Bp PLC 6-K, filed Aug 3, 2021
Bp PLC (BP)
6-K
2021-08-03
For: 2021-08-03
View Original
Added on
April 08, 2026
About this 6-K
Bp PLC filed this 6-K on August 3, 2021.
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 03 August, 2021
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|
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Top of page 1
"For a printer friendly version of this announcement please click
on the link below to open a PDF version of the
announcement"
http://www.rns-pdf.londonstockexchange.com/rns/3274H_1-2021-8-2.pdf
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Strong results, growing dividend, executing buybacks
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Financial summary
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Second
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First
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Second
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First
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First
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quarter
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quarter
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quarter
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half
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half
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$ million
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2021
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2021
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2020
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2021
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2020
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Profit (loss) for the period attributable to bp
shareholders
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3,116
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4,667
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(16,848)
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7,783
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(21,213)
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Inventory holding (gains) losses*, net of tax
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(736)
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(1,342)
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(809)
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(2,078)
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2,928
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Replacement cost (RC) profit (loss)*
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2,380
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3,325
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(17,657)
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5,705
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(18,285)
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Net
(favourable) adverse impact of adjusting items*(b), net of
tax
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418
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(695)
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10,975
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(277)
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12,394
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Underlying RC profit (loss)*
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2,798
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2,630
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(6,682)
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5,428
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(5,891)
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Operating cash flow*
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5,411
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6,109
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3,737
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11,520
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4,689
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Capital expenditure*
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(2,514)
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(3,798)
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(3,067)
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(6,312)
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(6,928)
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Divestment
and other proceeds(c)
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215
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4,839
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1,135
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5,054
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1,816
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Net issue (repurchase) of shares
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(500)
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-
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-
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(500)
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(776)
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Net
debt*(d)
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32,706
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33,313
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40,920
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32,706
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40,920
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Announced dividend per ordinary share (cents per
share)
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5.46
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5.25
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5.25
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10.71
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15.75
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Underlying RC profit (loss) per ordinary share*
(cents)
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13.80
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12.95
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(33.05)
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26.75
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(29.17)
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Underlying RC profit (loss) per ADS* (dollars)
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0.83
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0.78
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(1.98)
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1.61
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(1.75)
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●
Strong results and continued net debt reduction in an improving
environment
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●
Growth of resilient dividend within disciplined financial
frame
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●
Executing $1.4 billion buybacks from first half 2021 surplus cash
flow
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●
Further strategic progress with 4 major project start-ups, growth
in solar and convenience
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We are a year into executing bp's strategy to become an integrated
energy company and are making good progress - delivering another
quarter of strong performance while investing for the future in a
disciplined way. Based on the underlying performance of our
business, an improving outlook for the environment and confidence
in our balance sheet, we are increasing our resilient dividend by
4% per ordinary share and in addition, we are commencing a buyback
of $1.4 billion from first half surplus cash flow. On average at
around $60 per barrel, we expect to be able to deliver buybacks of
around $1.0 billion per quarter and to have capacity for an annual
increase in the dividend per ordinary share of around 4%, through
2025. This shows we continue to perform while transforming bp -
generating value for our shareholders today while we transition the
company for the future.
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Bernard Looney
Chief executive officer
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(a) This
results announcement also represents bp's half-yearly financial
report (see page 16).
(b) Prior
to 2021 adjusting items were reported under two different headings
- non-operating items and fair value accounting effects*. See page
32 for more information.
(c)
Divestment proceeds are disposal
proceeds as per the condensed group cash flow statement. Other
proceeds were $675 million from the sale of a 49% interest in a
controlled affiliate holding certain refined product and crude
logistics assets onshore US in the first quarter and first half
2021 and $455 million in relation to TANAP pipeline refinancing in
the second quarter and first half 2020. There are no other proceeds
in the second quarter 2021.
(d) See
Note 9 for more information.
RC profit (loss), underlying RC profit (loss) and net debt 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
38.
Top of page 2
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Highlights
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Strong results and continued net debt reduction in an improving
environment
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●
Operating performance was resilient in the second quarter with four
major project* start-ups, strong momentum in the customers
business, including material growth in convenience gross margin*,
and delivery of $2.5 billion of cash costs* savings on a run-rate
basis relative to 2019, around six months earlier than
targeted.
● Reported
profit for the quarter was $3.1 billion, compared with $4.7 billion
for the first quarter 2021.
● Underlying
replacement cost profit* was $2.8 billion, compared with $2.6
billion for the previous quarter. This result was driven by higher
oil prices and margins offset by a lower result in gas marketing
and trading.
● Operating
cash flow* of $5.4 billion includes $1.2 billion pre-tax of
Gulf of Mexico oil spill payments within a working capital* build
of $0.5 billion (after adjusting for inventory holding gains and
fair value accounting effects).
● Net
debt* fell to $32.7 billion at the end of the second
quarter.
● Following
the annual review of price assumptions used for investment
appraisal and value-in-use impairment testing, bp's Brent oil price
assumption to 2030 is increased to reflect expected supply
constraints, while longer-term assumptions are lowered as bp
expects an acceleration of the pace of transition to a low carbon
economy.
● As a
result of these changed assumptions, the reported result includes a
pre-tax net impairment reversal of $3.0 billion.
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Distribution growth within disciplined financial frame
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● A
resilient dividend is bp's first priority within its disciplined
financial frame.
● Reflecting
the underlying performance of the business, an improving outlook
for the environment, confidence in our balance sheet and
commencement of the share buyback programme, the board has
announced an increase in the second quarter dividend of 4% to 5.46
cents per ordinary share. This increase is accommodated within a
2021-5 average cash balance point* of around $40 per barrel Brent,
$11 per barrel RMM and $3 per mmBtu Henry Hub (all 2020
real).
● bp
generated surplus cash flow* of $0.7 billion in the second
quarter and $2.4 billion in the first half after having
reached its net debt target of $35 billion. Taking into account
surplus cash flow* generated in the first half of the year, bp
intends to execute a share buyback of $1.4 billion prior to
announcing its third quarter 2021 results. For 2021, and subject to
maintaining a strong investment grade credit rating, the board
remains committed to using 60% of surplus cash flow for share
buybacks and plans to allocate the remaining 40% to continue
strengthening 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 buybacks of around $1.0 billion per
quarter and have capacity for an annual increase in the dividend
per ordinary share of around 4%, through 2025. Other elements of
the financial frame are unchanged.
● 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.
● bp
expects to outline plans for the fourth-quarter share buyback at
the time of its third quarter results.
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Strong progress in our transformation to an integrated energy
company
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● Since
outlining its new strategy a year ago, bp has made strong progress
in its transformation to an IEC. It has delivered 8 major
projects*, built a 21GW renewable pipeline, grown convenience and
electrification, reorganized, reached over $10 billion of
divestment proceeds, strengthened the financial frame and begun
share buybacks.
● Four
major projects began production in the second quarter - in India,
Egypt, Angola and the Gulf of Mexico.
● bp has
continued to significantly expand its renewables pipeline, buying a
9GW solar development pipeline in the US. Lightsource bp also
continued to expand, growing in Portugal, Spain, Greece and
Australia. bp confirmed its intention to bid for offshore wind
leases in Scotland with EnBW and in Norway with Statkraft and
Aker.
● bp
opened the UK's first fleet-dedicated EV rapid charging hub in
London, the first of a series intended for cities across Europe. In
the US, bp agreed to take full ownership of the Thorntons business,
which is expected to complete in the third quarter of 2021,
positioning bp to be a leading convenience operator in the Midwest
US.
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We have delivered another strong set of results underpinned by an
improving environment and our disciplined financial frame. We
remain focused on: maintaining a resilient dividend within a cash
balance point of around $40 per barrel; strengthening our balance
sheet - with net debt reduced for the fifth consecutive quarter; a
disciplined approach to investment; and the execution of share
buybacks with upside to higher prices. Taken together, we are
building a track record of delivery, supporting our investor
proposition to grow long-term value.
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Murray Auchincloss
Chief financial officer
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The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
44.
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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:
- During the quarter, $500 million of share buybacks
were complete to offset the expected full-year dilution from the
vesting of awards under employee share schemes.
- Adjusting items* in the second quarter and half
year were a favourable pre-tax impact of $8 million and
$704 million respectively compared with an adverse impact of
$14,566 million and $15,930 million in the same periods
of 2020. The 2020 charges were driven by impairment charges of
$11,848 million in the second quarter. Pre-tax net impairment
reversals of $2,964 million were recorded in the second
quarter of 2021 following the annual review of price assumptions
used for investment appraisal and value-in-use impairment testing,
offset by fair value accounting effects* of $1,377 million,
increases in provisions of $856 million and a $415-million charge
relating to a remeasurement of deferred tax balances in our
equity-accounted entity in Argentina.
- Capital expenditure* in the second quarter and
half year was $2.5 billion and $6.3 billion respectively, compared
with $3.1 billion and $6.9 billion in the same periods of
2020.
- At the end of the second quarter, net debt* was
$32.7 billion, compared to $33.3 billion at the end of the
first quarter and $40.9 billion at the end of the second
quarter 2020.
- Operating cash flow* was $5.4 billion for the
second quarter, including $1.2 billion pre-tax Gulf of Mexico oil
spill payments and $0.2 billion of cash flow relating to severance
costs associated with the reinvent programme, and
$11.5 billion for the half year, compared with
$3.7 billion and $4.7 billion for the same periods of
2020.
- The effective tax rate (ETR) on RC profit* for the
second quarter and half year was 37% and 31% respectively, compared
with 19% and 15% for the same periods in 2020. Excluding adjusting
items*, the underlying ETR* for the second quarter and half year
was 27% and 29% respectively, compared with 9% and -3% for the same
periods a year ago. In 2020 the underlying ETRs were lower as they
reflected the exploration write-offs with a limited deferred tax
benefit and the reassessment of deferred tax asset recognition. The
underlying ETRs for 2021 include a benefit for the reassessment of
deferred tax asset recognition. ETR on RC profit or loss and
underlying ETR are non-GAAP measures.
- A dividend of 5.46 cents per ordinary share was
announced for the quarter.
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
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Second
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First
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Second
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First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
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$ million
|
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2021
|
2021
|
2020
|
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2021
|
2020
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RC profit (loss) before interest and tax
|
|
|
|
|
|
|
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gas
& low carbon energy
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927
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3,430
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(7,752)
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4,357
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(6,682)
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oil
production & operations
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3,118
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1,479
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(14,314)
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4,597
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(14,493)
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customers
& products
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640
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934
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594
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1,574
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1,258
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Rosneft
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643
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363
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(124)
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1,006
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(141)
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other
businesses & corporate
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(425)
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(678)
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(259)
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(1,103)
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(825)
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Consolidation
adjustment - UPII*
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(31)
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13
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(46)
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(18)
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132
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RC profit (loss) before interest and tax
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4,872
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5,541
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(21,901)
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10,413
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(20,751)
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Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
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(687)
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(729)
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(791)
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(1,416)
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(1,581)
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Taxation on a RC basis
|
|
(1,567)
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(1,254)
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4,361
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(2,821)
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3,353
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Non-controlling interests
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|
(238)
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(233)
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674
|
|
(471)
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694
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|
RC profit (loss) attributable to bp shareholders*
|
|
2,380
|
3,325
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(17,657)
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5,705
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(18,285)
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Inventory holding gains (losses)*
|
|
953
|
1,730
|
1,088
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|
2,683
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(3,796)
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Taxation (charge) credit on inventory holding gains and
losses
|
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(217)
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(388)
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(279)
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(605)
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868
|
|
Profit (loss) for the period attributable to bp
shareholders
|
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3,116
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4,667
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(16,848)
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7,783
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(21,213)
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Top of page 4
Analysis of underlying RC profit (loss) before interest and
tax
|
|
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Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
1,240
|
2,270
|
(814)
|
|
3,510
|
33
|
|
oil
production & operations
|
|
2,242
|
1,565
|
(7,713)
|
|
3,807
|
(6,818)
|
|
customers
& products
|
|
827
|
656
|
1,405
|
|
1,483
|
2,326
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Rosneft
|
|
689
|
363
|
(61)
|
|
1,052
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(78)
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other
businesses & corporate
|
|
(305)
|
(170)
|
(220)
|
|
(475)
|
(652)
|
|
Consolidation
adjustment - UPII
|
|
(31)
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13
|
(46)
|
|
(18)
|
132
|
|
Underlying RC profit (loss) before interest and tax
|
|
4,662
|
4,697
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(7,449)
|
|
9,359
|
(5,057)
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
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(485)
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(581)
|
(677)
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|
(1,066)
|
(1,345)
|
|
Taxation on an underlying RC basis
|
|
(1,141)
|
(1,253)
|
770
|
|
(2,394)
|
(183)
|
|
Non-controlling interests
|
|
(238)
|
(233)
|
674
|
|
(471)
|
694
|
|
Underlying RC profit (loss) attributable to bp
shareholders*
|
|
2,798
|
2,630
|
(6,682)
|
|
5,428
|
(5,891)
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Reconciliations of underlying RC profit attributable to bp
shareholders to the nearest equivalent IFRS measure are provided on
page 1 for the group and on pages 6-15 for the
segments.
Operating Metrics
|
Operating metrics
|
|
First half 2021
|
|
vs First half 2020
|
|
Tier 1 and tier 2 process safety events*
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|
30
|
|
-20
|
|
Reported recordable injury frequency*
|
|
0.168
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|
+32.5%
|
|
Group production (mboe/d)(a)
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|
3,242
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|
-11.3%
|
|
upstream* production (mboe/d) (excludes Rosneft
segment)
|
|
2,169
|
|
-15.0%
|
|
upstream unit production costs*(b) ($/boe)
|
|
7.33
|
|
+19.5%
|
|
bp-operated hydrocarbon plant reliability*
|
|
93.7%
|
|
-0.5
|
|
bp-operated refining availability*(a)
|
|
94.1%
|
|
-1.8
|
.
(a) See
Operational updates on pages 6, 9 and 11.
(b) Reflecting
lower volumes and higher costs due to phasing and seasonal
maintenance activities.
Top of page 5
Outlook & Guidance
Macro outlook
-
The oil market is expected to continue its rebalancing process.
Global stocks are expected to decline and reach historical levels
(in terms of days of forward cover) in the first half of
2022.
-
Oil demand is expected to recover in 2021 on the back of a bright
macroeconomic outlook, increasing vaccination roll-out and gradual
lifting of COVID-19 restrictions around the world. The expectation
is that demand reaches pre-Covid levels sometime in the second half
of 2022.
-
OPEC+ decision making on production levels is a key factor in oil
prices and market rebalancing.
-
Global gas demand is expected to recover to above 2019 levels by
end 2021, and LNG demand to increase as a result of higher Asian
imports.
-
Industry refining margins are expected to be broadly flat compared
to the second quarter, with recovery in demand offset by growth in
net refining capacity. In lubricants, industry base oil and
additive supply shortages are expected to continue in the second
half.
3Q21 guidance
-
Looking ahead, we expect third quarter reported upstream*
production to be higher than the second quarter reflecting the
completion of seasonal maintenance activity and the ramp-up of
major projects. Within this, we expect production from oil
production & operations to be higher.
-
If COVID restrictions continue to ease, we expect higher product
demand across our customer business in the third quarter. Realized
refining margins are expected to improve slightly supported by
stronger demand and wider North American heavy crude oil
differentials. In Castrol, industry base oil and additive supply
shortages are expected to continue.
2021 Guidance
In
addition to the guidance on page 2:
-
We continue to expect divestment and other proceeds for the year to
reach $5-6 billion during the latter stages of 2021. As a result of
the first half year divestments, 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 $14.9 billion with over $10 billion of proceeds
received.
-
bp continues to expect capital expenditure*, including inorganic
capital expenditure*, of around $13 billion in 2021.
-
Depreciation, depletion and amortization is expected to be at a
similar level to 2020 ($14.9 billion).
-
Gulf of Mexico oil spill payments for the year are expected to be
around $1.5 billion pre-tax.
-
The other businesses & corporate underlying annual charge is
expected to be in the range of $1.2-1.4 billion for 2021. The
quarterly charges may vary from quarter to quarter.
-
The underlying ETR* for 2021 is now 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.
-
For full year 2021 we expect reported upstream production to be
lower than 2020 due to the impact of the ongoing divestment
programme. However, underlying production* should be slightly
higher than 2020 with the ramp-up of major projects, primarily in
gas regions, partly offset by the impacts of reduced capital
investment and decline in lower-margin gas assets.
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
44.
|
Top of page 6
gas & low carbon energy
Financial results
●
The replacement cost profit before interest and tax for the second
quarter and half year was $927 million and $4,357 million
respectively, compared with a loss of $7,752 million and $6,682
million for the same periods in 2020. The second quarter and half
year included a net adjusting charge of $313 million and gain of
$847 million respectively, compared with a net adjusting charge of
$6,938 million and $6,715 million for the same periods in
2020.
●
After excluding adjusting items*, the underlying replacement cost
profit before interest and tax* for the second quarter and half
year was $1,240 million and $3,510 million respectively, compared
with a loss of $814 million and a profit of $33 million
for the same periods in 2020.
●
The underlying replacement cost profit for the second quarter,
compared with the same period in 2020, reflects significantly lower
exploration write-offs, higher realizations, and significantly
stronger gas marketing and trading performance, offset by a higher
depreciation, depletion and amortization charge as a result of
major project ramp-ups in Egypt and India. For the half year,
compared with the same period in 2020, the underlying replacement
cost profit mainly reflects the exceptionally strong gas marketing
and trading result in the first quarter, higher realizations, and
significantly lower exploration write-offs.
Operational update
●
Reported production for the quarter was 875mboe/d, slightly higher
compared to the same period in 2020 due to the partial divestment
in Oman offset by growth in underlying production. Underlying
production* was 3% higher, mainly due to major project ramp-ups,
partially offset by base decline.
● Reported
production for the half year was 892mboe/d, slightly higher
compared to the same period in 2020. Underlying production* was
flat, mainly due to major project ramp-ups, partially offset by
base decline.
● Renewables
pipeline* at the end of the quarter was 21GW (bp net). The
renewables pipeline grew by 7GW (bp net) in the quarter and 10GW
(bp net) in the half year, as a result of acquisition of a solar
pipeline in the US, Lightsource bp's (LSbp) net pipeline growth,
and our selection as preferred bidder for two major leases in the
UK Offshore Wind Round 4 with our partner EnBW in the first
quarter.
Strategic progress
gas
● On
6 July 2021 bp announced commencement of production from the East
South flank of Shah Deniz 2.
● On
11 June, bp agreed to establish a joint venture with the Beijing
Gas Group to supply downstream gas to northern China, expanding its
role in the Chinese gas market.
● On
9 June, bp signed a long-term LNG sale and purchase agreement with
Pavilion Energy Trading & Supply Pte. Ltd.for the supply of
approximately 0.8 million tonnes of LNG per year to Singapore for
10 years from 2024.
● These
events build on the progress announced in our first-quarter
results, which comprised the following: bp announced completion of
bp's sale of a 20% interest in Oman Block 61 (bp operator 40%, OQ
30%, PTTEP 20%, Petronas 10%); bp announced gas production from the
Raven field in Egypt (bp operator 82.75%); bp and Reliance
Industries Limited (RIL) announced the start of production from the
Satellites Cluster gas field in India (bp 33.33%, RIL operator
66.67%); India Gas Solutions, a 50:50 joint venture between bp and
RIL secured gas supply from block KG D6; bp received its first LNG
cargo to directly supply gas to customers in China.
low carbon energy
● Solar
- executing strategy and growing the pipeline
◦ On
1 June, bp reached an agreement to purchase 9GW of solar
development projects in the US and 1GW of safe harbour equipment
from independent US solar developer 7X Energy for $220 million. The
acquisition closed on 7 July.
◦ Lightsource
bp continued its expansion in Europe in the second quarter in
Portugal, where it entered a co-development partnership with local
company INSUN for five utility scale solar projects; entered the
Greek market through award of capacity in solar and wind auctions
alongside local developer KieferTEK; added to their Spanish
pipeline through an acquisition from Grupo Jorge's energy arm; and
began commercial operations at its five-project Vendimia cluster in
Zaragoza, Spain.
● Offshore
wind - progressing strategy
◦ On
19 July, bp and EnBW submitted a bid in the ScotWind leasing
round for offshore wind acreage in the UK North Sea that could
support projects with 2.9GW generating capacity (1.45GW bp
net).
◦ On
14 June, bp agreed to join Statkraft and Aker Offshore Wind in a
consortium bidding to develop offshore wind energy in
Norway. The partnership - in which bp, Statkraft and Aker Offshore
Wind will each hold a 33.3% share - will pursue a bid to
develop offshore wind power in the Sørlige Nordsjø II
(SN2) licence area.
Top of page 7
gas & low carbon energy (continued)
● These
events build on the progress announced in our first-quarter
results, which included the following: bp and Equinor completed the
formation of their strategic US offshore wind partnership to
initially develop four projects in two existing leases located
offshore New York and Massachusetts; bp and partner EnBW were
announced as the preferred bidder for two highly advantaged 60-year
leases in the UK's first offshore wind leasing round in a decade;
bp announced that it is developing plans for the UK's largest blue
hydrogen production facility, targeting 1GW of blue hydrogen
production by 2030; and LSbp acquired from Iberia Solar a 845MW
solar portfolio in Spain; LSbp acquired a 1.06GW portfolio from the
global photovoltaic (PV) project developer RIC Energy, together
they will develop 14 sites in Spain; on 9 March, LSbp announced it
has agreed to provide 88 bp service stations in New South Wales,
Australia with 100% solar power, starting in January
2023.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
931
|
3,452
|
(7,741)
|
|
4,383
|
(6,680)
|
|
Inventory holding (gains) losses*
|
|
(4)
|
(22)
|
(11)
|
|
(26)
|
(2)
|
|
RC profit (loss) before interest and tax
|
|
927
|
3,430
|
(7,752)
|
|
4,357
|
(6,682)
|
|
Net (favourable) adverse impact of adjusting items
|
|
313
|
(1,160)
|
6,938
|
|
(847)
|
6,715
|
|
Underlying RC profit (loss) before interest and tax
|
|
1,240
|
2,270
|
(814)
|
|
3,510
|
33
|
|
Taxation on an underlying RC basis
|
|
(244)
|
(535)
|
(111)
|
|
(779)
|
(372)
|
|
Underlying RC profit (loss) before interest
|
|
996
|
1,735
|
(925)
|
|
2,731
|
(339)
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,115
|
854
|
952
|
|
1,969
|
1,990
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration
write-offs(a)
|
|
21
|
6
|
1,631
|
|
27
|
1,634
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
2,376
|
3,130
|
1,101
|
|
5,506
|
2,989
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
gas
|
|
705
|
811
|
1,009
|
|
1,516
|
2,191
|
|
low
carbon energy(b)
|
|
42
|
1,074
|
10
|
|
1,116
|
12
|
|
Total capital expenditure
|
|
747
|
1,885
|
1,019
|
|
2,632
|
2,203
|
(a) Second
quarter and first half 2020 include a write-off of $668 million
which has been classified within the 'other' category of adjusting
items.
(b) First
quarter and first half 2021 include $712 million in respect of the
remaining payment to Equinor for our investment in our strategic US
offshore wind partnership and $326 million as a lease option fee
deposit paid to The Crown Estate in connection with our
participation in the UK Round 4 Offshore Wind Leasing together with
our partner EnBW.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Production (net of
royalties)(c)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
109
|
112
|
99
|
|
111
|
97
|
|
Natural gas (mmcf/d)
|
|
4,440
|
4,623
|
4,463
|
|
4,531
|
4,564
|
|
Total hydrocarbons* (mboe/d)
|
|
875
|
909
|
869
|
|
892
|
884
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(d)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
61.69
|
55.38
|
22.59
|
|
58.61
|
34.30
|
|
Natural gas ($/mcf)
|
|
4.14
|
3.94
|
3.12
|
|
4.04
|
3.32
|
|
Total hydrocarbons* ($/boe)
|
|
28.97
|
26.84
|
18.63
|
|
27.89
|
20.99
|
(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.
Top of page 8
gas & low carbon energy (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
low carbon energy
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
|
|
|
|
Installed renewables capacity*
|
|
1.6
|
1.6
|
1.1
|
|
1.6
|
1.1
|
|
|
|
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
3.7
|
3.3
|
2.8
|
|
3.7
|
2.8
|
|
Renewables pipeline
|
|
21.2
|
13.8
|
|
|
21.2
|
|
|
of which by geographical area:
|
|
|
|
|
|
|
|
|
Renewables
pipeline - Americas
|
|
15.3
|
7.3
|
|
|
15.3
|
|
|
Renewables
pipeline - Asia Pacific
|
|
0.8
|
1.4
|
|
|
0.8
|
|
|
Renewables
pipeline - Europe
|
|
5.1
|
5.1
|
|
|
5.1
|
|
|
Renewables
pipeline - Other
|
|
-
|
-
|
|
|
-
|
|
|
of which by technology:
|
|
|
|
|
|
|
|
|
Renewables
pipeline - offshore wind
|
|
3.7
|
3.7
|
|
|
3.7
|
|
|
Renewables
pipeline - solar
|
|
17.5
|
10.1
|
|
|
17.5
|
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
24.9
|
17.1
|
|
|
24.9
|
|
Top of page 9
oil production & operations
Financial results
●
The replacement cost profit before interest and tax for the second
quarter and half year was $3,118 million and $4,597 million
respectively, compared with a loss of $14,314 million and $14,493
million for the same periods in 2020. The second quarter and half
year included a net adjusting gain of $876 million and $790 million
respectively, compared with a net adjusting charge of $6,601
million and $7,675 million for the same periods in
2020.
●
After excluding adjusting items*, the underlying replacement cost
profit before interest and tax* for the second quarter and half
year was $2,242 million and $3,807 million respectively, compared
with a loss of $7,713 million and $6,818 million for the same
periods in 2020.
●
The underlying replacement cost profit for the second quarter and
half year, compared with the same periods in 2020 primarily
reflects significantly lower exploration write-offs and higher oil
and gas realizations.
Operational update
●
Reported production for the quarter was 1,245mboe/d, 24.8% lower
than the second quarter of 2020. This includes price impacts on
PSA* and TSC* entitlement volumes and the impact of divestments,
mainly in Alaska and BPX Energy. Underlying production* for the
quarter decreased by 9.0% mainly due to impacts from reduced
capital investment, seasonal maintenance activity and
decline.
●
Reported production for the half year was 1,277mboe/d, 23.4% 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 half year
decreased by 8.5% mainly due to impacts from reduced capital
investment and seasonal maintenance activity.
Strategic progress
● On 6
May, bp confirmed the start of production from the Zinia Phase 2
project in Block 17, Angola (Total 38% operator, Equinor 22.16%,
ExxonMobil 19%, bp 15.84%, Sonangol P&P 5%).
● On 19
May, bp and Eni announced that they have entered into a non-binding
memorandum of understanding to progress detailed discussions on
combining their upstream portfolios in Angola, including all their
oil, gas and LNG interests in the country.
● On 23
June, bp announced the start-up of the Manuel project at the Na
Kika platform in the deepwater Gulf of Mexico (bp 50% operator,
Shell 50%).
●
These events build on the progress announced in our first-quarter
results, which comprised the following: bp signed an agreement to
transfer its participating interests in six blocks located in Foz
do Amazonas basin off northern Brazil to Petróleo Brasileiro
S.A. (Petrobras). Subject to regulatory approval, the transaction
is expected to complete in 2021; bp announced the safe arrival in
Texas US of the Argos floating production platform, a major
milestone for the Mad Dog 2 project in the deepwater Gulf of Mexico
(bp operator 60.5%, BHP 23.9%, Union Oil Company of California
15.6%). While in Texas, Argos will undergo final preparatory
work and regulatory inspections before moving offshore; bp
announced an oil discovery in a high-quality Miocene reservoir at
the Puma West prospect in the US deepwater Gulf of Mexico (bp
operator 50%, Chevron U.S.A. Inc. 25%, Talos Energy 25%).
Evaluation is ongoing.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
3,112
|
1,494
|
(14,268)
|
|
4,606
|
(14,506)
|
|
Inventory holding (gains) losses*
|
|
6
|
(15)
|
(46)
|
|
(9)
|
13
|
|
RC profit (loss) before interest and tax
|
|
3,118
|
1,479
|
(14,314)
|
|
4,597
|
(14,493)
|
|
Net (favourable) adverse impact of adjusting items
|
|
(876)
|
86
|
6,601
|
|
(790)
|
7,675
|
|
Underlying RC profit (loss) before interest and tax
|
|
2,242
|
1,565
|
(7,713)
|
|
3,807
|
(6,818)
|
|
Taxation on an underlying RC basis
|
|
(939)
|
(729)
|
1,095
|
|
(1,668)
|
592
|
|
Underlying RC profit (loss) before interest
|
|
1,303
|
836
|
(6,618)
|
|
2,139
|
(6,226)
|
Top of page 10
oil production & operations (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,559
|
1,574
|
2,070
|
|
3,133
|
4,187
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration
write-offs(a)
|
|
8
|
56
|
7,987
|
|
64
|
8,082
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
3,809
|
3,195
|
1,043
|
|
7,004
|
4,150
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,148
|
1,319
|
1,619
|
|
2,467
|
3,579
|
(a) Second
quarter and first half 2020 includes a write-off of $1,301 million
which has been classified within the 'other' category of adjusting
items.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Production (net of
royalties)(b)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
938
|
997
|
1,266
|
|
967
|
1,238
|
|
Natural gas (mmcf/d)
|
|
1,786
|
1,810
|
2,262
|
|
1,798
|
2,492
|
|
Total hydrocarbons* (mboe/d)
|
|
1,245
|
1,309
|
1,656
|
|
1,277
|
1,668
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(c)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
60.55
|
52.92
|
22.76
|
|
56.69
|
34.40
|
|
Natural gas ($/mcf)
|
|
3.90
|
4.11
|
1.03
|
|
4.00
|
1.26
|
|
Total hydrocarbons* ($/boe)
|
|
52.47
|
46.81
|
19.32
|
|
49.61
|
28.01
|
(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 11
customers & products
Financial results
●
The replacement cost profit before interest and tax for the second
quarter and half year was $640 million and $1,574 million
respectively, compared with $594 million and $1,258 million for the
same periods in 2020. The second quarter and half year included a
net adjusting charge of $187 million and a net gain of $91 million
respectively, compared with a net charge of $811 million and $1,068
million for the same periods in 2020.
● After
excluding adjusting items*, the underlying replacement cost profit
before interest and tax* for the second quarter and half year was
$827 million and $1,483 million respectively, compared with $1,405
million and $2,326 million for the same periods in
2020.
● The
customers & products result for the second quarter and half
year reflects a stronger customers performance, more than offset by
a significantly weaker products result and absence of earnings from
our divested petrochemicals business, compared to the same periods
last year.
●
customers - convenience
and mobility results for the quarter and first half demonstrated
continued strong performance, with higher earnings than the same
periods last year. This result was supported by higher volumes in
both retail fuel and aviation, as well as a material growth in
convenience gross margin*.
Castrol
results for both the quarter and half year were materially higher
than last year. This was despite industry base oil and additive
shortages, and COVID impacts in key markets, such as India, in the
second quarter.
● products -
the products result was weaker for the quarter and the half year
due to a lower trading performance compared to an exceptionally
strong performance in the second quarter of 2020, and a higher
level of turnaround and maintenance activity in refining. Refining
margins in the quarter were materially higher compared to last
year, however the increasing cost of US renewable fuels credits and
relatively weaker distillate demand growth in comparison to
gasoline resulted in a smaller improvement in realized
margins.
Operational update
● bp-operated
refining availability* for the second quarter and half year was
93.5% and 94.1% respectively, lower compared with 95.6% and 95.9%
for the same periods last year, due to a higher level of planned
and unplanned maintenance. Utilization for the quarter was around 8
percentage points higher than the same period last year due to
lower COVID related demand impacts.
Strategic progress
● We
continued to progress our strategic agenda in redefining
convenience, adding further strategic convenience sites* to our
network. We also:
◦ announced
an agreement to take full ownership of the Thorntons business in
the US, positioning bp to be a leading convenience operator in the
Midwest US. Completion of the transaction is expected in the third
quarter, subject to regulatory approvals;
◦ expanded
our convenience partnership model with Marks & Spencer, a
leading UK retailer, piloting it in our UK franchise
network;
◦ extended
our partnership with PAYBACK, Europe's largest multi-partner
loyalty programme, which has over 30 million customers, to become
the first provider in Germany to exclusively offer PAYBACK loyalty
rewards to electric vehicle drivers.
● In
next-gen mobility:
◦ bp
pulse opened the UK's first fleet-dedicated rapid EV charging hub
in London;
◦ Air
bp expanded the rollout of sustainable aviation fuel (SAF), adding
the offer to Munich Airport. We now supply SAF at more than 20
airports worldwide.
● In
growth markets:
◦ Castrol
signed an exclusive three-year deal with Ki Mobility solutions in
India for supply of premium lubricants across their multi-brand
workshops and online service provider platform which has around
10,000 retailers and 20,000 garage owners as
customers.
● In
refining we continue to focus on creating a more resilient and
high-performing portfolio:
◦ bp's
Cherry Point refinery in Washington state was recognized as the
"Best site in the industry" for its project planning and execution,
for a record fifth time by research and benchmarking firm
Independent Project Analysis (IPA).
● These
events build on the progress announced in our first-quarter
results:
◦ bp
pulse announced the rollout of new EV-only ultra-fast charging hubs
across the UK;
◦ bp
agreed to take a stake alongside Daimler and BMW in Digital
Charging Solutions (DCS), a leading developer of digital charging
software. Completion of the transaction is subject to regulatory
approvals;
◦ Castrol
launched a range of advanced e-fluids, Castrol ON, designed for improved electric vehicle
performance, with more than half of the world's major vehicle
manufacturers(a) now
using them as part of their factory fill;
◦ we
ceased production at our Kwinana refinery in preparation to convert
it to an import terminal;
◦ we
received the final instalment of $1 billion for the sale of our
petrochemicals business to INEOS.
(a) Based
on LMCA data for top 20 selling OEMs (total new car sales) in
2019.
Top
of page 12
customers & products (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
1,527
|
2,539
|
1,572
|
|
4,066
|
(2,379)
|
|
Inventory holding (gains) losses*
|
|
(887)
|
(1,605)
|
(978)
|
|
(2,492)
|
3,637
|
|
RC profit before interest and tax
|
|
640
|
934
|
594
|
|
1,574
|
1,258
|
|
Net (favourable) adverse impact of adjusting items
|
|
187
|
(278)
|
811
|
|
(91)
|
1,068
|
|
Underlying RC profit before interest and tax
|
|
827
|
656
|
1,405
|
|
1,483
|
2,326
|
|
Of
which:(a)
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
951
|
658
|
432
|
|
1,609
|
1,120
|
|
Castrol - included in customers
|
|
265
|
334
|
63
|
|
599
|
230
|
|
products
- refining & trading
|
|
(124)
|
(2)
|
926
|
|
(126)
|
1,094
|
|
petrochemicals
|
|
-
|
-
|
47
|
|
-
|
112
|
|
Taxation on an underlying RC basis
|
|
(123)
|
(133)
|
(221)
|
|
(256)
|
(586)
|
|
Underlying RC profit before interest
|
|
704
|
523
|
1,184
|
|
1,227
|
1,740
|
(a) A
reconciliation to RC profit before interest and tax by business is
provided on page 35.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
1,280
|
982
|
715
|
|
2,262
|
1,690
|
|
Castrol - included in customers
|
|
304
|
373
|
106
|
|
677
|
311
|
|
products - refining & trading
|
|
301
|
419
|
1,345
|
|
720
|
1,923
|
|
petrochemicals
|
|
-
|
-
|
97
|
|
-
|
212
|
|
|
|
1,581
|
1,401
|
2,157
|
|
2,982
|
3,825
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
754
|
745
|
752
|
|
1,499
|
1,499
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
255
|
316
|
150
|
|
571
|
490
|
|
Castrol - included in customers
|
|
42
|
41
|
23
|
|
83
|
71
|
|
products - refining & trading
|
|
264
|
216
|
196
|
|
480
|
458
|
|
petrochemicals
|
|
-
|
-
|
23
|
|
-
|
78
|
|
Total capital expenditure
|
|
519
|
532
|
369
|
|
1,051
|
1,026
|
(b) A
reconciliation to RC profit before interest and tax by business is
provided on page 35.
|
Retail(c)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
bp retail sites* - total (#)
|
|
20,300
|
20,300
|
18,900
|
|
20,300
|
18,900
|
|
bp
retail sites in growth markets*
|
|
2,700
|
2,650
|
1,300
|
|
2,700
|
1,300
|
|
Strategic
convenience sites*
|
|
2,000
|
1,950
|
1,650
|
|
2,000
|
1,650
|
(c) Reported
to the nearest 50.
|
Marketing sales of refined products (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
US
|
|
1,131
|
1,016
|
872
|
|
1,074
|
955
|
|
Europe
|
|
838
|
706
|
685
|
|
772
|
820
|
|
Rest of World
|
|
469
|
440
|
364
|
|
455
|
441
|
|
|
|
2,438
|
2,162
|
1,921
|
|
2,301
|
2,216
|
|
Trading/supply
sales of refined products(d)
|
|
415
|
336
|
403
|
|
376
|
430
|
|
Total sales volume of refined products
|
|
2,853
|
2,498
|
2,324
|
|
2,677
|
2,646
|
(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. An amendment of
22mb/d has been made to amounts presented for the first quarter
2021.
Top of page 13
customers & products (continued)
|
Refining marker
margin*(a)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
bp average refining marker margin (RMM) ($/bbl)
|
|
13.7
|
8.7
|
5.9
|
|
11.2
|
7.4
|
|
|
|
|
|
|
|
|
|
(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 second quarter and half year 2020 RMM would be $6.1/bbl
and $7.5/bbl respectively.
|
Refinery throughputs - operated refineries (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
US
|
|
692
|
725
|
614
|
|
709
|
681
|
|
Europe
|
|
763
|
747
|
716
|
|
755
|
776
|
|
Rest of World
|
|
52
|
129
|
157
|
|
90
|
190
|
|
Total refinery throughputs
|
|
1,507
|
1,601
|
1,487
|
|
1,554
|
1,647
|
|
bp-operated refining availability* (%)
|
|
93.5
|
94.8
|
95.6
|
|
94.1
|
95.9
|
Top of page 14
Rosneft
Financial results
● The
replacement cost (RC) profit before interest and tax for the second
quarter and half year was $643 million and $1,006 million
respectively, compared with a loss of $124 million and $141 million
for the same periods in 2020. The second quarter and half year
included a net adjusting charge of $46 million, compared with $63
million for the same periods in 2020.
● After
excluding adjusting items, the underlying RC profit before interest
and tax* for the second quarter and half year was $689 million and
$1,052 million respectively, compared with a loss of $61 million
and $78 million for the same periods in 2020.
● Compared
with the same periods in 2020, the result for the second quarter
primarily reflects higher oil prices partially offset by adverse
foreign exchange effects whilst the result for the half year was
primarily affected by higher oil prices, favourable foreign
exchange and duty lag effects.
● bp's
two nominees, Bernard Looney and Bob Dudley, were re-elected to
Rosneft's board at Rosneft's annual general meeting (AGM) on 1 June
2021. At the AGM, shareholders also approved a resolution to pay
dividends of 6.94 roubles per ordinary share, which constitutes 50%
of the company's IFRS net profit for 2020. bp received a payment of
$176 million after a deduction of withholding tax on 14
July.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021(a)
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit
(loss) before interest and tax(b)(c)
|
|
711
|
451
|
(71)
|
|
1,162
|
(289)
|
|
Inventory holding (gains) losses*
|
|
(68)
|
(88)
|
(53)
|
|
(156)
|
148
|
|
RC profit (loss) before interest and tax
|
|
643
|
363
|
(124)
|
|
1,006
|
(141)
|
|
Net (favourable) adverse impact of adjusting items
|
|
46
|
-
|
63
|
|
46
|
63
|
|
Underlying RC profit (loss) before interest and tax
|
|
689
|
363
|
(61)
|
|
1,052
|
(78)
|
|
Taxation on an underlying RC basis
|
|
(68)
|
(35)
|
8
|
|
(103)
|
11
|
|
Underlying RC profit (loss) before interest
|
|
621
|
328
|
(53)
|
|
949
|
(67)
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021(a)
|
2021
|
2020
|
|
2021
|
2020
|
|
Production: Hydrocarbons (net of royalties, bp
share)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
858
|
827
|
856
|
|
842
|
886
|
|
Natural gas (mmcf/d)
|
|
1,374
|
1,294
|
1,248
|
|
1,335
|
1,261
|
|
Total hydrocarbons* (mboe/d)
|
|
1,095
|
1,050
|
1,071
|
|
1,073
|
1,103
|
(a) The
operational and financial information of the Rosneft segment for
the second quarter and half year is based on preliminary
operational and financial results of Rosneft for the three months
and six months ended 30 June 2021. Actual results may differ from
these amounts. Amounts reported for the second quarter are based on
bp's 22.03% average economic interest for the quarter (first
quarter 2021 22.03% and second quarter 2020
21.2%).
(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 15
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 second
quarter and half year was $425 million and $1,103 million
respectively, compared with $259 million and $825 million for the
same periods in 2020. The second quarter and half year included a
net adjusting charge of $120 million and $628 million respectively,
including $73 million of favourable and $374 million of adverse
fair value accounting effects* respectively, compared with a net
charge of $39 million and $173 million, including $41 million of
adverse fair value accounting effects, for the same periods in
2020.
●
After excluding adjusting items*, the underlying replacement cost
loss before interest and tax* for the second quarter and half year
was $305 million and $475 million respectively, compared with $220
million and $652 million for the same periods in 2020.
Strategic progress
● bp
and CEMEX signed a memorandum of understanding on 13 May to explore
solutions to help decarbonize the production and distribution of
CEMEX's products and develop lower carbon offers for CEMEX and bp
customers worldwide.
● bp
and the Mærsk Mc-Kinney Møller Center for Zero Carbon
Shipping signed a partnership agreement on 23 July committing to a
long-term collaboration on the development of new alternative fuels
and low carbon solutions for the shipping industry.
● On
25 May, bp ventures invested $7 million into electric vehicle (EV)
charging firm IoTecha, which uses Internet of Things technology to
connect EV charge points with the electricity grid, homes, and
buildings. bp plans to integrate IoTecha's products into its EV
ecosystem to help accelerate mainstream adoption of EVs and support
the transition to more sustainable mobility.
● bp
ventures portfolio company Lightning eMotors became a public listed
company on the New York Stock Exchange on 7 May. Lightning eMotors
designs and manufactures electric vehicles (EVs) for commercial
fleets, including school buses and ambulances, as well as offering
charging technologies for commercial and government vehicles. bp,
which has supported the company since 2014, owns approximately 30%
of the company. The listing is expected to provide Lightning
eMotors with growth capital to help accelerate its
business.
● Open
Energi became Launchpad's 6th portfolio company on 28 June. Open
Energi is an advanced software technology company that uses AI
algorithms to optimize distributed commercial and industrial power
assets at scale.
● These
events build on the progress announced in our first-quarter
results, which comprised the following: bp and Qantas signed a
memorandum of understanding on 15 January to collaborate on
opportunities to reduce carbon emissions in the aviation sector and
contribute to the development of a sustainable aviation fuel
industry in Australia; bp signed a memorandum of understanding with
the Ministry of Energy of the Republic of Azerbaijan to co-operate
in assessing the potential and conditions required for large-scale
decarbonized and integrated energy and mobility systems, including
renewable energy projects in the regions and cities of Azerbaijan;
bp and Infosys signed a memorandum of understanding to explore the
development of a digitally-enabled Energy as a Service offer at
Infosys campuses in India, which could be scaled to industrial
parks and cities in the future; bp divested its holding in Palantir
for $443 million.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Profit (loss) before interest and tax
|
|
(425)
|
(678)
|
(259)
|
|
(1,103)
|
(825)
|
|
Inventory holding (gains) losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
|
RC profit (loss) before interest and tax
|
|
(425)
|
(678)
|
(259)
|
|
(1,103)
|
(825)
|
|
Net (favourable) adverse impact of adjusting items
|
|
120
|
508
|
39
|
|
628
|
173
|
|
Underlying RC profit (loss) before interest and tax
|
|
(305)
|
(170)
|
(220)
|
|
(475)
|
(652)
|
|
Taxation on an underlying RC basis
|
|
101
|
54
|
(131)
|
|
155
|
(31)
|
|
Underlying RC profit (loss) before interest
|
|
(204)
|
(116)
|
(351)
|
|
(320)
|
(683)
|
Top of page 16
This results announcement also represents BP's half-yearly
financial report for the purposes of the Disclosure Guidance and
Transparency Rules made by the UK Financial Conduct Authority. In
this context: (i) the condensed set of financial statements can be
found on pages 18-30; (ii) pages 1-15, and 31-45 comprise the
interim management report; and (iii) the directors' responsibility
statement and auditors' independent review report can be found on
pages 16-17.
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, the
condensed set of financial statements on pages 18-30 has been
prepared in accordance with IAS 34 'Interim Financial Reporting',
and that the interim management report on pages 1-15, and 31-45
includes a fair review of the information required by the
Disclosure Guidance and Transparency Rules.
The directors of BP p.l.c. are listed on pages 74-77
of bp
Annual Report and Form 20-F 2020, with the following exceptions: Brendan Nelson
and Professor Dame
Ann Dowling retired on 12 May 2021.
By order of the board
|
Bernard Looney
|
Murray Auchincloss
|
|
Chief Executive Officer
|
Chief Financial Officer
|
|
2 August 2021
|
2 August 2021
|
Top of page 17
Independent review report to BP p.l.c.
We have been engaged by the company to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2021 which comprises the group income
statement, condensed group statement of comprehensive income,
condensed group statement of changes in equity, group balance
sheet, condensed group cash flow statement and related notes 1 to
11. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with United Kingdom adopted
International Financial Reporting Standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial
Reporting".
Our responsibility
Our responsibility is to express to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report based on our review.
Scope of review
We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2021
is not prepared, in all material respects, in accordance with
United Kingdom adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have
formed.
Deloitte LLP
Statutory Auditor
London
United Kingdom
2 August 2021
The maintenance and integrity of the BP p.l.c. website are the
responsibility of the directors; the review work carried out by the
statutory auditors does not involve consideration of these matters
and, accordingly, the statutory auditors accept no responsibility
for any changes that may have occurred to the financial information
since it was initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Top of page 18
Financial statements
Group income statement
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Sales
and other operating revenues (Note 5)(a)
|
|
36,467
|
34,544
|
21,262
|
|
71,011
|
52,235
|
|
Earnings from joint ventures - after interest and
tax
|
|
(57)
|
160
|
(567)
|
|
103
|
(589)
|
|
Earnings from associates - after interest and
tax
|
|
856
|
601
|
(100)
|
|
1,457
|
(344)
|
|
Interest and other income
|
|
82
|
82
|
107
|
|
164
|
247
|
|
Gains on sale of businesses and fixed assets
|
|
250
|
1,105
|
74
|
|
1,355
|
90
|
|
Total revenues and other income
|
|
37,598
|
36,492
|
20,776
|
|
74,090
|
51,639
|
|
Purchases(a)
|
|
21,241
|
15,656
|
8,364
|
|
36,897
|
28,565
|
|
Production and manufacturing expenses
|
|
6,562
|
6,858
|
5,211
|
|
13,420
|
11,310
|
|
Production and similar taxes
|
|
295
|
253
|
124
|
|
548
|
327
|
|
Depreciation, depletion and amortization (Note 6)
|
|
3,631
|
3,367
|
3,937
|
|
6,998
|
7,996
|
|
Impairment and losses on sale of businesses and fixed assets (Note
3)
|
|
(2,937)
|
373
|
11,770
|
|
(2,564)
|
12,919
|
|
Exploration expense
|
|
107
|
99
|
9,674
|
|
206
|
9,876
|
|
Distribution and administration expenses
|
|
2,874
|
2,615
|
2,509
|
|
5,489
|
5,193
|
|
Profit (loss) before interest and taxation
|
|
5,825
|
7,271
|
(20,813)
|
|
13,096
|
(24,547)
|
|
Finance costs
|
|
682
|
723
|
783
|
|
1,405
|
1,566
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
5
|
6
|
8
|
|
11
|
15
|
|
Profit (loss) before taxation
|
|
5,138
|
6,542
|
(21,604)
|
|
11,680
|
(26,128)
|
|
Taxation
|
|
1,784
|
1,642
|
(4,082)
|
|
3,426
|
(4,221)
|
|
Profit (loss) for the period
|
|
3,354
|
4,900
|
(17,522)
|
|
8,254
|
(21,907)
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
3,116
|
4,667
|
(16,848)
|
|
7,783
|
(21,213)
|
|
Non-controlling
interests
|
|
238
|
233
|
(674)
|
|
471
|
(694)
|
|
|
|
3,354
|
4,900
|
(17,522)
|
|
8,254
|
(21,907)
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to BP
shareholders
|
|
|
|
|
|
|
|
|
Per
ordinary share (cents)
|
|
|
|
|
|
|
|
|
Basic
|
|
15.37
|
22.99
|
(83.32)
|
|
38.36
|
(105.02)
|
|
Diluted
|
|
15.30
|
22.89
|
(83.32)
|
|
38.16
|
(105.02)
|
|
Per
ADS (dollars)
|
|
|
|
|
|
|
|
|
Basic
|
|
0.92
|
1.38
|
(5.00)
|
|
2.30
|
(6.30)
|
|
Diluted
|
|
0.92
|
1.37
|
(5.00)
|
|
2.29
|
(6.30)
|
(a) 2020
numbers have been restated as a result of changes to the 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 19
Condensed group statement of comprehensive income
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
3,354
|
4,900
|
(17,522)
|
|
8,254
|
(21,907)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|
Currency
translation differences(a)
|
|
902
|
(605)
|
1,371
|
|
297
|
(3,271)
|
|
Exchange
(gains) losses on translation of foreign operations reclassified to
gain or loss on sale of businesses and fixed assets
|
|
-
|
-
|
3
|
|
-
|
4
|
|
Cash
flow hedges and costs of hedging
|
|
(207)
|
(62)
|
68
|
|
(269)
|
153
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
(68)
|
11
|
(333)
|
|
(57)
|
109
|
|
Income
tax relating to items that may be reclassified
|
|
8
|
1
|
(37)
|
|
9
|
80
|
|
|
|
635
|
(655)
|
1,072
|
|
(20)
|
(2,925)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
Remeasurements of
the net pension and other post-retirement benefit liability or
asset(b)
|
|
590
|
2,026
|
(1,960)
|
|
2,616
|
(241)
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
1
|
2
|
(2)
|
|
3
|
(10)
|
|
Income
tax relating to items that will not be reclassified
|
|
(165)
|
(588)
|
623
|
|
(753)
|
-
|
|
|
|
426
|
1,440
|
(1,339)
|
|
1,866
|
(251)
|
|
Other comprehensive income
|
|
1,061
|
785
|
(267)
|
|
1,846
|
(3,176)
|
|
Total comprehensive income
|
|
4,415
|
5,685
|
(17,789)
|
|
10,100
|
(25,083)
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
4,183
|
5,460
|
(17,142)
|
|
9,643
|
(24,359)
|
|
Non-controlling
interests
|
|
232
|
225
|
(647)
|
|
457
|
(724)
|
|
|
|
4,415
|
5,685
|
(17,789)
|
|
10,100
|
(25,083)
|
(a) Second
quarter and first half 2021 and 2020 principally affected by
movements in the Russian rouble against the US
dollar.
(b) See
Note 1 - Basis of preparation - Pensions and other post-retirement
benefits for further information.
Top of page 20
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
|
|
9,643
|
249
|
208
|
10,100
|
|
Dividends
|
|
(2,134)
|
-
|
(158)
|
(2,292)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(6)
|
-
|
-
|
(6)
|
|
Repurchase of ordinary share capital
|
|
(500)
|
-
|
-
|
(500)
|
|
Share-based payments, net of tax
|
|
188
|
-
|
-
|
188
|
|
Share
of equity-accounted entities' changes in equity, net of
tax
|
|
(3)
|
-
|
-
|
(3)
|
|
Payments on perpetual hybrid bonds
|
|
(7)
|
(376)
|
-
|
(383)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
366
|
-
|
194
|
560
|
|
At 30 June 2021
|
|
78,797
|
11,949
|
2,486
|
93,232
|
|
|
|
|
|
|
|
|
|
|
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
|
|
(24,359)
|
-
|
(724)
|
(25,083)
|
|
Dividends
|
|
(4,242)
|
-
|
(105)
|
(4,347)
|
|
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
|
|
342
|
-
|
-
|
342
|
|
Issue of perpetual hybrid bonds
|
|
(48)
|
11,909
|
-
|
11,861
|
|
Transactions
involving non-controlling interests, net of tax
|
|
(471)
|
-
|
571
|
100
|
|
At 30 June 2020
|
|
68,864
|
11,909
|
2,038
|
82,811
|
Top of page 21
Group balance sheet
|
|
|
30 June
|
31 December
|
|
$ million
|
|
2021
|
2020
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
116,177
|
114,836
|
|
Goodwill
|
|
12,497
|
12,480
|
|
Intangible assets
|
|
6,237
|
6,093
|
|
Investments in joint ventures
|
|
9,703
|
8,362
|
|
Investments in associates
|
|
20,194
|
18,975
|
|
Other investments
|
|
2,539
|
2,746
|
|
Fixed assets
|
|
167,347
|
163,492
|
|
Loans
|
|
776
|
840
|
|
Trade and other receivables
|
|
3,685
|
4,351
|
|
Derivative financial instruments
|
|
7,887
|
9,755
|
|
Prepayments
|
|
487
|
533
|
|
Deferred tax assets
|
|
6,662
|
7,744
|
|
Defined benefit pension plan surpluses
|
|
10,489
|
7,957
|
|
|
|
197,333
|
194,672
|
|
Current assets
|
|
|
|
|
Loans
|
|
366
|
458
|
|
Inventories
|
|
22,608
|
16,873
|
|
Trade and other receivables
|
|
23,540
|
17,948
|
|
Derivative financial instruments
|
|
4,062
|
2,992
|
|
Prepayments
|
|
1,298
|
1,269
|
|
Current tax receivable
|
|
425
|
672
|
|
Other investments
|
|
164
|
333
|
|
Cash and cash equivalents
|
|
34,256
|
31,111
|
|
|
|
86,719
|
71,656
|
|
Assets classified as held for sale (Note 2)
|
|
34
|
1,326
|
|
|
|
86,753
|
72,982
|
|
Total assets
|
|
284,086
|
267,654
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
45,198
|
36,014
|
|
Derivative financial instruments
|
|
5,117
|
2,998
|
|
Accruals
|
|
4,517
|
4,650
|
|
Lease liabilities
|
|
1,825
|
1,933
|
|
Finance debt
|
|
7,622
|
9,359
|
|
Current tax payable
|
|
1,429
|
1,038
|
|
Provisions
|
|
4,831
|
3,761
|
|
|
|
70,539
|
59,753
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
31
|
46
|
|
|
|
70,570
|
59,799
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
10,886
|
12,112
|
|
Derivative financial instruments
|
|
5,419
|
5,404
|
|
Accruals
|
|
889
|
852
|
|
Lease liabilities
|
|
7,038
|
7,329
|
|
Finance debt
|
|
60,625
|
63,305
|
|
Deferred tax liabilities
|
|
7,854
|
6,831
|
|
Provisions
|
|
19,069
|
17,200
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
8,504
|
9,254
|
|
|
|
120,284
|
122,287
|
|
Total liabilities
|
|
190,854
|
182,086
|
|
Net assets
|
|
93,232
|
85,568
|
|
Equity
|
|
|
|
|
BP shareholders' equity
|
|
78,797
|
71,250
|
|
Non-controlling interests
|
|
14,435
|
14,318
|
|
Total equity
|
|
93,232
|
85,568
|
Top of page 22
Condensed group cash flow statement
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Profit (loss) before taxation
|
|
5,138
|
6,542
|
(21,604)
|
|
11,680
|
(26,128)
|
|
Adjustments to
reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,659
|
3,428
|
13,555
|
|
7,087
|
17,712
|
|
Impairment and
(gain) loss on sale of businesses and fixed assets
|
|
(3,187)
|
(732)
|
11,696
|
|
(3,919)
|
12,829
|
|
Earnings from
equity-accounted entities, less dividends received
|
|
(539)
|
(633)
|
860
|
|
(1,172)
|
1,365
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
300
|
29
|
17
|
|
329
|
154
|
|
Share-based
payments
|
|
228
|
(46)
|
351
|
|
182
|
345
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(371)
|
(20)
|
(34)
|
|
(391)
|
(54)
|
|
Net
charge for provisions, less payments
|
|
1,172
|
902
|
(365)
|
|
2,074
|
(424)
|
|
Movements in
inventories and other current and non-current assets and
liabilities
|
|
26
|
(2,793)
|
(609)
|
|
(2,767)
|
74
|
|
Income
taxes paid
|
|
(1,015)
|
(568)
|
(130)
|
|
(1,583)
|
(1,184)
|
|
Net cash provided by operating activities
|
|
5,411
|
6,109
|
3,737
|
|
11,520
|
4,689
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditure on
property, plant and equipment, intangible and other
assets
|
|
(2,435)
|
(3,033)
|
(3,018)
|
|
(5,468)
|
(6,807)
|
|
Acquisitions, net of cash acquired
|
|
-
|
(1)
|
-
|
|
(1)
|
(17)
|
|
Investment in joint ventures
|
|
(47)
|
(742)
|
(8)
|
|
(789)
|
(26)
|
|
Investment in associates
|
|
(32)
|
(22)
|
(41)
|
|
(54)
|
(78)
|
|
Total cash capital expenditure
|
|
(2,514)
|
(3,798)
|
(3,067)
|
|
(6,312)
|
(6,928)
|
|
Proceeds from disposal of fixed assets
|
|
93
|
551
|
10
|
|
644
|
20
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
122
|
3,613
|
670
|
|
3,735
|
1,341
|
|
Proceeds from loan repayments
|
|
67
|
61
|
543
|
|
128
|
606
|
|
Cash provided from investing activities
|
|
282
|
4,225
|
1,223
|
|
4,507
|
1,967
|
|
Net cash used in investing activities
|
|
(2,232)
|
427
|
(1,844)
|
|
(1,805)
|
(4,961)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares (Note 7)
|
|
(500)
|
-
|
-
|
|
(500)
|
(776)
|
|
Lease liability payments
|
|
(514)
|
(560)
|
(664)
|
|
(1,074)
|
(1,233)
|
|
Proceeds from long-term financing
|
|
1,985
|
1,956
|
6,846
|
|
3,941
|
9,530
|
|
Repayments of long-term financing
|
|
(67)
|
(7,029)
|
(964)
|
|
(7,096)
|
(4,681)
|
|
Net increase (decrease) in short-term debt
|
|
(33)
|
222
|
(215)
|
|
189
|
2,302
|
|
Issue of perpetual hybrid bonds
|
|
-
|
-
|
11,861
|
|
-
|
11,861
|
|
Payments on perpetual hybrid bonds
|
|
(328)
|
(55)
|
-
|
|
(383)
|
-
|
|
Payments relating to transactions involving non-controlling
interests (other)
|
|
-
|
-
|
(8)
|
|
-
|
(8)
|
|
Receipts relating to transactions involving non-controlling
interests (other)
|
|
3
|
668
|
-
|
|
671
|
9
|
|
Dividends paid - BP shareholders
|
|
(1,062)
|
(1,064)
|
(2,119)
|
|
(2,126)
|
(4,221)
|
|
-
non-controlling interests
|
|
(107)
|
(51)
|
(74)
|
|
(158)
|
(105)
|
|
Net cash provided by (used in) financing activities
|
|
(623)
|
(5,913)
|
14,663
|
|
(6,536)
|
12,678
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
24
|
(58)
|
(42)
|
|
(34)
|
(225)
|
|
Increase (decrease) in cash and cash equivalents
|
|
2,580
|
565
|
16,514
|
|
3,145
|
12,181
|
|
Cash and cash equivalents at beginning of period
|
|
31,676
|
31,111
|
18,139
|
|
31,111
|
22,472
|
|
Cash
and cash equivalents at end of period(a)
|
|
34,256
|
31,676
|
34,653
|
|
34,256
|
34,653
|
(a)
Second quarter and first half 2020 includes $436 million of cash
and cash equivalents classified as assets held for sale in the
group balance sheet.
Top of page 23
Notes
Note 1. Basis of preparation
The interim financial information included in this report has been
prepared in accordance with IAS 34 'Interim Financial
Reporting'.
The results for the interim periods are unaudited and, in the
opinion of management, include all adjustments necessary for a fair
presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in
conjunction with the consolidated financial statements and related
notes for the year ended 31 December 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 quarter. The assumption up to 2030 was increased to reflect
near-term supply constraints whereas the long-term assumption was
decreased reaching $55 per barrel by 2040 and $45 per barrel by
2050 (in real 2020 terms) as bp's management expects an
acceleration of the pace of transition to a lower carbon economy.
The price assumption for Henry Hub gas are unchanged from those
disclosed in BP Annual Report and Form 20-F
2020. A summary of the
group's price assumptions, in real 2020 terms, is provided
below:
|
|
|
|
Second half 2021
|
2025
|
2030
|
2040
|
2050
|
|
Brent oil ($/bbl)
|
|
|
60
|
60
|
60
|
55
|
45
|
|
Henry Hub gas ($/mmBtu)
|
|
|
3.00
|
3.00
|
3.00
|
3.00
|
2.75
|
The group has identified upstream oil and gas properties with
carrying amounts totalling approximately $33 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.
Impairment reversals for the second quarter of 2021 primarily
relate to the changes to price assumptions. For further information
see Note 3.
The discount rates used in value-in-use impairment testing as
disclosed in BP
Annual Report and Form 20-F 2020, are unchanged.
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 was revised in the second quarter to 2.0% (31
December 2020 2.5%) to reflect lower recent US Treasury yields. The
principal impact of this rate reduction was a $1.3 billion increase
in the decommissioning provision with a corresponding increase in
the carrying amount of property, plant and equipment of $1.0
billion.
During the second quarter, the group assessed that a
decommissioning provision should be recognized for 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. No other significant
decommissioning provisions of this nature have been identified
however bp continues to review and monitor the risk of reversion of
decommissioning obligations.
Top of page 24
Note 1. Basis of preparation (continued)
Pensions and other post-retirement benefits
The group's defined benefit pension 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 second quarter of 2021, the group's total net
defined benefit pension plan surplus as at 30 June 2021 is $2.0
billion, compared to a surplus of $1.0 billion and a deficit of
$1.3 billion at 31 March 2021 and 31 December 2020
respectively.
The movement for the six months principally reflects net actuarial
gains reported in other comprehensive income arising from increases
in the UK, US and Eurozone discount rates partly offset by
increases in inflation rates and negative asset performance. Also
reflected in the second quarter 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 has
been recognized in the income statement. 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 pension plan
surplus/deficit recognized.
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.
Updates to significant accounting policies
Change in accounting policy - Interest Rate Benchmark Reform -
Phase II
Financial authorities have announced the timing of interest rate
benchmark transitions with market discussions continuing around
benchmark application. 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 is
expected at the end of 2021 for most benchmarks, with remaining USD
tenors expected to cease in 2023. bp is primarily exposed to USD
LIBORs 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
will be applied prospectively.
bp has set up 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 existing interest rate benchmarks,
for example, borrowings, leases and derivative contracts have been
assessed and transition plans 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 group chief executive, 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.
Top of page 25
Note 1. Basis of preparation (continued)
Voluntary change in accounting policy - Net 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
organisational 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.
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
optimisation, 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 26
Note 1. Basis of preparation (continued)
|
|
|
Second
|
Second
|
|
First
|
First
|
|
|
|
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
|
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
|
|
4,183
|
3,227
|
(956)
|
10,235
|
8,752
|
(1,483)
|
|
oil production & operations
|
|
3,304
|
3,304
|
-
|
9,135
|
9,135
|
-
|
|
customers & products
|
|
27,241
|
17,783
|
(9,458)
|
81,205
|
43,597
|
(37,608)
|
|
other businesses & corporate
|
|
442
|
442
|
-
|
879
|
879
|
-
|
|
|
|
35,170
|
24,756
|
(10,414)
|
101,454
|
62,363
|
(39,091)
|
|
Less: sales and other revenues between segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
27
|
27
|
-
|
1,838
|
1,838
|
-
|
|
oil production & operations
|
|
2,870
|
2,870
|
-
|
8,371
|
8,371
|
-
|
|
customers & products
|
|
330
|
330
|
-
|
(452)
|
(452)
|
-
|
|
other businesses & corporate
|
|
267
|
267
|
-
|
371
|
371
|
-
|
|
|
|
3,494
|
3,494
|
-
|
10,128
|
10,128
|
-
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
4,156
|
3,200
|
(956)
|
8,397
|
6,914
|
(1,483)
|
|
oil production & operations
|
|
435
|
435
|
-
|
765
|
765
|
-
|
|
customers & products
|
|
26,911
|
17,453
|
(9,458)
|
81,657
|
44,049
|
(37,608)
|
|
other businesses & corporate
|
|
174
|
174
|
-
|
507
|
507
|
-
|
|
Total sales and other operating revenues
|
|
31,676
|
21,262
|
(10,414)
|
91,326
|
52,235
|
(39,091)
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude
oil
|
|
1,062
|
1,062
|
-
|
2,497
|
2,497
|
-
|
|
Oil
products
|
|
10,452
|
10,452
|
-
|
30,706
|
30,706
|
-
|
|
Natural
gas, LNG and NGLs
|
|
2,992
|
2,072
|
(920)
|
6,630
|
5,250
|
(1,379)
|
|
Non-oil
products and other revenues from contracts with
customers
|
|
2,118
|
2,092
|
(26)
|
4,608
|
4,569
|
(39)
|
|
Revenues from contracts with customers
|
|
16,624
|
15,678
|
(946)
|
44,441
|
43,022
|
(1,419)
|
|
Other operating revenues
|
|
15,052
|
5,584
|
(9,468)
|
46,885
|
9,213
|
(37,672)
|
|
Total sales and other operating revenues
|
|
31,676
|
21,262
|
(10,414)
|
91,326
|
52,235
|
(39,091)
|
(a)
Total purchases for the second quarter and
first half 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 30
June 2021 is $34 million, with associated liabilities of $31
million.
At 31 December 2020 the balance consists 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 27
Note 3. Impairment and losses on sale of businesses and fixed
assets(a)
Impairment reversals net of losses on sale of businesses and fixed
assets for the second quarter and first half 2021 were
$2,937 million and $2,564 million respectively (charges
of $11,770 million and $12,919 million for the
comparative periods in 2020) and include net impairment
reversals for the second quarter and first half 2021 of
$2,964 million and $2,744 million respectively (charges
of $11,848 million and $12,646 million for the
comparative periods in 2020). Impairment charges included
within the 2021 numbers are immaterial.
gas & low carbon energy segment
Net impairment reversals in the gas & low carbon energy segment
were $1,270 million and $1,148 million for the second
quarter and first half 2021 respectively (charges of
$6,111 million and $6,112 million for the comparative
periods in 2020).
Impairment reversals for the second quarter and first half 2021
mainly relate to producing assets and principally arose as a result
of changes to the group's oil and gas price assumptions. They
include amounts in Azerbaijan, India and Trinidad. The recoverable
amounts of the cash generating units within these businesses were
based on value-in-use calculations.
oil production & operations segment
Net impairment reversals in the oil production & operations
segment were $1,756 million and $1,657 million for the
second quarter and first half 2021 (charges of $5,008 million
and $5,792 million for the comparative periods in
2020).
Impairment reversals for the second quarter and first half 2021
mainly relate to producing assets and principally arose as a result
of changes to the group's oil and gas price assumptions. 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.
(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)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
gas & low carbon energy
|
|
927
|
3,430
|
(7,752)
|
|
4,357
|
(6,682)
|
|
oil production & operations
|
|
3,118
|
1,479
|
(14,314)
|
|
4,597
|
(14,493)
|
|
customers & products
|
|
640
|
934
|
594
|
|
1,574
|
1,258
|
|
Rosneft
|
|
643
|
363
|
(124)
|
|
1,006
|
(141)
|
|
other businesses & corporate
|
|
(425)
|
(678)
|
(259)
|
|
(1,103)
|
(825)
|
|
|
|
4,903
|
5,528
|
(21,855)
|
|
10,431
|
(20,883)
|
|
Consolidation adjustment - UPII*
|
|
(31)
|
13
|
(46)
|
|
(18)
|
132
|
|
RC profit (loss) before interest and tax*
|
|
4,872
|
5,541
|
(21,901)
|
|
10,413
|
(20,751)
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
4
|
22
|
11
|
|
26
|
2
|
|
oil
production & operations
|
|
(6)
|
15
|
46
|
|
9
|
(13)
|
|
customers
& products
|
|
887
|
1,605
|
978
|
|
2,492
|
(3,637)
|
|
Rosneft
(net of tax)
|
|
68
|
88
|
53
|
|
156
|
(148)
|
|
Profit (loss) before interest and tax
|
|
5,825
|
7,271
|
(20,813)
|
|
13,096
|
(24,547)
|
|
Finance costs
|
|
682
|
723
|
783
|
|
1,405
|
1,566
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
5
|
6
|
8
|
|
11
|
15
|
|
Profit (loss) before taxation
|
|
5,138
|
6,542
|
(21,604)
|
|
11,680
|
(26,128)
|
|
|
|
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
|
US
|
|
955
|
1,907
|
(4,695)
|
|
2,862
|
(4,100)
|
|
Non-US
|
|
3,917
|
3,634
|
(17,206)
|
|
7,551
|
(16,651)
|
|
|
|
4,872
|
5,541
|
(21,901)
|
|
10,413
|
(20,751)
|
(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 28
Note 5. Sales and other operating revenues(a)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
By segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
5,739
|
8,002
|
3,227
|
|
13,741
|
8,752
|
|
oil production & operations
|
|
5,597
|
5,155
|
3,304
|
|
10,752
|
9,135
|
|
customers & products
|
|
31,160
|
27,107
|
17,783
|
|
58,267
|
43,597
|
|
other businesses & corporate
|
|
381
|
436
|
442
|
|
817
|
879
|
|
|
|
42,877
|
40,700
|
24,756
|
|
83,577
|
62,363
|
|
|
|
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,063
|
1,032
|
27
|
|
2,095
|
1,838
|
|
oil production & operations
|
|
4,928
|
4,855
|
2,870
|
|
9,783
|
8,371
|
|
customers & products
|
|
112
|
110
|
330
|
|
222
|
(452)
|
|
other businesses & corporate
|
|
307
|
159
|
267
|
|
466
|
371
|
|
|
|
6,410
|
6,156
|
3,494
|
|
12,566
|
10,128
|
|
|
|
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
4,676
|
6,970
|
3,200
|
|
11,646
|
6,914
|
|
oil production & operations
|
|
669
|
300
|
435
|
|
969
|
765
|
|
customers & products
|
|
31,048
|
26,997
|
17,453
|
|
58,045
|
44,049
|
|
other businesses & corporate
|
|
74
|
277
|
174
|
|
351
|
507
|
|
Total sales and other operating revenues
|
|
36,467
|
34,544
|
21,262
|
|
71,011
|
52,235
|
|
|
|
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
|
|
|
|
US
|
|
15,305
|
14,491
|
7,532
|
|
29,796
|
17,197
|
|
Non-US
|
|
29,700
|
26,883
|
16,946
|
|
56,583
|
43,778
|
|
|
|
45,005
|
41,374
|
24,478
|
|
86,379
|
60,975
|
|
Less: sales and other operating revenues between areas
|
|
8,538
|
6,830
|
3,216
|
|
15,368
|
8,740
|
|
|
|
36,467
|
34,544
|
21,262
|
|
71,011
|
52,235
|
|
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude oil
|
|
1,291
|
1,334
|
1,062
|
|
2,625
|
2,497
|
|
Oil products
|
|
24,651
|
19,278
|
10,452
|
|
43,929
|
30,706
|
|
Natural
gas, LNG and NGLs(b)
|
|
4,273
|
4,181
|
2,072
|
|
8,454
|
5,250
|
|
Non-oil
products and other revenues from contracts with
customers(b)
|
|
1,603
|
1,398
|
2,092
|
|
3,001
|
4,569
|
|
Revenue from contracts with customers
|
|
31,818
|
26,191
|
15,678
|
|
58,009
|
43,022
|
|
Other
operating revenues(c)
|
|
4,649
|
8,353
|
5,584
|
|
13,002
|
9,213
|
|
Total sales and other operating revenues
|
|
36,467
|
34,544
|
21,262
|
|
71,011
|
52,235
|
(a) Comparative
information for 2020 has been restated for the changes in
reportable segments and also 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) Comparative
information has been amended for certain contracts that have been
reclassified to other operating revenues and then been subject to
the net presentation described in Note 1 Basis of preparation
- Voluntary change in accounting
policy.
(c) Principally
relates to commodity derivative transactions.
Top of page 29
Note 6. Depreciation, depletion and amortization(a)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,115
|
854
|
952
|
|
1,969
|
1,990
|
|
oil production & operations
|
|
1,559
|
1,574
|
2,070
|
|
3,133
|
4,187
|
|
customers & products
|
|
754
|
745
|
752
|
|
1,499
|
1,499
|
|
other businesses & corporate
|
|
203
|
194
|
163
|
|
397
|
320
|
|
|
|
3,631
|
3,367
|
3,937
|
|
6,998
|
7,996
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
|
US
|
|
1,160
|
1,121
|
1,404
|
|
2,281
|
2,829
|
|
Non-US
|
|
2,471
|
2,246
|
2,533
|
|
4,717
|
5,167
|
|
|
|
3,631
|
3,367
|
3,937
|
|
6,998
|
7,996
|
(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 second quarter 2021 115
million of ordinary shares were repurchased for cancellation for a
total cost of $500 million, including transaction costs of $3
million, as part of the share buyback programme announced on 27
April 2021. 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.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Results for the period
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
3,116
|
4,667
|
(16,848)
|
|
7,783
|
(21,213)
|
|
Less: preference dividend
|
|
-
|
1
|
1
|
|
1
|
1
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
3,116
|
4,666
|
(16,849)
|
|
7,782
|
(21,214)
|
|
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
20,272,111
|
20,297,585
|
20,222,575
|
|
20,285,083
|
20,200,694
|
|
ADS
equivalent(c)
|
|
3,378,685
|
3,382,930
|
3,370,429
|
|
3,380,847
|
3,366,782
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to calculate diluted earnings per
share
|
|
20,366,731
|
20,388,628
|
20,222,575
|
|
20,394,877
|
20,200,694
|
|
ADS
equivalent(c)
|
|
3,394,455
|
3,398,104
|
3,370,429
|
|
3,399,146
|
3,366,782
|
|
|
|
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
20,224,314
|
20,331,023
|
20,249,046
|
|
20,224,314
|
20,249,046
|
|
ADS
equivalent(c)
|
|
3,370,719
|
3,388,503
|
3,374,841
|
|
3,370,719
|
3,374,841
|
(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 second quarter 2020 and first half 2020 are 63,119 thousand
(ADS equivalent 10,520 thousand) and 85,469 thousand (ADS
equivalent 14,245 thousand) respectively.
(c)
One ADS is equivalent to six ordinary shares.
Top of page 30
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 24 September 2021 to ordinary
shareholders and American Depositary Share (ADS) holders on the
register on 13 August 2021. The ex-dividend date will be 12 August
2021. The corresponding amount in sterling is due to be announced
on 14 September 2021, calculated based on the average of the market
exchange rates over three dealing days between 8 September 2021 and
10 September 2021. 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 second 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 second quarter dividend and timetable are
available at bp.com/dividends and
further details of the dividend reinvestment programmes are
available at bp.com/drip.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
|
cents
|
|
5.250
|
5.250
|
10.500
|
|
10.500
|
21.000
|
|
pence
|
|
3.712
|
3.768
|
8.342
|
|
7.480
|
16.498
|
|
Dividends paid per ADS (cents)
|
|
31.50
|
31.50
|
63.00
|
|
63.00
|
126.00
|
Note 9. Net debt
|
Net debt*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Finance
debt(a)
|
|
68,247
|
66,123
|
76,003
|
|
68,247
|
76,003
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
(1,285)
|
(1,134)
|
(430)
|
|
(1,285)
|
(430)
|
|
|
|
66,962
|
64,989
|
75,573
|
|
66,962
|
75,573
|
|
Less: cash and cash equivalents
|
|
34,256
|
31,676
|
34,653
|
|
34,256
|
34,653
|
|
Net
debt(c)
|
|
32,706
|
33,313
|
40,920
|
|
32,706
|
40,920
|
|
Total equity
|
|
93,232
|
90,586
|
82,811
|
|
93,232
|
82,811
|
|
Gearing*
|
|
26.0%
|
26.9%
|
33.1%
|
|
26.0%
|
33.1%
|
(a) The
fair value of finance debt at 30 June 2021 was $70,589 million (30
June 2020 $77,990 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 $308 million
(first quarter 2021 liability of $346 million and second
quarter 2020 liability of $554 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, on 9 June 2021 bp
exercised its option to redeem finance debt with an outstanding
aggregate principal amount of $2.4 billion on 13 July 2021. In the
first quarter, the group bought back $3.9 billion equivalent of US
dollar, euro and sterling bonds and terminated derivatives
associated with the non-USD debt bought back. These transactions
have no significant impact on net debt or gearing.
Note 10. Inventory valuation
A provision of $17 million was held against hydrocarbon inventories
at 30 June 2021 ($80 million at 31 March 2021 and $289 million at
30 June 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 $11.0 billion as at 30
June 2021 ($10.2 billion as at 31 March 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 2 August 2021, 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 31
Additional information
Capital expenditure*(a)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
Organic capital expenditure*
|
|
2,511
|
2,906
|
3,034
|
|
5,417
|
6,573
|
|
Inorganic
capital expenditure*(b)
|
|
3
|
892
|
33
|
|
895
|
355
|
|
|
|
2,514
|
3,798
|
3,067
|
|
6,312
|
6,928
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
|
gas
& low carbon energy(b)
|
|
747
|
1,885
|
1,019
|
|
2,632
|
2,203
|
|
oil production & operations
|
|
1,148
|
1,319
|
1,619
|
|
2,467
|
3,579
|
|
customers & products
|
|
519
|
532
|
369
|
|
1,051
|
1,026
|
|
other businesses & corporate
|
|
100
|
62
|
60
|
|
162
|
120
|
|
|
|
2,514
|
3,798
|
3,067
|
|
6,312
|
6,928
|
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
|
US
|
|
890
|
1,487
|
1,113
|
|
2,377
|
2,436
|
|
Non-US
|
|
1,624
|
2,311
|
1,954
|
|
3,935
|
4,492
|
|
|
|
2,514
|
3,798
|
3,067
|
|
6,312
|
6,928
|
(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) First
quarter and first half 2021 include the final payment of $712
million in respect of the strategic partnership with
Equinor.
Adjusting items*(a)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
gas & low carbon energy
|
|
|
|
|
|
|
|
|
Gains
on sale of businesses and fixed assets(b)
|
|
-
|
1,034
|
-
|
|
1,034
|
-
|
|
Impairment
and losses on sale of businesses and fixed assets(c)
|
|
1,270
|
(123)
|
(6,111)
|
|
1,147
|
(6,114)
|
|
Environmental and other provisions
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(21)
|
(8)
|
(6)
|
|
(29)
|
(4)
|
|
Fair
value accounting effects(e)
|
|
(1,311)
|
247
|
(67)
|
|
(1,064)
|
156
|
|
Other(f)
|
|
(251)
|
10
|
(754)
|
|
(241)
|
(753)
|
|
|
|
(313)
|
1,160
|
(6,938)
|
|
847
|
(6,715)
|
|
oil production & operations
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
216
|
168
|
87
|
|
384
|
94
|
|
Impairment
and losses on sale of businesses and fixed assets(c)
|
|
1,751
|
(209)
|
(4,861)
|
|
1,542
|
(5,991)
|
|
Environmental
and other provisions(g)
|
|
(776)
|
(65)
|
-
|
|
(841)
|
(13)
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(90)
|
(4)
|
(18)
|
|
(94)
|
(24)
|
|
Fair value accounting effects
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Other(f)(h)
|
|
(225)
|
24
|
(1,809)
|
|
(201)
|
(1,741)
|
|
|
|
876
|
(86)
|
(6,601)
|
|
790
|
(7,675)
|
|
customers & products
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
8
|
(97)
|
(13)
|
|
(89)
|
(6)
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
(35)
|
(43)
|
(798)
|
|
(78)
|
(803)
|
|
Environmental and other provisions
|
|
(8)
|
-
|
-
|
|
(8)
|
-
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(10)
|
(41)
|
31
|
|
(51)
|
31
|
|
Fair
value accounting effects(e)
|
|
(139)
|
459
|
(31)
|
|
320
|
(290)
|
|
Other
|
|
(3)
|
-
|
-
|
|
(3)
|
-
|
|
|
|
(187)
|
278
|
(811)
|
|
91
|
(1,068)
|
|
Rosneft
|
|
|
|
|
|
|
|
|
Other
|
|
(46)
|
-
|
(63)
|
|
(46)
|
(63)
|
|
|
|
(46)
|
-
|
(63)
|
|
(46)
|
(63)
|
|
other businesses & corporate
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
-
|
-
|
-
|
|
-
|
2
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
(50)
|
(1)
|
-
|
|
(51)
|
-
|
|
Environmental and other provisions
|
|
(72)
|
-
|
-
|
|
(72)
|
(23)
|
|
Restructuring,
integration and rationalization costs(d)
|
|
(74)
|
(25)
|
(33)
|
|
(99)
|
(46)
|
|
Gulf of Mexico oil spill
|
|
(18)
|
(11)
|
(31)
|
|
(29)
|
(52)
|
|
Fair
value accounting effects(e)
|
|
73
|
(447)
|
(41)
|
|
(374)
|
(41)
|
|
Other
|
|
21
|
(24)
|
66
|
|
(3)
|
(13)
|
|
|
|
(120)
|
(508)
|
(39)
|
|
(628)
|
(173)
|
|
Total before interest and taxation
|
|
210
|
844
|
(14,452)
|
|
1,054
|
(15,694)
|
|
Finance
costs(i)(j)
|
|
(202)
|
(148)
|
(114)
|
|
(350)
|
(236)
|
|
Total before taxation
|
|
8
|
696
|
(14,566)
|
|
704
|
(15,930)
|
|
Taxation credit (charge) on adjusting items
|
|
(396)
|
12
|
3,477
|
|
(384)
|
3,787
|
|
Taxation
- impact of foreign exchange(k)
|
|
(30)
|
(13)
|
114
|
|
(43)
|
(251)
|
|
Total taxation on adjusting items
|
|
(426)
|
(1)
|
3,591
|
|
(427)
|
3,536
|
|
Total after taxation for period
|
|
(418)
|
695
|
(10,975)
|
|
277
|
(12,394)
|
(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) First
quarter and first half 2021 relate 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 recognized provisions for restructuring
costs associated with the reinvent programme that was formalized in
2020.
(e) For
further information, including the nature of fair value accounting
effects reported in each segment, see page 39.
(f) Second
quarter and first half 2020 include the exploration write-off of
$668 million in gas and lower 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.
(g) Second
quarter and first half 2021 Includes 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.
(h) Second
quarter and first half 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.
Top
of page 33
(i) All
periods presented include the unwinding of discounting effects
relating to Gulf of Mexico oil spill payables. Second quarter,
first quarter and first half 2021 also include the income statement
impact associated with the buyback of finance debt. See Note 9 for
further information.
(j) 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.
(k) bp
is presenting 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*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Net debt
|
|
32,706
|
33,313
|
40,920
|
|
32,706
|
40,920
|
|
Lease liabilities
|
|
8,863
|
9,030
|
9,331
|
|
8,863
|
9,331
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
109
|
37
|
(90)
|
|
109
|
(90)
|
|
Net debt including leases
|
|
41,678
|
42,380
|
50,161
|
|
41,678
|
50,161
|
|
Total
equity
|
|
93,232
|
90,586
|
82,811
|
|
93,232
|
82,811
|
|
Gearing including leases*
|
|
30.9%
|
31.9%
|
37.7%
|
|
30.9%
|
37.7%
|
Gulf of Mexico oil spill
|
|
|
30 June
|
31 December
|
|
$ million
|
|
2021
|
2020
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(10,258)
|
(11,436)
|
|
Of
which - current
|
|
(1,270)
|
(1,444)
|
|
|
|
|
|
|
Deferred tax asset
|
|
4,326
|
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 34
Working capital* reconciliation(a)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ 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)
|
|
26
|
(2,793)
|
(609)
|
|
(2,767)
|
74
|
|
Adjusted
for inventory holding gains (losses)* (Note 4 excluding
Rosneft)
|
|
885
|
1,642
|
1,035
|
|
2,527
|
(3,648)
|
|
Adjusted for fair value accounting effects
|
|
(1,377)
|
259
|
(139)
|
|
(1,118)
|
(175)
|
|
Working capital release (build) after adjusting for net inventory
gains (losses) and fair value accounting effects
|
|
(466)
|
(892)
|
287
|
|
(1,358)
|
(3,749)
|
(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 43.
(b)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis of $1,204 million and
$1,339 million in the second quarter and first half of 2021
respectively. For the same periods in 2020 the amount was an
outflow of $1,120 million and $1,374 million
respectively.
Surplus cash flow* reconciliation
|
|
|
Second
|
First
|
|
|
|
quarter
|
half
|
|
$ million
|
|
2021
|
2021
|
|
Sources:
|
|
|
|
|
Net cash provided by operating activities
|
|
5,411
|
11,520
|
|
Cash provided from investing activities
|
|
282
|
4,507
|
|
Receipts relating to transactions involving non-controlling
interests (other)
|
|
3
|
671
|
|
Cash inflow
|
|
5,696
|
16,698
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
Lease liability payments
|
|
(514)
|
(1,074)
|
|
Payments on perpetual hybrid bonds
|
|
(328)
|
(383)
|
|
Dividends paid - BP shareholders
|
|
(1,062)
|
(2,126)
|
|
-
non-controlling interests
|
|
(107)
|
(158)
|
|
Total capital expenditure*
|
|
(2,514)
|
(6,312)
|
|
Net repurchase of shares relating to employee share
schemes
|
|
(500)
|
(500)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
24
|
(34)
|
|
Cash outflow
|
|
(5,001)
|
(10,587)
|
|
|
|
|
|
|
Surplus (deficit) cash and cash equivalent
|
|
695
|
6,111
|
|
|
|
|
|
|
Net debt
|
|
|
|
|
Opening balance at 1 January 2021
|
|
|
38,941
|
|
Fair value and other movements on debt
|
|
|
(212)
|
|
Net debt target
|
|
|
35,000
|
|
Cash used to meet net debt target
|
|
|
3,729
|
|
|
|
|
|
|
Surplus cash flow
|
|
|
2,382
|
|
|
|
|
|
Top of page 35
Reconciliation of customers & products RC profit before
interest and tax* to underlying RC profit before interest and tax
to adjusted EBITDA* by business
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
RC profit before interest and tax for customers &
products
|
|
640
|
934
|
594
|
|
1,574
|
1,258
|
|
Less: Adjusting items gains (charges)
|
|
(187)
|
278
|
(811)
|
|
91
|
(1,068)
|
|
Underlying RC profit before interest and tax for customers
& products
|
|
827
|
656
|
1,405
|
|
1,483
|
2,326
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
951
|
658
|
432
|
|
1,609
|
1,120
|
|
Castrol - included in customers
|
|
265
|
334
|
63
|
|
599
|
230
|
|
products
- refining & trading
|
|
(124)
|
(2)
|
926
|
|
(126)
|
1,094
|
|
petrochemicals
|
|
-
|
-
|
47
|
|
-
|
112
|
|
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and amortization
|
|
754
|
745
|
752
|
|
1,499
|
1,499
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
329
|
324
|
283
|
|
653
|
570
|
|
Castrol - included in customers
|
|
39
|
39
|
43
|
|
78
|
81
|
|
products
- refining & trading
|
|
425
|
421
|
419
|
|
846
|
829
|
|
petrochemicals
|
|
-
|
-
|
50
|
|
-
|
100
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers & products
|
|
1,581
|
1,401
|
2,157
|
|
2,982
|
3,825
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
1,280
|
982
|
715
|
|
2,262
|
1,690
|
|
Castrol - included in customers
|
|
304
|
373
|
106
|
|
677
|
311
|
|
products
- refining & trading
|
|
301
|
419
|
1,345
|
|
720
|
1,923
|
|
petrochemicals
|
|
-
|
-
|
97
|
|
-
|
212
|
Top of page 36
Realizations* and marker prices
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
Average realizations(a)
|
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
|
US
|
|
53.64
|
45.21
|
21.63
|
|
49.36
|
33.80
|
|
Europe
|
|
69.19
|
61.72
|
28.91
|
|
64.83
|
40.30
|
|
Rest of World
|
|
64.44
|
57.48
|
22.58
|
|
61.04
|
33.79
|
|
BP Average
|
|
60.69
|
53.20
|
22.75
|
|
56.91
|
34.39
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
|
US
|
|
3.03
|
3.45
|
0.97
|
|
3.24
|
1.15
|
|
Europe
|
|
8.94
|
6.89
|
1.38
|
|
7.78
|
2.17
|
|
Rest of World
|
|
4.13
|
3.94
|
3.12
|
|
4.03
|
3.32
|
|
BP Average
|
|
4.08
|
3.98
|
2.53
|
|
4.03
|
2.69
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
|
US
|
|
41.14
|
36.91
|
16.05
|
|
39.02
|
23.37
|
|
Europe
|
|
63.85
|
55.34
|
23.00
|
|
58.93
|
33.46
|
|
Rest of World
|
|
40.27
|
36.06
|
20.21
|
|
38.16
|
25.63
|
|
BP Average
|
|
41.84
|
37.75
|
19.06
|
|
39.77
|
25.36
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
|
Brent
|
|
68.97
|
61.12
|
29.56
|
|
64.98
|
40.07
|
|
West Texas Intermediate
|
|
66.19
|
58.13
|
27.96
|
|
62.22
|
36.69
|
|
Western Canadian Select
|
|
53.10
|
46.12
|
22.19
|
|
49.57
|
25.48
|
|
Alaska North Slope
|
|
68.58
|
61.07
|
30.28
|
|
64.89
|
40.59
|
|
Mars
|
|
66.01
|
58.65
|
30.02
|
|
62.39
|
37.73
|
|
Urals (NWE - cif)
|
|
66.69
|
59.36
|
31.36
|
|
62.96
|
39.80
|
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
|
Henry
Hub gas price(b) ($/mmBtu)
|
|
2.83
|
2.71
|
1.71
|
|
2.77
|
1.83
|
|
UK Gas - National Balancing Point (p/therm)
|
|
64.79
|
49.82
|
12.88
|
|
57.19
|
18.98
|
|
|
|
|
|
|
|
|
|
(a) Based
on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(b) Henry
Hub First of Month Index.
Exchange rates
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2021
|
2021
|
2020
|
|
2021
|
2020
|
|
$/£ average rate for the period
|
|
1.40
|
1.38
|
1.24
|
|
1.39
|
1.26
|
|
$/£ period-end rate
|
|
1.38
|
1.37
|
1.23
|
|
1.38
|
1.23
|
|
|
|
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.21
|
1.21
|
1.10
|
|
1.21
|
1.10
|
|
$/€ period-end rate
|
|
1.19
|
1.17
|
1.12
|
|
1.19
|
1.12
|
|
|
|
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.77
|
0.77
|
0.66
|
|
0.77
|
0.66
|
|
$/AUD period-end rate
|
|
0.75
|
0.76
|
0.69
|
|
0.75
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Rouble/$ average rate for the period
|
|
74.20
|
74.41
|
72.40
|
|
74.31
|
69.64
|
|
Rouble/$ period-end rate
|
|
72.70
|
76.09
|
71.25
|
|
72.70
|
71.25
|
Top of page 37
Principal risks and uncertainties
The principal risks and uncertainties affecting bp are described in
the Risk factors section of bp Annual Report and Form 20-F
2020 (pages 67-70) and are
summarized below. There are no material changes in those principal
risks and uncertainties for the remaining six months of the
financial year.
The risks and uncertainties summarized below, separately or in
combination, could have a material adverse effect on the
implementation of our strategy, our business, financial
performance, results of operations, cash flows, liquidity,
prospects, shareholder value and returns and
reputation.
Strategic and commercial risks
● Prices
and markets - our
financial performance is impacted by fluctuating prices of oil, gas
and refined products, technological change, exchange rate
fluctuations, and the general macroeconomic
outlook.
● Access,
renewal and reserves progression - inability to access, renew and progress
upstream resources in a timely manner could adversely affect our
long-term replacement of reserves.
● Major
project* delivery -
failure to invest in the best opportunities or deliver major
projects successfully could adversely affect our financial
performance.
● Geopolitical -
exposure to a range of political developments and consequent
changes to the operating and regulatory environment could cause
business disruption.
● Liquidity,
financial capacity and financial, including credit,
exposure - failure to work
within our financial framework could impact our ability to operate
and result in financial loss.
● Joint
arrangements and contractors - varying levels of control over the
standards, operations and compliance of our partners, contractors
and sub-contractors could result in legal liability and
reputational damage.
● Digital
infrastructure and cyber security - breach or failure of our or third parties'
digital infrastructure or cyber security, including loss or misuse
of sensitive information could damage our operations, increase
costs and damage our reputation.
● Climate
change and the transition to a lower carbon
economy - developments in
policy, law, regulation, technology and markets, including societal
and investor sentiment, related to the issue of climate change
could increase costs, constrain our operations and affect our
business plans and financial performance.
● Competition -
inability to remain efficient, maintain a high-quality portfolio of
assets, innovate and retain an appropriately skilled workforce
could negatively impact delivery of our strategy in a highly
competitive market.
● Crisis
management and business continuity - failure to address an incident effectively
could potentially disrupt our business.
● Insurance -
our insurance strategy could expose the group to material uninsured
losses.
Safety and operational risks
● Process
safety, personal safety, and environmental risks - exposure to a wide range of health,
safety, security and environmental risks could cause harm to
people, the environment and our assets and result in regulatory
action, legal liability, business interruption, increased costs,
damage to our reputation and potentially denial of our licence to
operate.
● Drilling
and production -
challenging operational environments and other uncertainties could
impact drilling and production activities.
● Security -
hostile acts against our staff and activities could cause harm to
people and disrupt our operations.
● Product
quality - supplying
customers with off-specification products could damage our
reputation, lead to regulatory action and legal liability, and
impact our financial performance.
Compliance and control risks
● Ethical
misconduct and non-compliance - ethical misconduct or breaches of
applicable laws by our businesses or our employees could be
damaging to our reputation, and could result in litigation,
regulatory action and penalties.
● Regulation -
changes in the law and regulation could increase costs, constrain
our operations and affect our business plans and financial
performance.
● Treasury
and trading activities -
ineffective oversight of treasury and trading activities could lead
to business disruption, financial loss, regulatory intervention or
damage to our reputation.
● Reporting -
failure to accurately report our data could lead to regulatory
action, legal liability and reputational
damage.
Top of page 38
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 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 32. Prior to 2021 adjusting items were
reported under two different headings - non-operating items and
fair value accounting effects.
Bioenergy production is
average thousands of barrels of biofuel production per day during
the period covered, net to bp. This includes equivalent ethanol
production, bp Bunge biopower for grid export, biogas and refining
co-processing and standalone hydrogenated vegetable oil
(HVO).
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.
Cash costs is a non-GAAP
measure and is defined as production and manufacturing expenses
plus distribution and administration expenses and excludes costs
that are classified as adjusting items and costs that are variable,
primarily with volumes (such as freight costs). Management believes
that cash costs is a performance measure that provides investors
with useful information regarding the company's financial
performance because it considers these expenses to be the principal
operating and overhead expenses that are most directly under their
control although they also include certain foreign exchange and
commodity price effects.
Consolidation adjustment - UPII is unrealized profit in inventory arising on
inter-segment transactions.
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.
Divestment proceeds are
disposal proceeds as per the condensed group cash flow
statement.
Top of page 39
Glossary (continued)
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 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 40
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
30.
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 33.
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 31.
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.
Top of page 41
Glossary (continued)
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 31.
We are unable to present reconciliations of forward-looking
information for organic capital expenditure to total cash capital
expenditure, because without unreasonable efforts, we are unable to
forecast accurately the adjusting item, inorganic capital
expenditure, that is difficult to predict in advance in order to
derive the nearest GAAP estimate.
Production-sharing agreement/contract
(PSA/PSC) is an
arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return, if
exploration is successful, the oil company receives entitlement to
variable physical volumes of hydrocarbons, representing recovery of
the costs incurred and a stipulated share of the production
remaining after such cost recovery.
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 criteria to 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.
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.
Solomon availability - See
Refining availability definition.
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.
Top of page 42
Glossary (continued)
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 (other). 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 and currency translation
differences relating to cash and cash equivalents as presented on
the condensed group cash flow statement. See page 34 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 41) after excluding net adjusting items
and related taxation. See page 32 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 6-15 for the segments.
Top of page 43
Glossary (continued)
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.
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. 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.
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 44
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 shape of the COVID-19 recovery and the pace of
transition to a lower-carbon economy and energy system; plans,
expectations and assumptions regarding oil and gas demand, supply
or prices, the timing of production of reserves, or decision making
by OPEC+; expectations regarding refining margins, refinery
utilization rates and product demand; expectations regarding bp's
future financial performance and cash flows; expectations regarding
future upstream 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 quarterly dividends and share buybacks,
including bp's plan to increase the second quarter dividend by 4%
per ordinary share, bp's expectation based on its current
forecasts, at an oil price of around $60 per barrel Brent and
subject to the Board's approval each quarter of being able to
deliver a buyback of around $1.0 billion per quarter on average and
have capacity for an annual increase in the dividend per ordinary
share of around 4% through 2025, and plan to commence a buyback
from first half surplus cash flow; expectations of executing a
share buyback of $1.4 billion prior to announcement of third
quarter 2021 results; expectations of outlining plans for the
fourth-quarter share buyback at the time of bp's third quarter
results; plans and expectations of using 60% of surplus cash flow
for share buybacks and plans to allocate the remaining 40% to
strengthen bp's balance sheet for 2021; expectations regarding
demand for bp's products; plans and expectations with respect to
the total capital expenditure, depreciation, depletion and
amortization, expected tax rate and business and corporate
underlying annual charge for 2021; plans and expectations regarding
net debt; plans and expectations regarding the divestment
programme, including the amount and timing of proceeds in 2021, and
plans and expectations in respect of reaching $25 billion of
proceeds by 2025 and expectations that divestment and other
proceeds for 2021 will be in the $5-6 billion range; 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 price
assumptions used in accounting estimates; expectations regarding
the underlying effective tax rate for 2021; expectations regarding
the timing and amount of future payments relating to the Gulf of
Mexico oil spill; plans and expectations that capital expenditure,
including inorganic capital expenditure, will reach around $13
billion in 2021; plans and expectations regarding new joint
ventures and other agreements, including partnerships and other
collaborations with EnBW, Statkraft, Aker Offshore Wind, Equinor,
Eni, Marks & Spencer, PAYBACK, Ki Mobility, Daimler, BMW,
Qantas, Azerbaijan, Infosys, CEMEX and the Mærsk Mc-Kinney
Møller Center for Zero Carbon Shipping as well as plans and
expectations regarding LSbp's acquisitions from Iberia Solar and
RIC Energy and its activities in Australia, bp's blue hydrogen
production facility, bp's Mad Dog 2 development in the Gulf of
Mexico, the transfer by bp of its participating interests in six
blocks located in Foz do Amazonas basin off northern Brazil, bp's
exploration at the Puma West prospect, bp's announced agreement to
take full ownership of the Thorntons business in the US with
completion in the third quarter of 2021 and Air bp's rollout of
sustainable aviation fuel; plans and expectations regarding bp's
intention to bid with EnBW to develop offshore wind in the UK North
Sea; plans and expectations regarding bp's plans to join Statkraft
and Aker to develop offshore wind power in Norway and pursue a bid
in the Sørlige Nordsjø II (SN2) licence area; plans and
expectations for bp's work on EV charging, including the
development of EV charging networks in the UK and Europe and bp's
investment into IoTecha; plans and expectations regarding the
listing of Lightning eMotors; plans and expectations regarding
Launchpad portfolio companies; and expectations regarding
operational and financial results or acquisitions or divestments by
Rosneft, and expectations with respect to Rosneft
dividends.
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 Annual Report and Form 20-F 2020 as
filed with the US Securities and Exchange Commission.
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of BP p.l.c. is Ben Mathews, Company Secretary.
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Contacts
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London
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Houston
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Press Office
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David Nicholas
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Brett Clanton
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+44 (0)20 7496 4708
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+1 281 366 8346
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Investor Relations
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Craig Marshall
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Geoff Carr
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bp.com/investors
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+44 (0)20 7496 4962
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+1 281 892 3065
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BP
p.l.c.
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(Registrant)
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Dated: 03
August 2021
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/s/ Ben
J. S. Mathews
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------------------------
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Ben J.
S. Mathews
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Company
Secretary
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