Bp PLC 6-K, filed May 2, 2023
Bp PLC (BP)
6-K
2023-05-02
For: 2023-05-02
View Original
Added on
July 04, 2026
About this 6-K
Bp PLC filed this 6-K on May 2, 2023.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the
period ended 02
May, 2023
BP p.l.c.
(Translation
of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.
Form
20-F |X| Form 40-F
---------------
----------------
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of
1934.
Yes No
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Exhibit
1.1
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1Q23
SEA Part 1 of 1 on 02 May 2023
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Exhibit 1.1
Top of page
1
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FOR IMMEDIATE RELEASE
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London 2 May 2023
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BP p.l.c. Group results
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First quarter 2023
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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”
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Performing while transforming
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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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2023
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2022
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2022
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Profit (loss) for the period attributable to bp
shareholders
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8,218
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10,803
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(20,384)
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Inventory holding (gains) losses*, net of tax
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452
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1,066
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(2,664)
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AReplacement cost (RC) profit (loss)*
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8,670
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11,869
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(23,048)
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Net (favourable) adverse impact of adjusting items*, net of
tax
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(3,707)
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(7,062)
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29,293
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Underlying RC profit*
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4,963
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4,807
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6,245
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Operating cash flow*
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7,622
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13,571
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8,210
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Capital expenditure*
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(3,625)
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(7,369)
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(2,929)
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Divestment
and other proceeds(a)
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800
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614
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1,181
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Surplus cash flow*
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2,283
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4,985
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4,037
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Net issue (repurchase) of shares
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(2,448)
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(3,240)
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(1,592)
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Net
debt*(b)
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21,232
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21,422
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27,457
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Announced dividend per ordinary share (cents per
share)
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6.610
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6.610
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5.460
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Underlying RC profit per ordinary share* (cents)
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27.74
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26.44
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32.00
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Underlying RC profit per ADS* (dollars)
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1.66
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1.59
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1.92
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● Underlying RC profit $5.0bn; Net debt reduced to
$21.2bn
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● Further $1.75bn share buyback announced
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● Delivering resilient hydrocarbons - advancing two major
projects*; intention to form JV with ADNOC
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● Continued progress in transformation to an IEC - agreement
to acquire TravelCenters of America; advancing EV charging
strategy
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This has been a quarter of strong performance and strategic
delivery as we continue to focus on safe and reliable operations.
Momentum continues to build across our integrated energy company
strategy, with the start-up of Mad Dog Phase 2, our agreement to
acquire TravelCenters of America and progress towards hydrogen and
CCS projects in the UK. And importantly we continue to deliver for
shareholders, through disciplined investment, lowering net debt and
growing distributions.
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Bernard Looney
Chief executive officer
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(a)
Divestment proceeds
are disposal proceeds as per the condensed group cash flow
statement. See page 3 for more
information on divestment and other proceeds.
(b)
See Note 9 for more information.
RC profit (loss), underlying RC profit (loss), surplus cash flow,
net debt, underlying RC profit per ordinary share and underlying RC
profit per ADS are non-IFRS measures. Inventory holding (gains)
losses and adjusting items are non-IFRS adjustments.
* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
30.
Top of page 2
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Highlights
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Underlying replacement cost profit* $5.0 billion
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● Underlying
replacement cost profit for the quarter was $5.0 billion, compared with $4.8 billion for the previous quarter.
Compared to the fourth quarter
2022, the result reflects an
exceptional gas marketing and trading result, a lower level of
refinery turnaround activity and a very strong oil trading result,
partly offset by lower liquids and gas realizations and lower
refining margins.
● Reported
profit for the quarter was $8.2
billion, compared with $10.8
billion for the fourth
quarter 2022. The reported
result for the first quarter is
adjusted for inventory holding losses* of $0.5 billion (net of tax) and a net
favourable impact of adjusting items* of $3.7 billion (net of tax) to derive the
underlying replacement cost profit. Adjusting items include
favourable fair value accounting effects* of $4.3 billion, primarily resulting from the
decline in the forward price of LNG compared to the end of the
fourth quarter.
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Net debt* reduced to $21.2
billion; further $1.75 billion share buyback
announced
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● Operating
cash flow* in the quarter was $7.6
billion including a working capital* build (after adjusting
for inventory holding losses, fair value accounting effects and
other adjusting items) of $1.4
billion (see page
27).
● Capital
expenditure* in the first quarter was $3.6 billion. bp continues to expect
capital expenditure, including inorganic capital expenditure*, of
$16-18 billion in 2023.
● During
the first quarter, bp completed
$2.2 billion of share buybacks from surplus cash flow*. The $2.75
billion share buyback programme announced with the fourth quarter results was completed on 28
April 2023.
● During
the first quarter, bp also completed share buybacks of $225 million
as part of the $675 million programme announced on 7 February 2023
to offset the expected full-year dilution from the vesting of
awards under employee share schemes in 2023.
● In
the first quarter, bp generated
surplus cash flow of $2.3
billion and intends to execute a $1.75 billion share buyback
from surplus cash flow prior to announcing its second quarter 2023
results.
● bp
remains committed to using 60% of 2023 surplus cash flow for share
buybacks, subject to maintaining a strong investment grade credit
rating.
● Based
on bp’s current forecasts, at around $60 per barrel Brent and
subject to the board’s discretion each quarter, bp expects to
be able to deliver share buybacks of around $4.0 billion per annum,
at the lower end of its $14-18 billion capital expenditure range,
and have capacity for an annual increase in the dividend per
ordinary share of around 4%.
● Net
debt fell to $21.2 billion at
the end of the first quarter.
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Continued progress in transformation to an Integrated Energy
Company
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● In
resilient hydrocarbons, bp has announced the safe delivery of its
Mad Dog Phase 2 project in the Gulf of Mexico. In addition, the
KGD6-MJ project offshore India is in the final stages of
commissioning with two wells opened to flow gas and full start-up
expected during the second quarter. bp intends to form a new joint
venture with ADNOC that will be focused on gas development,
together making a non-binding offer for a 50% interest in NewMed
Energy as a significant first step. bp is moving forward with
concept selection for Kaskida in the Gulf of Mexico and bp and
partners have confirmed they will progress evaluation of
development concept for the bp-operated Greater Tortue Ahmeyim
Phase 2 project. During the quarter, bp completed the divestment of
its interest in the Toledo refinery and its Algerian upstream
assets.
● In
convenience and mobility, bp is advancing its strategy –
agreeing to acquire TravelCenters of America, one of the biggest
networks of highway travel centres in the US. bp has also continued
to progress its EV charging strategy – signing a strategic
collaboration agreement with Iberdrola in Spain and Portugal and
signing a global mobility agreement with Uber.
● In
low carbon energy, bp has signed an agreement to take a 40% stake
in the Viking carbon capture and storage (CCS) project in the North
Sea; three bp-led hydrogen and CCS projects in the north-east
England have been chosen by the UK government to progress to the
next stage of development; and bp has launched plans for a
low-carbon green energy cluster in Spain's Valencia region to
include world-scale green hydrogen* production at bp’s
Castellón refinery with up to 2GW of electrolysis capacity by
2030.
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In the first quarter, bp delivered resilient earnings and continues
to execute against its unchanged financial frame. We are
strengthening the balance sheet, investing with discipline to
advance our strategy, and are committed to returning 60% of 2023
surplus cash flow through share buybacks with a further $1.75
billion announced for the first quarter.
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Murray Auchincloss
Chief financial officer
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(a)
“fast
charging” includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
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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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Top of page 3
Financial results
In
addition to the highlights on page
2:
●
Profit attributable
to bp shareholders in the first
quarter was $8.2 billion, compared with a loss of
$20.4 billion in the same
period of 2022.
-
After adjusting
profit attributable to bp shareholders for inventory holding
losses* and net favourable impact of adjusting items*, underlying
replacement cost profit* for the first
quarter was $5.0 billion, compared with
$6.2 billion for the same
period of 2022. This reduction
in underlying replacement cost profit reflects lower oil and gas realizations, portfolio
changes and lower oil trading contribution, partly offset by
higher refining margins and an exceptional gas marketing and
trading result.
-
Adjusting items in
the first quarter had a net
favourable pre-tax impact of $3.9 billion, compared with an adverse
pre-tax impact of $30.8 billion in the same period of
2022.
-
Adjusting items for
the first quarter of
2023 include a favourable
impact of pre-tax fair value accounting effects*, relative to
management's internal measure of performance, of $4.3 billion, compared with an adverse
pre-tax impact of $5.8 billion in the same period of
2022. This is primarily due to
a decline in the forward price of LNG compared to the fourth
quarter of 2022, but an increase in the comparative period. Under
IFRS, reported earnings include the mark-to-market value of the
hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. The underlying result includes the
mark-to-market value of the hedges but also recognizes changes in
value of the LNG contracts being risk managed.
-
Adjusting items for
the first quarter of
2022 include a pre-tax charge
of $24.0 billion relating
to bp’s decision to exit its 19.75% shareholding in Rosneft.
A further $1.5 billion pre-tax charge relating to bp's decision to
exit its other businesses with Rosneft in Russia is also
included.
●
The effective tax
rate (ETR) on RC profit or loss* for the first quarter was 29%, compared with -8% for the same period in 2022. Excluding adjusting items, the
underlying ETR* for the first
quarter was 39%,
compared with 33% for the same
period a year ago. The higher underlying ETR for the first quarter reflects the UK Energy
Profits Levy on North Sea profits and other items. ETR on RC profit
or loss and underlying ETR are non-IFRS measures.
●
Operating cash
flow* for the first quarter was
$7.6 billion, compared
with $8.2 billion for the
same period in 2022.
●
Capital
expenditure* in the first
quarter was $3.6 billion, compared with
$2.9 billion in the same
period of 2022.
●
Total divestment
and other proceeds for the first
quarter were $0.8 billion, compared with
$1.2 billion for the same
period in 2022. There were no
other proceeds for the first
quarter of 2023. Other
proceeds for the first quarter
of 2022 consist of $0.2 billion
of proceeds from the disposal of a loan note related to the Alaska
divestment.
●
At the end of the
first quarter, net debt* was
$21.2 billion, compared with
$21.4 billion at the end
of the fourth quarter
2022 and $27.5 billion at the end of the
first quarter 2022.
Top of page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
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First
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Fourth
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First
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quarter
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quarter
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quarter
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$ million
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2023
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2022
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2022
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RC profit (loss) before interest and tax
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gas
& low carbon energy
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7,347
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16,439
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(1,524)
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oil
production & operations
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3,317
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1,688
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3,831
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customers
& products
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2,680
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771
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1,981
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other
businesses & corporate
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(90)
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103
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(24,719)
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Of
which:
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other
businesses & corporate excluding Rosneft
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(90)
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103
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(686)
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Rosneft
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—
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—
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(24,033)
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Consolidation
adjustment – UPII*
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(22)
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147
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34
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RC profit (loss) before interest and tax
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13,232
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19,148
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(20,397)
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Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
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(785)
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(818)
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(644)
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Taxation on a RC basis
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(3,573)
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(6,103)
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(1,693)
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Non-controlling interests
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(204)
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(358)
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(314)
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RC profit (loss) attributable to bp shareholders*
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8,670
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11,869
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(23,048)
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Inventory holding gains (losses)*
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(600)
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(1,428)
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3,501
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Taxation (charge) credit on inventory holding gains and
losses
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148
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362
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(837)
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Profit (loss) for the period attributable to bp
shareholders
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8,218
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10,803
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(20,384)
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Analysis of underlying RC profit (loss) before interest and
tax
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|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
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$ million
|
|
2023
|
2022
|
2022
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
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gas
& low carbon energy
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3,456
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3,148
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3,595
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oil
production & operations
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3,319
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4,428
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4,683
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customers
& products
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2,759
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1,902
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2,156
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|
other
businesses & corporate
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(296)
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(306)
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(259)
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|
Of
which:
|
|
|
|
|
|
other
businesses & corporate excluding Rosneft
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|
(296)
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(306)
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(259)
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|
Rosneft
|
|
—
|
—
|
—
|
|
Consolidation
adjustment – UPII
|
|
(22)
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147
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34
|
|
Underlying RC profit before interest and tax
|
|
9,216
|
9,319
|
10,209
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|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
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(681)
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(649)
|
(486)
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Taxation on an underlying RC basis
|
|
(3,368)
|
(3,505)
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(3,164)
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Non-controlling interests
|
|
(204)
|
(358)
|
(314)
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|
Underlying RC profit attributable to bp shareholders*
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4,963
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4,807
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6,245
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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
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Operating metrics
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First quarter 2023
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vs
First quarter 2022
|
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Tier 1 and tier 2 process safety events*
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8
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-4
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Reported recordable injury frequency*
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0.195
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+27.0%
|
|
upstream* production(a)
(mboe/d)
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2,330
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+3.4%
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upstream unit production costs*(b)
($/boe)
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5.73
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-12.1%
|
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bp-operated upstream plant reliability*
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95.5%
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-0.6
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|
bp-operated refining availability*(a)
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96.1%
|
|
1.1
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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 impact of portfolio changes.
Top
of page 5
Outlook & Guidance
Macro outlook
●
For
the second quarter, bp expects oil prices to remain elevated as the
recent decision by OPEC+ to restrict production, combined with
strengthening Chinese demand, tightens supply/demand
balances.
●
During
the second quarter, bp expects European gas and Asian LNG prices to
be supported by recovering Chinese gas demand, re-stocking of
European storage capacity and coal-to-gas switching. In the US,
Henry Hub gas prices are also expected to find support from
coal-to-gas switching in the power sector.
●
In
the second quarter, bp expects industry refining margins to be
lower than the first quarter due to weaker middle distillate
margins.
2Q23 guidance
●
Looking
ahead, bp expects second-quarter 2023 reported upstream* production
to be lower compared to first quarter 2023, in both oil production
& operations and gas & low carbon energy, including the
effects of seasonal maintenance, with the impact predominantly in
higher margin regions.
●
In
its customers business, bp expects higher marketing margins and
seasonally higher volumes compared to the first quarter. In
refining, bp expects realized margins to be lower compared to the
first quarter, mainly driven by weaker middle distillate margins
and narrower North American heavy oil crude differentials. In
addition, bp expects a higher level of turnaround activity compared
to the first quarter.
2023 guidance
In
addition to the guidance on page
2:
●
bp
continues to expect both reported and underlying upstream
production to be broadly flat compared with 2022. Within this, bp
expects underlying production* from oil production & operations
to be slightly higher and production from gas & low carbon
energy to be lower.
●
bp
continues to expect the other businesses & corporate underlying
annual charge to be in a range of $1.1-1.3 billion for 2023. The
charge may vary from quarter to quarter.
●
bp
continues to expect the depreciation, depletion and amortization to
be slightly above 2022.
●
bp
continues to expect the underlying ETR* for 2023 to be around 40%
but is sensitive to the impact that volatility in the current price
environment may have on the geographical mix of the group’s
profits and losses.
●
Having
realized $16.7 billion of divestment and other proceeds since the
second quarter of 2020, bp continues to expect divestment and other
proceeds of $2-3 billion in 2023 and continues to expect to reach
$25 billion of divestment and other proceeds between the second
half of 2020 and 2025.
●
bp
continues to expect Gulf of Mexico oil spill payments for the year
to be around $1.3 billion pre-tax including $1.2 billion pre-tax to
be paid during the second quarter.
●
bp
continues to expect capital expenditure* of $16-18 billion in 2023
including inorganic capital expenditure*.
●
bp
is committed to maintaining a strong investment grade credit
rating, targeting further progress within an 'A' grade credit
rating. For 2023 bp continues to intend to allocate 40% of surplus
cash flow to further strengthening the balance sheet.
●
For
2023 and subject to maintaining a strong investment grade credit
rating, bp remains committed to using 60% of surplus cash flow for
share buybacks.
●
Based
on bp’s current forecasts, at around $60 per barrel Brent and
subject to the board’s discretion each quarter, bp continues
to expect to be able to deliver share buybacks of around $4.0
billion per annum, at the lower end of its $14-18 billion capital
expenditure range, and have capacity for an annual increase in the
dividend per ordinary share of around 4%.
●
In
setting the dividend per ordinary share and buyback each quarter,
the board will continue to take into account factors including the
cumulative level of and outlook for surplus cash flow*, the cash
balance point* and the maintenance of a strong investment grade
credit rating.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
|
Top
of page 6
gas & low carbon energy*
Financial results
●
The replacement
cost (RC) profit before
interest and tax for the first
quarter was $7,347
million, compared with a loss of $1,524 million for the same period in
2022. The first quarter is adjusted by a favourable
impact of net adjusting items* of $3,891 million, compared with an adverse
impact of net adjusting items of $5,119 million for the same period in
2022. Adjusting items include
impacts of fair value accounting effects*, relative to management's
internal measure of performance, which are a favourable impact of
$3,934 million for the quarter
and an adverse impact of $5,015
million for the same period in 2022. Under IFRS, reported earnings include
the mark-to-market value of the hedges used to risk-manage LNG
contracts, but not of the LNG contracts themselves. The underlying
result includes the mark-to-market value of the hedges but also
recognizes changes in value of the LNG contracts being risk
managed, which decreased as forward prices fell during the first
quarter.
●
After adjusting RC
profit before interest and tax
for adjusting items, the underlying RC profit before interest and tax* for the
first quarter was $3,456 million, compared with $3,595 million for the same period in
2022.
●
The
underlying RC profit for the first quarter, compared with the same
period in 2022, reflects lower realizations and a higher
depreciation, depletion and amortization charge, offset by an
exceptional gas marketing and trading result.
Operational update
●
Reported
production for the quarter was 969mboe/d, 0.4% higher than the same
period in 2022. Underlying production* was 1.1% lower, mainly due
to unplanned outages offset by lower seasonal
maintenance.
●
Renewables
pipeline* at the end of the quarter was 38.8GW (bp net), including
15.5GW bp net share of Lightsource bp's (LSbp's) pipeline. The
renewables pipeline increased by 1.6GW during the quarter due to
additions to LSbp's portfolio. In addition, there is 19.8GW (9.9GW
bp net) of early stage opportunities in LSbp's hopper.
Strategic progress
gas
●
The
KGD6-MJ project offshore India is in the final stages of
commissioning (Reliance 66.67% operator, bp 33.33%). Two wells have
been opened to flow gas through the integrated production system.
Full start-up is expected later in the second quarter.
●
On
28 April bp signed an agreement with Shell to purchase
Shell’s 27% interest in the Browse project, offshore
Australia. The transaction is subject to regulatory and partner
approvals and on completion would increase bp’s interest to
44.33%.
●
On
27 February bp and its partners confirmed the development concept
for the second phase of the bp-operated Greater Tortue Ahmeyim
(GTA) liquefied natural gas project, with total capacity of between
2.5-3.0 million tonnes per annum, that they will take forward to
the next stage of evaluation.
●
On
29 March bp and our co-venturers in the Shah Deniz Consortium have
secured additional capacity in the Trans Adriatic Pipeline
(TAP).
●
On
28 February bp announced that it had completed the sale of its
upstream business in Algeria to Eni after successfully securing the
required approvals.
●
On
28 March bp confirmed that, together with ADNOC, it has made a
non-binding offer to take NewMed Energy private through an
acquisition of the free float and a partial acquisition of
Delek’s stake, which would result in bp and ADNOC holding 50%
of NewMed Energy. bp and ADNOC intend to form a new joint venture
that will be focused on gas development in international areas of
mutual interest including the East Mediterranean. The proposed
transaction with NewMed Energy would be a significant first step in
establishing this joint venture.
low carbon energy
●
Hydrogen and CCS
-
On
30 March it was announced that three bp-led hydrogen and CCS
projects in north-east England - Net Zero Teesside Power gas-fired
power station and CCS, H2Teesside blue hydrogen* and HyGreen
Teesside green hydrogen* - have been chosen by the UK government to
go to the next stage of development.
-
On 11 April bp signed
an agreement with Harbour Energy to take a 40% stake in the Viking
carbon capture and storage (CCS) project in the North
Sea.
-
On
28 February bp launched plans for low-carbon green hydrogen cluster
in Spain’s Valencia region. The cluster is intended to
include hydrogen production at bp’s Castellón refinery
of up to 2GW of electrolysis capacity by 2030.
●
Offshore wind
-
On
24 March bp announced a successful bid in the Innovation and
Targeted Oil and Gas (INTOG) Scottish offshore wind leasing round,
bp’s first step in floating offshore wind.
-
On
15 February bp and Deep Wind Offshore announced the formation of a
joint venture to develop offshore wind opportunities in South
Korea, which includes four projects across the Korean peninsula
with a potential generating capacity of up to 6GW.
●
Onshore
renewables
-
On
1 March Lightsource bp announced that it had obtained environmental
approval for 19 solar projects in four provinces in Spain for a
total 1.6GW and investment of ~$1.3 billion by 2025.
Top
of page 7
gas & low carbon energy (continued)
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit (loss) before interest and tax
|
|
7,348
|
16,429
|
(1,499)
|
|
Inventory holding (gains) losses*
|
|
(1)
|
10
|
(25)
|
|
RC profit (loss) before interest and tax
|
|
7,347
|
16,439
|
(1,524)
|
|
Net (favourable) adverse impact of adjusting items
|
|
(3,891)
|
(13,291)
|
5,119
|
|
Underlying RC profit before interest and tax
|
|
3,456
|
3,148
|
3,595
|
|
Taxation on an underlying RC basis
|
|
(961)
|
(1,163)
|
(1,009)
|
|
Underlying RC profit before interest
|
|
2,495
|
1,985
|
2,586
|
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,440
|
1,373
|
1,255
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
Exploration write-offs
|
|
(1)
|
(6)
|
(2)
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
Total adjusted EBITDA
|
|
4,895
|
4,515
|
4,848
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
gas
|
|
647
|
1,032
|
642
|
|
low
carbon energy(a)
|
|
366
|
577
|
219
|
|
Total capital expenditure
|
|
1,013
|
1,609
|
861
|
(a)
Fourth
quarter 2022 include $504 million in respect of the acquisition of
EDF Energy Services. Power trading is reported under low carbon
energy.
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
Production (net of
royalties)(b)
|
|
|
|
|
|
Liquids* (mb/d)
|
|
114
|
121
|
121
|
|
Natural gas (mmcf/d)
|
|
4,962
|
4,844
|
4,897
|
|
Total hydrocarbons* (mboe/d)
|
|
969
|
956
|
966
|
|
|
|
|
|
|
|
Average realizations*(c)
|
|
|
|
|
|
Liquids ($/bbl)
|
|
73.59
|
80.50
|
86.09
|
|
Natural gas ($/mcf)
|
|
7.41
|
9.40
|
7.88
|
|
Total hydrocarbons* ($/boe)
|
|
46.55
|
57.60
|
50.91
|
(b)
Includes bp’s
share of production of equity-accounted entities in the gas &
low carbon energy segment.
(c)
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 2023
|
31 December 2022
|
31 March 2022
|
|
|
|
|||
|
low carbon energy(d)
|
|
|||
|
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
|
Installed renewables capacity*
|
|
2.2
|
2.2
|
1.9
|
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
5.9
|
5.8
|
4.4
|
|
Renewables pipeline
|
|
38.8
|
37.2
|
24.9
|
|
of which by geographical area:
|
|
|
|
|
|
Renewables
pipeline – Americas
|
|
17.5
|
17.0
|
16.3
|
|
Renewables pipeline
– Asia Pacific(e)
|
|
12.2
|
11.8
|
1.4
|
|
Renewables
pipeline – Europe
|
|
8.9
|
8.3
|
7.0
|
|
Renewables
pipeline – Other
|
|
0.1
|
0.1
|
0.2
|
|
of which by technology:
|
|
|
|
|
|
Renewables
pipeline – offshore wind
|
|
5.3
|
5.2
|
5.2
|
|
Renewables
pipeline – onshore wind
|
|
6.3
|
6.3
|
—
|
|
Renewables
pipeline – solar
|
|
27.2
|
25.7
|
19.7
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
44.7
|
43.0
|
29.2
|
(d)
Because of
rounding, some totals may not agree exactly with the sum of their
component parts.
(e)
31 March 2023 and 31 December 2022 include
10.3GW of onshore wind and solar pipeline in support of
hydrogen.
Top
of page 9
oil production & operations
Financial results
●
The replacement
cost (RC) profit before
interest and tax for the first
quarter was $3,317
million, compared with $3,831
million for the same period in 2022. The first quarter is adjusted by an adverse
impact of net adjusting items* of $2
million, compared with an adverse impact of net adjusting
items of $852 million for the
same period in 2022.
●
After adjusting
items, the underlying RC profit
before interest and tax* for the first
quarter was $3,319
million, compared with $4,683
million for the same period in 2022.
●
The
underlying RC profit for the first quarter compared to the same
quarter in 2022, reflects lower oil and gas realizations and
portfolio changes partly offset by higher production.
Operational update
●
Reported
production for the quarter was 1,360mboe/d, 5.8% higher than the
first quarter of 2022. Underlying production* for the quarter was
6.1% higher compared with the first quarter of 2022 reflecting bpx
energy performance and improved base performance.
Strategic Progress
●
bp
was the apparent high bidder on 37 lease blocks in the Gulf of
Mexico lease sale 259 held on 29 March 2023.
●
The
Canadian regulator has issued a licence to Equinor for the 385
million-barrel Cappahayden K-67 discovery east of St John’s,
Newfoundland and Labrador (Equinor 60% operator, bp
40%).
●
Azule
Energy (bp and Eni’s 50:50 joint venture in Angola) has taken
the final investment decision for the Agogo Integrated West Hub
Development oil project.
●
MiQ,
the non-profit global leader in methane certification, announced
that it has independently audited and certified bp as the first
energy major in the US to verify the methane intensity of its
entire US onshore portfolio of natural gas.
●
On
13 April bp announced start-up of the Mad Dog Phase 2 Argos
platform. bp expects to safely and systematically ramp up
production through 2023 (bp 60.5% operator, Woodside Energy 23.9%
and Union Oil Company of California, an affiliate of Chevron U.S.A.
Inc. 15.6%).
●
Moving
forward with concept selection for a bp-operated Kaskida
development project in the Gulf of Mexico.
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit before interest and tax
|
|
3,318
|
1,686
|
3,832
|
|
Inventory holding (gains) losses*
|
|
(1)
|
2
|
(1)
|
|
RC profit before interest and tax
|
|
3,317
|
1,688
|
3,831
|
|
Net (favourable) adverse impact of adjusting items
|
|
2
|
2,740
|
852
|
|
Underlying RC profit before interest and tax
|
|
3,319
|
4,428
|
4,683
|
|
Taxation on an underlying RC basis
|
|
(1,766)
|
(2,015)
|
(1,912)
|
|
Underlying RC profit before interest
|
|
1,553
|
2,413
|
2,771
|
Top
of page 10
oil production & operations (continued)
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,327
|
1,383
|
1,429
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
Exploration write-offs
|
|
51
|
73
|
51
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
Total adjusted EBITDA
|
|
4,697
|
5,884
|
6,163
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
Total capital expenditure
|
|
1,520
|
1,430
|
1,254
|
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
Production (net of
royalties)(a)
|
|
|
|
|
|
Liquids* (mb/d)
|
|
1,005
|
966
|
948
|
|
Natural gas (mmcf/d)
|
|
2,060
|
1,989
|
1,964
|
|
Total hydrocarbons* (mboe/d)
|
|
1,360
|
1,309
|
1,286
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
Liquids ($/bbl)
|
|
71.63
|
80.43
|
83.47
|
|
Natural
gas(c)
($/mcf)
|
|
6.57
|
10.20
|
9.55
|
|
Total
hydrocarbons*(c)
($/boe)
|
|
62.36
|
74.60
|
76.85
|
(a)
Includes bp’s
share of production of equity-accounted entities in the oil
production & operations segment.
(b)
Realizations are
based on sales by consolidated subsidiaries only – this
excludes equity-accounted entities.
(c)
Realizations
calculation methodology has been changed to reflect gas price
fluctuations within the North Sea region. First quarter 2022 was
restated. There is no impact on financial results.
Top
of page 11
customers & products
Financial results
●
The replacement
cost (RC) profit before
interest and tax for the first
quarter was
$2,680 million, compared with
$1,981 million for the same
period in 2022. The
first quarter is adjusted by an
adverse impact of net adjusting items* of $79 million, compared with an adverse
impact of net adjusting items of $175
million for the same period in 2022. Adjusting items include impacts of
fair value accounting effects*, relative to management's internal
measure of performance, which are a favourable impact of $77 million for the quarter and an adverse
impact of $377 million for the
same period in 2022.
●
After adjusting
items, the underlying RC profit
before interest and tax* for the first
quarter was $2,759
million, compared with $2,156
million for the same period in 2022.
●
The
customers & products result for the first quarter was higher
than the same period in 2022, primarily reflecting a higher
refining performance.
●
customers
– the convenience and mobility
result, excluding Castrol, for the first quarter was lower than the
same period in 2022. Stronger performance in biofuels, aviation and
convenience was offset by higher costs, which included expenditure
in our transition growth engines and the impact of
inflation.
Castrol result for
the first quarter
was
lower than the same period in 2022,
primarily due to higher costs, including employee costs, partially
offset by higher margins.
●
products
– the products result for the
first quarter was higher compared with the same period in 2022,
primarily due to higher realized refining margins, which included
the benefit of wider North American heavy crude differentials. The
quarter also benefited from a very strong contribution from oil
trading, however this was lower than the same period last year
which benefited from an exceptional
performance.
Operational update
●
bp-operated
refining availability* for the first quarter was 96.1%, higher
compared with 95.0% for the same period in 2022. Utilization was
lower than the same period in 2022, primarily due to the Toledo
refinery shutdown.
Strategic progress
●
In
February, bp announced an agreement to purchase TravelCenters of
America, one of the biggest networks of highway travel centres in
the US. The deal is expected to add around 280 sites to our retail
network and nearly double our convenience gross margin*. The deal
is expected to close in the second quarter, subject to shareholder
approval.
●
In
March, bp signed a new agreement with Rontec, one of the UK’s
largest roadside retail networks, to supply around two billion
litres of fuel over the next five years to more than 60 of
Rontec’s sites. The two companies will also explore
opportunities to deploy bp pulse electric vehicle (EV) charging
infrastructure to Rontec’s forecourts.
●
In
March, bp pulse:
-
signed a strategic collaboration agreement with
Iberdrola to accelerate EV charging infrastructure roll-out in
Spain and Portugal. bp and Iberdrola intend to form a joint venture
with plans to invest up to €1 billion and install 5,000
fast(a)
EV charge points* by 2025 and around
11,000 by 2030. The formation of the joint venture is subject to
regulatory approval.
-
announced
a new global mobility agreement with Uber, which will see the
companies work together to help accelerate Uber’s commitment
to become a global zero-tailpipe emissions mobility platform by
2040.
●
In
March, Air bp announced the first sale of International
Sustainability and Carbon Certification (ISCC) EU sustainable
aviation fuel produced at bp’s Castellon refinery in Spain,
to the LATAM Group, one of Latin America’s largest
airlines.
●
In
April, bp’s Rotterdam refinery in the Netherlands, became the
first bp refinery to co-process Nuseed Carinta Oil as part of our
partnership with Nuseed. Nuseed Carinata Oil is a sustainable
low-carbon biofuel feedstock which we plan to use in our
refineries, as well as onward marketing.
●
In
February, bp and BHP, one of the world’s largest iron ore
producers, announced a partnership to trial the use of blended
diesel with hydrogenated vegetable oil (HVO) to assist BHP to
reduce carbon emissions from its iron ore operations in Western
Australia.
●
On
28 February 2023, bp completed the sale of its 50% interest in the
bp-Husky Toledo refinery in Ohio, US, to Cenovus Energy, its
partner in the facility.
(a)
“fast
charging” includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
Top
of page 12
customers & products (continued)
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit (loss) before interest and tax
|
|
2,078
|
(645)
|
5,456
|
|
Inventory holding (gains) losses*
|
|
602
|
1,416
|
(3,475)
|
|
RC profit (loss) before interest and tax
|
|
2,680
|
771
|
1,981
|
|
Net (favourable) adverse impact of adjusting items
|
|
79
|
1,131
|
175
|
|
Underlying RC profit before interest and tax
|
|
2,759
|
1,902
|
2,156
|
|
Of
which:(a)
|
|
|
|
|
|
customers
– convenience & mobility
|
|
391
|
628
|
522
|
|
Castrol – included in customers
|
|
161
|
70
|
256
|
|
products
– refining & trading
|
|
2,368
|
1,274
|
1,634
|
|
Taxation on an underlying RC basis
|
|
(777)
|
(400)
|
(400)
|
|
Underlying RC profit before interest
|
|
1,982
|
1,502
|
1,756
|
(a)
A reconciliation to
RC profit before interest and tax by business is provided on
page 28.
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
customers – convenience & mobility
|
|
732
|
962
|
848
|
|
Castrol – included in customers
|
|
200
|
110
|
295
|
|
products – refining & trading
|
|
2,824
|
1,681
|
2,025
|
|
|
|
3,556
|
2,643
|
2,873
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
797
|
741
|
717
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
customers – convenience & mobility
|
|
458
|
694
|
347
|
|
Castrol – included in customers
|
|
68
|
98
|
52
|
|
products
– refining & trading(c)
|
|
532
|
3,455
|
368
|
|
Total capital expenditure
|
|
990
|
4,149
|
715
|
(b)
A reconciliation to
RC profit before interest and tax by business is provided on
page 28.
(c)
Fourth quarter 2022
includes $3,030 million in
respect of the Archaea Energy acquisition.
|
Retail(d)
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
bp retail sites* – total (#)
|
|
20,700
|
20,650
|
20,550
|
|
Strategic
convenience sites*
|
|
2,450
|
2,400
|
2,150
|
(d)
Reported to the
nearest 50.
|
Marketing sales of refined products (mb/d)
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
US
|
|
1,078
|
1,126
|
1,113
|
|
Europe
|
|
973
|
1,069
|
883
|
|
Rest of World
|
|
462
|
461
|
471
|
|
|
|
2,513
|
2,656
|
2,467
|
|
Trading/supply sales of refined products
|
|
333
|
325
|
352
|
|
Total sales volume of refined products
|
|
2,846
|
2,981
|
2,819
|
Top
of page 13
customers & products (continued)
|
Refining marker margin*
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
bp
average refining marker margin (RMM)(e)
($/bbl)
|
|
28.1
|
32.2
|
18.9
|
(e)
The RMM in the quarter is calculated based on bp’s current
refinery portfolio. On a comparative basis, the fourth quarter and
first quarter 2022 RMM would be $32.2/bbl and $19.3/bbl
respectively.
|
Refinery throughputs (mb/d)
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
US
|
|
686
|
615
|
758
|
|
Europe
|
|
832
|
763
|
807
|
|
Rest of World
|
|
—
|
—
|
85
|
|
Total refinery throughputs
|
|
1,518
|
1,378
|
1,650
|
|
bp-operated refining availability* (%)
|
|
96.1
|
95.0
|
95.0
|
Top
of page 14
other businesses & corporate
Other
businesses & corporate comprises innovation & engineering,
bp ventures, Launchpad, regions, corporates & solutions, our
corporate activities & functions and any residual costs of the
Gulf of Mexico oil spill. It also
includes Rosneft results up to 27 February
2022.
Financial results
●
The replacement
cost (RC) loss before interest
and tax for the first quarter
was $90 million, compared with
$24,719 million for the same
period in 2022. The
first quarter is adjusted by a
favourable impact of net adjusting items* of $206 million, compared with an adverse
impact of net adjusting items of $24,460 million for the same period in
2022. Adjusting items include
impacts of fair value accounting effects* which are a favourable impact of $245 million for the quarter and
an adverse impact of
$425 million for the same
period in 2022. The adjusting
items for the first quarter of
2022 mainly relate to Rosneft.
●
After adjusting RC
loss for net adjusting items,
the underlying RC loss before
interest and tax* for the first
quarter was $296
million, compared with $259
million for the same period in 2022.
Strategic progress
●
In
April, bp ventures invested $11 million in Magenta Mobility, one of
India’s largest providers of electric mobility for last-mile
delivery, the journey from hub to customer.
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit (loss) before interest and tax
|
|
(90)
|
103
|
(24,719)
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
—
|
|
RC profit (loss) before interest and tax
|
|
(90)
|
103
|
(24,719)
|
|
Net
(favourable) adverse impact of adjusting items(a)
|
|
(206)
|
(409)
|
24,460
|
|
Underlying RC profit (loss) before interest and tax
|
|
(296)
|
(306)
|
(259)
|
|
Taxation on an underlying RC basis
|
|
29
|
43
|
23
|
|
Underlying RC profit (loss) before interest
|
|
(267)
|
(263)
|
(236)
|
(a)
Includes fair value
accounting effects relating to the hybrid bonds that were issued on
17 June 2020. See page 31 for
more information.
other businesses & corporate (excluding Rosneft)
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit (loss) before interest and tax
|
|
(90)
|
103
|
(686)
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
—
|
|
RC profit (loss) before interest and tax
|
|
(90)
|
103
|
(686)
|
|
Net (favourable) adverse impact of adjusting items
|
|
(206)
|
(409)
|
427
|
|
Underlying RC profit (loss) before interest and tax
|
|
(296)
|
(306)
|
(259)
|
|
Taxation on an underlying RC basis
|
|
29
|
43
|
23
|
|
Underlying RC profit (loss) before interest
|
|
(267)
|
(263)
|
(236)
|
other businesses & corporate (Rosneft)
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Profit (loss) before interest and tax
|
|
—
|
—
|
(24,033)
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
—
|
|
RC profit (loss) before interest and tax
|
|
—
|
—
|
(24,033)
|
|
Net (favourable) adverse impact of adjusting items
|
|
—
|
—
|
24,033
|
|
Underlying RC profit (loss) before interest and tax
|
|
—
|
—
|
—
|
|
Taxation on an underlying RC basis
|
|
—
|
—
|
—
|
|
Underlying RC profit (loss) before interest
|
|
—
|
—
|
—
|
Top
of page 15
Financial statements
Group income statement
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
|
|
|
|
|
|
Sales
and other operating revenues (Note
5)
|
|
56,182
|
69,257
|
49,258
|
|
Earnings from joint ventures – after interest and
tax
|
|
195
|
189
|
379
|
|
Earnings from associates – after interest and
tax
|
|
173
|
129
|
871
|
|
Interest and other income
|
|
248
|
608
|
194
|
|
Gains on sale of businesses and fixed assets
|
|
153
|
173
|
518
|
|
Total revenues and other income
|
|
56,951
|
70,356
|
51,220
|
|
Purchases
|
|
29,122
|
34,101
|
27,808
|
|
Production and manufacturing expenses
|
|
6,982
|
6,841
|
6,975
|
|
Production and similar taxes
|
|
474
|
557
|
505
|
|
Depreciation,
depletion and amortization (Note
6)
|
|
3,800
|
3,714
|
3,625
|
|
Net impairment and losses on sale of businesses and fixed assets
(Note 3)
|
|
88
|
3,629
|
26,031
|
|
Exploration expense
|
|
106
|
140
|
92
|
|
Distribution and administration expenses
|
|
3,747
|
3,654
|
3,080
|
|
Profit (loss) before interest and taxation
|
|
12,632
|
17,720
|
(16,896)
|
|
Finance costs
|
|
843
|
834
|
664
|
|
Net
finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(58)
|
(16)
|
(20)
|
|
Profit (loss) before taxation
|
|
11,847
|
16,902
|
(17,540)
|
|
Taxation
|
|
3,425
|
5,741
|
2,530
|
|
Profit (loss) for the period
|
|
8,422
|
11,161
|
(20,070)
|
|
Attributable to
|
|
|
|
|
|
bp
shareholders
|
|
8,218
|
10,803
|
(20,384)
|
|
Non-controlling
interests
|
|
204
|
358
|
314
|
|
|
|
8,422
|
11,161
|
(20,070)
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
|
|
|
|
Per
ordinary share (cents)
|
|
|
|
|
|
Basic
|
|
45.93
|
59.43
|
(104.46)
|
|
Diluted
|
|
45.06
|
58.36
|
(104.46)
|
|
Per
ADS (dollars)
|
|
|
|
|
|
Basic
|
|
2.76
|
3.57
|
(6.27)
|
|
Diluted
|
|
2.70
|
3.50
|
(6.27)
|
Top
of page 16
Condensed group statement of comprehensive income
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
8,422
|
11,161
|
(20,070)
|
|
Other comprehensive income
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
Currency
translation differences(a)
|
|
453
|
2,142
|
(1,749)
|
|
Exchange (gains)
losses on translation of foreign operations reclassified to gain or
loss on sale of businesses and fixed assets(b)
|
|
—
|
(32)
|
10,791
|
|
Cash
flow hedges and costs of hedging
|
|
546
|
584
|
222
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
(203)
|
392
|
85
|
|
Income
tax relating to items that may be reclassified
|
|
(76)
|
(108)
|
(102)
|
|
|
|
720
|
2,978
|
9,247
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
Remeasurements
of the net pension and other post-retirement benefit liability or
asset
|
|
(87)
|
(1,508)
|
2,128
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
—
|
1
|
(1)
|
|
Income
tax relating to items that will not be reclassified
|
|
23
|
538
|
(668)
|
|
|
|
(64)
|
(969)
|
1,459
|
|
Other comprehensive income
|
|
656
|
2,009
|
10,706
|
|
Total comprehensive income
|
|
9,078
|
13,170
|
(9,364)
|
|
Attributable to
|
|
|
|
|
|
bp
shareholders
|
|
8,861
|
12,760
|
(9,678)
|
|
Non-controlling
interests
|
|
217
|
410
|
314
|
|
|
|
9,078
|
13,170
|
(9,364)
|
(a)
Fourth quarter 2022
is principally affected by movements in the Pound Sterling against
the US dollar. First quarter 2022 principally affected by movements
in the Russian rouble against the US dollar.
(b)
First quarter 2022
predominantly relates to the loss of significant influence over
Rosneft.
Top
of page 17
Condensed group statement of changes in equity
|
|
|
bp shareholders’
|
Non-controlling interests
|
Total
|
|
|
$ 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
|
|
|
|
|
|
|
|
|
|
|
bp shareholders’
|
Non-controlling interests
|
Total
|
|
|
$ million
|
|
equity(a)
|
Hybrid bonds
|
Other interest
|
equity
|
|
At 1 January 2022
|
|
75,463
|
13,041
|
1,935
|
90,439
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
(9,678)
|
127
|
187
|
(9,364)
|
|
Dividends
|
|
(1,069)
|
—
|
(65)
|
(1,134)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(1)
|
—
|
—
|
(1)
|
|
Repurchase of ordinary share capital
|
|
(1,592)
|
—
|
—
|
(1,592)
|
|
Share-based payments, net of tax
|
|
175
|
—
|
—
|
175
|
|
Issue of perpetual hybrid bonds
|
|
(1)
|
67
|
—
|
66
|
|
Payments on perpetual hybrid bonds
|
|
—
|
(72)
|
—
|
(72)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
2
|
—
|
—
|
2
|
|
At 31 March 2022
|
|
63,299
|
13,163
|
2,057
|
78,519
|
(a)
In 2022 $9.2
billion of the opening foreign currency translation reserve has
been moved to the profit and loss account reserve as a result of
bp's decision to exit its shareholding in Rosneft and its other
businesses with Rosneft in Russia.
Top
of page 18
Group balance sheet
|
|
|
31 March
|
31 December
|
|
$ million
|
|
2023
|
2022
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
105,744
|
106,044
|
|
Goodwill
|
|
12,003
|
11,960
|
|
Intangible assets
|
|
10,295
|
10,200
|
|
Investments in joint ventures
|
|
13,030
|
12,400
|
|
Investments in associates
|
|
8,101
|
8,201
|
|
Other investments
|
|
2,656
|
2,670
|
|
Fixed assets
|
|
151,829
|
151,475
|
|
Loans
|
|
1,238
|
1,271
|
|
Trade and other receivables
|
|
1,131
|
1,092
|
|
Derivative financial instruments
|
|
11,575
|
12,841
|
|
Prepayments
|
|
698
|
576
|
|
Deferred tax assets
|
|
3,401
|
3,908
|
|
Defined benefit pension plan surpluses
|
|
9,531
|
9,269
|
|
|
|
179,403
|
180,432
|
|
Current assets
|
|
|
|
|
Loans
|
|
369
|
315
|
|
Inventories
|
|
23,905
|
28,081
|
|
Trade and other receivables
|
|
29,426
|
34,010
|
|
Derivative financial instruments
|
|
12,247
|
11,554
|
|
Prepayments
|
|
1,791
|
2,092
|
|
Current tax receivable
|
|
637
|
621
|
|
Other investments
|
|
450
|
578
|
|
Cash and cash equivalents
|
|
30,433
|
29,195
|
|
|
|
99,258
|
106,446
|
|
Assets classified as held for sale (Note 2)
|
|
—
|
1,242
|
|
|
|
99,258
|
107,688
|
|
Total assets
|
|
278,661
|
288,120
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
57,854
|
63,984
|
|
Derivative financial instruments
|
|
7,560
|
12,618
|
|
Accruals
|
|
5,829
|
6,398
|
|
Lease liabilities
|
|
2,160
|
2,102
|
|
Finance debt
|
|
2,499
|
3,198
|
|
Current tax payable
|
|
3,583
|
4,065
|
|
Provisions
|
|
5,102
|
6,332
|
|
|
|
84,587
|
98,697
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
—
|
321
|
|
|
|
84,587
|
99,018
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
10,181
|
10,387
|
|
Derivative financial instruments
|
|
11,412
|
13,537
|
|
Accruals
|
|
1,307
|
1,233
|
|
Lease liabilities
|
|
6,445
|
6,447
|
|
Finance debt
|
|
46,096
|
43,746
|
|
Deferred tax liabilities
|
|
10,886
|
10,526
|
|
Provisions
|
|
15,214
|
14,992
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
5,352
|
5,244
|
|
|
|
106,893
|
106,112
|
|
Total liabilities
|
|
191,480
|
205,130
|
|
Net assets
|
|
87,181
|
82,990
|
|
Equity
|
|
|
|
|
bp
shareholders’ equity
|
|
71,775
|
67,553
|
|
Non-controlling interests
|
|
15,406
|
15,437
|
|
Total equity
|
|
87,181
|
82,990
|
Top
of page 19
Condensed group cash flow statement
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Operating activities
|
|
|
|
|
|
Profit (loss) before taxation
|
|
11,847
|
16,902
|
(17,540)
|
|
Adjustments to
reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,850
|
3,781
|
3,674
|
|
Net
impairment and (gain) loss on sale of businesses and fixed
assets
|
|
(65)
|
3,456
|
25,513
|
|
Earnings from
equity-accounted entities, less dividends received
|
|
1
|
582
|
(1,093)
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
63
|
186
|
184
|
|
Share-based
payments
|
|
(22)
|
166
|
170
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(43)
|
(60)
|
(146)
|
|
Net
charge for provisions, less payments
|
|
(1,099)
|
(1,013)
|
484
|
|
Movements in
inventories and other current and non-current assets and
liabilities
|
|
(3,755)
|
(6,847)
|
(1,771)
|
|
Income
taxes paid
|
|
(3,155)
|
(3,582)
|
(1,265)
|
|
Net cash provided by operating activities
|
|
7,622
|
13,571
|
8,210
|
|
Investing activities
|
|
|
|
|
|
Expenditure on property, plant and equipment, intangible and other
assets
|
|
(3,129)
|
(3,696)
|
(2,602)
|
|
Acquisitions, net of cash acquired
|
|
52
|
(3,522)
|
(8)
|
|
Investment in joint ventures
|
|
(540)
|
(107)
|
(294)
|
|
Investment in associates
|
|
(8)
|
(44)
|
(25)
|
|
Total cash capital expenditure
|
|
(3,625)
|
(7,369)
|
(2,929)
|
|
Proceeds from disposal of fixed assets
|
|
15
|
27
|
468
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
785
|
587
|
549
|
|
Proceeds from loan repayments
|
|
6
|
7
|
29
|
|
Cash provided from investing activities
|
|
806
|
621
|
1,046
|
|
Net cash used in investing activities
|
|
(2,819)
|
(6,748)
|
(1,883)
|
|
Financing activities
|
|
|
|
|
|
Net
issue (repurchase) of shares (Note
7)
|
|
(2,448)
|
(3,240)
|
(1,592)
|
|
Lease liability payments
|
|
(555)
|
(513)
|
(498)
|
|
Proceeds from long-term financing
|
|
2,395
|
10
|
2,002
|
|
Repayments of long-term financing
|
|
(799)
|
(2,197)
|
(892)
|
|
Net increase (decrease) in short-term debt
|
|
(529)
|
190
|
(276)
|
|
Issue of perpetual hybrid bonds
|
|
45
|
48
|
66
|
|
Payments relating to perpetual hybrid bonds
|
|
(236)
|
(219)
|
(148)
|
|
Payments
relating to transactions involving non-controlling interests (Other
interest)
|
|
(180)
|
(1)
|
(5)
|
|
Receipts
relating to transactions involving non-controlling interests (Other
interest)
|
|
7
|
1
|
7
|
|
Dividends paid - bp shareholders
|
|
(1,183)
|
(1,088)
|
(1,068)
|
|
-
non-controlling interests
|
|
(68)
|
(100)
|
(65)
|
|
Net cash provided by (used in) financing activities
|
|
(3,551)
|
(7,109)
|
(2,469)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(14)
|
177
|
(125)
|
|
Increase (decrease) in cash and cash equivalents
|
|
1,238
|
(109)
|
3,733
|
|
Cash and cash equivalents at beginning of period
|
|
29,195
|
29,304
|
30,681
|
|
Cash and cash equivalents at end of period
|
|
30,433
|
29,195
|
34,414
|
Top
of page 20
Notes
Note 1. Basis of preparation
The
interim financial information included in this report has been
prepared in accordance with IAS 34 'Interim Financial
Reporting'.
The
results for the interim periods are unaudited and, in the opinion
of management, include all adjustments necessary for a fair
presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in
conjunction with the consolidated financial statements and related
notes for the year ended 31 December
2022 included in BP Annual
Report and Form 20-F 2022.
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 2023 which are the same as those used in preparing
BP Annual Report and Form
20-F 2022. There are no new or amended standards
or interpretations adopted from 1 January 2023 onwards, including
IFRS 17 'Insurance Contracts,' that have a significant impact on
the financial information.
Significant accounting judgements and estimates
bp's
significant accounting judgements and estimates were disclosed in
BP Annual Report and Form 20-F
2022. These have been subsequently considered at the end of
this quarter to determine if any changes were required to those
judgements and estimates. No significant changes were
identified.
Investment in Rosneft
Since
the first quarter 2022, bp accounts for its interest in Rosneft and
its other businesses with Rosneft within Russia, as financial
assets measured at fair value within ‘Other
investments’. It is considered by management that any measure
of fair value, other than nil, would be subject to such high
measurement uncertainty that no estimate would provide useful
information even if it were accompanied by a description of the
estimate made in producing it and an explanation of the
uncertainties that affect the estimate. Accordingly, it is not
currently possible to estimate any carrying value other than zero
when determining the measurement of the interest in Rosneft
and the other businesses with Rosneft within Russia
as at 31
March 2023.
Top
of page 21
Note 2. Non-current assets held for sale
There were no assets or liabilities classified as held for sale at
31 March 2023.
Transactions that were classified as held for sale at the end of
2022, but completed during the first quarter of 2023, are described
below.
On 7 September 2022, bp announced that it had agreed to sell its
upstream business in Algeria to Eni. The transaction closed on 28
February 2023.
On 8 August 2022, bp announced an agreement to sell its 50%
interest in the bp-Husky Toledo refinery in Ohio US, to Cenovus
Energy, its partner in the facility. The transaction closed on 28
February 2023.
Note 3. Impairment and losses on sale of businesses and fixed
assets
Net impairment charges and losses on sale of businesses and fixed
assets for the first quarter were $88 million, compared with
net charges of $26,031 million for the same period in 2022 and
include net impairment reversals for the first quarter of
$41 million, compared with net charges of $14,386 million
for the same period in 2022.
The impairment charge and the loss on sale of businesses and fixed
assets for 2022 mainly relates to bp's investment in Rosneft, which
has been reported in other businesses and corporate.
Note 4. Analysis of replacement cost profit (loss) before interest
and tax and reconciliation to profit (loss) before
taxation
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
gas & low carbon energy
|
|
7,347
|
16,439
|
(1,524)
|
|
oil production & operations
|
|
3,317
|
1,688
|
3,831
|
|
customers & products
|
|
2,680
|
771
|
1,981
|
|
other businesses & corporate
|
|
(90)
|
103
|
(24,719)
|
|
|
|
13,254
|
19,001
|
(20,431)
|
|
Consolidation adjustment – UPII*
|
|
(22)
|
147
|
34
|
|
RC profit (loss) before interest and tax
|
|
13,232
|
19,148
|
(20,397)
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
gas
& low carbon energy
|
|
1
|
(10)
|
25
|
|
oil
production & operations
|
|
1
|
(2)
|
1
|
|
customers
& products
|
|
(602)
|
(1,416)
|
3,475
|
|
Profit (loss) before interest and tax
|
|
12,632
|
17,720
|
(16,896)
|
|
Finance costs
|
|
843
|
834
|
664
|
|
Net
finance expense/(income) relating to pensions and other
post-retirement benefits
|
|
(58)
|
(16)
|
(20)
|
|
Profit (loss) before taxation
|
|
11,847
|
16,902
|
(17,540)
|
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
US
|
|
3,075
|
1,404
|
2,277
|
|
Non-US
|
|
10,157
|
17,744
|
(22,674)
|
|
|
|
13,232
|
19,148
|
(20,397)
|
Top
of page 22
Note 5. Sales and other operating revenues
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
By segment
|
|
|
|
|
|
gas & low carbon energy
|
|
17,886
|
26,793
|
8,166
|
|
oil production & operations
|
|
6,153
|
6,932
|
8,158
|
|
customers & products
|
|
38,882
|
43,072
|
42,163
|
|
other businesses & corporate
|
|
738
|
779
|
452
|
|
|
|
63,659
|
77,576
|
58,939
|
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
gas & low carbon energy
|
|
536
|
(441)
|
1,948
|
|
oil production & operations
|
|
6,261
|
6,916
|
7,036
|
|
customers & products
|
|
144
|
610
|
692
|
|
other businesses & corporate
|
|
536
|
1,234
|
5
|
|
|
|
7,477
|
8,319
|
9,681
|
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
|
gas & low carbon energy
|
|
17,350
|
27,234
|
6,218
|
|
oil production & operations
|
|
(108)
|
16
|
1,122
|
|
customers & products
|
|
38,738
|
42,462
|
41,471
|
|
other businesses & corporate
|
|
202
|
(455)
|
447
|
|
Total sales and other operating revenues
|
|
56,182
|
69,257
|
49,258
|
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
|
US
|
|
19,160
|
18,563
|
19,152
|
|
Non-US
|
|
46,350
|
61,593
|
42,797
|
|
|
|
65,510
|
80,156
|
61,949
|
|
Less: sales and other operating revenues between areas
|
|
9,328
|
10,899
|
12,691
|
|
|
|
56,182
|
69,257
|
49,258
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
Crude oil
|
|
637
|
809
|
2,144
|
|
Oil products
|
|
30,141
|
34,800
|
31,751
|
|
Natural gas, LNG and NGLs
|
|
9,644
|
11,040
|
10,680
|
|
Non-oil products and other revenues from contracts with
customers
|
|
1,872
|
1,459
|
2,345
|
|
Revenue from contracts with customers
|
|
42,294
|
48,108
|
46,920
|
|
Other
operating revenues(a)
|
|
13,888
|
21,149
|
2,338
|
|
Total sales and other operating revenues
|
|
56,182
|
69,257
|
49,258
|
(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
|
|
2023
|
2022
|
2022
|
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
gas & low carbon energy
|
|
1,440
|
1,373
|
1,255
|
|
oil production & operations
|
|
1,327
|
1,383
|
1,429
|
|
customers & products
|
|
797
|
741
|
717
|
|
other businesses & corporate
|
|
236
|
217
|
224
|
|
|
|
3,800
|
3,714
|
3,625
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
US
|
|
1,254
|
1,202
|
1,083
|
|
Non-US
|
|
2,546
|
2,512
|
2,542
|
|
|
|
3,800
|
3,714
|
3,625
|
Note 7. Earnings per share and shares in issue
Basic
earnings per ordinary share (EpS) amounts are calculated by
dividing the profit (loss) for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the period. Against the authority granted at
bp's 2022 annual general meeting, 385
million ordinary shares repurchased for cancellation were
settled during the first quarter
2023 for a total cost of $2,448 million. A further 154 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 $1,023 million. This
amount, plus a further $447 million, has been accrued at 31 March
2023. The number of shares in issue is reduced when shares are
repurchased, but is not reduced in respect of the period-end
commitment to repurchase shares subsequent to the end of the
period.
The
calculation of EpS is performed separately for each discrete
quarterly period, and for the year-to-date period. As a result, the
sum of the discrete quarterly EpS amounts in any particular
year-to-date period may not be equal to the EpS amount for the
year-to-date period.
For the
diluted EpS calculation the weighted average number of shares
outstanding during the period is adjusted for the number of shares
that are potentially issuable in connection with employee
share-based payment plans using the treasury stock
method.
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Results for the period
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
8,218
|
10,803
|
(20,384)
|
|
Less: preference dividend
|
|
—
|
—
|
—
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
8,218
|
10,803
|
(20,384)
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
17,891,455
|
18,178,821
|
19,514,477
|
|
ADS
equivalent(c)
|
|
2,981,909
|
3,029,803
|
3,252,412
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to calculate diluted earnings per
share
|
|
18,238,522
|
18,509,421
|
19,514,477
|
|
ADS
equivalent(c)
|
|
3,039,753
|
3,084,903
|
3,252,412
|
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
17,703,285
|
17,974,112
|
19,409,157
|
|
ADS
equivalent(c)
|
|
2,950,547
|
2,995,685
|
3,234,859
|
(a)
Excludes treasury
shares and includes certain shares that will be issued in the
future under employee share-based payment plans.
(b)
If the inclusion of
potentially issuable shares would decrease loss per share, the
potentially issuable shares are excluded from the weighted average
number of shares outstanding used to calculate diluted earnings per
share. The numbers of potentially issuable shares that have been
excluded from the calculation for the first quarter 2022 are
179,226 thousand (ADS equivalent 29,871 thousand).
(c)
One ADS is
equivalent to six ordinary shares.
Top
of page 24
Note 8. Dividends
Dividends payable
BP
today announced an interim dividend of 6.610 cents per ordinary share which is
expected to be paid on 23 June
2023 to ordinary shareholders and American Depositary Share
(ADS) holders on the register on 12
May 2023. The ex-dividend date will be 11 May 2023. The corresponding amount in
sterling is due to be announced on 6
June 2023, calculated based on the average of the market
exchange rates over three dealing days between 31 May 2023 and 2 June 2023. Holders of
ADSs are expected to receive $0.39660 per ADS (less applicable fees).
The board has decided not to offer a scrip dividend alternative in
respect of the first quarter
2023 dividend. Ordinary
shareholders and ADS holders (subject to certain exceptions) will
be able to participate in a dividend reinvestment programme.
Details of the 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
|
|
|
|
2023
|
2022
|
2022
|
|
Dividends paid per ordinary share
|
|
|
|
|
|
cents
|
|
6.610
|
6.006
|
5.460
|
|
pence
|
|
5.551
|
4.940
|
4.160
|
|
Dividends paid per ADS (cents)
|
|
39.66
|
36.04
|
32.76
|
Note 9. Net debt
|
Net debt*
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Finance
debt(a)
|
|
48,595
|
46,944
|
60,606
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
3,070
|
3,673
|
1,265
|
|
|
|
51,665
|
50,617
|
61,871
|
|
Less: cash and cash equivalents
|
|
30,433
|
29,195
|
34,414
|
|
Net
debt(c)
|
|
21,232
|
21,422
|
27,457
|
|
Total equity
|
|
87,181
|
82,990
|
78,519
|
|
Gearing*
|
|
19.6%
|
20.5%
|
25.9%
|
(a)
The fair value of
finance debt at 31 March 2023 was $45,071 million (31 December 2022 $42,590 million, 31 March 2022
$59,601 million).
(b)
Derivative
financial instruments entered into for the purpose of managing
interest rate and foreign currency exchange risk associated with
net debt with a fair value liability position of $97 million at 31 March 2023
(fourth quarter 2022 liability of $91 million and first quarter 2022 liability of $173 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 1 May 2023, is unaudited and does not
constitute statutory financial statements. Audited financial
information will be published in BP Annual Report and Form 20-F
2023. BP Annual Report and Form 20-F
2022 has
been filed with the Registrar of Companies in England and Wales.
The report of the auditor on those accounts was unqualified, did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying the report and did
not contain a statement under section 498(2) or section 498(3) of
the UK Companies Act 2006.
Top
of page 25
Additional information
Capital expenditure*
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Capital expenditure
|
|
|
|
|
|
Organic capital expenditure*
|
|
3,495
|
3,861
|
2,573
|
|
Inorganic
capital expenditure*(a)
|
|
130
|
3,508
|
356
|
|
|
|
3,625
|
7,369
|
2,929
|
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Capital expenditure by segment
|
|
|
|
|
|
gas & low carbon energy
|
|
1,013
|
1,609
|
861
|
|
oil production & operations
|
|
1,520
|
1,430
|
1,254
|
|
customers
& products(a)
|
|
990
|
4,149
|
715
|
|
other businesses & corporate
|
|
102
|
181
|
99
|
|
|
|
3,625
|
7,369
|
2,929
|
|
Capital expenditure by geographical area
|
|
|
|
|
|
US
|
|
1,697
|
4,929
|
1,097
|
|
Non-US
|
|
1,928
|
2,440
|
1,832
|
|
|
|
3,625
|
7,369
|
2,929
|
(a)
Fourth quarter 2022
includes $3,030 million in
respect of the Archaea Energy acquisition.
Top
of page 26
Adjusting items*
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
gas & low carbon energy
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
15
|
33
|
9
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(2)
|
1,111
|
(252)
|
|
Environmental and other provisions
|
|
—
|
—
|
—
|
|
Restructuring, integration and rationalization costs
|
|
—
|
3
|
4
|
|
Fair
value accounting effects(a)(b)
|
|
3,934
|
12,502
|
(5,015)
|
|
Other
|
|
(56)
|
(358)
|
135
|
|
|
|
3,891
|
13,291
|
(5,119)
|
|
oil production & operations
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
137
|
68
|
249
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
8
|
(3,246)
|
(1,204)
|
|
Environmental
and other provisions(c)
|
|
(49)
|
420
|
58
|
|
Restructuring, integration and rationalization costs
|
|
—
|
3
|
(10)
|
|
Fair value accounting effects
|
|
—
|
—
|
—
|
|
Other
|
|
(98)
|
15
|
55
|
|
|
|
(2)
|
(2,740)
|
(852)
|
|
customers & products
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
1
|
72
|
261
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(83)
|
(1,451)
|
(13)
|
|
Environmental and other provisions
|
|
(10)
|
(65)
|
—
|
|
Restructuring, integration and rationalization costs
|
|
(2)
|
12
|
1
|
|
Fair
value accounting effects(b)
|
|
77
|
189
|
(377)
|
|
Other
|
|
(62)
|
112
|
(47)
|
|
|
|
(79)
|
(1,131)
|
(175)
|
|
other businesses & corporate
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
—
|
1
|
(1)
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(6)
|
(1)
|
(1)
|
|
Environmental and other provisions
|
|
(14)
|
(67)
|
(3)
|
|
Restructuring, integration and rationalization costs
|
|
(10)
|
3
|
13
|
|
Fair
value accounting effects(b)
|
|
245
|
515
|
(425)
|
|
Rosneft
|
|
—
|
—
|
(24,033)
|
|
Gulf of Mexico oil spill
|
|
(9)
|
(23)
|
(19)
|
|
Other
|
|
—
|
(19)
|
9
|
|
|
|
206
|
409
|
(24,460)
|
|
Total before interest and taxation
|
|
4,016
|
9,829
|
(30,606)
|
|
Finance
costs(d)
|
|
(104)
|
(169)
|
(158)
|
|
Total before taxation
|
|
3,912
|
9,660
|
(30,764)
|
|
Taxation
on adjusting items(e)
|
|
(205)
|
(1,542)
|
1,471
|
|
Taxation
– tax rate change effect of UK energy profits
levy(f)
|
|
—
|
(1,056)
|
—
|
|
Total
after taxation for period(g)
|
|
3,707
|
7,062
|
(29,293)
|
(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)
Comparatives
include provision reversals relating to the change in discount rate
on retained decommissioning provisions.
(d)
Includes the
unwinding of discounting effects relating to Gulf of Mexico oil
spill payables and the income statement impact of temporary
valuation differences associated with the group’s interest
rate and foreign currency exchange risk management of finance
debt.
(e)
Includes certain
foreign exchange effects on tax as adjusting items. These amounts
represent the impact of: (i) foreign exchange on deferred tax
balances arising from the conversion of local currency tax base
amounts into functional currency, and (ii) taxable gains and losses
from the retranslation of US dollar-denominated intra-group loans
to local currency.
(f)
Fourth quarter 2022
includes the deferred tax impact of the UK Energy Profits Levy
(EPL) on existing temporary differences unwinding over the period 1
January 2023 to 31 March 2028. The revised EPL substantively
enacted in the fourth quarter 2022 increases the headline rate of
tax to 75% and applies to taxable profits from bp’s North Sea
business made from 1 January 2023 until 31 March 2028.
(g)
First quarter 2023
includes a $44-million charge
in respect of the EU Solidarity Contribution, the fourth quarter
2022 includes a $505-million charge.
Top
of page 27
Net debt including leases
|
Net debt including leases*
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Net debt
|
|
21,232
|
21,422
|
27,457
|
|
Lease liabilities
|
|
8,605
|
8,549
|
8,466
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
19
|
19
|
206
|
|
Net debt including leases
|
|
29,856
|
29,990
|
36,129
|
|
Total
equity
|
|
87,181
|
82,990
|
78,519
|
|
Gearing including leases*
|
|
25.5%
|
26.5%
|
31.5%
|
Gulf of Mexico oil spill
|
|
|
31 March
|
31 December
|
|
$ million
|
|
2023
|
2022
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(9,659)
|
(9,566)
|
|
Of
which - current
|
|
(1,220)
|
(1,216)
|
|
|
|
|
|
|
Deferred tax asset
|
|
1,455
|
1,444
|
Payables
and provisions presented in the table above reflect the latest
estimate for the remaining costs associated with the Gulf of Mexico
oil spill. Where amounts have been provided on an estimated basis,
the amounts ultimately payable may differ from the amounts provided
and the timing of payments is uncertain. Further information
relating to the Gulf of Mexico oil spill, including information on
the nature and expected timing of payments relating to provisions
and other payables, is provided in BP Annual Report and Form 20-F 2022 -
Financial statements - Notes 7, 22, 23, 29, and
33.
Working capital* reconciliation
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Movements in
inventories and other current and non-current assets and
liabilities as per condensed group cash flow statement(a)
|
|
(3,755)
|
(6,847)
|
(1,771)
|
|
Adjusted for inventory holding gains (losses)* (Note
4)
|
|
(600)
|
(1,428)
|
3,501
|
|
Adjusted for fair value accounting effects relating to
subsidiaries
|
|
4,242
|
13,288
|
(5,817)
|
|
Other
adjusting items(b)
|
|
(1,298)
|
(815)
|
438
|
|
Working capital release (build) after adjusting for net inventory
gains (losses), fair value accounting effects and other adjusting
items
|
|
(1,411)
|
4,198
|
(3,649)
|
(a)
The movement in
working capital includes outflows relating to the Gulf of Mexico
oil spill on a pre-tax basis of $12 million in the first quarter 2023,
$1 million in the fourth quarter 2022 and $47 million in the first quarter
2022.
(b)
Other adjusting
items relate to the non-cash movement of US emissions obligations
carried as a provision that will be settled by allowances held as
inventory.
Top
of page 28
Surplus cash flow* reconciliation
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
$ million
|
|
2023
|
2022
|
2022
|
|
Sources:
|
|
|
|
|
|
Net cash provided by operating activities
|
|
7,622
|
13,571
|
8,210
|
|
Cash provided from investing activities
|
|
806
|
621
|
1,046
|
|
Other(a)
|
|
(59)
|
(94)
|
119
|
|
Cash inflow
|
|
8,369
|
14,098
|
9,375
|
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
|
Lease liability payments
|
|
(555)
|
(513)
|
(498)
|
|
Payments on perpetual hybrid bonds
|
|
(236)
|
(219)
|
(148)
|
|
Dividends paid – BP shareholders
|
|
(1,183)
|
(1,088)
|
(1,068)
|
|
–
non-controlling interests
|
|
(68)
|
(100)
|
(65)
|
|
Total capital expenditure*
|
|
(3,625)
|
(7,369)
|
(2,929)
|
|
Net repurchase of shares relating to employee share
schemes
|
|
(225)
|
—
|
(500)
|
|
Payments relating to transactions involving non-controlling
interests
|
|
(180)
|
(1)
|
(5)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(14)
|
177
|
(125)
|
|
Cash outflow
|
|
(6,086)
|
(9,113)
|
(5,338)
|
|
|
|
|
|
|
|
Surplus cash flow
|
|
2,283
|
4,985
|
4,037
|
(a)
Other
includes adjustments for net operating cash received or paid which
is held on behalf of third parties for medium-term deferred payment
and prior periods have been adjusted accordingly. First quarter
2022 includes $164 million of proceeds from the disposal of a loan
note related to the Alaska divestment. The cash was received in the
fourth quarter 2021, was reported as a financing cash flow and was
not included in other proceeds at the time due to potential
recourse from the counterparty. The proceeds were recognized as the
potential recourse reduces and by end second quarter 2022 all were
recognized.
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
|
|
2023
|
2022
|
2022
|
|
RC profit before interest and tax for customers &
products
|
|
2,680
|
771
|
1,981
|
|
Less: Adjusting items* gains (charges)
|
|
(79)
|
(1,131)
|
(175)
|
|
Underlying RC profit before interest and tax for customers
& products
|
|
2,759
|
1,902
|
2,156
|
|
By business:
|
|
|
|
|
|
customers
– convenience & mobility
|
|
391
|
628
|
522
|
|
Castrol – included in customers
|
|
161
|
70
|
256
|
|
products
– refining & trading
|
|
2,368
|
1,274
|
1,634
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and amortization
|
|
797
|
741
|
717
|
|
By business:
|
|
|
|
|
|
customers
– convenience & mobility
|
|
341
|
334
|
326
|
|
Castrol – included in customers
|
|
39
|
40
|
39
|
|
products
– refining & trading
|
|
456
|
407
|
391
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers & products
|
|
3,556
|
2,643
|
2,873
|
|
By business:
|
|
|
|
|
|
customers
– convenience & mobility
|
|
732
|
962
|
848
|
|
Castrol – included in customers
|
|
200
|
110
|
295
|
|
products
– refining & trading
|
|
2,824
|
1,681
|
2,025
|
Top
of page 29
Realizations* and marker prices
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
Average realizations(a)
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
US
|
|
62.66
|
71.21
|
70.34
|
|
Europe
|
|
79.26
|
86.62
|
104.41
|
|
Rest of World
|
|
80.67
|
89.38
|
88.84
|
|
BP Average
|
|
71.89
|
80.44
|
83.80
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
US
|
|
2.47
|
4.84
|
3.90
|
|
Europe(b)
|
|
26.83
|
35.56
|
34.58
|
|
Rest of World
|
|
7.41
|
9.40
|
7.88
|
|
BP
Average(b)
|
|
7.20
|
9.59
|
8.28
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
US
|
|
45.00
|
55.67
|
52.17
|
|
Europe(b)
|
|
107.07
|
130.61
|
136.17
|
|
Rest of World
|
|
54.26
|
64.73
|
62.38
|
|
BP
Average(b)
|
|
54.74
|
66.18
|
64.81
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
Brent
|
|
81.17
|
88.87
|
102.23
|
|
West Texas Intermediate
|
|
75.97
|
82.82
|
95.22
|
|
Western Canadian Select
|
|
56.67
|
53.52
|
79.90
|
|
Alaska North Slope
|
|
79.02
|
87.89
|
96.13
|
|
Mars
|
|
74.24
|
78.81
|
93.43
|
|
Urals (NWE – cif)
|
|
46.19
|
61.04
|
87.26
|
|
Average natural gas marker prices
|
|
|
|
|
|
Henry
Hub gas price(c) ($/mmBtu)
|
|
3.44
|
6.26
|
4.96
|
|
UK Gas – National Balancing Point (p/therm)
|
|
130.81
|
166.54
|
232.84
|
(a)
Based on sales of
consolidated subsidiaries only – this excludes equity-accounted
entities.
(b)
Realizations
calculation methodology has been changed to reflect gas price
fluctuations within the North Sea region. First quarter 2022 was
restated. There is no impact on financial results.
(c)
Henry Hub First of
Month Index.
Exchange rates
|
|
|
First
|
Fourth
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
|
|
2023
|
2022
|
2022
|
|
$/£ average rate for the period
|
|
1.21
|
1.17
|
1.34
|
|
$/£ period-end rate
|
|
1.24
|
1.21
|
1.32
|
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.07
|
1.02
|
1.12
|
|
$/€ period-end rate
|
|
1.09
|
1.07
|
1.12
|
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.68
|
0.66
|
0.72
|
|
$/AUD period-end rate
|
|
0.67
|
0.68
|
0.75
|
|
|
|
|
|
|
Top
of page 30
Legal proceedings
The
following discussion sets out the material developments in the
group’s material legal proceedings during the recent period.
For a full discussion of the group’s material legal
proceedings, see pages 258-259
of bp Annual Report and Form 20-F
2022.
Other legal proceedings
Climate change BP p.l.c., BP America Inc. and BP Products
North America Inc. are co-defendants with other oil and gas
companies in over 20 lawsuits brought in various state and federal
courts on behalf of various governmental and private parties. The
lawsuits generally assert claims under a variety of legal theories
seeking to hold the defendant companies responsible for impacts
allegedly caused by and/or relating to climate change. Underlying
many of the legal theories are allegations regarding deceptive
communication and disinformation to the public. The lawsuits seek
remedies including payment of money and other forms of equitable
relief. If such suits were successful, the cost of the remedies
sought in the various cases could be substantial. Over the last
several years, defendants removed each lawsuit to federal court and
the removals were contested by plaintiffs, eventually resulting in
multiple decisions by several Circuit Court of Appeals rejecting
defendants’ attempts to have the cases moved to federal
court. The US Supreme Court recently declined to review the various
Circuit Court of Appeals decisions. Accordingly, the cases will
proceed in the various state courts. Due to these jurisdictional
challenges, the lawsuits all remain at relatively early stages.
While it is not possible to predict the outcome of these legal
actions, bp believes that it has valid defences, and it intends to
defend such actions vigorously.
Glossary
Non-IFRS
measures are provided for investors because they are closely
tracked by management to evaluate bp’s operating performance
and to make financial, strategic and operating decisions. Non-IFRS
measures are sometimes referred to as alternative performance
measures.
Adjusted EBITDA is a non-IFRS
measure presented for bp's operating segments and is defined as
replacement cost (RC) profit before interest and tax, excluding net
adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs
(net of adjusting items). Adjusted EBITDA by business is a further
analysis of adjusted EBITDA for the customers & products
businesses. bp believes it is helpful to disclose adjusted EBITDA
by operating segment and by business because it reflects how the
segments measure underlying business delivery. The nearest
equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or
loss that is required to be disclosed for each operating segment
under IFRS. A reconciliation to IFRS information is provided
on page 28 for the
segments.
Adjusting items are items that
bp discloses separately because it considers such disclosures to be
meaningful and relevant to investors. They are items that
management considers to be important to period-on-period analysis
of the group's results and are disclosed in order to enable
investors to better understand and evaluate the group’s
reported financial performance. Adjusting items include gains and
losses on the sale of businesses and fixed assets, impairments,
environmental and other provisions, restructuring, integration and
rationalization costs, fair value accounting effects, financial
impacts relating to Rosneft for the 2022 financial reporting period
and costs relating to the Gulf of Mexico oil spill and other items.
Adjusting items within equity-accounted earnings are reported net
of incremental income tax reported by the equity-accounted entity.
Adjusting items are used as a reconciling adjustment to derive
underlying RC profit or loss and related underlying measures which
are non-IFRS measures. An analysis of adjusting items by segment
and type is shown on page
26.
Blue hydrogen – Hydrogen
made from natural gas in combination with carbon capture and
storage (CCS).
Capital expenditure is total
cash capital expenditure as stated in the condensed group cash flow
statement. Capital expenditure for the operating segments and
customers & products businesses is presented on the same
basis.
Cash balance point is defined
as the implied Brent oil price 2021 real to balance bp’s
sources and uses of cash assuming an average bp refining marker
margin around $11/bbl and Henry Hub at $3/mmBtu in 2021 real
terms.
Consolidation adjustment – UPII is unrealized profit
in inventory arising on inter-segment transactions.
Convenience gross margin is a
non-IFRS measure. It is calculated as RC profit before interest and
tax for the customers & products segment, excluding RC profit
before interest and tax for the refining & trading and
petrochemicals businesses, and adjusting items* (as defined above)
for the convenience & mobility business to derive underlying RC
profit before interest and tax for the convenience & mobility
business; subtracting underlying RC profit before interest and tax
for the Castrol business; adding back depreciation, depletion and
amortization, production and manufacturing, distribution and
administration expenses for convenience & mobility (excluding
Castrol); subtracting earnings from equity-accounted entities in
the convenience & mobility business (excluding Castrol) and
gross margin for the retail fuels, EV charging, aviation, B2B and
midstream businesses. bp believes it is helpful because this
measure may help investors to understand and evaluate, in the same
way as management, our progress against our strategic objectives of
convenience growth. The nearest IFRS measure is RC profit before
interest and tax for the customers & products
segment.
Developed renewables to final investment decision (FID)
– Total generating capacity for assets developed to FID by
all entities where bp has an equity share (proportionate to equity
share). If asset is subsequently sold bp will continue to record
capacity as developed to FID. If bp equity share increases
developed capacity to FID will increase proportionately to share
increase for any assets where bp held equity at the point of
FID.
Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement.
Top
of page 31
Glossary (continued)
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-IFRS measure. The ETR on RC profit or loss is
calculated by dividing taxation on a RC basis by RC profit or loss
before tax. Taxation on a RC basis for the group is calculated as
taxation as stated on the group income statement adjusted for
taxation on inventory holding gains and losses. Information on RC
profit or loss is provided below. bp believes it is helpful to
disclose the ETR on RC profit or loss because this measure excludes
the impact of price changes on the replacement of inventories and
allows for more meaningful comparisons between reporting periods.
Taxation on a RC basis and ETR on RC profit or loss are non-IFRS
measures. The nearest equivalent measure on an IFRS basis is the
ETR on profit or loss for the period.
Electric vehicle charge points / EV charge points are
defined as the number of connectors on a charging device, operated
by either bp or a bp joint venture.
Fair value accounting effects are non-IFRS adjustments to
our IFRS profit (loss). They reflect the difference between the way
bp manages the economic exposure and internally measures
performance of certain activities and the way those activities are
measured under IFRS. Fair value accounting effects are included
within adjusting items. They relate to certain of the group's
commodity, interest rate and currency risk exposures as detailed
below. Other than as noted below, the fair value accounting effects
described are reported in both the gas & low carbon energy and
customer & products segments.
bp uses
derivative instruments to manage the economic exposure relating to
inventories above normal operating requirements of crude oil,
natural gas and petroleum products. Under IFRS, these inventories
are recorded at historical cost. The related derivative
instruments, however, are required to be recorded at fair value
with gains and losses recognized in the income statement. This is
because hedge accounting is either not permitted or not followed,
principally due to the impracticality of effectiveness-testing
requirements. Therefore, measurement differences in relation to
recognition of gains and losses occur. Gains and losses on these
inventories, other than net realizable value provisions, are not
recognized until the commodity is sold in a subsequent accounting
period. Gains and losses on the related derivative commodity
contracts are recognized in the income statement, from the time the
derivative commodity contract is entered into, on a fair value
basis using forward prices consistent with the contract
maturity.
bp
enters into physical commodity contracts to meet certain business
requirements, such as the purchase of crude for a refinery or the
sale of bp’s gas production. Under IFRS these physical
contracts are treated as derivatives and are required to be fair
valued when they are managed as part of a larger portfolio of
similar transactions. Gains and losses arising are recognized in
the income statement from the time the derivative commodity
contract is entered into.
IFRS
require that inventory held for trading is recorded at its fair
value using period-end spot prices, whereas any related derivative
commodity instruments are required to be recorded at values based
on forward prices consistent with the contract maturity. Depending
on market conditions, these forward prices can be either higher or
lower than spot prices, resulting in measurement
differences.
bp
enters into contracts for pipelines and other transportation,
storage capacity, oil and gas processing, liquefied natural gas
(LNG) and certain gas and power contracts that, under IFRS, are
recorded on an accruals basis. These contracts are risk-managed
using a variety of derivative instruments that are fair valued
under IFRS. This results in measurement differences in relation to
recognition of gains and losses.
The way
that bp manages the economic exposures described above, and
measures performance internally, differs from the way these
activities are measured under IFRS. bp calculates this difference
for consolidated entities by comparing the IFRS result with
management’s internal measure of performance. We believe that
disclosing management’s estimate of this difference provides
useful information for investors because it enables investors to
see the economic effect of these activities as a
whole.
These
include:
●
Under
management’s internal measure of performance the inventory,
transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end
of the period.
●
Fair value
accounting effects also include changes in the fair value of the
near-term portions of LNG contracts that fall within bp’s
risk management framework. LNG contracts are not considered
derivatives, because there is insufficient market liquidity, and
they are therefore accrual accounted under IFRS. However, oil and
natural gas derivative financial instruments used to risk manage
the near-term portions of the LNG contracts are fair valued under
IFRS. The fair value accounting effect, which is reported in the
gas and low carbon energy segment, represents the change in value
of LNG contacts that are being risk managed and which is reflected
in the underlying result, but not in reported earnings. Management
believes that this gives a better representation of performance in
each period.
Furthermore,
the fair values of derivative instruments used to risk manage
certain other oil, gas, power and other contracts, are deferred to
match with the underlying exposure. The commodity contracts for
business requirements are accounted for on an accruals
basis.
In
addition, fair value accounting effects include changes in the fair
value of derivatives entered into by the group to manage currency
exposure and interest rate risks relating to hybrid bonds to their
respective first call periods. The hybrid bonds which
were issued on 17 June 2020 are classified as equity
instruments and were recorded in the balance sheet at that date at
their USD equivalent issued value. Under IFRS these equity
instruments are not remeasured from period to period, and do not
qualify for 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.
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of page 32
Glossary (continued)
Gas & low carbon energy segment comprises our gas and low carbon
businesses. Our gas business includes regions with upstream
activities that predominantly produce natural gas, integrated gas
and power, and gas trading. Our low carbon business includes solar,
offshore and onshore wind, hydrogen and CCS and power trading.
Power trading includes trading of both renewable and non-renewable
power.
Gearing and net debt are non-IFRS measures. Net debt is
calculated as finance debt, as shown in the balance sheet, plus the
fair value of associated derivative financial instruments that are
used to hedge foreign currency exchange and interest rate risks
relating to finance debt, for which hedge accounting is applied,
less cash and cash equivalents. Net debt does not include accrued
interest, which is reported within other receivables and other
payables on the balance sheet and for which the associated cash
flows are presented as operating cash flows in the group cash flow
statement. Gearing is defined as the ratio of net debt to the total
of net debt plus total equity. bp believes these measures provide
useful information to investors. Net debt enables investors to see
the economic effect of finance debt, related hedges and cash and
cash equivalents in total. Gearing enables investors to see how
significant net debt is relative to total equity. The derivatives
are reported on the balance sheet within the headings
‘Derivative financial instruments’. The nearest
equivalent measures on an IFRS basis are finance debt and finance
debt ratio. A reconciliation of finance debt to net debt is
provided on page
24.
We are
unable to present reconciliations of forward-looking information
for net debt or gearing to finance debt and total equity, because
without unreasonable efforts, we are unable to forecast accurately
certain adjusting items required to present a meaningful comparable
IFRS forward-looking financial measure. These items include fair
value asset (liability) of hedges related to finance debt and cash
and cash equivalents, that are difficult to predict in advance in
order to include in an IFRS estimate.
Gearing including leases and net debt including leases are
non-IFRS measures. Net debt including leases is calculated as net
debt plus lease liabilities, less the net amount of partner
receivables and payables relating to leases entered into on behalf
of joint operations. Gearing including leases is defined as the
ratio of net debt including leases to the total of net debt
including leases plus total equity. bp believes these measures
provide useful information to investors as they enable investors to
understand the impact of the group’s lease portfolio on net
debt and gearing. The nearest equivalent measures on an IFRS basis
are finance debt and finance debt ratio. A reconciliation of
finance debt to net debt including leases is provided on
page 27.
Green hydrogen – Hydrogen
produced by electrolysis of water using renewable
power.
Hydrocarbons –
Liquids and natural gas. Natural gas is converted to oil equivalent
at 5.8 billion cubic feet = 1 million barrels.
Inorganic capital expenditure is a subset of capital
expenditure on a cash basis and a non-IFRS measure. Inorganic
capital expenditure comprises consideration in business
combinations and certain other significant investments made by the
group. It is reported on a cash basis. bp believes that this
measure provides useful information as it allows investors to
understand how bp’s management invests funds in projects
which expand the group’s activities through acquisition. The
nearest equivalent measure on an IFRS basis is capital expenditure
on a cash basis. Further information and a reconciliation to IFRS
information is provided on page
25.
Installed renewables capacity is bp's share of capacity for
operating assets owned by entities where bp has an equity
share.
Inventory holding gains and losses are non-IFRS adjustments
to our IFRS profit (loss) and represent:
a.
the difference
between the cost of sales calculated using the replacement cost of
inventory and the cost of sales calculated on the first-in
first-out (FIFO) method after adjusting for any changes in
provisions where the net realizable value of the inventory is lower
than its cost. Under the FIFO method, which we use for IFRS
reporting of inventories other than for trading inventories, the
cost of inventory charged to the income statement is based on its
historical cost of purchase or manufacture, rather than its
replacement cost. In volatile energy markets, this can have a
significant distorting effect on reported income. The amounts
disclosed as inventory holding gains and losses represent the
difference between the charge to the income statement for inventory
on a FIFO basis (after adjusting for any related movements in net
realizable value provisions) and the charge that would have arisen
based on the replacement cost of inventory. For this purpose, the
replacement cost of inventory is calculated using data from each
operation’s production and manufacturing system, either on a
monthly basis, or separately for each transaction where the system
allows this approach; and
b.
an adjustment
relating to certain trading inventories that are not price risk
managed which relate to a minimum inventory volume that is required
to be held to maintain underlying business activities. This
adjustment represents the movement in fair value of the inventories
due to prices, on a grade by grade basis, during the period. This
is calculated from each operation’s inventory management
system on a monthly basis using the discrete monthly movement in
market prices for these inventories.
The
amounts disclosed are not separately reflected in the financial
statements as a gain or loss. No adjustment is made in respect of
the cost of inventories held as part of a trading position and
certain other temporary inventory positions that are price
risk-managed. See Replacement cost (RC) profit or loss definition
below.
Liquids – Liquids comprises crude oil, condensate and
natural gas liquids. For the oil production & operations
segment, it also includes bitumen.
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.
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Glossary (continued)
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 PPA based
projects an offer has been made to the counterparty, or for auction
projects pre-qualification criteria has been met, or for
acquisition projects post a binding offer being
accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of inventories sold
in the period and is calculated as profit or loss attributable to
bp shareholders, adjusting for inventory holding gains and losses
(net of tax). RC profit or loss for the group is not a recognized
IFRS measure. bp believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our
reported result under IFRS can be significant. Inventory holding
gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order
for investors to understand the operating performance of the group
excluding the impact of price changes on the replacement of
inventories, and to make comparisons of operating performance
between reporting periods, bp’s management believes it is
helpful to disclose this measure. The nearest equivalent measure on
an IFRS basis is profit or loss attributable to bp shareholders. A
reconciliation to IFRS information is provided on
page 1. RC profit or loss before interest and tax is bp's
measure of profit or loss that is required to be disclosed for each
operating segment under IFRS.
Reported recordable injury frequency measures the number of
reported work-related employee and contractor incidents that result
in a fatality or injury per 200,000 hours worked. This represents
reported incidents occurring within bp’s operational HSSE
reporting boundary. That boundary includes bp’s own operated
facilities and certain other locations or situations. Reported
incidents are investigated throughout the year and as a result
there may be changes in previously reported incidents. Therefore
comparative movements are calculated against internal data
reflecting the final outcomes of such investigations, rather than
the previously reported comparative period, as this this represents
a more up to date reflection of the safety
environment.
Retail sites include sites operated by dealers, jobbers,
franchisees or brand licensees or joint venture (JV) partners,
under the bp brand. These may move to and from the bp brand as
their fuel supply agreement or brand licence agreement expires and
are renegotiated in the normal course of business. Retail sites are
primarily branded bp, ARCO,
Amoco, Aral and Thorntons, and also includes sites in
India through our Jio-bp JV.
Solomon availability – See Refining availability
definition.
Strategic convenience sites are retail sites, within the bp
portfolio, which sell bp-branded vehicle energy (e.g. bp, Aral, Arco, Amoco, Thorntons and bp pulse) and either carry
one of the strategic convenience brands (e.g. M&S, Rewe to Go)
or a differentiated convenience offer. To be considered a strategic
convenience site, the convenience offer should have a demonstrable
level of differentiation in the market in which it operates.
Strategic convenience site count includes sites under a pilot
phase.
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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.
For the first quarter of 2022, the sources of cash includes other
proceeds related to the proceeds from the disposal of a loan note
related to the Alaska divestment. The cash was received in the
fourth quarter 2021, was reported as a financing cash flow and was
not included in other proceeds at the time due to potential
recourse from the counterparty. The proceeds are being recognized
as the potential recourse reduces. See page 28 for the components of our sources
of cash and uses of cash.
Technical service contract (TSC) – Technical service
contract is an arrangement through which an oil and gas company
bears the risks and costs of exploration, development and
production. In return, the oil and gas company receives entitlement
to variable physical volumes of hydrocarbons, representing recovery
of the costs incurred and a profit margin which reflects
incremental production added to the oilfield.
Tier 1 and tier 2 process safety events – Tier 1
events are losses of primary containment from a process of greatest
consequence – causing harm to a member of the workforce,
damage to equipment from a fire or explosion, a community impact or
exceeding defined quantities. Tier 2 events are those of lesser
consequence. These represent reported incidents occurring within
bp’s operational HSSE reporting boundary. That boundary
includes bp’s own operated facilities and certain other
locations or situations. Reported process safety events are
investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this this represents a more up to
date reflection of the safety environment.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR is
calculated by dividing taxation on an underlying replacement cost
(RC) basis by underlying RC profit or loss before tax. Taxation on
an underlying RC basis for the group is calculated as taxation as
stated on the group income statement adjusted for taxation on
inventory holding gains and losses and total taxation on adjusting
items. Information on underlying RC profit or loss is provided
below. Taxation on an underlying RC basis presented for the
operating segments is calculated through an allocation of taxation
on an underlying RC basis to each segment. bp believes it is
helpful to disclose the underlying ETR because this measure may
help investors to understand and evaluate, in the same manner as
management, the underlying trends in bp’s operational
performance on a comparable basis, period on period. Taxation on an
underlying RC basis and underlying ETR are non-IFRS measures. The
nearest equivalent measure on an IFRS basis is the ETR on profit or
loss for the period.
We are unable to present reconciliations of forward-looking
information for underlying ETR to ETR on profit or loss for the
period, because without unreasonable efforts, we are unable to
forecast accurately certain adjusting items required to present a
meaningful comparable IFRS forward-looking financial measure. These
items include the taxation on inventory holding gains and losses
and adjusting items, that are difficult to predict in advance in
order to include in an IFRS estimate.
Underlying production – 2023 underlying production,
when compared with 2022, is production after adjusting for
acquisitions and divestments, curtailments, and entitlement impacts
in our production-sharing agreements/contracts and technical
service contract*.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a non-IFRS measure and is
RC profit or loss* (as defined on page
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.
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Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit or
loss per ADS is a non-IFRS measure. Earnings per share is
defined in Note 7. Underlying
RC profit or loss per ordinary share is calculated using the same
denominator as earnings per share as defined in the consolidated
financial statements. The numerator used is underlying RC profit or
loss attributable to bp shareholders rather than profit or loss
attributable to bp shareholders. Underlying RC profit or loss per
ADS is calculated as outlined above for underlying RC profit or
loss per share except the denominator is adjusted to reflect one
ADS equivalent to six ordinary shares. bp believes it is helpful to
disclose the underlying RC profit or loss per ordinary share and
per ADS because these measures may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp’s operational performance on a comparable basis, period
on period. The nearest equivalent measure on an IFRS basis is basic
earnings per share based on profit or loss for the period
attributable to bp shareholders.
upstream includes oil and natural gas field development and
production within the gas & low carbon energy and oil
production & operations segments.
upstream/hydrocarbon plant reliability (bp-operated) is
calculated taking 100% less the ratio of total unplanned plant
deferrals divided by installed production capacity, excluding
non-operated assets and bpx energy. Unplanned plant deferrals are
associated with the topside plant and where applicable the subsea
equipment (excluding wells and reservoir). Unplanned plant
deferrals include breakdowns, which does not include Gulf of Mexico
weather related downtime.
upstream unit production cost is calculated as production
cost divided by units of production. Production cost does not
include ad valorem and severance taxes. Units of production are
barrels for liquids and thousands of cubic feet for gas. Amounts
disclosed are for bp subsidiaries only and do not include
bp’s share of equity-accounted entities.
Working capital is movements in inventories and other
current and non-current assets and liabilities as reported in the
condensed group cash flow statement.
Change
in working capital adjusted for inventory holding gains/losses,
fair value accounting effects relating to subsidiaries and other
adjusting items is a non-IFRS measure. It is calculated by
adjusting for inventory holding gains/losses reported in the period
and fair value accounting effects relating to subsidiaries reported
within adjusting items for the period. From 2022, it is adjusted
for other adjusting items relating to the non-cash movement of US
emissions obligations carried as a provision that will be settled
by allowances held as inventory. This represents what would have
been reported as movements in inventories and other current and
non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been
underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities.
bp
utilizes various arrangements in order to manage its working
capital including discounting of receivables and, in the supply and
trading business, the active management of supplier payment terms,
inventory and collateral.
Trade marks
Trade
marks of the bp group appear throughout this announcement. They
include:
bp, Amoco,
Aral, bp pulse, Castrol and
Thorntons
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of page 36
Cautionary statement
In order to utilize the ‘safe harbor’ provisions of the
United States Private Securities Litigation Reform Act of 1995 (the
‘PSLRA’) and the general doctrine of cautionary
statements, bp is providing the following cautionary
statement:
The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is,
statements related to future, not past events and circumstances -
with respect to the financial condition, results of operations and
businesses of bp and certain of the plans and objectives of bp with
respect to these items. These statements may generally, but not
always, be identified by the use of words such as
‘will’, ‘expects’, ‘is expected
to’, ‘aims’, ‘should’,
‘may’, ‘objective’, ‘is likely
to’, ‘intends’, ‘believes’,
‘anticipates’, ‘plans’, ‘we
see’ or similar expressions.
In particular, the following, among other statements, are all
forward looking in nature: plans, expectations and assumptions
regarding oil and gas demand, supply, prices or volatility;
expectations regarding upstream production and bp’s customers
& products business; expectations regarding refining margins;
expectations regarding marketing margins and volumes; expectations
regarding turnaround activity; expectations regarding production
from oil production & operations and from gas & low carbon
energy; expectations regarding bp’s business, financial
performance, results of operations and cash flows; expectations
regarding future project start-ups; expectations with regards to
bp’s transformation to an IEC; expectations regarding price
assumptions used in accounting estimates; bp’s plans and
expectations regarding the amount and timing of share buybacks and
quarterly and interim dividends; plans and expectations regarding
bp’s credit rating, including in respect of maintaining a
strong investment grade credit rating; plans and expectations
regarding the allocation of surplus cash flow to share buybacks and
strengthening the balance sheet; plans and expectations with
respect to the total depreciation, depletion and amortization and
the other businesses & corporate underlying annual charge for
2023; plans and expectations regarding the factors taken into
account in setting the dividend per ordinary share and buyback each
quarter; plans and expectations regarding investments,
collaborations and partnerships in electric vehicle (EV) charging
infrastructure; plans and expectations related to bp’s
transition growth engines of bioenergy, convenience, EV charging,
renewables & power and hydrogen; 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, including the amount and timing of
proceeds; expectations regarding the underlying effective tax rate
for 2023; expectations regarding the timing and amount of future
payments relating to the Gulf of Mexico oil spill; plans and
expectations regarding capital expenditure, including that capital
expenditure will be $16-18 billion in 2023; expectations regarding
legal proceedings, including those related to climate change; plans
and expectations regarding projects, joint ventures, partnerships,
agreements and memoranda of understanding 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, the impact of COVID-19, overall global
economic and business conditions impacting bp’s business and
demand for bp’s products as well as the specific factors
identified in the discussions accompanying such forward-looking
statements; changes in consumer preferences and societal
expectations; the pace of development and adoption of alternative
energy solutions; developments in policy, law, regulation,
technology and markets, including societal and investor sentiment
related to the issue of climate change; the receipt of relevant
third party and/or regulatory approvals; the timing and level of
maintenance and/or turnaround activity; the timing and volume of
refinery additions and outages; the timing of bringing new fields
onstream; the timing, quantum and nature of certain acquisitions
and divestments; future levels of industry product supply, demand
and pricing, including supply growth in North America and continued
base oil and additive supply shortages; OPEC+ quota restrictions;
PSA and TSC effects; operational and safety problems; potential
lapses in product quality; economic and financial market conditions
generally or in various countries and regions; political stability
and economic growth in relevant areas of the world; changes in laws
and governmental regulations and policies, including related to
climate change; changes in social attitudes and customer
preferences; regulatory or legal actions including the types of
enforcement action pursued and the nature of remedies sought or
imposed; the actions of prosecutors, regulatory authorities and
courts; delays in the processes for resolving claims; amounts
ultimately payable and timing of payments relating to the Gulf of
Mexico oil spill; exchange rate fluctuations; development and use
of new technology; recruitment and retention of a skilled
workforce; the success or otherwise of partnering; the actions of
competitors, trading partners, contractors, subcontractors,
creditors, rating agencies and others; bp’s access to future
credit resources; business disruption and crisis management; the
impact on bp’s reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major
uninsured losses; the possibility that international sanctions or
other steps taken by any competent authorities or any other
relevant persons may limit or otherwise 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 other factors discussed elsewhere in
this report, as well as those factors discussed under “Risk
factors” in bp’s Annual Report and Form 20-F 2022 as
filed with the US Securities and Exchange Commission.
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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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Megan Baldino
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+44 (0) 7831 095541
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+1
907 529 9029
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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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BP
p.l.c.’s LEI Code 213800LH1BZH3D16G760
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BP
p.l.c.
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(Registrant)
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Dated: 02
May, 2023
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/s/ Ben
J. S. Mathews
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Ben J.
S. Mathews
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Company
Secretary
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