of this rate increase was a
$0.8 billion decrease in the decommissioning provision with a
corresponding decrease in the carrying amount of property, plant
and equipment of $0.6 billion.
Note 2. Non-current assets held for
sale
The carrying amount of assets
classified as held for sale at 30 June 2024 is $1,512 million,
with associated liabilities of $31 million. These relate to
the transactions described below.
On 14 February 2024, bp and ADNOC
announced that they had agreed to form a new joint venture (JV) in
Egypt (51% bp and 49% ADNOC). As part of the agreement, bp will
contribute its interests in three development concessions, as well
as exploration agreements, in Egypt to the new JV. ADNOC will make
a proportionate cash contribution. Subject to regulatory approvals
and clearances, the formation of the JV is expected to complete
during the second half of 2024. The carrying amount of assets
classified as held for sale at 30 June 2024 is $1,408 million,
with associated liabilities of $23 million.
On 16 November 2023, bp entered into
an agreement to sell its Türkiye ground fuels business to Petrol
Ofisi. This includes the group's interest in three joint venture
terminals in Türkiye. Completion of the sale is subject to
regulatory approvals. The carrying amount of assets classified as
held for sale at 30 June 2024 is $104 million, with associated
liabilities of $8 million. Cumulative foreign exchange losses
within reserves of approximately $930 million are expected to
be recycled to the group income statement at completion.
Note 3. Impairment and losses on
sale of businesses and fixed assets
Net impairment charges and losses on
sale of businesses and fixed assets for the second quarter and half
year were $1,309 million and $2,046 million respectively,
compared with net charges of $1,269 million and
$1,357 million for the same periods in 2023 and include net
impairment charges for the second quarter and half year of
$1,296 million and $1,945 million respectively, compared
with net impairment charges of $1,208 million and
$1,167 million for the same periods in
2023.
Top of
page 23
Note 4. Analysis of replacement cost
profit (loss) before interest and tax and reconciliation to profit
(loss) before taxation
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
gas & low carbon
energy
|
|
(315)
|
1,036
|
2,289
|
|
721
|
9,636
|
oil production &
operations
|
|
3,267
|
3,060
|
2,568
|
|
6,327
|
5,885
|
customers & products
|
|
(133)
|
988
|
555
|
|
855
|
3,235
|
other businesses &
corporate
|
|
(180)
|
(300)
|
(297)
|
|
(480)
|
(387)
|
|
|
2,639
|
4,784
|
5,115
|
|
7,423
|
18,369
|
Consolidation
adjustment - UPII*
|
|
(73)
|
32
|
(30)
|
|
(41)
|
(52)
|
RC profit (loss) before interest and
tax
|
|
2,566
|
4,816
|
5,085
|
|
7,382
|
18,317
|
Inventory holding gains
(losses)*
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
-
|
-
|
-
|
|
-
|
1
|
oil production &
operations
|
|
1
|
(1)
|
-
|
|
-
|
1
|
customers & products
|
|
(137)
|
852
|
(732)
|
|
715
|
(1,334)
|
Profit (loss) before interest and
tax
|
|
2,430
|
5,667
|
4,353
|
|
8,097
|
16,985
|
Finance costs
|
|
1,216
|
1,075
|
920
|
|
2,291
|
1,763
|
Net finance expense/(income)
relating to pensions and other post-retirement benefits
|
|
(40)
|
(41)
|
(61)
|
|
(81)
|
(119)
|
Profit (loss) before
taxation
|
|
1,254
|
4,633
|
3,494
|
|
5,887
|
15,341
|
|
|
|
|
|
|
|
|
RC
profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
US
|
|
1,545
|
1,610
|
2,244
|
|
3,155
|
5,319
|
Non-US
|
|
1,021
|
3,206
|
2,841
|
|
4,227
|
12,998
|
|
|
2,566
|
4,816
|
5,085
|
|
7,382
|
18,317
|
Top of
page 24
Note 5. Sales and other operating
revenues
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
By
segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
5,809
|
8,675
|
10,428
|
|
14,484
|
28,314
|
oil production &
operations
|
|
6,659
|
6,432
|
5,777
|
|
13,091
|
11,930
|
customers & products
|
|
41,100
|
39,895
|
38,051
|
|
80,995
|
76,933
|
other businesses &
corporate
|
|
526
|
606
|
590
|
|
1,132
|
1,328
|
|
|
54,094
|
55,608
|
54,846
|
|
109,702
|
118,505
|
|
|
|
|
|
|
|
|
Less: sales and other operating
revenues between segments
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
371
|
270
|
840
|
|
641
|
1,376
|
oil production &
operations
|
|
5,982
|
5,913
|
5,236
|
|
11,895
|
11,497
|
customers & products
|
|
25
|
293
|
(180)
|
|
318
|
(36)
|
other businesses &
corporate
|
|
417
|
252
|
412
|
|
669
|
948
|
|
|
6,795
|
6,728
|
6,308
|
|
13,523
|
13,785
|
|
|
|
|
|
|
|
|
External sales and other operating
revenues
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
5,438
|
8,405
|
9,588
|
|
13,843
|
26,938
|
oil production &
operations
|
|
677
|
519
|
541
|
|
1,196
|
433
|
customers & products
|
|
41,075
|
39,602
|
38,231
|
|
80,677
|
76,969
|
other businesses &
corporate
|
|
109
|
354
|
178
|
|
463
|
380
|
Total sales and other operating
revenues
|
|
47,299
|
48,880
|
48,538
|
|
96,179
|
104,720
|
|
|
|
|
|
|
|
|
By
geographical area
|
|
|
|
|
|
|
|
US
|
|
20,340
|
19,858
|
20,065
|
|
40,198
|
39,225
|
Non-US
|
|
36,832
|
39,208
|
38,492
|
|
76,040
|
84,842
|
|
|
57,172
|
59,066
|
58,557
|
|
116,238
|
124,067
|
Less: sales and other operating
revenues between areas
|
|
9,873
|
10,186
|
10,019
|
|
20,059
|
19,347
|
|
|
47,299
|
48,880
|
48,538
|
|
96,179
|
104,720
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
Sales and other operating revenues
include the following in relation to revenues from contracts with
customers:
|
|
|
|
|
|
|
|
Crude oil
|
|
538
|
548
|
520
|
|
1,086
|
1,157
|
Oil products
|
|
32,548
|
29,840
|
31,218
|
|
62,388
|
61,359
|
Natural gas, LNG and NGLs
|
|
4,987
|
5,751
|
5,841
|
|
10,738
|
15,485
|
Non-oil products and other revenues
from contracts with customers
|
|
3,108
|
2,928
|
2,750
|
|
6,036
|
4,622
|
Revenue from contracts with
customers
|
|
41,181
|
39,067
|
40,329
|
|
80,248
|
82,623
|
Other operating
revenues(a)
|
|
6,118
|
9,813
|
8,209
|
|
15,931
|
22,097
|
Total sales and other operating
revenues
|
|
47,299
|
48,880
|
48,538
|
|
96,179
|
104,720
|
(a)
Principally relates to commodity derivative transactions including
sales of bp own production in trading books.
Top of
page 25
Note 6. Depreciation, depletion and
amortization
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
1,209
|
1,293
|
1,407
|
|
2,502
|
2,847
|
oil production &
operations
|
|
1,698
|
1,657
|
1,370
|
|
3,355
|
2,697
|
customers & products
|
|
939
|
944
|
894
|
|
1,883
|
1,691
|
other businesses &
corporate
|
|
252
|
256
|
252
|
|
508
|
488
|
|
|
4,098
|
4,150
|
3,923
|
|
8,248
|
7,723
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
US
|
|
1,703
|
1,570
|
1,338
|
|
3,273
|
2,592
|
Non-US
|
|
2,395
|
2,580
|
2,585
|
|
4,975
|
5,131
|
|
|
4,098
|
4,150
|
3,923
|
|
8,248
|
7,723
|
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.
116 million and 163 million ordinary shares repurchased for
cancellation were settled during the second quarter 2024 against
the authority granted at bp's 2023 and 2024 annual general meetings
respectively, for a total cost of $1,751 million. A further
125 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 $748 million. This
amount has been accrued at 30 June 2024. The number of shares in
issue is reduced when shares are repurchased, but is not reduced in
respect of the period-end commitment to repurchase shares
subsequent to the end of the period.
The calculation of EpS is performed
separately for each discrete quarterly period, and for the
year-to-date period. As a result, the sum of the discrete quarterly
EpS amounts in any particular year-to-date period may not be equal
to the EpS amount for the year-to-date period.
For the diluted EpS calculation the
weighted average number of shares outstanding during the period is
adjusted for the number of shares that are potentially issuable in
connection with employee share-based payment plans using the
treasury stock method.
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Results for the period
|
|
|
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
(129)
|
2,263
|
1,792
|
|
2,134
|
10,010
|
Less: preference dividend
|
|
1
|
-
|
1
|
|
1
|
1
|
Less: (gain) loss on redemption of
perpetual hybrid
bonds(a)
|
|
-
|
(10)
|
-
|
|
(10)
|
-
|
Profit (loss) attributable to bp
ordinary shareholders
|
|
(130)
|
2,273
|
1,791
|
|
2,143
|
10,009
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(b)(c)
|
|
|
|
|
|
|
|
Basic weighted average number of
shares outstanding
|
|
16,590,173
|
16,751,887
|
17,523,778
|
|
16,670,999
|
17,706,388
|
ADS
equivalent(d)
|
|
2,765,028
|
2,791,981
|
2,920,629
|
|
2,778,499
|
2,951,064
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding used to calculate diluted earnings per share
|
|
16,590,173
|
17,153,505
|
17,900,984
|
|
17,090,967
|
18,068,256
|
ADS
equivalent(d)
|
|
2,765,028
|
2,858,917
|
2,983,497
|
|
2,848,494
|
3,011,376
|
|
|
|
|
|
|
|
|
Shares in issue at
period-end
|
|
16,491,420
|
16,687,850
|
17,379,366
|
|
16,491,420
|
17,379,366
|
ADS
equivalent(d)
|
|
2,748,570
|
2,781,308
|
2,896,561
|
|
2,748,570
|
2,896,561
|
(a)
See Condensed group statement of changes in equity - footnote (a) for further
information.
(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 second
quarter 2024 are 374,406 thousand (ADS equivalent 62,401
thousand).
(c)
Excludes treasury shares and includes certain shares that will be
issued in the future under employee share-based payment
plans.
(d) One ADS
is equivalent to six ordinary shares.
Top of
page 26
Note 8. Dividends
Dividends payable
bp today announced an interim
dividend of 8.000 cents per ordinary share which is expected to be
paid on 20 September 2024 to ordinary shareholders and American
Depositary Share (ADS) holders on the register on 9 August 2024.
The ex-dividend date will be 8 August 2024 for ordinary
shareholders and 9 August 2024 for ADS holders. The corresponding
amount in sterling is due to be announced on 3 September 2024,
calculated based on the average of the market exchange rates over
three dealing days between 28 August 2024 and 30 August 2024.
Holders of ADSs are expected to receive $0.48 per ADS (less
applicable fees). The board has decided not to offer a scrip
dividend alternative in respect of the second quarter 2024
dividend. Ordinary shareholders and ADS holders (subject to certain
exceptions) will be able to participate in a dividend reinvestment
programme. Details of the second quarter dividend and timetable are
available at bp.com/dividends and further details
of the dividend reinvestment programmes are available at
bp.com/drip.
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
cents
|
|
7.270
|
7.270
|
6.610
|
|
14.540
|
13.220
|
pence
|
|
5.683
|
5.692
|
5.309
|
|
11.375
|
10.860
|
Dividends paid per ADS
(cents)
|
|
43.62
|
43.62
|
39.66
|
|
87.24
|
79.32
|
Note 9. Net debt
Net
debt*
|
|
30 June
|
31 March
|
30 June
|
$
million
|
|
2024
|
2024
|
2023
|
Finance
debt(a)
|
|
54,986
|
53,013
|
49,738
|
Fair value (asset) liability of
hedges related to finance debt(b)
|
|
2,519
|
2,512
|
2,836
|
|
|
57,505
|
55,525
|
52,574
|
Less: cash and cash
equivalents
|
|
34,891
|
31,510
|
28,914
|
Net debt(c)
|
|
22,614
|
24,015
|
23,660
|
Total equity
|
|
82,199
|
84,940
|
85,603
|
Gearing*
|
|
21.6%
|
22.0%
|
21.7%
|
(a)
The fair value of finance debt at 30 June 2024 was
$50,677 million (31 March 2024 $49,263 million, 30 June 2023
$45,580 million).
(b)
Derivative financial instruments entered into for the purpose of
managing foreign currency exchange risk associated with net debt
with a fair value liability position of $144 million at
30 June 2024 (first quarter 2024 liability of $96 million
and second quarter 2023 liability of $98 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.
Note 10. Statutory
accounts
The financial information shown in
this publication, which was approved by the Board of Directors on
29 July 2024, is unaudited and does not constitute statutory
financial statements. Audited financial information will be
published in bp Annual Report and
Form 20-F 2024. bp Annual Report and Form 20-F 2023 has been
filed with the Registrar of Companies in England and Wales. The
report of the auditor on those accounts was unqualified, did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying the report and did
not contain a statement under section 498(2) or section 498(3) of
the UK Companies Act 2006.
Top of
page 27
Additional information
Capital expenditure*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Capital expenditure
|
|
|
|
|
|
|
|
Organic capital
expenditure*
|
|
3,586
|
3,979
|
3,233
|
|
7,565
|
6,728
|
Inorganic capital
expenditure*(a)
|
|
105
|
299
|
1,081
|
|
404
|
1,211
|
|
|
3,691
|
4,278
|
4,314
|
|
7,969
|
7,939
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
gas & low carbon
energy
|
|
1,005
|
1,298
|
887
|
|
2,303
|
1,900
|
oil production &
operations
|
|
1,534
|
1,776
|
1,478
|
|
3,310
|
2,998
|
customers &
products(a)
|
|
1,045
|
1,120
|
1,858
|
|
2,165
|
2,848
|
other businesses &
corporate
|
|
107
|
84
|
91
|
|
191
|
193
|
|
|
3,691
|
4,278
|
4,314
|
|
7,969
|
7,939
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
US
|
|
1,636
|
1,776
|
2,661
|
|
3,412
|
4,358
|
Non-US
|
|
2,055
|
2,502
|
1,653
|
|
4,557
|
3,581
|
|
|
3,691
|
4,278
|
4,314
|
|
7,969
|
7,939
|
(a)
Second quarter and first half 2023 include $1.1 billion, net of
adjustments, in respect of the TravelCenters of America
acquisition.
Top of
page 28
Adjusting items*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
gas
& low carbon energy
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
8
|
2
|
1
|
|
10
|
16
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(590)
|
(536)
|
(1,058)
|
|
(1,126)
|
(1,060)
|
Environmental and other
provisions
|
|
-
|
-
|
-
|
|
-
|
-
|
Restructuring, integration and
rationalization costs
|
|
-
|
-
|
1
|
|
-
|
1
|
Fair value accounting
effects(a)(b)
|
|
(1,011)
|
113
|
1,222
|
|
(898)
|
5,156
|
Other
|
|
(124)
|
(201)
|
(110)
|
|
(325)
|
(166)
|
|
|
(1,717)
|
(622)
|
56
|
|
(2,339)
|
3,947
|
oil
production & operations
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
7
|
184
|
(31)
|
|
191
|
106
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(29)
|
(120)
|
(140)
|
|
(149)
|
(132)
|
Environmental and other
provisions
|
|
195
|
(77)
|
(44)
|
|
118
|
(93)
|
Restructuring, integration and
rationalization costs
|
|
-
|
-
|
(1)
|
|
-
|
(1)
|
Fair value accounting
effects
|
|
-
|
-
|
-
|
|
-
|
-
|
Other
|
|
-
|
(52)
|
7
|
|
(52)
|
(91)
|
|
|
173
|
(65)
|
(209)
|
|
108
|
(211)
|
customers & products
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
4
|
5
|
2
|
|
9
|
3
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(678)
|
(96)
|
(36)
|
|
(774)
|
(119)
|
Environmental and other
provisions
|
|
7
|
-
|
(1)
|
|
7
|
(11)
|
Restructuring, integration and
rationalization costs
|
|
-
|
1
|
1
|
|
1
|
(1)
|
Fair value accounting
effects(b)
|
|
25
|
(144)
|
(109)
|
|
(119)
|
(32)
|
Other(c)
|
|
(640)
|
(67)
|
(98)
|
|
(707)
|
(160)
|
|
|
(1,282)
|
(301)
|
(241)
|
|
(1,583)
|
(320)
|
other businesses & corporate
|
|
|
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
-
|
32
|
-
|
|
32
|
-
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(11)
|
26
|
(31)
|
|
15
|
(37)
|
Environmental and other
provisions
|
|
28
|
(9)
|
(17)
|
|
19
|
(31)
|
Restructuring, integration and
rationalization costs
|
|
1
|
11
|
-
|
|
12
|
(10)
|
Fair value accounting
effects(b)
|
|
(29)
|
(193)
|
(48)
|
|
(222)
|
197
|
Gulf of Mexico oil spill
|
|
(8)
|
(11)
|
(18)
|
|
(19)
|
(27)
|
Other
|
|
(3)
|
(2)
|
(13)
|
|
(5)
|
(13)
|
|
|
(22)
|
(146)
|
(127)
|
|
(168)
|
79
|
Total before interest and
taxation
|
|
(2,848)
|
(1,134)
|
(521)
|
|
(3,982)
|
3,495
|
Finance
costs(d)
|
|
(205)
|
(92)
|
(119)
|
|
(297)
|
(223)
|
Total before taxation
|
|
(3,053)
|
(1,226)
|
(640)
|
|
(4,279)
|
3,272
|
Taxation on adjusting
items(e)
|
|
585
|
109
|
160
|
|
694
|
(45)
|
Taxation - tax rate change effect of
UK energy profits levy(f)
|
|
(304)
|
-
|
232
|
|
(304)
|
232
|
Total after taxation for
period
|
|
(2,772)
|
(1,117)
|
(248)
|
|
(3,889)
|
3,459
|
(a)
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.
(b) For
further information, including the nature of fair value accounting
effects reported in each segment, see pages 3, 6 and 34.
(c)
Second quarter and first half 2024 include recognition of onerous
contract provisions related to the Gelsenkirchen refinery. The
unwind of these provisions will be reported as an adjusting item as
the contractual obligations are settled.
(d) Includes
the unwinding of discounting effects relating to Gulf of Mexico oil
spill payables and the income statement impact of temporary
valuation differences associated with the group's interest rate and
foreign currency exchange risk management of finance debt. Second
quarter and first half 2023 also include the income statement
impact associated with the buyback of finance debt.
(e)
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.
(f) Second quarter and
first half 2024 and second quarter and first half 2023 include
revisions 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 before 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 29
Net debt including leases
Net
debt including leases*
|
|
30 June
|
31 March
|
30 June
|
$
million
|
|
2024
|
2024
|
2023
|
Net debt*
|
|
22,614
|
24,015
|
23,660
|
Lease liabilities
|
|
10,697
|
11,057
|
10,961
|
Net partner (receivable) payable for
leases entered into on behalf of joint operations
|
|
(112)
|
(130)
|
(136)
|
Net debt including leases
|
|
33,199
|
34,942
|
34,485
|
Total equity
|
|
82,199
|
84,940
|
85,603
|
Gearing including leases*
|
|
28.8%
|
29.1%
|
28.7%
|
Gulf of Mexico oil spill
|
|
30 June
|
31 December
|
$
million
|
|
2024
|
2023
|
Gulf of Mexico oil spill payables
and provisions
|
|
(7,785)
|
(8,735)
|
Of which - current
|
|
(1,104)
|
(1,133)
|
|
|
|
|
Deferred tax asset
|
|
1,180
|
1,320
|
During the second quarter pre-tax
payments of $1,129 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
2023 - Financial statements - Notes 7, 22, 23, 29, and
33.
Working capital*
reconciliation
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Movements in inventories and other
current and non-current assets and liabilities as per condensed
group cash flow statement(a)
|
|
1,556
|
(2,131)
|
(742)
|
|
(575)
|
(4,497)
|
Adjusted for inventory holding gains
(losses)* (Note 4)
|
|
(136)
|
851
|
(732)
|
|
715
|
(1,332)
|
Adjusted for fair value accounting
effects* relating to subsidiaries
|
|
(1,071)
|
(274)
|
1,053
|
|
(1,345)
|
5,295
|
Other adjusting
items(b)
|
|
182
|
(834)
|
558
|
|
(652)
|
(740)
|
Working capital release (build)
after adjusting for net inventory gains (losses), fair value
accounting effects and other adjusting items
|
|
531
|
(2,388)
|
137
|
|
(1,857)
|
(1,274)
|
(a)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis of $1,129 million
and $1,136 million in the second
quarter and first half of 2024 respectively (first quarter 2024
$7 million, second quarter 2023 $1,204 million, first
half 2023 $1,216 million).
(b) Other
adjusting items relate to the non-cash movement of US emissions
obligations carried as a provision that will be settled by
allowances held as inventory.
Top of
page 30
Adjusted earnings before interest,
taxation, depreciation and amortization (adjusted
EBITDA)*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Profit for the period
|
|
70
|
2,409
|
1,953
|
|
2,479
|
10,375
|
Finance costs
|
|
1,216
|
1,075
|
920
|
|
2,291
|
1,763
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(40)
|
(41)
|
(61)
|
|
(81)
|
(119)
|
Taxation
|
|
1,184
|
2,224
|
1,541
|
|
3,408
|
4,966
|
Profit before interest and
tax
|
|
2,430
|
5,667
|
4,353
|
|
8,097
|
16,985
|
Inventory holding (gains) losses*,
before tax
|
|
136
|
(851)
|
732
|
|
(715)
|
1,332
|
RC profit before interest and
tax
|
|
2,566
|
4,816
|
5,085
|
|
7,382
|
18,317
|
Net (favourable) adverse impact of
adjusting items*, before interest and tax
|
|
2,848
|
1,134
|
521
|
|
3,982
|
(3,495)
|
Underlying RC profit before interest
and tax
|
|
5,414
|
5,950
|
5,606
|
|
11,364
|
14,822
|
Add back:
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization
|
|
4,098
|
4,150
|
3,923
|
|
8,248
|
7,723
|
Exploration expenditure written
off
|
|
127
|
206
|
241
|
|
333
|
291
|
Adjusted EBITDA
|
|
9,639
|
10,306
|
9,770
|
|
19,945
|
22,836
|
Reconciliation of customers &
products RC profit before interest and tax to underlying RC profit
before interest and tax* to adjusted EBITDA* by business
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
$
million
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
RC profit before interest and
tax for customers & products
|
|
(133)
|
988
|
555
|
|
855
|
3,235
|
Less: Adjusting items* gains
(charges)
|
|
(1,282)
|
(301)
|
(241)
|
|
(1,583)
|
(320)
|
Underlying RC profit before interest
and tax for customers & products
|
|
1,149
|
1,289
|
796
|
|
2,438
|
3,555
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
790
|
370
|
701
|
|
1,160
|
1,092
|
Castrol - included in customers
|
|
211
|
184
|
171
|
|
395
|
332
|
products - refining &
trading
|
|
359
|
919
|
95
|
|
1,278
|
2,463
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion
and amortization
|
|
939
|
944
|
894
|
|
1,883
|
1,691
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
491
|
484
|
448
|
|
975
|
789
|
Castrol - included in customers
|
|
42
|
42
|
42
|
|
84
|
81
|
products - refining &
trading
|
|
448
|
460
|
446
|
|
908
|
902
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers
& products
|
|
2,088
|
2,233
|
1,690
|
|
4,321
|
5,246
|
By business:
|
|
|
|
|
|
|
|
customers - convenience &
mobility
|
|
1,281
|
854
|
1,149
|
|
2,135
|
1,881
|
Castrol - included in customers
|
|
253
|
226
|
213
|
|
479
|
413
|
products - refining &
trading
|
|
807
|
1,379
|
541
|
|
2,186
|
3,365
|
Top of
page 31
Realizations* and marker
prices
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
Average realizations(a)
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
US
|
|
65.88
|
62.20
|
60.53
|
|
64.11
|
61.59
|
Europe
|
|
80.55
|
85.00
|
75.14
|
|
82.90
|
77.06
|
Rest of World
|
|
83.58
|
79.83
|
79.35
|
|
81.67
|
80.98
|
bp average
|
|
73.73
|
71.24
|
69.76
|
|
72.49
|
71.17
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
US
|
|
1.29
|
1.69
|
1.58
|
|
1.49
|
2.01
|
Europe
|
|
9.49
|
10.27
|
12.46
|
|
9.94
|
19.80
|
Rest of World
|
|
5.47
|
5.45
|
5.53
|
|
5.46
|
6.49
|
bp average
|
|
4.47
|
4.62
|
4.91
|
|
4.55
|
6.06
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
US
|
|
44.26
|
41.50
|
40.84
|
|
42.90
|
42.89
|
Europe
|
|
73.21
|
76.65
|
74.20
|
|
75.08
|
90.00
|
Rest of World
|
|
47.49
|
46.61
|
45.97
|
|
47.05
|
50.37
|
bp average
|
|
47.49
|
46.42
|
46.27
|
|
46.95
|
50.62
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
Brent
|
|
84.97
|
83.16
|
78.05
|
|
84.06
|
79.66
|
West Texas Intermediate
|
|
80.82
|
77.01
|
73.56
|
|
78.95
|
74.76
|
Western Canadian Select
|
|
67.20
|
59.45
|
60.07
|
|
63.56
|
58.37
|
Alaska North Slope
|
|
86.42
|
81.33
|
78.26
|
|
83.91
|
78.64
|
Mars
|
|
81.37
|
76.90
|
73.17
|
|
79.17
|
73.70
|
Urals (NWE - cif)
|
|
72.79
|
68.34
|
54.56
|
|
70.55
|
50.24
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
Henry Hub gas price(b)
($/mmBtu)
|
|
1.89
|
2.25
|
2.09
|
|
2.07
|
2.77
|
UK Gas - National Balancing Point
(p/therm)
|
|
76.57
|
68.72
|
83.18
|
|
72.62
|
107.76
|
(a)
Based on sales of consolidated subsidiaries only
- this excludes
equity-accounted entities.
(b) Henry
Hub First of Month Index.
Exchange rates
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
2024
|
2024
|
2023
|
|
2024
|
2023
|
$/£ average rate for the
period
|
|
1.26
|
1.27
|
1.25
|
|
1.26
|
1.23
|
$/£ period-end rate
|
|
1.27
|
1.26
|
1.26
|
|
1.27
|
1.26
|
|
|
|
|
|
|
|
|
$/€ average rate for the
period
|
|
1.08
|
1.09
|
1.09
|
|
1.08
|
1.08
|
$/€ period-end rate
|
|
1.07
|
1.08
|
1.09
|
|
1.07
|
1.09
|
|
|
|
|
|
|
|
|
$/AUD average rate for the
period
|
|
0.66
|
0.66
|
0.67
|
|
0.66
|
0.68
|
$/AUD period-end rate
|
|
0.67
|
0.65
|
0.66
|
|
0.67
|
0.66
|
|
|
|
|
|
|
|
|
Top of
page 32
Principal risks and
uncertainties
The principal risks and
uncertainties affecting bp are described in the Risk factors
section of bp Annual Report and
Form 20-F 2023 (pages 77-79) and are summarized below. There
are no material changes in those principal risks and uncertainties
for the remaining six months of the financial year.
The risks and uncertainties
summarized below, separately or in combination, could have a
material adverse effect on the implementation of our strategy, our
business, financial performance, results of operations, cash flows,
liquidity, prospects, shareholder value and returns and
reputation.
Strategic and commercial risks
• Prices and
markets - our financial performance
is impacted by fluctuating prices of oil, gas and refined products,
technological change, exchange rate fluctuations, and the general
macroeconomic outlook.
• Accessing and progressing
hydrocarbon resources and low carbon opportunities
- inability to access and progress hydrocarbon
resources and low carbon opportunities could adversely affect
delivery of our strategy.
• Major project*
delivery - failure to invest in the
best opportunities or deliver major projects successfully could
adversely affect our financial performance.
• Geopolitical
- exposure to a range of political developments
and consequent changes to the operating and regulatory environment
could cause business disruption.
• Liquidity, financial capacity
and financial, including credit, exposure
- failure to work within our financial framework
could impact our ability to operate and result in financial
loss.
• Joint arrangements and
contractors - varying levels of
control over the standards, operations and compliance of our
partners, including non-operated joint ventures (NOJVs),
contractors and sub-contractors could result in legal liability and
reputational damage.
• Digital infrastructure, cyber
security and data protection -
breach or failure of our or third parties' digital infrastructure
or cyber security, including loss or misuse of sensitive
information could damage our operations, increase costs and damage
our reputation.
• Climate change and the
transition to a lower carbon economy - developments in policy, law, regulation, technology and
markets, including societal and investor sentiment, related to the
issue of climate change and the transition to a lower carbon
economy could increase costs, reduce revenues, constrain our
operations and affect our business plans and financial
performance.
• Competition
- inability to remain efficient, maintain a
high-quality portfolio of assets and innovate could negatively
impact delivery of our strategy in a highly competitive
market.
• Talent and
capability - inability to attract,
develop and retain people with necessary skills and capabilities
could negatively impact delivery of our strategy.
• Crisis management and business
continuity - failure to address an
incident effectively could potentially disrupt our
business.
• Insurance
- our insurance strategy could expose the group to
material uninsured losses.
Safety and operational risks
• Process safety, personal
safety, and environmental risks -
exposure to a wide range of health, safety and environmental risks
could cause harm to people, the environment and our assets and
result in regulatory action, legal liability, business
interruption, increased costs, damage to our reputation and
potentially denial of our licence to operate.
• Drilling and
production - challenging operational
environments and other uncertainties could impact drilling and
production activities.
• Security
- hostile acts against our employees and
activities could cause harm to people and disrupt our
operations.
• Product quality
- supplying customers with off-specification
products could damage our reputation, lead to regulatory action and
legal liability, and impact our financial performance.
Compliance and control risks
• Ethical misconduct and
non-compliance - ethical misconduct
or breaches of applicable laws by our businesses or our employees
could be damaging to our reputation, and could result in
litigation, regulatory action and penalties.
• Regulation
- changes in the law and regulation could increase
costs, constrain our operations and affect our strategy, business
plans and financial performance.
• Trading and treasury trading
activities - ineffective oversight
of trading and treasury trading activities could lead to business
disruption, financial loss, regulatory intervention or damage to
our reputation and affect our permissions to trade.
• Reporting
- failure to accurately report our data could lead
to regulatory action, legal liability and reputational
damage.
Top of
page 33
Legal proceedings
For a full discussion of the group's
material legal proceedings, see pages 242-243 of bp Annual Report and Form 20-F
2023.
Glossary
Non-IFRS measures are provided for
investors because they are closely tracked by management to
evaluate bp's operating performance and to make financial,
strategic and operating decisions. Non-IFRS measures are sometimes
referred to as alternative performance measures.
Adjusted EBITDA is a non-IFRS
measure presented for bp's operating segments and is defined as
replacement cost (RC) profit before interest and tax, excluding net
adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs
(net of adjusting items). Adjusted EBITDA by business is a further
analysis of adjusted EBITDA for the customers & products
businesses. bp believes it is helpful to disclose adjusted EBITDA
by operating segment and by business because it reflects how the
segments measure underlying business delivery. The nearest
equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or
loss that is required to be disclosed for each operating segment
under IFRS. A reconciliation to IFRS information is provided on
page 30 for the customers & products businesses.
Adjusted EBITDA for the group is
defined as profit or loss for the period, adjusting for finance
costs and net finance (income) or expense relating to pensions and
other post-retirement benefits and taxation, inventory holding
gains or losses before tax, net adjusting items before interest and
tax, and adding back depreciation, depletion and amortization
(pre-tax) and exploration expenditure written-off (net of adjusting
items, pre-tax). The nearest equivalent measure on an IFRS basis
for the group is profit or loss for the period. A reconciliation to
IFRS information is provided on page 30 for the group.
Adjusting items are items that
bp discloses separately because it considers such disclosures to be
meaningful and relevant to investors. They are items that
management considers to be important to period-on-period analysis
of the group's results and are disclosed in order to enable
investors to better understand and evaluate the group's reported
financial performance. Adjusting items include gains and losses on
the sale of businesses and fixed assets, impairments, environmental
and other provisions and charges, restructuring, integration and
rationalization costs, fair value accounting effects and costs
relating to the Gulf of Mexico oil spill and other items. Adjusting
items within equity-accounted earnings are reported net of
incremental income tax reported by the equity-accounted entity.
Adjusting items are used as a reconciling adjustment to derive
underlying RC profit or loss and related underlying measures which
are non-IFRS measures. An analysis of adjusting items by segment
and type is shown on page 28.
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.
Developed renewables to final investment decision
(FID) - Total generating capacity
for assets developed to FID by all entities where bp has an equity
share (proportionate to equity share at the time of FID). If asset
is subsequently sold bp will continue to record capacity as
developed to FID.
Divestment proceeds are
disposal proceeds as per the condensed group cash flow
statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-IFRS measure. The ETR
on RC profit or loss is calculated by dividing taxation on a RC
basis by RC profit or loss before tax. Taxation on a RC basis for
the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and
losses. Information on RC profit or loss is provided below. bp
believes it is helpful to disclose the ETR on RC profit or loss
because this measure excludes the impact of price changes on the
replacement of inventories and allows for more meaningful
comparisons between reporting periods. Taxation on a RC basis and
ETR on RC profit or loss are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss
for the period.
Electric vehicle charge points / EV charge
points are defined as the number of
connectors on a charging device, operated by either bp or a bp
joint venture as adjusted to be reflective of bp's accounting share
of joint arrangements.
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Glossary (continued)
Fair value accounting effects are non-IFRS adjustments to our IFRS profit (loss). They
reflect the difference between the way bp manages the economic
exposure and internally measures performance of certain activities
and the way those activities are measured under IFRS. Fair value
accounting effects are included within adjusting items. They relate
to certain of the group's commodity, interest rate and currency
risk exposures as detailed below. Other than as noted below, the
fair value accounting effects described are reported in both the
gas & low carbon energy and customer & products
segments.
bp uses derivative instruments to
manage the economic exposure relating to inventories above normal
operating requirements of crude oil, natural gas and petroleum
products. Under IFRS, these inventories are recorded at historical
cost. The related derivative instruments, however, are required to
be recorded at fair value with gains and losses recognized in the
income statement. This is because hedge accounting is either not
permitted or not followed, principally due to the impracticality of
effectiveness-testing requirements. Therefore, measurement
differences in relation to recognition of gains and losses occur.
Gains and losses on these inventories, other than net realizable
value provisions, are not recognized until the commodity is sold in
a subsequent accounting period. Gains and losses on the related
derivative commodity contracts are recognized in the income
statement, from the time the derivative commodity contract is
entered into, on a fair value basis using forward prices consistent
with the contract maturity.
bp enters into physical commodity
contracts to meet certain business requirements, such as the
purchase of crude for a refinery or the sale of bp's gas
production. Under IFRS these physical contracts are treated as
derivatives and are required to be fair valued when they are
managed as part of a larger portfolio of similar transactions.
Gains and losses arising are recognized in the income statement
from the time the derivative commodity contract is entered
into.
IFRS require that inventory held for
trading is recorded at its fair value using period-end spot prices,
whereas any related derivative commodity instruments are required
to be recorded at values based on forward prices consistent with
the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices,
resulting in measurement differences.
bp enters into contracts for
pipelines and other transportation, storage capacity, oil and gas
processing, liquefied natural gas (LNG) and certain gas and power
contracts that, under IFRS, are recorded on an accruals basis.
These contracts are risk-managed using a variety of derivative
instruments that are fair valued under IFRS. This results in
measurement differences in relation to recognition of gains and
losses.
The way that bp manages the economic
exposures described above, and measures performance internally,
differs from the way these activities are measured under IFRS. bp
calculates this difference for consolidated entities by comparing
the IFRS result with management's internal measure of performance.
We believe that disclosing management's estimate of this difference
provides useful information for investors because it enables
investors to see the economic effect of these activities as a
whole.
These include:
•
Under management's internal measure of performance the inventory,
transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end
of the period.
• Fair
value accounting effects also include changes in the fair value of
the near-term portions of LNG contracts that fall within bp's risk
management framework. LNG contracts are not considered derivatives,
because there is insufficient market liquidity, and they are
therefore accrual accounted under IFRS. However, oil and natural
gas derivative financial instruments used to risk manage the
near-term portions of the LNG contracts are fair valued under IFRS.
The fair value accounting effect, which is reported in the gas and
low carbon energy segment, represents the change in value of LNG
contacts that are being risk managed and which is reflected in the
underlying result, but not in reported earnings. Management
believes that this gives a better representation of performance in
each period.
Furthermore, the fair values of
derivative instruments used to risk manage certain other oil, gas,
power and other contracts, are deferred to match with the
underlying exposure. The commodity contracts for business
requirements are accounted for on an accruals basis.
In addition, fair value accounting
effects include changes in the fair value of derivatives entered
into by the group to manage currency exposure and interest rate
risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which were issued on 17 June 2020
are classified as equity instruments and were recorded in the
balance sheet at that date at their USD equivalent issued value.
Under IFRS these equity instruments are not remeasured from period
to period, and do not qualify for application of hedge accounting.
The derivative instruments relating to the hybrid bonds, however,
are required to be recorded at fair value with mark to market gains
and losses recognized in the income statement. Therefore,
measurement differences in relation to the recognition of gains and
losses occur. The fair value accounting effect, which is reported
in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial
instruments that are recognized in the income statement. We
believe that this gives a better representation of performance, by
more appropriately reflecting the economic effect of these risk
management activities, in each period.
Gas
& low carbon energy segment
comprises our gas and low carbon businesses. Our gas business
includes regions with upstream activities that predominantly
produce natural gas, integrated gas and power, and gas trading. Our
low carbon business includes solar, offshore and onshore wind,
hydrogen and CCS and power trading. Power trading includes trading
of both renewable and non-renewable power.
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Glossary (continued)
Gearing and net debt are
non-IFRS measures. Net debt is calculated as finance debt, as shown
in the balance sheet, plus the fair value of associated derivative
financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for
which hedge accounting is applied, less cash and cash equivalents.
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement. Gearing is defined as
the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors.
Net debt enables investors to see the economic effect of finance
debt, related hedges and cash and cash equivalents in total.
Gearing enables investors to see how significant net debt is
relative to total equity. The derivatives are reported on the
balance sheet within the headings 'Derivative financial
instruments'. The nearest equivalent measures on an IFRS basis are
finance debt and finance debt ratio. A reconciliation of finance
debt to net debt is provided on page 26.
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 29.
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
27.
Installed renewables capacity is bp's share of capacity for operating assets owned by
entities where bp has an equity share.
Inventory holding gains and losses are non-IFRS adjustments to our IFRS profit (loss) and
represent:
• the
difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
• an
adjustment relating to certain trading inventories that are not
price risk managed which relate to a minimum inventory volume that
is required to be held to maintain underlying business activities.
This adjustment represents the movement in fair value of the
inventories due to prices, on a grade by grade basis, during the
period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not
separately reflected in the financial statements as a gain or loss.
No adjustment is made in respect of the cost of inventories held as
part of a trading position and certain other temporary inventory
positions that are price risk-managed. See Replacement cost (RC)
profit or loss definition below.
Liquids - Liquids comprises
crude oil, condensate and natural gas liquids. For the oil
production & operations segment, it also includes
bitumen.
Low
carbon activity - An activity
relating to low carbon including: renewable electricity; bioenergy;
electric vehicles and other future mobility solutions; trading and
marketing low carbon products; blue or green hydrogen* and carbon
capture, use and storage (CCUS).
Note that, while there is some
overlap of activities, these terms do not mean the same as bp's
strategic focus area of low carbon energy or our low carbon energy
sub-segment, reported within the gas & low carbon energy
segment.
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Glossary (continued)
Major projects have a bp net
investment of at least $250 million, or are considered to be of
strategic importance to bp or of a high degree of
complexity.
Operating cash flow is net cash
provided by (used in) operating activities as stated in the
condensed group cash flow statement.
Organic capital expenditure is
a non-IFRS measure. Organic capital expenditure comprises capital
expenditure on a cash basis less inorganic capital expenditure. bp
believes that this measure provides useful information as it allows
investors to understand how bp's management invests funds in
developing and maintaining the group's assets. The nearest
equivalent measure on an IFRS basis is capital expenditure on a
cash basis and a reconciliation to IFRS information is provided on
page 27.
We are unable to present
reconciliations of forward-looking information for organic capital
expenditure to total cash capital expenditure, because without
unreasonable efforts, we are unable to forecast accurately the
adjusting item, inorganic capital expenditure, that is difficult to
predict in advance in order to derive the nearest IFRS
estimate.
Production-sharing agreement/contract (PSA/PSC)
is an arrangement through which an oil and gas
company bears the risks and costs of exploration, development and
production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of
hydrocarbons, representing recovery of the costs incurred and a
stipulated share of the production remaining after such cost
recovery.
Realizations are the result of
dividing revenue generated from hydrocarbon sales, excluding
revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes.
Revenue generating hydrocarbon production reflects the bp share of
production as adjusted for any production which does not generate
revenue. Adjustments may include losses due to shrinkage, amounts
consumed during processing, and contractual or regulatory host
committed volumes such as royalties. For the gas & low carbon
energy and oil production & operations segments, realizations
include transfers between businesses.
Refining availability represents Solomon Associates' operational availability for
bp-operated refineries, which is defined as the percentage of the
year that a unit is available for processing after subtracting the
annualized time lost due to turnaround activity and all planned
mechanical, process and regulatory downtime.
The Refining marker margin
(RMM) is the average of regional
indicator margins weighted for bp's crude refining capacity in each
region. Each regional marker margin is based on product yields and
a marker crude oil deemed appropriate for the region. The regional
indicator margins may not be representative of the margins achieved
by bp in any period because of bp's particular refinery
configurations and crude and product slate.
Renewables pipeline - Renewable
projects satisfying the following criteria until the point they can
be considered developed to final investment decision (FID): Site
based projects that have obtained land exclusivity rights, or for
power purchase agreement based projects an offer has been made to
the counterparty, or for auction projects pre-qualification
criteria has been met, or for acquisition projects post a binding
offer being accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of inventories sold in the
period and is calculated as profit or loss attributable to bp
shareholders, adjusting for inventory holding gains and losses (net
of tax). RC profit or loss for the group is not a recognized IFRS
measure. bp believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our
reported result under IFRS can be significant. Inventory holding
gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order
for investors to understand the operating performance of the group
excluding the impact of price changes on the replacement of
inventories, and to make comparisons of operating performance
between reporting periods, bp's management believes it is helpful
to disclose this measure. The nearest equivalent measure on an IFRS
basis is profit or loss attributable to bp shareholders. A
reconciliation to IFRS information is provided on page 1. RC profit
or loss before interest and tax is bp's measure of profit or loss
that is required to be disclosed for each operating segment under
IFRS.
Reported recordable injury frequency
measures the number of reported work-related
employee and contractor incidents that result in a fatality or
injury per 200,000 hours worked. This represents reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported incidents are investigated
throughout the year and as a result there may be changes in
previously reported incidents. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of
such investigations, rather than the previously reported
comparative period, as this represents a more up to date reflection
of the safety environment.
Retail sites include sites
operated by dealers, jobbers, franchisees or brand licensees or
joint venture (JV) partners, under the bp brand. These may move to
and from the bp brand as their fuel supply agreement or brand
licence agreement expires and are renegotiated in the normal course
of business. Retail sites are primarily branded bp, ARCO, Amoco, Aral, Thorntons and TravelCenters of America
and also includes sites in India through our Jio-bp JV.
Solomon availability - See
Refining availability definition.
Strategic convenience sites are
retail sites, within the bp portfolio, which sell bp-supplied
vehicle energy (e.g. bp,
Aral, Arco, Amoco, Thorntons, bp pulse, TA and PETRO) and
either carry one of the strategic convenience brands (e.g. M&S,
Rewe to Go) or a differentiated bp-controlled convenience offer. To
be considered a strategic convenience site, the convenience offer
should have a demonstrable level of differentiation in the market
in which it operates. Strategic convenience site count includes
sites under a pilot phase.
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Glossary (continued)
Surplus cash flow does not
represent the residual cash flow available for discretionary
expenditures. It is a non-IFRS financial measure that should be
considered in addition to, not as a substitute for or superior to,
net cash provided by operating activities, reported in accordance
with IFRS. bp believes it is helpful to disclose the surplus cash
flow because this measure forms part of bp's financial
frame.
Surplus cash flow refers to the net
surplus of sources of cash over uses of cash, after reaching the
$35 billion net debt target. Sources of cash include net cash
provided by operating activities, cash provided from investing
activities and cash receipts relating to transactions involving
non-controlling interests. Uses of cash include lease liability
payments, payments on perpetual hybrid bond, dividends paid, cash
capital expenditure, the cash cost of share buybacks to offset the
dilution from vesting of awards under employee share schemes, cash
payments relating to transactions involving non-controlling
interests and currency translation differences relating to cash and
cash equivalents as presented on the condensed group cash flow
statement.
Technical service contract (TSC) - Technical service contract is an arrangement through which
an oil and gas company bears the risks and costs of exploration,
development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin
which reflects incremental production added to the
oilfield.
Tier 1 and tier 2 process safety events
- Tier 1 events are losses of primary containment
from a process of greatest consequence - causing harm to a member
of the workforce, damage to equipment from a fire or explosion, a
community impact or exceeding defined quantities. Tier 2 events are
those of lesser consequence. These represent reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported process safety events are
investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this represents a more up to date
reflection of the safety environment.
Transition growth - Activities,
represented by a set of transition growth engines, that transition
bp toward its objective to be an integrated energy company, and
that comprise our low carbon activity* alongside other businesses
that support transition, such as our power trading and marketing
business and convenience.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR is calculated by
dividing taxation on an underlying replacement cost (RC) basis by
underlying RC profit or loss before tax. Taxation on an underlying
RC basis for the group is calculated as taxation as stated on the
group income statement adjusted for taxation on inventory holding
gains and losses and total taxation on adjusting items. Information
on underlying RC profit or loss is provided below. Taxation on an
underlying RC basis presented for the operating segments is
calculated through an allocation of taxation on an underlying RC
basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to
understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period. Taxation on an underlying RC basis and
underlying ETR are non-IFRS measures. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
We are unable to present
reconciliations of forward-looking information for underlying ETR
to ETR on profit or loss for the period, because without
unreasonable efforts, we are unable to forecast accurately certain
adjusting items required to present a meaningful comparable IFRS
forward-looking financial measure. These items include the taxation
on inventory holding gains and losses and adjusting items, that are
difficult to predict in advance in order to include in an IFRS
estimate.
Underlying production - 2024
underlying production, when compared with 2023, is production after
adjusting for acquisitions and divestments, curtailments, and
entitlement impacts in our production-sharing agreements/contracts
and technical service contract*.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a
non-IFRS measure and is RC profit or loss* (as defined on page 36)
after excluding net adjusting items and related taxation. See page
28 for additional information on the adjusting items that are used
to arrive at underlying RC profit or loss in order to enable a full
understanding of the items and their financial impact.
Underlying RC profit or loss before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating
segments and excluding net adjusting items for the respective
operating segment or business.
bp believes that underlying RC
profit or loss is a useful measure for investors because it is a
measure closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions and because it may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp's operational performance on a comparable basis, period on
period, by adjusting for the effects of these adjusting items. The
nearest equivalent measure on an IFRS basis for the group is profit
or loss attributable to bp shareholders. The nearest equivalent
measure on an IFRS basis for segments and businesses is RC profit
or loss before interest and taxation. A reconciliation to IFRS
information is provided on page 1 for the group and pages 6-14 for
the segments.
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Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit
or loss per ADS is a non-IFRS
measure. Earnings per share is defined in Note 7. Underlying RC
profit or loss per ordinary share is calculated using the same
denominator as earnings per share as defined in the consolidated
financial statements. The numerator used is underlying RC profit or
loss attributable to bp shareholders, rather than profit or loss
attributable to bp ordinary shareholders. Underlying RC profit or
loss per ADS is calculated as outlined above for underlying RC
profit or loss per share except the denominator is adjusted to
reflect one ADS equivalent to six ordinary shares. bp believes it
is helpful to disclose the underlying RC profit or loss per
ordinary share and per ADS because these measures may help
investors to understand and evaluate, in the same manner as
management, the underlying trends in bp's operational performance
on a comparable basis, period on period. The nearest equivalent
measure on an IFRS basis is basic earnings per share based on
profit or loss for the period attributable to bp ordinary
shareholders.
upstream includes oil and
natural gas field development and production within the gas &
low carbon energy and oil production & operations
segments.
upstream/hydrocarbon plant reliability
(bp-operated) is calculated taking 100% less the
ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and bpx energy.
Unplanned plant deferrals are associated with the topside plant and
where applicable the subsea equipment (excluding wells and
reservoir). Unplanned plant deferrals include breakdowns, which
does not include Gulf of Mexico weather related
downtime.
upstream unit production costs are calculated as production cost divided by units of
production. Production cost does not include ad valorem and
severance taxes. Units of production are barrels for liquids and
thousands of cubic feet for gas. Amounts disclosed are for bp
subsidiaries only and do not include bp's share of equity-accounted
entities.
Working capital is movements in
inventories and other current and non-current assets and
liabilities as reported in the condensed group cash flow
statement.
Change in working capital adjusted
for inventory holding gains/losses, fair value accounting effects
relating to subsidiaries and other adjusting items is a non-IFRS
measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period; fair value accounting effects
relating to subsidiaries reported within adjusting items for the
period; and other adjusting items relating to the non-cash movement
of US emissions obligations carried as a provision that will be
settled by allowances held as inventory. This represents what would
have been reported as movements in inventories and other current
and non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been
underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities.
bp utilizes various arrangements in
order to manage its working capital including discounting of
receivables and, in the supply and trading business, the active
management of supplier payment terms, inventory and
collateral.
Trade marks
Trade marks of the bp group appear
throughout this announcement. They include:
bp, Amoco, Aral, bp pulse, Castrol, PETRO, TA, Thorntons and Gigahub
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Cautionary statement
In
order to utilize the 'safe harbor' provisions of the United States
Private Securities Litigation Reform Act of 1995 (the 'PSLRA') and
the general doctrine of cautionary statements, bp is providing the
following cautionary statement:
The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is,
statements related to future, not past events and circumstances -
with respect to the financial condition, results of operations and
businesses of bp and certain of the plans and objectives of bp with
respect to these items. These statements may generally, but not
always, be identified by the use of words such as 'will',
'expects', 'is expected to', 'aims', 'should', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we
see' or similar expressions.
In
particular, the following, among other statements, are all forward
looking in nature: plans, expectations and assumptions regarding
oil and gas demand, supply, prices or volatility; expectations
regarding reserves; expectations regarding production and volumes;
expectations regarding bp's customers & products business;
expectations regarding margins, including sensitivity of fuels
margin to costs of supply; expectations regarding underlying
effective tax rate; expectations regarding turnaround and
maintenance activity; expectations regarding financial performance,
results of operations and cash flows; expectations regarding future
project start-ups; expectations regarding the timing of bp's
updates of medium-term plans; expectations regarding shareholders
returns; expectations regarding bp's convenience businesses,
including TravelCenters of America, Castrol and bp pulse; bp's
plans and expectations regarding the amount and timing of share
buybacks and dividends; plans and expectations regarding bp's
credit rating, including in respect of maintaining a strong
investment grade credit rating and targeting further improvements
in credit metrics; plans and expectations regarding the allocation
of surplus cash flow to share buybacks and strengthening the
balance sheet; plans and expectations regarding LNG sales and
purchases; plans and expectations regarding bp's investments,
including the formation of a joint venture with ADNOC in Egypt, the
award of an interest in ADNOC's planned Ruwais LNG project and the
sale of bp's Türkiye ground fuels business; plans and expectations
regarding investments, collaborations and partnerships in electric
vehicle (EV) charging infrastructure; plans and expectations for
the development of the Kaskida project following bp's final
investment decision; plans and expectations related to bp's
transition growth engines, including expected capital expenditures;
plans and expectations regarding the amount or timing of payments
related to divestment and other proceeds, and the timing, quantum
and nature of certain acquisitions and divestments; expectations
regarding the timing and amount of future payments relating to the
Gulf of Mexico oil spill; expectations regarding bp's development
of hydrogen, offshore wind and UK CCS projects; plans and
expectations regarding; plans and expectations regarding bioenergy,
including progress in biofuels and bp's ownership of bp Bunge
Bioenergia; plans and expectations regarding bp's guidance for 2024
and the third quarter of 2024, including expected growth, margins,
the other businesses & corporate underlying annual charge,
timing and amount of divestment and other proceeds, depreciation,
depletion and amortization; plans and expectations regarding
capital expenditure for 2024 and 2025; 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.
By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp.
Actual results or outcomes, may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the effects of
bp's plan to exit its shareholding in Rosneft and other investments
in Russia, overall global economic and business conditions
impacting bp's business and demand for bp's products as well as the
specific factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and
societal expectations; the pace of development and adoption of
alternative energy solutions; developments in policy, law,
regulation, technology and markets, including societal and investor
sentiment related to the issue of climate change; the receipt of
relevant third party and/or regulatory approvals including ongoing
approvals required for the continued developments of approved
projects; the timing and level of maintenance and/or turnaround
activity; the timing and volume of refinery additions and outages;
the timing of bringing new fields onstream; the timing, quantum and
nature of certain acquisitions and divestments; future levels of
industry product supply, demand and pricing, including supply
growth in North America and continued base oil and additive supply
shortages; OPEC+ quota restrictions; PSA and TSC effects;
operational and safety problems; potential lapses in product
quality; economic and financial market conditions generally or in
various countries and regions; political stability and economic
growth in relevant areas of the world; changes in laws and
governmental regulations and policies, including related to climate
change; changes in social attitudes and customer preferences;
regulatory or legal actions including the types of enforcement
action pursued and the nature of remedies sought or imposed; the
actions of prosecutors, regulatory authorities and courts; delays
in the processes for resolving claims; amounts ultimately payable
and timing of payments relating to the Gulf of Mexico oil spill;
exchange rate fluctuations; development and use of new technology;
recruitment and retention of a skilled workforce; the success or
otherwise of partnering; the actions of competitors, trading
partners, contractors, subcontractors, creditors, rating agencies
and others; bp's access to future credit resources; business
disruption and crisis management; the impact on bp's reputation of
ethical misconduct and non-compliance with regulatory obligations;
trading losses; major uninsured losses; the possibility that
international sanctions or other steps taken by governmental
authorities or any other relevant persons may impact bp's ability
to sell its interests in Rosneft, or the price for which 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 other factors discussed elsewhere in
this report, including under "Principal risks and uncertainties,"
as well as factors discussed under "Risk factors" in bp's Annual
Report and Form 20-F for fiscal year 2023 as filed with the US
Securities and Exchange Commission.
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 40
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