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1
FOR IMMEDIATE RELEASE
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London 7 May 2024
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BP
p.l.c. Group results
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First quarter 2024
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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/3361N_1-2024-5-6.pdf
Resilient performance, committed
distributions
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Financial summary
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First
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Fourth
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First
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quarter
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quarter
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quarter
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$ million
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2024
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2023
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2023
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Profit for the period attributable
to bp shareholders
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2,263
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371
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8,218
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Inventory holding (gains) losses*,
net of tax
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(657)
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1,155
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452
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Replacement cost (RC)
profit*
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1,606
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1,526
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8,670
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Net (favourable) adverse impact of
adjusting items*, net of tax
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1,117
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1,465
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(3,707)
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Underlying RC profit*
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2,723
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2,991
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4,963
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Operating cash flow*
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5,009
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9,377
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7,622
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Capital expenditure*
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(4,278)
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(4,711)
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(3,625)
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Divestment and other
proceeds(a)
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413
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300
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800
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Net issue (repurchase) of
shares
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(1,750)
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(1,350)
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(2,448)
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Net debt*(b)
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24,015
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20,912
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21,232
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Adjusted EBITDA*
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10,306
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10,568
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13,066
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Announced dividend per ordinary
share (cents per share)
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7.270
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7.270
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6.610
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Underlying RC profit per ordinary
share* (cents)
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16.24
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17.77
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27.74
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Underlying RC profit per ADS*
(dollars)
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0.97
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1.07
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1.66
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Highlights
• Resilient financial and operational
performance: Adjusted EBITDA
$10.3 billion; underlying RC profit
$2.7 billion; upstream* production grew
+2.1% vs 1Q23; start up of new Azeri
Central East (ACE) platform in Caspian Sea
• Growing shareholder
distributions: 1Q24 $1.75 billion
share buyback announced as part of our $3.5 billion commitment for
the first half of 2024; Dividend per ordinary share of 7.270
cents
• Focus on delivering our six
priorities: announcement to simplify
organizational structure; target to deliver at
least $2 billion of cash cost* savings by the end of
2026
We've delivered another resilient
quarter financially and continued to make progress on our strategy.
Oil production was up and our ACE platform in the Caspian is now
producing. We are simplifying and reducing complexity across bp and
plan to deliver at least $2 billion of cash cost savings by the end
of 2026 through high grading our portfolio, digital transformation,
supply chain efficiencies and global capability hubs.
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Murray Auchincloss
Chief executive officer
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(a)
Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. There were no other proceeds for all
periods stated.
(b) See
Note 9 for more information.
RC profit, underlying RC profit, net
debt, adjusted EBITDA, underlying RC profit per ordinary share and
underlying RC profit per ADS are non-IFRS measures. Inventory
holding (gains) losses and adjusting items are non-IFRS
adjustments.
*
For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
30.
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2
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bp reported solid financial
performance in the first quarter with adjusted EBITDA* of $10.3
billion and underlying replacement cost profit of $2.7 billion. Our
financial frame is unchanged, and we are delivering competitive
shareholder distributions, announcing a $1.75 billion share buyback
for the first quarter as part of our commitment of $3.5 billion for
the first half of 2024.
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Kate Thomson Chief financial
officer
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Highlights
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1Q24 underlying replacement cost (RC) profit* $2.7 billion
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•
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Underlying RC profit for the quarter
was $2.7 billion, compared with
$3.0 billion for the previous quarter.
Compared with the fourth quarter 2023, the result reflects lower
oil and gas realizations, the impacts of the Whiting refinery
outage and significantly weaker fuels margin, partially offset by
significantly lower level of turnaround activity, a strong oil
trading result and higher realized refining margins. The underlying
effective tax rate (ETR)* in the quarter was 43%.
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•
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Reported profit for the quarter was
$2.3 billion, compared with $0.4 billion for the fourth quarter 2023. The reported
result for the first quarter is adjusted for inventory holding
gains* of $0.7 billion (net of tax)
and a net adverse impact of adjusting items* of $1.1 billion (net of tax) to derive the underlying RC
profit. Adjusting items pre-tax include net impairment charges of
$0.6 billion, largely as a result of
regulatory and portfolio changes, and adverse fair value accounting
effects* of $0.2 billion.
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Segment results
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•
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Gas & low carbon energy: The RC
profit before interest and tax for the first quarter 2024 was
$1.0 billion, compared with $2.2 billion for the previous
quarter. After adjusting RC profit before interest and tax for a
net adverse impact of adjusting items of $0.6 billion, the
underlying RC profit before interest and tax* for the first quarter
was $1.7 billion, compared with $1.8 billion in the
fourth quarter 2023. The first quarter underlying result reflects
lower realizations and foreign exchange losses on Egyptian pound
balances, partially offset by lower exploration write-offs. Gas
marketing and trading was strong following a strong result in the
fourth quarter.
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•
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Oil production & operations: The
RC profit before interest and tax for the first quarter 2024 was
$3.1 billion, compared with $1.9 billion for the previous
quarter. After adjusting RC profit before interest and tax for a
net adverse impact of adjusting items of $0.1 billion, the
underlying RC profit before interest and tax for the first quarter
was $3.1 billion, compared with $3.5 billion in the
fourth quarter 2023. The first quarter underlying result reflects
lower realizations, partially offset by higher
production.
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•
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Customers & products: The RC
profit before interest and tax for the first quarter 2024 was
$1.0 billion, compared with a loss of $0.6 billion for
the previous quarter. After adjusting RC profit before interest and
tax for a net adverse impact of adjusting items of
$0.3 billion, the underlying RC profit before interest and tax
for the first quarter was $1.3 billion, compared with
$0.8 billion in the fourth quarter 2023. The customers first
quarter underlying result was lower by $0.5 billion, reflecting
significantly weaker fuels margin, seasonally lower volumes, and
the absence of one-off positive effects that benefited the prior
quarter, partly offset by lower costs. The products first quarter
underlying result was higher by $1.0 billion, reflecting higher
realized refining margins, a significantly lower level of
turnaround activity and higher commercial optimization, partially
offset by the impacts of the Whiting refinery outage. The oil
trading contribution was strong following a weak result in the
fourth quarter.
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Operating cash flow* $5.0
billion
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•
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Operating cash flow in the quarter
of $5.0 billion includes a working capital*
build (after adjusting for inventory holding gains, fair value
accounting effects and other adjusting items) of $2.4 billion, reflecting seasonal inventory effects,
timing of various payments and the price environment. (see
page 27).
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Delivering the next wave of efficiencies - at least $2 billion
cash cost* savings
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•
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bp has a target to deliver at least
$2 billion of cash cost savings by the end of 2026 relative to
2023. The reduction is expected to result from cost-saving measures
across bp's business underpinned by high-grading the portfolio,
digital transformation, supply chain efficiencies and global
capability hubs. Some of these cost savings may have associated
restructuring charges.
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Further $1.75 billion share buyback announced for 1Q24; $3.5
billion for first half 2024 unchanged
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•
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The $1.75 billion share buyback
programme announced with the fourth quarter
results was completed on 3 May 2024.
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•
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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
first quarter, bp has announced a dividend
per ordinary share of 7.270 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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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
36.
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3
Financial results
In addition to the highlights on
page 2:
• Profit attributable to bp
shareholders in the first quarter was
$2.3 billion, compared with a profit
of $8.2 billion in the same period of
2023.
- After
adjusting profit attributable to bp shareholders for inventory
holding gains* and net impact of adjusting items*, underlying
replacement cost (RC) profit* for the first
quarter was $2.7 billion,
compared with $5.0 billion for the
same period of 2023. This reduction in
underlying RC profit for the first quarter
mainly reflects lower realizations, lower industry refining
margins, a strong gas marketing and trading result compared with an
exceptional result in the first quarter in 2023 and the impacts of
the Whiting refinery outage.
- Adjusting items in the
first quarter had a net adverse pre-tax
impact of $1.2 billion, compared with
a net favourable pre-tax impact of $3.9 billion in the same period of 2023.
- Adjusting items for the
first quarter of 2024 include an adverse impact of pre-tax fair value
accounting effects*, relative to management's internal measure of
performance, of $0.2 billion, compared with
a favourable pre-tax impact of $4.3 billion in the same period of 2023. This difference is primarily due
to a small decline in the forward price of LNG over the quarter
compared to a large decline in this price during the first quarter
of 2023.
• The effective tax rate (ETR) on RC
profit or loss* for the first quarter was
54%, compared with 29% for the same period in 2023. Excluding adjusting items, the underlying ETR*
for the first quarter was 43%, compared with 39% for the
same period a year ago. The higher underlying ETR for the
first quarter reflects foreign exchange
impacts which are not tax deductible. ETR on RC profit or loss and
underlying ETR are non-IFRS measures.
• Operating cash flow* for the
first quarter was $5.0 billion, compared with $7.6 billion for the same period in 2023, reflecting the difference in the underlying RC
profit for the respective periods.
• Capital expenditure* in the
first quarter was $4.3 billion, compared with $3.6 billion in the same period of 2023.
• Total divestment and other
proceeds for the first quarter were
$0.4 billion, compared with
$0.8 billion for the same period in
2023. There were no other
proceeds for both periods.
• At the end of the first quarter, net debt* was $24.0
billion, compared with $20.9 billion at the end of the fourth quarter 2023 and
$21.2 billion at the end of the
first quarter 2023.
The increase in the net debt is mainly
attributable to a working capital* build.
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4
Analysis of RC profit (loss) before
interest and tax and reconciliation to profit (loss) for the
period
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First
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Fourth
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First
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quarter
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quarter
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quarter
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$
million
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2024
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2023
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2023
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RC
profit (loss) before interest and tax
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gas & low carbon
energy
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1,036
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2,169
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7,347
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oil production &
operations
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3,060
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1,879
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3,317
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customers & products
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988
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(554)
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2,680
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other businesses &
corporate
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(300)
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(16)
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(90)
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Consolidation adjustment -
UPII*
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32
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95
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(22)
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RC profit before interest and
tax
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4,816
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3,573
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13,232
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Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
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(1,034)
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(977)
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(785)
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Taxation on a RC basis
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(2,030)
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(1,005)
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(3,573)
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Non-controlling interests
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(146)
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(65)
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(204)
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RC profit attributable to bp
shareholders*
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1,606
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1,526
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8,670
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Inventory holding gains
(losses)*
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851
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(1,497)
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(600)
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Taxation (charge) credit on
inventory holding gains and losses
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(194)
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342
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148
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Profit for the period attributable
to bp shareholders
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2,263
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371
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8,218
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Analysis of underlying RC profit
(loss) before interest and tax
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First
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Fourth
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First
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quarter
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quarter
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quarter
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$
million
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2024
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2023
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2023
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Underlying RC profit (loss) before interest and
tax
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gas & low carbon
energy
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1,658
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1,777
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3,456
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oil production &
operations
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3,125
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3,549
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3,319
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customers & products
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1,289
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803
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2,759
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other businesses &
corporate
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(154)
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(97)
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(296)
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Consolidation adjustment -
UPII
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32
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95
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(22)
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Underlying RC profit before interest
and tax
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5,950
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6,127
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9,216
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Finance costs and net finance
expense relating to pensions and other post-retirement
benefits
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(942)
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(891)
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(681)
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Taxation on an underlying RC
basis
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(2,139)
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(2,180)
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(3,368)
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Non-controlling interests
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(146)
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(65)
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(204)
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Underlying RC profit attributable to
bp shareholders*
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2,723
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2,991
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4,963
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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
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First quarter
2024
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vs
First quarter 2023
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Tier 1 and tier 2 process safety events*
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14
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+5
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Reported recordable injury frequency*
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0.218
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+8.9%
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upstream* production(a) (mboe/d)
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2,378
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+2.1%
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upstream unit production costs*(b)
($/boe)
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6.00
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+4.7%
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bp-operated upstream plant reliability*
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94.9%
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-0.6
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bp-operated refining
availability*(a)
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90.4%
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-5.7
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(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.
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5
Outlook & Guidance
2Q
2024 guidance
• Looking ahead, bp
expects second quarter 2024 reported upstream* production to be
slightly lower compared with first-quarter 2024.
• In its customers
business, bp expects seasonally higher volumes and fuels margin to
remain sensitive to movements in the cost of
supply.
• In products, bp
expects realized margins to be impacted by narrower North American
heavy crude oil differentials, and to remain sensitive to relative
movements in product cracks. In addition, bp expects the absence of
the first quarter plant-wide power outage at the Whiting refinery
to be partly offset by a higher level of turnaround
activity.
2024 guidance
In addition to the guidance on page
2:
• bp continues to
expect both reported and underlying upstream production* to be
slightly higher compared with 2023. Within this, bp continues to
expect underlying production from oil production & operations
to be higher and production from gas & low carbon energy to be
lower.
• In its customers
business, bp continues to expect growth from convenience, including
a full year contribution from TravelCenters of America; a stronger
contribution from Castrol underpinned by volume growth in focus
markets; and continued margin growth from bp pulse driven by higher
energy sold. In addition, bp continues to expect fuels margin to
remain sensitive to the cost of supply.
• In products, bp
continues to expect a lower level of industry refining margins,
with realized margins impacted by narrower North American heavy
crude oil differentials. bp continues to expect refinery turnaround
activity to have a similar impact on both throughput and financial
performance compared to 2023, with phasing of activity in 2024
heavily weighted towards the second half.
• bp continues to
expect the other businesses & corporate underlying annual
charge to be around $1.0 billion for 2024. The charge may vary from
quarter to quarter.
• bp continues to expect the
depreciation, depletion and amortization to be slightly higher than
2023.
• bp continues to expect the
underlying ETR* for 2024 to be around 40% but it is sensitive to
the impact that volatility in the current price environment may
have on the geographical mix of the group's profits and
losses.
• bp continues to expect capital
expenditure* for 2024 to be around $16 billion, but now expects the
phasing to be split broadly evenly between the first half and the
second half.
• bp continues to expect divestment
and other proceeds of $2-3 billion in 2024, weighted towards the
second half. Having realized $18.2 billion of divestment and other
proceeds since the second quarter of 2020, bp continues to expect
to reach $25 billion of divestment and other proceeds between the
second half of 2020 and 2025.
• bp continues to
expect Gulf of Mexico oil spill payments for the year to be around
$1.2 billion pre-tax including $1.1 billion pre-tax paid during the
second quarter.
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
36.
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6
gas & low carbon
energy*
Financial results
• The replacement cost (RC) profit
before interest and tax for the first
quarter was $1,036 million, compared
with $7,347 million for the same period in
2023. The first
quarter is adjusted by an adverse impact of net adjusting
items* of $622 million, compared with a
favourable impact of net adjusting items of $3,891
million for the same period in 2023.
Adjusting items include impacts of fair value accounting effects*,
relative to management's internal measure of performance, which are
a favourable impact of $113 million for the
first quarter in 2024 and a favourable impact of $3,934
million for the same period in 2023.
Under IFRS, reported earnings include the mark-to-market value of
the hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. The underlying result includes the
mark-to-market value of the hedges but also recognizes changes in
value of the LNG contracts being risk managed.
•
After adjusting RC profit before interest
and tax for adjusting items, the underlying RC profit before interest and tax* for the first quarter was $1,658
million, compared with $3,456
million for the same period in 2023.
• The
underlying RC profit for the first quarter,
compared with the same period in 2023,
reflects lower realizations, foreign exchange losses on Egyptian
pound balances, higher exploration write-offs, and a strong gas
marketing and trading result compared with an exceptional result in
the first quarter in 2023.
Operational update
•
Reported production for the quarter was 914mboe/d, 5.7% lower than
the same period in 2023. Underlying
production* was 3.5% lower, mainly due to base decline partially
offset by major projects* which started up in 2023. Reported
production includes the effect of the disposal of the Algeria
business in 2023.
•
Renewables pipeline* at the end of the quarter was 58.5GW (bp net), including 20.4GW bp net share of
Lightsource bp's (LSbp's) pipeline. The renewables pipeline
increased by 0.2GW net during the quarter. In addition, there is
over 9.5GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
• On 14 February,
ADNOC and bp announced that they have agreed to form a new joint
venture (JV) in Egypt. The JV (51% bp and 49% ADNOC) will combine
the pair's deep technical capabilities and proven track records as
it aims to grow a highly competitive gas portfolio. As part of the
agreement, bp will contribute its interests in three development
concessions, as well as exploration agreements, in Egypt to the new
JV. ADNOC will make a proportionate cash
contribution which can be used for future growth opportunities.
Subject to regulatory approvals and clearances, the formation of
the JV is expected to complete during the second half of
2024.
• On 15 February,
the floating liquefied natural gas (FLNG) vessel that is a core
component of the Greater Tortue Ahmeyim (GTA) LNG project arrived
at its destination on the Mauritania and Senegal maritime border.
GTA Phase 1 is operated by bp (56%) with
partners Kosmos Energy, Société Mauritanienne des Hydrocarbures and Société des Pétroles du
Sénégal.
• In April bp and the Korea Gas Corporation signed an agreement
for bp to supply up to 9.8 million tonnes of LNG over an 11 year
period starting in 2026 from bp's global LNG
portfolio.
low
carbon energy
•
Following the announcement in January that bp and
Equinor had signed an agreement under which they would restructure
their investments in their US offshore wind projects, on 4 April,
bp announced it has received all the necessary regulatory approvals
and it is now 100% owner of the Beacon US offshore
wind projects and Equinor the Empire projects.
• On March 15, our
UK joint ventures Net Zero Teesside Power (bp 75%, Equinor 25%) and
the Northern Endurance Partnership (bp 45%, Equinor 45%, Total
Energies 10%) announced the selection of contractors for
engineering, procurement, and construction contracts with a
combined value of around $5 billion. The final award of contracts
is subject to the receipt of relevant regulatory clearances and
positive Final Investment Decisions (FID) by the projects and the UK government.
Top of page
7
gas & low carbon energy
(continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Profit before interest and
tax
|
|
1,036
|
2,169
|
7,348
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
(1)
|
RC profit before interest and
tax
|
|
1,036
|
2,169
|
7,347
|
Net (favourable) adverse impact of
adjusting items
|
|
622
|
(392)
|
(3,891)
|
Underlying RC profit before interest
and tax
|
|
1,658
|
1,777
|
3,456
|
Taxation on an underlying RC
basis
|
|
(518)
|
(746)
|
(961)
|
Underlying RC profit before
interest
|
|
1,140
|
1,031
|
2,495
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,293
|
1,290
|
1,440
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
Exploration write-offs
|
|
203
|
349
|
(1)
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
Total adjusted EBITDA
|
|
3,154
|
3,416
|
4,895
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
gas
|
|
639
|
848
|
647
|
low carbon energy
|
|
659
|
478
|
366
|
Total capital expenditure
|
|
1,298
|
1,326
|
1,013
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
Production (net of
royalties)(a)
|
|
|
|
|
Liquids* (mb/d)
|
|
102
|
99
|
114
|
Natural gas (mmcf/d)
|
|
4,708
|
4,637
|
4,962
|
Total hydrocarbons*
(mboe/d)
|
|
914
|
899
|
969
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
Liquids ($/bbl)
|
|
76.92
|
78.87
|
79.44
|
Natural gas ($/mcf)
|
|
5.45
|
6.18
|
7.41
|
Total hydrocarbons*
($/boe)
|
|
36.64
|
40.17
|
46.95
|
(a)
Includes bp's share of production of equity-accounted entities in
the gas & low carbon energy segment.
(b)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of page
8
gas & low carbon energy
(continued)
|
|
31 March
|
31 December
|
31 March
|
low
carbon energy(c)
|
|
2024
|
2023
|
2023
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
Installed renewables
capacity*
|
|
2.7
|
2.7
|
2.2
|
|
|
|
|
|
Developed renewables to
FID*
|
|
6.2
|
6.2
|
5.9
|
Renewables pipeline
|
|
58.5
|
58.3
|
38.8
|
of
which by geographical area:
|
|
|
|
|
Renewables pipeline -
Americas
|
|
18.1
|
18.8
|
17.5
|
Renewables pipeline - Asia
Pacific
|
|
21.3
|
21.3
|
12.2
|
Renewables pipeline -
Europe
|
|
15.7
|
14.6
|
8.9
|
Renewables pipeline -
Other
|
|
3.5
|
3.5
|
0.1
|
of
which by technology:
|
|
|
|
|
Renewables pipeline - offshore
wind
|
|
9.6
|
9.3
|
5.3
|
Renewables pipeline - onshore
wind
|
|
12.7
|
12.7
|
6.3
|
Renewables pipeline -
solar
|
|
36.2
|
36.3
|
27.2
|
Total Developed renewables to FID and Renewables
pipeline
|
|
64.7
|
64.5
|
44.7
|
(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 first quarter was
$3,060 million, compared with $3,317 million for the same period in 2023. The first quarter is
adjusted by an adverse impact of net adjusting items* of
$65 million, compared with an adverse
impact of net adjusting items of $2 million
for the same period in 2023.
•
After adjusting RC profit before interest
and tax for adjusting items, the underlying RC profit before interest and tax* for the first quarter was $3,125
million, compared with $3,319
million for the same period in 2023.
• The
underlying RC profit for the first quarter,
compared with the same period in 2023,
primarily reflects lower realizations and increased depreciation
charges partly offset by increased volume.
Operational update
•
Reported production for the quarter was 1,463mboe/d, 7.6% higher
than the first quarter of 2023. Underlying production* for the quarter was 7.4%
higher compared with the first quarter of
2023 reflecting bpx energy performance and
major projects* partly offset by base performance.
Strategic Progress
• On
16 April, bp, as operator of the Azeri-Chirag-Gunashli (ACG)
project, announced the start-up of oil production from the new
Azeri Central East (ACE) platform as part of the ACG field
development in the Azerbaijan sector of the Caspian Sea, which is
the first remotely operated offshore platform in the Caspian (bp
share 30.37%).
• In
April bpx energy successfully brought online 'Checkmate', its third
central processing facility in the Permian Basin. It is a
low-emission, electrified facility that will enable further
production growth for bpx energy in the basin (bp 100%
operator).
•
Final investment decision taken on the Atlantis
Drill Center Expansion which will be a two well tie back to the
Atlantis facility in the Gulf of Mexico (bp share
56%).
• bp
has been awarded a licence for two blocks in the central North Sea,
consolidating our position around our Eastern Trough Area Project
(ETAP) central processing facility. The award aligns with our
strategic focus on oil and gas opportunities that can be developed
through established production facilities.
•
Aker BP was awarded interest in 27 licences
(of which it will operate 17) in the North Sea and Norwegian Sea
(bp interest in Aker BP 15.9%).
• In
May Azule Energy announced it had agreed to acquire a 42.5%
interest in exploration block 2914A (PEL85), Orange Basin, offshore
Namibia. Completion of the deal is subject to customary third-party
approvals from the Namibian authorities and JV parties. Azule
Energy is a 50:50 joint venture between bp and Eni, based in
Angola.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Profit before interest and
tax
|
|
3,059
|
1,879
|
3,318
|
Inventory holding (gains)
losses*
|
|
1
|
-
|
(1)
|
RC profit before interest and
tax
|
|
3,060
|
1,879
|
3,317
|
Net (favourable) adverse impact of
adjusting items
|
|
65
|
1,670
|
2
|
Underlying RC profit before interest
and tax
|
|
3,125
|
3,549
|
3,319
|
Taxation on an underlying RC
basis
|
|
(1,509)
|
(1,433)
|
(1,766)
|
Underlying RC profit before
interest
|
|
1,616
|
2,116
|
1,553
|
Top of page
10
oil production & operations
(continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
1,657
|
1,563
|
1,327
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
Exploration write-offs
|
|
3
|
32
|
51
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
Total adjusted EBITDA
|
|
4,785
|
5,144
|
4,697
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
Total capital expenditure
|
|
1,776
|
1,636
|
1,520
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
Production (net of
royalties)(a)
|
|
|
|
|
Liquids* (mb/d)
|
|
1,056
|
1,024
|
1,005
|
Natural gas (mmcf/d)
|
|
2,364
|
2,305
|
2,060
|
Total hydrocarbons*
(mboe/d)
|
|
1,463
|
1,421
|
1,360
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
Liquids ($/bbl)
|
|
70.53
|
76.22
|
71.63
|
Natural gas ($/mcf)
|
|
2.66
|
3.65
|
6.57
|
Total hydrocarbons*
($/boe)
|
|
54.11
|
59.69
|
62.36
|
(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) profit before interest and tax for the first
quarter was $988 million, compared with a
profit of $2,680 million for the same period in 2023. The first
quarter is adjusted by an adverse impact of net adjusting items* of
$301 million, compared with an adverse impact of net adjusting
items of $79 million for the same period in 2023. Adjusting items
include impacts of fair value accounting effects*, relative to
management's internal measure of performance, which are an adverse
impact of $144 million for the quarter in 2024, compared with a
favourable impact of $77 million for the same period in
2023.
•
After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the
first quarter was $1,289 million, compared with $2,759 million for
the same period in 2023.
• The
customers & products result for the first quarter was
significantly lower than the same period in 2023, primarily
reflecting a lower refining result.
• customers
- the convenience and mobility result, excluding
Castrol, for the first quarter was lower than the same period in
2023. The first quarter result benefited from higher retail fuels
margin and continued strong growth in convenience, more than offset
by a weaker performance in midstream and biofuels. The contribution
of TravelCenters of America was impacted by the ongoing US freight
recession.
Castrol result for the first quarter
was higher compared with the same period in 2023, primarily due to
higher margins partly offset by adverse foreign exchange
impacts.
• products
- the products result for the first quarter was
significantly lower compared with the same period in 2023. In
refining, the result for the first quarter reflected lower industry
refining margins, with realized margins impacted by narrower North
American heavy crude oil differentials. In addition, the first
quarter was significantly impacted by the plant-wide power outage
at the Whiting refinery. The oil trading contribution for the first
quarter was strong, consistent with the result in the same period
last year.
Operational update
• bp-operated refining availability* for the first quarter was
90.4%, lower compared with 96.1% for the same period in 2023,
mainly due to the plant-wide power outage at the Whiting
refinery.
Strategic progress
• In
March, bp announced plans to transform the Gelsenkirchen refinery
site by the end of the decade. The plans include simplification of
the site to improve competitiveness, including a controlled
reduction in total production capacity from 2025 and increased
production of lower-emission fuels using co-processing.
• In
April, bp's Archaea Energy announced it had brought online in March
its largest Archaea Modular Design (AMD) renewable natural gas
(RNG) plant in Kansas City, Missouri. The plant can convert 9,600
standard cubic feet of landfill gas per minute into lower-carbon
RNG. In addition, on 4 April, Archaea Energy completed the purchase
of Sunshine Gas Producers and now fully owns and operates the
current landfill-gas-to-electric facility in California, with plans
to develop an RNG plant.
• In
April, bp launched its new hydrotreated vegetable oil (HVO)
bioenergy brand, commencing with roll out at sites across the UK
and the Netherlands. Marketed as "bp bioenergy HVO", it joins bp
pulse as customers & products' second transition growth engine
brand.
• In
March, bp acquired the freehold of one of the largest truck stops
in Europe, Ashford International Truckstop in Kent. The acquisition
presents bp with the opportunity to help meet the comprehensive
needs of UK and European HGV operators transitioning to EVs. In
addition, in April, bp opened its first bp pulse branded Gigahub in
Houston, Texas, with 24 ultra-fast charge points, building momentum
in our US charging business offering.
• In
February, bp New Zealand was announced as a foundation partner for
Woolworths' loyalty programme, "Everyday Rewards". The loyalty
scheme enables current customers and over one million new customers
to collect points and obtain instant rewards at bp retail
sites.
Top of page
12
customers & products
(continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Profit (loss) before interest and
tax
|
|
1,840
|
(2,051)
|
2,078
|
Inventory holding (gains)
losses*
|
|
(852)
|
1,497
|
602
|
RC profit (loss) before interest and
tax
|
|
988
|
(554)
|
2,680
|
Net (favourable) adverse impact of
adjusting items
|
|
301
|
1,357
|
79
|
Underlying RC profit before interest
and tax
|
|
1,289
|
803
|
2,759
|
Of which:(a)
|
|
|
|
|
customers - convenience &
mobility
|
|
370
|
882
|
391
|
Castrol - included in customers
|
|
184
|
213
|
161
|
products - refining &
trading
|
|
919
|
(79)
|
2,368
|
Taxation on an underlying RC
basis
|
|
(333)
|
(239)
|
(777)
|
Underlying RC profit before
interest
|
|
956
|
564
|
1,982
|
(a) A
reconciliation to RC profit before interest and tax by business is
provided on page 28.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Adjusted EBITDA*(b)
|
|
|
|
|
customers - convenience &
mobility
|
|
854
|
1,348
|
732
|
Castrol - included in customers
|
|
226
|
256
|
200
|
products - refining &
trading
|
|
1,379
|
397
|
2,824
|
|
|
2,233
|
1,745
|
3,556
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and
amortization
|
|
944
|
942
|
797
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
customers - convenience &
mobility
|
|
566
|
790
|
458
|
Castrol - included in customers
|
|
43
|
90
|
68
|
products - refining &
trading
|
|
554
|
813
|
532
|
Total capital expenditure
|
|
1,120
|
1,603
|
990
|
(b) A
reconciliation to RC profit before interest and tax by business is
provided on page 28.
Retail(c)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
bp retail sites* - total
(#)
|
|
21,150
|
21,100
|
20,700
|
Strategic convenience
sites*
|
|
2,900
|
2,850
|
2,450
|
(c)
Reported to the nearest 50.
Marketing sales of refined products (mb/d)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
US
|
|
1,080
|
1,205
|
1,078
|
Europe
|
|
940
|
1,037
|
973
|
Rest of World
|
|
469
|
465
|
462
|
|
|
2,489
|
2,707
|
2,513
|
Trading/supply sales of refined
products
|
|
352
|
355
|
333
|
Total sales volume of refined
products
|
|
2,841
|
3,062
|
2,846
|
Top of page
13
customers & products
(continued)
Refining marker margin*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
bp average refining marker margin
(RMM) ($/bbl)
|
|
20.6
|
18.5
|
28.1
|
Refinery throughputs (mb/d)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
US
|
|
525
|
634
|
686
|
Europe
|
|
830
|
678
|
832
|
Total refinery
throughputs
|
|
1,355
|
1,312
|
1,518
|
bp-operated refining availability* (%)
|
|
90.4
|
96.1
|
96.1
|
Top of page
14
other businesses &
corporate
Other businesses & corporate
comprises innovation & engineering, bp ventures, launchpad,
regions, corporates & solutions, our corporate activities &
functions and any residual costs of the Gulf of Mexico oil
spill.
Financial results
•
The replacement cost (RC) loss before interest and
tax for the first quarter was $300 million, compared with a loss of
$90 million for the same period in 2023. The first quarter is
adjusted by an adverse impact of net adjusting items* of $146
million, compared with a favourable impact of net adjusting items
of $206 million for the same period in 2023. Adjusting items
include impacts of fair value accounting effects* which are an
adverse impact of $193 million for the quarter in 2024, and a
favourable impact of $245 million for the same period in
2023.
•
After adjusting RC loss before interest and tax for adjusting
items, the underlying RC loss before interest and tax* for the
first quarter was $154 million, compared with a loss of $296
million for the same period in 2023.
Strategic progress
•
In March, bp launchpad divested all of its 100%
shareholding in Insight Analytics Solutions Holdings Limited
("Onyx") to Macquarie Capital.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Profit (loss) before interest and
tax
|
|
(300)
|
(16)
|
(90)
|
Inventory holding (gains)
losses*
|
|
-
|
-
|
-
|
RC profit (loss) before interest and
tax
|
|
(300)
|
(16)
|
(90)
|
Net (favourable) adverse impact of
adjusting items(a)
|
|
146
|
(81)
|
(206)
|
Underlying RC profit (loss) before
interest and tax
|
|
(154)
|
(97)
|
(296)
|
Taxation on an underlying RC
basis
|
|
99
|
121
|
29
|
Underlying RC profit (loss) before
interest
|
|
(55)
|
24
|
(267)
|
(a)
Includes fair value accounting effects relating to
hybrid bonds. See page 31 for more information.
Top of page
15
Financial statements
Group income statement
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
|
|
|
|
|
Sales and other operating revenues
(Note 5)
|
|
48,880
|
52,141
|
56,182
|
Earnings from joint
ventures - after interest and tax
|
|
178
|
(290)
|
195
|
Earnings from
associates - after interest and tax
|
|
298
|
156
|
173
|
Interest and other income
|
|
381
|
599
|
248
|
Gains on sale of businesses and
fixed assets
|
|
224
|
(20)
|
153
|
Total revenues and other
income
|
|
49,961
|
52,586
|
56,951
|
Purchases
|
|
27,647
|
31,062
|
29,122
|
Production and manufacturing
expenses
|
|
6,847
|
5,751
|
6,982
|
Production and similar
taxes
|
|
444
|
445
|
474
|
Depreciation, depletion and
amortization (Note 6)
|
|
4,150
|
4,060
|
3,800
|
Net impairment and losses on sale of
businesses and fixed assets (Note
3)
|
|
737
|
3,958
|
88
|
Exploration expense
|
|
247
|
501
|
106
|
Distribution and administration
expenses
|
|
4,222
|
4,733
|
3,747
|
Profit (loss) before interest and
taxation
|
|
5,667
|
2,076
|
12,632
|
Finance costs
|
|
1,075
|
1,038
|
843
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(41)
|
(61)
|
(58)
|
Profit (loss) before
taxation
|
|
4,633
|
1,099
|
11,847
|
Taxation
|
|
2,224
|
663
|
3,425
|
Profit (loss) for the
period
|
|
2,409
|
436
|
8,422
|
Attributable to
|
|
|
|
|
bp shareholders
|
|
2,263
|
371
|
8,218
|
Non-controlling interests
|
|
146
|
65
|
204
|
|
|
2,409
|
436
|
8,422
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
|
|
|
Per ordinary share
(cents)
|
|
|
|
|
Basic
|
|
13.57
|
2.20
|
45.93
|
Diluted
|
|
13.25
|
2.15
|
45.06
|
Per ADS (dollars)
|
|
|
|
|
Basic
|
|
0.81
|
0.13
|
2.76
|
Diluted
|
|
0.80
|
0.13
|
2.70
|
Top of page
16
Condensed group statement of
comprehensive income
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
|
|
|
|
|
Profit (loss) for the
period
|
|
2,409
|
436
|
8,422
|
Other comprehensive income
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss
|
|
|
|
|
Currency translation
differences
|
|
(448)
|
711
|
453
|
Cash flow hedges and costs of
hedging
|
|
(115)
|
125
|
546
|
Share of items relating to
equity-accounted entities, net of tax
|
|
(8)
|
13
|
(203)
|
Income tax relating to items that
may be reclassified
|
|
(4)
|
64
|
(76)
|
|
|
(575)
|
913
|
720
|
Items that will not be reclassified
to profit or loss
|
|
|
|
|
Remeasurements of the net pension
and other post-retirement benefit liability or asset
|
|
(66)
|
(1,209)
|
(87)
|
Remeasurements of equity
investments
|
|
(13)
|
51
|
-
|
Cash flow hedges that will
subsequently be transferred to the balance sheet
|
|
(3)
|
16
|
-
|
Income tax relating to items that
will not be reclassified(a)
|
|
674
|
357
|
23
|
|
|
592
|
(785)
|
(64)
|
Other comprehensive
income
|
|
17
|
128
|
656
|
Total comprehensive
income
|
|
2,426
|
564
|
9,078
|
Attributable to
|
|
|
|
|
bp shareholders
|
|
2,303
|
461
|
8,861
|
Non-controlling interests
|
|
123
|
103
|
217
|
|
|
2,426
|
564
|
9,078
|
(a)
First quarter 2024 includes a $658-million
credit in respect of the reduction in the deferred tax liability on
defined benefit pension plan surpluses following the reduction in
the rate of the authorized surplus payments tax charge in the UK
from 35% to 25%.
Top of page
17
Condensed group statement of changes
in equity
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2024
|
|
70,283
|
13,566
|
1,644
|
85,493
|
|
|
|
|
|
|
Total comprehensive
income
|
|
2,303
|
154
|
(31)
|
2,426
|
Dividends
|
|
(1,222)
|
-
|
(126)
|
(1,348)
|
Cash flow hedges transferred to the
balance sheet, net of tax
|
|
(2)
|
-
|
-
|
(2)
|
Repurchase of ordinary share
capital
|
|
(1,751)
|
-
|
-
|
(1,751)
|
Share-based payments, net of
tax
|
|
154
|
-
|
-
|
154
|
Issue of perpetual hybrid
bonds(a)
|
|
(4)
|
1,300
|
-
|
1,296
|
Redemption of perpetual hybrid
bonds, net of tax(a)
|
|
9
|
(1,300)
|
-
|
(1,291)
|
Payments on perpetual hybrid
bonds
|
|
-
|
(84)
|
-
|
(84)
|
Transactions involving
non-controlling interests, net of tax
|
|
-
|
-
|
47
|
47
|
At 31 March 2024
|
|
69,770
|
13,636
|
1,534
|
84,940
|
|
|
|
|
|
|
|
|
bp
shareholders'
|
Non-controlling
interests
|
Total
|
$
million
|
|
equity
|
Hybrid
bonds
|
Other
interest
|
equity
|
At 1 January 2023
|
|
67,553
|
13,390
|
2,047
|
82,990
|
|
|
|
|
|
|
Total comprehensive
income
|
|
8,861
|
142
|
75
|
9,078
|
Dividends
|
|
(1,189)
|
-
|
(68)
|
(1,257)
|
Repurchase of ordinary share
capital
|
|
(3,421)
|
-
|
-
|
(3,421)
|
Share-based payments, net of
tax
|
|
(29)
|
-
|
-
|
(29)
|
Issue of perpetual hybrid
bonds
|
|
-
|
45
|
-
|
45
|
Payments on perpetual hybrid
bonds
|
|
-
|
(80)
|
-
|
(80)
|
Transactions involving
non-controlling interests, net of tax
|
|
-
|
-
|
(145)
|
(145)
|
At 31 March 2023
|
|
71,775
|
13,497
|
1,909
|
87,181
|
(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
18
Group balance sheet
|
|
31 March
|
31 December
|
$
million
|
|
2024
|
2023
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
|
102,744
|
104,719
|
Goodwill
|
|
12,378
|
12,472
|
Intangible assets
|
|
10,008
|
9,991
|
Investments in joint
ventures
|
|
12,467
|
12,435
|
Investments in associates
|
|
7,932
|
7,814
|
Other investments
|
|
2,267
|
2,189
|
Fixed assets
|
|
147,796
|
149,620
|
Loans
|
|
2,113
|
1,942
|
Trade and other
receivables
|
|
1,735
|
1,767
|
Derivative financial
instruments
|
|
9,686
|
9,980
|
Prepayments
|
|
665
|
623
|
Deferred tax assets
|
|
4,227
|
4,268
|
Defined benefit pension plan
surpluses
|
|
7,804
|
7,948
|
|
|
174,026
|
176,148
|
Current assets
|
|
|
|
Loans
|
|
219
|
240
|
Inventories
|
|
24,310
|
22,819
|
Trade and other
receivables
|
|
29,908
|
31,123
|
Derivative financial
instruments
|
|
10,150
|
12,583
|
Prepayments
|
|
2,247
|
2,520
|
Current tax receivable
|
|
766
|
837
|
Other investments
|
|
615
|
843
|
Cash and cash equivalents
|
|
31,510
|
33,030
|
|
|
99,725
|
103,995
|
Assets classified as held for sale
(Note 2)
|
|
1,684
|
151
|
|
|
101,409
|
104,146
|
Total assets
|
|
275,435
|
280,294
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
58,621
|
61,155
|
Derivative financial
instruments
|
|
4,772
|
5,250
|
Accruals
|
|
5,189
|
6,527
|
Lease liabilities
|
|
2,628
|
2,650
|
Finance debt
|
|
4,665
|
3,284
|
Current tax payable
|
|
2,804
|
2,732
|
Provisions
|
|
3,579
|
4,418
|
|
|
82,258
|
86,016
|
Liabilities directly associated with
assets classified as held for sale (Note
2)
|
|
30
|
62
|
|
|
82,288
|
86,078
|
Non-current liabilities
|
|
|
|
Other payables
|
|
9,914
|
10,076
|
Derivative financial
instruments
|
|
11,140
|
10,402
|
Accruals
|
|
1,286
|
1,310
|
Lease liabilities
|
|
8,429
|
8,471
|
Finance debt
|
|
48,348
|
48,670
|
Deferred tax liabilities
|
|
8,980
|
9,617
|
Provisions
|
|
14,835
|
14,721
|
Defined benefit pension plan and
other post-retirement benefit plan deficits
|
|
5,275
|
5,456
|
|
|
108,207
|
108,723
|
Total liabilities
|
|
190,495
|
194,801
|
Net assets
|
|
84,940
|
85,493
|
Equity
|
|
|
|
bp shareholders' equity
|
|
69,770
|
70,283
|
Non-controlling interests
|
|
15,170
|
15,210
|
Total equity
|
|
84,940
|
85,493
|
Top of page
19
Condensed group cash flow
statement
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Operating activities
|
|
|
|
|
Profit (loss) before
taxation
|
|
4,633
|
1,099
|
11,847
|
Adjustments to reconcile profit
(loss) before taxation to net cash provided by operating
activities
|
|
|
|
|
Depreciation, depletion and
amortization and exploration expenditure written off
|
|
4,356
|
4,441
|
3,850
|
Net impairment and (gain) loss on
sale of businesses and fixed assets
|
|
513
|
3,978
|
(65)
|
Earnings from equity-accounted
entities, less dividends received
|
|
(96)
|
803
|
1
|
Net charge for interest and other
finance expense, less net interest paid
|
|
192
|
202
|
63
|
Share-based payments
|
|
161
|
97
|
(22)
|
Net operating charge for pensions
and other post-retirement benefits, less contributions and benefit
payments for unfunded plans
|
|
(32)
|
(63)
|
(43)
|
Net charge for provisions, less
payments
|
|
(683)
|
(819)
|
(1,099)
|
Movements in inventories and other
current and non-current assets and liabilities
|
|
(2,131)
|
1,942
|
(3,755)
|
Income taxes paid
|
|
(1,904)
|
(2,303)
|
(3,155)
|
Net cash provided by operating
activities
|
|
5,009
|
9,377
|
7,622
|
Investing activities
|
|
|
|
|
Expenditure on property, plant and
equipment, intangible and other assets
|
|
(3,718)
|
(4,247)
|
(3,129)
|
Acquisitions, net of cash
acquired
|
|
(106)
|
(38)
|
52
|
Investment in joint
ventures
|
|
(353)
|
(347)
|
(540)
|
Investment in associates
|
|
(101)
|
(79)
|
(8)
|
Total cash capital
expenditure
|
|
(4,278)
|
(4,711)
|
(3,625)
|
Proceeds from disposal of fixed
assets
|
|
66
|
31
|
15
|
Proceeds from disposal of
businesses, net of cash disposed
|
|
347
|
269
|
785
|
Proceeds from loan
repayments
|
|
16
|
16
|
6
|
Cash provided from investing
activities
|
|
429
|
316
|
806
|
Net cash used in investing
activities
|
|
(3,849)
|
(4,395)
|
(2,819)
|
Financing activities
|
|
|
|
|
Net issue (repurchase) of shares
(Note 7)
|
|
(1,750)
|
(1,350)
|
(2,448)
|
Lease liability payments
|
|
(694)
|
(722)
|
(555)
|
Proceeds from long-term
financing
|
|
2,259
|
1,522
|
2,395
|
Repayments of long-term
financing
|
|
(674)
|
(11)
|
(799)
|
Net increase (decrease) in
short-term debt
|
|
16
|
87
|
(529)
|
Issue of perpetual hybrid
bonds(a)
|
|
1,296
|
13
|
45
|
Redemption of perpetual hybrid
bonds(a)
|
|
(1,288)
|
-
|
-
|
Payments relating to perpetual
hybrid bonds
|
|
(256)
|
(264)
|
(236)
|
Payments relating to transactions
involving non-controlling interests (Other interest)
|
|
-
|
(7)
|
(180)
|
Receipts relating to transactions
involving non-controlling interests (Other interest)
|
|
16
|
10
|
7
|
Dividends paid - bp
shareholders
|
|
(1,219)
|
(1,224)
|
(1,183)
|
- non-controlling
interests
|
|
(126)
|
(77)
|
(68)
|
Net cash provided by (used in)
financing activities
|
|
(2,420)
|
(2,023)
|
(3,551)
|
Currency translation differences
relating to cash and cash equivalents
|
|
(260)
|
145
|
(14)
|
Increase (decrease) in cash and cash
equivalents
|
|
(1,520)
|
3,104
|
1,238
|
Cash and cash equivalents at
beginning of period
|
|
33,030
|
29,926
|
29,195
|
Cash and cash equivalents at end of
period
|
|
31,510
|
33,030
|
30,433
|
(a)
See Condensed group statement of changes in equity - footnote (a) for further
information.
Top of page
20
Notes
Note 1. Basis of
preparation
The interim financial information
included in this report has been prepared in accordance with IAS 34
'Interim Financial Reporting'.
The results for the interim periods
are unaudited and, in the opinion of management, include all
adjustments necessary for a fair presentation of the results for
each period. All such adjustments are of a normal recurring nature.
This report should be read in conjunction with the consolidated
financial statements and related notes for the year ended
31 December 2023 included in bp Annual Report and Form 20-F 2023.
bp prepares its consolidated
financial statements included within bp Annual Report and Form 20-F
on the basis of International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB),
IFRS as adopted by the UK, and European Union (EU), and in
accordance with the provisions of the UK Companies Act 2006 as
applicable to companies reporting under international accounting
standards. IFRS as adopted by the UK does not differ from IFRS as
adopted by the EU. IFRS as adopted by the UK and EU differ in
certain respects from IFRS as issued by the IASB. The differences
have no impact on the group's consolidated financial statements for
the periods presented. The financial information presented herein
has been prepared in accordance with the accounting policies
expected to be used in preparing bp Annual Report and Form 20-F
2024 which are the same as those used in preparing bp Annual Report
and Form 20-F 2023.
There are no other new or amended
standards or interpretations adopted from 1 January 2024 onwards
that have a significant impact on the financial
information.
Significant accounting judgements and
estimates
bp's significant accounting
judgements and estimates were disclosed in bp Annual Report and Form 20-F 2023.
These have been subsequently considered at the end of this quarter
to determine if any changes were required to those judgements and
estimates. No significant changes were identified.
Note 2. Non-current assets held for
sale
The carrying amount of assets
classified as held for sale at 31 March 2024 is $1,684 million, with associated liabilities of
$30 million. These relate to the
transactions described below.
On 14 February 2024, bp and ADNOC
announced that they had agreed to form a new joint venture (JV) in
Egypt (51% bp and 49% ADNOC). As part of the agreement, bp will
contribute its interests in three development concessions, as well
as exploration agreements, in Egypt to the new JV. ADNOC will make
a proportionate cash contribution. Subject to regulatory approvals
and clearances, the formation of the JV is expected to complete
during the second half of 2024. The carrying amount of assets
classified as held for sale at 31 March 2024 is $1,583 million, with associated liabilities
of $23 million.
On 16 November 2023, bp entered into
an agreement to sell its Türkiye ground fuels business to Petrol
Ofisi. This includes the group's interest in three joint venture
terminals in Türkiye. Completion of the sale is subject to
regulatory approvals. The carrying amount of assets classified as
held for sale at 31 March 2024 is $101 million, with associated
liabilities of $7 million. Cumulative foreign exchange losses
within reserves of approximately $900
million are expected to be recycled to the group income
statement at completion.
Note 3. Impairment and losses on
sale of businesses and fixed assets
Net impairment charges and losses on
sale of businesses and fixed assets for the first quarter were
$737 million, compared with net charges of $88 million
for the same period in 2023 and include net impairment charges for
the first quarter of $649 million, compared with net
impairment reversals of $41 million for the same period in
2023.
Top of page
21
Note 4. Analysis of replacement cost
profit (loss) before interest and tax and reconciliation to profit
(loss) before taxation
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
gas & low carbon
energy
|
|
1,036
|
2,169
|
7,347
|
oil production &
operations
|
|
3,060
|
1,879
|
3,317
|
customers & products
|
|
988
|
(554)
|
2,680
|
other businesses &
corporate
|
|
(300)
|
(16)
|
(90)
|
|
|
4,784
|
3,478
|
13,254
|
Consolidation
adjustment - UPII*
|
|
32
|
95
|
(22)
|
RC profit (loss) before interest and
tax
|
|
4,816
|
3,573
|
13,232
|
Inventory holding gains
(losses)*
|
|
|
|
|
gas & low carbon
energy
|
|
-
|
-
|
1
|
oil production &
operations
|
|
(1)
|
-
|
1
|
customers & products
|
|
852
|
(1,497)
|
(602)
|
Profit (loss) before interest and
tax
|
|
5,667
|
2,076
|
12,632
|
Finance costs
|
|
1,075
|
1,038
|
843
|
Net finance expense/(income)
relating to pensions and other post-retirement benefits
|
|
(41)
|
(61)
|
(58)
|
Profit (loss) before
taxation
|
|
4,633
|
1,099
|
11,847
|
|
|
|
|
|
RC
profit (loss) before interest and tax*
|
|
|
|
|
US
|
|
1,610
|
1,154
|
3,075
|
Non-US
|
|
3,206
|
2,419
|
10,157
|
|
|
4,816
|
3,573
|
13,232
|
Top of page
22
Note 5. Sales and other operating
revenues
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
By
segment
|
|
|
|
|
gas & low carbon
energy
|
|
8,675
|
11,670
|
17,886
|
oil production &
operations
|
|
6,432
|
6,749
|
6,153
|
customers & products
|
|
39,895
|
40,374
|
38,882
|
other businesses &
corporate
|
|
606
|
657
|
738
|
|
|
55,608
|
59,450
|
63,659
|
|
|
|
|
|
Less: sales and other operating
revenues between segments
|
|
|
|
|
gas & low carbon
energy
|
|
270
|
65
|
536
|
oil production &
operations
|
|
5,913
|
6,464
|
6,261
|
customers & products
|
|
293
|
(105)
|
144
|
other businesses &
corporate
|
|
252
|
885
|
536
|
|
|
6,728
|
7,309
|
7,477
|
|
|
|
|
|
External sales and other operating
revenues
|
|
|
|
|
gas & low carbon
energy
|
|
8,405
|
11,605
|
17,350
|
oil production &
operations
|
|
519
|
285
|
(108)
|
customers & products
|
|
39,602
|
40,479
|
38,738
|
other businesses &
corporate
|
|
354
|
(228)
|
202
|
Total sales and other operating
revenues
|
|
48,880
|
52,141
|
56,182
|
|
|
|
|
|
By
geographical area
|
|
|
|
|
US
|
|
19,858
|
20,920
|
19,160
|
Non-US
|
|
39,208
|
40,808
|
46,350
|
|
|
59,066
|
61,728
|
65,510
|
Less: sales and other operating
revenues between areas
|
|
10,186
|
9,587
|
9,328
|
|
|
48,880
|
52,141
|
56,182
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
Sales and other operating revenues
include the following in relation to revenues from contracts with
customers:
|
|
|
|
|
Crude oil
|
|
548
|
760
|
637
|
Oil products
|
|
29,840
|
32,124
|
30,141
|
Natural gas, LNG and NGLs
|
|
5,751
|
7,660
|
9,644
|
Non-oil products and other revenues
from contracts with customers
|
|
2,928
|
2,911
|
1,872
|
Revenue from contracts with
customers
|
|
39,067
|
43,455
|
42,294
|
Other operating
revenues(a)
|
|
9,813
|
8,686
|
13,888
|
Total sales and other operating
revenues
|
|
48,880
|
52,141
|
56,182
|
(a)
Principally relates to commodity derivative transactions including
sales of bp own production in trading books.
Top of page
23
Note 6. Depreciation, depletion and
amortization
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
gas & low carbon
energy
|
|
1,293
|
1,290
|
1,440
|
oil production &
operations
|
|
1,657
|
1,563
|
1,327
|
customers & products
|
|
944
|
942
|
797
|
other businesses &
corporate
|
|
256
|
265
|
236
|
|
|
4,150
|
4,060
|
3,800
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
US
|
|
1,570
|
1,547
|
1,254
|
Non-US
|
|
2,580
|
2,513
|
2,546
|
|
|
4,150
|
4,060
|
3,800
|
Note 7. Earnings per share and
shares in issue
Basic earnings per ordinary share
(EpS) amounts are calculated by dividing the profit (loss) for the
period attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
Against the authority granted at bp's 2023 annual general meeting,
292 million ordinary shares repurchased for cancellation were
settled during the first quarter 2024 for a total cost of
$1,750 million. A further 115 million ordinary shares
were repurchased between the end of the reporting period and the
date when the financial statements are authorised for issue for a
total cost of $747 million. This amount has been accrued at 31
March 2024. The number of shares in issue is reduced when shares
are repurchased, but is not reduced in respect of the period-end
commitment to repurchase shares subsequent to the end of the
period.
The calculation of EpS is performed
separately for each discrete quarterly period, and for the
year-to-date period. As a result, the sum of the discrete quarterly
EpS amounts in any particular year-to-date period may not be equal
to the EpS amount for the year-to-date period.
For the diluted EpS calculation the
weighted average number of shares outstanding during the period is
adjusted for the number of shares that are potentially issuable in
connection with employee share-based payment plans using the
treasury stock method.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Results for the period
|
|
|
|
|
Profit (loss) for the period
attributable to bp shareholders
|
|
2,263
|
371
|
8,218
|
Less: preference dividend
|
|
-
|
-
|
-
|
Less: (gain) loss on redemption of
perpetual hybrid bonds(a)
|
|
(10)
|
-
|
-
|
Profit (loss) attributable to bp
ordinary shareholders
|
|
2,273
|
371
|
8,218
|
|
|
|
|
|
Number of shares (thousand)(b)
|
|
|
|
|
Basic weighted average number of
shares outstanding
|
|
16,751,887
|
16,834,354
|
17,891,455
|
ADS
equivalent(c)
|
|
2,791,981
|
2,805,725
|
2,981,909
|
|
|
|
|
|
Weighted average number of shares
outstanding used to calculate diluted earnings per share
|
|
17,153,505
|
17,269,574
|
18,238,522
|
ADS
equivalent(c)
|
|
2,858,917
|
2,878,262
|
3,039,753
|
|
|
|
|
|
Shares in issue at
period-end
|
|
16,687,850
|
16,824,651
|
17,703,285
|
ADS
equivalent(c)
|
|
2,781,308
|
2,804,108
|
2,950,547
|
(a)
See Condensed group statement of changes in equity - footnote (a) for further
information.
(b) Excludes
treasury shares and includes certain shares that will be issued in
the future under employee share-based payment plans.
(c)
One ADS is equivalent to six ordinary shares.
Top of page
24
Note 8. Dividends
Dividends payable
bp today announced an interim
dividend of 7.270 cents per ordinary share
which is expected to be paid on 28 June 2024 to
ordinary shareholders and American Depositary Share (ADS) holders
on the register on 17 May 2024. The ex-dividend date will be 16 May
2024. The corresponding amount in sterling is due to be announced
on 11 June 2024, calculated based on the average of the market
exchange rates over three dealing days between 5 June 2024 and 7
June 2024. Holders of ADSs are expected to receive $0.43620 per ADS
(less applicable fees). The board has decided not to offer a scrip
dividend alternative in respect of the first quarter 2024 dividend.
Ordinary shareholders and ADS holders (subject to certain
exceptions) will be able to participate in a dividend reinvestment
programme. Details of the first quarter dividend and timetable are
available at bp.com/dividends and further details
of the dividend reinvestment programmes are available at
bp.com/drip.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
Dividends paid per ordinary share
|
|
|
|
|
cents
|
|
7.270
|
7.270
|
6.610
|
pence
|
|
5.692
|
5.737
|
5.551
|
Dividends paid per ADS
(cents)
|
|
43.62
|
43.62
|
39.66
|
Note 9. Net debt
Net
debt*
|
|
31 March
|
31 December
|
31 March
|
$
million
|
|
2024
|
2023
|
2023
|
Finance
debt(a)
|
|
53,013
|
51,954
|
48,595
|
Fair value (asset) liability of
hedges related to finance debt(b)
|
|
2,512
|
1,988
|
3,070
|
|
|
55,525
|
53,942
|
51,665
|
Less: cash and cash
equivalents
|
|
31,510
|
33,030
|
30,433
|
Net debt(c)
|
|
24,015
|
20,912
|
21,232
|
Total equity
|
|
84,940
|
85,493
|
87,181
|
Gearing*
|
|
22.0%
|
19.7%
|
19.6%
|
(a)
The fair value of finance debt at 31 March
2024 was $49,263 million
(31 December 2023 $48,795 million, 31 March 2023
$45,071 million).
(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 $96 million at 31 March
2024 (fourth quarter 2023 liability of $73 million and first
quarter 2023 liability of
$97 million) are not included in the
calculation of net debt shown above as hedge accounting is not
applied for these instruments.
(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 6
May 2024, is unaudited and does not constitute statutory financial
statements. Audited financial information will be published in
bp Annual Report and Form 20-F
2024. bp Annual Report and Form 20-F
2023 has been filed with the
Registrar of Companies in England and Wales. The report of the
auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and did not contain a
statement under section 498(2) or section 498(3) of the UK
Companies Act 2006.
Top of page
25
Additional information
Capital expenditure*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Capital expenditure
|
|
|
|
|
Organic capital
expenditure*
|
|
3,979
|
4,673
|
3,495
|
Inorganic capital
expenditure*
|
|
299
|
38
|
130
|
|
|
4,278
|
4,711
|
3,625
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Capital expenditure by segment
|
|
|
|
|
gas & low carbon
energy
|
|
1,298
|
1,326
|
1,013
|
oil production &
operations
|
|
1,776
|
1,636
|
1,520
|
customers & products
|
|
1,120
|
1,603
|
990
|
other businesses &
corporate
|
|
84
|
146
|
102
|
|
|
4,278
|
4,711
|
3,625
|
Capital expenditure by geographical area
|
|
|
|
|
US
|
|
1,776
|
2,164
|
1,697
|
Non-US
|
|
2,502
|
2,547
|
1,928
|
|
|
4,278
|
4,711
|
3,625
|
Top of page
26
Adjusting items*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
gas
& low carbon energy
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
2
|
3
|
15
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(536)
|
(937)
|
(2)
|
Environmental and other
provisions
|
|
-
|
-
|
-
|
Restructuring, integration and
rationalization costs
|
|
-
|
-
|
-
|
Fair value accounting
effects(a)(b)
|
|
113
|
1,887
|
3,934
|
Other(c)
|
|
(201)
|
(561)
|
(56)
|
|
|
(622)
|
392
|
3,891
|
oil
production & operations
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
184
|
(55)
|
137
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(120)
|
(1,635)
|
8
|
Environmental and other
provisions
|
|
(77)
|
48
|
(49)
|
Restructuring, integration and
rationalization costs
|
|
-
|
-
|
-
|
Fair value accounting
effects
|
|
-
|
-
|
-
|
Other
|
|
(52)
|
(28)
|
(98)
|
|
|
(65)
|
(1,670)
|
(2)
|
customers & products
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
5
|
23
|
1
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
(96)
|
(1,396)
|
(83)
|
Environmental and other
provisions
|
|
-
|
(86)
|
(10)
|
Restructuring, integration and
rationalization costs
|
|
1
|
-
|
(2)
|
Fair value accounting
effects(b)
|
|
(144)
|
144
|
77
|
Other
|
|
(67)
|
(42)
|
(62)
|
|
|
(301)
|
(1,357)
|
(79)
|
other businesses & corporate
|
|
|
|
|
Gains on sale of businesses and
fixed assets
|
|
32
|
1
|
-
|
Net impairment and losses on sale of
businesses and fixed assets
|
|
26
|
19
|
(6)
|
Environmental and other
provisions(d)
|
|
(9)
|
(565)
|
(14)
|
Restructuring, integration and
rationalization costs
|
|
11
|
51
|
(10)
|
Fair value accounting
effects(b)
|
|
(193)
|
579
|
245
|
Gulf of Mexico oil spill
|
|
(11)
|
(11)
|
(9)
|
Other
|
|
(2)
|
7
|
-
|
|
|
(146)
|
81
|
206
|
Total before interest and
taxation
|
|
(1,134)
|
(2,554)
|
4,016
|
Finance
costs(e)
|
|
(92)
|
(86)
|
(104)
|
Total before taxation
|
|
(1,226)
|
(2,640)
|
3,912
|
Taxation on adjusting
items(f)
|
|
109
|
1,175
|
(205)
|
Total after taxation for
period
|
|
(1,117)
|
(1,465)
|
3,707
|
(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 31.
(c)
Fourth quarter 2023 includes $600 million of impairment charges
recognized through equity-accounted earnings relating to our US
offshore wind projects.
(d) Fourth
quarter 2023 includes charges related to the control, abatement,
clean-up or elimination of environmental pollution and legal
settlements.
(e)
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.
(f) Includes certain
foreign exchange effects on tax as adjusting items. These amounts
represent the impact of: (i) foreign exchange on deferred tax
balances arising from the conversion of local currency tax base
amounts into functional currency, and (ii) taxable gains and losses
from the retranslation of US dollar-denominated intra-group loans
to local currency.
Top of page
27
Net debt including leases
Net
debt including leases*
|
|
31 March
|
31 December
|
31 March
|
$
million
|
|
2024
|
2023
|
2023
|
Net debt
|
|
24,015
|
20,912
|
21,232
|
Lease liabilities
|
|
11,057
|
11,121
|
8,605
|
Net partner (receivable) payable for
leases entered into on behalf of joint operations
|
|
(130)
|
(131)
|
19
|
Net debt including leases
|
|
34,942
|
31,902
|
29,856
|
Total equity
|
|
84,940
|
85,493
|
87,181
|
Gearing including leases*
|
|
29.1%
|
27.2%
|
25.5%
|
Gulf of Mexico oil spill
|
|
31 March
|
31 December
|
$
million
|
|
2024
|
2023
|
Gulf of Mexico oil spill payables
and provisions
|
|
(8,826)
|
(8,735)
|
Of which - current
|
|
(1,138)
|
(1,133)
|
|
|
|
|
Deferred tax asset
|
|
1,334
|
1,320
|
Payables and provisions presented in
the table above reflect the latest estimate for the remaining costs
associated with the Gulf of Mexico oil spill. Where amounts have
been provided on an estimated basis, the amounts ultimately payable
may differ from the amounts provided and the timing of payments is
uncertain. Further information relating to the Gulf of Mexico oil
spill, including information on the nature and expected timing of
payments relating to provisions and other payables, is provided in
bp Annual Report and Form 20-F
2023 - Financial statements - Notes 7, 22, 23, 29, and
33.
Working capital*
reconciliation
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Movements in inventories and other
current and non-current assets and liabilities as per condensed
group cash flow statement(a)
|
|
(2,131)
|
1,942
|
(3,755)
|
Adjusted for inventory holding gains
(losses)* (Note 4)
|
|
851
|
(1,497)
|
(600)
|
Adjusted for fair value accounting
effects* relating to subsidiaries
|
|
(274)
|
2,610
|
4,242
|
Other adjusting
items(b)
|
|
(834)
|
(966)
|
(1,298)
|
Working capital release (build)
after adjusting for net inventory gains (losses), fair value
accounting effects and other adjusting items
|
|
(2,388)
|
2,089
|
(1,411)
|
(a)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis of $7 million in the first quarter
2024 (fourth quarter 2023 nil, first quarter 2023 $12 million).
(b) Other
adjusting items relate to the non-cash movement of US emissions
obligations carried as a provision that will be settled by
allowances held as inventory.
Top of page
28
Adjusted earnings before interest,
taxation, depreciation and amortization (adjusted
EBITDA)*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
Profit for the period
|
|
2,409
|
436
|
8,422
|
Finance costs
|
|
1,075
|
1,038
|
843
|
Net finance (income) expense
relating to pensions and other post-retirement benefits
|
|
(41)
|
(61)
|
(58)
|
Taxation
|
|
2,224
|
663
|
3,425
|
Profit before interest and
tax
|
|
5,667
|
2,076
|
12,632
|
Inventory holding (gains) losses*,
before tax
|
|
(851)
|
1,497
|
600
|
RC profit before interest and
tax
|
|
4,816
|
3,573
|
13,232
|
Net (favourable) adverse impact of
adjusting items*, before interest and tax
|
|
1,134
|
2,554
|
(4,016)
|
Underlying RC profit before interest
and tax
|
|
5,950
|
6,127
|
9,216
|
Add back:
|
|
|
|
|
Depreciation, depletion and
amortization
|
|
4,150
|
4,060
|
3,800
|
Exploration expenditure written
off
|
|
206
|
381
|
50
|
Adjusted EBITDA
|
|
10,306
|
10,568
|
13,066
|
Reconciliation of customers &
products RC profit before interest and tax to underlying RC profit
before interest and tax* to adjusted EBITDA* by business
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$
million
|
|
2024
|
2023
|
2023
|
RC profit before interest and
tax for customers & products
|
|
988
|
(554)
|
2,680
|
Less: Adjusting items* gains
(charges)
|
|
(301)
|
(1,357)
|
(79)
|
Underlying RC profit before interest
and tax for customers & products
|
|
1,289
|
803
|
2,759
|
By business:
|
|
|
|
|
customers - convenience &
mobility
|
|
370
|
882
|
391
|
Castrol - included in customers
|
|
184
|
213
|
161
|
products - refining &
trading
|
|
919
|
(79)
|
2,368
|
|
|
|
|
|
Add back: Depreciation, depletion
and amortization
|
|
944
|
942
|
797
|
By business:
|
|
|
|
|
customers - convenience &
mobility
|
|
484
|
466
|
341
|
Castrol - included in customers
|
|
42
|
43
|
39
|
products - refining &
trading
|
|
460
|
476
|
456
|
|
|
|
|
|
Adjusted EBITDA for customers
& products
|
|
2,233
|
1,745
|
3,556
|
By business:
|
|
|
|
|
customers - convenience &
mobility
|
|
854
|
1,348
|
732
|
Castrol - included in customers
|
|
226
|
256
|
200
|
products - refining &
trading
|
|
1,379
|
397
|
2,824
|
Top of page
29
Realizations* and marker
prices
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
Average realizations(a)
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
US
|
|
62.20
|
67.66
|
62.66
|
Europe
|
|
85.00
|
81.02
|
79.26
|
Rest of World
|
|
79.83
|
87.27
|
82.55
|
bp average
|
|
71.24
|
76.50
|
72.58
|
Natural gas ($/mcf)
|
|
|
|
|
US
|
|
1.69
|
2.04
|
2.47
|
Europe
|
|
10.27
|
15.12
|
26.83
|
Rest of World
|
|
5.45
|
6.18
|
7.41
|
bp average
|
|
4.62
|
5.45
|
7.20
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
US
|
|
41.50
|
45.68
|
45.00
|
Europe
|
|
76.65
|
83.21
|
107.07
|
Rest of World
|
|
46.61
|
50.74
|
54.63
|
bp average
|
|
46.42
|
50.90
|
54.96
|
Average oil marker prices ($/bbl)
|
|
|
|
|
Brent
|
|
83.16
|
84.34
|
81.17
|
West Texas Intermediate
|
|
77.01
|
78.60
|
75.97
|
Western Canadian Select
|
|
59.45
|
55.06
|
56.67
|
Alaska North Slope
|
|
81.33
|
84.23
|
79.02
|
Mars
|
|
76.90
|
78.35
|
74.24
|
Urals (NWE - cif)
|
|
68.34
|
72.48
|
46.19
|
Average natural gas marker prices
|
|
|
|
|
Henry Hub gas price(b)
($/mmBtu)
|
|
2.25
|
2.88
|
3.44
|
UK Gas - National Balancing Point
(p/therm)
|
|
68.72
|
98.68
|
130.81
|
(a)
Based on sales of consolidated subsidiaries only
- this excludes
equity-accounted entities.
(b) Henry
Hub First of Month Index.
Exchange rates
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2024
|
2023
|
2023
|
$/£ average rate for the
period
|
|
1.27
|
1.24
|
1.21
|
$/£ period-end rate
|
|
1.26
|
1.28
|
1.24
|
|
|
|
|
|
$/€ average rate for the
period
|
|
1.09
|
1.07
|
1.07
|
$/€ period-end rate
|
|
1.08
|
1.11
|
1.09
|
|
|
|
|
|
$/AUD average rate for the
period
|
|
0.66
|
0.65
|
0.68
|
$/AUD period-end rate
|
|
0.65
|
0.69
|
0.67
|
|
|
|
|
|
Top of page
30
Legal proceedings
For a full discussion of the group's
material legal proceedings, see pages
242-243 of bp Annual
Report and Form 20-F 2023.
Glossary
Non-IFRS measures are provided for
investors because they are closely tracked by management to
evaluate bp's operating performance and to make financial,
strategic and operating decisions. Non-IFRS measures are sometimes
referred to as alternative performance measures.
Adjusted EBITDA is a non-IFRS
measure presented for bp's operating segments and is defined as
replacement cost (RC) profit before interest and tax, excluding net
adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs
(net of adjusting items). Adjusted EBITDA by business is a further
analysis of adjusted EBITDA for the customers & products
businesses. bp believes it is helpful to disclose adjusted EBITDA
by operating segment and by business because it reflects how the
segments measure underlying business delivery. The nearest
equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or
loss that is required to be disclosed for each operating segment
under IFRS. A reconciliation to IFRS
information is provided on page 28 for the
customers & products businesses.
Adjusted EBITDA for the group is
defined as profit or loss for the period, adjusting for finance
costs and net finance (income) or expense relating to pensions and
other post-retirement benefits and taxation, inventory holding
gains or losses before tax, net adjusting items before interest and
tax, and adding back depreciation, depletion and amortization
(pre-tax) and exploration expenditure written-off (net of adjusting
items, pre-tax). The nearest equivalent measure on an IFRS basis
for the group is profit or loss for the period. A reconciliation to IFRS information is provided on
page 28 for the group.
Adjusting items are items that
bp discloses separately because it considers such disclosures to be
meaningful and relevant to investors. They are items that
management considers to be important to period-on-period analysis
of the group's results and are disclosed in order to enable
investors to better understand and evaluate the group's reported
financial performance. Adjusting items include gains and losses on
the sale of businesses and fixed assets, impairments, environmental
and other provisions and charges, restructuring, integration and
rationalization costs, fair value accounting effects and costs
relating to the Gulf of Mexico oil spill and other items. Adjusting
items within equity-accounted earnings are reported net of
incremental income tax reported by the equity-accounted entity.
Adjusting items are used as a reconciling adjustment to derive
underlying RC profit or loss and related underlying measures which
are non-IFRS measures. An analysis of adjusting items by segment
and type is shown on page
26.
Blue hydrogen - Hydrogen made
from natural gas in combination with carbon capture and storage
(CCS).
Capital expenditure is total
cash capital expenditure as stated in the condensed group cash flow
statement. Capital expenditure for the operating segments, gas
& low carbon energy businesses and customers & products
businesses is presented on the same basis.
Cash balance point is
defined as the implied Brent oil price 2021 real
to balance bp's sources and uses of cash assuming an average bp
refining marker margin around $11/bbl and Henry Hub at $3/mmBtu in
2021 real terms.
Cash costs is a non-IFRS
measure and a subset of production and manufacturing expenses plus
distribution and administration expenses and excludes costs that
are classified as adjusting items. They represent the substantial
majority of the remaining expenses in these line items but exclude
certain costs that are variable, primarily with volumes (such as
freight costs). Management believes that cash costs is a
performance measure that provides investors with useful information
regarding the company's financial performance because it considers
these expenses to be the principal operating and overhead expenses
that are most directly under their control although they also
include certain foreign exchange and commodity price
effects.
Consolidation adjustment - UPII is unrealized profit in inventory arising on inter-segment
transactions.
Developed renewables to final investment decision
(FID) - Total generating capacity
for assets developed to FID by all entities where bp has an equity
share (proportionate to equity share at the time of FID). If asset
is subsequently sold bp will continue to record capacity as
developed to FID.
Divestment proceeds are
disposal proceeds as per the condensed group cash flow
statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-IFRS measure. The ETR
on RC profit or loss is calculated by dividing taxation on a RC
basis by RC profit or loss before tax. Taxation on a RC basis for
the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and
losses. Information on RC profit or loss is provided below. bp
believes it is helpful to disclose the ETR on RC profit or loss
because this measure excludes the impact of price changes on the
replacement of inventories and allows for more meaningful
comparisons between reporting periods. Taxation on a RC basis and
ETR on RC profit or loss are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss
for the period.
Electric vehicle charge points / EV charge
points are defined as the number of
connectors on a charging device, operated by either bp or a bp
joint venture as adjusted to be reflective of bp's accounting share
of joint arrangements.
Top of page
31
Glossary (continued)
Fair value accounting effects are non-IFRS adjustments to our IFRS profit (loss). They
reflect the difference between the way bp manages the economic
exposure and internally measures performance of certain activities
and the way those activities are measured under IFRS. Fair value
accounting effects are included within adjusting items. They relate
to certain of the group's commodity, interest rate and currency
risk exposures as detailed below. Other than as noted below, the
fair value accounting effects described are reported in both the
gas & low carbon energy and customer & products
segments.
bp uses derivative instruments to
manage the economic exposure relating to inventories above normal
operating requirements of crude oil, natural gas and petroleum
products. Under IFRS, these inventories are recorded at historical
cost. The related derivative instruments, however, are required to
be recorded at fair value with gains and losses recognized in the
income statement. This is because hedge accounting is either not
permitted or not followed, principally due to the impracticality of
effectiveness-testing requirements. Therefore, measurement
differences in relation to recognition of gains and losses occur.
Gains and losses on these inventories, other than net realizable
value provisions, are not recognized until the commodity is sold in
a subsequent accounting period. Gains and losses on the related
derivative commodity contracts are recognized in the income
statement, from the time the derivative commodity contract is
entered into, on a fair value basis using forward prices consistent
with the contract maturity.
bp enters into physical commodity
contracts to meet certain business requirements, such as the
purchase of crude for a refinery or the sale of bp's gas
production. Under IFRS these physical contracts are treated as
derivatives and are required to be fair valued when they are
managed as part of a larger portfolio of similar transactions.
Gains and losses arising are recognized in the income statement
from the time the derivative commodity contract is entered
into.
IFRS require that inventory held for
trading is recorded at its fair value using period-end spot prices,
whereas any related derivative commodity instruments are required
to be recorded at values based on forward prices consistent with
the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices,
resulting in measurement differences.
bp enters into contracts for
pipelines and other transportation, storage capacity, oil and gas
processing, liquefied natural gas (LNG) and certain gas and power
contracts that, under IFRS, are recorded on an accruals basis.
These contracts are risk-managed using a variety of derivative
instruments that are fair valued under IFRS. This results in
measurement differences in relation to recognition of gains and
losses.
The way that bp manages the economic
exposures described above, and measures performance internally,
differs from the way these activities are measured under IFRS. bp
calculates this difference for consolidated entities by comparing
the IFRS result with management's internal measure of performance.
We believe that disclosing management's estimate of this difference
provides useful information for investors because it enables
investors to see the economic effect of these activities as a
whole.
These include:
•
Under management's internal measure of performance the inventory,
transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end
of the period.
• Fair
value accounting effects also include changes in the fair value of
the near-term portions of LNG contracts that fall within bp's risk
management framework. LNG contracts are not considered derivatives,
because there is insufficient market liquidity, and they are
therefore accrual accounted under IFRS. However, oil and natural
gas derivative financial instruments used to risk manage the
near-term portions of the LNG contracts are fair valued under IFRS.
The fair value accounting effect, which is reported in the gas and
low carbon energy segment, represents the change in value of LNG
contacts that are being risk managed and which is reflected in the
underlying result, but not in reported earnings. Management
believes that this gives a better representation of performance in
each period.
Furthermore, the fair values of
derivative instruments used to risk manage certain other oil, gas,
power and other contracts, are deferred to match with the
underlying exposure. The commodity contracts for business
requirements are accounted for on an accruals basis.
In addition, fair value accounting
effects include changes in the fair value of derivatives entered
into by the group to manage currency exposure and interest rate
risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which were issued on 17 June 2020
are classified as equity instruments and were recorded in the
balance sheet at that date at their USD equivalent issued value.
Under IFRS these equity instruments are not remeasured from period
to period, and do not qualify for application of hedge accounting.
The derivative instruments relating to the hybrid bonds, however,
are required to be recorded at fair value with mark to market gains
and losses recognized in the income statement. Therefore,
measurement differences in relation to the recognition of gains and
losses occur. The fair value accounting effect, which is reported
in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial
instruments that are recognized in the income statement. We
believe that this gives a better representation of performance, by
more appropriately reflecting the economic effect of these risk
management activities, in each period.
Gas
& low carbon energy segment
comprises our gas and low carbon businesses. Our gas business
includes regions with upstream activities that predominantly
produce natural gas, integrated gas and power, and gas trading. Our
low carbon business includes solar, offshore and onshore wind,
hydrogen and CCS and power trading. Power trading includes trading
of both renewable and non-renewable power.
Top of page
32
Glossary (continued)
Gearing and net debt are
non-IFRS measures. Net debt is calculated as finance debt, as shown
in the balance sheet, plus the fair value of associated derivative
financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for
which hedge accounting is applied, less cash and cash equivalents.
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement. Gearing is defined as
the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors.
Net debt enables investors to see the economic effect of finance
debt, related hedges and cash and cash equivalents in total.
Gearing enables investors to see how significant net debt is
relative to total equity. The derivatives are reported on the
balance sheet within the headings 'Derivative financial
instruments'. The nearest equivalent measures on an IFRS basis are
finance debt and finance debt ratio. A reconciliation of finance
debt to net debt is provided on page
24.
We are unable to present
reconciliations of forward-looking information for net debt or
gearing to finance debt and total equity, because without
unreasonable efforts, we are unable to forecast accurately certain
adjusting items required to present a meaningful comparable IFRS
forward-looking financial measure. These items include fair value
asset (liability) of hedges related to finance debt and cash and
cash equivalents, that are difficult to predict in advance in order
to include in an IFRS estimate.
Gearing including leases and net debt including
leases are non-IFRS measures. Net
debt including leases is calculated as net debt plus lease
liabilities, less the net amount of partner receivables and
payables relating to leases entered into on behalf of joint
operations. Gearing including leases is defined as the ratio of net
debt including leases to the total of net debt including leases
plus total equity. bp believes these measures provide useful
information to investors as they enable investors to understand the
impact of the group's lease portfolio on net debt and gearing. The
nearest equivalent measures on an IFRS basis are finance debt and
finance debt ratio. A reconciliation of finance debt to net debt
including leases is provided on page
27.
Green hydrogen - Hydrogen
produced by electrolysis of water using renewable power.
Hydrocarbons - Liquids and
natural gas. Natural gas is converted to oil equivalent at 5.8
billion cubic feet = 1 million barrels.
Hydrogen pipeline - Hydrogen
projects which have not been developed to final investment decision
(FID) but which have advanced to the concept development
stage.
Inorganic capital expenditure is
a subset of capital expenditure on a cash basis and a non-IFRS
measure. Inorganic capital expenditure comprises consideration in
business combinations and certain other significant investments
made by the group. It is reported on a cash basis. bp believes that
this measure provides useful information as it allows investors to
understand how bp's management invests funds in projects which
expand the group's activities through acquisition. The nearest
equivalent measure on an IFRS basis is capital expenditure on a
cash basis. Further information and a reconciliation to IFRS
information is provided on page
25.
Installed renewables capacity is bp's share of capacity for operating assets owned by
entities where bp has an equity share.
Inventory holding gains and losses are non-IFRS adjustments to our IFRS profit (loss) and
represent:
• the
difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
• an
adjustment relating to certain trading inventories that are not
price risk managed which relate to a minimum inventory volume that
is required to be held to maintain underlying business activities.
This adjustment represents the movement in fair value of the
inventories due to prices, on a grade by grade basis, during the
period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not
separately reflected in the financial statements as a gain or loss.
No adjustment is made in respect of the cost of inventories held as
part of a trading position and certain other temporary inventory
positions that are price risk-managed. See Replacement cost (RC)
profit or loss definition below.
Liquids - Liquids comprises
crude oil, condensate and natural gas liquids. For the oil
production & operations segment, it also includes
bitumen.
Low
carbon activity - An activity
relating to low carbon including: renewable electricity; bioenergy;
electric vehicles and other future mobility solutions; trading and
marketing low carbon products; blue or green hydrogen* and carbon
capture, use and storage (CCUS).
Note that, while there is some
overlap of activities, these terms do not mean the same as bp's
strategic focus area of low carbon energy or our low carbon energy
sub-segment, reported within the gas & low carbon energy
segment.
Top of page
33
Glossary (continued)
Major projects have a bp net
investment of at least $250 million, or are considered to be of
strategic importance to bp or of a high degree of
complexity.
Operating cash flow is net cash
provided by (used in) operating activities as stated in the
condensed group cash flow statement.
Organic capital expenditure is
a non-IFRS measure. Organic capital expenditure comprises capital
expenditure on a cash basis less inorganic capital expenditure. bp
believes that this measure provides useful information as it allows
investors to understand how bp's management invests funds in
developing and maintaining the group's assets. The nearest
equivalent measure on an IFRS basis is capital expenditure on a
cash basis and a reconciliation to IFRS information is provided on
page 25.
We are unable to present
reconciliations of forward-looking information for organic capital
expenditure to total cash capital expenditure, because without
unreasonable efforts, we are unable to forecast accurately the
adjusting item, inorganic capital expenditure, that is difficult to
predict in advance in order to derive the nearest IFRS
estimate.
Production-sharing agreement/contract (PSA/PSC)
is an arrangement through which an oil and gas
company bears the risks and costs of exploration, development and
production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of
hydrocarbons, representing recovery of the costs incurred and a
stipulated share of the production remaining after such cost
recovery.
Realizations are the result of
dividing revenue generated from hydrocarbon sales, excluding
revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes.
Revenue generating hydrocarbon production reflects the bp share of
production as adjusted for any production which does not generate
revenue. Adjustments may include losses due to shrinkage, amounts
consumed during processing, and contractual or regulatory host
committed volumes such as royalties. For the gas & low carbon
energy and oil production & operations segments, realizations
include transfers between businesses.
Refining availability represents Solomon Associates' operational availability for
bp-operated refineries, which is defined as the percentage of the
year that a unit is available for processing after subtracting the
annualized time lost due to turnaround activity and all planned
mechanical, process and regulatory downtime.
The Refining marker margin
(RMM) is the average of regional indicator margins
weighted for bp's crude refining capacity in each region. Each
regional marker margin is based on product yields and a marker
crude oil deemed appropriate for the region. The regional indicator
margins may not be representative of the margins achieved by bp in
any period because of bp's particular refinery configurations and
crude and product slate.
Renewables pipeline - Renewable
projects satisfying the following criteria until the point they can
be considered developed to final investment decision (FID): Site
based projects that have obtained land exclusivity rights, or for
power purchase agreement based projects an offer has been made to
the counterparty, or for auction projects pre-qualification
criteria has been met, or for acquisition projects post a binding
offer being accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of inventories sold in the
period and is calculated as profit or loss attributable to bp
shareholders, adjusting for inventory holding gains and losses (net
of tax). RC profit or loss for the group is not a recognized IFRS
measure. bp believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our
reported result under IFRS can be significant. Inventory holding
gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order
for investors to understand the operating performance of the group
excluding the impact of price changes on the replacement of
inventories, and to make comparisons of operating performance
between reporting periods, bp's management believes it is helpful
to disclose this measure. The nearest equivalent measure on an IFRS
basis is profit or loss attributable to bp shareholders. A
reconciliation to IFRS information is provided on
page 1. RC profit or loss before interest and tax is bp's measure of
profit or loss that is required to be disclosed for each operating
segment under IFRS.
Reported recordable injury frequency
measures the number of reported work-related
employee and contractor incidents that result in a fatality or
injury per 200,000 hours worked. This represents reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported incidents are investigated
throughout the year and as a result there may be changes in
previously reported incidents. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of
such investigations, rather than the previously reported
comparative period, as this represents a more up to date reflection
of the safety environment.
Retail sites include sites
operated by dealers, jobbers, franchisees or brand licensees or
joint venture (JV) partners, under the bp brand. These may move to
and from the bp brand as their fuel supply agreement or brand
licence agreement expires and are renegotiated in the normal course
of business. Retail sites are primarily branded bp, ARCO, Amoco, Aral, Thorntons and TravelCenters of America
and also includes sites in India through our Jio-bp JV.
Solomon availability - See
Refining availability definition.
Strategic convenience sites are
retail sites, within the bp portfolio, which sell bp-supplied
vehicle energy (e.g. bp,
Aral, Arco, Amoco, Thorntons, bp pulse, TA and PETRO) and
either carry one of the strategic convenience brands (e.g. M&S,
Rewe to Go) or a differentiated bp-controlled convenience offer. To
be considered a strategic convenience site, the convenience offer
should have a demonstrable level of differentiation in the market
in which it operates. Strategic convenience site count includes
sites under a pilot phase.
Top of page
34
Glossary (continued)
Surplus cash flow does not
represent the residual cash flow available for discretionary
expenditures. It is a non-IFRS financial measure that should be
considered in addition to, not as a substitute for or superior to,
net cash provided by operating activities, reported in accordance
with IFRS. bp believes it is helpful to disclose the surplus cash
flow because this measure forms part of bp's financial
frame.
Surplus cash flow refers to the net
surplus of sources of cash over uses of cash, after reaching the
$35 billion net debt target. Sources of cash include net cash
provided by operating activities, cash provided from investing
activities and cash receipts relating to transactions involving
non-controlling interests. Uses of cash include lease liability
payments, payments on perpetual hybrid bond, dividends paid, cash
capital expenditure, the cash cost of share buybacks to offset the
dilution from vesting of awards under employee share schemes, cash
payments relating to transactions involving non-controlling
interests and currency translation differences relating to cash and
cash equivalents as presented on the condensed group cash flow
statement.
Technical service contract (TSC) - Technical service contract is an arrangement through which
an oil and gas company bears the risks and costs of exploration,
development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin
which reflects incremental production added to the
oilfield.
Tier 1 and tier 2 process safety events
- Tier 1 events are losses of primary containment
from a process of greatest consequence - causing harm to a member
of the workforce, damage to equipment from a fire or explosion, a
community impact or exceeding defined quantities. Tier 2 events are
those of lesser consequence. These represent reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported process safety events are
investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this represents a more up to date
reflection of the safety environment.
Transition growth - Activities,
represented by a set of transition growth engines, that transition
bp toward its objective to be an integrated energy company, and
that comprise our low carbon activity* alongside other businesses
that support transition, such as our power trading and marketing
business and convenience.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR is calculated by
dividing taxation on an underlying replacement cost (RC) basis by
underlying RC profit or loss before tax. Taxation on an underlying
RC basis for the group is calculated as taxation as stated on the
group income statement adjusted for taxation on inventory holding
gains and losses and total taxation on adjusting items. Information
on underlying RC profit or loss is provided below. Taxation on an
underlying RC basis presented for the operating segments is
calculated through an allocation of taxation on an underlying RC
basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to
understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period. Taxation on an underlying RC basis and
underlying ETR are non-IFRS measures. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
We are unable to present
reconciliations of forward-looking information for underlying ETR
to ETR on profit or loss for the period, because without
unreasonable efforts, we are unable to forecast accurately certain
adjusting items required to present a meaningful comparable IFRS
forward-looking financial measure. These items include the taxation
on inventory holding gains and losses and adjusting items, that are
difficult to predict in advance in order to include in an IFRS
estimate.
Underlying production - 2024
underlying production, when compared with 2023, is production after
adjusting for acquisitions and divestments, curtailments, and
entitlement impacts in our production-sharing agreements/contracts
and technical service contract*.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a
non-IFRS measure and is RC profit or loss* (as defined on
page 33) after excluding net adjusting
items and related taxation. See page 26 for
additional information on the adjusting items that are used to
arrive at underlying RC profit or loss in order to enable a full
understanding of the items and their financial impact.
Underlying RC profit or loss before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating
segments and excluding net adjusting items for the respective
operating segment or business.
bp believes that underlying RC
profit or loss is a useful measure for investors because it is a
measure closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions and because it may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp's operational performance on a comparable basis, period on
period, by adjusting for the effects of these adjusting items. The
nearest equivalent measure on an IFRS basis for the group is profit
or loss attributable to bp shareholders. The nearest equivalent
measure on an IFRS basis for segments and businesses is RC profit
or loss before interest and taxation. A
reconciliation to IFRS information is provided on page 1 for the group and pages
6-14 for the segments.
Top of page
35
Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit
or loss per ADS is a non-IFRS
measure. Earnings per share is defined in Note 7. Underlying RC
profit or loss per ordinary share is calculated using the same
denominator as earnings per share as defined in the consolidated
financial statements. The numerator used is underlying RC profit or
loss attributable to bp shareholders, rather than profit or loss
attributable to bp ordinary shareholders. Underlying RC profit or
loss per ADS is calculated as outlined above for underlying RC
profit or loss per share except the denominator is adjusted to
reflect one ADS equivalent to six ordinary shares. bp believes it
is helpful to disclose the underlying RC profit or loss per
ordinary share and per ADS because these measures may help
investors to understand and evaluate, in the same manner as
management, the underlying trends in bp's operational performance
on a comparable basis, period on period. The nearest equivalent
measure on an IFRS basis is basic earnings per share based on
profit or loss for the period attributable to bp ordinary
shareholders.
upstream includes oil and
natural gas field development and production within the gas &
low carbon energy and oil production & operations
segments.
upstream/hydrocarbon plant reliability
(bp-operated) is calculated taking 100% less the
ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and bpx energy.
Unplanned plant deferrals are associated with the topside plant and
where applicable the subsea equipment (excluding wells and
reservoir). Unplanned plant deferrals include breakdowns, which
does not include Gulf of Mexico weather related
downtime.
upstream unit production costs are calculated as production cost divided by units of
production. Production cost does not include ad valorem and
severance taxes. Units of production are barrels for liquids and
thousands of cubic feet for gas. Amounts disclosed are for bp
subsidiaries only and do not include bp's share of equity-accounted
entities.
Working capital is movements in
inventories and other current and non-current assets and
liabilities as reported in the condensed group cash flow
statement.
Change in working capital adjusted
for inventory holding gains/losses, fair value accounting effects
relating to subsidiaries and other adjusting items is a non-IFRS
measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period; fair value accounting effects
relating to subsidiaries reported within adjusting items for the
period; and other adjusting items relating to the non-cash movement
of US emissions obligations carried as a provision that will be
settled by allowances held as inventory. This represents what would
have been reported as movements in inventories and other current
and non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been
underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities.
bp utilizes various arrangements in
order to manage its working capital including discounting of
receivables and, in the supply and trading business, the active
management of supplier payment terms, inventory and
collateral.
Trade marks
Trade marks of the bp group appear
throughout this announcement. They include:
bp, Amoco, Aral, bp pulse, Castrol, PETRO, TA, Thorntons and Gigahub
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36
Cautionary statement
In
order to utilize the 'safe harbor' provisions of the United States
Private Securities Litigation Reform Act of 1995 (the 'PSLRA') and
the general doctrine of cautionary statements, bp is providing the
following cautionary statement:
The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is,
statements related to future, not past events and circumstances -
with respect to the financial condition, results of operations and
businesses of bp and certain of the plans and objectives of bp with
respect to these items. These statements may generally, but not
always, be identified by the use of words such as 'will',
'expects', 'is expected to', 'aims', 'should', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we
see' or similar expressions.
In
particular, the following, among other statements, are all forward
looking in nature: plans, expectations and assumptions regarding
oil and gas demand, supply, prices or volatility; expectations
regarding reserves; expectations regarding production and volumes;
expectations regarding bp's customers & products business;
expectations regarding margins, including sensitivity of fuels
margin to costs of supply; expectations regarding the
simplification of bp's organizational structure and related cash
cost savings; expectations regarding underlying effective tax rate;
expectations regarding turnaround and maintenance activity;
expectations regarding financial performance, results of operations
and cash flows; expectations regarding future project start-ups;
expectations regarding bp's customers & products businesses,
including TravelCenters of America, Castrol and bp pulse; bp's
plans regarding transforming to an IEC; price assumptions used in
accounting estimates; bp's plans and expectations regarding the
amount and timing of share buybacks and dividends; plans and
expectations regarding bp's credit rating, including in respect of
maintaining a strong investment grade credit rating and targeting
further improvements in credit metrics; plans and expectations
regarding the allocation of surplus cash flow to share buybacks and
strengthening the balance sheet; plans and expectations regarding
LNG sales; plans and expectations the sale of its investments,
including those relating to the sale of its Türkiye ground fuels
business; plans and expectations regarding investments,
collaborations and partnerships in electric vehicle (EV) charging
infrastructure; plans and expectations related to bp's transition
growth engines, including expected capital expenditures; plans and
expectations regarding the amount or timing of payments related to
divestment and other proceeds, and the timing, quantum and nature
of certain acquisitions and divestments; expectations regarding the
timing and amount of future payments relating to the Gulf of Mexico
oil spill; plans and expectations regarding bp's guidance for 2024
and the second quarter of 2024, including expected growth, margins,
other businesses & corporate underlying annual charge,
depreciation, depletion and amortization; plans and expectations
regarding capital expenditure for 2024 and 2025; expectations
regarding greenhouse gas emissions; and plans and expectations
regarding bp-operated projects and ventures, including plans for
the Gelsenkirchen refinery site, and its projects, joint ventures,
partnerships and agreements with commercial entities and other
third party partners.
By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp.
Actual results or outcomes, may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the effects of
bp's plan to exit its shareholding in Rosneft and other investments
in Russia, overall global economic and business conditions
impacting bp's business and demand for bp's products as well as the
specific factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and
societal expectations; the pace of development and adoption of
alternative energy solutions; developments in policy, law,
regulation, technology and markets, including societal and investor
sentiment related to the issue of climate change; the receipt of
relevant third party and/or regulatory approvals; the timing and
level of maintenance and/or turnaround activity; the timing and
volume of refinery additions and outages; the timing of bringing
new fields onstream; the timing, quantum and nature of certain
acquisitions and divestments; future levels of industry product
supply, demand and pricing, including supply growth in North
America and continued base oil and additive supply shortages; OPEC+
quota restrictions; PSA and TSC effects; operational and safety
problems; potential lapses in product quality; economic and
financial market conditions generally or in various countries and
regions; political stability and economic growth in relevant areas
of the world; changes in laws and governmental regulations and
policies, including related to climate change; changes in social
attitudes and customer preferences; regulatory or legal actions
including the types of enforcement action pursued and the nature of
remedies sought or imposed; the actions of prosecutors, regulatory
authorities and courts; delays in the processes for resolving
claims; amounts ultimately payable and timing of payments relating
to the Gulf of Mexico oil spill; exchange rate fluctuations;
development and use of new technology; recruitment and retention of
a skilled workforce; the success or otherwise of partnering; the
actions of competitors, trading partners, contractors,
subcontractors, creditors, rating agencies and others; bp's access
to future credit resources; business disruption and crisis
management; the impact on bp's reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major
uninsured losses; the possibility that international sanctions or
other steps taken by governmental authorities or any other relevant
persons may impact bp's ability to sell its interests in Rosneft,
or the price for which bp could sell such interests; the actions of
contractors; natural disasters and adverse weather conditions;
changes in public expectations and other changes to business
conditions; wars and acts of terrorism; cyber-attacks or sabotage;
and those factors discussed under "Risk factors" in bp's Annual
Report and Form 20-F for fiscal year 2023 as filed with the US
Securities and Exchange Commission.
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37
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Craig Marshall
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BP
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