Bp PLC 6-K, filed Feb 8, 2022
Bp PLC (BP)
6-K
2022-02-08
For: 2022-02-08
View Original
Added on
July 04, 2026
About this 6-K
Bp PLC filed this 6-K on February 8, 2022.
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 08 February, 2022
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
|X|
---------------
--------------
Top of page 1
|
FOR IMMEDIATE RELEASE
|
|
|
London 8 February 2022
|
|
|
BP p.l.c. Group results
|
|
|
Fourth quarter and full year 2021
|
"For a printer friendly version of this announcement please click
on the link below to open a PDF version of this
announcement."
http://www.rns-pdf.londonstockexchange.com/rns/9507A_1-2022-2-7.pdf
|
Performing while
transforming
|
|
Financial summary
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
2,326
|
(2,544)
|
1,358
|
|
7,565
|
(20,305)
|
|
Inventory holding (gains) losses*, net of tax
|
|
(358)
|
(390)
|
(533)
|
|
(2,826)
|
2,201
|
|
Replacement cost (RC) profit (loss)*
|
|
1,968
|
(2,934)
|
825
|
|
4,739
|
(18,104)
|
|
Net
(favourable) adverse impact of adjusting items*(a), net of
tax
|
|
2,097
|
6,256
|
(710)
|
|
8,076
|
12,414
|
|
Underlying RC profit (loss)*
|
|
4,065
|
3,322
|
115
|
|
12,815
|
(5,690)
|
|
Operating cash flow*
|
|
6,116
|
5,976
|
2,269
|
|
23,612
|
12,162
|
|
Capital expenditure*
|
|
(3,633)
|
(2,903)
|
(3,491)
|
|
(12,848)
|
(14,055)
|
|
Divestment
and other proceeds(b)
|
|
2,265
|
313
|
4,173
|
|
7,632
|
6,586
|
|
Net issue (repurchase) of shares
|
|
(1,725)
|
(926)
|
-
|
|
(3,151)
|
(776)
|
|
Net
debt*(c)
|
|
30,613
|
31,971
|
38,941
|
|
30,613
|
38,941
|
|
ROACE* (%)
|
|
|
|
|
|
13.3%
|
(3.8)%
|
|
Adjusted EBIDA*
|
|
|
|
|
|
30,783
|
19,244
|
|
Announced dividend per ordinary share (cents per
share)
|
|
5.46
|
5.46
|
5.25
|
|
21.63
|
26.25
|
|
Underlying RC profit (loss) per ordinary share*
(cents)
|
|
20.53
|
16.48
|
0.57
|
|
63.65
|
(28.14)
|
|
Underlying RC profit (loss) per ADS* (dollars)
|
|
1.23
|
0.99
|
0.03
|
|
3.82
|
(1.69)
|
|
● Net debt reduced for seventh quarter in a row to $30.6bn
end 2021
|
|
● 2021 ROACE 13.3%
|
|
● Delivering distributions - $4.15bn total buyback from 2021
surplus cash flow
|
|
● Continued strategic momentum - seven major projects;
accelerated EV strategy; growing offshore wind
portfolio
|
|
2021 shows bp doing what we said we would - performing while
transforming. We've strengthened the balance sheet and grown
returns. We're delivering distributions to shareholders with $4.15
billion of buybacks announced and the dividend increased. And we're
investing for the future. We've made strong progress in our
transformation to an integrated energy company: focusing and high
grading our hydrocarbons business, growing in convenience and
mobility and building with discipline a low carbon energy business
- now with over 5GW in offshore wind projects - and significant
opportunities in hydrogen.
|
|
|
|
Bernard Looney
Chief executive officer
|
|
|
(a)
Prior to 2021 adjusting items were reported under two different
headings - non-operating items and fair value accounting effects*.
See page 29 for more information.
(b)
Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more information on other
proceeds.
(c)
See Note 9 for more information.
RC profit (loss), underlying RC profit (loss), net debt, ROACE and
adjusted EBIDA are non-GAAP measures. Inventory holding (gains)
losses and adjusting items are non-GAAP adjustments.
* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
35.
Top of page 2
|
Highlights
|
|
|
Underlying results and cash flow
|
|
|
●
Underlying replacement cost profit* for the quarter was $4.1
billion, compared with $3.3 billion for the previous quarter.
This result was driven by higher oil and gas realizations, higher
upstream* production volumes and stronger refining commercial
optimization, partly offset by a significantly lower oil trading
result and an average contribution from gas marketing and trading
and the impact of higher energy costs.
●
Reported profit for the quarter was $2.3 billion, compared with a
loss of $2.5 billion for the third quarter 2021. The reported
result includes adjusting items* before tax of $3.0 billion with
net impairments of $1.1 billion and adverse fair value accounting
effects* of $0.9 billion primarily due to further increases in
forward gas prices compared to the third quarter.
●
Operating cash flow* of $6.1 billion includes a working capital*
build of $2.2 billion (after adjusting for inventory holding gains*
and fair value accounting effects).
●
bp received $7.6 billion of divestment and other proceeds in
the full year including $2.3 billion during the fourth
quarter. bp expects to receive proceeds of $2-3 billion in
2022.
●
For full year 2021 ROACE* was 13.3%.
|
|
|
Building a track-record of delivery against our disciplined
financial frame
|
|
|
●
For the fourth quarter bp has announced a dividend of 5.46 cents
per ordinary share payable in March 2022.
●
Net debt* fell to $30.6 billion at the end of the fourth quarter -
a reduction of $8.3 billion compared to fourth quarter
2020.
●
Capital expenditure* in the fourth quarter and full year was
$3.6 billion and $12.8 billion respectively. bp now
expects capital expenditure of $14-15 billion in 2022 and continues
to expect a range of $14-16 billion per annum through
2025.
●
During 2021 bp generated surplus cash flow* of
$6.3 billion.
●
Share buybacks of $1.725 billion were executed during the fourth
quarter including $1.25 billion announced with third quarter
results and $475 million to complete the buybacks announced with
second quarter results.
●
bp intends to execute a further $1.5 billion share buyback from
2021 surplus cash flow prior to announcing its first quarter 2022
results.
●
For 2022, and subject to maintaining a strong investment grade
credit rating, bp is committed to using 60% of surplus cash flow
for share buybacks and intends to allocate the remaining 40% to
strengthen the balance sheet.
●
On average, based on bp's current forecasts, at around $60 per
barrel Brent and subject to the board's discretion each quarter, bp
expects to be able to deliver share buybacks of around $4.0 billion
per annum and have capacity for an annual increase in the dividend
per ordinary share of around 4% through 2025.
●
In addition, to date in 2022, bp has executed a share buyback of
$500 million to offset the expected full year dilution from the
vesting of awards under employee share schemes in
2022.
●
The board will take into account factors including the cumulative
level of and outlook for surplus cash flow*, the cash balance
point* and the maintenance of a strong investment grade credit
rating in setting the dividend per ordinary share and the buyback
each quarter.
|
|
|
Investing for the future - transforming to an Integrated Energy
Company
|
|
|
● In
a separate
announcement, bp has today
provided an update on the significant progress made in executing
its transformation to an IEC since outlining its new strategy.
Since announcing third quarter results:
-
In resilient and focused hydrocarbons bp announced the start-up of
Platina, offshore Angola - the seventh major project* start-up
during the year. In addition, bp has taken further steps to drive
portfolio competitiveness supporting the proposed acquisition of
Lundin Energy's oil and gas business by Aker BP.
-
In convenience and mobility, bp acquired EV fleet charging provider
AMPLY Power in the US, and in the UK, bp and Marks & Spencer
agreed to extend their convenience partnership until at least
2030.
-
In low carbon bp has continued to advance its offshore wind
strategy with the award of a lease option with 2.9GW gross
potential in the Scotwind auction and finalizing offtake terms for
the Empire Wind 2 and Beacon Wind 1 projects offshore New York. In
addition, bp has announced plans for a new large-scale green
hydrogen production facility in the UK - HyGreen Teeside - and
formed a strategic partnership with Oman to progress an integrated
project to deliver world-class scale renewable energy and green
hydrogen.
|
|
|
During 2021 we established a track-record of delivery against our
financial frame with four quarters of strong underlying financial
performance. We raised our dividend, substantially reduced net
debt, invested with discipline, announced $4.15 billion of share
buybacks and drove returns to 13.3%. Looking ahead, our priorities
for capital allocation are unchanged and we remain committed to the
continued execution of this plan.
|
|
|
|
Murray Auchincloss
Chief financial officer
|
|
|
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
41.
|
Top of page 3
Financial results
At 31 December 2020, the group's reportable segments were Upstream,
Downstream and Rosneft. From the first quarter of 2021, the group's
reportable segments are gas & low carbon energy, oil production
& operations, customers & products, and Rosneft.
Comparative information for 2020 has been restated to reflect the
changes in reportable segments. For more information see note 1
Basis of preparation - Change in
segmentation.
In addition to the highlights on page 2:
●
Profit attributable to bp shareholders in the fourth quarter was
$2,326 million with a profit of $7,565 million for the
full year compared with a profit of $1,358 million and a loss
of $20,305 million in the fourth quarter and full year of 2020
respectively. Underlying replacement cost profit* has improved as a
result of higher oil and gas prices and refining margins and
stronger trading results; however this improvement in the fourth
quarter compared to 2020 has been somewhat offset by the impact of
adjusting items*. The level of adverse adjusting items for the full
year 2021 was lower than in 2020 and the full year 2021 profit
attributable to shareholders also included an inventory holding
gain compared with a loss in full year 2020.
●
Adjusting items in the fourth quarter and full year were an adverse
pre-tax impact of $2,985 million and $8,697 million
respectively compared with an adverse pre-tax impact of
$5 million and $16,649 million in the same periods of
2020 respectively. The fourth quarter and full year 2021 charges
were driven by adverse fair value accounting effects* of
$856 million and $8,075 million respectively primarily
arising from the exceptional increase in forward gas prices. Under
IFRS, reported earnings include the mark-to-market value of the
hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. This mismatch at the end of 2021 is expected
to unwind if prices decline and as the cargoes are delivered. The
2020 full year charge was primarily driven by net impairment
charges of $13,688 million which were mainly recorded in the second
quarter. Pre-tax net impairment charges of $1,131 million and net
reversals of $1,352 million are included in the fourth quarter and
full year 2021 adjusting items total respectively.
●
The effective tax rate (ETR) on RC profit or loss* for the fourth
quarter and full year was 38% and 51% respectively, compared with
-141% and 16% for the same periods in 2020. Excluding adjusting
items*, the underlying ETR* for the fourth quarter and full year
was 34% and 32% respectively, compared with 40% and -14% for the
same periods a year ago. The lower underlying ETR for the fourth
quarter reflects changes in the geographical mix of profits. The
underlying ETR for the full year is higher than the same period a
year ago due to the absence of the exploration write-offs with a
limited deferred tax benefit and the reassessment of deferred tax
asset recognition. ETR on RC profit or loss and underlying ETR are
non-GAAP measures.
●
Operating cash flow* was $6.1 billion for the fourth quarter,
and $23.6 billion for the full year, compared with
$2.3 billion and $12.2 billion for the same periods of
2020. Fourth quarter and full year 2021 includes $0.1 billion and
$0.9 billion respectively of cash flow relating to severance costs
associated with the reinvent programme.
●
Total divestment and other proceeds for the fourth quarter and full
year were $2.3 billion and $7.6 billion respectively,
compared with $4.2 billion and $6.6 billion for the same
periods in 2020. For the fourth quarter this includes $1.5 billion
of proceeds relating to the 2020 divestment of bp's Alaska business
to Hilcorp.
●
Other proceeds in the full year 2021 were $0.7 billion from the
sale of a 49% interest in a controlled affiliate holding certain
refined product and crude logistics assets onshore US. In the
fourth quarter and full year 2020 other proceeds were $0.2 billion
in relation to the sale of an interest in bp's New Zealand retail
property portfolio and also in the full year 2020 $0.5
billion in relation to the sale of an interest in bp's UK retail
property portfolio and $0.5 billion in relation to TANAP pipeline
refinancing. The other proceeds from the US transaction in 2021 and
the UK and New Zealand transactions in 2020 are reported within
financing activities in the condensed group cash flow
statement.
●
At the end of the fourth quarter, net debt* was $30.6 billion,
compared to $32.0 billion at the end of the third quarter 2021
and $38.9 billion at the end of the fourth quarter
2020.
Top of page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
1,911
|
(4,135)
|
(638)
|
|
2,133
|
(7,068)
|
|
oil
production & operations
|
|
3,212
|
2,692
|
66
|
|
10,501
|
(14,583)
|
|
customers
& products
|
|
(426)
|
1,060
|
1,245
|
|
2,208
|
3,418
|
|
Rosneft
|
|
555
|
868
|
270
|
|
2,429
|
(149)
|
|
other
businesses & corporate
|
|
(924)
|
(750)
|
288
|
|
(2,777)
|
(579)
|
|
Consolidation
adjustment - UPII*
|
|
(7)
|
(42)
|
(77)
|
|
(67)
|
89
|
|
RC profit (loss) before interest and tax
|
|
4,321
|
(307)
|
1,154
|
|
14,427
|
(18,872)
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(751)
|
(688)
|
(759)
|
|
(2,855)
|
(3,148)
|
|
Taxation on a RC basis
|
|
(1,350)
|
(1,740)
|
557
|
|
(5,911)
|
3,492
|
|
Non-controlling interests
|
|
(252)
|
(199)
|
(127)
|
|
(922)
|
424
|
|
RC profit (loss) attributable to bp shareholders*
|
|
1,968
|
(2,934)
|
825
|
|
4,739
|
(18,104)
|
|
Inventory holding gains (losses)*
|
|
472
|
500
|
695
|
|
3,655
|
(2,868)
|
|
Taxation (charge) credit on inventory holding gains and
losses
|
|
(114)
|
(110)
|
(162)
|
|
(829)
|
667
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
2,326
|
(2,544)
|
1,358
|
|
7,565
|
(20,305)
|
Analysis of underlying RC profit (loss) before interest and
tax
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
2,211
|
1,807
|
154
|
|
7,528
|
689
|
|
oil
production & operations
|
|
4,024
|
2,461
|
563
|
|
10,292
|
(5,888)
|
|
customers
& products
|
|
611
|
1,158
|
126
|
|
3,252
|
3,088
|
|
Rosneft
|
|
745
|
923
|
311
|
|
2,720
|
56
|
|
other
businesses & corporate
|
|
(535)
|
(373)
|
(109)
|
|
(1,383)
|
(882)
|
|
Consolidation
adjustment - UPII
|
|
(7)
|
(42)
|
(77)
|
|
(67)
|
89
|
|
Underlying RC profit (loss) before interest and tax
|
|
7,049
|
5,934
|
968
|
|
22,342
|
(2,848)
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(494)
|
(513)
|
(568)
|
|
(2,073)
|
(2,523)
|
|
Taxation on an underlying RC basis
|
|
(2,238)
|
(1,900)
|
(158)
|
|
(6,532)
|
(743)
|
|
Non-controlling interests
|
|
(252)
|
(199)
|
(127)
|
|
(922)
|
424
|
|
Underlying RC profit (loss) attributable to bp
shareholders*
|
|
4,065
|
3,322
|
115
|
|
12,815
|
(5,690)
|
Reconciliations of underlying RC profit attributable to bp
shareholders to the nearest equivalent IFRS measure are provided on
page 1 for the group and on pages 6-14 for the
segments.
Operating Metrics
|
Operating metrics
|
|
Year 2021
|
|
vs Year 2020
|
|
Tier 1 and tier 2 process safety events*
|
|
62
|
|
-8
|
|
Reported recordable injury frequency*
|
|
0.164
|
|
+24.5%
|
|
Group production (mboe/d)(a)
|
|
3,316
|
|
-4.5%
|
|
upstream* production (mboe/d) (excludes Rosneft
segment)
|
|
2,218
|
|
-6.6%
|
|
upstream unit production costs*(b) ($/boe)
|
|
6.82
|
|
+6.7%
|
|
bp-operated hydrocarbon plant reliability*
|
|
94.0%
|
|
0.0
|
|
bp-operated refining availability*(a)
|
|
94.8%
|
|
-1.2
|
(a)
See Operational updates on pages 6, 8 and 10.
(b)
Reflecting lower volumes and higher costs including phasing
impacts.
Reserves replacement ratio*
The organic reserves replacement ratio on a combined basis of
subsidiaries and equity-accounted entities was 50% for the year.
Including acquisitions and divestments, the total reserves
replacement was 16%.
Top of page 5
Outlook & Guidance
Macro outlook
●
We expect oil supply and demand to move back into balance through
2022; however with lower levels of spare capacity price volatility
is likely.
●
OPEC+ decision making on production levels continues to be a key
factor in oil prices and market rebalancing.
●
In gas markets, with ongoing geopolitical uncertainty, and low
storage levels, we see the potential for continued price
volatility.
●
In the first quarter of 2022, we expect industry refining margins
to remain broadly flat compared to the fourth quarter of
2021.
1Q22 guidance
●
Looking ahead, we expect first-quarter 2022 reported upstream*
production to be lower than fourth-quarter 2021 reflecting base
decline and higher maintenance. Within this, we expect production
from both oil production & operations and gas & low carbon
to be lower.
●
In our customer businesses we expect product demand to remain
impacted by ongoing uncertainty around COVID-19 restrictions and
continued additive supply shortages in Castrol. In products we
expect energy costs to remain under pressure.
2022 Guidance
In
addition to the guidance on page 2:
●
For full year 2022 we expect both reported and underlying upstream*
production to be broadly flat compared with 2021. Within this, we
expect production from oil production & operations to be
slightly higher and production from gas & low carbon to be
slightly lower. We expect the start-up of Mad Dog Phase 2 in the
second half of the year and first gas from the Tangguh expansion
project in 2023.
●
The other businesses & corporate underlying annual charge is
expected to be in a range of $1.2-1.4 billion for 2022. The charge
may vary from quarter to quarter.
●
Depreciation, depletion and amortization is expected to be at a
similar level to 2021.
●
The underlying ETR* for 2022 is expected to be around 35% but is
sensitive to the impact that volatility in the current price
environment may have on the geographical mix of the group's profits
and losses.
●
We expect divestment and other proceeds for the year of $2-3
billion. Our target of $25 billion of divestment and other proceeds
between the second half of 2020 and 2025 is now underpinned by
agreed or completed transactions of around $15.5 billion with
almost $12.8 billion of proceeds received.
●
Gulf of Mexico oil spill payments for the year are expected to be
around $1.4 billion pre-tax.
COVID-19 Update
●
bp's future financial performance, including cash flows and net
debt, will be impacted by the extent and duration of the current
market conditions and the effectiveness of the actions that it and
others take, including its financial interventions. It is difficult
to predict when all current supply and demand imbalances will be
resolved and what the ultimate impact of COVID-19 will
be.
● bp continues to take steps to protect and
support its staff through the pandemic. Precautions in operations
and offices together with enhanced support and guidance to staff
continue with a focus on safety, health and hygiene, homeworking
and mental health. Decisions on working practices and return to
office based working are being taken with caution and in compliance
with local and national guidelines and
regulations.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
41.
|
Top of page 6
gas & low carbon energy
Financial results
●
The replacement cost profit before interest and tax for the fourth
quarter and full year was $1,911 million and $2,133 million
respectively, compared with a loss of $638 million and $7,068
million for the same periods in 2020. The fourth quarter and full
year include an adverse impact of net adjusting items* of $300
million and $5,395 million respectively, compared with an adverse
impact of net adjusting items of $792 million and $7,757 million
for the same periods in 2020.
●
After excluding adjusting items, the underlying replacement cost
profit before interest and tax* for the fourth quarter and full
year was $2,211 million and $7,528 million respectively, compared
with $154 million and $689 million for the same periods in
2020.
●
The underlying replacement cost profit for the fourth quarter,
compared with the same period in 2020, reflects higher
realizations, higher production and a higher gas marketing and
trading result, offset by a higher depreciation, depletion and
amortization charge. For the full year, compared with the same
period in 2020, the underlying replacement cost profit mainly
reflects higher realizations, higher production and an exceptional
gas marketing and trading result, offset by a higher depreciation,
depletion and amortization charge.
Operational update
●
Reported production for the quarter and full year were 974mboe/d
and 912mboe/d respectively, higher than the same periods in 2020
mainly due to major project* start-ups, partially offset by base
decline and the partial divestment in Oman. Underlying production*
was also higher, by 26.5% and 9.0% for the quarter and full year
respectively, mainly due to major project* start-ups, partially
offset by base decline.
●
Renewables pipeline* at the end of the quarter was 23.1GW (bp net).
The renewables pipeline decreased by 0.2GW during the quarter as a
result of new projects more than offset by promotions to FID. For
the full year the pipeline grew by 12.2GW (bp net), due to growth
in Lightsource bp (LSbp) and the acquisition of a 9GW development
pipeline from 7X Energy.
Strategic progress
gas
●
On 10 January bp and its partner Eni were awarded the new
exploration block EGY-MED-E5 in Egypt following a successful
bidding round organized by the Egyptian Natural Gas Holding
Company. The block is located in the Eastern Mediterranean
Sea.
●
In December 2021 and January 2022, bp signed two 10-year sale and
purchase agreements with State Power Investment Co. Ltd. (SPIC) and
Qianhai Foran Energy Co. Ltd. Both agreements will start in
2023, and bp will provide in total about 300,000 tonnes per year of
pipeline gas. The supply will be re-gasified through Guangdong
Dapeng LNG's receiving terminal, in which bp has a 30%
stake.
low carbon energy
● On 17
January bp and its partner EnBW were awarded a lease option off the
east coast of Scotland to develop a major offshore wind project.
The approximately 860km2 lease
is located around 60km off the coast of Aberdeen, allowing the
partners to develop it as a fixed-bottom offshore wind project with
a total generating capacity of around 2.9GW (1.45GW bp net),
sufficient to power more than three million
homes.
● On 17
January bp and Oman formed a strategic partnership to progress
world-class scale renewable energy and green hydrogen development
in Oman. As part of the agreement, bp will capture and evaluate
solar and wind data from 8,000km2 of
land, to support the Government of Oman in approving the future
developments of renewable energy and green hydrogen hubs within
this area.
●
On 14 January bp and its partner Equinor signed a 25 year purchase
and sale agreement with the New York State Energy Research and
Development Authority (NYSERDA) for 2.5GW of power offtake
agreements for US projects Empire Wind II and Beacon Wind
I.
●
In the fourth quarter LSbp developed 17 projects to FID in five
countries taking their overall total capacity developed to FID to
2,038MW for the full year, compared to 1,403MW for the same period
in 2020. In the fourth quarter LSbp continued to grow its pipeline
of projects including securing its first projects in Poland with a
757MW acquisition.
●
On 29 November bp confirmed it is planning a new large-scale green
hydrogen production facility, HyGreen Teesside, in the North-East
of England that could deliver up to 500 megawatts electrical input
(MWe) of hydrogen production capacity by 2030. The initial phase is
for 60MWe and bp is aiming to start production by
2025.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
1,903
|
(4,120)
|
(628)
|
|
2,166
|
(7,049)
|
|
Inventory holding (gains) losses*
|
|
8
|
(15)
|
(10)
|
|
(33)
|
(19)
|
|
RC profit (loss) before interest and tax
|
|
1,911
|
(4,135)
|
(638)
|
|
2,133
|
(7,068)
|
|
Net (favourable) adverse impact of adjusting items
|
|
300
|
5,942
|
792
|
|
5,395
|
7,757
|
|
Underlying RC profit before interest and tax
|
|
2,211
|
1,807
|
154
|
|
7,528
|
689
|
|
Taxation on an underlying RC basis
|
|
(509)
|
(389)
|
(152)
|
|
(1,677)
|
(773)
|
|
Underlying RC profit (loss) before interest
|
|
1,702
|
1,418
|
2
|
|
5,851
|
(84)
|
Top of page 7
gas & low carbon energy (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,265
|
1,230
|
721
|
|
4,464
|
3,457
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration
write-offs(a)
|
|
2
|
14
|
42
|
|
43
|
1,741
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
3,478
|
3,051
|
914
|
|
12,035
|
5,214
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
gas
|
|
928
|
736
|
929
|
|
3,180
|
4,012
|
|
low
carbon energy(b)
|
|
109
|
336
|
541
|
|
1,561
|
596
|
|
Total capital expenditure
|
|
1,037
|
1,072
|
1,470
|
|
4,741
|
4,608
|
(a)
Fourth quarter and full year 2020 include a write-off of $3 million
and $673 million respectively, which have been classified within
the 'other' category of adjusting items.
(b)
Full year 2021 includes $712 million in respect of the remaining
payment to Equinor for our investment in our strategic US offshore
wind partnership and $326 million as a lease option fee deposit
paid to The Crown Estate in connection with our participation in
the UK Round 4 Offshore Wind Leasing together with our partner
EnBW.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Production (net of
royalties)(c)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
122
|
109
|
98
|
|
113
|
96
|
|
Natural gas (mmcf/d)
|
|
4,941
|
4,520
|
4,049
|
|
4,632
|
4,379
|
|
Total hydrocarbons* (mboe/d)
|
|
974
|
889
|
796
|
|
912
|
851
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(d)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
71.63
|
66.39
|
36.51
|
|
63.60
|
35.63
|
|
Natural gas ($/mcf)
|
|
6.94
|
5.26
|
3.37
|
|
5.11
|
3.25
|
|
Total hydrocarbons* ($/boe)
|
|
43.68
|
34.91
|
21.27
|
|
33.75
|
20.71
|
(c)
Includes bp's share of production of equity-accounted entities in
the gas & low carbon energy segment.
(d)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
low carbon energy
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
|
|
|
|
Installed renewables capacity*
|
|
1.9
|
1.7
|
1.5
|
|
1.9
|
1.5
|
|
|
|
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
4.4
|
3.6
|
3.3
|
|
4.4
|
3.3
|
|
Renewables pipeline
|
|
23.1
|
23.3
|
10.9
|
|
23.1
|
10.9
|
|
of which by geographical area:
|
|
|
|
|
|
|
|
|
Renewables
pipeline - Americas
|
|
16.2
|
16.8
|
6.3
|
|
16.2
|
6.3
|
|
Renewables
pipeline - Asia Pacific
|
|
1.4
|
1.1
|
0.8
|
|
1.4
|
0.8
|
|
Renewables
pipeline - Europe
|
|
5.3
|
5.2
|
3.7
|
|
5.3
|
3.7
|
|
Renewables
pipeline - Other
|
|
0.2
|
0.2
|
0.1
|
|
0.2
|
0.1
|
|
of which by technology:
|
|
|
|
|
|
|
|
|
Renewables
pipeline - offshore wind
|
|
3.7
|
3.7
|
2.2
|
|
3.7
|
2.2
|
|
Renewables
pipeline - solar
|
|
19.4
|
19.6
|
8.7
|
|
19.4
|
8.7
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
27.5
|
26.9
|
14.1
|
|
27.5
|
14.1
|
Top of page 8
oil production & operations
Financial results
●
The replacement cost profit before interest and tax for the fourth
quarter and full year was $3,212 million and $10,501 million
respectively, compared with a profit of $66 million and a loss
of $14,583 million for the same periods in 2020. The fourth
quarter and full year include an adverse impact of net adjusting
items* of $812 million and a favourable impact of net adjusting
items of $209 million respectively, compared with an adverse impact
of net adjusting items of $497 million and $8,695 million for the
same periods in 2020.
●
After excluding adjusting items, the underlying replacement cost
profit before interest and tax* for the fourth quarter and full
year was $4,024 million and $10,292 million respectively, compared
with a profit of $563 million and a loss of $5,888 million for the
same periods in 2020.
●
The underlying replacement cost profit for the fourth quarter,
compared with the same period in 2020, primarily reflects higher
liquids and gas realizations. For the full year, compared with the
same period in 2020, the underlying replacement cost profit mainly
reflects higher liquids and gas realizations and significantly
lower exploration write-offs, partially offset by lower
volumes.
Operational update
●
Reported production for the quarter was 1,358mboe/d, which is flat
with the fourth quarter of 2020. Underlying production* for the
quarter was 4.0% higher reflecting lower weather impacts from
hurricanes in the Gulf of Mexico and the ramp-up and start-up of
major projects*.
●
Reported production for the full year was 1,307mboe/d, 14.2% lower
than the same period in 2020. This includes price impacts on PSA*
and TSC* entitlement volumes and the impact of divestments in
Alaska and BPX Energy. Underlying production for the full year
decreased by 3.8% mainly due to impacts from reduced capital
investment and decline.
Strategic progress
●
On 11 November bp sold 7,718,571 shares, representing a 2.1% stake
in Aker BP ASA, for a total of NOK 2.39 billion. Following the
sale, at 31 December 2021 bp held a 27.85% interest, Aker held
37.14% and the portion of shares available to public investors was
35%.
●
On 15 November Rosneft announced that the Yermak Neftegaz LLC joint
venture (Rosneft 51%, bp 49%) discovered a material new gas
condensate field in the Taymyr Peninsula.
●
On 25 November bp announced the start of production from its
Platina project in Block 18 in Angola (bp 46% operator, Sinopec
37.72%, Sonangol P&P 16.28%).
●
On 3 December bp confirmed the start of production from CLOV Phase
2, a tie-back to the existing CLOV Floating Production, Storage and
Offloading unit in Block 17, Angola (TotalEnergies 38% operator,
Equinor 22.16%, ExxonMobil 19%, bp 15.84% and Sonangol P&P
5%).
● On 21
December Aker BP announced its proposed acquisition of the oil and
gas business of Lundin Energy, through a statutory merger.
Following completion of the merger, which is subject to
approvals, bp
is expected to own 15.9% in the combined company (Aker 21.2%,
Nemesia S.á.r.l 14.4%, other Aker BP and Lundin Energy
shareholders 48.6%).
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
3,212
|
2,691
|
76
|
|
10,509
|
(14,585)
|
|
Inventory holding (gains) losses*
|
|
-
|
1
|
(10)
|
|
(8)
|
2
|
|
RC profit (loss) before interest and tax
|
|
3,212
|
2,692
|
66
|
|
10,501
|
(14,583)
|
|
Net (favourable) adverse impact of adjusting items
|
|
812
|
(231)
|
497
|
|
(209)
|
8,695
|
|
Underlying RC profit (loss) before interest and tax
|
|
4,024
|
2,461
|
563
|
|
10,292
|
(5,888)
|
|
Taxation on an underlying RC basis
|
|
(1,235)
|
(1,220)
|
(275)
|
|
(4,123)
|
70
|
|
Underlying RC profit (loss) before interest
|
|
2,789
|
1,241
|
288
|
|
6,169
|
(5,818)
|
Top of page 9
oil production & operations (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,628
|
1,767
|
1,786
|
|
6,528
|
7,787
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration
write-offs(a)
|
|
45
|
16
|
112
|
|
125
|
8,179
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
5,697
|
4,244
|
2,461
|
|
16,945
|
8,777
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,272
|
1,099
|
1,133
|
|
4,838
|
5,829
|
(a)
Full year 2020 includes a write-off of $1,301 million which has
been classified within the 'other' category of adjusting
items.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Production (net of
royalties)(b)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
1,004
|
975
|
1,021
|
|
978
|
1,133
|
|
Natural gas (mmcf/d)
|
|
2,053
|
1,961
|
1,962
|
|
1,903
|
2,264
|
|
Total hydrocarbons* (mboe/d)
|
|
1,358
|
1,313
|
1,359
|
|
1,307
|
1,524
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(c)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
71.07
|
65.53
|
38.58
|
|
62.57
|
36.21
|
|
Natural gas ($/mcf)
|
|
9.27
|
5.61
|
2.38
|
|
5.90
|
1.53
|
|
Total hydrocarbons* ($/boe)
|
|
66.94
|
57.72
|
33.18
|
|
56.19
|
29.88
|
(b)
Includes bp's share of production of equity-accounted entities in
the oil production & operations segment.
(c)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of page 10
customers & products
Financial results
● The
replacement cost loss before interest and tax for the fourth
quarter was
$426 million and profit for the full year was $2,208 million,
compared with a profit of $1,245 million and $3,418 million for the
same periods in 2020. The fourth quarter and full year included an
adverse impact of net adjusting items* of $1,037 million and $1,044
million respectively, compared with a favourable impact of net
adjusting items of $1,119 million and $330 million for the same
periods in 2020.
●
After excluding adjusting items, the underlying replacement cost
profit before interest and tax* for the fourth quarter and full
year was $611 million and $3,252 million respectively, compared
with $126 million and $3,088 million for the same periods in
2020.
●
The customers & products results for the fourth quarter and
full year, reflect a stronger performance compared to the same
periods in 2020, despite the absence of earnings from our divested
petrochemicals business and ongoing COVID impacts.
●
customers - convenience
and mobility results, excluding Castrol, for the quarter and full
year were similar to 2020 with the benefit of higher volumes offset
by the impact of rising commodity costs and increased employee, and
digital and marketing expenditure in support of our strategic
growth agenda. Convenience gross margin* delivery was a record for
the year.
Castrol
result in the quarter was lower than 2020 with the benefit of
higher volumes more than offset by the impact of significantly
higher industry base oil prices and continuing additive shortages.
The full-year result was stronger than 2020. Premium volumes
grew and growth markets delivered material earnings growth despite
the impact of significantly higher industry base oil prices and
additive shortages.
● products -
the products results were higher for the quarter and full year due
to an improved refining result, partially offset by a lower trading
contribution, compared to the same periods in 2020. In refining,
the results for the quarter and full year were higher due to
improved refining margins, higher utilization and commercial
optimization. This was partially offset by a higher level of
combined turnaround and maintenance activity and increased energy
costs.
Operational update
●
Utilization for the quarter and full year was around 8 and 5
percentage points higher than the same periods in 2020 mainly due
to lower COVID related demand impacts. bp-operated refining
availability* for the fourth quarter and full year was 95.4% and
94.8% respectively, lower compared with 96.1% and 96.0% for the
same periods in 2020, due to a higher level of maintenance
activity.
Strategic progress
●
Strategic convenience sites* grew to 2,150, an increase of more
than 200 compared to 2020.
●
In January, bp and Marks & Spencer agreed to extend their
convenience partnership for bp's UK retail forecourts until at
least 2030.
●
In the US, we are working with Grabango, a leading provider of
checkout-free technology to bring a more seamless store experience
to our customers.
●
As a member of the South China Blue Sky Aviation Oil Co. joint
venture, bp signed a twenty-five-year extension agreement which
increased the JV's presence to over 30 commercial aviation airports
in China. bp also agreed to supply sustainable aviation fuel (SAF)
to Qantas.
●
An agreement was announced to take full ownership of BP Midstream
Partners LP (BPMP), which will deepen bp's interests in midstream
assets that support the integration and optimization of our fuels
value chain in the US. Completion of the transaction is expected in
the second quarter, subject to customary closing
conditions.
●
Castrol and Williams Advanced Engineering (WAE) signed a strategic
five-year partnership to co-develop EV fluids, with Castrol now the
official supplier of EV Thermal Fluids for WAE's electrification
programmes and electric motorsport activities including Formula
E.
●
EV charge points* grew to over 13,100, of which nearly half are now
rapid or ultra-fast charging. In addition:
◦
in EV fleet, we acquired charging provider AMPLY Power in the US,
accelerating bp's entry into one of the fastest growing fleet
charging markets in the world, and we are working with Royal Mail,
the UK's largest fleet, to provide EV charging products and
services;
◦
Jio-bp, our fuels and mobility joint venture in India with
Reliance, opened their first EV charging hub in Delhi, one of the
biggest in India with over 100 charge points.
● In
refining, we announced our intention to invest in creating an
integrated energy hub at bp's Castellón refinery in Spain, to
reduce its operational emissions while scaling the production of
low carbon products. This could help to position the Valencia
region as a strategic point for the decarbonization of
Spain.
Top of page 11
customers & products (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
(14)
|
1,511
|
1,895
|
|
5,563
|
622
|
|
Inventory holding (gains) losses*
|
|
(412)
|
(451)
|
(650)
|
|
(3,355)
|
2,796
|
|
RC profit (loss) before interest and tax
|
|
(426)
|
1,060
|
1,245
|
|
2,208
|
3,418
|
|
Net (favourable) adverse impact of adjusting items
|
|
1,037
|
98
|
(1,119)
|
|
1,044
|
(330)
|
|
Underlying RC profit before interest and tax
|
|
611
|
1,158
|
126
|
|
3,252
|
3,088
|
|
Of
which:(a)
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
637
|
806
|
682
|
|
3,052
|
2,883
|
|
Castrol - included in customers
|
|
207
|
231
|
262
|
|
1,037
|
818
|
|
products
- refining & trading
|
|
(26)
|
352
|
(589)
|
|
200
|
(28)
|
|
petrochemicals
|
|
-
|
-
|
33
|
|
-
|
233
|
|
Taxation on an underlying RC basis
|
|
(640)
|
(314)
|
100
|
|
(1,210)
|
(537)
|
|
Underlying RC profit before interest
|
|
(29)
|
844
|
226
|
|
2,042
|
2,551
|
(a)
A reconciliation to RC profit before interest and tax by business
is provided on page 33.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
966
|
1,130
|
1,006
|
|
4,358
|
4,083
|
|
Castrol - included in customers
|
|
243
|
267
|
304
|
|
1,187
|
979
|
|
products - refining & trading
|
|
399
|
775
|
(167)
|
|
1,894
|
1,658
|
|
petrochemicals
|
|
-
|
-
|
35
|
|
-
|
337
|
|
|
|
1,365
|
1,905
|
874
|
|
6,252
|
6,078
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
754
|
747
|
748
|
|
3,000
|
2,990
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
692
|
301
|
401
|
|
1,564
|
2,157
|
|
Castrol - included in customers
|
|
53
|
37
|
69
|
|
173
|
173
|
|
products - refining & trading
|
|
532
|
296
|
365
|
|
1,308
|
1,067
|
|
petrochemicals
|
|
-
|
-
|
4
|
|
-
|
91
|
|
Total capital expenditure
|
|
1,224
|
597
|
770
|
|
2,872
|
3,315
|
(b)
A reconciliation to RC profit before interest and tax by business
is provided on page 33.
|
Retail(c)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
bp retail sites* - total (#)
|
|
20,500
|
20,350
|
20,300
|
|
20,500
|
20,300
|
|
bp
retail sites in growth markets*
|
|
2,700
|
2,650
|
2,700
|
|
2,700
|
2,700
|
|
Strategic
convenience sites*
|
|
2,150
|
2,050
|
1,900
|
|
2,150
|
1,900
|
(c)
Reported to the nearest 50.
|
Marketing sales of refined products (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
US
|
|
1,151
|
1,161
|
1,055
|
|
1,115
|
1,011
|
|
Europe
|
|
936
|
968
|
801
|
|
863
|
823
|
|
Rest of World
|
|
496
|
439
|
457
|
|
461
|
441
|
|
|
|
2,583
|
2,568
|
2,313
|
|
2,439
|
2,275
|
|
Trading/supply
sales of refined products(d)
|
|
395
|
425
|
370
|
|
393
|
416
|
|
Total sales volume of refined products
|
|
2,978
|
2,993
|
2,683
|
|
2,832
|
2,691
|
(d) Comparative
information for 2020 has been restated for the changes to net
presentation of revenues and purchases relating to physically
settled derivative contracts effective 1 January 2021. For more
information see Note 1 basis of preparation
- Voluntary change in accounting
policy.
Top of page 12
customers & products (continued)
|
Refining marker
margin*(a)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
bp average refining marker margin (RMM) ($/bbl)
|
|
15.1
|
15.2
|
5.9
|
|
13.2
|
6.7
|
(a) In 2021 the RMM
has been updated to reflect changes in bp's portfolio, and the
update of crude reference for Mediterranean region. On this basis
the fourth quarter and full year 2020 RMM would be $6.1/bbl and
$6.8/bbl respectively.
|
Refinery throughputs (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
US
|
|
720
|
737
|
708
|
|
719
|
693
|
|
Europe
|
|
833
|
804
|
720
|
|
787
|
742
|
|
Rest of World
|
|
91
|
81
|
200
|
|
88
|
192
|
|
Total refinery throughputs
|
|
1,644
|
1,622
|
1,628
|
|
1,594
|
1,627
|
|
bp-operated refining availability* (%)
|
|
95.4
|
95.6
|
96.1
|
|
94.8
|
96.0
|
Top of page 13
Rosneft
Financial results
●
The replacement cost (RC) profit before interest and tax for the
fourth quarter and full year was $555 million and $2,429 million
respectively, compared with a profit of $270 million and a loss
of $149 million for the same periods in 2020. The fourth
quarter and full year included an adverse impact of net adjusting
items* of $190 million and $291 million respectively, compared with
an adverse impact of net adjusting items of $41 million and $205
million for the same periods in 2020.
●
After excluding adjusting items, the underlying RC profit before
interest and tax* for the fourth quarter and full year was $745
million and $2,720 million respectively, compared with a profit of
$311 million and $56 million for the same periods in
2020.
●
Compared with the same periods in 2020, the higher result for the
fourth quarter primarily reflects higher oil prices partially
offset by adverse foreign exchange effects, the higher result for
the full year primarily reflects higher oil prices and favourable
foreign exchange effects.
●
The extraordinary general meeting held on 30 September adopted a
resolution to pay interim dividends of 18.03 roubles per ordinary
share which constitute 50% of Rosneft's IFRS net profit for the
first half of 2021. bp received a payment of $464 million
after a deduction of withholding tax in the fourth
quarter.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021(a)
|
2021
|
2020
|
|
2021(a)
|
2020
|
|
Profit
(loss) before interest and tax(b)(c)
|
|
623
|
903
|
295
|
|
2,688
|
(238)
|
|
Inventory holding (gains) losses*
|
|
(68)
|
(35)
|
(25)
|
|
(259)
|
89
|
|
RC profit (loss) before interest and tax
|
|
555
|
868
|
270
|
|
2,429
|
(149)
|
|
Net (favourable) adverse impact of adjusting items
|
|
190
|
55
|
41
|
|
291
|
205
|
|
Underlying RC profit (loss) before interest and tax
|
|
745
|
923
|
311
|
|
2,720
|
56
|
|
Taxation on an underlying RC basis
|
|
(73)
|
(93)
|
(31)
|
|
(269)
|
(3)
|
|
Underlying RC profit (loss) before interest
|
|
672
|
830
|
280
|
|
2,451
|
53
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021(a)
|
2021
|
2020
|
|
2021(a)
|
2020
|
|
Production: Hydrocarbons (net of royalties, bp
share)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
879
|
876
|
876
|
|
860
|
877
|
|
Natural gas (mmcf/d)
|
|
1,433
|
1,418
|
1,360
|
|
1,380
|
1,286
|
|
Total hydrocarbons* (mboe/d)
|
|
1,126
|
1,120
|
1,111
|
|
1,098
|
1,098
|
(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 2021. Actual results may differ
from these amounts. Amounts reported for the fourth quarter are
based on bp's 22.03% average economic interest for the quarter
(third quarter 2021 22.03% and fourth quarter 2020
22.01%).
(b)
The Rosneft segment result includes equity-accounted earnings
arising from bp's economic interest in Rosneft as adjusted for
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.
(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 14
other businesses & corporate
Other businesses & corporate comprises our innovation &
engineering business including bp ventures and Launchpad, regions,
cities & solutions, our corporate activities & 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 $924 million and $2,777 million
respectively, compared with a profit of $288 million and a loss
of $579 million for the same periods in 2020. The fourth
quarter and full year included an adverse impact of net adjusting
items* of $389 million and $1,394 million respectively, including
$212 million and $849 million of adverse fair value accounting
effects* respectively, compared with a favourable impact of net
adjusting items of $397 million and $303 million, including $450
million and $675 million of favourable fair value accounting
effects respectively, for the same periods in 2020. The movement in
fair value accounting effects is the primary reason for the
significantly higher replacement cost loss before interest and tax
for both the fourth quarter and the full year compared with the
same periods in 2020.
●
After excluding adjusting items, the underlying replacement cost
loss before interest and tax* for the fourth quarter and full year
was $535 million and $1,383 million respectively, compared with
$109 million and $882 million for the same periods in
2020.
●
The underlying replacement cost charges for the fourth quarter and
full year, compared with the same periods in 2020, include
lower uplifts in valuation of ventures investments.
Strategic progress
●
On 25 October bp was selected as the preferred bidder to form a
joint venture with Aberdeen City Council to build and operate
Scotland's first green hydrogen hub.
●
On 28 October bp signed a collaboration agreement with Infosys to
co-develop and pilot an energy as a service solution, which will
aim to help businesses improve the energy efficiency of
infrastructure and help meet their decarbonization
goals.
●
On 17 November bp signed a memorandum of understanding with
Aberdeen Harbour to pilot shore power and supply low carbon power
to vessels, and to explore the use of hydrogen as a marine
fuel.
●
On 29 November bp signed a memorandum of understanding with
Schneider Electric to collaborate on low carbon energy solutions to
help customers decarbonize.
●
On 25 January bp signed a memorandum of understanding with the
Valencia state government in Spain to explore ways to decarbonize
public and private mobility and carbon-intensive industries in the
region.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
(924)
|
(750)
|
288
|
|
(2,777)
|
(579)
|
|
Inventory holding (gains) losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
|
RC profit (loss) before interest and tax
|
|
(924)
|
(750)
|
288
|
|
(2,777)
|
(579)
|
|
Net
(favourable) adverse impact of adjusting items(a)
|
|
389
|
377
|
(397)
|
|
1,394
|
(303)
|
|
Underlying RC profit (loss) before interest and tax
|
|
(535)
|
(373)
|
(109)
|
|
(1,383)
|
(882)
|
|
Taxation on an underlying RC basis
|
|
128
|
11
|
55
|
|
294
|
37
|
|
Underlying RC profit (loss) before interest
|
|
(407)
|
(362)
|
(54)
|
|
(1,089)
|
(845)
|
(a)
Includes fair value accounting effects relating to the hybrid bonds
that were issued on 17 June 2020. See page 36 for more
information.
Top
of page 15
Financial
statements
Group
income statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Sales
and other operating revenues (Note 5)(a)
|
|
50,554
|
36,174
|
26,406
|
|
157,739
|
105,944
|
|
Earnings from joint ventures - after interest and
tax
|
|
243
|
197
|
214
|
|
543
|
(302)
|
|
Earnings from associates - after interest and
tax
|
|
896
|
1,103
|
575
|
|
3,456
|
(101)
|
|
Interest and other income
|
|
259
|
158
|
233
|
|
581
|
663
|
|
Gains on sale of businesses and fixed assets
|
|
286
|
235
|
2,757
|
|
1,876
|
2,874
|
|
Total revenues and other income
|
|
52,238
|
37,867
|
30,185
|
|
164,195
|
109,078
|
|
Purchases(a)
|
|
32,089
|
23,937
|
14,420
|
|
92,923
|
57,682
|
|
Production and manufacturing expenses
|
|
6,397
|
6,026
|
6,111
|
|
25,843
|
22,494
|
|
Production and similar taxes
|
|
406
|
354
|
228
|
|
1,308
|
695
|
|
Depreciation, depletion and amortization (Note 6)
|
|
3,863
|
3,944
|
3,426
|
|
14,805
|
14,889
|
|
Net impairment and losses on sale of businesses and fixed assets
(Note 3)
|
|
1,223
|
220
|
1,168
|
|
(1,121)
|
14,381
|
|
Exploration expense
|
|
102
|
116
|
214
|
|
424
|
10,280
|
|
Distribution and administration expenses
|
|
3,365
|
3,077
|
2,769
|
|
11,931
|
10,397
|
|
Profit (loss) before interest and taxation
|
|
4,793
|
193
|
1,849
|
|
18,082
|
(21,740)
|
|
Finance costs
|
|
759
|
693
|
749
|
|
2,857
|
3,115
|
|
Net
finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(8)
|
(5)
|
10
|
|
(2)
|
33
|
|
Profit (loss) before taxation
|
|
4,042
|
(495)
|
1,090
|
|
15,227
|
(24,888)
|
|
Taxation
|
|
1,464
|
1,850
|
(395)
|
|
6,740
|
(4,159)
|
|
Profit (loss) for the period
|
|
2,578
|
(2,345)
|
1,485
|
|
8,487
|
(20,729)
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
2,326
|
(2,544)
|
1,358
|
|
7,565
|
(20,305)
|
|
Non-controlling
interests
|
|
252
|
199
|
127
|
|
922
|
(424)
|
|
|
|
2,578
|
(2,345)
|
1,485
|
|
8,487
|
(20,729)
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to BP
shareholders
|
|
|
|
|
|
|
|
|
Per
ordinary share (cents)
|
|
|
|
|
|
|
|
|
Basic
|
|
11.75
|
(12.63)
|
6.71
|
|
37.57
|
(100.42)
|
|
Diluted
|
|
11.66
|
(12.63)
|
6.68
|
|
37.33
|
(100.42)
|
|
Per
ADS (dollars)
|
|
|
|
|
|
|
|
|
Basic
|
|
0.70
|
(0.76)
|
0.40
|
|
2.25
|
(6.03)
|
|
Diluted
|
|
0.70
|
(0.76)
|
0.40
|
|
2.24
|
(6.03)
|
(a) 2020 numbers
have been restated as a result of changes to the presentation of
revenues and purchases relating to physically settled derivative
contracts effective 1 January 2021. For more information see Note 1
Basis of preparation - Voluntary change in accounting
policy.
Top of page 16
Condensed group statement of comprehensive
income
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
2,578
|
(2,345)
|
1,485
|
|
8,487
|
(20,729)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|
Currency
translation differences
|
|
(619)
|
(599)
|
1,594
|
|
(921)
|
(1,843)
|
|
Exchange
(gains) losses on translation of foreign operations reclassified to
gain or loss on sale of businesses and fixed assets
|
|
36
|
-
|
(357)
|
|
36
|
(353)
|
|
Cash
flow hedges and costs of hedging
|
|
408
|
(398)
|
42
|
|
(259)
|
105
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
104
|
(3)
|
(105)
|
|
44
|
312
|
|
Income
tax relating to items that may be reclassified
|
|
(24)
|
80
|
2
|
|
65
|
66
|
|
|
|
(95)
|
(920)
|
1,176
|
|
(1,035)
|
(1,713)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
Remeasurements of
the net pension and other post-retirement benefit liability or
asset(a)
|
|
1,306
|
494
|
333
|
|
4,416
|
170
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
-
|
(2)
|
9
|
|
1
|
7
|
|
Income
tax relating to items that will not be reclassified
|
|
(434)
|
(130)
|
(89)
|
|
(1,317)
|
(105)
|
|
|
|
872
|
362
|
253
|
|
3,100
|
72
|
|
Other comprehensive income
|
|
777
|
(558)
|
1,429
|
|
2,065
|
(1,641)
|
|
Total comprehensive income
|
|
3,355
|
(2,903)
|
2,914
|
|
10,552
|
(22,370)
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
3,095
|
(3,084)
|
2,740
|
|
9,654
|
(21,983)
|
|
Non-controlling
interests
|
|
260
|
181
|
174
|
|
898
|
(387)
|
|
|
|
3,355
|
(2,903)
|
2,914
|
|
10,552
|
(22,370)
|
(a)
See Note 1 - Basis of preparation - Pensions and other
post-retirement benefits for further information.
Top of page 17
Condensed group statement of changes
in equity
|
|
|
bp shareholders'
|
Non-controlling interests
|
Total
|
|
|
$ million
|
|
equity
|
Hybrid bonds
|
Other interest
|
equity
|
|
At 1
January 2021
|
|
71,250
|
12,076
|
2,242
|
85,568
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
9,654
|
507
|
391
|
10,552
|
|
Dividends
|
|
(4,316)
|
-
|
(311)
|
(4,627)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(10)
|
-
|
-
|
(10)
|
|
Repurchase of ordinary share capital
|
|
(3,151)
|
-
|
-
|
(3,151)
|
|
Share-based payments, net of tax
|
|
632
|
-
|
-
|
632
|
|
Share
of equity-accounted entities' changes in equity, net of
tax
|
|
556
|
-
|
-
|
556
|
|
Issue
of perpetual hybrid bonds(a)
|
|
(26)
|
950
|
-
|
924
|
|
Payments on perpetual hybrid bonds
|
|
(7)
|
(492)
|
-
|
(499)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
881
|
-
|
(387)
|
494
|
|
At 31 December 2021
|
|
75,463
|
13,041
|
1,935
|
90,439
|
|
|
|
|
|
|
|
|
|
|
bp shareholders'
|
Non-controlling interests
|
Total
|
|
|
$ million
|
|
equity
|
Hybrid bonds
|
Other interest
|
equity
|
|
At 1
January 2020
|
|
98,412
|
-
|
2,296
|
100,708
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
(21,983)
|
256
|
(643)
|
(22,370)
|
|
Dividends
|
|
(6,367)
|
-
|
(238)
|
(6,605)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
6
|
-
|
-
|
6
|
|
Repurchase of ordinary share capital
|
|
(776)
|
-
|
-
|
(776)
|
|
Share-based payments, net of tax
|
|
726
|
-
|
-
|
726
|
|
Share
of equity-accounted entities' changes in equity, net of
tax
|
|
1,341
|
-
|
-
|
1,341
|
|
Issue of perpetual hybrid bonds
|
|
(48)
|
11,909
|
-
|
11,861
|
|
Payments on perpetual hybrid bonds
|
|
-
|
(89)
|
-
|
(89)
|
|
Tax on issue of perpetual hybrid bonds
|
|
3
|
-
|
-
|
3
|
|
Transactions
involving non-controlling interests, net of tax
|
|
(64)
|
-
|
827
|
763
|
|
At 31 December 2020
|
|
71,250
|
12,076
|
2,242
|
85,568
|
(a)
See Note 1 - Issuance of hybrid securities for further
information.
Top of page 18
Group balance
sheet
|
|
|
31 December
|
31 December
|
|
$ million
|
|
2021
|
2020
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
112,902
|
114,836
|
|
Goodwill
|
|
12,373
|
12,480
|
|
Intangible assets
|
|
6,451
|
6,093
|
|
Investments in joint ventures
|
|
9,982
|
8,362
|
|
Investments in associates
|
|
21,001
|
18,975
|
|
Other investments
|
|
2,544
|
2,746
|
|
Fixed assets
|
|
165,253
|
163,492
|
|
Loans
|
|
922
|
840
|
|
Trade and other receivables
|
|
2,693
|
4,351
|
|
Derivative financial instruments
|
|
7,006
|
9,755
|
|
Prepayments
|
|
479
|
533
|
|
Deferred tax assets
|
|
6,410
|
7,744
|
|
Defined benefit pension plan surpluses
|
|
11,919
|
7,957
|
|
|
|
194,682
|
194,672
|
|
Current assets
|
|
|
|
|
Loans
|
|
355
|
458
|
|
Inventories
|
|
23,711
|
16,873
|
|
Trade and other receivables
|
|
27,139
|
17,948
|
|
Derivative financial instruments
|
|
5,744
|
2,992
|
|
Prepayments
|
|
2,486
|
1,269
|
|
Current tax receivable
|
|
542
|
672
|
|
Other investments
|
|
280
|
333
|
|
Cash and cash equivalents
|
|
30,681
|
31,111
|
|
|
|
90,938
|
71,656
|
|
Assets classified as held for sale (Note 2)
|
|
1,652
|
1,326
|
|
|
|
92,590
|
72,982
|
|
Total assets
|
|
287,272
|
267,654
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
52,611
|
36,014
|
|
Derivative financial instruments
|
|
7,565
|
2,998
|
|
Accruals
|
|
5,638
|
4,650
|
|
Lease liabilities
|
|
1,747
|
1,933
|
|
Finance debt
|
|
5,557
|
9,359
|
|
Current tax payable
|
|
1,554
|
1,038
|
|
Provisions
|
|
5,256
|
3,761
|
|
|
|
79,928
|
59,753
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
359
|
46
|
|
|
|
80,287
|
59,799
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
10,567
|
12,112
|
|
Derivative financial instruments
|
|
6,356
|
5,404
|
|
Accruals
|
|
968
|
852
|
|
Lease liabilities
|
|
6,864
|
7,329
|
|
Finance debt
|
|
55,619
|
63,305
|
|
Deferred tax liabilities
|
|
8,780
|
6,831
|
|
Provisions
|
|
19,572
|
17,200
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
7,820
|
9,254
|
|
|
|
116,546
|
122,287
|
|
Total liabilities
|
|
196,833
|
182,086
|
|
Net assets
|
|
90,439
|
85,568
|
|
Equity
|
|
|
|
|
BP
shareholders' equity
|
|
75,463
|
71,250
|
|
Non-controlling interests
|
|
14,976
|
14,318
|
|
Total equity
|
|
90,439
|
85,568
|
Top of page 19
Condensed group cash flow
statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Profit (loss) before taxation
|
|
4,042
|
(495)
|
1,090
|
|
15,227
|
(24,888)
|
|
Adjustments to
reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,909
|
3,976
|
3,580
|
|
14,972
|
24,809
|
|
Net
impairment and (gain) loss on sale of businesses and fixed
assets
|
|
937
|
(15)
|
(1,589)
|
|
(2,997)
|
11,507
|
|
Earnings from
equity-accounted entities, less dividends received
|
|
(201)
|
(784)
|
(538)
|
|
(2,157)
|
1,845
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
74
|
63
|
22
|
|
466
|
236
|
|
Share-based
payments
|
|
226
|
219
|
179
|
|
627
|
723
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(184)
|
(80)
|
(182)
|
|
(655)
|
(282)
|
|
Net
charge for provisions, less payments
|
|
194
|
666
|
866
|
|
2,934
|
735
|
|
Movements in
inventories and other current and non-current assets and
liabilities
|
|
(1,709)
|
3,850
|
(715)
|
|
(626)
|
(85)
|
|
Income
taxes paid
|
|
(1,172)
|
(1,424)
|
(444)
|
|
(4,179)
|
(2,438)
|
|
Net cash provided by operating activities
|
|
6,116
|
5,976
|
2,269
|
|
23,612
|
12,162
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditure on
property, plant and equipment, intangible and other
assets
|
|
(2,772)
|
(2,647)
|
(2,922)
|
|
(10,887)
|
(12,306)
|
|
Acquisitions, net of cash acquired
|
|
(132)
|
(53)
|
(17)
|
|
(186)
|
(44)
|
|
Investment in joint ventures
|
|
(581)
|
(70)
|
(529)
|
|
(1,440)
|
(567)
|
|
Investment in associates
|
|
(148)
|
(133)
|
(23)
|
|
(335)
|
(1,138)
|
|
Total cash capital expenditure
|
|
(3,633)
|
(2,903)
|
(3,491)
|
|
(12,848)
|
(14,055)
|
|
Proceeds from disposal of fixed assets
|
|
520
|
(19)
|
439
|
|
1,145
|
491
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
1,745
|
332
|
3,564
|
|
5,812
|
4,989
|
|
Proceeds from loan repayments
|
|
36
|
33
|
61
|
|
197
|
717
|
|
Cash provided from investing activities
|
|
2,301
|
346
|
4,064
|
|
7,154
|
6,197
|
|
Net cash used in investing activities
|
|
(1,332)
|
(2,557)
|
573
|
|
(5,694)
|
(7,858)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares (Note 7)
|
|
(1,725)
|
(926)
|
-
|
|
(3,151)
|
(776)
|
|
Lease liability payments
|
|
(502)
|
(506)
|
(631)
|
|
(2,082)
|
(2,442)
|
|
Proceeds from long-term financing
|
|
648
|
2,398
|
2,619
|
|
6,987
|
14,736
|
|
Repayments of long-term financing
|
|
(2,963)
|
(6,745)
|
(3,191)
|
|
(16,804)
|
(12,179)
|
|
Net increase (decrease) in short-term debt
|
|
969
|
(81)
|
(906)
|
|
1,077
|
(1,234)
|
|
Issue
of perpetual hybrid bonds(a)
|
|
65
|
859
|
-
|
|
924
|
11,861
|
|
Payments relating to perpetual hybrid bonds
|
|
(100)
|
(55)
|
(62)
|
|
(538)
|
(89)
|
|
Payments
relating to transactions involving non-controlling interests (Other
interest)
|
|
-
|
(560)
|
-
|
|
(560)
|
(8)
|
|
Receipts
relating to transactions involving non-controlling interests (Other
interest)
|
|
12
|
-
|
173
|
|
683
|
665
|
|
Dividends paid - BP shareholders
|
|
(1,077)
|
(1,101)
|
(1,059)
|
|
(4,304)
|
(6,340)
|
|
-
non-controlling interests
|
|
(66)
|
(87)
|
(75)
|
|
(311)
|
(238)
|
|
Net cash provided by (used in) financing activities
|
|
(4,739)
|
(6,804)
|
(3,132)
|
|
(18,079)
|
3,956
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(58)
|
(177)
|
336
|
|
(269)
|
379
|
|
Increase (decrease) in cash and cash equivalents
|
|
(13)
|
(3,562)
|
46
|
|
(430)
|
8,639
|
|
Cash and cash equivalents at beginning of period
|
|
30,694
|
34,256
|
31,065
|
|
31,111
|
22,472
|
|
Cash and cash equivalents at end of period
|
|
30,681
|
30,694
|
31,111
|
|
30,681
|
31,111
|
(a)
See Note 1 - Issuance of hybrid securities for further
information.
Top of page 20
Notes
Note 1. Basis of
preparation
The results for the interim periods are unaudited and, in the
opinion of management, include all adjustments necessary for a fair
presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in
conjunction with the consolidated financial statements and related
notes for the year ended 31 December 2020 included
in BP
Annual Report and Form 20-F 2020.
The directors consider it appropriate to adopt the going concern
basis of accounting in preparing the interim financial statements.
The ongoing impact of COVID-19 and the current economic environment
has been considered as part of the going concern assessment.
Forecast liquidity has been assessed under a number of stressed
scenarios to support this assertion. Reverse stress tests indicated
that the group will continue to operate as a going concern for at
least 12 months from the date of approval of the interim financial
statements even if the Brent price fell to zero.
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
international accounting standards. As a result of the UK's
withdrawal from the EU, with effect from 1 January 2021, the
consolidated financial statements are also prepared in accordance
with IFRS as adopted by the UK. IFRS as adopted by the UK does not
differ from IFRS as adopted by the EU. IFRS as adopted by the EU
and UK differ in certain respects from IFRS as issued by the IASB.
The differences have no impact on the group's consolidated
financial statements for the periods presented.
The financial information presented herein has been prepared in
accordance with the accounting policies expected to be used in
preparing BP Annual Report and Form 20-F
2021 which are the same as
those used in preparing BP Annual Report and Form 20-F
2020 with the exception of
the changes described in the 'Updates to significant accounting
policies' section below. There are no other new or amended
standards or interpretations adopted from 1 January 2021 onwards
that have a significant impact on the financial
information.
Considerations in respect of COVID-19 and the current economic
environment
bp's significant accounting judgements and estimates were disclosed
in BP
Annual Report and Form 20-F 2020. These have been subsequently considered at the
end of each quarter to determine if any changes were required to
those judgements and estimates as a result of current market
conditions. The conditions also result in the valuation of certain
assets and liabilities remaining subject to more uncertainty,
including those set out below.
Impairment testing assumptions
The group's price assumption for Brent oil was revised during the
second and fourth quarters. The assumption up to 2030 was increased
from the price disclosed in the BP Annual Report and Form 20-F
2020 to reflect near-term
supply constraints whereas the long-term assumption was decreased
reaching $55 per barrel by 2040 and $45 per barrel by 2050 (in real
2020 terms) as bp's management expects an acceleration of the pace
of transition to a lower carbon economy. The price assumptions for
Henry Hub gas were unchanged from those disclosed
in BP
Annual Report and Form 20-F 2020 except that the assumption for 2022 has been
increased during the fourth quarter to reflect short term market
conditions. A
summary of the group's price assumptions, in real 2020 terms, is
provided below:
|
|
|
|
2022
|
2025
|
2030
|
2040
|
2050
|
|
Brent oil ($/bbl)
|
|
|
70
|
60
|
60
|
55
|
45
|
|
Henry Hub gas ($/mmBtu)
|
|
|
4.00
|
3.00
|
3.00
|
3.00
|
2.75
|
The group has identified upstream oil and gas properties with
carrying amounts totalling approximately $28 billion where the
headroom, based on the most recent impairment tests performed, was
less than or equal to 20% of the carrying value. A change in price
or other assumptions within the next financial year may result in a
recoverable amount of one or more of these assets above or below
the current carrying amount and therefore there is a significant
risk of impairment reversals or charges in that
period.
The post-tax discount rates used in value-in-use impairment testing
of oil and gas properties and refineries remain unchanged at
6%.
Provisions
The nominal risk-free discount rate applied to provisions is
reviewed on a quarterly basis. The discount rate applied to the
group's provisions remains at 2.0% following the reduction applied
in the second quarter (31 December 2020 2.5%).
Pensions and other post-retirement benefits
The group's defined benefit plans are reviewed quarterly to
determine any changes to the fair value of the plan assets or
present value of the defined benefit obligations. As a result of
the review during the fourth quarter of 2021, the group's total net
defined benefit plan surplus as at 31 December 2021 is $4.1
billion, compared to a surplus of $2.4 billion and a deficit of
$1.3 billion at 30 September 2021 and 31 December 2020
respectively.
The movement for the year principally reflects net actuarial gains
reported in other comprehensive income arising from increases in
the UK, US and Eurozone discount rates and positive asset
performance, partly offset by increases in inflation rates. Also
reflected in the year is a reduction in the liability of the UK
funded final salary pension plan which was closed to future accrual
on 30 June 2021. A curtailment gain of $0.3 billion was recognized
in the income statement in the second quarter. For active members
of the scheme at 30 June 2021, benefits payable are now linked to
salary as at that date rather than to salary on retirement. The
current environment is likely to continue to affect the values of
the plan assets and obligations resulting in potential volatility
in the amount of the net defined benefit plan surplus/deficit
recognized.
Top of page 21
Note 1.
Basis of preparation (continued)
Impairment of financial assets measured at amortized
cost
The estimate of the loss allowance recognized on financial assets
measured at amortized cost using an expected credit loss approach
was determined not to be a significant accounting estimate in
preparing BP Annual Report and Form 20-F
2020. Expected credit loss
allowances are, however, reviewed and updated quarterly. Allowances
are recognized on assets where there is evidence that the asset is
credit-impaired and on a forward-looking expected credit loss basis
for assets that are not credit-impaired. The current economic
environment and future credit risk outlook have been considered in
updating the estimate of loss allowances with no significant impact
in the quarter.
The group continues to believe that the calculation of expected
credit loss allowances is not a significant accounting estimate.
The group continues to apply its credit policy as disclosed
in BP
Annual Report and Form 20-F 2020 - Financial statements - Note 29 Financial
instruments and financial risk factors - credit
risk.
Other accounting judgements and estimates
All other significant accounting judgements and estimates disclosed
in BP
Annual Report and Form 20-F 2020 remain applicable and no new significant
accounting judgements or estimates have been identified
specifically arising from the impact of
COVID-19.
Issuance of hybrid securities
During the second half of 2021, a group subsidiary issued perpetual
subordinated hybrid capital securities of $950 million. The
proceeds from this issuance were specifically earmarked to fund a
forward purchase and leaseback of an under-construction floating,
production, storage, and offloading vessel (FPSO) to be used on one
of the group's major projects.
As the group has the unconditional right to defer interest and
principal indefinitely, they are classified as equity instruments
and reported within non-controlling interests in the condensed
consolidated financial statements.
Updates to significant accounting policies
Change in accounting policy - Interest Rate Benchmark Reform -
Phase II
The replacement of key interest rate benchmarks such as the London
Inter-bank Offered Rate (LIBOR) with alternative benchmarks in the
US, UK, EU and other territories occurred at the end of 2021 for
most benchmarks, with remaining USD LIBOR tenors expected to cease
in 2023. bp is primarily exposed to 3 month USD LIBOR that will be
available until June 2023.
Amendments to IFRS 9 'Financial instruments', IFRS 16 'Leases' and
other IFRSs were issued by the IASB in August 2020 to provide
practical expedients and reliefs when changes are made to
contractual cash flows or hedging relationships because of the
transition from Inter-bank Offered Rates to alternative risk-free
rates. bp adopted these amendments from 1 January 2021 and they
were applied prospectively from that date.
bp has an internal working group on interest rate benchmark reform
to monitor market developments and manage the transition to
alternative benchmark rates. The impacts on contracts and
arrangements that are linked to interest rate benchmarks, for
example, borrowings, leases and derivative contracts, have been
assessed and transition plans have either been executed or are
being developed. bp is also participating on external committees
and task forces dedicated to interest rate benchmark
reform.
Change in segmentation
During the first quarter of 2021, the group's reportable segments
were changed consistent with a change in the way that resources are
allocated and performance is assessed by the chief operating
decision maker, who for bp is the chief executive officer, from
that date. From the first quarter of 2021, the group's reportable
segments are gas & low carbon energy, oil production &
operations, customers & products, and Rosneft. At 31 December
2020, the group's reportable segments were Upstream, Downstream and
Rosneft.
Gas & low carbon energy comprises regions with upstream
businesses that predominantly produce natural gas, gas marketing
and trading activities and the group's renewables businesses,
including biofuels, solar and wind. Gas producing regions were
previously in the Upstream segment. The group's renewables
businesses were previously part of 'Other businesses and
corporate'.
Oil production & operations comprises regions with upstream
activities that predominantly produce crude oil. These activities
were previously in the Upstream segment.
Customers & products comprises the group's customer-focused
businesses, spanning convenience and mobility, which includes fuels
retail and next-gen offers such as electrification, as well as
aviation, midstream, and Castrol lubricants. It also includes our
oil products businesses, refining & trading. The petrochemicals
business will also be reported in restated comparative information
as part of the customers and products segment up to its sale in
December 2020. The customers & products segment is, therefore,
substantially unchanged from the former Downstream segment with the
exception of the Petrochemicals disposal.
The Rosneft segment is unchanged and continues to include
equity-accounted earnings from the group's investment in
Rosneft.
The segment measure of profit or loss continues to be replacement
cost profit or loss before interest and tax, which reflects the
replacement cost of supplies by excluding from profit or loss
before interest and tax inventory holding gains and losses. See
Note 4 for further information.
Comparative information for 2020 has been restated in Notes 4, 5
and 6 to reflect the changes in reportable segments.
New significant judgement - Investment in Aker BP
Judgement is required in assessing the level of control or
influence over another entity in which the group holds an interest.
For bp, the judgement that the group expects to continue to have
significant influence over Aker BP, a Norwegian oil and gas
company, following completion of its proposed acquisition of Lundin
Energy is significant. As a consequence of this judgement, bp has
classified $0.6 billion as an asset held for sale, reflecting the
highly probable deemed disposal of a part of bp's equity
accounted
Top of page 22
Note 1.
Basis of preparation (continued)
interest as a result of the transaction. See note 2 for further
information. If significant influence was not present following
completion, the carrying amount of bp's entire interest in Aker BP
would be classified as an asset held for sale.
Significant influence is defined in IFRS as the power to
participate in the financial and operating policy decisions of the
investee but is not control or joint control of those policies.
Significant influence is presumed when an entity owns 20% or more
of the voting power of the investee. Significant influence is
presumed not to be present when an entity owns less than 20% of the
voting power of the investee.
bp owned 27.85% of the voting shares of Aker BP at 31 December 2021
and significant influence was presumed. On completion of the
acquisition of Lundin Energy, which remains subject to shareholder
and regulatory approval, bp expects to own 15.9% of the voting
shares of Aker BP. IFRS identifies several indicators that may
provide evidence of significant influence, including representation
on the board of directors of the investee and participation in
policy-making processes. bp's group chief financial officer, Murray
Auchincloss, has been a member of the Aker BP board since 2017.
bp's other nominated director, Kate Thomson has been a member of
the Aker BP board since formation of that company in 2016. She is
also a member of the Aker BP board's Audit and Risk Committee.
These memberships are not expected to change following the
transaction. bp also holds the voting rights at general meetings of
shareholders conferred by its stake in Aker BP. bp's management
considers, therefore, that the group will retain significant
influence, as defined by IFRS, over Aker BP following the
acquisition of Lundin Energy.
Voluntary change in accounting policy - Presentation of revenues
and purchases relating to physically settled derivative
contracts
bp routinely enters into transactions for the sale and purchase of
commodities that are physically settled and meet the definition of
a derivative financial instrument. These contracts are within the
scope of IFRS 9 and as such, prior to settlement, changes in the
fair value of these derivative contracts are presented as gains and
losses within other operating revenues. The group previously
presented revenues and purchases for such contracts on a gross
basis in the income statement upon physical
settlement.
These transactions have historically represented a substantial
portion of the revenues and purchases reported in the group's
consolidated financial statements.
The change in strategic direction of the group, supported by
organizational changes to implement the strategy from 1 January
2021, resulted in the group determining that the revenue and
corresponding purchases relating to such transactions should be
presented net, as gains or losses within other operating revenues,
from that date. Physically settled derivative contracts were
previously presented on a gross basis and included in other
operating revenues and purchases; however, under the new accounting
policy, such contracts will be presented on a net basis
within other operating revenues to the extent that they relate to
trading or optimization activities.
Additionally the group's trading activity has continued to evolve
over time from one of capturing third-party physical trades to
provide flow assurance to one with increasing levels of
optimization, taking advantage of price volatility and fluctuations
in demand and supply, which will continue under the new strategy,
further supporting the change in presentation. The new presentation
provides reliable and more relevant information for users of the
accounts as the group's revenue recognition is more closely aligned
with its assessment of 'Scope 3' emissions from its products, its
'Net Zero' ambition and how management monitors and manages
performance of such contracts. Comparative information for sales
and other operating revenues and purchases for 2020 has been
restated as shown in the table below. There is no significant
impact on comparative information for profit before income and tax
or earnings per share.
In addition, as disclosed in the group's 2020 financial statements,
in 2020 revenues from physically settled derivative contracts were
reclassified as other operating revenues and were no longer
presented together with revenues from contracts with customers. In
these financial statements certain other similar contracts have
been reclassified as other operating revenues and then been subject
to net presentation as described above. Comparative information for
natural gas, LNG and NGLs, and non-oil products and other revenue
from contracts with customers in Note 5 has been amended to align
with current period presentation as shown in the table
below.
Top of page 23
Note 1.
Basis of preparation (continued)
|
|
|
Fourth
|
Fourth
|
|
Full
|
Full
|
|
|
|
|
quarter
|
quarter
|
|
year
|
year
|
|
|
|
|
2020
|
2020
|
Impact of net
|
2020
|
2020
|
Impact of net
|
|
$ million
|
|
|
Restated
|
presentation(a)
|
|
Restated
|
presentation(a)
|
|
Sales and other operating revenues (Note 5)
|
|
|
|
|
|||
|
gas & low carbon energy
|
|
4,091
|
3,188
|
(903)
|
18,467
|
16,275
|
(2,192)
|
|
oil production & operations
|
|
4,100
|
4,100
|
-
|
17,234
|
17,234
|
-
|
|
customers & products
|
|
41,513
|
24,033
|
(17,480)
|
162,974
|
90,744
|
(72,230)
|
|
other businesses & corporate
|
|
405
|
405
|
-
|
1,666
|
1,666
|
-
|
|
|
|
50,109
|
31,726
|
(18,383)
|
200,341
|
125,919
|
(74,422)
|
|
Less: sales and other revenues between segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
616
|
616
|
-
|
2,708
|
2,708
|
-
|
|
oil production & operations
|
|
3,782
|
3,782
|
-
|
15,879
|
15,879
|
-
|
|
customers & products
|
|
486
|
486
|
-
|
158
|
158
|
-
|
|
other businesses & corporate
|
|
436
|
436
|
-
|
1,230
|
1,230
|
-
|
|
|
|
5,320
|
5,320
|
-
|
19,975
|
19,975
|
-
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
3,475
|
2,572
|
(903)
|
15,759
|
13,567
|
(2,192)
|
|
oil production & operations
|
|
318
|
318
|
-
|
1,355
|
1,355
|
-
|
|
customers & products
|
|
41,027
|
23,547
|
(17,480)
|
162,816
|
90,586
|
(72,230)
|
|
other businesses & corporate
|
|
(31)
|
(31)
|
-
|
436
|
436
|
-
|
|
Total sales and other operating revenues
|
|
44,789
|
26,406
|
(18,383)
|
180,366
|
105,944
|
(74,422)
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude
oil
|
|
1,185
|
1,185
|
-
|
5,048
|
5,048
|
-
|
|
Oil
products
|
|
16,216
|
16,216
|
-
|
63,564
|
63,564
|
-
|
|
Natural
gas, LNG and NGLs
|
|
3,252
|
2,695
|
(557)
|
12,726
|
10,762
|
(1,964)
|
|
Non-oil
products and other revenues from contracts with
customers
|
|
2,608
|
2,589
|
(19)
|
9,840
|
9,779
|
(61)
|
|
Revenues from contracts with customers
|
|
23,261
|
22,685
|
(576)
|
91,178
|
89,153
|
(2,025)
|
|
Other operating revenues
|
|
21,528
|
3,721
|
(17,807)
|
89,188
|
16,791
|
(72,397)
|
|
Total sales and other operating revenues
|
|
44,789
|
26,406
|
(18,383)
|
180,366
|
105,944
|
(74,422)
|
(a)
Total purchases for the fourth quarter and full year 2020 have been
re-stated by the equal and opposite amount as total sales and other
operating revenues.
Note
2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 31
December 2021 is $1,652 million, with associated liabilities of
$359 million.
In August 2021, bp and PetroChina established Basra Energy Company,
an incorporated joint venture, intended to own and manage the
companies' interests in the Rumaila field in Iraq. Subject to
approvals and clearances, the transaction is expected to complete
during the first half of 2022. Assets of $1,009 million and
associated liabilities of $333 million have been classified as held
for sale in the group balance sheet at 31 December
2021.
On 21 December 2021, Aker BP, an associate of bp, announced the
proposed acquisition of Lundin Energy for consideration in cash and
new Aker BP shares. bp currently holds a 27.9% interest in Aker BP.
Following completion of the transaction, which is subject to
approvals, this is expected to become a 15.9% interest in the
combined company. $595 million of bp's investment in Aker BP has
therefore been classified as held for sale in the group's balance
sheet.
At 31 December 2020 the balance consisted primarily of a 20%
participating interest from BP's 60% participating interest in
Block 61 in Oman, which is reported in the gas & low carbon
energy segment. As announced on 1 February 2021, bp agreed to sell
this interest to PTT Exploration and Production Public Company
Limited (PTTEP) of Thailand for a total consideration of up to $2.6
billion, subject to final adjustments. On 28 March, a royal decree
was published approving the sale and $2.4 billion was received in
March 2021.
Top
of page 24
Note 3.
Impairment and losses on sale of businesses and fixed
assets(a)
Net impairment charges net of losses on sale of businesses and
fixed assets for the fourth quarter were $1,223 million and
impairment reversals net of losses on sale of businesses and fixed
assets for the full year 2021 were $1,121 million respectively
(charges of $1,168 million and $14,381 million for the
comparative periods in 2020) and include net impairment charges for
the fourth quarter of 2021 of $1,137 million and net
impairment reversals for the full year 2021 of $1,351 million
(charges of $777 million and $13,701 million for the
comparative periods in 2020).
gas & low carbon energy segment
In the gas & low carbon energy segment there was a net
impairment reversal of $553 million and $1,504 million
for the fourth quarter and full year 2021 respectively (charges of
$23 million and $6,211 million for the comparative
periods in 2020).
Impairment reversals for the fourth quarter and full year 2021
mainly relate to producing assets and principally arose as a result
of changes to the group's oil and gas price assumptions and
re-assessment of reserves. They include amounts in Trinidad and
India for the fourth quarter and the full year also includes
amounts in Azerbaijan. The recoverable amounts of the cash
generating units within these businesses were based on value-in-use
calculations. They have been offset by impairment charges in the
fourth quarter and full year 2021 which principally arose as a
result of increased future expenditure.
oil production & operations segment
In the oil production & operations segment there was a net
impairment charge of $790 million for the fourth quarter and a
net impairment reversal of $862 million for the full year 2021
(charges of $648 million and $6,637 million for the
comparative periods in 2020).
Impairment charges for the fourth quarter and for the full year
2021 principally related to anticipated portfolio changes.
Impairment reversals for the full year 2021 mainly relate to
producing assets and principally arose as a result of changes to
the group's oil and gas price assumptions and re-assessment of
reserves. They include amounts in BPX Energy and the North Sea. The
recoverable amounts of the cash generating units within these
businesses were based on value-in-use calculations.
customers & products segment
Impairment charges in the customer & products segment were $885
million and $949 million for the fourth quarter and full year 2021
respectively (charges of $104 million and $840 million for the
comparative periods in 2020). 2021 impairment charges principally
relate to increased future expenditure and anticipated portfolio
changes in the products business. The recoverable amounts of the
cash generating units within this business were based on
value-in-use calculations.
(a) All disclosures are pre-tax.
Note 4. Analysis of replacement cost
profit (loss) before interest and tax and reconciliation to profit
(loss) before taxation(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
gas & low carbon energy
|
|
1,911
|
(4,135)
|
(638)
|
|
2,133
|
(7,068)
|
|
oil production & operations
|
|
3,212
|
2,692
|
66
|
|
10,501
|
(14,583)
|
|
customers & products
|
|
(426)
|
1,060
|
1,245
|
|
2,208
|
3,418
|
|
Rosneft
|
|
555
|
868
|
270
|
|
2,429
|
(149)
|
|
other businesses & corporate
|
|
(924)
|
(750)
|
288
|
|
(2,777)
|
(579)
|
|
|
|
4,328
|
(265)
|
1,231
|
|
14,494
|
(18,961)
|
|
Consolidation adjustment - UPII*
|
|
(7)
|
(42)
|
(77)
|
|
(67)
|
89
|
|
RC profit (loss) before interest and tax*
|
|
4,321
|
(307)
|
1,154
|
|
14,427
|
(18,872)
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
(8)
|
15
|
10
|
|
33
|
19
|
|
oil
production & operations
|
|
-
|
(1)
|
10
|
|
8
|
(2)
|
|
customers
& products
|
|
412
|
451
|
650
|
|
3,355
|
(2,796)
|
|
Rosneft
(net of tax)
|
|
68
|
35
|
25
|
|
259
|
(89)
|
|
Profit (loss) before interest and tax
|
|
4,793
|
193
|
1,849
|
|
18,082
|
(21,740)
|
|
Finance costs
|
|
759
|
693
|
749
|
|
2,857
|
3,115
|
|
Net
finance expense/(income) relating to pensions and other
post-retirement benefits
|
|
(8)
|
(5)
|
10
|
|
(2)
|
33
|
|
Profit (loss) before taxation
|
|
4,042
|
(495)
|
1,090
|
|
15,227
|
(24,888)
|
|
|
|
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
|
US
|
|
959
|
1,964
|
(21)
|
|
5,785
|
(4,016)
|
|
Non-US
|
|
3,362
|
(2,271)
|
1,175
|
|
8,642
|
(14,856)
|
|
|
|
4,321
|
(307)
|
1,154
|
|
14,427
|
(18,872)
|
(a)Comparative information for 2020 has been
restated to reflect the changes in reportable segments. For more
information see Note 1 Basis of preparation - Change in
segmentation.
Top of page 25
Note 5. Sales and other operating
revenues(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
By segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
14,545
|
2,554
|
3,188
|
|
30,840
|
16,275
|
|
oil production & operations
|
|
7,482
|
6,285
|
4,100
|
|
24,519
|
17,234
|
|
customers & products
|
|
37,446
|
34,382
|
24,033
|
|
130,095
|
90,744
|
|
other businesses & corporate
|
|
484
|
423
|
405
|
|
1,724
|
1,666
|
|
|
|
59,957
|
43,644
|
31,726
|
|
187,178
|
125,919
|
|
|
|
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,199
|
1,269
|
616
|
|
4,563
|
2,708
|
|
oil production & operations
|
|
7,202
|
5,423
|
3,782
|
|
22,408
|
15,879
|
|
customers & products
|
|
650
|
354
|
486
|
|
1,226
|
158
|
|
other businesses & corporate
|
|
352
|
424
|
436
|
|
1,242
|
1,230
|
|
|
|
9,403
|
7,470
|
5,320
|
|
29,439
|
19,975
|
|
|
|
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
13,346
|
1,285
|
2,572
|
|
26,277
|
13,567
|
|
oil production & operations
|
|
280
|
862
|
318
|
|
2,111
|
1,355
|
|
customers & products
|
|
36,796
|
34,028
|
23,547
|
|
128,869
|
90,586
|
|
other businesses & corporate
|
|
132
|
(1)
|
(31)
|
|
482
|
436
|
|
Total sales and other operating revenues
|
|
50,554
|
36,174
|
26,406
|
|
157,739
|
105,944
|
|
|
|
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
|
|
|
|
US
|
|
17,927
|
15,372
|
9,036
|
|
63,095
|
35,631
|
|
Non-US
|
|
43,423
|
28,578
|
22,447
|
|
128,584
|
88,721
|
|
|
|
61,350
|
43,950
|
31,483
|
|
191,679
|
124,352
|
|
Less: sales and other operating revenues between areas
|
|
10,796
|
7,776
|
5,077
|
|
33,940
|
18,408
|
|
|
|
50,554
|
36,174
|
26,406
|
|
157,739
|
105,944
|
|
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude
oil(b)
|
|
1,583
|
1,275
|
1,185
|
|
5,483
|
5,048
|
|
Oil products
|
|
29,790
|
27,699
|
16,216
|
|
101,418
|
63,564
|
|
Natural
gas, LNG and NGLs(b)(c)
|
|
10,449
|
5,475
|
2,695
|
|
24,378
|
10,762
|
|
Non-oil
products and other revenues from contracts with
customers(c)
|
|
806
|
2,275
|
2,589
|
|
6,082
|
9,779
|
|
Revenue from contracts with customers
|
|
42,628
|
36,724
|
22,685
|
|
137,361
|
89,153
|
|
Other
operating revenues(d)
|
|
7,926
|
(550)
|
3,721
|
|
20,378
|
16,791
|
|
Total sales and other operating revenues
|
|
50,554
|
36,174
|
26,406
|
|
157,739
|
105,944
|
(a) Comparative
information for 2020 has been restated for the changes in
reportable segments and also for the changes to net presentation of
revenues and purchases relating to physically settled derivative
contracts effective 1 January 2021. For more information see Note 1
Basis of preparation - Voluntary change in accounting
policy and Change in
segmentation.
(b)
An amendment of $1,017 million has been made to amounts presented
for the third quarter 2021.
(c) Comparative
information has been amended for certain contracts that have been
reclassified to other operating revenues and restated to reflect
the presentation described in Note 1 Basis of preparation
- Voluntary change in accounting
policy.
(d)
Principally relates to commodity derivative
transactions.
Top of page 26
Note 6. Depreciation, depletion and amortization(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,265
|
1,230
|
721
|
|
4,464
|
3,457
|
|
oil production & operations
|
|
1,628
|
1,767
|
1,786
|
|
6,528
|
7,787
|
|
customers & products
|
|
754
|
747
|
748
|
|
3,000
|
2,990
|
|
other businesses & corporate
|
|
216
|
200
|
171
|
|
813
|
655
|
|
|
|
3,863
|
3,944
|
3,426
|
|
14,805
|
14,889
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
|
US
|
|
1,209
|
1,206
|
1,174
|
|
4,697
|
5,194
|
|
Non-US
|
|
2,654
|
2,738
|
2,252
|
|
10,108
|
9,695
|
|
|
|
3,863
|
3,944
|
3,426
|
|
14,805
|
14,889
|
(a) Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 basis of
preparation - Change in
segmentation.
Note 7. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by
dividing the profit (loss) for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the period. During the fourth quarter 2021 371
million of ordinary shares were repurchased for cancellation for a
total cost of $1,725 million, including transaction costs of $9
million, as part of the share buyback programme announced on 27
April 2021. This brings the total number of shares repurchased in
the full year to 707 million for a total cost of $3,151 million. A
further 95 million of shares have been repurchased in January 2022
at a total cost of $500 million to offset the expected full year
dilution from the vesting of awards under employee share schemes in
2022. 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
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Results for the period
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
2,326
|
(2,544)
|
1,358
|
|
7,565
|
(20,305)
|
|
Less: preference dividend
|
|
-
|
1
|
-
|
|
2
|
1
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
2,326
|
(2,545)
|
1,358
|
|
7,563
|
(20,306)
|
|
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
19,800,620
|
20,150,186
|
20,233,240
|
|
20,128,862
|
20,221,514
|
|
ADS
equivalent(c)
|
|
3,300,103
|
3,358,364
|
3,372,206
|
|
3,354,810
|
3,370,252
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to calculate diluted earnings per
share
|
|
19,947,023
|
20,150,186
|
20,329,326
|
|
20,260,388
|
20,221,514
|
|
ADS
equivalent(c)
|
|
3,324,503
|
3,358,364
|
3,388,221
|
|
3,376,731
|
3,370,252
|
|
|
|
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
19,642,221
|
20,008,900
|
20,264,027
|
|
19,642,221
|
20,264,027
|
|
ADS
equivalent(c)
|
|
3,273,703
|
3,334,816
|
3,377,337
|
|
3,273,703
|
3,377,337
|
(a)
Excludes treasury shares and includes certain shares that will be
issued in the future under employee share-based payment
plans.
(b)
If the inclusion of potentially issuable shares would decrease loss
per share, the potentially issuable shares are excluded from the
weighted average number of shares outstanding used to calculate
diluted earnings per share. The numbers of potentially issuable
shares that have been excluded from the calculation for the third
quarter 2021 and full year 2020 are 123,543 thousand (ADS
equivalent 20,591 thousand) and 101,450 thousand (ADS equivalent
16,908 thousand) respectively.
(c)
One ADS is equivalent to six ordinary shares.
Top of page 27
Note 8. Dividends
Dividends payable
BP today announced an interim dividend of 5.46 cents per ordinary
share which is expected to be paid on 25 March 2022 to ordinary
shareholders and American Depositary Share (ADS) holders on the
register on 18 February 2022. The ex-dividend date will be 17
February 2022. The corresponding amount in sterling is due to be
announced on 15 March 2022, calculated based on the average of the
market exchange rates over three dealing days between 9 March 2022
and 11 March 2022. Holders of ADSs are expected to receive $0.3276
per ADS (less applicable fees). The board has decided not to offer
a scrip dividend alternative in respect of the fourth quarter 2021
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
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
|
cents
|
|
5.460
|
5.460
|
5.250
|
|
21.420
|
31.500
|
|
pence
|
|
4.105
|
3.953
|
3.917
|
|
15.538
|
24.458
|
|
Dividends paid per ADS (cents)
|
|
32.76
|
32.76
|
31.50
|
|
128.52
|
189.00
|
Note 9. Net debt
|
Net debt*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Finance
debt(a)
|
|
61,176
|
63,214
|
72,664
|
|
61,176
|
72,664
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
118
|
(549)
|
(2,612)
|
|
118
|
(2,612)
|
|
`
|
|
61,294
|
62,665
|
70,052
|
|
61,294
|
70,052
|
|
Less: cash and cash equivalents
|
|
30,681
|
30,694
|
31,111
|
|
30,681
|
31,111
|
|
Net
debt(c)
|
|
30,613
|
31,971
|
38,941
|
|
30,613
|
38,941
|
|
Total equity
|
|
90,439
|
89,266
|
85,568
|
|
90,439
|
85,568
|
|
Gearing*
|
|
25.3%
|
26.4%
|
31.3%
|
|
25.3%
|
31.3%
|
(a)
The fair value of finance debt at 31 December 2021 was $62,946
million (30 September 2021 $65,316 million, 31 December 2020
$76,092 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
$166 million at 31 December 2021 (third quarter 2021 liability
of $151 million and fourth quarter 2020 liability of
$236 million) are not included in the calculation of net debt
shown above as hedge accounting is not applied for these
instruments.
(c)
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement.
As part of actively managing its debt portfolio, in the fourth
quarter the group bought back $2.9 billion of finance debt (third
quarter 2021 $4.2 billion; fourth quarter 2020 $nil) consisting
entirely of US dollar bonds. Year to date the group has bought back
a total of $11.0 billion equivalent of finance debt ($4.0 billion
for the comparative period in 2020) primarily consisting of US
dollar, euro and sterling bonds. Derivatives associated with non-US
dollar debt bought back were also terminated. There was no
significant impact on net debt or gearing as a result of these
transactions.
Note 10. Inventory valuation
A provision of $64 million was held against hydrocarbon inventories
at 31 December 2021 ($129 million at 30 September 2021 and $216
million at 31 December 2020) to write them down to their net
realizable value. As a result of the changes in strategic direction
of the group and the evolution of the trading strategy set out in
Note 1, from 1 January, certain inventory, totalling
$11.4 billion as at 31 December 2021 ($12.8 billion as at 30
September 2021), is now treated as trading inventory and is valued
at fair value whereas the equivalent inventory was previously
valued at the lower of cost or net realisable value in prior
periods.
Note 11. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 7 February 2022, is unaudited
and does not constitute statutory financial statements. Audited
financial information will be published in BP Annual Report and Form 20-F
2021. BP Annual Report and Form 20-F 2020 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 28
Additional information
Capital expenditure*(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
Organic capital expenditure*
|
|
3,512
|
2,850
|
2,949
|
|
11,779
|
12,034
|
|
Inorganic
capital expenditure*(b)(c)
|
|
121
|
53
|
542
|
|
1,069
|
2,021
|
|
|
|
3,633
|
2,903
|
3,491
|
|
12,848
|
14,055
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
|
gas
& low carbon energy(b)
|
|
1,037
|
1,072
|
1,470
|
|
4,741
|
4,608
|
|
oil production & operations
|
|
1,272
|
1,099
|
1,133
|
|
4,838
|
5,829
|
|
customers & products
|
|
1,224
|
597
|
770
|
|
2,872
|
3,315
|
|
other businesses & corporate
|
|
100
|
135
|
118
|
|
397
|
303
|
|
|
|
3,633
|
2,903
|
3,491
|
|
12,848
|
14,055
|
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
|
US
|
|
1,305
|
1,176
|
1,305
|
|
4,858
|
4,482
|
|
Non-US
|
|
2,328
|
1,727
|
2,186
|
|
7,990
|
9,573
|
|
|
|
3,633
|
2,903
|
3,491
|
|
12,848
|
14,055
|
(a) Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 Basis of
preparation - Change in
segmentation.
(b)
Full year 2021 includes the final payment of $712 million in
respect of the strategic partnership with Equinor.
(c)
Fourth quarter and full year 2020 includes a $500 million deposit
in respect of the strategic partnership with Equinor. Full year
2020 includes $1 billion relating to an investment in a 49%
interest in the group's Indian fuels and mobility venture with
Reliance industries. Full year 2020 also includes amounts relating
to the 25-year extension to our ACG production-sharing agreement*
in Azerbaijan.
Top of page 29
Adjusting items*(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
gas & low carbon energy
|
|
|
|
|
|
|
|
|
Gains
on sale of businesses and fixed assets(b)
|
|
-
|
-
|
-
|
|
1,034
|
-
|
|
Net
impairment and losses on sale of businesses and fixed
assets(c)
|
|
553
|
(197)
|
(23)
|
|
1,503
|
(6,220)
|
|
Environmental and other provisions
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(4)
|
-
|
(87)
|
|
(33)
|
(127)
|
|
Fair
value accounting effects(e)(f)
|
|
(790)
|
(5,808)
|
(677)
|
|
(7,662)
|
(738)
|
|
Other(g)
|
|
(59)
|
63
|
(5)
|
|
(237)
|
(672)
|
|
|
|
(300)
|
(5,942)
|
(792)
|
|
(5,395)
|
(7,757)
|
|
oil production & operations
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
224
|
261
|
257
|
|
869
|
360
|
|
Net
impairment and losses on sale of businesses and fixed
assets(c)
|
|
(799)
|
33
|
(830)
|
|
776
|
(7,012)
|
|
Environmental
and other provisions(h)
|
|
(235)
|
(68)
|
20
|
|
(1,144)
|
(2)
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(2)
|
4
|
(125)
|
|
(92)
|
(278)
|
|
Fair value accounting effects
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Other(g)(i)
|
|
-
|
1
|
181
|
|
(200)
|
(1,763)
|
|
|
|
(812)
|
231
|
(497)
|
|
209
|
(8,695)
|
|
customers & products
|
|
|
|
|
|
|
|
|
Gains
on sale of businesses and fixed assets(j)
|
|
62
|
(25)
|
2,310
|
|
(52)
|
2,320
|
|
Impairment
and losses on sale of businesses and fixed assets(c)
|
|
(961)
|
(58)
|
(313)
|
|
(1,097)
|
(1,136)
|
|
Environmental and other provisions
|
|
(102)
|
(1)
|
(33)
|
|
(111)
|
(33)
|
|
Restructuring,
integration and rationalization costs(d)
|
|
24
|
16
|
(522)
|
|
(11)
|
(633)
|
|
Fair
value accounting effects(f)
|
|
146
|
(30)
|
(284)
|
|
436
|
(149)
|
|
Other(k)
|
|
(206)
|
-
|
(39)
|
|
(209)
|
(39)
|
|
|
|
(1,037)
|
(98)
|
1,119
|
|
(1,044)
|
330
|
|
Rosneft
|
|
|
|
|
|
|
|
|
Other
|
|
(190)
|
(55)
|
(41)
|
|
(291)
|
(205)
|
|
|
|
(190)
|
(55)
|
(41)
|
|
(291)
|
(205)
|
|
other businesses & corporate
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
-
|
-
|
190
|
|
-
|
194
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(9)
|
1
|
(1)
|
|
(59)
|
(1)
|
|
Environmental and other provisions
|
|
(144)
|
(65)
|
(122)
|
|
(281)
|
(177)
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(2)
|
(12)
|
(57)
|
|
(113)
|
(258)
|
|
Gulf of Mexico oil spill
|
|
(24)
|
(17)
|
(140)
|
|
(70)
|
(255)
|
|
Fair
value accounting effects(f)
|
|
(212)
|
(263)
|
450
|
|
(849)
|
675
|
|
Other
|
|
2
|
(21)
|
77
|
|
(22)
|
125
|
|
|
|
(389)
|
(377)
|
397
|
|
(1,394)
|
303
|
|
Total before interest and taxation
|
|
(2,728)
|
(6,241)
|
186
|
|
(7,915)
|
(16,024)
|
|
Finance
costs(l)(m)
|
|
(257)
|
(175)
|
(191)
|
|
(782)
|
(625)
|
|
Total before taxation
|
|
(2,985)
|
(6,416)
|
(5)
|
|
(8,697)
|
(16,649)
|
|
Total
taxation(n)
|
|
888
|
160
|
715
|
|
621
|
4,235
|
|
Total after taxation for period
|
|
(2,097)
|
(6,256)
|
710
|
|
(8,076)
|
(12,414)
|
(a) Prior to 2021
adjusting items were reported under two different headings -
non-operating items and fair value accounting effects. Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 Basis of
preparation - Change in
segmentation.
(b)
Full year 2021 relates to a gain from the divestment of a 20% stake
in Oman Block 61.
(c)
See Note 3 for further information.
(d)
All periods in 2021 include charges and write-backs on provisions
for restructuring costs associated with the reinvent programme that
was formalized in 2020.
(e)
Under IFRS bp marks-to-market the derivative financial instruments
used to risk-manage LNG contracts, but does not mark-to-market the
physical LNG contracts themselves, resulting in a mismatch in
accounting treatment. The fair value accounting effect removes this
mismatch, and the underlying result reflects how bp risk-manages
its LNG contracts.
(f) For further information,
including the nature of fair value accounting effects reported in
each segment, see page 36.
(g)
Full year 2020 includes the exploration write-off of $673 million
in gas and low carbon energy relating to fair value ascribed to
certain licences as part of the accounting at the time of
acquisition of gas & low carbon assets in India and the
impairment of certain intangible assets in Mauritania and Senegal
and $1,301 million in oil production & operations relating to
fair value ascribed to certain licences as part of the accounting
at the time of acquisition of oil production & operations
assets in Brazil and the Gulf of Mexico.
Top
of page 30
(h)
Full year 2021 include adjustments relating to the change in
discount rate on retained decommissioning provisions and the
recognition of a decommissioning provision in relation to certain
assets previously sold to a third party where the decommissioning
obligation transferred may revert to bp due to the financial
condition of the current owner.
(i)
Full year 2021 includes a $415-million charge relating to a
remeasurement of deferred tax balances in our equity-accounted
entity in Argentina following income tax rate changes partially
offset by impairment reversals in equity-accounted
entities.
(j)
Fourth quarter and full year 2020 include a gain of $2.3 billion on
the sale of our petrochemicals business.
(k)
Fourth quarter and full year 2021 include amounts arising in
relation to the amendment of the timing of recognition of certain
customer incentives in our customers business.
(l)
All periods presented include the unwinding of discounting effects
relating to Gulf of Mexico oil spill payables and the income
statement impact associated with the buyback of finance debt. See
Note 9 for further information.
(m)
From first quarter 2021 bp is presenting temporary valuation
differences associated with the group's interest rate and foreign
currency exchange risk management of finance debt as an adjusting
item within finance costs. In 2020 these amounts were presented
within production and manufacturing expenses and as an 'other'
adjusting item in the other business & corporate segment.
Relevant amounts in the comparative periods presented were not
material.
(n)
Includes certain foreign exchange effects on tax as adjusting
items. These amounts represent the impact of: (i) foreign exchange
on deferred tax balances arising from the conversion of local
currency tax base amounts into functional currency, and (ii)
taxable gains and losses from the retranslation of US
dollar-denominated intra-group loans to local
currency.
Net debt including leases
|
Net debt including leases*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Net debt
|
|
30,613
|
31,971
|
38,941
|
|
30,613
|
38,941
|
|
Lease liabilities
|
|
8,611
|
8,628
|
9,262
|
|
8,611
|
9,262
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
187
|
111
|
(7)
|
|
187
|
(7)
|
|
Net debt including leases
|
|
39,411
|
40,710
|
48,196
|
|
39,411
|
48,196
|
|
Total
equity
|
|
90,439
|
89,266
|
85,568
|
|
90,439
|
85,568
|
|
Gearing including leases*
|
|
30.4%
|
31.3%
|
36.0%
|
|
30.4%
|
36.0%
|
Gulf of Mexico oil spill
|
|
|
31 December
|
31 December
|
|
$ million
|
|
2021
|
2020
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(10,433)
|
(11,436)
|
|
Of
which - current
|
|
(1,279)
|
(1,444)
|
|
|
|
|
|
|
Deferred tax asset
|
|
3,959
|
5,471
|
During the second quarter pre-tax payments of $1,199 million were
made relating to the 2016 consent decree and settlement agreement
with the United States and the five Gulf coast states. Payables and
provisions presented in the table above reflect the latest estimate
for the remaining costs associated with the Gulf of Mexico oil
spill. Where amounts have been provided on an estimated basis, the
amounts ultimately payable may differ from the amounts provided and
the timing of payments is uncertain. Further information relating
to the Gulf of Mexico oil spill, including information on the
nature and expected timing of payments relating to provisions and
other payables, is provided in BP Annual Report and Form 20-F
2020 - Financial
statements - Notes 7, 9, 20, 22, 23, 29, and
33.
Top of page 31
Working capital* reconciliation(a)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Movements in
inventories and other current and non-current assets and
liabilities as per condensed group cash flow statement(b)
|
|
(1,709)
|
3,850
|
(715)
|
|
(626)
|
(85)
|
|
Adjusted
for inventory holding gains (losses)* (Note 4 excluding
Rosneft)
|
|
404
|
465
|
670
|
|
3,396
|
(2,779)
|
|
Adjusted for fair value accounting effects
|
|
(856)
|
(6,101)
|
(511)
|
|
(8,075)
|
(212)
|
|
Working capital release (build) after adjusting for net inventory
gains (losses) and fair value accounting effects
|
|
(2,161)
|
(1,786)
|
(556)
|
|
(5,305)
|
(3,076)
|
|
|
|
|
|
|
|
|
|
|
After adjusting for Gulf of Mexico oil spill
outflows
|
|
|
|
|
|
(3,923)
|
(1,496)
|
(a)Commencing
with second quarter 2021 results fair value accounting effects have
been included in the working capital reconciliation. For further
information see Glossary page 40.
(b)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis of $7 million and
$1,382 million in the fourth quarter and full year of 2021
respectively. For the same periods in 2020 the amount was an
outflow of $41 million and $1,580 million respectively. Net cash
outflows relating to the Gulf of Mexico oil spill in 2021 and 2020
include payments made under the 2016 consent decree and settlement
agreement with the United States and the five Gulf coast
states.
Surplus cash flow* reconciliation
|
|
|
Fourth
|
|
|
|
|
quarter
|
Year
|
|
$ million
|
|
2021
|
2021
|
|
Sources:
|
|
|
|
|
Net cash provided by operating activities
|
|
6,116
|
23,612
|
|
Cash provided from investing activities
|
|
2,301
|
7,154
|
|
Receipts relating to transactions involving non-controlling
interests
|
|
12
|
683
|
|
Cash inflow
|
|
8,429
|
31,449
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
Lease liability payments
|
|
(502)
|
(2,082)
|
|
Payments on perpetual hybrid bonds
|
|
(100)
|
(538)
|
|
Dividends paid - BP shareholders
|
|
(1,077)
|
(4,304)
|
|
-
non-controlling interests
|
|
(66)
|
(311)
|
|
Total capital expenditure*
|
|
(3,633)
|
(12,848)
|
|
Net repurchase of shares relating to employee share
schemes
|
|
-
|
(500)
|
|
Payments relating to transactions involving non-controlling
interests
|
|
-
|
(560)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(58)
|
(269)
|
|
Cash outflow
|
|
(5,436)
|
(21,412)
|
|
|
|
|
|
|
Cash used to meet net debt target
|
|
-
|
(3,729)
|
|
|
|
|
|
|
Surplus cash flow
|
|
2,993
|
6,308
|
Top of page 32
Adjusted EBIDA*
|
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
18,082
|
(21,740)
|
|
Inventory holding (gains) losses*, before tax
|
|
(3,655)
|
2,868
|
|
RC profit before interest and tax
|
|
14,427
|
(18,872)
|
|
Net (favourable) adverse impact of adjusting items*, before
interest and tax
|
|
7,915
|
16,024
|
|
Underlying RC profit before interest and tax
|
|
22,342
|
(2,848)
|
|
Taxation on an underlying RC basis
|
|
(6,532)
|
(743)
|
|
|
|
15,810
|
(3,591)
|
|
Add back:
|
|
|
|
|
Depreciation, depletion and amortization
|
|
14,805
|
14,889
|
|
Exploration
expenditure written off, net of adjusting items(a)
|
|
168
|
7,946
|
|
Adjusted EBIDA
|
|
30,783
|
19,244
|
(a)
There are no adjusting items in 2021. For 2020, exploration
expenditure written off was $9,920 million, of which adjusting
items were $1,974 million.
Return on average capital employed (ROACE)*
|
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2020
|
|
Profit (loss) for the year attributable to bp
shareholders
|
|
7,565
|
(20,305)
|
|
Inventory holding (gains) losses*, net of tax
|
|
(2,826)
|
2,201
|
|
Adjusting items*, after taxation
|
|
8,076
|
12,414
|
|
Underlying replacement cost (RC) profit*
|
|
12,815
|
(5,690)
|
|
Interest
expense, net of tax(a)
|
|
1,127
|
1,402
|
|
Non-controlling interests
|
|
922
|
(424)
|
|
Adjusted underlying RC profit
|
|
14,864
|
(4,712)
|
|
Total equity
|
|
90,439
|
85,568
|
|
Finance debt
|
|
61,176
|
72,664
|
|
Capital employed (2021 averaged $154,924 million, 2020 average
$163,332 million)
|
|
151,615
|
158,232
|
|
Less: Goodwill
|
|
12,373
|
12,480
|
|
Cash
and cash equivalents
|
|
30,681
|
31,111
|
|
|
|
108,561
|
114,641
|
|
Average capital employed (excluding goodwill and cash and cash
equivalents)
|
|
111,601
|
124,367
|
|
ROACE
|
|
13.3%
|
(3.8)%
|
(a)
Finance costs, as reported in the Group income statement, were
$2,857 million (2020 $3,115 million). Interest expense which
totals $1,322 million (2020 $1,808 million) on a pre-tax basis is
finance costs excluding lease interest of $306 million (2020 $350
million), unwinding of discount on provisions and other payables of
$890 million (2020 $957 million) and for 2021 other adjusting items
related to finance costs of $339 million. Interest expense included
above is calculated on a post-tax basis.
Top of page 33
Reconciliation of customers & products RC profit before
interest and tax* to underlying RC profit before interest and tax
to adjusted EBITDA* by business
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
RC profit before interest and tax for customers &
products
|
|
(426)
|
1,060
|
1,245
|
|
2,208
|
3,418
|
|
Less: Adjusting items gains (charges)
|
|
(1,037)
|
(98)
|
1,119
|
|
(1,044)
|
330
|
|
Underlying RC profit before interest and tax for customers
& products
|
|
611
|
1,158
|
126
|
|
3,252
|
3,088
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
637
|
806
|
682
|
|
3,052
|
2,883
|
|
Castrol - included in customers
|
|
207
|
231
|
262
|
|
1,037
|
818
|
|
products
- refining & trading
|
|
(26)
|
352
|
(589)
|
|
200
|
(28)
|
|
petrochemicals
|
|
-
|
-
|
33
|
|
-
|
233
|
|
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and amortization
|
|
754
|
747
|
748
|
|
3,000
|
2,990
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
329
|
324
|
324
|
|
1,306
|
1,200
|
|
Castrol - included in customers
|
|
36
|
36
|
42
|
|
150
|
161
|
|
products
- refining & trading
|
|
425
|
423
|
422
|
|
1,694
|
1,686
|
|
petrochemicals
|
|
-
|
-
|
2
|
|
-
|
104
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers & products
|
|
1,365
|
1,905
|
874
|
|
6,252
|
6,078
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
966
|
1,130
|
1,006
|
|
4,358
|
4,083
|
|
Castrol - included in customers
|
|
243
|
267
|
304
|
|
1,187
|
979
|
|
products
- refining & trading
|
|
399
|
775
|
(167)
|
|
1,894
|
1,658
|
|
petrochemicals
|
|
-
|
-
|
35
|
|
-
|
337
|
Top of page 34
Realizations* and marker prices
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Average realizations(a)
|
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
|
US
|
|
65.25
|
59.87
|
32.40
|
|
56.15
|
33.06
|
|
Europe
|
|
80.49
|
74.02
|
43.39
|
|
70.82
|
41.79
|
|
Rest of World
|
|
74.19
|
68.67
|
41.60
|
|
66.23
|
37.42
|
|
BP Average
|
|
71.12
|
65.63
|
38.42
|
|
62.69
|
36.16
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
|
US
|
|
4.59
|
3.51
|
1.76
|
|
3.68
|
1.30
|
|
Europe
|
|
32.45
|
17.07
|
5.37
|
|
17.06
|
3.13
|
|
Rest of World
|
|
6.94
|
5.26
|
3.37
|
|
5.11
|
3.25
|
|
BP Average
|
|
7.51
|
5.35
|
3.10
|
|
5.30
|
2.75
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
|
US
|
|
51.09
|
45.39
|
24.20
|
|
43.88
|
23.25
|
|
Europe
|
|
118.97
|
81.99
|
39.39
|
|
79.78
|
35.52
|
|
Rest of World
|
|
52.93
|
45.13
|
29.28
|
|
43.72
|
26.91
|
|
BP Average
|
|
56.46
|
47.57
|
28.48
|
|
46.08
|
26.31
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
|
Brent
|
|
79.76
|
73.51
|
44.16
|
|
70.91
|
41.84
|
|
West Texas Intermediate
|
|
77.32
|
70.54
|
42.63
|
|
68.10
|
39.25
|
|
Western Canadian Select
|
|
59.71
|
56.95
|
31.57
|
|
53.90
|
28.53
|
|
Alaska North Slope
|
|
79.74
|
72.66
|
44.82
|
|
70.56
|
42.20
|
|
Mars
|
|
75.21
|
69.09
|
43.26
|
|
67.28
|
40.20
|
|
Urals (NWE - cif)
|
|
77.66
|
70.63
|
44.29
|
|
68.65
|
41.71
|
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
|
Henry
Hub gas price(b) ($/mmBtu)
|
|
5.84
|
4.02
|
2.67
|
|
3.85
|
2.08
|
|
UK Gas - National Balancing Point (p/therm)
|
|
226.24
|
118.81
|
40.46
|
|
115.78
|
24.93
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
$/£ average rate for the period
|
|
1.35
|
1.38
|
1.32
|
|
1.38
|
1.28
|
|
$/£ period-end rate
|
|
1.35
|
1.34
|
1.36
|
|
1.35
|
1.36
|
|
|
|
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.14
|
1.18
|
1.19
|
|
1.18
|
1.14
|
|
$/€ period-end rate
|
|
1.13
|
1.16
|
1.23
|
|
1.13
|
1.23
|
|
|
|
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.73
|
0.73
|
0.73
|
|
0.75
|
0.69
|
|
$/AUD period-end rate
|
|
0.73
|
0.72
|
0.77
|
|
0.73
|
0.77
|
|
|
|
|
|
|
|
|
|
|
Rouble/$ average rate for the period
|
|
72.72
|
73.52
|
76.16
|
|
73.71
|
72.32
|
|
Rouble/$ period-end rate
|
|
74.66
|
72.78
|
74.44
|
|
74.66
|
74.44
|
Top of page 35
Legal proceedings
For a full discussion of the group's material legal proceedings,
see pages 226-227 of bp Annual Report and Form 20-F
2020.
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.
New metrics have been introduced in 2021 to provide transparency
against key strategic value drivers.
Adjusted EBIDA is a
non-GAAP measure and is defined as profit or loss before finance
costs and net finance expense relating to pensions and other
post-retirement benefits and taxation, adjusting for inventory
holding gains or losses before tax, adjusting items* before
interest and tax, taxation on an underlying RC basis, and adding
back depreciation, depletion and amortization (pre-tax) and
exploration expenditure written-off (net of adjusting items,
pre-tax). bp believes that adjusted EBIDA 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. The nearest equivalent measure on an IFRS
basis is profit or loss for the period. A reconciliation of profit
or loss for the period to adjusted EBIDA is provided on page
32.
Adjusted EBITDA is a
non-GAAP measure presented for bp's operating segments and is
defined as replacement cost (RC) profit before interest and tax,
excluding net adjusting items*, adding back depreciation, depletion
and amortization and exploration write-offs (net of adjusting
items). Adjusted EBITDA by business is a further analysis of
adjusted EBITDA for the customers & products businesses. bp
believes it is helpful to disclose adjusted EBITDA by operating
segment and by business because it reflects how the segments
measure underlying business delivery. The nearest equivalent
measure on an IFRS basis for the segment is RC profit or loss
before interest and tax, which is bp's measure of profit or loss
that is required to be disclosed for each operating segment under
IFRS.
Adjusting items are items
that bp discloses separately because it considers such disclosures
to be meaningful and relevant to investors. They are items that
management considers to be important to period-on-period analysis
of the group's results and are disclosed in order to enable
investors to better understand and evaluate the group's reported
financial performance. Adjusting items include gains and losses on
the sale of businesses and fixed assets, impairments, environmental
and other provisions, restructuring, integration and
rationalization costs, fair value accounting effects, costs
relating to the Gulf of Mexico oil spill and other items. Adjusting
items within equity-accounted earnings are reported net of
incremental income tax reported by the equity-accounted entity.
Adjusting items are used as a reconciling adjustment to derive
underlying RC profit or loss and related underlying measures which
are non-GAAP measures. An analysis of adjusting items by segment
and type is shown on page 29. Prior to 2021 adjusting items were
reported under two different headings - non-operating items and
fair value accounting effects.
Capital expenditure is
total cash capital expenditure as stated in the condensed group
cash flow statement. Capital expenditure for the operating segments
and customers & products businesses is presented on the same
basis.
Cash balance point is
defined as the implied Brent oil price for the quarter that would
cause the sum of operating cash flow excluding Gulf of Mexico oil
spill payments (assuming actual refining marker margins and Henry
Hub gas prices for the quarter) and proceeds from loan repayments
to equate to the sum of total cash capital expenditure, lease
liability payments, dividend paid, and payments on perpetual hybrid
bonds.
Consolidation adjustment - UPII is unrealized profit in inventory arising on
inter-segment transactions.
Convenience gross margin is a non-GAAP measure. Convenience gross
margin is calculated as RC profit before interest and tax for the
customers & products segment, excluding RC profit before
interest and tax for the refining & trading and petrochemicals
businesses, and adjusting items* (as defined above) for the
convenience & mobility business to derive underlying RC profit
before interest and tax for the convenience & mobility
business; subtracting underlying RC profit before interest and tax
for the Castrol business; adding back depreciation, depletion and
amortization, production and manufacturing, distribution and
administration expenses for convenience & mobility (excluding
Castrol); subtracting earnings from equity-accounted entities in
the convenience & mobility business (excluding Castrol) and
gross margin for the retail fuels, next-gen, aviation, B2B and
midstream businesses.
Convenience gross margin growth at constant foreign exchange is a non-GAAP
measure. This metric requires a calculation of the comparative
convenience gross margin ($ million) at current period foreign
exchange rates (constant foreign exchange) and compares the current
period value with the restated comparative period value, which
results in the growth % at constant foreign exchange rates. bp
believes the convenience gross margin and growth at constant
foreign exchange are useful measures because these measures may
help investors to understand and evaluate, in the same way as
management, our progress against our strategic objectives of
redefining convenience. The nearest GAAP measure to convenience
gross margin is RC profit before interest and tax for the customer
& products segment.
Developed renewables to final investment decision
(FID) - Total generating
capacity for assets developed to FID by all entities where bp has
an equity share (proportionate to equity share). If asset is
subsequently sold bp will continue to record capacity as developed
to FID. If bp equity share increases developed capacity to FID will
increase proportionately to share increase for any assets where bp
held equity at the point of FID.
Top of page 36
Glossary (continued)
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. Taxation on
a RC basis for the group is calculated as taxation as stated on the
group income statement adjusted for taxation on inventory holding
gains and losses. Information on RC profit or loss is provided
below. bp believes it is helpful to disclose the ETR on RC profit
or loss because this measure excludes the impact of price changes
on the replacement of inventories and allows for more meaningful
comparisons between reporting periods. Taxation on a RC basis and
ETR on RC profit or loss are non-GAAP measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss
for the period.
Electric vehicle charge points / EV charge
points are defined as
charge points operated by either bp or a bp joint
venture.
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.
Fair value accounting effects are included within adjusting items.
They relate to certain of the group's commodity, interest rate and
currency risk exposures as detailed below. Other than as noted
below, the fair value accounting effects described are reported in
both the gas & low carbon energy and customer & products
segments.
bp uses derivative instruments to manage the economic exposure
relating to inventories above normal operating requirements of
crude oil, natural gas and petroleum products. Under IFRS, these
inventories are recorded at historical cost. The related derivative
instruments, however, are required to be recorded at fair value
with gains and losses recognized in the income statement. This is
because hedge accounting is either not permitted or not followed,
principally due to the impracticality of effectiveness-testing
requirements. Therefore, measurement differences in relation to
recognition of gains and losses occur. Gains and losses on these
inventories, other than net realizable value provisions, are not
recognized until the commodity is sold in a subsequent accounting
period. Gains and losses on the related derivative commodity
contracts are recognized in the income statement, from the time the
derivative commodity contract is entered into, on a fair value
basis using forward prices consistent with the contract
maturity.
bp enters into physical commodity contracts to meet certain
business requirements, such as the purchase of crude for a refinery
or the sale of bp's gas production. Under IFRS these physical
contracts are treated as derivatives and are required to be fair
valued when they are managed as part of a larger portfolio of
similar transactions. Gains and losses arising are recognized in
the income statement from the time the derivative commodity
contract is entered into.
IFRS require that inventory held for trading is recorded at its
fair value using period-end spot prices, whereas any related
derivative commodity instruments are required to be recorded at
values based on forward prices consistent with the contract
maturity. Depending on market conditions, these forward prices can
be either higher or lower than spot prices, resulting in
measurement differences.
bp enters into contracts for pipelines and other transportation,
storage capacity, oil and gas processing, liquefied natural gas
(LNG) and certain gas and power contracts that, under IFRS, are
recorded on an accruals basis. These
contracts are risk-managed using a variety of derivative
instruments that are fair valued under IFRS. This results in
measurement differences in relation to recognition of gains and
losses.
The way that bp manages the economic exposures described above, and
measures performance internally, differs from the way these
activities are measured under IFRS. bp calculates this difference
for consolidated entities by comparing the IFRS result with
management's internal measure of performance. 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, power 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.
Fair value accounting effects also include changes in the fair
value of the near-term portions of LNG contracts that fall within
bp's risk management framework. LNG contracts are not considered
derivatives, because there is insufficient market liquidity, and
they are therefore accrual accounted under IFRS. However, oil and
natural gas derivative financial instruments (used to risk manage
the near-term portions of the LNG contracts) are fair valued under
IFRS. The fair value accounting effect, which is reported in the
gas and low carbon energy segment, reduces the measurement
differences between that of the derivative financial instruments
used to risk manage the LNG contracts and the measurement of the
LNG contracts themselves, which therefore gives a better
representation of performance in each period.
In addition, from the second quarter 2020 fair value accounting
effects include changes in the fair value of derivatives entered
into by the group to manage currency exposure and interest rate
risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which were issued on 17 June 2020
are classified as equity instruments and were recorded in the
balance sheet at that date at their USD equivalent issued value.
Under IFRS these equity instruments are not remeasured from period
to period, and do not qualify for application of hedge accounting.
The derivative instruments relating to the hybrid bonds, however,
are required to be recorded at fair value with mark to market gains
and losses recognized in the income statement. Therefore,
measurement differences in relation to the recognition of gains and
losses occur. The fair value accounting effect, which is reported
in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial
instruments that are recognized in the income statement. We
believe that this gives a better representation of performance, by
more appropriately reflecting the economic effect of these risk
management activities, in each period.
Top of page 37
Glossary (continued)
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.
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement. Gearing is defined as
the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors.
Net debt enables investors to see the economic effect of finance
debt, related hedges and cash and cash equivalents in total.
Gearing enables investors to see how significant net debt is
relative to total equity. The derivatives are reported on the
balance sheet within the headings 'Derivative financial
instruments'. The nearest equivalent 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
27.
We are unable to present reconciliations of forward-looking
information for net debt or gearing to finance debt and total
equity, because without unreasonable efforts, we are unable to
forecast accurately certain adjusting items required to present a
meaningful comparable 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.
Gearing including leases and net debt including
leases are non-GAAP
measures. Net debt including leases is calculated as net debt plus
lease liabilities, less the net amount of partner receivables and
payables relating to leases entered into on behalf of joint
operations. Gearing including leases is defined as the ratio of net
debt including leases to the total of net debt including leases
plus total equity. bp believes these measures provide useful
information to investors as they enable investors to understand the
impact of the group's lease portfolio on net debt and gearing. The
nearest equivalent GAAP measures on an IFRS basis are finance debt
and finance debt ratio. A reconciliation of finance debt to net
debt including leases is provided on page 30.
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 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. The nearest equivalent measure on
an IFRS basis is capital expenditure on a cash basis. Further
information and a reconciliation to GAAP information is provided on
page 28.
Installed renewables capacity is bp's share of capacity for operating
assets owned by entities where bp has an equity
share.
Inventory holding gains and losses are non-GAAP adjustments to our IFRS profit
(loss) and represent:
a.
the difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
b.
an adjustment relating to certain trading inventories that are not
price risk managed which relate to a minimum inventory volume that
is required to be held to maintain underlying business activities.
This adjustment represents the movement in fair value of the
inventories due to prices, on a grade by grade basis, during the
period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not separately reflected in the financial
statements as a gain or loss. No adjustment is made in respect of
the cost of inventories held as part of a trading position and
certain other temporary inventory positions that are price
risk-managed. See Replacement cost (RC) profit or loss definition
below.
Liquids - Liquids for oil
production & operations, gas & low carbon energy and
Rosneft comprises crude oil, condensate and natural gas liquids.
For oil production & operations and gas & low carbon
energy, liquids also includes bitumen.
Major projects have a bp
net investment of at least $250 million, or are considered to be of
strategic importance to bp or of a high degree of
complexity.
Operating cash flow is
net cash provided by (used in) operating activities as stated in
the condensed group cash flow statement.
Organic capital expenditure is a non-GAAP measure. Organic capital
expenditure comprises capital expenditure on a cash basis less
inorganic capital expenditure. bp believes that this measure
provides useful information as it allows investors to understand
how bp's management invests funds in developing and maintaining the
group's assets. The nearest equivalent measure on an IFRS basis is
capital expenditure on a cash basis and a reconciliation to GAAP
information is provided on page 28.
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.
Top of page 38
Glossary (continued)
Production-sharing agreement/contract
(PSA/PSC) is an
arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return, if
exploration is successful, the oil company receives entitlement to
variable physical volumes of hydrocarbons, representing recovery of
the costs incurred and a stipulated share of the production
remaining after such cost recovery.
Realizations are the
result of dividing revenue generated from hydrocarbon sales,
excluding revenue generated from purchases made for resale and
royalty volumes, by revenue generating hydrocarbon production
volumes. Revenue generating hydrocarbon production reflects the bp
share of production as adjusted for any production which does not
generate revenue. Adjustments may include losses due to shrinkage,
amounts consumed during processing, and contractual or regulatory
host committed volumes such as royalties.
Refining availability represents
Solomon Associates' operational availability for bp-operated
refineries, which is defined as the percentage of the year that a
unit is available for processing after subtracting the annualized
time lost due to turnaround activity and all planned mechanical,
process and regulatory downtime.
The Refining marker margin
(RMM) is the average of
regional indicator margins weighted for bp's crude refining
capacity in each region. Each regional marker margin is based on
product yields and a marker crude oil deemed appropriate for the
region. The regional indicator margins may not be representative of
the margins achieved by bp in any period because of bp's particular
refinery configurations and crude and product
slate.
Renewables pipeline -
Renewable projects satisfying the following criteria until the
point they can be considered developed to final investment decision
(FID): Site based projects have obtained land exclusivity rights,
or for PPA based projects an offer has been made to the
counterparty, or for auction projects pre-qualification criteria
has been met, or for acquisition projects post a binding offer
being accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of inventories sold
in the period and is calculated as profit or loss attributable to
bp shareholders, adjusting for inventory holding gains and losses
(net of tax). RC profit or loss for the group is not a recognized
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 bp's measure of profit or loss
that is required to be disclosed for each operating segment under
IFRS.
Reported recordable injury frequency measures the number of reported work-related
employee and contractor incidents that result in a fatality or
injury per 200,000 hours worked. This represents reported incidents
occurring within bp's operational HSSE reporting boundary. That
boundary includes bp's own operated facilities and certain other
locations or situations. Reported incidents are investigated
throughout the year and as a result there may be changes in
previously reported incidents. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of
such investigations, rather than the previously reported
comparative period, as this this represents a more up to date
reflection of the safety environment.
Reserves replacement ratio - 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.
Retail sites include sites
operated by dealers, jobbers, franchisees or brand licensees or
joint venture (JV) partners, under the bp brand. These may move to
and from the bp brand as their fuel supply agreement or brand
licence agreement expires and are renegotiated in the normal course
of business. Retail sites are primarily
branded bp, ARCO, Amoco, Aral and Thorntons, and also includes sites in India through our
Jio-bp JV.
Retail sites in growth markets are retail sites that are either bp branded or
co-branded with our partners in China, Mexico and Indonesia and
also include sites in India through our Jio-bp
JV.
Return on average capital employed (ROACE) is
a non-GAAP measure. ROACE is defined as underlying replacement cost
profit, which is defined as profit or loss attributable to bp
shareholders adjusted for inventory holding gains and losses,
adjusting items and related taxation on inventory holding gains and
losses and total taxation on adjusting items, after adding back
non-controlling interest and interest expense net of tax, divided
by the average of the beginning and ending balances of total
equity plus finance debt, excluding cash and cash equivalents and
goodwill as presented on the group balance sheet over the periods
presented. Interest expense is finance costs as presented on the
group income statement, excluding lease interest and the unwinding
of the discount on provisions and other payables 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 total
equity respectively. The reconciliation of the numerator and
denominator is provided on page 32.
We are unable to present forward-looking information of the nearest
GAAP measures of the numerator and denominator for ROACE, because
without unreasonable efforts, we are unable to forecast accurately
certain adjusting items required to calculate a meaningful
comparable GAAP forward-looking financial measure. These items
include inventory holding gains or losses and interest net of tax,
that are difficult to predict in advance in order to include in a
GAAP estimate.
Solomon availability - See
Refining availability definition.
Top of page 39
Glossary (continued)
Strategic convenience sites are retail sites, within the bp portfolio,
which both sell bp branded fuel and carry one of the strategic
convenience brands (e.g. M&S, Rewe to Go). To be considered a
strategic convenience brand the convenience offer should be a
strategic differentiator in the market in which it operates.
Strategic convenience site count includes sites under a pilot
phase.
Surplus cash flow is a
non-GAAP measure and refers to the net surplus of sources of cash
over uses of cash, after reaching the $35 billion net debt target.
Sources of cash include net cash provided by operating activities,
cash provided from investing activities and cash receipts relating
to transactions involving non-controlling interests. Uses of cash
include lease liability payments, payments on perpetual hybrid
bond, dividends paid, cash capital expenditure, the cash cost of
share buybacks to offset the dilution from vesting of awards under
employee share schemes, cash payments relating to transactions
involving non-controlling interests and currency translation
differences relating to cash and cash equivalents as presented on
the condensed group cash flow statement. See page 31 for the components of our
sources of cash and uses of cash.
Technical service contract (TSC) - Technical service contract is an
arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return,
the oil and gas company receives entitlement to variable physical
volumes of hydrocarbons, representing recovery of the costs
incurred and a profit margin which reflects incremental production
added to the oilfield.
Tier 1 and tier 2 process safety events - Tier 1 events are losses of primary
containment from a process of greatest consequence - causing harm
to a member of the workforce, damage to equipment from a fire or
explosion, a community impact or exceeding defined quantities. Tier
2 events are those of lesser consequence. These represent reported
incidents occurring within bp's operational HSSE reporting
boundary. That boundary includes bp's own operated facilities and
certain other locations or situations. Reported process safety
events are investigated throughout the year and as a result there
may be changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this this represents a more up to
date reflection of the safety environment.
Underlying effective tax rate (ETR) is a non-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 for the group is calculated as taxation as
stated on the group income statement adjusted for taxation on
inventory holding gains and losses and total taxation on adjusting
items. Information on underlying RC profit or loss is provided
below. Taxation on an underlying RC basis presented for the
operating segments is calculated through an allocation of taxation
on an underlying RC basis to each segment. bp believes it is
helpful to disclose the underlying ETR because this measure may
help investors to understand and evaluate, in the same manner as
management, the underlying trends in bp's operational performance
on a comparable basis, period on period. Taxation on an underlying
RC basis and underlying ETR are non-GAAP measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss
for the period.
We are unable to present reconciliations of forward-looking
information for underlying ETR to ETR on profit or loss for the
period, because without unreasonable efforts, we are unable to
forecast accurately certain adjusting items required to present a
meaningful comparable GAAP forward-looking financial measure. These
items include the taxation on inventory holding gains and losses
and adjusting items, that are difficult to predict in advance in
order to include in a GAAP estimate.
Underlying production -
2021 underlying production, when compared with 2020, is production
after adjusting for acquisitions and divestments, curtailments, and
entitlement impacts in our production-sharing agreements/contracts
and technical service contract.
Underlying RC profit or loss / underlying RC profit or loss
attributable to bp shareholders is a non-GAAP measure and is RC profit or
loss* (as defined on page 38) after excluding net adjusting items
and related taxation. See page 29 for additional information on the
adjusting items that are used to arrive at underlying RC profit or
loss in order to enable a full understanding of the items and their
financial impact.
Underlying RC profit or loss before interest and
tax for the operating
segments or customers & products businesses is calculated as RC
profit or loss (as defined above) including profit or loss
attributable to non-controlling interests before interest and tax
for the operating segments and excluding net adjusting items for
the respective operating segment or business.
bp believes that underlying RC profit or loss is a useful measure
for investors because it is a measure closely tracked by management
to evaluate bp's operating performance and to make financial,
strategic and operating decisions and because it may help investors
to understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period, by adjusting for the effects of these
adjusting items. The nearest equivalent measure on an IFRS basis
for the group is profit or loss attributable to bp shareholders.
The nearest equivalent measure on an IFRS basis for segments and
businesses is RC profit or loss before interest and taxation. A
reconciliation to GAAP information is provided on page 1 for the
group and pages 6-14 for the segments.
Underlying RC profit or loss per share is a non-GAAP measure. Earnings per share is
defined in Note 7. Underlying RC profit or loss per ordinary share
is calculated using the same denominator as earnings per share as
defined in the consolidated financial statements. The numerator
used is underlying RC profit or loss attributable to bp
shareholders rather than profit or loss attributable to bp
shareholders. Underlying RC profit or loss
per ADS is calculated as
outlined above for underlying RC profit or loss per share except
the denominator is adjusted to reflect one ADS equivalent to six
ordinary shares. bp believes it is helpful to disclose the
underlying RC profit or loss per ordinary share and per ADS because
these measures may help investors to understand and evaluate, in
the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period.
The nearest equivalent measure on an IFRS basis is basic earnings
per share based on profit or loss for the period attributable to bp
shareholders.
Top of page 40
Glossary (continued)
upstream includes oil and
natural gas field development and production within the gas &
low carbon energy and oil production & operations segments.
References to upstream exclude Rosneft.
upstream/hydrocarbon plant reliability (bp-operated) is calculated taking 100% less the
ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and BPX Energy.
Unplanned plant deferrals are associated with the topside plant and
where applicable the subsea equipment (excluding wells and
reservoir). Unplanned plant deferrals include breakdowns, which
does not include Gulf of Mexico weather related
downtime.
upstream unit production cost is calculated as production cost divided by
units of production. Production cost does not include ad valorem
and severance taxes. Units of production are barrels for liquids
and thousands of cubic feet for gas. Amounts disclosed are for bp
subsidiaries only and do not include bp's share of equity-accounted
entities.
Working capital is
movements in inventories and other current and non-current assets
and liabilities as reported in the condensed group cash flow
statement.
Change in working capital adjusted for inventory holding
gains/losses and fair value accounting effects is a non-GAAP
measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period and from the second quarter
onwards, it is also adjusted for fair value accounting effects
reported within adjusting items for the period. This represents
what would have been reported as movements in inventories and other
current and non-current assets and liabilities, if the starting
point in determining net cash provided by operating activities had
been underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities. In the context of describing working capital after
adjusting for Gulf of Mexico oil spill outflows, 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.
bp utilizes various arrangements in order to manage its working
capital including discounting of receivables and, in the supply and
trading business, the active management of supplier payment terms,
inventory and collateral.
Trade marks
Trade marks of the bp group appear throughout this announcement.
They include:
bp, Amoco, Aral, Castrol
ON and Thorntons
Top of page 41
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 COVID-19
pandemic, including its risks, impacts, consequences, duration,
continued restrictions, challenges, bp's response, the impact on
bp's financial performance (including cash flows and net debt),
operations and credit losses, and the impact on the trading
environment, oil and gas prices, and global GDP; expectations
regarding the pace of transition to a lower-carbon economy; plans,
expectations and assumptions regarding oil and gas demand, supply
or prices, the timing of production of reserves, storage levels and
decision making by OPEC+; expectations and assumptions underlying
liquidity forecasts and reverse stress tests; expectations
regarding refining margins, refinery utilization rates and product
demand; expectations regarding bp's future financial performance
and cash flows; expectations regarding future hydrocarbon
production and project ramp-up; expectations regarding supply
shortages; expectations with respect to completion of transactions
and the timing and amount of proceeds of agreed disposals;
expectations with regards to bp's transformation to an IEC; plans
and expectations regarding bp's financial framework; expectations
regarding price assumptions used in accounting estimates; bp's
plans and expectations regarding the amount and timing of share
buybacks and quarterly dividends; expectations regarding the amount
of full-year dilution from the vesting of awards under employee
share schemes in 2022; expectations regarding bp's credit rating,
including in respect of maintaining a strong investment grade
credit rating; plans and expectations regarding the allocation of
surplus cash flow to share buybacks and strengthening the balance
sheet; plans and expectations with respect to the total
depreciation, depletion and amortization, expected tax rate and
business and corporate underlying annual charge for 2022; plans and
expectations regarding net debt, debt and bp's intentions to
strengthen the balance sheet; plans and expectations regarding the
divestment programme, including the amount and timing of proceeds,
and plans and expectations in respect of reaching $25 billion of
divestment and other proceeds by 2025, and expectations that
divestment and other proceeds for 2022 will be $2-3 billion; plans
and expectations regarding bp's renewable energy and alternative
energy businesses; expectations regarding reported and underlying
production and related major project ramp-up, capital investments,
divestment and maintenance activity; expectations regarding the
underlying effective tax rate for 2022; expectations regarding the
timing and amount of future payments relating to the Gulf of Mexico
oil spill; plans and expectations regarding capital expenditure,
including that capital expenditure, including inorganic capital
expenditure, will be within a range of $14-15 billion in 2022 and
within a range of $14-16 billion per annum through 2025;
expectations regarding Rosneft's operational and financial results,
and expectations with respect to Rosneft dividends; and plans and
expectations regarding new joint ventures and other agreements,
including partnerships and other collaborations with State Power
Investment Co. Ltd., Qianhai Foran Energy Co. Ltd, EnBW, Grabango,
Aberdeen City Council, and bp's Jio-bp and Yermak Neftegaz LLC JVs,
as well as plans and expectations regarding offtake terms for
offshore wind projects in New York, the HyGreen Teesside green
hydrogen production facility, the start-up of Mad Dog Phase 2 and
the Tangguh expansion project, the development of LSbp's pipeline
of projects, the completion of the acquisition of the oil and gas
business of Lundin Energy, the completion of bp's taking full
ownership of BP Midstream Partners LP, the development of EV charge
points, the plan to create an integrated energy hub at bp's
Castellón refinery in Spain and the completion of the
establishment of bp's Basra Energy Company joint venture with
PetroChina.
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
extent and duration of the impact of current market conditions
including the volatility of oil prices, the impact of COVID-19,
overall global economic and business conditions impacting our
business and demand for our products as well as the specific
factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and
societal expectations; the pace of development and adoption of
alternative energy solutions; developments in policy, law,
regulation, technology and markets, including societal and investor
sentiment related to the issue of climate change; the receipt of
relevant third party and/or regulatory approvals; the timing and
level of maintenance and/or turnaround activity; the timing and
volume of refinery additions and outages; the timing of bringing
new fields onstream; the timing, quantum and nature of certain
acquisitions and divestments; future levels of industry product
supply, demand and pricing, including supply growth in North
America and continued base oil and additive supply shortages; OPEC+
quota restrictions; PSA and TSC effects; operational and safety
problems; potential lapses in product quality; economic and
financial market conditions generally or in various countries and
regions; political stability and economic growth in relevant areas
of the world; changes in laws and governmental regulations;
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, as well those factors discussed
under "Risk factors" in bp's Annual Report and Form 20-F 2020 and
those factors discussed under "Principal risks and uncertainties"
in bp's Report on Form 6-K regarding results for the six-month
period ended 30 June 2021, as filed with the US Securities and
Exchange Commission.
Top of page 42
|
|
Contacts
|
|
London
|
Houston
|
|
|
|
|
|
Press Office
|
David Nicholas
|
Brett Clanton
|
|
|
+44 (0)20 7496 4708
|
+1 281 366 8346
|
|
|
|
|
|
Investor Relations
|
Craig Marshall
|
Geoff Carr
|
|
bp.com/investors
|
+44 (0)20 7496 4962
|
+1 281 892 3065
|
|
|
|
|
BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
|
BP
p.l.c.
|
|
|
(Registrant)
|
|
|
|
|
Dated: 08
February 2022
|
|
|
|
/s/ Ben
J. S. Mathews
|
|
|
------------------------
|
|
|
Ben J.
S. Mathews
|
|
|
Company
Secretary
|