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FOR IMMEDIATE RELEASE
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London 14 January 2025
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BP
p.l.c. Trading Statement
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Fourth quarter 2024 trading statement
The following Trading Statement
provides a summary of BP p.l.c.'s (bp) current estimates and
expectations for the fourth quarter of 2024, including data on the
economic environment as well as group performance during the
period.
The information presented is not
comprehensive of all factors which may impact bp's group results
for the fourth quarter 2024 and is not an estimate of those
results. Also refer to bp's third quarter and nine months 2024
group results announcement on 29 October 2024 for fourth quarter
and full year 2024 guidance items which continue to apply unless
explicitly stated. A summary of that guidance is also provided in
the Appendix to this Trading Statement. All information provided is
subject to the finalization of bp's financial reporting processes
and actual results may vary.
Murray Auchincloss has recently
undergone a planned medical procedure from which he is recovering
well. He will be back in the office by February. To ensure his full
recuperation the capital markets event previously scheduled for 11
February in New York will now take place on 26 February in London.
The fourth quarter and full year 2024 results date is unchanged and
they are expected to be published at 0700 GMT on 11
February.
Updated 4Q24
guidancea
•
Upstream productionb in the fourth quarter is expected
to be lower compared to the prior quarter, with production lower in
oil production & operations and in gas & low carbon
energy.
• In
the gas & low carbon energy segment, realizationsc,
compared to the prior quarter, are expected to have a favourable
impact in the range of $0.1 - 0.2 billion including changes in
non-Henry Hub natural gas marker prices. The gas marketing and
trading result is expected to be average.
• In
the oil production & operations segment,
realizationsc, compared to the prior quarter, are
expected to have an unfavourable impact in the range of $0.2 - 0.4
billion, including the impact of price lags on bp's production in
the Gulf of Mexico and the UAE. Compared to the prior quarter,
exploration write-offs are expected to be $0.1 - 0.2 billion
lower.
• In
the customers & products segment, compared to the prior
quarter, results are expected to be impacted by the following
factors:
◦
customers - seasonally
lower volumes, lower fuels margins, foreign exchange losses, and a
one-off inventory purchase price adjustment relating to our
bio-ethanol acquisition.
◦
products - weaker realized
refining margins in the range of $0.1 - 0.3 billion and a higher
impact from turnaround activity. The oil trading result is expected
to be weak.
•
Other items:
◦ Net debt
at the end of the quarter is expected to be lower compared the
prior quarter, including proceeds from divestments of around $2.8
billion, the issuance of around $2.5 billion perpetual hybrid bonds
primarily in anticipation of refinancing perpetual hybrid bonds
callable from June 2025 and/or March 2026, and acquired net debt of
around $3.0 billion from the completion of the bp Bunge Bioenergia
and Lightsource bp transactions.
◦ The fourth
quarter results are expected to include non-cash, post-tax charges
related to impairments of $1.0 - 2.0 billion attributable across
the segments. These items are treated as adjusting items and
excluded from underlying replacement cost profit.
Updated FY24
guidancea
• The
underlying effective tax rate for the full year is now expected to
be around 42% compared to the previous guidance of around 40%
primarily due to changes in the geographical mix of
profits.
• bp
now expects other businesses & corporate underlying annual
charge to be around $0.6 billion for 2024 compared to the previous
range of $0.3 - 0.4 billion due to foreign exchange
losses.
a
All impacts influence bp's underlying RC profit
before interest and tax, unless stated otherwise.
b
Includes bp's share of production of
equity-accounted entities.
c
Realizations are based on sales by consolidated
subsidiaries only - this excludes equity-accounted
entities.
Trading conditions
Brent averaged $74.73/bbl in the
fourth quarter 2024 compared to $80.34/bbl in the third quarter
2024.
US gas Henry Hub first of month
index averaged $2.79/mmBtu in the fourth quarter 2024 compared to
$2.15/mmBtu in the third quarter 2024.
The bp RMM* averaged $13.1/bbl in
the fourth quarter 2024 compared to $16.5/bbl in the third quarter
2024.
Further information on prices and
bp's current rules of thumb can be found at the following
link:
bp.com Rules of Thumb
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 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. 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
(without limitation): price fluctuations in crude oil and natural
gas; changes in demand for bp's products; currency fluctuations;
drilling and production results; reserves estimates; sales volume
and sales mix numbers; supply and demand imbalances including as a
result of direct or indirect restrictions on production; regional
pricing differentials and refining margins; seasonal impacts on
product demand and operating expenses; resolution of trading and
derivative positions for the quarter; 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; 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 as well as
those factors discussed under "Risk factors" in bp's Annual Report
and Form 20-F 2023 and under "Principal risks and uncertainties" in
bp's Report on Form 6-K for the three months and six months ended
30 June 2024, each as filed with the US Securities and Exchange
Commission. Furthermore, additional factors may exist that will be
relevant to bp's group results for the fourth quarter and full year
of 2024 that are not currently known or fully understood. Neither
bp nor any of its subsidiaries assumes any obligation to update,
revise or supplement any forward-looking statement contained in
this announcement to reflect future circumstances, events or
information.
The contents of websites referred to
in this announcement do not form part of this
announcement.
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FOR IMMEDIATE RELEASE
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London 14 January 2025
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BP
p.l.c. Trading Statement
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Appendix: Guidance issued in 3Q24 Stock Exchange
Announcementa
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Guidance Area
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Full Year 2024
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4Q24 vs 3Q24
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Reported and underlying* upstream
production
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Slightly higher than 2023, of which
Oil production & operations higher and Gas & low carbon
energy lower
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• lower
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Customers
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Growth from convenience, including a
full year contribution from TravelCenters of America; stronger
Castrol, bp pulse margin growth; fuels margins to remain sensitive
to movements in cost of supply
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• seasonally lower
volumes
• fuels margins to remain
sensitive to movements in the cost of supply
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Products
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Lower level of industry refining
margins, with realized margins impacted by narrower North American
heavy crude oil differentials; turnaround activity broadly in line
with 2023 but heavily weighted towards the second half, with the
highest impact in the fourth quarter
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• realized refining
margins to remain low in the fourth quarter, albeit to continue to
remain sensitive to relative movements in product cracks
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OB&C
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Around $0.3-0.4bn charge
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DD&A
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Slightly higher than 2023
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Underlying effective tax
rate*b
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Expected to be around 40%
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Capital expenditure*
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Around $16bn
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Divestment and other
proceeds
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Greater than $3bn
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bp Bunge Bioenergia and Lightsource
bp transaction
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Full earnings from both companies
will be included in bp's results from the date the transactions
complete and finance debt acquired is expected to be approximately
$3.7 billion.
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Gulf of Mexico oil spill
payments
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~$1.2bn pre-tax, of which $1.1bn
2Q
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a
Refer to bp's third quarter and nine months 2024
group results announcement and bp.com for full text.
b
Underlying effective tax rate is sensitive to a
range of factors, including the volatility of the price environment
and its impact on the geographical mix of the group's profits and
losses.
* See
Glossary.
Contacts
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London
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Houston
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Press Office
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David Nicholas
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Paul Takahashi
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+44 (0) 7831 095541
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+1 713 903 9729
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Investor Relations
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Craig Marshall
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Graham Collins
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bp.com/investors
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+44 (0) 203 401 5592
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+1 832 753 5116
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Glossary
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 before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss 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.
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.
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.
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.
BP
p.l.c.'s LEI Code 213800LH1BZH3D16G760
