UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 6-K
Report of Foreign
Private Issuer
Pursuant to
Rule 13a-16 or 15d-16 of
the Securities
Exchange Act of 1934
for the period
ended 30 June 2020
Commission File
Number 1-06262
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 of Form 20-F or Form 40-F:
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Form 20-F
x Form 40-F ¨
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Indicate by check mark if the
registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
¨
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Indicate by check mark if the
registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
¨
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THIS REPORT ON FORM 6-K SHALL BE
DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED
IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NOS. 333-226485,
333-226485-01 AND 333-226485-02) OF BP p.l.c., BP CAPITAL MARKETS
p.l.c. AND BP CAPITAL MARKETS AMERICA INC.; THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP
p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8
(FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON
FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c., THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP
p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-132619) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8
(FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON
FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-173136) OF BP
p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8
(FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON
FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP
p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8
(FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON
FORM S-8 (FILE NO. 333-207188) OF BP p.l.c., THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-207189) OF BP p.l.c., THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210316) OF BP
p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-210318) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON
WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY
DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
BP p.l.c. and
subsidiaries
Form 6-K for the
period ended 30 June 2020(a)
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Page
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1.
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3-14, 29-34,
36-38
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2.
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15-28
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3.
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35
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4.
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36
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5.
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39
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6.
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40
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7
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41
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8
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42
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(a)
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In this Form 6-K,
references to the half year
2020
and
half
year 2019
refer
to the six-month periods ended 30 June 2020
and
30 June 2019
respectively.
References to the
second
quarter 2020
and
second
quarter 2019
refer
to the three-month periods ended 30 June 2020
and
30 June 2019
respectively.
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(b)
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This discussion
should be read in conjunction with the consolidated financial
statements and related notes provided elsewhere in this Form 6-K
and with the information, including the consolidated financial
statements and related notes, in BP’s
Annual Report on Form 20-F for the year
ended 31 December 2019.
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Group results
second quarter and half year 2020
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Highlights
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Resetting
for the future in face of difficult conditions
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–
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Loss for the
quarter attributable to BP shareholders was $16.8
billion, compared with a
profit of $1.8
billion for the same
period a year earlier, including a net post-tax charge of
$10.9
billion for non-operating
items. This included $9.2 billion in post-tax non-cash impairments
across the group largely
arising from the
revisions to its long-term price assumptions and $1.7 billion of
post-tax non-cash exploration write-offs treated as non-operating
items.
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–
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Underlying
replacement cost loss for the quarter was $6.7
billion, compared with a
profit of $2.8
billion for the same
period a year earlier. The result was driven primarily by non-cash
Upstream exploration write-offs – $6.5 billion after tax –
principally resulting from a review of BP’s long-term strategic
plans and revisions to long-term price assumptions, combined with
the impact of lower oil and gas prices and very weak refining
margins, reduced oil and gas production and much lower demand for
fuels and lubricants. Oil trading delivered an exceptionally strong
result.
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–
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Operating cash
flow for the quarter was $3.7
billion including the
impact of Gulf of Mexico oil spill payments(a).
Gulf
of Mexico oil spill payments in the quarter of $1.1
billion on a post-tax
basis included the scheduled annual payment.
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–
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Total proceeds
from divestments and other disposals received in the quarter
were $1.1
billion. This included
the first payment from the agreed sale of BP’s petrochemicals
business to INEOS, which delivered BP’s plans for $15 billion of
announced transactions a year earlier than expected. The sale of
the upstream portion of BP’s Alaska business also completed at the
end of the quarter.
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–
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Total capital
expenditure in the first half of 2020 was $6.9
billion, compared
with $11.3
billion for the same
periods in 2019.
Organic capital expenditure in the first half of 2020 was
$6.6
billion, on track to meet
BP’s revised full year expectation of around $12 billion, announced
in April.
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–
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BP’s redesign of
its organization to become leaner, faster moving and lower cost,
including the announced reduction of around 10,000 jobs, is
expected to make a significant contribution to the planned $2.5
billion reduction in annual cash costs by the end of 2021, relative
to 2019. Restructuring costs of around $1.5 billion are expected to
be recognized in 2020.
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–
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During the quarter
BP issued $11.9 billion in hybrid bonds – a significant step in
diversifying its capital structure, supporting its investment grade
credit rating, and strengthening its finances.
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Finance debt
at 30 June 2020
was
$76.0
billion, compared
with $67.6
billion a year ago.
Finance debt ratio at 30 June 2020
was
47.9%,
compared with 39.5%
a year
ago. Net debt at the end of the quarter was $40.9
billion, $10.5 billion
lower than in the first quarter. Gearing at the end of the quarter
was 33.1%
compared
with 36.2%
at the
end of the previous quarter. This reflected the increase in equity
associated with the issuance of hybrid bonds and the lower net
debt, partly offset by the reduction in equity associated with the
second-quarter loss.
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A dividend of 5.25
cents per share was announced for the quarter, compared to 10.5
cents per share for the previous quarter. This dividend decision is
aligned with BP’s new distribution policy announced separately
today.
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(a)
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Operating cash
flow excluding Gulf of Mexico oil spill payments is a measure used
by management and BP believes it is useful as it allows for
meaningful comparisons between reporting periods. It is not however
disclosed in this SEC filing because SEC regulations do not permit
the inclusion of this non-GAAP metric.
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Helge
Lund – chairman:
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Together with our
results, we are today announcing BP’s new strategy to deliver our
net zero ambition, and a new investor proposition underpinned by a
coherent financial frame. Our investor proposition includes a new
distribution policy, which is designed to reward our investors with
committed distributions, and which has informed the board’s
decision on the dividend declared today for the second quarter of
2020.
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Financial summary
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Second
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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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half
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half
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$ million
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2020
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2019
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2020
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2019
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Sales and other
operating revenues
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31,676
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72,676
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91,326
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138,997
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Profit (loss) for
the period attributable to BP shareholders
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(16,848
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1,822
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(21,213
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4,756
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Inventory holding
(gains) losses, before tax
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(1,088
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(81
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3,796
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(1,169
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Taxation charge
(credit) on inventory holding gains and losses
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279
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34
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(868
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283
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RC profit
(loss)
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(17,657
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1,775
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(18,285
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3,870
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Net
(favourable) adverse impact of non-operating items and fair value
accounting effects, before tax
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14,566
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1,341
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15,930
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1,690
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Taxation charge
(credit) on non-operating items and fair value accounting
effects
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(3,591
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(305
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(3,536
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(391
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Underlying RC
profit (loss)
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(6,682
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2,811
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(5,891
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5,169
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Profit (loss) per
ordinary share (cents)
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(83.32
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8.95
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(105.02
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23.47
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Profit (loss) per
ADS (dollars)
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(5.00
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0.54
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(6.3
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1.41
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RC profit (loss)
per ordinary share (cents)
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(87.32
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8.72
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(90.52
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19.10
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RC profit (loss)
per ADS (dollars)
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(5.24
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0.52
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(5.43
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1.15
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Underlying RC
profit (loss) per ordinary share (cents)
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(33.05
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13.82
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(29.17
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25.51
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Underlying RC
profit (loss) per ADS (dollars)
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(1.98
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0.83
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(1.75
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1.53
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RC
profit (loss), underlying RC profit, organic capital expenditure,
net debt and gearing are non-GAAP measures. These measures and
finance debt ratio, inventory holding gains and losses,
non-operating items, fair value accounting effects, underlying
production, major project, Upstream plant reliability and refining
availability are defined in the Glossary on page
36.
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Bernard
Looney – chief
executive officer:
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“These headline
results have been driven by another very challenging quarter, but
also by the deliberate steps we have taken as we continue to
reimagine energy and reinvent bp. In particular, our reset of
long-term price assumptions and the related impairment and
exploration write-off charges had a major impact. Beneath these,
however, our performance remained resilient, with good cash flow
and – most importantly – safe and reliable
operations.”
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COVID-19
Update
Outlook:
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–
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The ongoing
severe impacts of the COVID-19 pandemic continue to create a
volatile and challenging trading environment.
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–
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Looking ahead,
the outlook for commodity prices and product demand remains
challenging and uncertain.
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–
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Global GDP is
expected to contract this year by 4-5%.
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–
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Global oil
demand is expected to be around 8-9 million barrels of oil per day
lower than 2019, with OECD oil stocks above their five-year range,
and gas markets are likely to remain materially oversupplied. There
is also a risk of the pandemic having an enduring impact on the
global economy, with the potential for weaker demand for energy for
a sustained period.
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–
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In July,
refining margins remained under pressure, with RMM at $6.3/barrel
due to lower product demand and high inventories, while BP refining
utilization improved to above 80%. Retail fuel demand recovered in
July to 10-15% lower than a year earlier, however, aviation fuel
demand continued to be over 70% lower.
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–
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The pandemic is
not expected to result in Upstream oil and gas outages but has
impacted development of the Mad Dog 2, Tangguh Expansion, Trinidad
Cassia Compression and Greater Tortue Ahmeyin Phase 1 major
projects.
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–
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BP's future
financial performance, including cash flows, net debt and gearing,
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 current supply and demand imbalances will be resolved
and what the ultimate impact of COVID-19 will be.
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Strengthening
finances:
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–
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BP continues to
take deliberate steps to strengthen its finances and drive down its
cash balance point.
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–
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These steps
include issuing around $7 billion of bonds in April, issuing $12
billion in hybrid bonds in June, agreeing the $5 billion divestment
of its petrochemicals business, and completing the sale of the
upstream Alaska business. BP also reset its long-term price
assumptions.
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–
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BP will continue
to review these actions, and any further actions that may be
appropriate, in response to changes in prevailing market
conditions.
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Organic capital
expenditure was limited to $6.6
billion in the first
half.
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–
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Net debt fell
to $40.9
billion at quarter-end.
BP had around $47 billion of liquidity, including cash and undrawn
revolving credit facilities, at quarter end.
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–
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Costs that are
directly attributable to COVID-19 were around $200 million for the
quarter.
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Protecting
our people and operations:
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–
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BP continues to
monitor the impact of COVID-19 on global operations and to date
there has been no direct significant operational impact, although
this could change through the rest of the third
quarter.
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–
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In the second
quarter, Upstream production was curtailed as a result of market
demand and OPEC+ restrictions, and refinery utilization was more
than 10% below normal levels due to COVID-19 demand
impacts.
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–
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Despite the
significant challenges of the environment, BP’s operations
continued safely and reliably in the quarter. BP-operated Upstream
plant reliability was 95.5% and BP-operated refining availability
was strong at 95.6%.
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–
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BP continues to
take steps to protect and support its staff through the pandemic,
including: reduced manning levels, changing working patterns, and
deploying appropriate personal protective equipment (PPE), enhanced
cleaning and social distancing measures at plants and retail sites.
The great majority of BP staff who are able to work from home have
done so since mid-March. Decisions on repopulating offices are
taken with caution and in compliance with local and national
guidelines and regulations.
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–
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BP is providing
enhanced support and guidance to staff on safety, health and
hygiene, homeworking and mental health.
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Supporting
communities:
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–
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BP continues to
offer support in response to the pandemic in communities in which
it operates.
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–
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Recent actions
include: providing discounts to emergency service and health
workers in the UK and US; donating PPE to health services;
campaigning to promote the wearing of masks in Africa; and
supporting staff in volunteering efforts, including matching
employee donations to charities.
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The
commentary above and following should be read in conjunction with
the cautionary statement on page 39.
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Group headlines
Results
Loss
for the second quarter and
half year attributable to BP
shareholders was $16,848
million and
$21,213
million respectively,
compared with a profit
of
$1,822
million and
$4,756
million for the same
periods in 2019.
For
the half
year, replacement cost
(RC) loss
was
$18,285
million, compared with
a profit
of
$3,870
million in
2019.
Underlying RC loss*
was $5,891
million, compared with a
profit of $5,169
million in
2019.
Underlying RC loss
is
after adjusting RC loss*
for a net charge
for
non-operating items* of $12,248
million and net
adverse
fair
value accounting effects* of $146
million (both on a
post-tax basis).
For
the second
quarter, RC
loss
was
$17,657
million, compared
with a
profit
of
$1,775
million in
2019.
Underlying RC loss
was
$6,682
million, compared with a
profit of $2,811
million in
2019.
Underlying RC loss is after adjusting RC loss
for a
net charge
for
non-operating items of $10,857
million and net
adverse
fair
value accounting effects of $118
million (both on a
post-tax basis).
See
further information on pages 6, 30 and
31.
Depreciation, depletion and amortization
The
charge for depreciation, depletion and amortization was
$3.9
billion in the quarter
and $8.0
billion in the
half
year, compared
with $4.6
billion and
$9.0
billion for the same
periods in 2019.
BP now expects the 2020 full-year charge to be around 10% lower
than 2019.
Effective tax rate
The
effective tax rate (ETR) on the profit or loss for the
second
quarter and half year was
19%
and
16%
respectively,
compared with 40%
and
38%
for
the same periods in 2019.
The
ETR on RC profit or loss* for the second quarter and
half year was
19%
and
15%
respectively,
compared with 39%
and
41%
for
the same periods in 2019.
Adjusting for non-operating items and fair value accounting
effects, the underlying ETR* for the second quarter and
half year was
9%
and
-3%
respectively,
compared with 34%
and
37%
for
the same periods a year ago. The lower underlying ETR for
the second quarter and
half year reflects the
exploration write-offs with a limited deferred tax benefit and the
reassessment of deferred tax asset recognition. The underlying ETR
in the second half of the year remains sensitive to the volatility
in the current environment. ETR on RC profit or loss and underlying
ETR are non-GAAP measures.
Dividend
BP
today announced a quarterly dividend of 5.25 cents per ordinary
share ($0.315 per ADS), which is expected to be paid on
25
September 2020. The
corresponding amount in sterling will be announced on
14
September 2020. See
page
27 for
more
information.
Share buybacks
BP
repurchased 120 million ordinary shares at a cost of $776 million
(including fees and stamp duty) in the first half year
of
2020,
all of which was completed in the first quarter. In January 2020,
the share dilution buyback programme had fully offset the impact of
scrip dilution since the third quarter 2017.
Operating cash flow*
Operating cash
flow was $3.7
billion for the
second
quarter and
$4.7
billion for the
half
year, including the
impact of Gulf of Mexico oil spill payments of $1.1
billion and
$1.4
billion respectively,
compared with $6.8
billion and
$12.1
billion for the same
periods in 2019.
Capital expenditure*
Total
capital expenditure for the second quarter and
half year was
$3.1
billion and
$6.9
billion respectively,
compared with $5.7
billion and
$11.3
billion for the same
periods in 2019.
Organic capital
expenditure* for the second quarter and
half year was
$3.0
billion and
$6.6
billion respectively,
compared with $3.7
billion and
$7.3
billion for the same
periods in 2019.
Inorganic capital
expenditure* for the second quarter and
half year was
$33
million and
$0.4
billion respectively,
compared with $2.0
billion and
$4.0
billion for the same
periods in 2019.
Organic capital
expenditure and inorganic capital expenditure are non-GAAP
measures. See page 29
for
further information.
Divestment and other proceeds
Total
divestment and other proceeds were $1.1
billion for the
second
quarter, including the
first tranche of petrochemicals disposal proceeds and also TANAP
pipeline refinancing, and $1.8
billion for the
half
year. Divestment
proceeds* were $0.7
billion for the
second
quarter and
$1.4
billion for the
half
year, compared
with $0.1
billion and
$0.7
billion for the same
periods in 2019.
Debt
Finance debt
at 30 June 2020
was
$76.0
billion, compared
with $67.6
billion a year ago.
Finance debt ratio* at 30 June 2020
was
47.9%,
compared with 39.5%
a year
ago. Net debt* at 30 June 2020
was
$40.9
billion, compared
with $46.5
billion a year ago.
Gearing* at 30 June 2020
was
33.1%,
compared with 31.0%
a year
ago. Gearing including leases* at 30 June 2020
was
37.7%,
compared with 35.3%
a year
ago. Net debt, gearing and gearing including leases are non-GAAP
measures. See
pages
27
and
32
for
more information.
*
For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
36.
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The
commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page
39.
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Analysis of underlying RC profit (loss)* before interest and
tax
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Second
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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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half
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half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
Upstream
|
|
(8,487
|
)
|
3,413
|
|
|
(6,616
|
)
|
6,341
|
|
|
Downstream
|
|
1,405
|
|
1,365
|
|
|
2,326
|
|
3,098
|
|
|
Rosneft
|
|
(61
|
)
|
638
|
|
|
(78
|
)
|
1,205
|
|
|
Other businesses
and corporate
|
|
(260
|
)
|
(290
|
)
|
|
(821
|
)
|
(708
|
)
|
|
Consolidation
adjustment – UPII*
|
|
(46
|
)
|
34
|
|
|
132
|
|
21
|
|
|
Underlying RC
profit (loss) before interest and tax
|
|
(7,449
|
)
|
5,160
|
|
|
(5,057
|
)
|
9,957
|
|
|
Finance costs and
net finance expense relating to pensions and other post-retirement
benefits
|
|
(677
|
)
|
(752
|
)
|
|
(1,345
|
)
|
(1,506
|
)
|
|
Taxation on an
underlying RC basis
|
|
770
|
|
(1,515
|
)
|
|
(183
|
)
|
(3,135
|
)
|
|
Non-controlling
interests
|
|
674
|
|
(82
|
)
|
|
694
|
|
(147
|
)
|
|
Underlying RC
profit (loss) attributable to BP shareholders
|
|
(6,682
|
)
|
2,811
|
|
|
(5,891
|
)
|
5,169
|
|
Reconciliations of
underlying RC profit or loss attributable to BP shareholders to the
nearest equivalent IFRS measure are provided on page 3
for
the group and on pages 9-14
for
the segments.
Analysis of RC profit (loss)* before interest and tax and
reconciliation to profit (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
Upstream
|
|
(22,008
|
)
|
2,469
|
|
|
(20,985
|
)
|
5,353
|
|
|
Downstream
|
|
594
|
|
1,288
|
|
|
1,258
|
|
3,053
|
|
|
Rosneft
|
|
(124
|
)
|
525
|
|
|
(141
|
)
|
1,011
|
|
|
Other businesses
and corporate
|
|
(317
|
)
|
(381
|
)
|
|
(1,015
|
)
|
(927
|
)
|
|
Consolidation
adjustment – UPII
|
|
(46
|
)
|
34
|
|
|
132
|
|
21
|
|
|
RC profit (loss)
before interest and tax
|
|
(21,901
|
)
|
3,935
|
|
|
(20,751
|
)
|
8,511
|
|
|
Finance costs and
net finance expense relating to pensions and other post-retirement
benefits
|
|
(791
|
)
|
(868
|
)
|
|
(1,581
|
)
|
(1,750
|
)
|
|
Taxation on a RC
basis
|
|
4,361
|
|
(1,210
|
)
|
|
3,353
|
|
(2,744
|
)
|
|
Non-controlling
interests
|
|
674
|
|
(82
|
)
|
|
694
|
|
(147
|
)
|
|
RC profit (loss)
attributable to BP shareholders
|
|
(17,657
|
)
|
1,775
|
|
|
(18,285
|
)
|
3,870
|
|
|
Inventory holding
gains (losses)*
|
|
1,088
|
|
81
|
|
|
(3,796
|
)
|
1,169
|
|
|
Taxation (charge)
credit on inventory holding gains and losses
|
|
(279
|
)
|
(34
|
)
|
|
868
|
|
(283
|
)
|
|
Profit (loss) for
the period attributable to BP shareholders
|
|
(16,848
|
)
|
1,822
|
|
|
(21,213
|
)
|
4,756
|
|
Operational updates
Upstream
Upstream
production, which excludes Rosneft, for the first half of the year
averaged 2,552mboe/d, 3.3% lower than a year earlier. Underlying
production*, was 1.0% higher than 2019 mainly due to ramp up of
major projects*.
The
sale of the upstream portion of BP’s Alaska business completed on
30 June. Hilcorp Energy and BP continue to work with regulators and
subject to approvals, expect to complete the sale of the midstream
portion, including BP’s interest in the Trans Alaska Pipeline,
during 2020. BP and Premier Oil signed sale and purchase
agreements, reflecting final agreed terms, for the divestment of
the Andrew Area and Shearwater assets in the UK North Sea. Subject
to approvals, the transaction is expected to complete by the end of
the third quarter of 2020.
Upstream has
delayed exploration and appraisal activities and curtailed
development activities in lower margin areas, as well as rephasing
or minimizing spend on projects in the early phases of development.
These interventions are expected to reduce 2020 reported production
by around 70mboe/d.
Downstream
The
second quarter saw the weakest industry refining environment in
over 15 years, and an unprecedented fall in product demand driven
by COVID-19. While refining operations in the quarter were strong,
with BP-operated
refining availability of
95.6%, demand destruction resulted in lower
utilization.
In
June BP announced the sale of its petrochemicals business to INEOS
for a total consideration of $5 billion. Subject to approvals, the
transaction is expected to complete before the end of the
year.
In
July BP and Reliance Industries completed the formation of the new
fuel and mobility joint venture that will operate across India
under the Jio-bp brand.
Low carbon
BP
entered into an agreement with China’s ENN to work together to
supply 300,000 tonnes a year of regasified LNG to ENN's customers
in Guangdong province. BP also agreed with Enágas in Spain to
jointly promote LNG and CNG for transport and the use of renewable
gas.
In
July BP announced plans to work with JinkoPower, a leading Chinese
solar power company, to offer integrated decarbonized energy
solutions and services to customers in China. It also announced
plans to invest $70 million in India’s Green Growth Equity Fund to
support the growing renewable energy sector in India.
Petrofac and BP
extended their partnership with a new metering contract for four
years. BP has invested in Satelytics whose technology is expected
to aid in the deployment of a suite of methane detecting techniques
across new and existing major facilities.
Financial framework
Operating
cash flow* was
$4.7
billion for the
half
year of
2020,
including Gulf of Mexico oil spill payments of $1.4
billion, compared
with $12.1
billion for the same
period in 2019.
Organic
capital expenditure* for the
half
year of
2020
was
$6.6
billion. BP expects 2020
organic capital expenditure to be around $12 billion.
Total
divestment
and
other proceeds were
$1.8
billion for the
half
year of
2020.
Gulf
of Mexico oil spill payments on a post-tax
basis were $1.4
billion in the
half
year of
2020.
BP now expects the post-tax payments to be around $1.5 billion in
2020.
Gearing*
at
30 June 2020
was
33.1%,
in part reflecting the recent hybrid bond issue. See
page
27 for more
information.
|
|
|
|
|
|
|
|
|
Operating
metrics
|
|
First half
2020
|
|
Financial
metrics
|
|
First half
2020
|
|
|
(vs. First half
2019)
|
|
|
(vs. First half
2019)
|
|
Tier 1 and tier
2 process safety events
|
|
47
|
|
Underlying RC
profit (loss)*i
|
|
$(5.9)bn
|
|
|
(-2)
|
|
|
(-$11.1bn)
|
|
Reported
recordable injury frequency*
|
|
0.131
|
|
Operating cash
flow excluding Gulf of Mexico oil spill payments
(post-tax)
|
|
(b)
|
|
|
(-29.8%)
|
|
|
|
|
Group
production
|
|
3,655mboe/d
|
|
Organic capital
expenditureii
|
|
$6.6bn
|
|
|
(-3.5%)
|
|
|
(-$0.8bn)
|
|
Upstream
production (excludes Rosneft
segment)
|
|
2,552mboe/d
|
|
Gulf of Mexico
oil spill payments (post-tax)
|
|
$1.4bn
|
|
|
(-3.3%)
|
|
|
(-$0.7bn)
|
|
Upstream unit
production costs*(a)
|
|
$6.13/boe
|
|
Divestment
proceeds*
|
|
$1.4bn
|
|
|
(-12.6%)
|
|
|
(+$0.7bn)
|
|
BP-operated
Upstream plant reliability*
|
|
94.2%
|
|
Gearingiii
|
|
33.1%
|
|
|
(-0.7)
|
|
|
(+2.1)
|
|
BP-operated
refining availability*
|
|
95.9%
|
|
Dividend per
ordinary share(c)
|
|
5.25 cents
|
|
|
(+2.0)
|
|
|
(-48.8%)
|
|
|
|
(a)
|
Reflecting
divestment impacts and lower costs.
|
|
|
|
(b)
|
SEC regulations do
not permit inclusion of this non-GAAP metric in this SEC filing.
Operating cash flow excluding Gulf of Mexico oil spill payments is
calculated by excluding post-tax payments relating to the Gulf of
Mexico oil spill from net cash provided by operating activities, as
reported in the condensed group cash flow statement. For the
half
year, net cash
provided by operating activities was $5 billion
and
post-tax Gulf of Mexico oil spill payments were $1.4
billion.
|
|
|
|
(c)
|
Represents
dividend announced in the quarter (vs. prior year
quarter).
|
|
|
|
|
|
Nearest GAAP
equivalent measures
|
|
i
|
(Loss) for the period att. to BP shareholders:
|
$(21.2)bn
|
|
ii
|
Capital expenditure*:
|
$6.9bn
|
|
iii
|
Finance debt ratio*:
|
47.9%
|
|
|
|
The
commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page
39.
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Sales and other
operating revenues(a)
|
|
7,194
|
|
13,556
|
|
|
18,658
|
|
28,150
|
|
|
Profit (loss)
before interest and tax
|
|
(21,951
|
)
|
2,459
|
|
|
(20,996
|
)
|
5,345
|
|
|
Inventory holding
(gains) losses*
|
|
(57
|
)
|
10
|
|
|
11
|
|
8
|
|
|
RC profit (loss)
before interest and tax
|
|
(22,008
|
)
|
2,469
|
|
|
(20,985
|
)
|
5,353
|
|
|
Net
(favourable) adverse impact of non-operating items* and fair value
accounting effects*
|
|
13,521
|
|
944
|
|
|
14,369
|
|
988
|
|
|
Underlying RC
profit (loss) before interest and tax*(b)
|
|
(8,487
|
)
|
3,413
|
|
|
(6,616
|
)
|
6,341
|
|
|
|
|
(a)
|
Includes sales to
other segments.
|
|
|
|
(b)
|
See
page
10 for a
reconciliation to segment RC profit before interest and tax by
region.
|
Financial results
Sales
and other operating revenues for the second quarter and
half year were
$7
billion and
$19
billion respectively,
compared with $14 billion
and
$28
billion for the
corresponding periods in 2019.
For the second quarter and half year, revenues were lower mainly
due to lower realizations and lower gas marketing and trading
revenues.
The
replacement cost loss before interest and tax for the
second
quarter and half year was
$22,008
million and
$20,985
million respectively,
compared with a profit of $2,469
million and
$5,353
million for the same
periods in 2019.
The second quarter and
half year included a net
non-operating charge
of
$13,454
million and
$14,525
million respectively,
which principally relate to impairments associated with revisions
to long-term price assumptions, compared with a net
charge
of
$766
million and
$770
million for the same
periods in 2019.
Fair value accounting effects in the second quarter and
half year had
an
adverse impact of
$67
million and
a
favourable impact of
$156
million respectively,
compared with an adverse
impact
of $178
million and
$218
million in the same
periods of 2019.
After
adjusting for non-operating items and fair value accounting
effects, the underlying replacement cost loss
before
interest and tax for the second quarter and
half year was
$8,487
million and
$6,616
million respectively,
compared with a profit of $3,413
million and
$6,341
million for the same
periods in 2019.
The results for the second quarter and half year mainly reflect the
impact of writing down certain exploration intangible carrying
values, and lower liquids and gas realizations.
Production
Production for the
quarter was 2,525mboe/d, 3.8% lower than the second quarter of
2019. Underlying production* for the quarter increased by 0.6%
mainly due to ramp up of major projects*.
For
the half year, production was 2,552mboe/d, 3.3% lower than the
first half of 2019. Underlying production for the half year was
1.0% higher than 2019 mainly due to ramp up of major
projects.
Key events
On 30
June, BP completed the sale of its upstream Alaska business to
Hilcorp. BP and Hilcorp continue to work with regulators to
complete the sale of midstream assets, including BP’s interest in
the Trans Alaska Pipeline System (TAPS).
On 1
July, BP confirmed the Bashrush gas discovery, located offshore
Egypt. Evaluation is ongoing (Eni operator 37.5%, BP 37.5%, Total
25%).
On 20
July, BP signed sale and purchase agreements, reflecting final
agreed terms, for the divestment of its interests in the Andrew
Area and Shearwater assets, both located in the UK North Sea, to
Premier Oil. Subject to approvals, the transaction is expected to
complete by the end of the third quarter of 2020.
These
events follow the announcements in our first-quarter results, which
comprised the following: BP executed a gas sale and purchase
agreement with partners in the Greater Tortue Ahmeyim (GTA)
project. GTA operations are severely affected by COVID-19 and the
2020 weather window for installation works can no longer be met
resulting in a delay of around one year (BP operator 56%, Kosmos
27%, Petrosen 10%, SMHPM 7%); BP confirmed notification from the
Brazilian National Petroleum Agency (ANP) of its approvals to
postpone the deadline for declaring commerciality of the Wahoo (BP
operator 35.7%, IBV Brasil Petróleo 35.7% Total 20%, Anadarko 8.6%)
and Itaipu (BP operator 60%, Total 26.7%, Anadarko 13.3%) pre-salt
discoveries offshore Brazil in the Campos basin, until June 2022;
BP confirmed completion of the restructuring of contractual
arrangements for the Petrojari Foinaven floating production,
storage and offloading vessel on the Foinaven field to the west of
the Shetlands (BP operator 72%, RockRose Energy 28%); BP relocated
personnel from the remote Tangguh expansion project in Indonesia,
as part of a COVID-19 response plan and anticipates a delay to
start-up (BP operator 40.22%, MI Berau B.V. 16.30%, CNOOC Muturi
Ltd. 13.90%, Nippon Oil Exploration (Berau) Ltd. 12.23%, KG Berau
Petroleum Ltd 8.60%, Indonesia Natural Gas Resources Muturi Inc
7.35%, KG Wiriagar Overseas Ltd 1.40%).
Outlook
Looking ahead, we
expect third-quarter 2020 reported production to be lower than the
second quarter reflecting price impacts on TSC* entitlement
volumes, divestment of the Alaska business, and seasonal
maintenance activities.
|
|
|
The
commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page
39.
|
Upstream (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
US
|
|
(2,960
|
)
|
861
|
|
|
(2,421
|
)
|
1,473
|
|
|
Non-US
|
|
(5,527
|
)
|
2,552
|
|
|
(4,195
|
)
|
4,868
|
|
|
|
|
(8,487
|
)
|
3,413
|
|
|
(6,616
|
)
|
6,341
|
|
|
Non-operating items(a)(b)
|
|
|
|
|
|
|
|
US
|
|
(2,122
|
)
|
(446
|
)
|
|
(2,754
|
)
|
(476
|
)
|
|
Non-US
|
|
(11,332
|
)
|
(320
|
)
|
|
(11,771
|
)
|
(294
|
)
|
|
|
|
(13,454
|
)
|
(766
|
)
|
|
(14,525
|
)
|
(770
|
)
|
|
Fair value accounting effects
|
|
|
|
|
|
|
|
US
|
|
39
|
|
(225
|
)
|
|
37
|
|
(318
|
)
|
|
Non-US
|
|
(106
|
)
|
47
|
|
|
119
|
|
100
|
|
|
|
|
(67
|
)
|
(178
|
)
|
|
156
|
|
(218
|
)
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
US
|
|
(5,043
|
)
|
190
|
|
|
(5,138
|
)
|
679
|
|
|
Non-US
|
|
(16,965
|
)
|
2,279
|
|
|
(15,847
|
)
|
4,674
|
|
|
|
|
(22,008
|
)
|
2,469
|
|
|
(20,985
|
)
|
5,353
|
|
|
Exploration expense
|
|
|
|
|
|
|
|
US
|
|
2,560
|
|
69
|
|
|
2,580
|
|
94
|
|
|
Non-US
|
|
7,114
|
|
77
|
|
|
7,296
|
|
419
|
|
|
|
|
9,674
|
|
146
|
|
|
9,876
|
|
513
|
|
|
Of which:
Exploration expenditure written off(b)
|
|
9,618
|
|
77
|
|
|
9,716
|
|
361
|
|
|
Production
(net of royalties)(c)(d)
|
|
|
|
|
|
|
|
Liquids*
(mb/d)
|
|
|
|
|
|
|
|
US
|
|
472
|
|
506
|
|
|
488
|
|
480
|
|
|
Europe
|
|
166
|
|
137
|
|
|
156
|
|
148
|
|
|
Rest of
World
|
|
728
|
|
658
|
|
|
691
|
|
672
|
|
|
|
|
1,366
|
|
1,301
|
|
|
1,336
|
|
1,300
|
|
|
Of which
equity-accounted entities
|
|
146
|
|
130
|
|
|
146
|
|
134
|
|
|
Natural gas
(mmcf/d)
|
|
|
|
|
|
|
|
US
|
|
1,549
|
|
2,410
|
|
|
1,799
|
|
2,360
|
|
|
Europe
|
|
298
|
|
132
|
|
|
271
|
|
139
|
|
|
Rest of
World
|
|
4,878
|
|
5,138
|
|
|
4,985
|
|
5,276
|
|
|
|
|
6,725
|
|
7,680
|
|
|
7,056
|
|
7,775
|
|
|
Of which
equity-accounted entities
|
|
467
|
|
454
|
|
|
478
|
|
457
|
|
|
Total hydrocarbons* (mboe/d)
|
|
|
|
|
|
|
|
US
|
|
739
|
|
921
|
|
|
799
|
|
887
|
|
|
Europe
|
|
217
|
|
160
|
|
|
203
|
|
172
|
|
|
Rest of
World
|
|
1,569
|
|
1,544
|
|
|
1,551
|
|
1,581
|
|
|
|
|
2,525
|
|
2,625
|
|
|
2,552
|
|
2,640
|
|
|
Of which
equity-accounted entities
|
|
227
|
|
209
|
|
|
228
|
|
212
|
|
|
Average realizations*(e)
|
|
|
|
|
|
|
|
Total
liquids(e) ($/bbl)
|
|
22.75
|
|
62.63
|
|
|
34.39
|
|
59.61
|
|
|
Natural gas
($/mcf)
|
|
2.53
|
|
3.35
|
|
|
2.69
|
|
3.68
|
|
|
Total
hydrocarbons ($/boe)
|
|
19.06
|
|
40.64
|
|
|
25.36
|
|
40.02
|
|
|
|
|
(a)
|
Second quarter
2020 principally relates to impairments in a number of our
businesses resulting from the revisions to BP’s long-term price
assumptions. Half year 2020 includes impairment charges and loss
principally related to the disposal of our Alaska business, BPX
Energy assets and oil price impacts in the UK North Sea. Second
quarter and first half 2019 include impairment charges related to
the disposal of BPX Energy assets and GUPCO divestment. See Note 3
for further information.
|
|
|
|
(b)
|
Second quarter
2020 includes the write-off of $1,969 million relating to value
ascribed to certain licences as part of the accounting for the
acquisition of upstream assets in Brazil, India and the Gulf of
Mexico. This has been classified within the ‘other’ category of
non-operating items. See Note 4 for further
information.
|
|
|
|
(c)
|
Includes BP’s
share of production of equity-accounted entities in the Upstream
segment.
|
|
|
|
(d)
|
Because of
rounding, some totals may not agree exactly with the sum of their
component parts.
|
|
|
|
(e)
|
Realizations are
based on sales by consolidated subsidiaries only – this excludes
equity-accounted entities.
|
|
|
|
(f)
|
Includes
condensate, natural gas liquids and bitumen.
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Sales and other
operating revenues(a)
|
|
27,241
|
|
66,396
|
|
|
81,205
|
|
124,812
|
|
|
Profit (loss)
before interest and tax
|
|
1,572
|
|
1,381
|
|
|
(2,379
|
)
|
4,192
|
|
|
Inventory holding
(gains) losses*
|
|
(978
|
)
|
(93
|
)
|
|
3,637
|
|
(1,139
|
)
|
|
RC profit before
interest and tax
|
|
594
|
|
1,288
|
|
|
1,258
|
|
3,053
|
|
|
Net
(favourable) adverse impact of non-operating items* and fair value
accounting effects*
|
|
811
|
|
77
|
|
|
1,068
|
|
45
|
|
|
Underlying RC
profit before interest and tax*(b)
|
|
1,405
|
|
1,365
|
|
|
2,326
|
|
3,098
|
|
|
|
|
(a)
|
Includes sales to
other segments.
|
|
|
|
(b)
|
See
page
12 for a
reconciliation to segment RC profit before interest and tax by
region and by business.
|
Financial results
Sales
and other operating revenues for the second quarter and
half year were
$27
billion and
$81
billion respectively,
compared with $66 billion
and
$125
billion for the
corresponding periods in 2019.
The reduction in the second quarter and
half year was due to lower
oil prices and COVID-19 related demand destruction.
The
replacement cost profit
before
interest and tax for the second quarter and
half year was
$594
million and
$1,258
million respectively,
compared with $1,288
million and
$3,053
million for the same
periods in 2019.
The
second
quarter and half year include a net
non-operating charge
of
$780
million and
$778
million respectively,
mainly relating to impairments, compared with a charge
of
$31
million and
$35
million for the same
periods in 2019.
Fair value accounting effects in the second quarter and
half year had
an
adverse impact of
$31
million and
$290
million respectively,
compared with an adverse
impact
of $46 million
and
$10
million in the same
periods in 2019.
After
adjusting for non-operating items and fair value accounting
effects, the underlying replacement cost profit
before
interest and tax for the second quarter and
half year was
$1,405
million and
$2,326
million respectively,
compared with $1,365
million and
$3,098
million for the same
periods in 2019.
Replacement cost
profit before interest and tax for the fuels, lubricants and
petrochemicals businesses is set out on page
12.
Fuels
The
fuels business reported an underlying replacement cost
profit
before
interest and tax of $1,295
million for the
second
quarter and
$1,984
million for the
half
year, compared
with $961
million and
$2,253
million for the same
periods in 2019.
The result for the quarter was primarily driven by an exceptionally
strong contribution from supply and trading.
The
refining result for the quarter and half year reflects the weakest
industry refining environment in over 15 years. In addition,
utilization was more than 10% below normal levels at around 80%,
driven by COVID-19 demand impacts. These factors were partially
offset by lower turnaround activity and continued strong
availability.
The
fuels marketing result was significantly impacted by COVID-19
related fuels demand destruction with retail fuels volumes in the
quarter around 30% lower than last year. In addition, aviation
fuels volumes were more than 70% lower than the same period in
2019. Despite these demand impacts, store sales at our retail sites
increased year on year on a like for like basis, demonstrating the
strength and resilience of our convenience retail
offer.
In
July we announced the start of our new fuels and mobility joint
venture in India, Reliance BP Mobility Limited. Operating under the
“Jio-bp” brand, the joint venture aims to become a leading player
in India’s growing fuels and mobility markets, expanding from its
current retail network of over 1,400 retail sites to up to 5,500
over the next five years.
Lubricants
The
lubricants business reported an underlying replacement cost
profit
before
interest and tax of $63 million
for
the second
quarter and
$230
million for the
half
year, compared
with $321
million and
$593
million for the same
periods in 2019.
The result for the quarter and half year reflects significant
COVID-19 related demand destruction, with lubricants volumes in
Europe, North America and India 40-50% lower in the quarter
compared with the same period last year. In China, where we
experienced significant impacts in the first quarter, we have seen
strong volume recovery in the second quarter.
Petrochemicals
The
petrochemicals business reported an underlying replacement
cost profit
before
interest and tax of $47 million
for
the second
quarter and
$112
million for the
half
year, compared
with $83 million
and
$252
million for the same
periods in 2019.
The result for the quarter and half year reflects a weaker margin
environment and the impact of COVID-19, partly offset by lower
turnaround activity.
In the
quarter we announced the sale of BP’s petrochemicals business to
INEOS for a total consideration of $5 billion, subject to customary
adjustments. As a result, the net assets have been classified as
held for sale in the group balance sheet at 30 June 2020. Subject
to approvals, the transaction is expected to complete before the
end of the year.
Outlook
Looking to the
third quarter of 2020, we expect higher product demand, albeit
still significantly below last year’s levels. We also expect
significant continued pressure on industry refining margins into
the third quarter.
|
|
|
The
commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page
39.
|
Downstream (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Underlying RC profit before interest and tax - by
region
|
|
|
|
|
|
|
|
US
|
|
719
|
|
566
|
|
|
1,276
|
|
1,097
|
|
|
Non-US
|
|
686
|
|
799
|
|
|
1,050
|
|
2,001
|
|
|
|
|
1,405
|
|
1,365
|
|
|
2,326
|
|
3,098
|
|
|
Non-operating items
|
|
|
|
|
|
|
|
US
|
|
(69
|
)
|
2
|
|
|
(63
|
)
|
3
|
|
|
Non-US
|
|
(711
|
)
|
(33
|
)
|
|
(715
|
)
|
(38
|
)
|
|
|
|
(780
|
)
|
(31
|
)
|
|
(778
|
)
|
(35
|
)
|
|
Fair value accounting effects(a)
|
|
|
|
|
|
|
|
US
|
|
(71
|
)
|
8
|
|
|
74
|
|
69
|
|
|
Non-US
|
|
40
|
|
(54
|
)
|
|
(364
|
)
|
(79
|
)
|
|
|
|
(31
|
)
|
(46
|
)
|
|
(290
|
)
|
(10
|
)
|
|
RC profit before interest and tax
|
|
|
|
|
|
|
|
US
|
|
579
|
|
576
|
|
|
1,287
|
|
1,169
|
|
|
Non-US
|
|
15
|
|
712
|
|
|
(29
|
)
|
1,884
|
|
|
|
|
594
|
|
1,288
|
|
|
1,258
|
|
3,053
|
|
|
Underlying RC profit before interest and tax - by
business(b)(c)
|
|
|
|
|
|
|
|
Fuels
|
|
1,295
|
|
961
|
|
|
1,984
|
|
2,253
|
|
|
Lubricants
|
|
63
|
|
321
|
|
|
230
|
|
593
|
|
|
Petrochemicals
|
|
47
|
|
83
|
|
|
112
|
|
252
|
|
|
|
|
1,405
|
|
1,365
|
|
|
2,326
|
|
3,098
|
|
|
Non-operating items and fair value accounting
effects(a)
|
|
|
|
|
|
|
|
Fuels
|
|
(748
|
)
|
(99
|
)
|
|
(1,005
|
)
|
(62
|
)
|
|
Lubricants
|
|
(51
|
)
|
22
|
|
|
(51
|
)
|
18
|
|
|
Petrochemicals
|
|
(12
|
)
|
—
|
|
|
(12
|
)
|
(1
|
)
|
|
|
|
(811
|
)
|
(77
|
)
|
|
(1,068
|
)
|
(45
|
)
|
|
RC profit before interest and tax(b)(c)
|
|
|
|
|
|
|
|
Fuels
|
|
547
|
|
862
|
|
|
979
|
|
2,191
|
|
|
Lubricants
|
|
12
|
|
343
|
|
|
179
|
|
611
|
|
|
Petrochemicals
|
|
35
|
|
83
|
|
|
100
|
|
251
|
|
|
|
|
594
|
|
1,288
|
|
|
1,258
|
|
3,053
|
|
|
|
|
|
|
|
|
|
|
BP average refining marker margin (RMM)*
($/bbl)
|
|
5.9
|
|
15.2
|
|
|
7.4
|
|
12.7
|
|
|
|
|
|
|
|
|
|
|
Refinery throughputs
(mb/d)
|
|
|
|
|
|
|
|
US
|
|
614
|
|
673
|
|
|
681
|
|
703
|
|
|
Europe
|
|
716
|
|
715
|
|
|
776
|
|
741
|
|
|
Rest of
World
|
|
157
|
|
209
|
|
|
190
|
|
223
|
|
|
|
|
1,487
|
|
1,597
|
|
|
1,647
|
|
1,667
|
|
|
BP-operated refining availability*
(%)
|
|
95.6
|
|
93.4
|
|
|
95.9
|
|
93.9
|
|
|
|
|
|
|
|
|
|
|
Marketing sales of refined products (mb/d)
|
|
|
|
|
|
|
|
US
|
|
872
|
|
1,174
|
|
|
955
|
|
1,126
|
|
|
Europe
|
|
685
|
|
1,091
|
|
|
820
|
|
1,042
|
|
|
Rest of
World
|
|
364
|
|
520
|
|
|
441
|
|
520
|
|
|
|
|
1,921
|
|
2,785
|
|
|
2,216
|
|
2,688
|
|
|
Trading/supply
sales of refined products
|
|
3,172
|
|
3,099
|
|
|
3,274
|
|
3,197
|
|
|
Total sales
volumes of refined products
|
|
5,093
|
|
5,884
|
|
|
5,490
|
|
5,885
|
|
|
|
|
|
|
|
|
|
|
Petrochemicals production
(kte)
|
|
|
|
|
|
|
|
US
|
|
410
|
|
584
|
|
|
1,021
|
|
1,185
|
|
|
Europe
|
|
1,246
|
|
1,226
|
|
|
2,617
|
|
2,386
|
|
|
Rest of
World
|
|
1,271
|
|
1,156
|
|
|
2,424
|
|
2,455
|
|
|
|
|
2,927
|
|
2,966
|
|
|
6,062
|
|
6,026
|
|
|
|
|
(a)
|
For Downstream,
fair value accounting effects arise solely in the fuels business.
See page 31
for
further information.
|
|
|
|
(b)
|
Segment-level
overhead expenses are included in the fuels business
result.
|
|
|
|
(c)
|
Results from
petrochemicals at our Gelsenkirchen and Mülheim sites in Germany
are reported in the fuels business.
|
Rosneft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020(a)
|
|
2019
|
|
|
2020(a)
|
|
2019
|
|
|
Profit (loss)
before interest and tax(b)(c)
|
|
(71
|
)
|
523
|
|
|
(289
|
)
|
1,049
|
|
|
Inventory holding
(gains) losses*
|
|
(53
|
)
|
2
|
|
|
148
|
|
(38
|
)
|
|
RC profit (loss)
before interest and tax
|
|
(124
|
)
|
525
|
|
|
(141
|
)
|
1,011
|
|
|
Net charge
(credit) for non-operating items*
|
|
63
|
|
113
|
|
|
63
|
|
194
|
|
|
Underlying RC
profit (loss) before interest and tax*
|
|
(61
|
)
|
638
|
|
|
(78
|
)
|
1,205
|
|
Financial results
Replacement cost
(RC) loss
before
interest and tax for the second quarter and
half year was
$124
million and
$141
million respectively,
compared with a profit
of
$525
million and
$1,011
million for the same
periods in 2019.
After
adjusting for non-operating items, the underlying RC
loss
before
interest and tax for the second quarter and
half year was
$61
million and
$78
million respectively,
compared with a profit
of
$638
million and
$1,205
million for the same
periods in 2019.
Compared with the
same periods in 2019,
the result for the second
quarter primarily reflects
lower oil prices partially offset by favourable foreign exchange,
whilst the result for the half year was primarily affected by lower
oil prices.
Key events
BP’s
two nominees, Bob Dudley and Bernard Looney, were elected to
Rosneft’s board at Rosneft's annual general meeting (AGM) on 2 June
2020. At the AGM, shareholders also approved a resolution to pay a
dividend of 18.07 roubles per ordinary share, which brings the
total dividend for 2019 to 33.41 roubles per ordinary share,
constituting 50% of the company’s IFRS net profit. BP received a
payment of $480 million, after the deduction of withholding tax, on
14 July.
On 30
April 2020, Rosneft completed a transaction to transfer all of its
interest and cease participation in its Venezuelan businesses to a
company owned by the government of the Russian Federation. In
consideration, Rosneft received shares equal to a 9.6% share of its
own equity. The shares are held by a 100% subsidiary of Rosneft and
accounted for as treasury shares. Rosneft also has an approved
programme of share buybacks under which shares are being
repurchased. Those shares are also accounted for as treasury
shares.
BP
retains 19.75% of the voting rights at meetings of Rosneft
shareholders and continues to be entitled to dividends based on
that shareholding. BP’s economic interest as of 30 June, however,
has increased to 21.93% as a result of its indirect interest in the
shares held by the subsidiaries of Rosneft. BP’s share of profit or
loss of Rosneft reflects its economic interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
|
|
2020(a)
|
|
2019
|
|
|
2020(a)
|
|
2019
|
|
|
Production (net of royalties) (BP share)
|
|
|
|
|
|
|
|
Liquids*
(mb/d)
|
|
856
|
|
912
|
|
|
886
|
|
924
|
|
|
Natural gas
(mmcf/d)
|
|
1,248
|
|
1,250
|
|
|
1,261
|
|
1,288
|
|
|
Total
hydrocarbons* (mboe/d)
|
|
1,071
|
|
1,127
|
|
|
1,103
|
|
1,146
|
|
|
|
|
(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 2020. Actual results may
differ from these amounts. Amounts reported for the second quarter
are based on BP’s 21.2% average economic interest for the quarter
and include adjustments to reflect the finalization of Rosneft’s
first quarter results. Amounts reported for the first quarter and
all comparative periods are based on BP’s 19.75% economic
interest.
|
|
|
|
(b)
|
The Rosneft
segment result includes equity-accounted earnings arising from BP’s
economic interest in Rosneft for the second
quarter 2020 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.
|
Other businesses and corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Sales and other
operating revenues(a)
|
|
450
|
|
433
|
|
|
903
|
|
789
|
|
|
Profit (loss)
before interest and tax
|
|
(317
|
)
|
(381
|
)
|
|
(1,015
|
)
|
(927
|
)
|
|
Inventory holding
(gains) losses*
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
RC profit (loss)
before interest and tax
|
|
(317
|
)
|
(381
|
)
|
|
(1,015
|
)
|
(927
|
)
|
|
Net
(favourable) adverse impact of non-operating items* and fair value
accounting effects*
|
|
57
|
|
91
|
|
|
194
|
|
219
|
|
|
Underlying RC
profit (loss) before interest and tax*
|
|
(260
|
)
|
(290
|
)
|
|
(821
|
)
|
(708
|
)
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
US
|
|
(129
|
)
|
(224
|
)
|
|
(253
|
)
|
(379
|
)
|
|
Non-US
|
|
(131
|
)
|
(66
|
)
|
|
(568
|
)
|
(329
|
)
|
|
|
|
(260
|
)
|
(290
|
)
|
|
(821
|
)
|
(708
|
)
|
|
Non-operating items
|
|
|
|
|
|
|
|
US
|
|
(62
|
)
|
(78
|
)
|
|
(110
|
)
|
(206
|
)
|
|
Non-US
|
|
46
|
|
(13
|
)
|
|
(43
|
)
|
(13
|
)
|
|
|
|
(16
|
)
|
(91
|
)
|
|
(153
|
)
|
(219
|
)
|
|
Fair value accounting effects
|
|
|
|
|
|
|
|
US
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Non-US
|
|
(41
|
)
|
—
|
|
|
(41
|
)
|
—
|
|
|
|
|
(41
|
)
|
—
|
|
|
(41
|
)
|
—
|
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
US
|
|
(191
|
)
|
(302
|
)
|
|
(363
|
)
|
(585
|
)
|
|
Non-US
|
|
(126
|
)
|
(79
|
)
|
|
(652
|
)
|
(342
|
)
|
|
|
|
(317
|
)
|
(381
|
)
|
|
(1,015
|
)
|
(927
|
)
|
|
|
|
(a)
|
Includes sales to
other segments.
|
Other businesses
and corporate comprises our alternative energy business, shipping,
treasury, BP ventures and corporate activities including
centralized functions, and any residual costs of the Gulf of Mexico
oil spill.
Financial results
The
replacement cost loss
before interest
and tax for the second quarter
and half year was
$317
million and
$1,015
million respectively,
compared with $381
million and
$927
million for the same
periods in 2019.
The
results included a net non-operating charge
of
$16
million for the
second
quarter and
$153
million for the
half
year, compared with
a charge
of
$91
million and
$219
million for the same
periods in 2019.
Fair value accounting effects in the second quarter
and half year had an adverse
impact of $41
million. See
page
31 for further
information.
After adjusting
for non-operating items and fair value accounting effects, the
underlying replacement cost loss
before interest
and tax for the second quarter
and half year was
$260
million and
$821
million respectively,
compared with $290
million and
$708
million for the same
periods in 2019.
Alternative Energy
BP's
net ethanol-equivalent production* for the first half of the year
averaged 14.4kb/d, compared with 9.3kb/d for the 100% BP-owned
business for the same period in 2019.
Net
wind generation capacity* was 923MW at 30 June 2020,
compared with 926MW at 30 June 2019.
BP’s net share of wind generation for the second quarter
and half year was 673GWh and
1,450GWh respectively, compared with 688GWh and 1,461GWh for the
same periods in 2019.
In July, BP agreed to acquire the remaining 50% interest in the
BP-operated Fowler Ridge 1 wind asset from its current partner,
Dominion Energy. Located in central Indiana, the asset includes 162
wind turbines with a generating capacity of 300MW and will increase
BP's net wind generation capacity to 1,073MW.
Lightsource BP
has developed assets of 2.2GW to date and has an ambition to reach
10GW of developed assets by the end of 2023.
In
April, Lightsource BP and Conway Corp signed a 20-year purchase
power agreement for the development of a 132MW solar energy project
in White County, Arkansas, US. In the same month Lightsource BP and
the Southeastern Pennsylvania Transportation Authority (SEPTA) in
the US signed a long-term power contract. The agreement will
provide SEPTA with 67,029MWh of electricity from two solar power
plants in Franklin county – about 20% of the transportation
agency’s annual electricity usage. Lightsource BP also acquired the
Wellington North solar project in New South Wales, Australia in
July. It will be sited adjacent to Lightsource BP’s existing 200MW
Wellington solar asset, which is currently in construction,
creating a combined total capacity of 550MW.
This
builds on the progress announced in our first-quarter results,
which comprised the following: Lightsource BP signed a multi-year
module supply agreement with Canadian Solar Inc. to deliver 1.2GW
of high-efficiency polycrystalline solar modules for projects in
the US and Australia; and Lightsource BP closed on a $250 million
financing package for its Impact Solar project located in Lamar
County, Texas, USA.
In
early July BP signed a memorandum of understanding (MOU) with
Chinese solar firm, JinkoPower Technologies, to provide integrated
decarbonized energy solutions and services to customers in
China.
Outlook
Other businesses
and corporate average quarterly charges, excluding non-operating
items, fair value accounting effects and foreign exchange
volatility impact, are expected to be around $350 million although
this will fluctuate quarter to quarter.
|
|
|
The
commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page
39.
|
Financial statements
Group income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Sales and other
operating revenues (Note 6)
|
|
31,676
|
|
72,676
|
|
|
91,326
|
|
138,997
|
|
|
Earnings from
joint ventures – after interest and tax
|
|
(567
|
)
|
138
|
|
|
(589
|
)
|
323
|
|
|
Earnings from
associates – after interest and tax
|
|
(100
|
)
|
608
|
|
|
(344
|
)
|
1,257
|
|
|
Interest and other
income
|
|
107
|
|
270
|
|
|
247
|
|
433
|
|
|
Gains on sale of
businesses and fixed assets
|
|
74
|
|
55
|
|
|
90
|
|
144
|
|
|
Total revenues and
other income
|
|
31,190
|
|
73,747
|
|
|
90,730
|
|
141,154
|
|
|
Purchases
|
|
18,778
|
|
55,683
|
|
|
67,656
|
|
103,955
|
|
|
Production and
manufacturing expenses
|
|
5,211
|
|
5,391
|
|
|
11,310
|
|
10,747
|
|
|
Production and
similar taxes (Note 8)
|
|
124
|
|
371
|
|
|
327
|
|
795
|
|
|
Depreciation,
depletion and amortization (Note 7)
|
|
3,937
|
|
4,588
|
|
|
7,996
|
|
9,049
|
|
|
Impairment and
losses on sale of businesses and fixed assets (Note 3)
|
|
11,770
|
|
906
|
|
|
12,919
|
|
1,002
|
|
|
Exploration
expense (Note 4)
|
|
9,674
|
|
146
|
|
|
9,876
|
|
513
|
|
|
Distribution and
administration expenses
|
|
2,509
|
|
2,646
|
|
|
5,193
|
|
5,413
|
|
|
Profit (loss)
before interest and taxation
|
|
(20,813
|
)
|
4,016
|
|
|
(24,547
|
)
|
9,680
|
|
|
Finance
costs
|
|
783
|
|
853
|
|
|
1,566
|
|
1,720
|
|
|
Net finance
expense relating to pensions and other post-retirement
benefits
|
|
8
|
|
15
|
|
|
15
|
|
30
|
|
|
Profit (loss)
before taxation
|
|
(21,604
|
)
|
3,148
|
|
|
(26,128
|
)
|
7,930
|
|
|
Taxation
|
|
(4,082
|
)
|
1,244
|
|
|
(4,221
|
)
|
3,027
|
|
|
Profit (loss) for
the period
|
|
(17,522
|
)
|
1,904
|
|
|
(21,907
|
)
|
4,903
|
|
|
Attributable
to
|
|
|
|
|
|
|
|
BP
shareholders
|
|
(16,848
|
)
|
1,822
|
|
|
(21,213
|
)
|
4,756
|
|
|
Non-controlling
interests
|
|
(674
|
)
|
82
|
|
|
(694
|
)
|
147
|
|
|
|
|
(17,522
|
)
|
1,904
|
|
|
(21,907
|
)
|
4,903
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Note 9)
|
|
|
|
|
|
|
|
Profit (loss) for
the period attributable to BP shareholders
|
|
|
|
|
|
|
|
Per ordinary share
(cents)
|
|
|
|
|
|
|
|
Basic
|
|
(83.32
|
)
|
8.95
|
|
|
(105.02
|
)
|
23.47
|
|
|
Diluted
|
|
(83.32
|
)
|
8.92
|
|
|
(105.02
|
)
|
23.35
|
|
|
Per ADS
(dollars)
|
|
|
|
|
|
|
|
Basic
|
|
(5.00
|
)
|
0.54
|
|
|
(6.30
|
)
|
1.41
|
|
|
Diluted
|
|
(5.00
|
)
|
0.54
|
|
|
(6.30
|
)
|
1.40
|
|
Condensed group statement of comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
|
First
|
|
First
|
|
|
|
|
quarter
|
|
quarter
|
|
|
half
|
|
half
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for
the period
|
|
(17,522
|
)
|
1,904
|
|
|
(21,907
|
)
|
4,903
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit or loss
|
|
|
|
|
|
|
|
Currency
translation differences(a)
|
|
1,371
|
|
131
|
|
|
(3,271
|
)
|
1,120
|
|
|
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
|
|
68
|
|
133
|
|
|
153
|
|
152
|
|
|
Share of items
relating to equity-accounted entities, net of tax
|
|
(333
|
)
|
(30
|
)
|
|
109
|
|
(80
|
)
|
|
Income tax
relating to items that may be reclassified
|
|
(37
|
)
|
(9
|
)
|
|
80
|
|
(43
|
)
|
|
|
|
1,072
|
|
225
|
|
|
(2,925
|
)
|
1,149
|
|
|
Items that will
not be reclassified to profit or loss
|
|
|
|
|
|
|
|
Remeasurements of
the net pension and other post-retirement benefit liability or
asset(b)
|
|
(1,960
|
)
|
(39
|
)
|
|
(241
|
)
|
(892
|
)
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
(2
|
)
|
(7
|
)
|
|
(10
|
)
|
1
|
|
|
Income tax
relating to items that will not be reclassified
|
|
623
|
|
2
|
|
|
—
|
|
275
|
|
|
|
|
(1,339
|
)
|
(44
|
)
|
|
(251
|
)
|
(616
|
)
|
|
Other
comprehensive income
|
|
(267
|
)
|
181
|
|
|
(3,176
|
)
|
533
|
|
|
Total
comprehensive income
|
|
(17,789
|
)
|
2,085
|
|
|
(25,083
|
)
|
5,436
|
|
|
Attributable to
|
|
|
|
|
|
|
|
BP
shareholders
|
|
(17,142
|
)
|
2,001
|
|
|
(24,359
|
)
|
5,282
|
|
|
Non-controlling
interests
|
|
(647
|
)
|
84
|
|
|
(724
|
)
|
154
|
|
|
|
|
(17,789
|
)
|
2,085
|
|
|
(25,083
|
)
|
5,436
|
|
|
|
|
(a)
|
Second quarter and
half year 2020 was principally affected by movements in the Russian
rouble against the US dollar.
|
|
|
|
(b)
|
See Note 1 for
further information.
|
Condensed group statement of changes in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Share
of equity-accounted entities’ changes in equity, net of
tax
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
BP shareholders’
|
|
Non-controlling interests
|
|
Total
|
|
|
$ million
|
|
equity
|
|
Hybrid bonds
|
|
Other interest
|
|
equity
|
|
|
At 31 December
2018
|
|
99,444
|
|
—
|
|
2,104
|
|
101,548
|
|
|
Adjustment on
adoption of IFRS 16, net of tax(a)
|
|
(329
|
)
|
—
|
|
(1
|
)
|
(330
|
)
|
|
At
1 January 2019
|
|
99,115
|
|
—
|
|
2,103
|
|
101,218
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income
|
|
5,282
|
|
—
|
|
154
|
|
5,436
|
|
|
Dividends
|
|
(3,200
|
)
|
—
|
|
(119
|
)
|
(3,319
|
)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
12
|
|
—
|
|
—
|
|
12
|
|
|
Repurchase of
ordinary share capital
|
|
(125
|
)
|
—
|
|
—
|
|
(125
|
)
|
|
Share-based
payments, net of tax
|
|
398
|
|
—
|
|
—
|
|
398
|
|
|
Share
of equity-accounted entities’ changes in equity, net of
tax
|
|
3
|
|
—
|
|
—
|
|
3
|
|
|
At
30 June 2019
|
|
101,485
|
|
—
|
|
2,138
|
|
103,623
|
|
|
|
|
(a)
|
See Note 1
in BP
Annual Report and Form 20-F 2019 for further
information.
|
Group balance sheet
|
|
|
|
|
|
|
|
|
|
30 June
|
|
31 December
|
|
|
$ million
|
|
2020
|
|
2019
|
|
|
Non-current assets
|
|
|
|
|
Property, plant
and equipment
|
|
117,208
|
|
132,642
|
|
|
Goodwill
|
|
12,352
|
|
11,868
|
|
|
Intangible
assets
|
|
5,987
|
|
15,539
|
|
|
Investments in
joint ventures
|
|
8,015
|
|
9,991
|
|
|
Investments in
associates
|
|
16,982
|
|
20,334
|
|
|
Other
investments
|
|
2,559
|
|
1,276
|
|
|
Fixed
assets
|
|
163,103
|
|
191,650
|
|
|
Loans
|
|
724
|
|
630
|
|
|
Trade and other
receivables
|
|
4,270
|
|
2,147
|
|
|
Derivative
financial instruments
|
|
7,381
|
|
6,314
|
|
|
Prepayments
|
|
495
|
|
781
|
|
|
Deferred tax
assets
|
|
6,891
|
|
4,560
|
|
|
Defined benefit
pension plan surpluses
|
|
6,346
|
|
7,053
|
|
|
|
|
189,210
|
|
213,135
|
|
|
Current assets
|
|
|
|
|
Loans
|
|
370
|
|
339
|
|
|
Inventories
|
|
12,504
|
|
20,880
|
|
|
Trade and other
receivables
|
|
16,522
|
|
24,442
|
|
|
Derivative
financial instruments
|
|
4,751
|
|
4,153
|
|
|
Prepayments
|
|
679
|
|
857
|
|
|
Current tax
receivable
|
|
637
|
|
1,282
|
|
|
Other
investments
|
|
122
|
|
169
|
|
|
Cash and cash
equivalents
|
|
34,217
|
|
22,472
|
|
|
|
|
69,802
|
|
|