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 27 October, 2020
 
 
BP p.l.c.
(Translation of registrant's name into English)
 
 
 
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
 
 
 
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
 
 
Form 20-F |X| Form 40-F
--------------- ----------------
 
 
 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
 
 
 
Yes No |X|
--------------- --------------
 
 
 
 
 
 
Exhibit 1.1
3Q20 Part 1 of 1 dated 27 October 2020
 
 
 
 
 
 
 
Exhibit 1.1
 
 
FOR IMMEDIATE RELEASE
 
 
London 27 October 2020
 
 
BP p.l.c. Group results
 
Third quarter and nine months 2020
 
For a printer friendly copy of this announcement, please click on the link below to open a PDF version.
 
http://www.rns-pdf.londonstockexchange.com/rns/2598D_1-2020-10-26.pdf
 
 
Highlights
Performance improving despite difficult environment
 
Financial results and progress
 
-
Underlying replacement cost profit for the quarter was $0.1 billion, compared with a loss of $6.7 billion for the second quarter of 2020 and $2.3 billion profit for the third quarter of 2019. Compared to the previous quarter, the result benefitted from the absence of significant exploration write-offs and recovering oil and gas prices and demand. This was partly offset by a significantly lower oil trading result.
-
Reported loss for the quarter was $0.5 billion, compared with losses of $16.8 billion for the previous quarter of 2020, reflecting absence of significant exploration write-offs and impairment charges, and $0.7 billion for the third quarter of 2019.
-
Operating cash flow for the quarter, excluding Gulf of Mexico oil spill payments, was resilient at $5.3 billion, including $0.9 billion working capital release (after adjusting for net inventory holding gains). Gulf of Mexico oil spill payments in the quarter were $0.1 billion post-tax.
-
Organic capital expenditure in the first three quarters of 2020 was $9.1 billion, in line with the full-year target of around $12 billion.
-
BP continues to make progress towards its target of $2.5 billion in annual cash cost savings by end-2021 compared with 2019, with its new organization on schedule to be in place by start of 2021.
-
Proceeds from divestments and other disposals in the quarter were $0.6 billion. BP has already completed or agreed transactions for approaching half its target of $25 billion in proceeds by 2025, including the agreed $5 billion sale of BP’s petrochemicals business, expected to complete by year end.
-
Net debt at quarter-end was $40.4 billion, down $0.5 billion. This includes the impact of the $1.1 billion payment for the completion of the joint venture with Reliance. Net debt is expected to fall in the fourth quarter as proceeds from divestments are received.
-
A dividend of 5.25 cents per share was announced for the quarter.
Performing while transforming
 
-
BP has brought two new Upstream major projects into production since mid-year: Atlantis Phase 3 in the US Gulf of Mexico and, ahead of schedule, Khazzan Phase 2 (Ghazeer) in Oman.
-
Operations continued to be good with refining availability of 96.2% and Upstream plant reliability of 93.0%. Upstream unit production costs for the nine months of 2020 were 10% lower than 2019, reflecting progress on cost efficiency and strategic divestments.
-
While refining margins remained at historical lows, driven by the extremely weak environment, BP‘s marketing businesses recovered strongly in the quarter, with fuels marketing earnings growing 3% year on year and lubricants result broadly in line with a year earlier.
-
BP agreed to enter the offshore wind sector through a strategic partnership with Equinor to pursue offshore wind opportunities in the US, including taking a 50% stake in two leases off the US east coast.
-
BP announced plans for a network of ultra-fast chargers in Germany and BP Chargemaster won a contract to deliver over 1,000 charging points for Police Scotland.
-
BP also announced a partnership with Microsoft under which the two companies will co-operate to progress their sustainability aims. As part of this, BP has agreed to supply Microsoft with renewable energy and to extend its use of Microsoft’s cloud-based services.
 
 
See chart on pdf
 
 

Bernard Looney – chief executive officer:
 
Having set out our new strategy in detail, our priority is execution and, despite a challenging environment, we are doing just that – performing while transforming. Major projects are coming online, our consumer-facing businesses are really delivering and we remain firmly focused on cost and capital discipline. Importantly, net debt continues to fall. We are firmly committed to our updated financial frame, including the dividend – the first call on our funds.
 
 

 
Financial summary
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) for the period attributable to BP shareholders
 
 
(450)
 
 
(16,848)
 
 
(749)
 
 
 
(21,663)
 
 
4,007 
 
 
Inventory holding (gains) losses, net of tax
 
 
(194)
 
 
(809)
 
 
398 
 
 
 
2,734 
 
 
(488)
 
 
RC profit (loss)
 
 
(644)
 
 
(17,657)
 
 
(351)
 
 
 
(18,929)
 
 
3,519 
 
 
Net (favourable) adverse impact of non-operating items and fair value accounting effects, net of tax
 
 
730 
 
 
10,975 
 
 
2,605 
 
 
 
13,124 
 
 
3,904 
 
 
Underlying RC profit (loss)
 
 
86 
 
 
(6,682)
 
 
2,254 
 
 
 
(5,805)
 
 
7,423 
 
 
RC profit (loss) per ordinary share (cents)
 
 
(3.18)
 
 
(87.32)
 
 
(1.72)
 
 
 
(93.63)
 
 
17.33 
 
 
RC profit (loss) per ADS (dollars)
 
 
(0.19)
 
 
(5.24)
 
 
(0.10)
 
 
 
(5.62)
 
 
1.04 
 
 
Underlying RC profit (loss) per ordinary share (cents)
 
 
0.42 
 
 
(33.05)
 
 
11.06 
 
 
 
(28.72)
 
 
36.57 
 
 
Underlying RC profit (loss) per ADS (dollars)
 
 
0.03 
 
 
(1.98)
 
 
0.66 
 
 
 
(1.72)
 
 
2.19 
 
 
 
  
RC profit (loss), underlying RC profit, operating cash flow excluding Gulf of Mexico oil spill payments, working capital, organic capital expenditure, net debt and gearing are non-GAAP measures. These measures and inventory holding gains and losses, non-operating items, fair value accounting effects, major project, Upstream plant reliability. refining availability and cash balance point are defined in the Glossary on page 32.
 

 
 
Top of page 2
 
BP p.l.c. Group results
 
Third quarter and nine months 2020
 
Murray Auchincloss – chief financial officer:
 
The underlying business performance in the quarter remained resilient and we made substantial progress in strengthening our balance sheet. In the quarter, net debt reduced to around $40 billion and our cash balance point was around $42 Brent, despite weak refining margins, low gas prices reduced product demand and the payment to Reliance. Funding the dividend remains our first priority and we are confident in moving towards our $35 billion net debt target, supported by value accretive divestments.
 
 
COVID-19 Update
 
Strengthening finances:
 
-
BP has continued to take deliberate steps to strengthen its finances and drive down its cash balance point.
 
-
Organic capital expenditure is on track for the revised full-year target of around $12 billion, announced in April. Total for the first nine months was $9.1 billion.
 
-
BP has continued to progress its divestment programme towards delivery of $25 billion of proceeds by 2025. The $5 billion sale of its petrochemicals business is expected to complete by year end. In the quarter, BP also sold an interest in a portfolio of UK retail properties for $0.5 billion.
 
-
BP’s headcount has reduced by a total of around 2,800 so far during 2020, including around 300 who have already left the organization as part of the reinvent bp programme. A further 2,100 have elected to leave under the programme, which is expected to result in a total reduction of around 10,000 positions, the majority by the end of this year. BP expects to incur people-related costs associated with the reinvent programme, including redundancy payments, of around $1.4 billion over the next 1-2 years, primarily in 2020.
-
Net debt was $40.4 billion at quarter-end and is expected to fall further in the fourth quarter as divestment proceeds are received. BP also continues to actively manage the profile of its debt portfolio, buying back/retiring $4.0 billion of shorter-term debt in the quarter. At quarter end BP had around $44 billion of liquidity, including cash and undrawn revolving credit facilities.
 
-
BP will continue to review these actions, and any further actions that may be appropriate, in response to changes in prevailing market conditions.
 
-
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.
 
-
Costs that are directly attributable to COVID-19 were around $0.1 billion for the quarter (second quarter 2020 $0.2 billion).
 
Protecting our people and operations:
 
-
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 fourth quarter.
 
-
Refinery utilization in the quarter was around 10% below 2019 levels, driven by COVID-19 impacts. Year-on-year, demand for retail fuels was lower by 7% and for aviation by around 60%. However fuels marketing earnings grew, benefitting from continued growth in convenience sales.
 
-
Despite the significant challenges of the environment, BP’s operations performed safely and reliably in the quarter. BP-operated Upstream plant reliability was 93.0% and BP-operated refining availability 96.2%.
-
BP continues to take steps to protect and support its staff through the pandemic. The great majority of BP staff who are able to work from home are still doing so. Precautions in operations and offices include: reduced manning levels, changing working patterns, deploying appropriate personal protective equipment (PPE), enhanced cleaning and social distancing measures at plants and retail sites. Decisions on repopulating offices are being taken with caution and in compliance with local and national guidelines and regulations.
 
-
BP is providing enhanced support and guidance to staff on safety, health and hygiene, homeworking and mental health.
 
Outlook:
 
-
The ongoing impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment. There have been some early signs of global economic recovery as countries move to more regional or localised restrictions on movement and governments continue to offer monetary and fiscal policy stimulus. However, the shape and pace of the recovery is uncertain, as it depends on the further spread of the pandemic.
 
-
The gradual recovery in oil demand seen since the spring looks set to continue, led by strengthening demand in Asia. The IEA estimates an increase of around six million barrels a day in 2021, as economies continue to open up. OPEC+ production cuts have played a major role in stabilising the market and there is already a reduction in crude and product inventories. Inventories are likely to reduce through 2021, although the pace at which they normalise will depend on the strength of economic recovery and the degree of continued OPEC+ compliance.
 
-
US gas supply is expected to continue on a declining trend in 2021, largely due to a drop in associated gas production. Tightening gas balances have caused the prompt price to rise, and the futures curve for Henry Hub now averages above $3 for 2021. This would be expected to provide some support to pricing in Europe and Asia until more gas comes to market.
 
-
The refining margin outlook remains challenging, given record high inventory levels and a levelling off in demand recovery for gasoline and jet fuel due to COVID-19.
 
 The commentary above and following should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
Top of page 3
 
Group headlines
Results
For the nine months, underlying replacement cost (RC) loss* was $5,805 million, compared with a profit of $7,423 million in 2019. Underlying RC loss is after adjusting RC loss* for a net charge for non-operating items* of $13,357 million and net favourable fair value accounting effects* of $233 million (both on a post-tax basis).
RC loss was $18,929 million for the nine months, compared with a profit of $3,519 million in 2019.
For the third quarter, underlying RC profit was $86 million, compared with $2,254 million in 2019. Underlying RC profit is after adjusting RC loss for a net charge for non-operating items of $1,109 million and net favourable fair value accounting effects of $379 million (both on a post-tax basis).
RC loss was $644 million for the third quarter, compared with $351 million in 2019.
Loss for the third quarter and nine months attributable to BP shareholders was $450 million and $21,663 million respectively, compared with a loss of $749 million and a profit of $4,007 million for the same periods in 2019.
See further information on pages 4, 27 and 28.
Depreciation, depletion and amortization
The charge for depreciation, depletion and amortization was $3.5 billion in the quarter and $11.5 billion in the nine months, compared with $4.3 billion and $13.3 billion for the same periods in 2019. BP now expects the 2020 full-year charge to be around 15% lower than 2019.
Effective tax rate
The effective tax rate (ETR) on RC profit or loss* for the third quarter and nine months was -504% and 13% respectively, compared with 168% and 49% for the same periods in 2019. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the third quarter and nine months was 64% and -10% respectively, compared with 40% and 38% for the same periods a year ago. The higher underlying ETR for the third quarter reflects changes in the mix of profits and losses. The lower underlying ETR for the nine months mainly reflects the exploration write-offs with a limited deferred tax benefit and the reassessment of deferred tax asset recognition in the second quarter. 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 18 December 2020. The corresponding amount in sterling will be announced on 7 December 2020. See page 24 for more information.
 
 
 
Share buybacks
BP repurchased 120 million ordinary shares at a cost of $776 million (including fees and stamp duty) in the nine months 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 excluding Gulf of Mexico oil spill payments* was $5.3 billion for the third quarter and $11.4 billion for the nine months. These amounts include a working capital* release of $0.9 billion in the third quarter and a working capital build of $1.3 billion in the nine months, after adjusting for net inventory holding gains or losses* and working capital effects of the Gulf of Mexico oil spill. The comparable amount for the same periods in 2019 was $6.5 billion and $20.6 billion.
Operating cash flow as reported in the group cash flow statement was $5.2 billion for the third quarter and $9.9 billion for the nine months, including a working capital release of $0.6 billion and $0.6 billion respectively, compared with $6.1 billion and $18.2 billion for the same periods in 2019.
See page 30 and Glossary for further information on Gulf of Mexico oil spill cash flows and on working capital.
Capital expenditure*
Organic capital expenditure* for the third quarter and nine months was $2.5 billion and $9.1 billion respectively, compared with $3.9 billion and $11.3 billion for the same periods in 2019.
Inorganic capital expenditure* for the third quarter and nine months was $1.1 billion and $1.5 billion respectively, compared with $0.1 billion and $4.0 billion for the same periods in 2019.
BP expects total capital expenditure for 2021 to be at the lower end of a $13-15 billion range.
Organic capital expenditure and inorganic capital expenditure are non-GAAP measures. See page 26 for further information.
Divestment and other proceeds
Divestment proceeds* were $0.1 billion for the third quarter and $1.5 billion for the nine months, compared with $0.7 billion and $1.4 billion for the same periods in 2019. In addition, $0.5 billion was received in the third quarter of 2020 in relation to the sale of an interest in BP's UK retail property portfolio.
Net debt* and gearing*
Net debt at 30 September 2020 was $40.4 billion, compared with $46.5 billion a year ago. Gearing at 30 September 2020 was 33.0%, compared with 31.7% a year ago, reflecting the reduction in equity in the period. Gearing including leases* at 30 September 2020 was 37.7%, compared with 35.9% a year ago. Net debt, gearing and gearing including leases are non-GAAP measures. See pages 25 and 29 for more information.
 
   
 
* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 32.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
Top of page 4
 
 
Analysis of underlying RC profit (loss)* before interest and tax
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
Upstream
 
 
878 
 
 
(8,487)
 
 
2,139 
 
 
 
(5,738)
 
 
8,480 
 
 
Downstream
 
 
636 
 
 
1,405 
 
 
1,883 
 
 
 
2,962 
 
 
4,981 
 
 
Rosneft
 
 
(177)
 
 
(61)
 
 
802 
 
 
 
(255)
 
 
2,007 
 
 
Other businesses and corporate
 
 
(130)
 
 
(260)
 
 
(322)
 
 
 
(951)
 
 
(1,030)
 
 
Consolidation adjustment – UPII*
 
 
34 
 
 
(46)
 
 
30 
 
 
 
166 
 
 
51 
 
 
Underlying RC profit (loss) before interest and tax
 
 
1,241 
 
 
(7,449)
 
 
4,532 
 
 
 
(3,816)
 
 
14,489 
 
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(610)
 
 
(677)
 
 
(754)
 
 
 
(1,955)
 
 
(2,260)
 
 
Taxation on an underlying RC basis
 
 
(402)
 
 
770 
 
 
(1,506)
 
 
 
(585)
 
 
(4,641)
 
 
Non-controlling interests
 
 
(143)
 
 
674 
 
 
(18)
 
 
 
551 
 
 
(165)
 
 
Underlying RC profit (loss) attributable to BP shareholders
 
 
86 
 
 
(6,682)
 
 
2,254 
 
 
 
(5,805)
 
 
7,423 
 
 
 
Reconciliations of underlying RC profit or loss attributable to BP shareholders to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 6-11 for the segments.
 
 
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
Upstream
 
 
30 
 
 
(22,008)
 
 
(1,050)
 
 
 
(20,955)
 
 
4,303 
 
 
Downstream
 
 
915 
 
 
594 
 
 
2,016 
 
 
 
2,173 
 
 
5,069 
 
 
Rosneft
 
 
(278)
 
 
(124)
 
 
802 
 
 
 
(419)
 
 
1,813 
 
 
Other businesses and corporate
 
 
24 
 
 
(317)
 
 
(412)
 
 
 
(991)
 
 
(1,339)
 
 
Consolidation adjustment – UPII
 
 
34 
 
 
(46)
 
 
30 
 
 
 
166 
 
 
51 
 
 
RC profit (loss) before interest and tax
 
 
725 
 
 
(21,901)
 
 
1,386 
 
 
 
(20,026)
 
 
9,897 
 
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(808)
 
 
(791)
 
 
(899)
 
 
 
(2,389)
 
 
(2,649)
 
 
Taxation on a RC basis
 
 
(418)
 
 
4,361 
 
 
(820)
 
 
 
2,935 
 
 
(3,564)
 
 
Non-controlling interests
 
 
(143)
 
 
674 
 
 
(18)
 
 
 
551 
 
 
(165)
 
 
RC profit (loss) attributable to BP shareholders
 
 
(644)
 
 
(17,657)
 
 
(351)
 
 
 
(18,929)
 
 
3,519 
 
 
Inventory holding gains (losses)*
 
 
233 
 
 
1,088 
 
 
(512)
 
 
 
(3,563)
 
 
657 
 
 
Taxation (charge) credit on inventory holding gains and losses
 
 
(39)
 
 
(279)
 
 
114 
 
 
 
829 
 
 
(169)
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
(450)
 
 
(16,848)
 
 
(749)
 
 
 
(21,663)
 
 
4,007 
 
 
 
 
 
 
 
Top of page 5
 
Operational updates
Upstream
Upstream production, which excludes Rosneft, for the nine months of the year averaged 2,448mboe/d, 6.4% lower than a year earlier. Underlying production*, for the nine months was slightly lower than 2019 reflecting adverse weather, primarily in the US Gulf of Mexico.
For the first nine months of 2020, BP-operated Upstream plant reliability* was 93.8% and Upstream unit production costs of $6.30/boe were more than 10% lower than in 2019 reflecting ongoing progress on cost efficiency in operations, and strategic divestments.
Since mid-year, BP has started production on the Atlantis Phase 3 project in the Gulf of Mexico, followed by the Ghazeer gas project, the second phase of development on Block 61 in Oman, that began production three months ahead of schedule. These are the first of five Upstream major projects* expected to begin production in 2020. BP also brought the Galeota expansion project in Trinidad into operation during the quarter.
In September, BP confirmed a gas discovery with the Nidoco NW-1 exploratory well in the Abu Madi West development lease, offshore Egypt.
The Trans Adriatic Gas pipeline (TAP) has completed construction and is expected to soon commence gas exports from Azerbaijan to customers in Europe.
Downstream
Fuels marketing earnings for the third quarter were 3% higher than in 2019, benefiting from continued growth in store gross margin, despite COVID-driven fuel demand impacts.
BP-operated refining availability continued to be strong, at 96.2% in the quarter. However, refining margins were extremely weak and refinery utilization was around 10% below 2019 levels.
Lubricants saw strong demand recovery in the third quarter, including year-on-year growth in key markets such as India and China.
The sale of BP’s petrochemicals business to INEOS, agreed in June, remains on track to complete by the end of 2020.
 
Strategic progress
In September, BP agreed to enter into a strategic partnership with Equinor to develop offshore wind projects in the US. This includes the purchase of a 50% interest in two existing wind leases and associated projects off the east coast of the US. Subject to customary regulatory and other approvals, the transaction is expected to close in early 2021.
BP continued to progress electrification in the quarter with plans announced in July to build a network of ultra-fast charging points across Germany, including more than 100 charging points at Aral retail sites over the next 12 months. BP Chargemaster was recently awarded a contract by Police Scotland, to deliver more than 1,000 charging points over the next four years.
BP announced a strategic partnership with Microsoft under which the two companies will co-operate to progress their sustainability aims. As part of this, BP has agreed to supply Microsoft with renewable energy and to extend its use of Microsoft’s cloud-based services.
BP announced an agreement to partner with Aberdeen City Council to help it achieve the goals of its Net Zero Vision to reduce emissions and become a climate positive city. This follows the partnership with the City of Houston that BP announced in July.
 
Financial framework
Operating cash flow excluding Gulf of Mexico oil spill payments* was $11.4 billion for the nine months of 2020, compared with $20.6 billion for the same period in 2019.
Organic capital expenditure* for the nine months of 2020 was $9.1 billion. BP expects 2020 organic capital expenditure to be around $12 billion.
Divestment and other proceeds were $2.4 billion for the nine months of 2020.
Gulf of Mexico oil spill payments on a post-tax basis were $1.5 billion in the nine months of 2020. Payments for the full year are expected to be around $1.5 billion on a post-tax basis.
Gearing* at 30 September 2020 was 33.0%, in part reflecting the recent hybrid bond issue. See page 25 for more information.
 
 
 
 
 
Operating metrics
 
 
Nine months 2020
 
 
Financial metrics
 
 
Nine months 2020
 
 
(vs. Nine months 2019)
 
 
 
(vs. Nine months 2019)
 
Tier 1 and tier 2 process safety events
 
 
66
 
 
Underlying RC profit (loss)*
 
 
$(5.8)bn
 
 
(-7)
 
 
 
(-$13.2bn)
 
Reported recordable injury frequency*
 
 
0.127
 
 
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
 
 
$11.4bn
 
 
(-29.2%)
 
 
 
(-$9.2bn)
 
Group production
 
 
3,542mboe/d
 
 
Organic capital expenditure
 
 
$9.1bn
 
 
(-5.7%)
 
 
 
(-$2.2bn)
 
Upstream production (excludes Rosneft segment)
 
 
2,448mboe/d
 
 
Gulf of Mexico oil spill payments (post-tax)
 
 
$1.5bn
 
 
(-6.4%)
 
 
 
(-$1.0bn)
 
Upstream unit production costs(a)
 
 
$6.30/boe
 
 
Divestment proceeds*
 
 
$1.5bn
 
 
(-10.3%)
 
 
 
(+$0.1bn)
 
BP-operated Upstream plant reliability
 
 
93.8%
 
 
Gearing
 
 
33.0%
 
 
(-0.6)
 
 
 
(+1.3)
 
BP-operated refining availability*
 
 
96.0%
 
 
Dividend per ordinary share(b)
 
 
5.25 cents
 
 
(+1.4)
 
 
 
(-48.8%)
 
 
(a)
Reflecting lower costs and divestment impacts.
 
(b)
Represents dividend announced in the quarter (vs. prior year quarter).
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 

 
Top of page 6
 
 
Upstream
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) before interest and tax
 
 
38 
 
 
(21,951)
 
 
(1,050)
 
 
 
(20,958)
 
 
4,295 
 
 
Inventory holding (gains) losses*
 
 
(8)
 
 
(57)
 
 
— 
 
 
 
 
 
 
 
RC profit (loss) before interest and tax
 
 
30 
 
 
(22,008)
 
 
(1,050)
 
 
 
(20,955)
 
 
4,303 
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
848 
 
 
13,521 
 
 
3,189 
 
 
 
15,217 
 
 
4,177 
 
 
Underlying RC profit (loss) before interest and tax*(a)
 
 
878 
 
 
(8,487)
 
 
2,139 
 
 
 
(5,738)
 
 
8,480 
 
 
 
(a)
See page 7 for a reconciliation to segment RC profit before interest and tax by region.
 
 
 
Financial results
The replacement cost result before interest and tax for the third quarter and nine months was a profit of $30 million and a loss of $20,955 million respectively, compared with a loss of $1,050 million and a profit of $4,303 million for the same periods in 2019. The third quarter and nine months included a net non-operating charge of $631 million and $15,156 million respectively, compared with a net charge of $3,454 million and $4,224 million for the same periods in 2019. The net non-operating charge for the nine months is principally related to impairments associated with revisions to long-term price assumptions. Fair value accounting effects in the third quarter and nine months had an adverse impact of $217 million and $61 million respectively, compared with a favourable impact of $265 million and $47 million in the same periods of 2019.
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost result before interest and tax for the third quarter and nine months was a profit of $878 million and a loss of $5,738 million respectively, compared with a profit of $2,139 million and $8,480 million for the same periods in 2019. The result for the third quarter mainly reflects lower liquids and gas realizations, partly offset by lower depreciation, depletion and amortization. The result for the nine months mainly reflects lower liquids and gas realizations and the impact of writing down certain exploration intangible carrying values.
 
Production
Production for the quarter was 2,243mboe/d, 12.7% lower than the third quarter of 2019 mainly due to divestments in BPX Energy, Alaska and Gulf of Suez oil concessions in Egypt. Underlying production* for the quarter decreased by 3.0% mainly due to decline associated with reduced capital investment levels and significant weather impacts from hurricanes in the US Gulf of Mexico.
 
For the nine months, production was 2,448mboe/d, 6.4% lower than the nine months of 2019. Underlying production for the nine months was slightly lower than 2019 reflecting adverse weather, primarily in the US Gulf of Mexico.
 
 
 
Key events
During the third quarter, BP was awarded eight operated and three non-operated blocks in the North Sea as part of the UK Oil & Gas Authority 32nd offshore licensing round.
 
On 25 August, BP confirmed it started production on Atlantis Phase 3 in the US Gulf of Mexico (BP operator 56%, BHP Billiton 44%).
 
On 16 September, BP confirmed a gas discovery with the Nidoco NW-1 exploratory well in the Abu Madi West development lease, offshore Egypt (Eni operator 75%, BP 25%).
 
On 28 September, BP Trinidad and Tobago LLC started up the Galeota expansion project in Trinidad.
 
On 1 October, BP confirmed force majeure was lifted on the Greater Tortue Ahmeyim (GTA) project offshore Mauritania and Senegal (BP operator 56%, Kosmos 27%, Petrosen 10%, SMHPM 7%).
 
On 6 October, BP confirmed the planned divestment to Premier Oil of its interests in the Andrew area and Shearwater assets, both located in the UK North Sea, will not proceed following the announcement of a proposed merger between Chrysaor and Premier Oil.
 
On 12 October, BP announced the start-up of production from Block 61 Phase 2 Ghazeer gas field in Oman (BP operator 60%, Makarim Gas Development Limited 30%, PC Oman Ventures Limited 10%).
 
 
 
Outlook
Looking ahead, we expect fourth-quarter 2020 reported production to be slightly lower than the third quarter due to maintenance activity.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
Top of page 7
 
 
Upstream (continued)
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
125 
 
 
(2,960)
 
 
552 
 
 
 
(2,296)
 
 
2,025 
 
 
Non-US
 
 
753 
 
 
(5,527)
 
 
1,587 
 
 
 
(3,442)
 
 
6,455 
 
 
 
 
878 
 
 
(8,487)
 
 
2,139 
 
 
 
(5,738)
 
 
8,480 
 
 
Non-operating items(a)(b)
 
 
 
 
 
 
 
 
US
 
 
(114)
 
 
(2,122)
 
 
(3,338)
 
 
 
(2,868)
 
 
(3,814)
 
 
Non-US
 
 
(517)
 
 
(11,332)
 
 
(116)
 
 
 
(12,288)
 
 
(410)
 
 
 
 
(631)
 
 
(13,454)
 
 
(3,454)
 
 
 
(15,156)
 
 
(4,224)
 
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
57 
 
 
39 
 
 
19 
 
 
 
94 
 
 
(299)
 
 
Non-US
 
 
(274)
 
 
(106)
 
 
246 
 
 
 
(155)
 
 
346 
 
 
 
 
(217)
 
 
(67)
 
 
265 
 
 
 
(61)
 
 
47 
 
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
68 
 
 
(5,043)
 
 
(2,767)
 
 
 
(5,070)
 
 
(2,088)
 
 
Non-US
 
 
(38)
 
 
(16,965)
 
 
1,717 
 
 
 
(15,885)
 
 
6,391 
 
 
 
 
30 
 
 
(22,008)
 
 
(1,050)
 
 
 
(20,955)
 
 
4,303 
 
 
Exploration expense
 
 
 
 
 
 
 
 
US
 
 
40 
 
 
2,560 
 
 
53 
 
 
 
2,620 
 
 
147 
 
 
Non-US
 
 
150 
 
 
7,114 
 
 
132 
 
 
 
7,446 
 
 
551 
 
 
 
 
190 
 
 
9,674 
 
 
185 
 
 
 
10,066 
 
 
698 
 
 
Of which: Exploration expenditure written off(b)
 
 
50 
 
 
9,618 
 
 
115 
 
 
 
9,766 
 
 
476 
 
 
Production (net of royalties)(c)(d)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
 
 
 
 
 
 
US
 
 
363 
 
 
472 
 
 
449 
 
 
 
446 
 
 
470 
 
 
Europe
 
 
143 
 
 
166 
 
 
118 
 
 
 
152 
 
 
138 
 
 
Rest of World
 
 
623 
 
 
728 
 
 
657 
 
 
 
668 
 
 
667 
 
 
 
 
1,129 
 
 
1,366 
 
 
1,224 
 
 
 
1,266 
 
 
1,274 
 
 
Natural gas (mmcf/d)
 
 
 
 
 
 
 
 
US
 
 
1,419 
 
 
1,549 
 
 
2,396 
 
 
 
1,671 
 
 
2,372 
 
 
Europe
 
 
265 
 
 
298 
 
 
188 
 
 
 
269 
 
 
155 
 
 
Rest of World
 
 
4,774 
 
 
4,878 
 
 
5,211 
 
 
 
4,915 
 
 
5,254 
 
 
 
 
6,457 
 
 
6,725 
 
 
7,795 
 
 
 
6,855 
 
 
7,782 
 
 
Total hydrocarbons* (mboe/d)
 
 
 
 
 
 
 
 
US
 
 
608 
 
 
739 
 
 
862 
 
 
 
735 
 
 
879 
 
 
Europe
 
 
188 
 
 
217 
 
 
151 
 
 
 
198 
 
 
165 
 
 
Rest of World
 
 
1,446 
 
 
1,569 
 
 
1,555 
 
 
 
1,516 
 
 
1,573 
 
 
 
 
2,243 
 
 
2,525 
 
 
2,568 
 
 
 
2,448 
 
 
2,616 
 
 
Average realizations*(e)
 
 
 
 
 
 
 
 
Total liquids(f) ($/bbl)
 
 
38.17 
 
 
22.75 
 
 
55.68 
 
 
 
35.51 
 
 
58.38 
 
 
Natural gas ($/mcf)
 
 
2.56 
 
 
2.53 
 
 
3.11 
 
 
 
2.65 
 
 
3.49 
 
 
Total hydrocarbons ($/boe)
 
 
26.42 
 
 
19.06 
 
 
35.48 
 
 
 
25.68 
 
 
38.55 
 
 
 
(a)
Second quarter and nine months 2020 principally relate to impairments in a number of our businesses resulting from the revisions to BP’s long-term price assumptions. Nine months 2020 also 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. Third quarter and nine months 2019 include impairment charges related to the disposal of heritage BPX Energy assets, Alaska and GUPCO divestment. See Note 3 for further information.
 
(b)
Second quarter and nine months 2020 include 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.
 
 
 
 
Top of page 8
 
 
Downstream
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) before interest and tax
 
 
1,106 
 
 
1,572 
 
 
1,583 
 
 
 
(1,273)
 
 
5,775 
 
 
Inventory holding (gains) losses*
 
 
(191)
 
 
(978)
 
 
433 
 
 
 
3,446 
 
 
(706)
 
 
RC profit before interest and tax
 
 
915 
 
 
594 
 
 
2,016 
 
 
 
2,173 
 
 
5,069 
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
(279)
 
 
811 
 
 
(133)
 
 
 
789 
 
 
(88)
 
 
Underlying RC profit before interest and tax*(a)
 
 
636 
 
 
1,405 
 
 
1,883 
 
 
 
2,962 
 
 
4,981 
 
 
 
(a)
See page 9 for a reconciliation to segment RC profit before interest and tax by region and by business.
 
 
 
Financial results
The replacement cost profit before interest and tax for the third quarter and nine months was $915 million and $2,173 million respectively, compared with $2,016 million and $5,069 million for the same periods in 2019.
 
The third quarter and nine months include a net non-operating charge of $146 million and $924 million respectively, compared with a charge of $14 million and $49 million for the same periods in 2019. The charge for the quarter mainly relates to restructuring, while the charge for the nine months primarily reflects impairments. Fair value accounting effects in the third quarter and nine months had a favourable impact of $425 million and $135 million respectively, compared with a favourable impact of $147 million and $137 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 third quarter and nine months was $636 million and $2,962 million respectively, compared with $1,883 million and $4,981 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 9.
 
Fuels
The fuels business reported an underlying replacement cost profit before interest and tax of $222 million for the third quarter and $2,206 million for the nine months, compared with $1,438 million and $3,691 million for the same periods in 2019.
 
Across fuels marketing we saw earnings growth of 3% year on year primarily driven by increased store gross margin. This growth is despite continued COVID-19 demand impacts with retail volumes in the quarter 7% lower than last year. The result for the nine months, however, remained impacted by COVID-19, with year to date retail volumes 15% lower than 2019, and aviation volumes down by 50%.
 
The refining result for the quarter and nine months continued to be impacted by an extremely weak environment with refining margins remaining at historical lows. Utilization of 83% for the quarter improved compared with the second quarter, albeit still around 10% lower than 2019, driven by continued COVID-19 demand impacts. These factors were partially offset by a lower level of turnaround activity and strong refining availability.
 
The quarterly result also reflects a weaker contribution from supply and trading, although the contribution for the nine months remains higher year on year.
 
We continued to progress our advanced mobility agenda in the quarter with plans announced in July to build a network of ultra-fast charging across Germany, beginning with the roll out of more than 100 charging points at Aral retail sites over the next 12 months. In addition, BP Chargemaster was recently awarded the UK’s largest ever EV infrastructure contract by Police Scotland, to deliver more than 1,000 charging points over the next four years.
 
Lubricants
The lubricants business saw significant recovery in the third quarter as volumes improved to levels similar to 2019, supported by growth of more than 5% in China and India. The result for the nine months, however, continued to reflect significant COVID-19 demand destruction seen in the first half of 2020.
 
Underlying replacement cost profit before interest and tax was $326 million for the third quarter and $556 million for the nine months, compared with $332 million and $925 million for the same periods in 2019.
 
Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $88 million for the third quarter and $200 million for the nine months, compared with $113 million and $365 million for the same periods in 2019. The result for the quarter and nine months reflects a significantly weaker margin environment and the demand impact of COVID-19.
 
As previously reported, in the second quarter we announced the sale of BP’s petrochemicals business to INEOS for a total consideration of $5 billion, subject to customary adjustments. The transaction remains on track and, subject to approvals, is expected to complete by the end of the year.
 
Outlook
Looking to the fourth quarter of 2020, we expect continued pressure on industry refining margins and for marketing volumes to remain impacted by COVID-19 restrictions.
 
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
Top of page 9
 
 
Downstream (continued)
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit before interest and tax - by region
 
 
 
 
 
 
 
 
US
 
 
96 
 
 
719 
 
 
537 
 
 
 
1,372 
 
 
1,634 
 
 
Non-US
 
 
540 
 
 
686 
 
 
1,346 
 
 
 
1,590 
 
 
3,347 
 
 
 
 
636 
 
 
1,405 
 
 
1,883 
 
 
 
2,962 
 
 
4,981 
 
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
(27)
 
 
(69)
 
 
(5)
 
 
 
(90)
 
 
(2)
 
 
Non-US
 
 
(119)
 
 
(711)
 
 
(9)
 
 
 
(834)
 
 
(47)
 
 
 
 
(146)
 
 
(780)
 
 
(14)
 
 
 
(924)
 
 
(49)
 
 
Fair value accounting effects(a)
 
 
 
 
 
 
 
 
US
 
 
78 
 
 
(71)
 
 
116 
 
 
 
152 
 
 
185 
 
 
Non-US
 
 
347 
 
 
40 
 
 
31 
 
 
 
(17)
 
 
(48)
 
 
 
 
425 
 
 
(31)
 
 
147 
 
 
 
135 
 
 
137 
 
 
RC profit before interest and tax
 
 
 
 
 
 
 
 
US
 
 
147 
 
 
579 
 
 
648 
 
 
 
1,434 
 
 
1,817 
 
 
Non-US
 
 
768 
 
 
15 
 
 
1,368 
 
 
 
739 
 
 
3,252 
 
 
 
 
915 
 
 
594 
 
 
2,016 
 
 
 
2,173 
 
 
5,069 
 
 
Underlying RC profit before interest and tax - by business(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
222 
 
 
1,295 
 
 
1,438 
 
 
 
2,206 
 
 
3,691 
 
 
Lubricants
 
 
326 
 
 
63 
 
 
332 
 
 
 
556 
 
 
925 
 
 
Petrochemicals
 
 
88 
 
 
47 
 
 
113 
 
 
 
200 
 
 
365 
 
 
 
 
636 
 
 
1,405 
 
 
1,883 
 
 
 
2,962 
 
 
4,981 
 
 
Non-operating items and fair value accounting effects(a)
 
 
 
 
 
 
 
 
Fuels
 
 
288 
 
 
(748)
 
 
135 
 
 
 
(717)
 
 
73 
 
 
Lubricants
 
 
(7)
 
 
(51)
 
 
— 
 
 
 
(58)
 
 
18 
 
 
Petrochemicals
 
 
(2)
 
 
(12)
 
 
(2)
 
 
 
(14)
 
 
(3)
 
 
 
 
279 
 
 
(811)
 
 
133 
 
 
 
(789)
 
 
88 
 
 
RC profit before interest and tax(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
510 
 
 
547 
 
 
1,573 
 
 
 
1,489 
 
 
3,764 
 
 
Lubricants
 
 
319 
 
 
12 
 
 
332 
 
 
 
498 
 
 
943 
 
 
Petrochemicals
 
 
86 
 
 
35 
 
 
111 
 
 
 
186 
 
 
362 
 
 
 
 
915 
 
 
594 
 
 
2,016 
 
 
 
2,173 
 
 
5,069 
 
 
 
 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
 
6.2 
 
 
5.9 
 
 
14.7 
 
 
 
7.0 
 
 
13.4 
 
 
 
 
 
 
 
 
 
 
Refinery throughputs (mb/d)
 
 
 
 
 
 
 
 
US
 
 
701 
 
 
614 
 
 
781 
 
 
 
687 
 
 
730 
 
 
Europe
 
 
699 
 
 
716 
 
 
815 
 
 
 
750 
 
 
766 
 
 
Rest of World
 
 
187 
 
 
157 
 
 
217 
 
 
 
189 
 
 
221 
 
 
 
 
1,587 
 
 
1,487 
 
 
1,813 
 
 
 
1,626 
 
 
1,717 
 
 
BP-operated refining availability* (%)
 
 
96.2 
 
95.6 
 
96.1 
 
 
96.0 
 
94.6 
 
 
 
 
 
 
 
 
 
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
 
 
US
 
 
1,083 
 
 
872 
 
 
1,172 
 
 
 
997 
 
 
1,141 
 
 
Europe
 
 
849 
 
 
685 
 
 
1,157 
 
 
 
830 
 
 
1,081 
 
 
Rest of World
 
 
422 
 
 
364 
 
 
459 
 
 
 
435 
 
 
500 
 
 
 
 
2,354 
 
 
1,921 
 
 
2,788 
 
 
 
2,262 
 
 
2,722 
 
 
Trading/supply sales of refined products
 
 
2,618 
 
 
3,172 
 
 
3,157 
 
 
 
3,054 
 
 
3,183 
 
 
Total sales volumes of refined products
 
 
4,972 
 
 
5,093 
 
 
5,945 
 
 
 
5,316 
 
 
5,905 
 
 
 
 
 
 
 
 
 
 
Petrochemicals production (kte)
 
 
 
 
 
 
 
 
US
 
 
541 
 
 
410 
 
 
564 
 
 
 
1,562 
 
 
1,749 
 
 
Europe
 
 
1,325 
 
 
1,246 
 
 
1,187 
 
 
 
3,942 
 
 
3,573 
 
 
Rest of World
 
 
1,211 
 
 
1,271 
 
 
1,325 
 
 
 
3,635 
 
 
3,780 
 
 
 
 
3,077 
 
 
2,927 
 
 
3,076 
 
 
 
9,139 
 
 
9,102 
 
 
 
(a)
For Downstream, fair value accounting effects arise solely in the fuels business. See page 28 for further information.
 
(b)
Segment-level overhead expenses are included in the fuels business result.
 
(c)
Results from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany are reported in the fuels business.
 
 
 
Top of page 10
 
Rosneft
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020(a)
 
2020
 
2019
 
 
2020(a)
 
2019
 
Profit (loss) before interest and tax(b)(c)
 
 
(244)
 
 
(71)
 
 
723 
 
 
 
(533)
 
 
1,772 
 
 
Inventory holding (gains) losses*
 
 
(34)
 
 
(53)
 
 
79 
 
 
 
114 
 
 
41 
 
 
RC profit (loss) before interest and tax
 
 
(278)
 
 
(124)
 
 
802 
 
 
 
(419)
 
 
1,813 
 
 
Net charge (credit) for non-operating items*
 
 
101 
 
 
63 
 
 
— 
 
 
 
164 
 
 
194 
 
 
Underlying RC profit (loss) before interest and tax*
 
 
(177)
 
 
(61)
 
 
802 
 
 
 
(255)
 
 
2,007 
 
 
 
 
 
Financial results
Replacement cost (RC) loss before interest and tax for the third quarter and nine months was $278 million and $419 million respectively, compared with a profit of $802 million and $1,813 million for the same periods in 2019.
 
After adjusting for non-operating items, the underlying RC loss before interest and tax for the third quarter and nine months was $177 million and $255 million respectively, compared with a profit of $802 million and $2,007 million for the same periods in 2019.
 
Compared with the same periods in 2019, the results for the third quarter and nine months primarily reflects lower oil prices and adverse foreign exchange effects and lower production as a result of OPEC+ agreement.
 
 
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
 
 
2020(a)
 
2020
 
2019
 
 
2020(a)
 
2019
 
Production (net of royalties) (BP share)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
858 
 
 
856 
 
 
920 
 
 
 
877 
 
 
923 
 
 
Natural gas (mmcf/d)
 
 
1,260 
 
 
1,248 
 
 
1,236 
 
 
 
1,261 
 
 
1,271 
 
 
Total hydrocarbons* (mboe/d)
 
 
1,075 
 
 
1,071 
 
 
1,133 
 
 
 
1,094 
 
 
1,142 
 
 
 
(a)
The operational and financial information of the Rosneft segment for the third quarter and nine months is based on preliminary operational and financial results of Rosneft for the three months and nine months ended 30 September 2020. Actual results may differ from these amounts. Amounts reported for the third quarter are based on BP’s 21.96% average economic interest for the quarter (second quarter 2020 21.20%, first quarter 2020 and 2019 19.75%).
 
(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 11
 
 
Other businesses and corporate
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) before interest and tax
 
 
24 
 
 
(317)
 
 
(412)
 
 
 
(991)
 
 
(1,339)
 
 
Inventory holding (gains) losses*
 
 
— 
 
 
— 
 
 
— 
 
 
 
— 
 
 
— 
 
 
RC profit (loss) before interest and tax
 
 
24 
 
 
(317)
 
 
(412)
 
 
 
(991)
 
 
(1,339)
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
(154)
 
 
57 
 
 
90 
 
 
 
40 
 
 
309 
 
 
Underlying RC profit (loss) before interest and tax*
 
 
(130)
 
 
(260)
 
 
(322)
 
 
 
(951)
 
 
(1,030)
 
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(65)
 
 
(129)
 
 
(249)
 
 
 
(318)
 
 
(628)
 
 
Non-US
 
 
(65)
 
 
(131)
 
 
(73)
 
 
 
(633)
 
 
(402)
 
 
 
 
(130)
 
 
(260)
 
 
(322)
 
 
 
(951)
 
 
(1,030)
 
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
(62)
 
 
(62)
 
 
(85)
 
 
 
(172)
 
 
(291)
 
 
Non-US
 
 
(50)
 
 
46 
 
 
(5)
 
 
 
(93)
 
 
(18)
 
 
 
 
(112)
 
 
(16)
 
 
(90)
 
 
 
(265)
 
 
(309)
 
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
— 
 
 
— 
 
 
— 
 
 
 
— 
 
 
— 
 
 
Non-US
 
 
266 
 
 
(41)
 
 
— 
 
 
 
225 
 
 
— 
 
 
 
 
266 
 
 
(41)
 
 
— 
 
 
 
225 
 
 
— 
 
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(127)
 
 
(191)
 
 
(334)
 
 
 
(490)
 
 
(919)
 
 
Non-US
 
 
151 
 
 
(126)
 
 
(78)
 
 
 
(501)
 
 
(420)
 
 
 
 
24 
 
 
(317)
 
 
(412)
 
 
 
(991)
 
 
(1,339)
 
 
 
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 result before interest and tax for the third quarter and nine months was a profit of $24 million and a loss of $991 million respectively, compared with a loss of $412 million and $1,339 million for the same periods in 2019.
 
The results included a net non-operating charge of $112 million for the third quarter and $265 million for the nine months, compared with a charge of $90 million and $309 million for the same periods in 2019. Fair value accounting effects in the third quarter and nine months had a favourable impact of $266 million and $225 million. See page 28 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 third quarter and nine months was $130 million and $951 million respectively, compared with $322 million and $1,030 million for the same periods in 2019.
 
Alternative Energy
BP's net ethanol-equivalent production* for the third quarter and nine months of the year averaged 36.5kb/d and 22.1kb/d respectively, compared with 24.4kb/d and 14.4kb/d for the 100% BP-owned business for the same periods in 2019.
 
Net wind generation capacity* was 1,072MW at 30 September 2020, compared with 926MW at 30 September 2019. BP’s net share of wind generation for the third quarter and nine months was 454GWh and 1,904GWh respectively, compared with 506GWh and 1,967GWh for the same periods in 2019. In September BP acquired the remaining 50% interest in the BP-operated Fowler Ridge 1 wind asset. The asset increased net wind capacity by 150MW to 1,072MW.
 
In September BP and Equinor announced the formation of a new strategic partnership to develop four assets in two existing offshore wind leases located offshore New York and Massachusetts. Subject to customary regulatory and other approvals, the transaction is expected to close in early 2021 and will mark BP’s first entry into the offshore wind sector, one of the fastest growing energy sectors.
 
Lightsource BP has developed 637MW for the nine months of the year to 30 September 2020. In September Lightsource BP reached financial close and mobilized construction for the 300MW Bighorn Solar project in the US, which will deliver energy to the EVRAZ North America steel mill in Pueblo, Colorado. In October they completed construction on three solar sites in Franklin County, Pennsylvania in the US. The sites will deliver electricity to Penn State University under the 70MW Power Purchase Agreement (PPA) to provide over 100 million kilowatt-hours of electricity in year one.
 
BP has developed a total of 3GW net renewable energy generating capacity by 30 September 2020 across our businesses. We intend to continue building our renewable energy businesses and to have developed 20GW by 2025.
 
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 36.
  
 
Top of page 12
 
 
Financial statements
 
 
Group income statement
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
Sales and other operating revenues (Note 6)
 
 
44,251 
 
 
31,676 
 
 
68,291 
 
 
 
135,577 
 
 
207,288 
 
 
Earnings from joint ventures – after interest and tax
 
 
73 
 
 
(567)
 
 
90 
 
 
 
(516)
 
 
413 
 
 
Earnings from associates – after interest and tax
 
 
(332)
 
 
(100)
 
 
784 
 
 
 
(676)
 
 
2,041 
 
 
Interest and other income
 
 
183 
 
 
107 
 
 
126 
 
 
 
430 
 
 
559 
 
 
Gains on sale of businesses and fixed assets
 
 
27 
 
 
74 
 
 
 
 
 
117 
 
 
145 
 
 
Total revenues and other income
 
 
44,202 
 
 
31,190 
 
 
69,292 
 
 
 
134,932 
 
 
210,446 
 
 
Purchases
 
 
31,645 
 
 
18,778 
 
 
52,273 
 
 
 
99,301 
 
 
156,228 
 
 
Production and manufacturing expenses
 
 
5,073 
 
 
5,211 
 
 
5,259 
 
 
 
16,383 
 
 
16,006 
 
 
Production and similar taxes (Note 8)
 
 
140 
 
 
124 
 
 
340 
 
 
 
467 
 
 
1,135 
 
 
Depreciation, depletion and amortization (Note 7)
 
 
3,467 
 
 
3,937 
 
 
4,297 
 
 
 
11,463 
 
 
13,346 
 
 
Impairment and losses on sale of businesses and fixed assets (Note 3)
 
 
294 
 
 
11,770 
 
 
3,416 
 
 
 
13,213 
 
 
4,418 
 
 
Exploration expense (Note 4)
 
 
190 
 
 
9,674 
 
 
185 
 
 
 
10,066 
 
 
698 
 
 
Distribution and administration expenses
 
 
2,435 
 
 
2,509 
 
 
2,648 
 
 
 
7,628 
 
 
8,061 
 
 
Profit (loss) before interest and taxation
 
 
958 
 
 
(20,813)
 
 
874 
 
 
 
(23,589)
 
 
10,554 
 
 
Finance costs
 
 
800 
 
 
783 
 
 
883 
 
 
 
2,366 
 
 
2,603 
 
 
Net finance expense relating to pensions and other post-retirement benefits
 
 
 
 
 
 
16 
 
 
 
23 
 
 
46 
 
 
Profit (loss) before taxation
 
 
150 
 
 
(21,604)
 
 
(25)
 
 
 
(25,978)
 
 
7,905 
 
 
Taxation
 
 
457 
 
 
(4,082)
 
 
706 
 
 
 
(3,764)
 
 
3,733 
 
 
Profit (loss) for the period
 
 
(307)
 
 
(17,522)
 
 
(731)
 
 
 
(22,214)
 
 
4,172 
 
 
Attributable to
 
 
 
 
 
 
 
 
BP shareholders
 
 
(450)
 
 
(16,848)
 
 
(749)
 
 
 
(21,663)
 
 
4,007 
 
 
Non-controlling interests
 
 
143 
 
 
(674)
 
 
18 
 
 
 
(551)
 
 
165 
 
 
 
 
(307)
 
 
(17,522)
 
 
(731)
 
 
 
(22,214)
 
 
4,172 
 
 
 
 
 
 
 
 
 
 
Earnings per share (Note 9)
 
 
 
 
 
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
 
 
 
 
 
 
Per ordinary share (cents)
 
 
 
 
 
 
 
 
Basic
 
 
(2.22)
 
 
(83.32)
 
 
(3.68)
 
 
 
(107.15)
 
 
19.74 
 
 
Diluted
 
 
(2.22)
 
 
(83.32)
 
 
(3.68)
 
 
 
(107.15)
 
 
19.63 
 
 
Per ADS (dollars)
 
 
 
 
 
 
 
 
Basic
 
 
(0.13)
 
 
(5.00)
 
 
(0.22)
 
 
 
(6.43)
 
 
1.18 
 
 
Diluted
 
 
(0.13)
 
 
(5.00)
 
 
(0.22)
 
 
 
(6.43)
 
 
1.18 
 
 
 
 
 
Top of page 13
 
 
Condensed group statement of comprehensive income
 
 
 
Third
 
Second
 
Third
 
 
Nine
 
Nine
 
 
 
quarter
 
quarter
 
quarter
 
 
months
 
months
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
 
(307)
 
 
(17,522)
 
 
(731)
 
 
 
(22,214)
 
 
4,172 
 
 
Other comprehensive income
 
 
 
 
 
 
 
 
Items that may be reclassified subsequently to profit or loss
 
 
 
 
 
 
 
 
Currency translation differences(a)
 
 
(166)
 
 
1,371 
 
 
(986)
 
 
 
(3,437)
 
 
134 
 
 
Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
 
 
— 
 
 
 
 
— 
 
 
 
 
 
— 
 
 
Cash flow hedges and costs of hedging
 
 
(90)
 
 
68 
 
 
(17)
 
 
 
63 
 
 
135 
 
 
Share of items relating to equity-accounted entities, net of tax
 
 
308 
 
 
(333)
 
 
119 
 
 
 
417 
 
 
39 
 
 
Income tax relating to items that may be reclassified
 
 
(16)
 
 
(37)
 
 
12 
 
 
 
64 
 
 
(31)
 
 
 
 
36 
 
 
1,072 
 
 
(872)
 
 
 
(2,889)
 
 
277 
 
 
Items that will not be reclassified to profit or loss
 
 
 
 
 
 
 
 
Remeasurements of the net pension and other post-retirement benefit liability or asset(b)
 
 
78 
 
 
(1,960)
 
 
(260)
 
 
 
(163)
 
 
(1,152)
 
 
Cash flow hedges that will subsequently be transferred to the balance sheet
 
 
 
 
(2)
 
 
(10)
 
 
 
(2)
 
 
(9)
 
 
Income tax relating to items that will not be reclassified
 
 
(16)
 
 
623 
 
 
27 
 
 
 
(16)
 
 
302 
 
 
 
 
70 
 
 
(1,339)
 
 
(243)
 
 
 
(181)
 
 
(859)
 
 
Other comprehensive income
 
 
106 
 
 
(267)
 
 
(1,115)
 
 
 
(3,070)
 
 
(582)
 
 
Total comprehensive income
 
 
(201)
 
 
(17,789)
 
 
(1,846)
 
 
 
(25,284)
 
 
3,590 
 
 
Attributable to
 
 
 
 
 
 
 
 
BP shareholders
 
 
(364)
 
 
(17,142)
 
 
(1,848)
 
 
 
(24,723)
 
 
3,434 
 
 
Non-controlling interests
 
 
163 
 
 
(647)
 
 
 
 
 
(561)
 
 
156 
 
 
 
 
(201)
 
 
(17,789)
 
 
(1,846)
 
 
 
(25,284)
 
 
3,590 
 
 
 
 
 
(a)
Second quarter and nine months 2020 was principally affected by movements in the Russian rouble against the US dollar.
 
(b)
See Note 1 for further information.
 
 
 
Top of page 14
 
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
 
 
(24,723)
 
 
133 
 
 
(694)
 
 
(25,284)
 
 
Dividends
 
 
(5,305)
 
 
— 
 
 
(163)
 
 
(5,468)
 
 
Cash flow hedges transferred to the balance sheet, net of tax
 
 
 
 
— 
 
 
— 
 
 
 
 
Repurchase of ordinary share capital
 
 
(776)
 
 
— 
 
 
— 
 
 
(776)
 
 
Share-based payments, net of tax
 
 
547 
 
 
— 
 
 
— 
 
 
547 
 
 
Share of equity-accounted entities’ changes in equity, net of tax
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
Issue of perpetual hybrid bonds
 
 
(48)
 
 
11,909 
 
 
— 
 
 
11,861 
 
 
Payments on perpetual hybrid bonds
 
 
— 
 
 
(27)
 
 
— 
 
 
(27)
 
 
Tax on issue of perpetual hybrid bonds
 
 
 
 
— 
 
 
— 
 
 
 
 
Transactions involving non-controlling interests, net of tax
 
 
(160)
 
 
— 
 
 
746 
 
 
586 
 
 
At 30 September 2020
 
 
67,955 
 
 
12,015 
 
 
2,185 
 
 
82,155 
 
 
 
 
 
 
 
 
 
 
BP shareholders’
 
Non-controlling interests
 
Total
 
$ million
 
 
equity
 
Hybrid bonds
 
Other interest
 
equity
 
At 31 December 2018
 
 
99,444 
 
 
—