Bp PLC 6-K, filed Feb 4, 2020
Bp PLC (BP)
6-K
2020-02-04
For: 2020-02-04
View Original
Added on
April 08, 2026
About this 6-K
Bp PLC filed this 6-K on February 4, 2020.
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 04
February, 2020
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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Top of page 1
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FOR IMMEDIATE RELEASE
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London 4 February 2020
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BP p.l.c. Group results
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Fourth quarter and full year 2019
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For a
printer friendly copy of this announcement, please click on the
link below to open a PDF version
http://www.rns-pdf.londonstockexchange.com/rns/8294B_1-2020-2-3.pdf
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Highlights
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Operational momentum, growing cash flow, strategic progress:
dividend increased
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Cash flow strong, increased disposal plans
1
Underlying
replacement cost profit for the fourth quarter and full year 2019
was $2.6 billion and $10.0 billion respectively, compared to $3.5
billion and $12.7 billion for the same periods a year earlier,
largely reflecting the impact of the weaker environment. Reported
profit was $19 million for the fourth quarter and $4.0 billion for
the full year.
2
Non-operating items
in the quarter included a $1.9 billion after-tax impairment charge,
mainly for the disposal of US gas assets, and a $0.9 billion charge
arising from the reclassification of past foreign exchange losses
on the formation of BP’s new biofuels joint
venture.
3
Full-year operating
cash flow, excluding Gulf of Mexico oil spill payments, was $28.2
billion, including a $0.3 billion working capital release (after
adjusting for net inventory holding gains).
4
Gulf of Mexico oil
spill payments for the year totalled $2.4 billion on a post-tax
basis, and are expected to be less than $1 billion in
2020.
5
Maintaining capital
discipline, full-year organic capital expenditure of $15.2 billion
was at the bottom of the guided range. Divestments and other
disposals announced since the start of 2019 now total $9.4 billion,
keeping BP ahead of schedule to meet its target of $10 billion
proceeds by end-2020. BP expects to announce a further $5 billion
of agreed disposals by mid-2021.
6
In January 2020 BP
completed its announced share buyback programme.
7
Net debt reduced by
$1.1 billion in the quarter with gearing at 31.1%, down from 31.7%
at the end of the previous quarter.
8
A dividend of 10.5
cents per share was announced for the quarter, an increase of 2.4%
on a year earlier.
Continued reliable operations
1
Downstream
delivered full-year refining availability of 95% and record
refining throughput for the second consecutive year. Upstream
operated plant reliability was 94.4% for the year.
2
Reported oil and
gas production averaged 3.8 million barrels of oil equivalent a day
in 2019, 2.7% higher than in 2018. Underlying full year Upstream
production, which excludes both Rosneft and portfolio changes, was
broadly flat with 2018.
Low-carbon expansions, new projects, retail growth
1
BP expanded its
low-carbon businesses in 2019, increasing ownership in its solar
joint venture Lightsource BP to 50%, and completed formation of its
new Brazilian biofuels and biopower joint venture, BP Bunge
Bioenergia.
2
Five Upstream major
projects began production in 2019, and final investment decisions
were taken for a further five.
1
BP continued its
expansion into fast-growing fuels markets during the year and
agreed a major fuels joint venture with Reliance Industries Limited
in India.
See
chart on PDF
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Bob
Dudley – Group
chief executive:
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"BP is performing well, with safe and reliable operations,
continued strategic progress and strong cash delivery. This all
supports our commitment to growing distributions to shareholders
over the long term and the dividend rise we announced today. After
almost ten years, this is now my last quarter as CEO. In that time,
we have achieved a huge amount together and I am proud to be
handing over a safer and stronger BP to Bernard and his team. I am
confident that under their leadership, BP will continue to
successfully navigate the rapidly-changing energy
landscape."
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Financial summary
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Fourth
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Third
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Fourth
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quarter
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quarter
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quarter
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Year
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Year
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$ million
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2019
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2019
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2018
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2019
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2018
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Profit
(loss) for the period attributable
to BP shareholders
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19
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(749
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)
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766
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4,026
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9,383
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Inventory holding (gains) losses, net of tax
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(23
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)
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398
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1,951
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(511
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603
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RC profit (loss)
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(4
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)
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(351
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)
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2,717
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3,515
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9,986
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Net
(favourable) adverse impact of non-operating items and fair value
accounting effects, net of tax
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2,571
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2,605
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760
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6,475
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2,737
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Underlying RC profit
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2,567
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2,254
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3,477
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9,990
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12,723
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RC profit (loss) per ordinary share (cents)
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(0.02
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)
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(1.72
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13.58
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17.32
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50.00
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RC profit (loss) per ADS (dollars)
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0.00
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(0.10
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)
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0.81
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1.04
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3.00
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Underlying RC profit per ordinary share (cents)
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12.67
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11.06
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17.38
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49.24
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63.70
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Underlying RC profit per ADS (dollars)
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0.76
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0.66
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1.04
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2.95
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3.82
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RC profit (loss), underlying RC profit, operating cash flow
excluding Gulf of Mexico oil spill payments, working capital,
organic capital expenditure, net debt and gearing are non-GAAP
measures. These measures and underlying production, refining
availability, inventory holding gains and losses, non-operating
items and fair value accounting effects are defined in the Glossary
on page 32.
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The commentary above and following should be read in conjunction
with the cautionary statement on page 36.
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Top of
page 2
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Results
For the
full year, underlying replacement cost (RC) profit* was $9,990
million, compared with $12,723 million in 2018. Underlying RC
profit is after adjusting RC profit* for a net charge for
non-operating items* of $7,186 million and net favourable fair
value accounting effects* of $711 million (both on a post-tax
basis).
RC
profit was $3,515 million for the full year, compared with $9,986
million in 2018.
For the
fourth quarter, underlying RC profit was $2,567 million, compared
with $3,477 million in 2018. Underlying RC profit is after
adjusting RC loss for a net charge for non-operating items of
$3,142 million primarily divestment-related impairment charges (see
Note 3 and page 27) and reclassification of past foreign exchange
losses on the formation of the BP Bunge Bioenergia joint venture,
as well as net favourable fair value accounting effects of $571
million (both on a post-tax basis).
RC loss
was $4 million for the fourth quarter, compared with a profit
of $2,717
million in 2018.
BP’s
profit for the fourth quarter and full year was $19 million and
$4,026 million respectively, compared with $766 million and $9,383
million for the same periods in 2018.
See
further information on pages 3, 27 and 28.
Depreciation, depletion and amortization
The
charge for depreciation, depletion and amortization was $4.4
billion in the quarter and $17.8 billion in the full year. In the
same periods in 2018 it was $4.0 billion and $15.5 billion
respectively (prior to the implementation of IFRS 16). In 2020, we
expect the full-year charge to be slightly lower than the 2019
level reflecting impacts of divestments.
Effective tax rate
The
effective tax rate (ETR) on RC profit or loss* for the fourth
quarter and full year was 102% and 51% respectively, compared with
45% and 42% for the same periods in 2018. Adjusting for
non-operating items and fair value accounting effects, the
underlying ETR* for the fourth quarter and full year was 27% and
36% respectively, compared with 38% and 38% for the same periods a
year ago. The lower underlying ETR for the fourth quarter and full
year reflects the reassessment of the recognition of deferred tax
assets. In the current environment the underlying ETR in 2020 is
expected to be lower than 40%. ETR on RC profit or loss and
underlying ETR are non-GAAP measures.
Dividend
BP
today announced a quarterly dividend of 10.5 cents per ordinary
share ($0.63 per ADS), which is expected to be paid on 27 March
2020. The corresponding amount in sterling will be announced on 16
March 2020. See page 23 for more information.
Share buybacks
BP
repurchased 184 million ordinary shares at a cost of $1,171 million
in the fourth quarter, totalling 235 million ordinary shares
at
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a cost
of $1,511 million (including fees and stamp duty) for the full
year. In January 2020, the share buyback programme had fully offset
the impact of scrip dilution since the third quarter
2017.
Operating cash flow*
Operating
cash flow excluding Gulf of Mexico oil spill payments* was $7.6
billion for the fourth quarter and $28.2 billion for the full year.
These amounts include a working capital* build of $0.2 billion in
the fourth quarter and a release of $0.3 billion in the full year,
after adjusting for net inventory holding losses or gains* and
working capital effects of the Gulf of Mexico oil spill. The
comparable amounts for the same periods in 2018 were $7.1 billion
and $26.1 billion (prior to the implementation of IFRS
16).
Operating
cash flow as reported in the group cash flow statement was $7.6
billion for the fourth quarter and $25.8 billion for the full year.
These amounts include a working capital build of $0.3 billion and
$2.9 billion respectively. The comparable amounts for the same
periods in 2018 were $6.8 billion and $22.9 billion (prior to the
implementation of IFRS 16).
See
page 30 and Glossary for further information on Gulf of Mexico oil
spill cash flows and on working capital.
Capital expenditure*
Organic
capital expenditure* for the fourth quarter and full year was $4.0
billion and $15.2 billion respectively. We reported $4.4 billion
and $15.1 billion for the same periods in 2018 (prior to the
implementation of IFRS 16).
Inorganic
capital expenditure* for the fourth quarter and full year was $0.2
billion and $4.2 billion respectively, including $3.5 billion for
the full year relating to the BHP acquisition, compared with $8.5
billion and $9.9 billion for the same periods in 2018.
Organic
capital expenditure and inorganic capital expenditure are non-GAAP
measures. See page 26 for further information.
Divestment and other proceeds
Divestment
proceeds* were $0.8 billion for the fourth quarter and $2.2 billion
for the full year, in addition $0.6 billion was received in the
fourth quarter in relation to the sale of a 49% interest in
BP’s retail property portfolio in Australia. Divestment
proceeds for the same periods in 2018 were $2.4 billion and $2.9
billion respectively.
Gearing*
Net
debt* at 31 December 2019 was $45.4 billion, compared
with $43.5 billion a year ago. Gearing at
31 December 2019 was 31.1%, compared with 30.0% a year
ago. Net debt and gearing are non-GAAP measures. See page 23 for
more information.
Reserves replacement ratio*
The
organic reserves replacement ratio on a combined basis of
subsidiaries and equity-accounted entities was 67% for the year.
Including acquisitions and divestments, the total reserves
replacement ratio was 57%.
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Brian Gilvary –
Chief financial
officer:
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“We continue to make strong progress on our divestment
programme, with announced transactions totalling $9.4 billion since
the start of 2019. We are ahead of our target of $10 billion of
proceeds by end-2020, and now plan a further $5 billion of agreed
disposals by mid-2021. Net debt fell $1 billion in the fourth
quarter, and with further disposal proceeds expected, and assuming
recent average oil prices, we continue to expect gearing to move
towards the middle of the 20 to 30% range through this year.
Together with the continued strong operational momentum, growing
free cash flow, and our confidence in delivery of 2021 free cash
flow targets, this underpins our announcement today of an increase
in the dividend to 10.5 cents per ordinary
share.”
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* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page 32.
For more information on the impact of IFRS 16 'Leases' on key
financial metrics, see page 25.
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The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
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Top of
page 3
Analysis of underlying RC profit* before interest and
tax
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Fourth
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Third
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Fourth
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|||||
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quarter
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quarter
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quarter
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Year
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Year
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$ million
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2019
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2019
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2018
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2019
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2018
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Underlying RC profit before interest and tax
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Upstream
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2,678
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2,139
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3,886
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11,158
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14,550
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Downstream
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1,438
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1,883
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2,169
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6,419
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7,561
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Rosneft
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412
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802
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431
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2,419
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2,316
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Other
businesses and corporate
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(250
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)
|
(322
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)
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(344
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)
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(1,280
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)
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(1,558
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)
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Consolidation
adjustment – UPII*
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24
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30
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142
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|
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75
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|
211
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|
Underlying RC profit before interest and tax
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4,302
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|
4,532
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6,284
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18,791
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23,080
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Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
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(781
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)
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(754
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)
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(654
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)
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(3,041
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)
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(2,176
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)
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Taxation on an underlying RC basis
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|
(955
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)
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(1,506
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)
|
(2,148
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)
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(5,596
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)
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(7,986
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)
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Non-controlling interests
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1
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(18
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)
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(5
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)
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(164
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)
|
(195
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)
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Underlying RC profit attributable to BP shareholders
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|
2,567
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2,254
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3,477
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9,990
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12,723
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Reconciliations
of underlying RC profit or loss to the nearest equivalent IFRS
measure are provided on page 1 for the group and on pages 6-11 for
the segments.
Analysis of RC profit (loss)* before interest and tax and
reconciliation to profit (loss) for the period
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Fourth
|
Third
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Fourth
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quarter
|
quarter
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quarter
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Year
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Year
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$ million
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2019
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2019
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2018
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2019
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2018
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RC profit before interest and tax
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Upstream
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614
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(1,050
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)
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4,168
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4,917
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14,328
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Downstream
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1,433
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2,016
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2,138
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6,502
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6,940
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Rosneft
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503
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802
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400
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2,316
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2,221
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Other
businesses and corporate
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(1,432
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)
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(412
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)
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(1,110
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)
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(2,771
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)
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(3,521
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)
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Consolidation
adjustment – UPII
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24
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30
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142
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75
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|
211
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|
|
RC profit before interest and tax
|
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1,142
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|
1,386
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5,738
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11,039
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20,179
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Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
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(903
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)
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(899
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)
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(776
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)
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(3,552
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)
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(2,655
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)
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Taxation on a RC basis
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(244
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)
|
(820
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)
|
(2,240
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)
|
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(3,808
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)
|
(7,343
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)
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Non-controlling interests
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1
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|
(18
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)
|
(5
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)
|
|
(164
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)
|
(195
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)
|
|
RC profit (loss) attributable to BP shareholders
|
|
(4
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)
|
(351
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)
|
2,717
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|
|
3,515
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|
9,986
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|
|
Inventory holding gains (losses)*
|
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10
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|
(512
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)
|
(2,574
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)
|
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667
|
|
(801
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)
|
|
Taxation (charge) credit on inventory holding gains and
losses
|
|
13
|
|
114
|
|
623
|
|
|
(156
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)
|
198
|
|
|
Profit (loss) for the period attributable to BP
shareholders
|
|
19
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|
(749
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)
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766
|
|
|
4,026
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|
9,383
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Top of
page 4
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Strategic progress
Upstream
Upstream
production for the fourth quarter, which excludes Rosneft, was
2,698mboe/d, 2.7% higher than a year earlier. Underlying
production*, adjusted for portfolio changes and PSA* impact,
increased by 2.1%, mainly due to major project growth.
In 2019
BP announced seven discoveries. In December, it confirmed the
success of a three-well drilling campaign offshore Mauritania and
Senegal, offering the potential for possible future
developments.
The
Alligin project, a tie-back to the Quad 204 development west of
Shetland, UK, began production ahead of schedule in December and
was the fifth Upstream major project start-up of 2019. The Raven
project in Egypt is now expected to come onstream around the end of
2020. Final investment decisions for five further projects, in the
US Gulf of Mexico, UK North Sea, Azerbaijan and India, were taken
in 2019.
In
November BP agreed to sell its interests in the onshore San Juan
and Arkoma fields in the US. In
early January 2020, BP announced it had agreed terms to sell its
interests in the Andrew area and in the Shearwater field, both in
the central UK North Sea.
Downstream
BP
continued to make strategic progress in fuels marketing, with its
convenience partnership model now in around 1,600 sites across the
network.
BP also
made progress towards its growth ambition in new markets, most
notably in Mexico, where there are now over 520 BP-branded sites
and volumes more than doubled in 2019.
In
December, BP signed key agreements with Reliance Industries Limited
to form a new fuels marketing joint venture, which will build on
Reliance’s existing network of retail sites in India and
include access to the country’s aviation fuels
market.
A
consortium of leading companies across the PET plastics value
chain, including BP, was formed. It aims to help accelerate the
commercialisation of BP’s enhanced recycling technology, BP
Infinia, which is capable of processing currently-unrecyclable
plastic waste.
Advancing the energy transition
In
December BP increased its interest in its solar joint venture
Lightsource BP, creating a simplified equal ownership structure
with the company’s management. The cash injection will
support Lightsource BP's planned continuing rapid
growth.
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The
formation of the BP Bunge Bioenergia joint venture has completed.
BP’s 50% share in the company represents a 50% increase in
BP's Brazilian biofuels and biopower business.
BP
continued to progress its advanced mobility agenda in 2019, forming
an electric vehicle charging joint venture in China with DiDi and
beginning the roll out of 150kW ultra-fast electric chargers on BP
forecourts across the UK.
Financial framework
Following
the introduction of IFRS 16 on 1 January 2019, the positive impacts
on Operating cash flow* and Organic capital expenditure* are fully
offset in the cash flow statement by a new line, Lease liability
payments. Lease payments are now included in the definition of
free cash flow* as a use of
cash, which means the net impact on this measure is
zero.
Operating cash flow excluding Gulf of Mexico oil spill
payments* was $28.2 billion for the full year of 2019. For the full
year of 2018, we reported $26.1 billion (prior to the
implementation of IFRS 16).
Organic capital expenditure for the full year of 2019 was
$15.2 billion. BP expects 2020 organic capital expenditure to
remain towards the lower end of our $15-17 billion
range.
Lease liability payments of principal for the full year of
2019 were $2.4 billion.
Divestment and other transactions announced have now reached
$9.4 billion since the start of 2019. BP expects this total to be
around $15 billion by mid-2021.
Gulf of Mexico oil spill payments on a post-tax basis
totalled $2.4 billion in the full year. Payments for 2020 are
expected to be less than $1 billion on a post-tax
basis.
Gearing* at the end of the year was 31.1%. See page 23 for
more information. We expect gearing to move towards the middle of
the 20-30% range through 2020, assuming recent average oil
prices.
Safety
Both
tier 1 and tier 2 process safety events* were higher in 2019
compared with 2018. The increase in this group metric mainly
reflects performance in assets acquired over the past year;
excluding these the number of events fell slightly. Safety remains
our number one priority and we continue to focus on working to
reduce all process safety events.
|
|
Operating metrics
|
|
Year 2019
|
|
Financial metrics
|
|
Year 2019
|
|
|
(vs. Year 2018)
|
|
|
(vs. Year 2018)
|
||
|
Tier 1 and tier 2 process safety events
|
|
98
|
|
Underlying RC profit*
|
|
$10.0bn
|
|
|
(+26)
|
|
|
(-$2.7bn)
|
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|
Reported recordable injury frequency*
|
|
0.17
|
|
Operating cash flow excluding Gulf of Mexico oil spill payments
(post-tax)(b)
|
|
$28.2bn
|
|
|
(-16%)
|
|
|
(+$2.1bn)
|
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|
Group production
|
|
3,781mboe/d
|
|
Organic capital expenditure
|
|
$15.2bn
|
|
|
(+2.7%)
|
|
|
(+$0.1bn)
|
||
|
Upstream production (excludes Rosneft segment)
|
|
2,637mboe/d
|
|
Gulf of Mexico oil spill payments (post-tax)
|
|
$2.4bn
|
|
|
(+3.8%)
|
|
|
(-$0.8bn)
|
||
|
Upstream unit production costs*(a)
|
|
$6.84/boe
|
|
Divestment proceeds*
|
|
$2.2bn
|
|
|
(-4.4%)
|
|
|
(-$0.7bn)
|
||
|
BP-operated Upstream plant reliability*
|
|
94.4%
|
|
Gearing
|
|
31.1%
|
|
|
(-1.3)
|
|
|
(+1.1)
|
||
|
BP-operated refining availability*
|
|
94.9%
|
|
Dividend per ordinary share(c)
|
|
10.50 cents
|
|
|
(-0.1)
|
|
|
(2.4%)
|
||
|
|
|
|
|
Return on average capital employed*
|
|
8.9%
|
|
|
|
|
|
(-2.3)
|
(a)
Slight decrease
from the same period in 2018 after excluding the impacts of IFRS 16
on production costs.
(b)
Full year 2019
includes estimated $2.0 billion favourable impact due to IFRS 16
(see page 25).
(c)
Represents dividend
announced in the quarter (vs. prior year quarter).
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
|
Top of
page 5
This
page is intentionally left blank
Top of
page 6
Upstream
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Profit (loss) before interest and tax
|
|
614
|
|
(1,050
|
)
|
4,156
|
|
|
4,909
|
|
14,322
|
|
|
Inventory holding (gains) losses*
|
|
—
|
|
—
|
|
12
|
|
|
8
|
|
6
|
|
|
RC profit (loss) before interest and tax
|
|
614
|
|
(1,050
|
)
|
4,168
|
|
|
4,917
|
|
14,328
|
|
|
Net
(favourable) adverse impact of non-operating items* and fair value
accounting effects*
|
|
2,064
|
|
3,189
|
|
(282
|
)
|
|
6,241
|
|
222
|
|
|
Underlying
RC profit before interest and tax*(a)
|
|
2,678
|
|
2,139
|
|
3,886
|
|
|
11,158
|
|
14,550
|
|
(a)
See page 7 for a
reconciliation to segment RC profit before interest and tax by
region.
Financial results
The
replacement cost profit before interest and tax for the fourth
quarter and full year was $614 million and $4,917 million
respectively, compared with $4,168 million and $14,328 million for
the same periods in 2018. The fourth quarter and full year included
a net non-operating charge of $2,723 million and $6,947 million
respectively, which principally relate to impairments arising from
disposal transactions, compared with a net gain of $136 million and
a net charge $183 million for
the same periods in 2018. Fair value accounting effects in the
fourth quarter and full year had a favourable impact of $659
million and $706 million respectively, compared with a favourable
impact of $146 million and an adverse impact of $39 million in the
same periods of 2018.
After
adjusting for non-operating items and fair value accounting
effects, the underlying replacement cost profit before interest and
tax for the fourth quarter and full year was $2,678 million and
$11,158 million respectively, compared with $3,886 million and
$14,550 million for the same periods in 2018. The result for the
fourth quarter mainly reflected lower liquids and gas realizations
partly offset by higher production. The result for the full year
mainly reflected lower liquids and gas realizations and higher
depreciation, depletion and amortization partly offset by strong
gas marketing and trading results and higher
production.
Production
Production
for the quarter was 2,698mboe/d, 2.7% higher than the fourth
quarter of 2018. Underlying production* for the quarter increased
by 2.1%, mainly due to major project growth.
For the
full year, production was 2,637mboe/d, 3.8% higher than 2018.
Underlying production for the full year was broadly flat versus
full year 2018.
Key events
On 29
October, BP announced the New Gas Consortium (NGC), a joint venture
with Chevron, Eni, Total and Angolan state-owned Sonangol. This is
the first upstream natural gas partnership in Angola, initially
comprised of the Quiluma & Maboqueiro fields (Eni operator
25.6%, Chevron 31%, Sonangol 18.8%, BP 11.8%, and Total
11.8%).
On 14
November, BP signed an agreement to acquire KrisEnergy’s 30%
non-operating working interest in the Andaman II production-sharing
contract* in the Malacca Strait, Indonesia, subject to government
approval.
On 15
November, BP Trinidad and Tobago LLC announced a gas discovery with
the Ginger exploration well, offshore Trinidad. The well is
currently under evaluation.
In
November, BP signed agreements to sell its interests in the San
Juan field in Colorado and New Mexico, and in the Arkoma field in
Oklahoma, US. Subject to regulatory approvals, the transactions are
expected to complete by the end of the first quarter of
2020.
On 30
November, the Trans-Anatolian Natural Gas Pipeline (TANAP) through
Turkey and its connection to the Trans Adriatic Pipeline (TAP) in
Greece was completed. TANAP is expected to begin transporting gas
to Turkish and European markets in late 2020 (Azeri state energy
company SOCAR 51%, BOTAS 30%, BP 12%, and SOCAR Turkey
7%).
On 16
December, BP confirmed the production licence extension on Block
17, offshore Angola, to 2045, and for Sonangol to assume an equity
interest in the block (Total operator 38%, Equinor 22.16%,
ExxonMobil 19%, BP 15.84%, and Sonangol 5%).
On 7
January 2020, BP announced it has agreed terms to sell its interest
in the Andrew area and the Shearwater field, both located in the UK
North Sea, to Premier Oil. Subject to regulatory approval, the
transaction is expected to complete by the end of the third quarter
of 2020.
On 4
February 2020, BP confirmed the start-up of oil production from the
Alligin field in the UK North Sea. This was the fifth major project
start-up in 2019 (BP operator 50% and Shell 50%).
Outlook
We
expect full-year 2020 underlying production to be lower than 2019
due to declines in lower margin gas basins. We expect reported
production to be lower due to the above factor and the impact of
the ongoing divestment programme.
We
expect first-quarter 2020 reported production to be lower than
fourth-quarter 2019 due to the impact of our ongoing divestment
programme and planned seasonal maintenance and turnaround
activities.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
|
Top of
page 7
Upstream (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Underlying RC profit before interest and tax
|
|
|
|
|
|
|
|
|||||
|
US
|
|
645
|
|
552
|
|
1,400
|
|
|
2,670
|
|
3,693
|
|
|
Non-US
|
|
2,033
|
|
1,587
|
|
2,486
|
|
|
8,488
|
|
10,857
|
|
|
|
|
2,678
|
|
2,139
|
|
3,886
|
|
|
11,158
|
|
14,550
|
|
|
Non-operating items(a)(b)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(2,451
|
)
|
(3,338
|
)
|
(267
|
)
|
|
(6,265
|
)
|
(590
|
)
|
|
Non-US
|
|
(272
|
)
|
(116
|
)
|
403
|
|
|
(682
|
)
|
407
|
|
|
|
|
(2,723
|
)
|
(3,454
|
)
|
136
|
|
|
(6,947
|
)
|
(183
|
)
|
|
Fair value accounting effects
|
|
|
|
|
|
|
|
|||||
|
US
|
|
120
|
|
19
|
|
127
|
|
|
(179
|
)
|
(35
|
)
|
|
Non-US
|
|
539
|
|
246
|
|
19
|
|
|
885
|
|
(4
|
)
|
|
|
|
659
|
|
265
|
|
146
|
|
|
706
|
|
(39
|
)
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(1,686
|
)
|
(2,767
|
)
|
1,260
|
|
|
(3,774
|
)
|
3,068
|
|
|
Non-US
|
|
2,300
|
|
1,717
|
|
2,908
|
|
|
8,691
|
|
11,260
|
|
|
|
|
614
|
|
(1,050
|
)
|
4,168
|
|
|
4,917
|
|
14,328
|
|
|
Exploration expense
|
|
|
|
|
|
|
|
|||||
|
US
|
|
86
|
|
53
|
|
84
|
|
|
233
|
|
509
|
|
|
Non-US
|
|
180
|
|
132
|
|
373
|
|
|
731
|
|
936
|
|
|
|
|
266
|
|
185
|
|
457
|
|
|
964
|
|
1,445
|
|
|
Of
which: Exploration expenditure written off(b)
|
|
155
|
|
115
|
|
351
|
|
|
631
|
|
1,085
|
|
|
Production (net of
royalties)(c)(d)
|
|
|
|
|
|
|
|
|||||
|
Liquids* (mb/d)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
517
|
|
449
|
|
495
|
|
|
482
|
|
445
|
|
|
Europe
|
|
149
|
|
118
|
|
154
|
|
|
141
|
|
142
|
|
|
Rest of World
|
|
662
|
|
657
|
|
673
|
|
|
666
|
|
681
|
|
|
|
|
1,328
|
|
1,224
|
|
1,321
|
|
|
1,288
|
|
1,268
|
|
|
Natural gas (mmcf/d)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
2,317
|
|
2,396
|
|
2,255
|
|
|
2,358
|
|
1,900
|
|
|
Europe
|
|
275
|
|
188
|
|
215
|
|
|
185
|
|
211
|
|
|
Rest of World
|
|
5,354
|
|
5,211
|
|
5,104
|
|
|
5,279
|
|
5,263
|
|
|
|
|
7,945
|
|
7,795
|
|
7,574
|
|
|
7,823
|
|
7,374
|
|
|
Total hydrocarbons* (mboe/d)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
916
|
|
862
|
|
884
|
|
|
888
|
|
772
|
|
|
Europe
|
|
196
|
|
151
|
|
191
|
|
|
173
|
|
179
|
|
|
Rest of World
|
|
1,585
|
|
1,555
|
|
1,553
|
|
|
1,576
|
|
1,589
|
|
|
|
|
2,698
|
|
2,568
|
|
2,627
|
|
|
2,637
|
|
2,539
|
|
|
Average realizations*(e)
|
|
|
|
|
|
|
|
|||||
|
Total
liquids(f)
($/bbl)
|
|
55.90
|
|
55.68
|
|
61.80
|
|
|
57.73
|
|
64.98
|
|
|
Natural gas ($/mcf)
|
|
3.12
|
|
3.11
|
|
4.33
|
|
|
3.39
|
|
3.92
|
|
|
Total hydrocarbons ($/boe)
|
|
36.42
|
|
35.48
|
|
42.98
|
|
|
38.00
|
|
43.47
|
|
(a)
Fourth quarter and
full year 2019 include impairment charges which principally related
to the disposal of heritage BPX Energy assets, Alaska and GUPCO.
Fourth quarter and full year 2018 include impairment reversals for
assets in the North Sea and Angola.
(b)
Full year 2018
includes the write-off of $124 million in relation to the value
ascribed to certain licences in the deepwater Gulf of Mexico as
part of the accounting for the acquisition of upstream assets from
Devon Energy in 2011. This has been classified within the
‘other’ category of non-operating items.
(c)
Includes BP’s
share of production of equity-accounted entities in the Upstream
segment.
(d)
Because of
rounding, some totals may not agree exactly with the sum of their
component parts.
(e)
Realizations are
based on sales by consolidated subsidiaries only - this excludes
equity-accounted entities.
(f)
Includes
condensate, natural gas liquids and bitumen.
Top of
page 8
Downstream
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Profit (loss) before interest and tax
|
|
1,412
|
|
1,583
|
|
(332
|
)
|
|
7,187
|
|
6,078
|
|
|
Inventory holding (gains) losses*
|
|
21
|
|
433
|
|
2,470
|
|
|
(685
|
)
|
862
|
|
|
RC profit before interest and tax
|
|
1,433
|
|
2,016
|
|
2,138
|
|
|
6,502
|
|
6,940
|
|
|
Net
(favourable) adverse impact of non-operating items* and fair value
accounting effects*
|
|
5
|
|
(133
|
)
|
31
|
|
|
(83
|
)
|
621
|
|
|
Underlying
RC profit before interest and tax*(a)
|
|
1,438
|
|
1,883
|
|
2,169
|
|
|
6,419
|
|
7,561
|
|
(a)
See page 9 for a
reconciliation to segment RC profit before interest and tax by
region and by business.
Financial results
The
replacement cost profit before interest and tax for the fourth
quarter and full year was $1,433 million and $6,502 million
respectively, compared with $2,138 million and $6,940 million for
the same periods in 2018.
The
fourth quarter and full year include a net non-operating charge of
$28 million and $77 million respectively, compared with a charge of
$401 million and $716 million for the same periods in 2018. Fair
value accounting effects in the fourth quarter and full year had a
favourable impact of $23 million and $160 million respectively,
compared with $370 million and $95 million in the same periods in
2018.
After
adjusting for non-operating items and fair value accounting
effects, the underlying replacement cost profit before interest and
tax for the fourth quarter and full year was $1,438 million and
$6,419 million respectively, compared with $2,169 million and
$7,561 million for the same periods in 2018.
Replacement
cost profit before interest and tax for the fuels, lubricants and
petrochemicals businesses is set out on page 9.
Fuels
The
fuels business reported an underlying replacement cost profit
before interest and tax of $1,068 million for the fourth quarter
and $4,759 million for the full year, compared with $1,624 million
and $5,642 million for the same periods in 2018. Year on year we
delivered growth in marketing and refining operational performance,
offset by a significantly weaker environment.
The
result for the quarter reflects increased refining margin capture,
supported by improved operations, higher levels of advantaged
feedstocks, and a lower level of turnaround activity. This was more
than offset, however, by narrower heavy crude oil discounts and a
lower fuels marketing result compared to a very strong result in
the fourth quarter of 2018.
The
full-year result reflects strong refining operational performance,
which led to a second consecutive year of record refining
throughput and higher commercial optimization, despite high levels
of turnaround activity. This was more than offset, however, by
lower refining margins including significantly narrower heavy crude
oil discounts, which together represented one of the weakest
refining environments in the last 10 years. In fuels marketing we
saw volumes and margins grow year on year, offset by adverse
foreign exchange effects. The full-year result also reflects a
higher contribution from supply and trading.
We
continued to make strategic progress in fuels marketing, with our
convenience partnership model now in around 1,600 sites across our
network. We also made progress towards our growth ambition in new
markets, most notably in Mexico where we now have over 520 sites,
with volumes more than doubling in 2019.
In
December we also signed an agreement with Reliance Industries
Limited to form a fuels retail and aviation joint venture in India,
providing access to one of the world’s largest and fastest
growing fuels markets.
Lubricants
The
lubricants business reported an underlying replacement cost profit
before interest and tax of $333 million for the fourth quarter and
$1,258 million for the full year, compared with $311 million and
$1,292 million for the same periods in 2018. The result for the
full year reflects year-on-year unit margin improvement, offset by
adverse foreign exchange effects.
Following
the decision by Groupe Renault to select Castrol as its aftersales'
global service fill engine oil lubricants partner from 1 January
2020, a new Renault Castrol jointly branded product range has been
launched to all Renault dealers globally.
Petrochemicals
The
petrochemicals business reported an underlying replacement cost
profit before interest and tax of $37 million for the fourth
quarter and $402 million for the full year, compared with $234
million and $627 million for the same periods in 2018. The result
for the quarter and full year reflects a significantly weaker
margin environment across both aromatics and acetyls.
In
October we announced BP Infinia, an enhanced recycling technology,
and in December a consortium of leading companies was formed which
aims to help accelerate the commercialisation of this technology.
These are important steps to enable a stronger circular economy in
the polyethylene terephthalate (PET) plastics industry and to help
reduce plastic waste.
Outlook
Looking
to the first quarter of 2020, we expect lower levels of industry
refining margins and wider North American heavy crude oil discounts
compared with the fourth quarter of 2019.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
|
Top of
page 9
Downstream (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Underlying RC profit before interest and tax - by
region
|
|
|
|
|
|
|
|
|||||
|
US
|
|
556
|
|
537
|
|
995
|
|
|
2,190
|
|
2,818
|
|
|
Non-US
|
|
882
|
|
1,346
|
|
1,174
|
|
|
4,229
|
|
4,743
|
|
|
|
|
1,438
|
|
1,883
|
|
2,169
|
|
|
6,419
|
|
7,561
|
|
|
Non-operating items
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(40
|
)
|
(5
|
)
|
(109
|
)
|
|
(42
|
)
|
(295
|
)
|
|
Non-US
|
|
12
|
|
(9
|
)
|
(292
|
)
|
|
(35
|
)
|
(421
|
)
|
|
|
|
(28
|
)
|
(14
|
)
|
(401
|
)
|
|
(77
|
)
|
(716
|
)
|
|
Fair value accounting
effects(a)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(37
|
)
|
116
|
|
184
|
|
|
148
|
|
(155
|
)
|
|
Non-US
|
|
60
|
|
31
|
|
186
|
|
|
12
|
|
250
|
|
|
|
|
23
|
|
147
|
|
370
|
|
|
160
|
|
95
|
|
|
RC profit before interest and tax
|
|
|
|
|
|
|
|
|||||
|
US
|
|
479
|
|
648
|
|
1,070
|
|
|
2,296
|
|
2,368
|
|
|
Non-US
|
|
954
|
|
1,368
|
|
1,068
|
|
|
4,206
|
|
4,572
|
|
|
|
|
1,433
|
|
2,016
|
|
2,138
|
|
|
6,502
|
|
6,940
|
|
|
Underlying RC profit before interest and tax - by
business(b)(c)
|
|
|
|
|
|
|
|
|||||
|
Fuels
|
|
1,068
|
|
1,438
|
|
1,624
|
|
|
4,759
|
|
5,642
|
|
|
Lubricants
|
|
333
|
|
332
|
|
311
|
|
|
1,258
|
|
1,292
|
|
|
Petrochemicals
|
|
37
|
|
113
|
|
234
|
|
|
402
|
|
627
|
|
|
|
|
1,438
|
|
1,883
|
|
2,169
|
|
|
6,419
|
|
7,561
|
|
|
Non-operating items and fair value accounting
effects(a)
|
|
|
|
|
|
|
|
|||||
|
Fuels
|
|
(41
|
)
|
135
|
|
173
|
|
|
32
|
|
(381
|
)
|
|
Lubricants
|
|
39
|
|
—
|
|
(198
|
)
|
|
57
|
|
(227
|
)
|
|
Petrochemicals
|
|
(3
|
)
|
(2
|
)
|
(6
|
)
|
|
(6
|
)
|
(13
|
)
|
|
|
|
(5
|
)
|
133
|
|
(31
|
)
|
|
83
|
|
(621
|
)
|
|
RC profit before interest and tax(b)(c)
|
|
|
|
|
|
|
|
|||||
|
Fuels
|
|
1,027
|
|
1,573
|
|
1,797
|
|
|
4,791
|
|
5,261
|
|
|
Lubricants
|
|
372
|
|
332
|
|
113
|
|
|
1,315
|
|
1,065
|
|
|
Petrochemicals
|
|
34
|
|
111
|
|
228
|
|
|
396
|
|
614
|
|
|
|
|
1,433
|
|
2,016
|
|
2,138
|
|
|
6,502
|
|
6,940
|
|
|
|
|
|
|
|
|
|
|
|||||
|
BP average refining marker margin (RMM)* ($/bbl)
|
|
12.4
|
|
14.7
|
|
11.0
|
|
|
13.2
|
|
13.1
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Refinery throughputs (mb/d)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
761
|
|
781
|
|
691
|
|
|
737
|
|
703
|
|
|
Europe
|
|
848
|
|
815
|
|
735
|
|
|
787
|
|
781
|
|
|
Rest of World
|
|
238
|
|
217
|
|
240
|
|
|
225
|
|
241
|
|
|
|
|
1,847
|
|
1,813
|
|
1,666
|
|
|
1,749
|
|
1,725
|
|
|
BP-operated refining availability* (%)
|
|
95.7
|
|
96.1
|
|
95.6
|
|
|
94.9
|
|
95.0
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Marketing sales of refined products (mb/d)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
1,156
|
|
1,172
|
|
1,138
|
|
|
1,145
|
|
1,141
|
|
|
Europe
|
|
1,051
|
|
1,157
|
|
1,053
|
|
|
1,073
|
|
1,100
|
|
|
Rest of World
|
|
537
|
|
459
|
|
526
|
|
|
509
|
|
495
|
|
|
|
|
2,744
|
|
2,788
|
|
2,717
|
|
|
2,727
|
|
2,736
|
|
|
Trading/supply sales of refined products
|
|
3,519
|
|
3,157
|
|
3,199
|
|
|
3,268
|
|
3,194
|
|
|
Total sales volumes of refined products
|
|
6,263
|
|
5,945
|
|
5,916
|
|
|
5,995
|
|
5,930
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Petrochemicals production (kte)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
518
|
|
564
|
|
672
|
|
|
2,267
|
|
2,235
|
|
|
Europe
|
|
1,141
|
|
1,187
|
|
1,037
|
|
|
4,714
|
|
4,468
|
|
|
Rest of World
|
|
1,353
|
|
1,325
|
|
1,259
|
|
|
5,133
|
|
5,154
|
|
|
|
|
3,012
|
|
3,076
|
|
2,968
|
|
|
12,114
|
|
11,857
|
|
(a)
For Downstream,
fair value accounting effects arise solely in the fuels business.
See page 28 for further information.
(b)
Segment-level
overhead expenses are included in the fuels business
result.
(c)
Results from
petrochemicals at our Gelsenkirchen and Mülheim sites in
Germany are reported in the fuels business.
Top of
page 10
Rosneft
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019(a)
|
2019
|
2018
|
|
2019(a)
|
2018
|
|||||
|
Profit
before interest and tax(b)(c)
|
|
534
|
|
723
|
|
308
|
|
|
2,306
|
|
2,288
|
|
|
Inventory holding (gains) losses*
|
|
(31
|
)
|
79
|
|
92
|
|
|
10
|
|
(67
|
)
|
|
RC profit before interest and tax
|
|
503
|
|
802
|
|
400
|
|
|
2,316
|
|
2,221
|
|
|
Net charge (credit) for non-operating items*
|
|
(91
|
)
|
—
|
|
31
|
|
|
103
|
|
95
|
|
|
Underlying RC profit before interest and tax*
|
|
412
|
|
802
|
|
431
|
|
|
2,419
|
|
2,316
|
|
Financial results
Replacement
cost (RC) profit before interest and tax for the fourth quarter and
full year was $503 million and $2,316 million respectively,
compared with $400 million and $2,221 million for the same periods
in 2018.
After
adjusting for non-operating items, the underlying RC profit before
interest and tax for the fourth quarter and full year was $412
million and $2,419 million respectively, compared with $431 million
and $2,316 million for the same periods in 2018.
Compared
with the same period in 2018, the result for the fourth quarter
primarily reflects lower oil prices partially offset by duty lag
benefit. Compared with 2018, the result for the full year primarily
reflects favourable foreign exchange and certain one-off items
offset by lower oil prices.
The
extraordinary general meeting held on 30 September adopted a
resolution to pay interim dividends of 15.34 roubles per ordinary
share which constitute 50% of Rosneft’s IFRS net profit for
the first half of 2019. BP received dividends of $451 million (net
of withholding tax) in November.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
|
|
2019(a)
|
2019
|
2018
|
|
2019(a)
|
2018
|
|||||
|
Production (net of royalties) (BP share)
|
|
|
|
|
|
|
|
|||||
|
Liquids* (mb/d)
|
|
923
|
|
920
|
|
946
|
|
|
923
|
|
923
|
|
|
Natural gas (mmcf/d)
|
|
1,306
|
|
1,236
|
|
1,312
|
|
|
1,279
|
|
1,285
|
|
|
Total hydrocarbons* (mboe/d)
|
|
1,148
|
|
1,133
|
|
1,173
|
|
|
1,144
|
|
1,144
|
|
(a)
The operational and
financial information of the Rosneft segment for the fourth quarter
and full year is based on preliminary operational and financial
results of Rosneft for the three months and full year ended
31 December 2019. Actual results may differ from these
amounts.
(b)
The Rosneft segment
result includes equity-accounted earnings arising from BP’s
19.75% shareholding in Rosneft as adjusted for the accounting
required under IFRS relating to BP’s purchase of its interest
in Rosneft and the amortization of the deferred gain relating to
the divestment of BP’s interest in TNK-BP. These adjustments
increase the segment's reported profit before interest and tax, as
shown in the table above, compared with the amounts reported in
Rosneft’s IFRS financial statements.
(c)
BP’s adjusted
share of Rosneft’s earnings after Rosneft's own finance
costs, taxation and non-controlling interests is included in the BP
group income statement within profit before interest and taxation.
For each year-to-date period it is calculated by translating the
amounts reported in Russian roubles into US dollars using the
average exchange rate for the year to date.
Top of
page 11
Other businesses and corporate
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Profit (loss) before interest and tax
|
|
(1,432
|
)
|
(412
|
)
|
(1,110
|
)
|
|
(2,771
|
)
|
(3,521
|
)
|
|
Inventory holding (gains) losses*
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
RC profit (loss) before interest and tax
|
|
(1,432
|
)
|
(412
|
)
|
(1,110
|
)
|
|
(2,771
|
)
|
(3,521
|
)
|
|
Net charge (credit) for non-operating items*
|
|
1,182
|
|
90
|
|
766
|
|
|
1,491
|
|
1,963
|
|
|
Underlying RC profit (loss) before interest and tax*
|
|
(250
|
)
|
(322
|
)
|
(344
|
)
|
|
(1,280
|
)
|
(1,558
|
)
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(85
|
)
|
(249
|
)
|
(179
|
)
|
|
(713
|
)
|
(615
|
)
|
|
Non-US
|
|
(165
|
)
|
(73
|
)
|
(165
|
)
|
|
(567
|
)
|
(943
|
)
|
|
|
|
(250
|
)
|
(322
|
)
|
(344
|
)
|
|
(1,280
|
)
|
(1,558
|
)
|
|
Non-operating items
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(268
|
)
|
(85
|
)
|
(654
|
)
|
|
(559
|
)
|
(1,738
|
)
|
|
Non-US
|
|
(914
|
)
|
(5
|
)
|
(112
|
)
|
|
(932
|
)
|
(225
|
)
|
|
|
|
(1,182
|
)
|
(90
|
)
|
(766
|
)
|
|
(1,491
|
)
|
(1,963
|
)
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(353
|
)
|
(334
|
)
|
(833
|
)
|
|
(1,272
|
)
|
(2,353
|
)
|
|
Non-US
|
|
(1,079
|
)
|
(78
|
)
|
(277
|
)
|
|
(1,499
|
)
|
(1,168
|
)
|
|
|
|
(1,432
|
)
|
(412
|
)
|
(1,110
|
)
|
|
(2,771
|
)
|
(3,521
|
)
|
Other
businesses and corporate comprises our alternative energy business,
shipping, treasury, BP ventures and corporate activities including
centralized functions, and any residual costs of the Gulf of Mexico
oil spill.
Financial results
The
replacement cost loss before interest and tax for the fourth
quarter and full year was $1,432 million and $2,771 million
respectively, compared with $1,110 million and $3,521 million for
the same periods in 2018.
The
results included a net non-operating charge of $1,182 million for
the fourth quarter and $1,491 million for the full year, primarily
relating to the reclassification of $877 million of accumulated
foreign exchange losses from reserves to the income statement which
arose as a result of the contribution of our Brazilian biofuels
business to BP Bunge Bioenergia, as well as costs of the Gulf of
Mexico oil spill, compared with a charge of $766 million and $1,963
million for the same periods in 2018.
After
adjusting for non-operating items, the underlying replacement cost
loss before interest and tax for the fourth quarter and full year
was $250 million and $1,280 million respectively, compared with
$344 million and $1,558 million for the same periods in
2018.
Alternative Energy
The net
ethanol-equivalent production (which includes ethanol and sugar)
for the fourth quarter and full year was 172 million litres and 796
million litres respectively, compared with 144 million litres and
765 million litres for the same periods in 2018.
Net
wind generation capacity* was 926MW at 31 December 2019,
compared with 1,001MW at 31 December 2018. BP’s net
share of wind generation for the fourth quarter and full year was
785GWh and 2,752GWh respectively, compared with 933GWh and 3,821GWh
for the same periods in 2018. The lower production and reduced
capacity in 2019 is due to divestments in the fourth quarter of
2018 and second quarter of 2019.
Lightsource
BP has an operating portfolio of 2GW of solar projects under its
management and has plans for 10GW of developed assets by the end of
2023. During the fourth quarter BP increased its shareholding, to
become an equal partner in the business, with the balance of shares
continuing to be held by Lightsource BP's management and
staff.
In
November, Lightsource BP became the first company in the UK to
provide a reactive power service from a solar plant at night
following a successful trial at its East Sussex solar plant. The
trial follows three years of testing and development working with
UK Power Networks and the National Grid Electricity System
Operator.
In
December, BP and Bunge Limited completed the formation of BP Bunge
Bioenergia. The joint venture combines the Brazilian biofuels and
biopower assets of the two companies into a 50/50 JV, and has 11
biofuel sites, with 32 million metric tonnes of combined crushing
capacity per year. In 2018 the combined operations produced around
2.2 billion litres of ethanol equivalent and after powering the
sites, exported 1,200 gigawatt-hours of low-carbon biopower to the
national grid.
In
early January 2020, BP participated in an artificial intelligence
(AI) venture by investing in energy management specialist R&B
whose systems are designed to predict, control and improve a
building’s energy use. Buildings currently account for one
third of the world’s total energy consumption and this
venture will enable building managers to make informed decisions to
optimize energy use and reduce carbon emissions.
Outlook
Other
businesses and corporate average quarterly charges, excluding
non-operating items, are expected to be around $350 million
although this will fluctuate quarter to quarter.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
36.
|
Top of
page 12
Financial statements
Group income statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
Sales and other operating revenues (Note 5)
|
|
71,109
|
|
68,291
|
|
75,677
|
|
|
278,397
|
|
298,756
|
|
|
Earnings from joint ventures – after interest and
tax
|
|
163
|
|
90
|
|
236
|
|
|
576
|
|
897
|
|
|
Earnings from associates – after interest and
tax
|
|
640
|
|
784
|
|
425
|
|
|
2,681
|
|
2,856
|
|
|
Interest and other income
|
|
210
|
|
126
|
|
295
|
|
|
769
|
|
773
|
|
|
Gains on sale of businesses and fixed assets
|
|
48
|
|
1
|
|
252
|
|
|
193
|
|
456
|
|
|
Total revenues and other income
|
|
72,170
|
|
69,292
|
|
76,885
|
|
|
282,616
|
|
303,738
|
|
|
Purchases
|
|
53,444
|
|
52,273
|
|
59,019
|
|
|
209,672
|
|
229,878
|
|
|
Production and manufacturing expenses
|
|
5,809
|
|
5,259
|
|
6,173
|
|
|
21,815
|
|
23,005
|
|
|
Production and similar taxes (Note 7)
|
|
412
|
|
340
|
|
186
|
|
|
1,547
|
|
1,536
|
|
|
Depreciation, depletion and amortization (Note 6)
|
|
4,434
|
|
4,297
|
|
3,987
|
|
|
17,780
|
|
15,457
|
|
|
Impairment and losses on sale of businesses and fixed assets (Note
3)
|
|
3,657
|
|
3,416
|
|
244
|
|
|
8,075
|
|
860
|
|
|
Exploration expense
|
|
266
|
|
185
|
|
457
|
|
|
964
|
|
1,445
|
|
|
Distribution and administration expenses
|
|
2,996
|
|
2,648
|
|
3,655
|
|
|
11,057
|
|
12,179
|
|
|
Profit (loss) before interest and taxation
|
|
1,152
|
|
874
|
|
3,164
|
|
|
11,706
|
|
19,378
|
|
|
Finance costs
|
|
886
|
|
883
|
|
742
|
|
|
3,489
|
|
2,528
|
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
17
|
|
16
|
|
34
|
|
|
63
|
|
127
|
|
|
Profit (loss) before taxation
|
|
249
|
|
(25
|
)
|
2,388
|
|
|
8,154
|
|
16,723
|
|
|
Taxation
|
|
231
|
|
706
|
|
1,617
|
|
|
3,964
|
|
7,145
|
|
|
Profit (loss) for the period
|
|
18
|
|
(731
|
)
|
771
|
|
|
4,190
|
|
9,578
|
|
|
Attributable to
|
|
|
|
|
|
|
|
|||||
|
BP
shareholders
|
|
19
|
|
(749
|
)
|
766
|
|
|
4,026
|
|
9,383
|
|
|
Non-controlling
interests
|
|
(1
|
)
|
18
|
|
5
|
|
|
164
|
|
195
|
|
|
|
|
18
|
|
(731
|
)
|
771
|
|
|
4,190
|
|
9,578
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earnings per share (Note 8)
|
|
|
|
|
|
|
|
|||||
|
Profit (loss) for the period attributable to BP
shareholders
|
|
|
|
|
|
|
|
|||||
|
Per
ordinary share (cents)
|
|
|
|
|
|
|
|
|||||
|
Basic
|
|
0.09
|
|
(3.68
|
)
|
3.83
|
|
|
19.84
|
|
46.98
|
|
|
Diluted
|
|
0.09
|
|
(3.68
|
)
|
3.80
|
|
|
19.73
|
|
46.67
|
|
|
Per
ADS (dollars)
|
|
|
|
|
|
|
|
|||||
|
Basic
|
|
0.01
|
|
(0.22
|
)
|
0.23
|
|
|
1.19
|
|
2.82
|
|
|
Diluted
|
|
0.01
|
|
(0.22
|
)
|
0.23
|
|
|
1.18
|
|
2.80
|
|
Top of
page 13
Condensed group statement of comprehensive income
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
Profit (loss) for the period
|
|
18
|
|
(731
|
)
|
771
|
|
|
4,190
|
|
9,578
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|||||
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|||||
|
Currency
translation differences
|
|
1,404
|
|
(986
|
)
|
(937
|
)
|
|
1,538
|
|
(3,771
|
)
|
|
Exchange
(gains) losses on translation of foreign operations reclassified to
gain or loss on sale of businesses and fixed assets
|
|
880
|
|
—
|
|
—
|
|
|
880
|
|
—
|
|
|
Cash
flow hedges and costs of hedging
|
|
(76
|
)
|
(17
|
)
|
(68
|
)
|
|
59
|
|
(192
|
)
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
43
|
|
119
|
|
200
|
|
|
82
|
|
417
|
|
|
Income
tax relating to items that may be reclassified
|
|
(39
|
)
|
12
|
|
33
|
|
|
(70
|
)
|
4
|
|
|
|
|
2,212
|
|
(872
|
)
|
(772
|
)
|
|
2,489
|
|
(3,542
|
)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|||||
|
Remeasurements
of the net pension and other post-retirement benefit liability or
asset
|
|
1,480
|
|
(260
|
)
|
(651
|
)
|
|
328
|
|
2,317
|
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
6
|
|
(10
|
)
|
(8
|
)
|
|
(3
|
)
|
(37
|
)
|
|
Income
tax relating to items that will not be reclassified
|
|
(459
|
)
|
27
|
|
223
|
|
|
(157
|
)
|
(718
|
)
|
|
|
|
1,027
|
|
(243
|
)
|
(436
|
)
|
|
168
|
|
1,562
|
|
|
Other comprehensive income
|
|
3,239
|
|
(1,115
|
)
|
(1,208
|
)
|
|
2,657
|
|
(1,980
|
)
|
|
Total comprehensive income
|
|
3,257
|
|
(1,846
|
)
|
(437
|
)
|
|
6,847
|
|
7,598
|
|
|
Attributable to
|
|
|
|
|
|
|
|
|||||
|
BP
shareholders
|
|
3,240
|
|
(1,848
|
)
|
(444
|
)
|
|
6,674
|
|
7,444
|
|
|
Non-controlling
interests
|
|
17
|
|
2
|
|
7
|
|
|
173
|
|
154
|
|
|
|
|
3,257
|
|
(1,846
|
)
|
(437
|
)
|
|
6,847
|
|
7,598
|
|
Top of
page 14
Condensed group statement of changes in equity
|
|
|
BP
shareholders’
|
Non-controlling
|
Total
|
|||
|
$ million
|
|
equity
|
interests
|
equity
|
|||
|
At 31 December 2018
|
|
99,444
|
|
2,104
|
|
101,548
|
|
|
Adjustment
on adoption of IFRS 16, net of tax(a)
|
|
(329
|
)
|
(1
|
)
|
(330
|
)
|
|
At 1 January 2019
|
|
99,115
|
|
2,103
|
|
101,218
|
|
|
|
|
|
|
|
|||
|
Total comprehensive income
|
|
6,674
|
|
173
|
|
6,847
|
|
|
Dividends
|
|
(6,929
|
)
|
(213
|
)
|
(7,142
|
)
|
|
Cash flow hedges transferred to the balance sheet, net of
tax
|
|
23
|
|
—
|
|
23
|
|
|
Repurchase
of ordinary share capital
|
|
(1,511
|
)
|
—
|
|
(1,511
|
)
|
|
Share-based payments, net of tax
|
|
719
|
|
—
|
|
719
|
|
|
Share
of equity-accounted entities’ changes in equity, net of
tax
|
|
5
|
|
—
|
|
5
|
|
|
Transactions involving non-controlling interests, net of
tax
|
|
316
|
|
233
|
|
549
|
|
|
At 31 December 2019
|
|
98,412
|
|
2,296
|
|
100,708
|
|
|
|
|
|
|
|
|||
|
|
|
BP
shareholders’
|
Non-controlling
|
Total
|
|||
|
$ million
|
|
equity
|
interests
|
equity
|
|||
|
At 31 December 2017
|
|
98,491
|
|
1,913
|
|
100,404
|
|
|
Adjustment
on adoption of IFRS 9, net of tax(b)
|
|
(180
|
)
|
—
|
|
(180
|
)
|
|
At 1 January 2018
|
|
98,311
|
|
1,913
|
|
100,224
|
|
|
|
|
|
|
|
|||
|
Total comprehensive income
|
|
7,444
|
|
154
|
|
7,598
|
|
|
Dividends
|
|
(6,699
|
)
|
(170
|
)
|
(6,869
|
)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
26
|
|
—
|
|
26
|
|
|
Repurchase of ordinary share capital
|
|
(355
|
)
|
—
|
|
(355
|
)
|
|
Share-based payments, net of tax
|
|
703
|
|
—
|
|
703
|
|
|
Share of equity-accounted entities’ changes in equity, net of
tax
|
|
14
|
|
—
|
|
14
|
|
|
Transactions involving non-controlling interests, net of
tax
|
|
—
|
|
207
|
|
207
|
|
|
At 31 December 2018
|
|
99,444
|
|
2,104
|
|
101,548
|
|
(a)
See Note 1 for
further information.
(b)
See Note 1 in BP Annual Report and Form
20-F 2018 for further
information.
Top of
page 15
Group balance sheet
|
|
|
31 December
|
31 December
|
||
|
$ million
|
|
2019
|
2018(a)
|
||
|
Non-current assets
|
|
|
|
||
|
Property, plant and equipment
|
|
132,642
|
|
135,261
|
|
|
Goodwill
|
|
11,868
|
|
12,204
|
|
|
Intangible assets
|
|
15,539
|
|
17,284
|
|
|
Investments in joint ventures
|
|
9,991
|
|
8,647
|
|
|
Investments in associates
|
|
20,334
|
|
17,673
|
|
|
Other investments
|
|
1,276
|
|
1,341
|
|
|
Fixed assets
|
|
191,650
|
|
192,410
|
|
|
Loans
|
|
630
|
|
637
|
|
|
Trade and other receivables
|
|
2,147
|
|
1,834
|
|
|
Derivative financial instruments
|
|
6,314
|
|
5,145
|
|
|
Prepayments
|
|
781
|
|
1,179
|
|
|
Deferred tax assets
|
|
4,560
|
|
3,706
|
|
|
Defined benefit pension plan surpluses
|
|
7,053
|
|
5,955
|
|
|
|
|
213,135
|
|
210,866
|
|
|
Current assets
|
|
|
|
||
|
Loans
|
|
339
|
|
326
|
|
|
Inventories
|
|
20,880
|
|
17,988
|
|
|
Trade and other receivables
|
|
24,442
|
|
24,478
|
|
|
Derivative financial instruments
|
|
4,153
|
|
3,846
|
|
|
Prepayments
|
|
857
|
|
963
|
|
|
Current tax receivable
|
|
1,282
|
|
1,019
|
|
|
Other investments
|
|
169
|
|
222
|
|
|
Cash and cash equivalents
|
|
22,472
|
|
22,468
|
|
|
|
|
74,594
|
|
71,310
|
|
|
Assets
classified as held for sale (Note 2)
|
|
7,465
|
|
—
|
|
|
|
|
82,059
|
|
71,310
|
|
|
Total assets
|
|
295,194
|
|
282,176
|
|
|
Current liabilities
|
|
|
|
||
|
Trade and other payables
|
|
46,829
|
|
46,265
|
|
|
Derivative financial instruments
|
|
3,261
|
|
3,308
|
|
|
Accruals
|
|
5,066
|
|
4,626
|
|
|
Lease liabilities
|
|
2,067
|
|
44
|
|
|
Finance debt
|
|
10,487
|
|
9,329
|
|
|
Current tax payable
|
|
2,039
|
|
2,101
|
|
|
Provisions
|
|
2,453
|
|
2,564
|
|
|
|
|
72,202
|
|
68,237
|
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
1,393
|
|
—
|
|
|
|
|
73,595
|
|
68,237
|
|
|
Non-current liabilities
|
|
|
|
||
|
Other payables
|
|
12,626
|
|
13,830
|
|
|
Derivative financial instruments
|
|
5,537
|
|
5,625
|
|
|
Accruals
|
|
996
|
|
575
|
|
|
Lease liabilities
|
|
7,655
|
|
623
|
|
|
Finance debt
|
|
57,237
|
|
55,803
|
|
|
Deferred tax liabilities
|
|
9,750
|
|
9,812
|
|
|
Provisions
|
|
18,498
|
|
17,732
|
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
8,592
|
|
8,391
|
|
|
|
|
120,891
|
|
112,391
|
|
|
Total liabilities
|
|
194,486
|
|
180,628
|
|
|
Net assets
|
|
100,708
|
|
101,548
|
|
|
Equity
|
|
|
|
||
|
BP shareholders’ equity
|
|
98,412
|
|
99,444
|
|
|
Non-controlling interests
|
|
2,296
|
|
2,104
|
|
|
Total equity
|
|
100,708
|
|
101,548
|
|
(a)
Finance debt on the
comparative balance sheet has been re-presented to align with the
current period. See Note 1 for further information.
Top of
page 16
Condensed group cash flow statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Operating activities
|
|
|
|
|
|
|
|
|||||
|
Profit (loss) before taxation
|
|
249
|
|
(25
|
)
|
2,388
|
|
|
8,154
|
|
16,723
|
|
|
Adjustments
to reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|||||
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
4,589
|
|
4,412
|
|
4,338
|
|
|
18,411
|
|
16,542
|
|
|
Impairment
and (gain) loss on sale of businesses and fixed assets
|
|
3,609
|
|
3,415
|
|
(8
|
)
|
|
7,882
|
|
404
|
|
|
Earnings
from equity-accounted entities, less dividends
received
|
|
(75
|
)
|
(236
|
)
|
(30
|
)
|
|
(1,295
|
)
|
(2,218
|
)
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
250
|
|
257
|
|
222
|
|
|
657
|
|
607
|
|
|
Share-based
payments
|
|
167
|
|
149
|
|
126
|
|
|
730
|
|
690
|
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(43
|
)
|
(50
|
)
|
(60
|
)
|
|
(238
|
)
|
(386
|
)
|
|
Net
charge for provisions, less payments
|
|
270
|
|
(132
|
)
|
617
|
|
|
(176
|
)
|
986
|
|
|
Movements
in inventories and other current and non-current assets and
liabilities
|
|
(306
|
)
|
141
|
|
778
|
|
|
(2,918
|
)
|
(4,763
|
)
|
|
Income
taxes paid
|
|
(1,107
|
)
|
(1,875
|
)
|
(1,542
|
)
|
|
(5,437
|
)
|
(5,712
|
)
|
|
Net cash provided by operating activities
|
|
7,603
|
|
6,056
|
|
6,829
|
|
|
25,770
|
|
22,873
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|||||
|
Expenditure
on property, plant and equipment, intangible and other
assets
|
|
(3,936
|
)
|
(3,954
|
)
|
(5,962
|
)
|
|
(15,418
|
)
|
(16,707
|
)
|
|
Acquisitions, net of cash acquired
|
|
(33
|
)
|
13
|
|
(6,379
|
)
|
|
(3,562
|
)
|
(6,986
|
)
|
|
Investment in joint ventures
|
|
(57
|
)
|
(60
|
)
|
(290
|
)
|
|
(137
|
)
|
(382
|
)
|
|
Investment in associates
|
|
(83
|
)
|
(22
|
)
|
(265
|
)
|
|
(304
|
)
|
(1,013
|
)
|
|
Total cash capital expenditure
|
|
(4,109
|
)
|
(4,023
|
)
|
(12,896
|
)
|
|
(19,421
|
)
|
(25,088
|
)
|
|
Proceeds from disposal of fixed assets
|
|
24
|
|
171
|
|
660
|
|
|
500
|
|
940
|
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
792
|
|
536
|
|
1,758
|
|
|
1,701
|
|
1,911
|
|
|
Proceeds from loan repayments
|
|
64
|
|
63
|
|
619
|
|
|
246
|
|
666
|
|
|
Net cash used in investing activities
|
|
(3,229
|
)
|
(3,253
|
)
|
(9,859
|
)
|
|
(16,974
|
)
|
(21,571
|
)
|
|
Financing
activities(a)
|
|
|
|
|
|
|
|
|||||
|
Net
issue (repurchase) of shares (Note 8)
|
|
(1,171
|
)
|
(215
|
)
|
(16
|
)
|
|
(1,511
|
)
|
(355
|
)
|
|
Lease liability payments
|
|
(566
|
)
|
(594
|
)
|
(11
|
)
|
|
(2,372
|
)
|
(35
|
)
|
|
Proceeds from long-term financing
|
|
1,879
|
|
213
|
|
2,118
|
|
|
8,597
|
|
9,038
|
|
|
Repayments of long-term financing
|
|
(360
|
)
|
(516
|
)
|
(1,795
|
)
|
|
(7,118
|
)
|
(7,175
|
)
|
|
Net increase (decrease) in short-term debt
|
|
62
|
|
(852
|
)
|
889
|
|
|
180
|
|
1,317
|
|
|
Net increase (decrease) in non-controlling interests
|
|
566
|
|
—
|
|
—
|
|
|
566
|
|
—
|
|
|
Dividends paid - BP shareholders
|
|
(2,076
|
)
|
(1,656
|
)
|
(1,733
|
)
|
|
(6,946
|
)
|
(6,699
|
)
|
|
-
non-controlling interests
|
|
(47
|
)
|
(47
|
)
|
(41
|
)
|
|
(213
|
)
|
(170
|
)
|
|
Net cash provided by (used in) financing activities
|
|
(1,713
|
)
|
(3,667
|
)
|
(589
|
)
|
|
(8,817
|
)
|
(4,079
|
)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
119
|
|
(118
|
)
|
(105
|
)
|
|
25
|
|
(330
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
|
2,780
|
|
(982
|
)
|
(3,724
|
)
|
|
4
|
|
(3,107
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
19,692
|
|
20,674
|
|
26,192
|
|
|
22,468
|
|
25,575
|
|
|
Cash and cash equivalents at end of period
|
|
22,472
|
|
19,692
|
|
22,468
|
|
|
22,472
|
|
22,468
|
|
(a)
Financing cash
flows for the fourth quarter and full year 2018 have been
re-presented to align with the current period. See Note 1 for
further information.
Top of
page 17
Notes
Note 1. Basis of preparation
The
results for the interim periods and the year ended 31 December 2019
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 2018 included in BP Annual Report and Form 20-F
2018.
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 European
Union (EU) and in accordance with the provisions of the UK
Companies Act 2006 as applicable to companies reporting under IFRS.
IFRS as adopted by the EU differs 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 2019, which are the same as those used
in preparing
BP Annual Report and Form 20-F
2018 with the exception of the adoption of IFRS 16 'Leases'
from 1 January 2019.
Changes in significant accounting estimates
In
BP Annual Report and Form 20-F
2018 we disclosed significant estimates relating to
provisions and the recoverability of asset carrying values. During
the fourth quarter 2019 certain key assumptions used in these
estimates were reviewed.
Provisions discount rate
The
nominal discount rate applied to provisions was revised to 2.5% (31
December 2018 3.0%). The principal impact of this rate reduction
was a $1.4 billion increase in the decommissioning provision with a
similar increase in the carrying amount of property, plant and
equipment.
Impairment testing assumptions
The
price assumptions used in value-in-use impairment testing were
reviewed. The long-term assumption for Brent oil used in the fourth
quarter is derived from $70 per barrel in 2015 prices (31 December
2018 $75 per barrel). The long-term natural gas price assumption
for Henry Hub used in the fourth quarter is unchanged from 2018.
Short-term oil and gas price assumptions were updated to reflect
recent market rates and a gradual transition to the long-term
assumptions over 5 years for Brent oil (2018 5 years), and 12 years
for Henry Hub gas (2018 5 years).
The
pre-tax discount rate applied to value-in-use impairment testing
during the fourth quarter typically ranged from 7% to 13% depending
on the applicable tax rate in the geographic location of the
relevant cash-generating unit (31 December 2018 9%). The additional
premium applied to higher-risk countries ranged from 1% to 4% (31
December 2018 2%).
The
revision to the group’s oil and gas price assumptions and
impairment discount rates did not result in the recognition of any
significant impairment charges.
Further
details will be provided in BP
Annual Report and Form 20-F 2019, which is expected to be
published in March 2020.
New International Financial Reporting Standards
adopted
BP
adopted IFRS 16 ‘Leases’, which replaced IAS 17
‘Leases’ and IFRIC 4 ‘Determining whether an
arrangement contains a lease’, with effect from
1 January 2019. Further information is included in
BP Annual Report and Form 20-F
2018 - Financial statements - Note 1 Significant accounting
policies, judgements, estimates and assumptions - Impact of new
International Financial Reporting Standards.
IFRS 16
provides a new model for lessee accounting in which the majority of
leases are accounted for by the recognition on the balance sheet of
a right-of-use asset and a lease liability.
Agreements
that convey the right to control the use of an identified asset for
a period of time in exchange for consideration are accounted for as
leases. A lease liability is recognized at the present value of
future lease payments over the reasonably certain lease term.
Variable lease payments that do not depend on an index or a rate
are not included in the lease liability. The right-of-use asset is
recognized at a value equivalent to the initial measurement of the
lease liability adjusted for lease prepayments, lease incentives,
initial direct costs and any restoration obligations. The
subsequent amortization of the right-of-use asset and the interest
expense related to the lease liability are recognized in the income
statement over the lease term.
The
group recognizes the full lease liability, rather than its working
interest share, for leases entered into on behalf of a joint
operation if the group has the primary responsibility for making
the lease payments. If the right-of-use asset is jointly controlled
by the group and the other joint operators, a receivable is
recognized for the share of the asset transferred to the other
joint operators.
BP
elected to apply the modified retrospective transition approach in
which the cumulative effect of initial application is recognized in
opening retained earnings at the date of initial application with
no restatement of comparative periods’ financial information.
Comparative information in the group balance sheet and group cash
flow statement has, however, been re-presented to align with
current year presentation, showing lease liabilities and lease
liability payments as separate line items.
Top of
page 18
Note 1. Basis of preparation (continued)
These
were previously included within the finance debt and repayments of
long-term financing line items respectively. Amounts presented in
these line items for the comparative periods relate to leases
accounted for as finance leases under IAS 17.
IFRS 16
introduces a revised definition of a lease. As permitted by the
standard, BP elected not to reassess the existing population of
leases under the new definition and will only apply the new
definition for the assessment of contracts entered into after the
transition date. On transition the standard permits, on a
lease-by-lease basis, the right-of-use asset to be measured either
at an amount equal to the lease liability (as adjusted for prepaid
or accrued lease payments), or on a historical basis as if the
standard had always applied. BP elected to use the historical asset
measurement for its more material leases and used the asset equals
liability approach for the remainder of the population. BP also
elected to adjust the carrying amounts of the right-of-use assets
as at 1 January 2019 for onerous lease provisions that had been
recognized on the group balance sheet as at 31 December 2018,
rather than performing impairment tests on transition.
The
effect of the adoption of IFRS 16 on the group balance sheet is set
out below.
|
|
|
|
|
Adjustment
|
|||
|
|
|
31 December
|
1 January
|
on adoption
|
|||
|
$ million
|
|
2018
|
2019
|
of IFRS 16
|
|||
|
Non-current assets
|
|
|
|
|
|||
|
Property,
plant and equipment
|
|
135,261
|
|
143,950
|
|
8,689
|
|
|
Trade
and other receivables
|
|
1,834
|
|
2,159
|
|
325
|
|
|
Prepayments
|
|
1,179
|
|
849
|
|
(330
|
)
|
|
Deferred
tax assets
|
|
3,706
|
|
3,736
|
|
30
|
|
|
Current assets
|
|
|
|
|
|||
|
Trade
and other receivables
|
|
24,478
|
|
24,673
|
|
195
|
|
|
Prepayments
|
|
963
|
|
872
|
|
(91
|
)
|
|
Current liabilities
|
|
|
|
|
|||
|
Trade
and other payables
|
|
46,265
|
|
46,209
|
|
(56
|
)
|
|
Accruals
|
|
4,626
|
|
4,578
|
|
(48
|
)
|
|
Lease
liabilities
|
|
44
|
|
2,196
|
|
2,152
|
|
|
Finance
debt
|
|
9,329
|
|
9,329
|
|
—
|
|
|
Provisions
|
|
2,564
|
|
2,547
|
|
(17
|
)
|
|
Non-current liabilities
|
|
|
|
|
|||
|
Other
payables
|
|
13,830
|
|
14,013
|
|
183
|
|
|
Accruals
|
|
575
|
|
548
|
|
(27
|
)
|
|
Lease
liabilities
|
|
623
|
|
7,704
|
|
7,081
|
|
|
Finance
debt
|
|
55,803
|
|
55,803
|
|
—
|
|
|
Deferred
tax liabilities
|
|
9,812
|
|
9,767
|
|
(45
|
)
|
|
Provisions
|
|
17,732
|
|
17,657
|
|
(75
|
)
|
|
|
|
|
|
|
|||
|
Net assets
|
|
101,548
|
|
101,218
|
|
(330
|
)
|
|
|
|
|
|
|
|||
|
Equity
|
|
|
|
|
|||
|
BP
shareholders' equity
|
|
99,444
|
|
99,115
|
|
(329
|
)
|
|
Non-controlling
interests
|
|
2,104
|
|
2,103
|
|
(1
|
)
|
|
|
|
101,548
|
|
101,218
|
|
(330
|
)
|
The
presentation and timing of recognition of charges in the income
statement has changed following the adoption of IFRS 16. The
operating lease expense previously reported under IAS 17, typically
on a straight-line basis, has been replaced by depreciation of the
right-of-use asset and interest on the lease liability. In the cash
flow statement payments are now presented as financing cash flows,
representing payments of principal, and as operating cash flows,
representing payments of interest. Variable lease payments that do
not depend on an index or rate are not included in the lease
liability and will continue to be presented as operating cash
flows. In prior years, operating lease payments were principally
presented within cash flows from operating activities.
Top of
page 19
Note 1. Basis of preparation (continued)
The
following table provides a reconciliation of the group’s
operating lease commitments as at 31 December 2018 to the total
lease liability recognized on the group balance sheet in accordance
with IFRS 16 as at 1 January 2019.
|
$ million
|
|
|
|
|
Operating lease commitments at 31 December 2018
|
|
11,979
|
|
|
|
|
|
|
|
Leases not yet commenced
|
|
(1,372
|
)
|
|
Leases below materiality threshold
|
|
(86
|
)
|
|
Short-term leases
|
|
(91
|
)
|
|
Effect of discounting
|
|
(1,512
|
)
|
|
Impact on leases in joint operations
|
|
836
|
|
|
Variable lease payments
|
|
(58
|
)
|
|
Redetermination of lease term
|
|
(252
|
)
|
|
Other
|
|
(22
|
)
|
|
Total additional lease liabilities recognized on adoption of IFRS
16
|
|
9,422
|
|
|
Finance lease obligations at 31 December 2018
|
|
667
|
|
|
Adjustment for finance leases in joint operations
|
|
(189
|
)
|
|
Total lease liabilities at 1 January 2019
|
|
9,900
|
|
An
explanation of each reconciling item shown in the table above is
provided in BP Annual Report and
Form 20-F 2018 - Financial statements - Note 1 Significant
accounting policies, judgements, estimates and assumptions - Impact
of new International Financial Reporting Standards.
The
total adjustments to the group's lease liabilities at 1 January
2019 are reconciled as follows:
|
$ million
|
|
|
|
|
Total additional lease liabilities recognized on adoption of IFRS
16
|
|
9,422
|
|
|
Less: adjustment for finance leases in joint
operations
|
|
(189
|
)
|
|
Total adjustment to lease liabilities
|
|
9,233
|
|
|
Of which – current
|
|
2,152
|
|
|
1 non-current
|
|
7,081
|
|
IFRIC agenda decision on IFRS 9 'Financial
Instruments'
In
March 2019, the IFRS Interpretations Committee (IFRIC) issued an
agenda decision on the application of IFRS 9 to the physical
settlement of contracts to buy or sell a non-financial
item. The agenda decision concluded that where a derivative
contract is settled by the physical receipt (or delivery) of the
commodity, the transaction price reported for the purchase (or
sale) should include the fair value of the derivative instrument in
addition to the cash payable (or receivable). BP is currently
assessing the impact of the agenda decision but expects it to have
no effect on reported earnings. Further details will be provided in
BP Annual Report and Form 20-F
2019.
Note 2. Non-current assets held for sale
The
carrying amount of assets classified as held for sale at 31
December 2019 is $7,465 million, with associated liabilities of
$1,393 million. These principally relate to two material disposal
transactions which have been classified as held for sale in the
group balance sheet.
On 27
August 2019, BP announced that it had agreed to sell all its Alaska
operations and interests to Hilcorp Energy for up to $5.6 billion,
subject to customary closing adjustments, of which $1.6 billion is
contingent on future cash flows. The sale will include BP’s
entire upstream and midstream business in the state, including BP
Exploration (Alaska) Inc., which owns all of BP’s upstream
oil and gas interests in Alaska, and BP Pipelines (Alaska)
Inc.’s 49% interest in the Trans Alaska Pipeline System
(TAPS). BP will retain decommissioning liability relating to TAPS,
which will be partially offset by a 30% cost reimbursement from
Hilcorp. The deal, which is subject to governmental authorizations,
is expected to complete during 2020. Assets of $6,518 million and
associated liabilities of $969 million relating to this transaction
are classified as held for sale at 31 December 2019.
In
November 2019, BP agreed to sell its interests in the San Juan
basin in Colorado and New Mexico to IKAV. The deal is
expected to complete during the first half of 2020. Assets and
associated liabilities relating to this transaction are classified
as held for sale at 31 December 2019.
Top of
page 20
Note 3. Impairment and losses on sale of businesses and fixed
assets
Included
within the line item in the income statement for impairment and
losses on sale of businesses and fixed assets is a net impairment
charge for the fourth quarter of $2,543 million. The net
charge for the year is $6,716 million.
The
impairment charges, which are substantially all reported in the
Upstream segment, principally relate to BP’s ongoing
divestment programme. They include $1,986 million in the
fourth quarter and $4,703 million in the year relating to heritage
BPX Energy assets; $258 million in the fourth quarter and the
$1,264 million in the year relating to the group’s interests
in its Alaska business; and $244 million in the year relating to
the group’s interests in Gulf of Suez oil concessions in
Egypt. The impairment charges were determined based on the
assets' fair value less costs of disposal referenced to expected
sales proceeds. See Note 1 and Note 2 for further
information.
Also
included is an $877 million loss on disposal relating to the
reclassification of accumulated foreign exchange losses from
reserves which arose as a result of the contribution of our
Brazilian biofuels business to BP Bunge Bioenergia.
Note 4. Analysis of replacement cost profit (loss) before interest
and tax and reconciliation to profit (loss) before
taxation
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Upstream
|
|
614
|
|
(1,050
|
)
|
4,168
|
|
|
4,917
|
|
14,328
|
|
|
Downstream
|
|
1,433
|
|
2,016
|
|
2,138
|
|
|
6,502
|
|
6,940
|
|
|
Rosneft
|
|
503
|
|
802
|
|
400
|
|
|
2,316
|
|
2,221
|
|
|
Other businesses and corporate
|
|
(1,432
|
)
|
(412
|
)
|
(1,110
|
)
|
|
(2,771
|
)
|
(3,521
|
)
|
|
|
|
1,118
|
|
1,356
|
|
5,596
|
|
|
10,964
|
|
19,968
|
|
|
Consolidation adjustment – UPII*
|
|
24
|
|
30
|
|
142
|
|
|
75
|
|
211
|
|
|
RC profit (loss) before interest and tax*
|
|
1,142
|
|
1,386
|
|
5,738
|
|
|
11,039
|
|
20,179
|
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
—
|
|
—
|
|
(12
|
)
|
|
(8
|
)
|
(6
|
)
|
|
Downstream
|
|
(21
|
)
|
(433
|
)
|
(2,470
|
)
|
|
685
|
|
(862
|
)
|
|
Rosneft
(net of tax)
|
|
31
|
|
(79
|
)
|
(92
|
)
|
|
(10
|
)
|
67
|
|
|
Profit (loss) before interest and tax
|
|
1,152
|
|
874
|
|
3,164
|
|
|
11,706
|
|
19,378
|
|
|
Finance costs
|
|
886
|
|
883
|
|
742
|
|
|
3,489
|
|
2,528
|
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
17
|
|
16
|
|
34
|
|
|
63
|
|
127
|
|
|
Profit (loss) before taxation
|
|
249
|
|
(25
|
)
|
2,388
|
|
|
8,154
|
|
16,723
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
|||||
|
US
|
|
(1,603
|
)
|
(2,425
|
)
|
1,487
|
|
|
(2,759
|
)
|
3,041
|
|
|
Non-US
|
|
2,745
|
|
3,811
|
|
4,251
|
|
|
13,798
|
|
17,138
|
|
|
|
|
1,142
|
|
1,386
|
|
5,738
|
|
|
11,039
|
|
20,179
|
|
Top of
page 21
Note 5. Sales and other operating revenues
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
By segment
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
13,955
|
|
12,396
|
|
15,050
|
|
|
54,501
|
|
56,399
|
|
|
Downstream
|
|
64,251
|
|
61,834
|
|
67,733
|
|
|
250,897
|
|
270,689
|
|
|
Other businesses and corporate
|
|
538
|
|
461
|
|
536
|
|
|
1,788
|
|
1,678
|
|
|
|
|
78,744
|
|
74,691
|
|
83,319
|
|
|
307,186
|
|
328,766
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
6,823
|
|
6,406
|
|
8,669
|
|
|
27,034
|
|
28,565
|
|
|
Downstream
|
|
384
|
|
(59
|
)
|
(1,232
|
)
|
|
973
|
|
574
|
|
|
Other businesses and corporate
|
|
428
|
|
53
|
|
205
|
|
|
782
|
|
871
|
|
|
|
|
7,635
|
|
6,400
|
|
7,642
|
|
|
28,789
|
|
30,010
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Third party sales and other operating revenues
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
7,132
|
|
5,990
|
|
6,381
|
|
|
27,467
|
|
27,834
|
|
|
Downstream
|
|
63,867
|
|
61,893
|
|
68,965
|
|
|
249,924
|
|
270,115
|
|
|
Other businesses and corporate
|
|
110
|
|
408
|
|
331
|
|
|
1,006
|
|
807
|
|
|
Total sales and other operating revenues
|
|
71,109
|
|
68,291
|
|
75,677
|
|
|
278,397
|
|
298,756
|
|
|
|
|
|
|
|
|
|
|
|||||
|
By geographical area
|
|
|
|
|
|
|
|
|||||
|
US
|
|
24,148
|
|
23,413
|
|
26,890
|
|
|
95,495
|
|
104,759
|
|
|
Non-US
|
|
54,450
|
|
51,030
|
|
53,540
|
|
|
208,031
|
|
219,681
|
|
|
|
|
78,598
|
|
74,443
|
|
80,430
|
|
|
303,526
|
|
324,440
|
|
|
Less: sales and other operating revenues between areas
|
|
7,489
|
|
6,152
|
|
4,753
|
|
|
25,129
|
|
25,684
|
|
|
|
|
71,109
|
|
68,291
|
|
75,677
|
|
|
278,397
|
|
298,756
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|||||
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|||||
|
Crude oil
|
|
16,276
|
|
14,502
|
|
15,448
|
|
|
62,130
|
|
65,276
|
|
|
Oil products
|
|
46,279
|
|
44,667
|
|
47,847
|
|
|
180,528
|
|
195,466
|
|
|
Natural gas, LNG and NGLs
|
|
5,086
|
|
4,465
|
|
5,862
|
|
|
20,167
|
|
21,745
|
|
|
Non-oil products and other revenues from contracts with
customers
|
|
3,280
|
|
3,300
|
|
3,618
|
|
|
13,254
|
|
13,768
|
|
|
|
|
70,921
|
|
66,934
|
|
72,775
|
|
|
276,079
|
|
296,255
|
|
Note 6. Depreciation, depletion and amortization
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Upstream
|
|
|
|
|
|
|
|
|||||
|
US
|
|
1,150
|
|
1,121
|
|
1,137
|
|
|
4,672
|
|
4,211
|
|
|
Non-US
|
|
2,371
|
|
2,295
|
|
2,242
|
|
|
9,560
|
|
8,907
|
|
|
|
|
3,521
|
|
3,416
|
|
3,379
|
|
|
14,232
|
|
13,118
|
|
|
Downstream
|
|
|
|
|
|
|
|
|||||
|
US
|
|
343
|
|
336
|
|
240
|
|
|
1,335
|
|
900
|
|
|
Non-US
|
|
417
|
|
394
|
|
298
|
|
|
1,586
|
|
1,177
|
|
|
|
|
760
|
|
730
|
|
538
|
|
|
2,921
|
|
2,077
|
|
|
Other businesses and corporate
|
|
|
|
|
|
|
|
|||||
|
US
|
|
14
|
|
14
|
|
11
|
|
|
55
|
|
59
|
|
|
Non-US
|
|
139
|
|
137
|
|
59
|
|
|
572
|
|
203
|
|
|
|
|
153
|
|
151
|
|
70
|
|
|
627
|
|
262
|
|
|
Total group
|
|
4,434
|
|
4,297
|
|
3,987
|
|
|
17,780
|
|
15,457
|
|
Top of
page 22
Note 7. Production and similar taxes
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
US
|
|
89
|
|
66
|
|
99
|
|
|
315
|
|
369
|
|
|
Non-US
|
|
323
|
|
274
|
|
87
|
|
|
1,232
|
|
1,167
|
|
|
|
|
412
|
|
340
|
|
186
|
|
|
1,547
|
|
1,536
|
|
Note 8. 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. During the quarter the company
repurchased for cancellation 184 million ordinary shares for a
total cost of $1,171 million, including transaction costs of $6
million, as part of the share buyback programme announced on 31
October 2017. This brings the total number of shares repurchased in
the year to 235 million for a total cost of $1,511 million,
including transaction costs of $8 million. A further 120 million of
shares have been repurchased in January 2020 at a total cost of
$776 million. The number of shares in issue is reduced when shares
are repurchased.
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.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Results for the period
|
|
|
|
|
|
|
|
|||||
|
Profit
(loss) for the period attributable to BP shareholders
|
|
19
|
|
(749
|
)
|
766
|
|
|
4,026
|
|
9,383
|
|
|
Less: preference dividend
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
1
|
|
|
Profit
(loss) attributable to BP ordinary shareholders
|
|
19
|
|
(749
|
)
|
766
|
|
|
4,025
|
|
9,382
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
|||||
|
Basic
weighted average number of shares outstanding
|
|
20,254,234
|
|
20,371,728
|
|
20,007,781
|
|
|
20,284,859
|
|
19,970,215
|
|
|
ADS equivalent
|
|
3,375,705
|
|
3,395,288
|
|
3,334,630
|
|
|
3,380,809
|
|
3,328,369
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Weighted
average number of shares outstanding used to calculate diluted
earnings per share
|
|
20,351,808
|
|
20,371,728
|
|
20,133,087
|
|
|
20,399,670
|
|
20,102,493
|
|
|
ADS equivalent
|
|
3,391,968
|
|
3,395,288
|
|
3,355,514
|
|
|
3,399,945
|
|
3,350,415
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Shares in issue at period-end
|
|
20,241,170
|
|
20,417,220
|
|
20,101,658
|
|
|
20,241,170
|
|
20,101,658
|
|
|
ADS equivalent
|
|
3,373,528
|
|
3,402,870
|
|
3,350,276
|
|
|
3,373,528
|
|
3,350,276
|
|
(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.
Top of
page 23
Note 9. Dividends
Dividends payable
BP
today announced an interim dividend of 10.50 cents per ordinary
share which is expected to be paid on 27 March 2020 to ordinary
shareholders and American Depositary Share (ADS) holders on the
register on 14 February 2020. The corresponding amount in sterling
is due to be announced on 16 March 2020, calculated based on the
average of the market exchange rates for the four dealing days
commencing on 10 March 2020. Holders of ADSs are expected to
receive $0.630 per ADS (less applicable fees). The board has
decided not to offer a scrip dividend alternative in respect of the
fourth quarter 2019 dividend. Ordinary shareholders and ADS holders
(subject to certain exceptions) will be able to participate in a
dividend reinvestment programme. Details of the fourth quarter
dividend and timetable are available at bp.com/dividends and further details of
the dividend reinvestment programmes are available at bp.com/drip.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
|||||
|
cents
|
|
10.250
|
|
10.250
|
|
10.250
|
|
|
41.000
|
|
40.500
|
|
|
pence
|
|
7.825
|
|
8.348
|
|
8.025
|
|
|
31.977
|
|
30.568
|
|
|
Dividends paid per ADS (cents)
|
|
61.50
|
|
61.50
|
|
61.50
|
|
|
246.00
|
|
243.00
|
|
|
Scrip dividends
|
|
|
|
|
|
|
|
|||||
|
Number of shares issued (millions)
|
|
—
|
|
72.5
|
|
47.5
|
|
|
208.9
|
|
195.3
|
|
|
Value of shares issued ($ million)
|
|
—
|
|
440
|
|
322
|
|
|
1,387
|
|
1,381
|
|
Note 10. Net debt and net debt including leases
|
Net debt*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Finance
debt(a)
|
|
67,724
|
|
65,867
|
|
65,132
|
|
|
67,724
|
|
65,132
|
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
190
|
|
319
|
|
813
|
|
|
190
|
|
813
|
|
|
|
|
67,914
|
|
66,186
|
|
65,945
|
|
|
67,914
|
|
65,945
|
|
|
Less: cash and cash equivalents
|
|
22,472
|
|
19,692
|
|
22,468
|
|
|
22,472
|
|
22,468
|
|
|
Net debt
|
|
45,442
|
|
46,494
|
|
43,477
|
|
|
45,442
|
|
43,477
|
|
|
Total equity
|
|
100,708
|
|
100,015
|
|
101,548
|
|
|
100,708
|
|
101,548
|
|
|
Gearing*
|
|
31.1%
|
31.7%
|
30.0%
|
|
31.1%
|
30.0%
|
|||||
(a)
The fair value of
finance debt at 31 December 2019 was $69,376 million (31 December
2018 $65,366 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 $601 million
(third quarter 2019 liability of $682 million and fourth quarter
2018 liability of $827 million) are not included in the calculation
of net debt shown above as hedge accounting is not applied for
these instruments.
As a
result of the adoption of IFRS 16 ‘Leases’ from 1
January 2019, leases that were previously classified as finance
leases under IAS 17 are now presented as ‘Lease
liabilities’ on the group balance sheet and, therefore, do
not form part of finance debt. Comparative information for finance
debt (previously termed ‘gross debt’), net debt and
gearing (previously termed 'net debt ratio') have been amended to
be on a consistent basis with amounts presented for 2019. The
relevant amount for finance lease liabilities that has been
excluded from comparative information for the fourth quarter and
full year 2018 is $667 million. The previously disclosed amount for
finance debt for the fourth quarter and full year 2018 was $65,799
million. The previously disclosed amount for net debt for the
fourth quarter and full year 2018 was $44,144 million. The
previously disclosed gearing for the fourth quarter and full year
2018 was 30.3%.
|
Net debt including leases*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Net debt
|
|
45,442
|
|
46,494
|
|
43,477
|
|
|
45,442
|
|
43,477
|
|
|
Lease liabilities
|
|
9,722
|
|
9,639
|
|
667
|
|
|
9,722
|
|
667
|
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
(158
|
)
|
(197
|
)
|
—
|
|
|
(158
|
)
|
—
|
|
|
Net debt including leases
|
|
55,006
|
|
55,936
|
|
44,144
|
|
|
55,006
|
|
44,144
|
|
Top of
page 24
Note 11. Inventory valuation
A
provision of $290 million was held against hydrocarbon inventories
at 31 December 2019 ($369 million at
30 September 2019 and $604 million at
31 December 2018) to write them down to their net
realizable value. The net movement credited to the income statement
during the fourth quarter 2019 was $80 million (third quarter 2019
was a charge of $131 million and fourth quarter 2018 was a charge
of $562 million).
Note 12. Statutory accounts
The
financial information shown in this publication, which was approved
by the Board of Directors on 3 February 2020, is unaudited and does
not constitute statutory financial statements. Audited financial
information will be published in BP Annual Report and Form 20-F 2019. BP Annual
Report and Form 20-F 2018 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
Effects on the financial statements of the adoption of IFRS 16
‘Leases’
BP
adopted IFRS 16 ‘Leases’ with effect from
1 January 2019. The principal effects of the adoption are
described below. BP elected to apply the modified retrospective
transition approach in which the cumulative effect of initial
application is recognized in opening retained earnings at the date
of initial application with no restatement of comparative
periods’ financial information. For further information of
the effects of adoption see Financial statements - Note 1 and Note
10.
Balance sheet
As a
result of the adoption of IFRS 16, $9.0 billion of
right-of-use assets and $9.7 billion of lease liabilities have been
included in the group balance sheet as at
31 December 2019. Lease liabilities are now presented
separately on the group balance sheet and do not form part of
finance debt. Comparative information for finance debt in the group
balance sheet has been re-presented to align with current year
presentation.
|
|
|
31 December
|
31 December
|
||
|
$ billion
|
|
2019
|
2018
|
||
|
Property,
plant and equipment(a)
(b)
|
|
9.0
|
|
0.5
|
|
|
Lease
liabilities(a)
|
|
9.7
|
|
0.7
|
|
|
Finance debt
|
|
67.7
|
|
65.1
|
|
(a)
Comparative
information represents finance leases accounted for under IAS
17.
(b)
Net additions to
right-of-use assets for the fourth quarter and full year 2019 were
$0.5 billion and $2.5 billion respectively.
Income statement
The
presentation and timing of recognition of charges in the income
statement has changed following the adoption of IFRS 16. The
operating lease expense reported under the previous lease
accounting standard, IAS 17, typically on a straight-line basis,
has been replaced by depreciation of the right-of-use asset and
interest on the lease liability. Depreciation of right-of-use
assets for the fourth quarter and full year 2019 was $0.5 billion
and $1.9 billion respectively. Interest on the group’s lease
liabilities for the fourth quarter and full year 2019 was $0.1
billion and $0.4 billion respectively. Operating lease expenses
were previously principally included within Production and
manufacturing expenses and Distribution and administration expenses
in the income statement. It is estimated that the resulting benefit
to these line items is largely offset, in total, by an equivalent
amount in depreciation and interest charges. Therefore, there has
been no material overall effect on group profit measures in the
fourth quarter and full year 2019.
Cash flow statement
Lease
payments are now presented as financing cash flows, representing
payments of principal, and as operating cash flows, representing
payments of interest. In prior years, operating lease payments were
presented as operating cash flows and capital expenditure. Of the
$0.6 billion of lease payments included within financing activities
for the fourth quarter of 2019, it is estimated that $0.5 billion
would have been reported as operating cash flows and $0.1 billion
would have been reported as capital expenditure cash flows,
ignoring the effects of IFRS 16. Of the $2.4 billion of lease
payments included within financing activities for the full year
2019, it is estimated that $2.0 billion would have been reported as
operating cash flows and $0.4 billion would have been reported as
capital expenditure cash flows, ignoring the effects of IFRS
16.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ billion
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Financing activities
|
|
|
|
|
|
|
|
|||||
|
Lease
liability payments(a)
|
|
(0.6
|
)
|
(0.6
|
)
|
—
|
|
|
(2.4
|
)
|
—
|
|
(a)
Comparative
information represents finance leases accounted for under IAS
17.
Top of
page 26
Capital expenditure*
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Capital expenditure on a cash basis
|
|
|
|
|
|
|
|
|||||
|
Organic capital expenditure*
|
|
3,958
|
|
3,946
|
|
4,402
|
|
|
15,238
|
|
15,140
|
|
|
Inorganic
capital expenditure*(a)
|
|
151
|
|
77
|
|
8,494
|
|
|
4,183
|
|
9,948
|
|
|
|
|
4,109
|
|
4,023
|
|
12,896
|
|
|
19,421
|
|
25,088
|
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Organic capital expenditure by segment
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
|
|
|
|
|
|
|||||
|
US
|
|
1,029
|
|
1,036
|
|
1,048
|
|
|
4,019
|
|
3,482
|
|
|
Non-US
|
|
2,029
|
|
2,110
|
|
2,419
|
|
|
7,885
|
|
8,545
|
|
|
|
|
3,058
|
|
3,146
|
|
3,467
|
|
|
11,904
|
|
12,027
|
|
|
Downstream
|
|
|
|
|
|
|
|
|||||
|
US
|
|
258
|
|
197
|
|
237
|
|
|
913
|
|
877
|
|
|
Non-US
|
|
522
|
|
558
|
|
562
|
|
|
2,084
|
|
1,904
|
|
|
|
|
780
|
|
755
|
|
799
|
|
|
2,997
|
|
2,781
|
|
|
Other businesses and corporate
|
|
|
|
|
|
|
|
|||||
|
US
|
|
15
|
|
8
|
|
34
|
|
|
47
|
|
54
|
|
|
Non-US
|
|
105
|
|
37
|
|
102
|
|
|
290
|
|
278
|
|
|
|
|
120
|
|
45
|
|
136
|
|
|
337
|
|
332
|
|
|
|
|
3,958
|
|
3,946
|
|
4,402
|
|
|
15,238
|
|
15,140
|
|
|
Organic capital expenditure by geographical area
|
|
|
|
|
|
|
|
|||||
|
US
|
|
1,302
|
|
1,241
|
|
1,319
|
|
|
4,979
|
|
4,413
|
|
|
Non-US
|
|
2,656
|
|
2,705
|
|
3,083
|
|
|
10,259
|
|
10,727
|
|
|
|
|
3,958
|
|
3,946
|
|
4,402
|
|
|
15,238
|
|
15,140
|
|
(a)
On 31 October 2018,
BP acquired from BHP Billiton Petroleum (North America) Inc. 100%
of the issued share capital of Petrohawk Energy Corporation, a
wholly owned subsidiary of BHP that holds a portfolio of
unconventional onshore US oil and gas assets. The entire
consideration payable of $10,268 million, after customary closing
adjustments, was paid in instalments between July 2018 and April
2019. The amounts presented as inorganic capital expenditure
include $6,263 million for the fourth quarter 2018, $3,480 million
for the full year 2019 and $6,788 million for the full year 2018
relating to this transaction. Fourth quarter and full year 2018
include $1,739 million relating to the purchase of an additional
16.5% interest in the Clair field west of Shetland in the North
Sea, as part of the agreements with Conoco-Phillips in which
Conoco-Philips simultaneously purchased BP's entire 39.2% interest
in the Greater Kuparuk Area on the North Slope of Alaska. Full year
2019 and 2018 also include amounts relating to the 25-year
extension to our ACG production-sharing agreement* in
Azerbaijan.
Top of
page 27
Non-operating items*
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018(a)
|
|
2019
|
2018(a)
|
|||||
|
Upstream
|
|
|
|
|
|
|
|
|||||
|
Impairment
and gain (loss) on sale of businesses and fixed assets(b)
|
|
(2,680
|
)
|
(3,406
|
)
|
34
|
|
|
(6,893
|
)
|
(90
|
)
|
|
Environmental and other provisions
|
|
(32
|
)
|
—
|
|
(35
|
)
|
|
(32
|
)
|
(35
|
)
|
|
Restructuring, integration and rationalization costs
|
|
(13
|
)
|
(24
|
)
|
(53
|
)
|
|
(89
|
)
|
(131
|
)
|
|
Fair value gain (loss) on embedded derivatives
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
17
|
|
|
Other(c)
|
|
2
|
|
(24
|
)
|
190
|
|
|
67
|
|
56
|
|
|
|
|
(2,723
|
)
|
(3,454
|
)
|
136
|
|
|
(6,947
|
)
|
(183
|
)
|
|
Downstream
|
|
|
|
|
|
|
|
|||||
|
Impairment and gain (loss) on sale of businesses and fixed
assets
|
|
(16
|
)
|
(9
|
)
|
(20
|
)
|
|
(72
|
)
|
(54
|
)
|
|
Environmental and other provisions
|
|
(77
|
)
|
(1
|
)
|
(83
|
)
|
|
(78
|
)
|
(83
|
)
|
|
Restructuring, integration and rationalization costs
|
|
71
|
|
(4
|
)
|
(279
|
)
|
|
85
|
|
(405
|
)
|
|
Fair value gain (loss) on embedded derivatives
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Other
|
|
(6
|
)
|
—
|
|
(19
|
)
|
|
(12
|
)
|
(174
|
)
|
|
|
|
(28
|
)
|
(14
|
)
|
(401
|
)
|
|
(77
|
)
|
(716
|
)
|
|
Rosneft
|
|
|
|
|
|
|
|
|||||
|
Impairment and gain (loss) on sale of businesses and fixed
assets
|
|
91
|
|
—
|
|
(31
|
)
|
|
(103
|
)
|
(95
|
)
|
|
Environmental and other provisions
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Restructuring, integration and rationalization costs
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Fair value gain (loss) on embedded derivatives
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Other
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
91
|
|
—
|
|
(31
|
)
|
|
(103
|
)
|
(95
|
)
|
|
Other businesses and corporate
|
|
|
|
|
|
|
|
|||||
|
Impairment
and gain (loss) on sale of businesses and fixed assets(d)
|
|
(913
|
)
|
—
|
|
(6
|
)
|
|
(917
|
)
|
(260
|
)
|
|
Environmental
and other provisions(e)
|
|
(203
|
)
|
—
|
|
(575
|
)
|
|
(231
|
)
|
(640
|
)
|
|
Restructuring, integration and rationalization costs
|
|
(1
|
)
|
—
|
|
(112
|
)
|
|
6
|
|
(190
|
)
|
|
Fair value gain (loss) on embedded derivatives
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Gulf of Mexico oil spill
|
|
(63
|
)
|
(84
|
)
|
(67
|
)
|
|
(319
|
)
|
(714
|
)
|
|
Other
|
|
(2
|
)
|
(6
|
)
|
(6
|
)
|
|
(30
|
)
|
(159
|
)
|
|
|
|
(1,182
|
)
|
(90
|
)
|
(766
|
)
|
|
(1,491
|
)
|
(1,963
|
)
|
|
Total before interest and taxation
|
|
(3,842
|
)
|
(3,558
|
)
|
(1,062
|
)
|
|
(8,618
|
)
|
(2,957
|
)
|
|
Finance
costs(f)
|
|
(122
|
)
|
(145
|
)
|
(122
|
)
|
|
(511
|
)
|
(479
|
)
|
|
Total before taxation
|
|
(3,964
|
)
|
(3,703
|
)
|
(1,184
|
)
|
|
(9,129
|
)
|
(3,436
|
)
|
|
Taxation
credit (charge) on non-operating items
|
|
822
|
|
772
|
|
(2
|
)
|
|
1,943
|
|
631
|
|
|
Total after taxation for period
|
|
(3,142
|
)
|
(2,931
|
)
|
(1,186
|
)
|
|
(7,186
|
)
|
(2,805
|
)
|
(a)
Amounts reported as
restructuring, integration and rationalization costs relate to the
group's restructuring programme, originally announced in 2014,
which was completed in fourth quarter 2018.
(b)
Fourth quarter and
full year 2019 include impairment charges of $2,506 million and
$6,621 million respectively, principally resulting from the
announcements to dispose of certain assets in the US and Egypt. See
Note 3 for further information. Fourth quarter and full year 2018
include impairment reversals for assets in the North Sea and
Angola.
(c)
Full year 2018
includes the write-off of $124 million in relation to the value
ascribed to certain licences in the deepwater Gulf of Mexico as
part of the accounting for the acquisition of upstream assets from
Devon Energy in 2011.
(d)
Fourth quarter and
full year 2019 include $877 million relating to the
reclassification of accumulated foreign exchange losses from
reserves to the income statement upon the contribution of our
Brazilian biofuels business to BP Bunge Bioenergia.
(e)
Fourth quarter and
full year 2019 and 2018 primarily reflects charges due to the
annual update of environmental provisions, including
asbestos-related provisions for past operations, together with
updates of non-Gulf of Mexico oil spill related legal
provisions.
(f)
Relates to the
unwinding of discounting effects relating to Gulf of Mexico oil
spill payables.
Top of
page 28
Non-GAAP information on fair value accounting effects
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Favourable (adverse) impact relative to management’s measure
of performance
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
659
|
|
265
|
|
146
|
|
|
706
|
|
(39
|
)
|
|
Downstream
|
|
23
|
|
147
|
|
370
|
|
|
160
|
|
95
|
|
|
|
|
682
|
|
412
|
|
516
|
|
|
866
|
|
56
|
|
|
Taxation credit (charge)
|
|
(111
|
)
|
(86
|
)
|
(90
|
)
|
|
(155
|
)
|
12
|
|
|
|
|
571
|
|
326
|
|
426
|
|
|
711
|
|
68
|
|
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 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 and liquefied natural gas
(LNG) 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. 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. The fair values of
derivative instruments used to risk manage certain oil, gas and
other contracts, are deferred to match with the underlying exposure
and the commodity contracts for business requirements are accounted
for on an accruals basis. 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.
In
addition, fair value accounting effects 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 reduces
timing differences between recognition of the derivative financial
instruments used to risk manage the LNG contracts and the
recognition of the LNG contracts themselves, which therefore gives
a better representation of performance in each period.
Top of
page 29
Non-GAAP information on fair value accounting effects
(continued)
The
impacts of fair value accounting effects, relative to
management’s internal measure of performance, are shown in
the table above. A reconciliation to GAAP information is set out
below.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Upstream
|
|
|
|
|
|
|
|
|||||
|
Replacement
cost profit (loss) before interest and tax adjusted for fair value
accounting effects
|
|
(45
|
)
|
(1,315
|
)
|
4,022
|
|
|
4,211
|
|
14,367
|
|
|
Impact of fair value accounting effects
|
|
659
|
|
265
|
|
146
|
|
|
706
|
|
(39
|
)
|
|
Replacement cost profit (loss) before interest and tax
|
|
614
|
|
(1,050
|
)
|
4,168
|
|
|
4,917
|
|
14,328
|
|
|
Downstream
|
|
|
|
|
|
|
|
|||||
|
Replacement
cost profit (loss) before interest and tax adjusted for fair value
accounting effects
|
|
1,410
|
|
1,869
|
|
1,768
|
|
|
6,342
|
|
6,845
|
|
|
Impact of fair value accounting effects
|
|
23
|
|
147
|
|
370
|
|
|
160
|
|
95
|
|
|
Replacement cost profit (loss) before interest and tax
|
|
1,433
|
|
2,016
|
|
2,138
|
|
|
6,502
|
|
6,940
|
|
|
Total group
|
|
|
|
|
|
|
|
|||||
|
Profit
(loss) before interest and tax adjusted for fair value accounting
effects
|
|
470
|
|
462
|
|
2,648
|
|
|
10,840
|
|
19,322
|
|
|
Impact of fair value accounting effects
|
|
682
|
|
412
|
|
516
|
|
|
866
|
|
56
|
|
|
Profit (loss) before interest and tax
|
|
1,152
|
|
874
|
|
3,164
|
|
|
11,706
|
|
19,378
|
|
Readily marketable inventory* (RMI)
|
|
|
31 December
|
31 December
|
||
|
$ million
|
|
2019
|
2018
|
||
|
RMI at fair value*
|
|
6,837
|
|
4,202
|
|
|
Paid-up RMI*
|
|
3,217
|
|
1,641
|
|
Readily
marketable inventory (RMI) is oil and oil products inventory held
and price risk-managed by BP’s integrated supply and trading
function (IST) which could be sold to generate funds if required.
Paid-up RMI is RMI that BP has paid for.
We
believe that disclosing the amounts of RMI and paid-up RMI is
useful to investors as it enables them to better understand and
evaluate the group’s inventories and liquidity position by
enabling them to see the level of discretionary inventory held by
IST and to see builds or releases of liquid trading
inventory.
See the
Glossary on page 32 for a more detailed definition of RMI. RMI at
fair value, paid-up RMI and unpaid RMI are non-GAAP measures. A
reconciliation of total inventory as reported on the group balance
sheet to paid-up RMI is provided below.
|
|
|
31 December
|
31 December
|
||
|
$ million
|
|
2019
|
2018
|
||
|
Reconciliation of total inventory to paid-up RMI
|
|
|
|
||
|
Inventories as reported on the group balance sheet under
IFRS
|
|
20,880
|
|
17,988
|
|
|
Less:
(a) inventories that are not oil and oil products and (b) oil and
oil product inventories that are not risk-managed by
IST
|
|
(14,280
|
)
|
(14,066
|
)
|
|
|
|
6,600
|
|
3,922
|
|
|
Plus: difference between RMI at fair value and RMI on an IFRS
basis
|
|
237
|
|
280
|
|
|
RMI at fair value
|
|
6,837
|
|
4,202
|
|
|
Less: unpaid RMI* at fair value
|
|
(3,620
|
)
|
(2,561
|
)
|
|
Paid-up RMI
|
|
3,217
|
|
1,641
|
|
Top of
page 30
Gulf of Mexico oil spill
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Net
cash provided by operating activities as per condensed group cash
flow statement
|
|
7,603
|
|
6,056
|
|
6,829
|
|
|
25,770
|
|
22,873
|
|
|
Exclude
net cash from operating activities relating to the Gulf of Mexico
oil spill on a post-tax basis
|
|
(42
|
)
|
409
|
|
272
|
|
|
2,429
|
|
3,218
|
|
|
Operating cash flow, excluding Gulf of Mexico oil spill
payments*
|
|
7,561
|
|
6,465
|
|
7,101
|
|
|
28,199
|
|
26,091
|
|
Net
cash from operating activities relating to the Gulf of Mexico oil
spill on a pre-tax basis amounted to an outflow of $125 million and
$2,694 million in the fourth quarter and full year of 2019
respectively. For the same periods in 2018, the amount was an
outflow of $273 million and $3,531 million respectively. Net cash
outflows relating to the Gulf of Mexico oil spill in 2019 and 2018
include payments made under the 2016 consent decree and settlement
agreement with the United States and the five Gulf coast states.
Cash outflows in 2018 also include the final payment made under the
2012 agreement with the US government to resolve all federal
criminal claims arising from the incident.
|
|
|
31 December
|
31 December
|
||
|
$ million
|
|
2019
|
2018
|
||
|
Trade and other payables
|
|
(12,480
|
)
|
(14,201
|
)
|
|
Provisions
|
|
(189
|
)
|
(345
|
)
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(12,669
|
)
|
(14,546
|
)
|
|
Of
which - current
|
|
(1,800
|
)
|
(2,612
|
)
|
|
|
|
|
|
||
|
Deferred tax asset
|
|
5,526
|
|
5,562
|
|
The
provision reflects the latest estimate for the remaining costs
associated with the Gulf of Mexico oil spill. The amounts
ultimately payable may differ from the amount 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 2018 - Financial statements - Note
2 and pages 296 to 298 of Legal proceedings.
Working capital* reconciliation
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
$ million
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Movements
in inventories and other current and non-current assets and
liabilities as per condensed group cash flow statement
|
|
(306
|
)
|
141
|
|
778
|
|
|
(2,918
|
)
|
(4,763
|
)
|
|
Adjustments
to exclude movements in inventories and other current and
non-current assets and liabilities for the Gulf of Mexico oil
spill
|
|
91
|
|
413
|
|
238
|
|
|
2,586
|
|
3,057
|
|
|
Adjusted for Inventory holding gains (losses)* (Note
4)
|
|
|
|
|
|
|
|
|||||
|
Upstream
|
|
—
|
|
—
|
|
(12
|
)
|
|
(8
|
)
|
(6
|
)
|
|
Downstream
|
|
(21
|
)
|
(433
|
)
|
(2,470
|
)
|
|
685
|
|
(862
|
)
|
|
Working capital release (build)
|
|
(236
|
)
|
121
|
|
(1,466
|
)
|
|
345
|
|
(2,574
|
)
|
Top of
page 31
Realizations* and marker prices
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
Average realizations(a)
|
|
|
|
|
|
|
|
|||||
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
49.34
|
|
50.46
|
|
61.61
|
|
|
51.88
|
|
61.72
|
|
|
Europe
|
|
63.01
|
|
61.90
|
|
65.07
|
|
|
63.95
|
|
69.20
|
|
|
Rest of World
|
|
60.34
|
|
59.14
|
|
61.42
|
|
|
61.50
|
|
66.68
|
|
|
BP Average
|
|
55.90
|
|
55.68
|
|
61.80
|
|
|
57.73
|
|
64.98
|
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
1.65
|
|
1.72
|
|
3.10
|
|
|
1.93
|
|
2.43
|
|
|
Europe
|
|
4.06
|
|
3.03
|
|
8.80
|
|
|
4.01
|
|
7.71
|
|
|
Rest of World
|
|
3.77
|
|
3.82
|
|
4.77
|
|
|
4.10
|
|
4.37
|
|
|
BP Average
|
|
3.12
|
|
3.11
|
|
4.33
|
|
|
3.39
|
|
3.92
|
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
|||||
|
US
|
|
31.84
|
|
31.23
|
|
42.50
|
|
|
33.30
|
|
41.59
|
|
|
Europe
|
|
51.91
|
|
52.47
|
|
61.98
|
|
|
56.87
|
|
64.11
|
|
|
Rest of World
|
|
37.91
|
|
36.82
|
|
41.64
|
|
|
39.23
|
|
42.65
|
|
|
BP Average
|
|
36.42
|
|
35.48
|
|
42.98
|
|
|
38.00
|
|
43.47
|
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
|||||
|
Brent
|
|
63.08
|
|
62.00
|
|
68.81
|
|
|
64.21
|
|
71.31
|
|
|
West Texas Intermediate
|
|
56.88
|
|
56.40
|
|
59.98
|
|
|
57.03
|
|
65.20
|
|
|
Western Canadian Select
|
|
37.70
|
|
43.61
|
|
25.31
|
|
|
43.42
|
|
38.27
|
|
|
Alaska North Slope
|
|
64.32
|
|
62.98
|
|
69.53
|
|
|
65.00
|
|
71.54
|
|
|
Mars
|
|
57.85
|
|
59.19
|
|
64.45
|
|
|
60.84
|
|
66.86
|
|
|
Urals (NWE – cif)
|
|
60.74
|
|
60.82
|
|
68.02
|
|
|
62.96
|
|
69.89
|
|
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
|||||
|
Henry
Hub gas price(b) ($/mmBtu)
|
|
2.50
|
|
2.23
|
|
3.65
|
|
|
2.63
|
|
3.09
|
|
|
UK Gas – National Balancing Point (p/therm)
|
|
31.77
|
|
27.46
|
|
65.13
|
|
|
34.70
|
|
60.38
|
|
(a)
Based on sales of
consolidated subsidiaries only – this excludes equity-accounted
entities.
(b)
Henry Hub First of
Month Index.
Exchange rates
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|||||
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|||||
|
|
|
2019
|
2019
|
2018
|
|
2019
|
2018
|
|||||
|
$/£ average rate for the period
|
|
1.29
|
|
1.23
|
|
1.29
|
|
|
1.28
|
|
1.33
|
|
|
$/£ period-end rate
|
|
1.31
|
|
1.23
|
|
1.27
|
|
|
1.31
|
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|||||
|
$/€ average rate for the period
|
|
1.11
|
|
1.11
|
|
1.14
|
|
|
1.12
|
|
1.18
|
|
|
$/€ period-end rate
|
|
1.12
|
|
1.09
|
|
1.14
|
|
|
1.12
|
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Rouble/$ average rate for the period
|
|
63.74
|
|
64.64
|
|
66.48
|
|
|
64.73
|
|
62.73
|
|
|
Rouble/$ period-end rate
|
|
61.98
|
|
64.32
|
|
69.57
|
|
|
61.98
|
|
69.57
|
|
Top of
page 32
Legal proceedings
For a
full discussion of the group’s material legal proceedings,
see pages 296-298 of BP Annual
Report and Form 20-F 2018, and page 35 of BP p.l.c. Group results second quarter and
half-year 2019.
Glossary
Non-GAAP
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-GAAP
measures are sometimes referred to as alternative performance
measures.
Capital expenditure is total cash capital expenditure as
stated in the condensed group cash flow statement.
Consolidation adjustment – UPII is unrealized profit
in inventory arising on inter-segment transactions.
Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-GAAP measure. The ETR on RC profit or loss is
calculated by dividing taxation on a RC basis by RC profit or loss
before tax. 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. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
Fair value accounting effects are non-GAAP 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. Further information on fair value accounting
effects is provided on page 28.
Free cash flow is operating cash flow less net cash used in
investing activities and lease liability payments included in
financing activities, as presented in the condensed group cash flow
statement.
Gearing and net debt are non-GAAP 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. 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 GAAP measures on an IFRS basis are finance
debt and finance debt ratio. A reconciliation of finance debt to
net debt is provided on page 23.
We are
unable to present reconciliations of forward-looking information
for 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 GAAP
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 a GAAP estimate.
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 and is a non-GAAP 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. Further information
and a reconciliation to GAAP information is provided on page
26.
Inventory holding gains and losses represent the difference
between the cost of sales calculated using the replacement cost of
inventory and the cost of sales calculated on the first-in
first-out (FIFO) method after adjusting for any changes in
provisions where the net realizable value of the inventory is lower
than its cost. Under the FIFO method, which we use for IFRS
reporting, 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 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. 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. See Replacement cost (RC) profit or
loss definition below.
Top of
page 33
Glossary (continued)
Liquids – Liquids for Upstream and Rosneft comprises
crude oil, condensate and natural gas liquids. For Upstream,
liquids also includes bitumen.
Net debt including leases is a non-GAAP
measure. 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. BP believes this measure provides useful information to
investors as it enables investors to understand the impact of the
group’s lease portfolio on net debt. The nearest equivalent
GAAP measure on an IFRS basis is finance debt. A reconciliation of
finance debt to net debt including leases is provided on page
23.
Net wind generation capacity is the sum of the rated
capacities of the assets/turbines that have entered into commercial
operation, including BP’s share of equity-accounted
entities.
Non-operating items are charges and credits included in the
financial statements that BP discloses separately because it
considers such disclosures to be meaningful and relevant to
investors. They are items that management considers not to be part
of underlying business operations and are disclosed in order to
enable investors better to understand and evaluate the
group’s reported financial performance. Non-operating items
within equity-accounted earnings are reported net of incremental
income tax reported by the equity-accounted entity. An analysis of
non-operating items by region is shown on pages 7, 9 and 11, and by
segment and type is shown on page 27.
Operating cash flow is net cash
provided by (used in) operating activities as stated in the
condensed group cash flow statement. When used in the context of a
segment rather than the group, the terms refer to the
segment’s share thereof.
Operating cash flow excluding Gulf of Mexico oil spill
payments is a non-GAAP measure. It is calculated by
excluding post-tax operating cash flows relating to the Gulf of
Mexico oil spill from net cash provided by operating activities as
reported in the condensed group cash flow statement. BP believes
net cash provided by operating activities excluding amounts related
to the Gulf of Mexico oil spill is a useful measure as it allows
for more meaningful comparisons between reporting periods. The
nearest equivalent measure on an IFRS basis is net cash provided by
operating activities.
Organic capital expenditure is a subset of capital
expenditure and is a non-GAAP measure. Organic capital expenditure
comprises capital expenditure 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. An
analysis of organic capital expenditure by segment and region, and
a reconciliation to GAAP information is provided on page
26.
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
GAAP 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.
Readily marketable inventory (RMI) is inventory held and
price risk-managed by our integrated supply and trading function
(IST) which could be sold to generate funds if required. It
comprises oil and oil products for which liquid markets are
available and excludes inventory which is required to meet
operational requirements and other inventory which is not price
risk-managed. RMI is reported at fair value. Inventory held by the
Downstream fuels business for the purpose of sales and marketing,
and all inventories relating to the lubricants and petrochemicals
businesses, are not included in RMI.
Paid-up
RMI excludes RMI which has not yet been paid for. For inventory
that is held in storage, a first-in first-out (FIFO) approach is
used to determine whether inventory has been paid for or not.
Unpaid RMI is RMI which has not yet been paid for by BP. RMI at
fair value, Paid-up RMI and Unpaid RMI are non-GAAP measures.
Further information is provided on page 29.
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.
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.
Top of
page 34
Glossary (continued)
Replacement cost (RC) profit or loss reflects the
replacement cost of inventories sold in the period and is arrived
at by excluding inventory holding gains and losses from profit or
loss. RC profit or loss for the group is not a recognized GAAP
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 GAAP information is provided on page 1. RC profit
or loss before interest and tax is the measure of profit or loss
that is required to be disclosed for each operating segment under
IFRS.
RC profit or loss per share is a non-GAAP measure. Earnings
per share is defined in Note 8. RC profit or loss per share is
calculated using the same denominator. The numerator used is RC
profit or loss attributable to BP shareholders rather than profit
or loss attributable to BP shareholders. BP believes it is helpful
to disclose the RC profit or loss per share because this measure
excludes the impact of price changes on the replacement of
inventories and allows for more meaningful comparisons between
reporting periods. 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.
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.
Reserves replacement ratio is the extent to which the
year’s production has been replaced by proved reserves added
to our reserve base. The ratio is expressed in oil-equivalent terms
and includes changes resulting from discoveries, improved recovery
and extensions and revisions to previous estimates, but excludes
changes resulting from acquisitions and disposals. The reserves
replacement ratio will be reported in BP Annual Report and Form 20-F
2019.
Return on average capital employed (ROACE) is a non-GAAP
measure and is underlying replacement cost profit, after adding
back non-controlling interest and interest expense net of tax,
divided by average capital employed (total equity plus finance
debt), excluding cash and cash equivalents and goodwill. Interest
expense is finance costs excluding lease interest and the unwinding
of the discount on provisions and other payables, and for full year
2019 interest expense was $2,032 million (2018 $1,779 million)
before tax. BP believes it is helpful to disclose the ROACE because
this measure gives an indication of the company's capital
efficiency. The nearest GAAP measures of the numerator and
denominator are profit or loss for the period attributable to BP
shareholders and average capital employed
respectively.
Solomon availability – See Refining availability
definition.
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.
Underlying effective tax rate (ETR) is a non-GAAP 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 is taxation on
a RC basis for the period adjusted for taxation on non-operating
items and fair value accounting effects. Information on underlying
RC profit or loss is provided below. 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. 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
GAAP forward-looking financial measure. These items include the
taxation on inventory holding gains and losses, non-operating items
and fair value accounting effects, that are difficult to predict in
advance in order to include in a GAAP estimate.
Underlying production – 2019 underlying production,
when compared with 2018, is production after adjusting for BPX
Energy, other acquisitions and divestments, and entitlement impacts
in our production-sharing agreements.
Underlying RC profit or loss is RC profit or loss after
adjusting for non-operating items and fair value accounting
effects. Underlying RC profit or loss and adjustments for fair
value accounting effects are not recognized GAAP measures. See
pages 27 and 28 for additional information on the non-operating
items and fair value accounting effects that are used to arrive at
underlying RC profit or loss in order to enable a full
understanding of the events and their financial impact. 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 non-operating items and fair value accounting effects. 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 is RC profit or loss before
interest and taxation. A reconciliation to GAAP information is
provided on page 1.
Top of
page 35
Glossary (continued)
Underlying RC profit or loss per share is a non-GAAP
measure. Earnings per share is defined in Note 8. Underlying RC
profit or loss per share is calculated using the same denominator.
The numerator used is underlying RC profit or loss attributable to
BP shareholders rather than profit or loss attributable to BP
shareholders. BP believes it is helpful to disclose the underlying
RC profit or loss per share 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. 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 plant reliability (BP-operated) is calculated
taking 100% less the ratio of total unplanned plant deferrals
divided by installed production capacity. 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 - Change in 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 is a non-GAAP measure. It is calculated by adjusting
for inventory holding gains/losses reported in the period and this
therefore 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 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. In the context of
describing operating cash flow excluding Gulf of Mexico oil spill
payments, change in working capital also excludes movements in
inventories and other current and non-current assets and
liabilities relating to the Gulf of Mexico oil spill. See page 30
for further details.
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.
Top 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:
expectations regarding the expected quarterly dividend payment and
timing of such payment; expectations regarding the underlying
effective tax rate in 2020; expectations regarding 2020 organic
capital expenditure and depreciation, depletion and amortization
charges; expectations for gearing to move towards the middle of the
20-30% range through 2020; plans and expectations to meet cash flow
and returns objectives and to increase distributions to
shareholders over the long term; plans and expectations relating to
divestments and disposals, including expectations that BP will meet
its target of $10 billion of divestment proceeds by the end of 2020
and announce a further $5 billion of agreed disposals by mid-2021,
for a total of $15 billion of announced disposals by mid-2021 and
expectations with respect to completion and the timing of receipt
of proceeds of agreed divestments and disposals; plans and
expectations regarding Upstream projects, including for Raven to
come onstream around the end of 2020 and for TANAP to begin
transporting gas to Turkish and European markets in late 2020;
expectations regarding Upstream full year and first-quarter 2020
reported production, seasonal maintenance and turnaround
activities; plans and expectations with respect to the joint
venture in India with Reliance Industries Limited; expectations
regarding Downstream turnaround activity and first-quarter 2020
industry refining margins and North American heavy crude oil
discounts; plans and expectations regarding Lightsource BP,
including plans to have 10GW of developed assets by the end of
2023; plans and expectations regarding the joint venture in China
with DiDi, including the roll out of 150kW ultra-fast chargers
across BP’s UK retail network; plans and expectations with
respect to BP’s AI venture, including the venture’s
impact on energy use and carbon emissions of buildings, and plans
and expectations with respect to BP Infinia, including to
accelerate Infinia’s commercialisation; expectations
regarding the Other businesses and corporate average quarterly
charges excluding non-operating items; and expectations with
respect to the amount of future payments relating to the Gulf of
Mexico oil spill. 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 may differ materially
from those expressed in such statements, depending on a variety of
factors, including: the specific factors identified in the
discussions accompanying such forward-looking statements; 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; OPEC quota restrictions; PSA 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;
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; our access to future credit resources; business
disruption and crisis management; the impact on our reputation of
ethical misconduct and non-compliance with regulatory obligations;
trading losses; major uninsured losses; decisions by
Rosneft’s management and board of directors; 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, and under
“Risk factors” in BP Annual Report and Form 20-F 2018
as filed with the US Securities and Exchange
Commission.
This announcement contains inside information.
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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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Brett Clanton
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+44 (0)20 7496 4708
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+1 281 366 8346
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Investor Relations
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Craig Marshall
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Brian Sullivan
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bp.com/investors
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+44 (0)20 7496 4962
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+1 281 892 3421
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BP
p.l.c.’s LEI Code 213800LH1BZH3D16G760
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: 04
February 2020
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/s/ Ben
J. S. Mathews
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------------------------
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Ben J.
S. Mathews
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Company
Secretary
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