Yes No
|X|
---------------
--------------
Top of
page 1
|
|
London 27 April 2021
|
|
BP p.l.c. Group
results
|
First quarter 2021
|
“For
a printer friendly version of this announcement please click on the
link below to open a PDF version of the
announcement”
http://www.rns-pdf.londonstockexchange.com/rns/6508W_1-2021-4-26.pdf
Performing while transforming
|
Financial summary
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Profit (loss) for the period attributable to bp
shareholders
|
|
4,667
|
|
1,358
|
|
(4,365)
|
|
Inventory holding (gains) losses*, net of tax
|
|
(1,342)
|
|
(533)
|
|
3,737
|
|
Replacement cost (RC) profit (loss)*
|
|
3,325
|
|
825
|
|
(628)
|
|
Net
(favourable) adverse impact of adjusting items*(a), net of
tax
|
|
(695)
|
|
(710)
|
|
1,419
|
|
Underlying RC profit*
|
|
2,630
|
|
115
|
|
791
|
|
Operating cash flow*
|
|
6,109
|
|
2,269
|
|
952
|
|
Capital expenditure*
|
|
(3,798)
|
|
(3,491)
|
|
(3,861)
|
|
Divestment
and other proceeds(b)
|
|
4,839
|
|
4,173
|
|
681
|
|
Net issue (repurchase) of shares
|
|
—
|
|
—
|
|
(776)
|
|
Net
debt*(c)
|
|
33,313
|
|
38,941
|
|
51,404
|
|
Announced dividend per ordinary share (cents per
share)
|
|
5.25
|
|
5.25
|
|
10.50
|
|
Underlying RC profit per ordinary share* (cents)
|
|
12.95
|
|
0.57
|
|
3.92
|
|
Underlying RC profit per ADS (dollars)
|
|
0.78
|
|
0.03
|
|
0.24
|
|
● Strong earnings and cash flow
|
|
● Net debt target reached around a year early
|
|
● $500 million share buybacks in the second
quarter
|
|
● Disciplined strategic progress across the
business
|
This quarter demonstrates what we mean by performing while
transforming.
With the acceleration of divestment proceeds, together with strong
business performance and the recovery in the price environment, we
generated strong cash flow and delivered on our net debt target
around a year early. We are commencing share buybacks in the second
quarter which, alongside our resilient dividend, support the growth
in distributions to shareholders.
And at the same time, we’ve delivered disciplined strategic
progress right across bp – including building a high-quality
offshore wind business, making great strides in our electrification
agenda and setting ourselves up for further growth in the Gulf of
Mexico.
|
Bernard Looney
Chief executive officer
|
|
(a)
Prior to 2021
adjusting items were reported under two different headings –
non-operating items and fair value accounting effects*. See page 28
for more information.
(b)
Divestment proceeds
are disposal proceeds as per the condensed group cash flow
statement. Other proceeds were $675 million from the sale of a 49%
interest in a controlled affiliate holding certain refined product
and crude logistics assets onshore US in the first quarter 2021 and
$170 million in relation to the sale of an interest in bp's New
Zealand retail property portfolio in the fourth quarter 2020. There
are no other proceeds in the first quarter 2020.
(c)
See Note 8 for more
information.
RC profit (loss), underlying RC profit (loss) and net debt are
non-GAAP measures. Inventory holding (gains) losses and adjusting
items are non-GAAP adjustments.
* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
33.
|
Highlights
|
|
|
Strong results and cash flow delivery
|
|
|
●
Reported profit for the quarter was $4.7 billion, compared with
$1.4 billion profit for the fourth quarter 2020.
●
Underlying replacement cost profit* was $2.6 billion, compared with
$0.1 billion for the previous quarter. This result was driven by an
exceptional gas marketing and trading performance, significantly
higher oil prices and higher refining margins.
1 Operating cash
flow* of $6.1 billion was underpinned by strong business
performance, with a working capital* build (after adjusting for
inventory holding gains) of $1.2 billion including $0.5 billion of
severance payments. This build was
largely offset by other timing differences.
2 Divestment
and other proceeds were $4.8 billion in the quarter, including $2.4
billion from the divestment of a 20% stake in Oman Block 61 and
$1.0 billion final instalment for the sale of the petrochemicals
business.
|
|
|
Net debt target achieved, $500 million share buybacks in the second
quarter
|
|
|
1 Net debt* reduced
by $5.6 billion to reach $33.3 billion at the end of the
quarter. Having reached $35 billion net debt, bp is now retiring
this target and remains committed to maintaining a strong
investment grade credit rating.
2 bp is introducing
an intent going forward to offset dilution from vesting of awards
under employee share schemes through buybacks. Surplus cash flow*
is now defined after the cost of buying back these
shares.
3 In addition, bp
remains committed to returning at least 60% of surplus cash flow to
shareholders through share buybacks, subject to maintaining a
strong investment grade credit rating. In considering the quantum
of buybacks, the
board will take account of the cumulative level of, and outlook
for, surplus cash flow with the intention to provide guidance on a
quarter-forward basis while macro uncertainties
remain.
4 For
2021:
1 In the second
quarter, bp intends to offset the expected full-year dilution from
the vesting of awards under employee share schemes through
buybacks, at a cost of around $500 million.
2 Subject to
maintaining a strong investment grade credit rating, the board is
committed to using 60% of surplus cash flow for buybacks, planning
to allocate the remaining 40% to further strengthen the balance
sheet and
support our strong
investment grade credit rating.
3 During the first
quarter, bp generated surplus cash flow of $1.7 billion after
having reached its net debt target of $35 billion. During the
second quarter, cash flow is expected to be impacted by the $1.2
billion pre-tax annual
Gulf of Mexico oil spill payment, further
severance payments and a smaller improvement in realized refining
margins relative to the quarter to date rise in our RMM*. As a
result of these factors we expect a cash flow deficit
in the second quarter.
4 In the second half
of the year bp expects to generate surplus cash flow above an oil
price of around $45 per barrel with an RMM of around $13 per barrel
and Henry Hub of $3 per mmBtu.
5 bp will provide an
update on our third quarter buyback plans at the time of our second
quarter results, taking into account the surplus cash flow in the
first half of the year as well as the outlook for surplus cash
flow.
|
|
|
Disciplined strategic progress
|
|
|
1 Oil production
& operations: in April in the Gulf of Mexico, the Argos
platform for bp's Mad Dog 2 development arrived, on track for
start-up in 2022, and bp announced the high-quality Puma West oil
discovery.
2 Customers &
products: bp agreed to acquire a stake alongside Daimler and BMW in
Digital Charging Solutions, a leading developer of digital charging
software, and bp pulse announced the roll out of new EV-only
ultra-fast charging hubs across the
UK. bp also added further strategic convenience sites* to its
network during the quarter.
3 Gas
& low carbon energy: bp and EnBW were selected as preferred
bidder for UK offshore wind leases and bp completed formation of
its US offshore wind partnership with Equinor. bp announced plans
for the UK's largest blue
hydrogen production facility in
Teesside. Start of production from two new gas projects –
Raven in Egypt and Satellite Cluster in India – was announced
in April.
|
|
We generated around $11 billion of cash inflow in the first
quarter, enabling us to reach our $35 billion net debt target
significantly ahead of plan and move to the second phase of our
financial frame. We are starting buybacks in the second quarter
with the intent to offset the full-year dilution from employee
share schemes. In addition, we intend to distribute 60% of surplus
cash flow for 2021 through share buybacks, with the remaining 40%
being used to further strengthen our balance sheet. We’ll
outline these plans further in our second quarter
results.
|
|
Murray Auchincloss
Chief financial officer
|
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
39.
|
Top of
page 3
Financial results
bp
announced a change in strategy and a new organizational model in
2020. From the start of 2021 we have also changed the way that we
performance manage bp. From the first quarter of 2021, the group's
reportable segments are gas & low carbon energy, oil production
& operations, customers & products, and
Rosneft.
In
customers & products, as we respond to the energy transition,
convenience and electrification are expected to form a greater
proportion of our margins and to provide visibility we have
provided further information on customers – convenience &
mobility and products – refining and trading.
Customers
– convenience & mobility includes our customer-focused
businesses, spanning convenience and mobility, which includes fuels
retail and next-gen offers such as electrification, as well as
aviation, midstream, and Castrol lubricants. Products business
includes refining and oil & oil products trading.
At 31
December 2020, the group's reportable segments were Upstream,
Downstream and Rosneft. Comparative information for 2020 has been
restated to reflect the changes in reportable segments. For more
information see note 1 Basis of preparation - Change in segmentation.
In
addition to the highlights on page 2:
1
Divestment and
other proceeds of $4.8 billion in the first quarter include
$2.4 billion from the divestment of a 20% stake in Oman Block 61,
$1.0 billion final instalment relating to the sale of the
petrochemicals business and $0.7 billion from the sale of a 49%
interest in a controlled affiliate holding certain refined product
and crude logistics assets onshore US.
2
The divestment of
the stake in Oman Block 61 has resulted in a gain on disposal of
$1.0 billion.
3
Capital
expenditure* in the first quarter was $3.8 billion, consistent with
the $3.9 billion spend in the first quarter 2020 and higher
than the $3.5 billion in the fourth quarter 2020. This
includes payments of $0.7 billion following completion of the
formation of the offshore wind joint venture with Equinor and a
$0.3 billion payment in connection with our share of UK offshore
wind leases in partnership with EnBW.
4
Included in the
operating cash flow* of $6.1 billion for the first quarter was
$0.5 billion of cash flow relating to severance costs associated
with the reinvent programme.
5
The effective tax
rate (ETR) on RC profit* for the first quarter was 26%, compared
with 280% for the same period in 2020. Excluding adjusting items,
the underlying ETR* for the first quarter was 30%, compared with
55% for the same period a year ago. The lower underlying ETR for
the first quarter reflects changes in the geographical mix of
profits, and an absence of charges for the reassessment of the
recognition of deferred tax assets. ETR on RC profit or loss and
underlying ETR are non-GAAP measures.
6
A dividend of 5.25
cents per share was announced for the quarter.
Analysis of RC profit (loss)* before interest and tax and
reconciliation to profit (loss) for the period
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
RC profit (loss) before interest and tax
|
|
|
|
|
gas & low carbon energy
|
|
3,430
|
|
(638)
|
|
1,070
|
|
oil production & operations
|
|
1,479
|
|
66
|
|
(179)
|
|
customers & products
|
|
934
|
|
1,245
|
|
664
|
|
Rosneft
|
|
363
|
|
270
|
|
(17)
|
|
other businesses & corporate
|
|
(678)
|
|
288
|
|
(566)
|
|
Consolidation adjustment – UPII*
|
|
13
|
|
(77)
|
|
178
|
|
RC profit before interest and tax
|
|
5,541
|
|
1,154
|
|
1,150
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(729)
|
|
(759)
|
|
(790)
|
|
Taxation on a RC basis
|
|
(1,254)
|
|
557
|
|
(1,008)
|
|
Non-controlling interests
|
|
(233)
|
|
(127)
|
|
20
|
|
RC profit (loss) attributable to bp shareholders
|
|
3,325
|
|
825
|
|
(628)
|
|
Inventory holding gains (losses)*
|
|
1,730
|
|
695
|
|
(4,884)
|
|
Taxation (charge) credit on inventory holding gains and
losses
|
|
(388)
|
|
(162)
|
|
1,147
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
4,667
|
|
1,358
|
|
(4,365)
|
|
Top of
page 4
Analysis of underlying RC profit (loss)* before interest and
tax
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
gas & low carbon energy
|
|
2,270
|
|
154
|
|
847
|
|
oil production & operations
|
|
1,565
|
|
563
|
|
895
|
|
customers & products
|
|
656
|
|
126
|
|
921
|
|
Rosneft
|
|
363
|
|
311
|
|
(17)
|
|
other businesses & corporate
|
|
(170)
|
|
(109)
|
|
(432)
|
|
Consolidation adjustment – UPII
|
|
13
|
|
(77)
|
|
178
|
|
Underlying RC profit before interest and tax
|
|
4,697
|
|
968
|
|
2,392
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(581)
|
|
(568)
|
|
(668)
|
|
Taxation on an underlying RC basis
|
|
(1,253)
|
|
(158)
|
|
(953)
|
|
Non-controlling interests
|
|
(233)
|
|
(127)
|
|
20
|
|
Underlying RC profit attributable to bp shareholders
|
|
2,630
|
|
115
|
|
791
|
|
Reconciliations
of underlying RC profit attributable to bp shareholders to the
nearest equivalent IFRS measure are provided on page 1 for the
group and on pages 6-13 for the segments.
Operating Metrics
Operating metrics
|
|
First quarter 2021
|
|
vs First quarter 2020
|
Tier 1 and tier 2 process safety events*
|
|
23
|
|
-3
|
Reported recordable injury frequency*
|
|
0.160
|
|
+8.1%
|
Group production (mboe/d)
|
|
3,268
|
|
-12.0%
|
upstream* production (mboe/d) (excludes Rosneft
segment)
|
|
2,218
|
|
-14.0%
|
upstream unit production costs*(a)
($/boe)
|
|
7.36
|
|
+4.1%
|
bp-operated hydrocarbon plant reliability*
|
|
93.0%
|
|
0.0
|
bp-operated refining availability*
|
|
94.8%
|
|
-1.3
|
(a)
Reflecting lower
volumes.
Top of
page 5
Outlook &
Guidance
Macro outlook
1
The oil market is
set to continue its rebalancing process. Global stocks are expected
to decline and reach historical levels (in terms of days of forward
cover) at the end of 2021.
2
Oil demand is
expected to recover in 2021 due to strong growth in US and China
and as the distribution of vaccinations gains momentum and lockdown
restrictions are gradually lifted.
3
OPEC+ behaviour is
a key factor in oil prices and market rebalancing.
4
We expect global
gas demand to recover to above 2019 levels, and LNG demand to
increase as a result of higher Asian imports.
5
Industry refining
margins are expected to improve over the course of 2021 compared to
the first quarter, with the recovery in demand and the closure of
some capacity supporting higher utilization rates compared to the
exceptionally low levels seen last year. However, refining margins
are expected to remain weaker than pre-COVID-19
levels.
2Q21 guidance
1
We expect second
quarter reported upstream* production to be lower than the first
quarter mainly due to divestments and seasonal maintenance
activities, primarily in the Gulf of Mexico, the North Sea and
Trinidad, partly offset by the ramp-up of the Raven and KG D6 R
Cluster major projects*. Within this, we expect both gas & low
carbon energy and oil production & operations to be
lower.
2
We expect higher
product demand across our customer businesses in the second quarter
as restrictions begin to ease and vaccination rollouts continue.
This should help provide some support to industry refining margins.
However, realized refining margins are expected to show a smaller
improvement due to the slower recovery in diesel and jet demand and
a narrower North American heavy crude oil differential. In
addition, we expect a higher level of turnaround activity in our
refining portfolio.
2021 Guidance
In
addition to the guidance on page 2:
1
We now expect
disposal proceeds for the year to reach $5-6 billion during the
latter stages of 2021. As a result of this quarter's divestments,
our target of $25 billion of disposal and other proceeds between
the second half of 2020 and 2025 is now underpinned by agreed or
completed transactions of around $14.7 billion with approximately
$10 billion of proceeds received.
2
bp continues to
expect capital expenditure*, including inorganic capital
expenditure*, of around $13 billion in 2021.
3
Depreciation,
depletion and amortization is expected to be at a similar level to
2020 ($14.9 billion).
4
Gulf of Mexico oil
spill payments are expected to be around $1 billion post
tax.
5
The other
businesses & corporate underlying annual charge is expected to
be in the range of $1.2-1.4 billion for 2021. The quarterly charges
may vary from quarter to quarter.
6
The underlying ETR*
for 2021 is expected to be higher than 40% but is sensitive to the
impact that volatility in the current environment may have on the
geographical mix of the group’s profits and
losses.
7
For full year 2021
we expect reported upstream production to be lower than 2020 due to
the impact of the ongoing divestment programme. However, underlying
production* should be slightly higher than 2020 with the ramp-up of
major projects, primarily in gas regions, partly offset by the
impacts of reduced capital investment and decline in lower-margin
gas assets.
COVID-19 Update
Strengthening finances
1
bp's future
financial performance, including cash flows and net debt, will be
impacted by the extent and duration of the current market
conditions and the effectiveness of the actions that it and others
take, including its financial interventions. It is difficult to
predict when current supply and demand imbalances will be resolved
and what the ultimate impact of COVID-19 will be.
Protecting our people and operations
1
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
continue to do so. Precautions in operations and offices include:
reduced manning levels, changing working patterns, deploying
appropriate personal protective equipment and enhanced cleaning and
social distancing measures at plants and retail sites. Decisions on
working practices and return to office based working are being
taken with caution and in compliance with local and national
guidelines and regulations.
2
bp continues to
provide enhanced support and guidance to staff on safety, health
and hygiene, homeworking and mental health.
3
Costs that are
directly attributable to COVID-19 were around $0.2 billion for the
quarter, of which $58 million of COVID-19 related capital
expenditure was incurred at Tangguh.
4
Refinery
utilization for the quarter was around 6% lower than the same
period in 2020, in part due to the impact of COVID-19 on demand.
Year on year demand for retail fuels was lower by 9% and for
aviation by 45%. However, Castrol is already demonstrating strong
recovery in first quarter 2021, with high volume delivery, and
convenience performance continues to remain resilient, with
convenience gross margin* more than 10% higher than last
year.
5
Despite the
challenges of the environment, bp's operations have performed
safely and reliably over the course of the quarter. bp-operated
hydrocarbon plant reliability* was 93.0% and bp-operated refining
availability* was 94.8%.
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
39.
|
Top of
page 6
gas & low carbon energy
Financial results
1
The replacement
cost profit before interest and tax for the first quarter was
$3,430 million, compared with $1,070 million for the same period in
2020. The first quarter included a net adjusting gain of $1,160
million, which is principally the gain on disposal of a 20%
interest in Block 61 Oman, compared with a net adjusting gain of
$223 million for the same period in 2020.
2
After excluding
adjusting items*, the underlying replacement cost profit* before
interest and tax for the first quarter was $2,270 million, compared
with $847 million for the same period in 2020.
3
The first quarter
underlying replacement cost profit before interest and tax reflects
exceptionally strong gas marketing and trading results, as well as
higher realizations and lower depreciation, depletion and
amortization in the gas business.
Operational update
1
Reported production
for the quarter was 909mboe/d, 1.0% higher than the same period in
2020. Underlying production* was 3.2% lower, mainly due to decline
in Trinidad partly offset by major project* growth in India and
Oman and recovery from planned maintenance.
2
The renewables
pipeline* grew in the quarter by 2.9GW (bp net) as a result of
Lightsource bp's (LSbp) pipeline growth and our selection as
preferred bidder for two major leases in the UK Offshore Wind Round
4 with our partner EnBW.
Strategic progress
gas
1
On 28 March, a
royal decree was published approving bp's sale of a 20% interest in
Oman Block 61 to PTT Exploration and Production Public Company
Limited (PTTEP) of Thailand. (bp operator 40%, OQ 30%, PTTEP 20%,
Petronas 10%).
2
On 26 April bp
announced gas production from Raven field, the third stage of its
major West Nile Delta development off the Mediterranean coast in
Egypt (bp operator 82.75%).
3
On 26 April bp and
Reliance Industries Limited (RIL) announced the start of production
from the Satellites Cluster gas field in block KG D6 off the east
coast of India. (bp 33.33%, RIL operator 66.67%).
4
Following the start
of production from the R Cluster field in block KG D6 in India in
December 2020, India Gas Solutions, a 50:50 joint venture between
bp and RIL secured gas supply from the block as a first step to
building a gas value chain business in the country.
5
On 24 January, bp
received its first LNG cargo to directly supply gas to customers in
China. This is the first time that bp has created a fully
integrated gas value chain into China.
low carbon energy
1
In January 2021 bp
and Equinor completed the formation of their strategic US offshore
wind partnership to initially develop four projects in two existing
leases located offshore New York and Massachusetts, which together
are expected to have a total generating capacity of 4.4GW (2.2GW
net to bp).
2
On 8 February, bp
and partner EnBW were announced as the preferred bidder for two
highly advantaged 60-year leases in the UK’s first offshore
wind leasing round in a decade. The leases, both located in the
Irish Sea, offer a combined potential generating capacity of 3GW
(1.5GW net to bp).
3
On 18 March, bp
announced that it is developing plans for the UK’s largest
blue hydrogen production facility, targeting 1GW of blue hydrogen
production by 2030.
4
In the first
quarter, LSbp’s pipeline grew by 2.9GW (1.4GW net to bp)
including:
a
On 15 February,
LSbp acquired from Iberia Solar a 845MW solar portfolio in
Spain.
b
On 21 January, LSbp
announced it had acquired a 1.06GW portfolio from the global
photovoltaic (PV) project developer RIC Energy. Together they will
develop 14 sites across Madrid, Andalucía, and Castilla y
León.
c
On 9 March, LSbp
announced it has agreed to provide 88 bp service stations in New
South Wales, Australia with 100% solar power, starting in January
2023.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Profit (loss) before interest and tax
|
|
3,452
|
|
(628)
|
|
1,061
|
|
Inventory holding (gains) losses*
|
|
(22)
|
|
(10)
|
|
9
|
|
RC profit (loss) before interest and tax
|
|
3,430
|
|
(638)
|
|
1,070
|
|
Net (favourable) adverse impact of adjusting items
|
|
(1,160)
|
|
792
|
|
(223)
|
|
Underlying RC profit before interest and tax
|
|
2,270
|
|
154
|
|
847
|
|
Taxation on an underlying RC basis
|
|
(535)
|
|
(152)
|
|
(261)
|
|
Underlying RC profit before interest
|
|
1,735
|
|
2
|
|
586
|
|
Top of
page 7
gas & low carbon energy (continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
854
|
|
721
|
|
1,038
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
Exploration
write-offs(a)
|
|
6
|
|
42
|
|
3
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
Total adjusted EBITDA
|
|
3,130
|
|
914
|
|
1,888
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
gas
|
|
811
|
|
929
|
|
1,182
|
|
low
carbon energy(b)
|
|
1,074
|
|
541
|
|
2
|
|
Total capital expenditure
|
|
1,885
|
|
1,470
|
|
1,184
|
|
(a)
Fourth quarter 2020
includes a write-off of $3 million which has been classified within
the ‘other’ category of adjusting items.
(b)
First quarter 2021
includes $712 million in respect of the remaining payment to
Equinor for our investment in our strategic US offshore wind
partnership and $326 million as a lease option fee deposit paid to
The Crown Estate in connection with our participation in the UK
Round 4 Offshore Wind Leasing together with our partner
EnBW.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
Production (net of
royalties)(c)
|
|
|
|
|
Liquids* (mb/d)
|
|
112
|
|
98
|
|
96
|
|
Natural gas (mmcf/d)
|
|
4,623
|
|
4,049
|
|
4,665
|
|
Total hydrocarbons* (mboe/d)
|
|
909
|
|
796
|
|
900
|
|
|
|
|
|
|
Average realizations*(d)
|
|
|
|
|
Liquids ($/bbl)
|
|
55.38
|
|
36.51
|
|
45.70
|
|
Natural gas ($/mcf)
|
|
3.94
|
|
3.37
|
|
3.51
|
|
Total hydrocarbons* ($/boe)
|
|
26.84
|
|
21.27
|
|
23.30
|
|
(c)
Includes bp’s
share of production of equity-accounted entities in the gas &
low carbon energy segment.
(d)
Realizations are
based on sales by consolidated subsidiaries only – this
excludes equity-accounted entities.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
low carbon energy
|
|
2021
|
2020
|
2020
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
Installed renewables capacity*
|
|
1.6
|
|
1.5
|
|
1.1
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
3.3
|
|
3.3
|
|
2.7
|
|
Renewables pipeline
|
|
13.8
|
10.9
|
|
of which by geographical area:
|
|
|
|
|
Renewables pipeline – Americas
|
|
7.3
|
|
6.3
|
|
|
Renewables pipeline – Asia Pacific
|
|
1.4
|
|
0.8
|
|
|
Renewables pipeline – Europe
|
|
5.1
|
|
3.7
|
|
|
Renewables pipeline – Other
|
|
—
|
|
0.1
|
|
|
of which by technology:
|
|
|
|
|
Renewables pipeline – offshore wind
|
|
3.7
|
|
2.2
|
|
|
Renewables pipeline – solar
|
|
10.1
|
|
8.7
|
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
17.1
|
|
14.1
|
|
|
Top of
page 8
oil production & operations
Financial results
1
The replacement
cost profit before interest and tax for the first quarter was
$1,479 million, compared with a loss of $179 million for the same
period in 2020. The first quarter included a net adjusting charge
of $86 million, compared with a net adjusting charge of $1,074
million for the same period in 2020.
2
After excluding
adjusting items*, the underlying replacement cost profit* before
interest and tax for the first quarter was $1,565 million, compared
with $895 million for the same period in 2020.
3
The result for the
first quarter mainly reflects higher liquids and gas realizations
and lower depreciation, depletion and amortization, partly offset
by lower production.
Operational update
1
Production for the
quarter was 1,309mboe/d, 22.1% lower than the first quarter of
2020. This includes the impact of divestments, mainly in bpx energy
and Alaska. Underlying production* for the quarter decreased by
7.4% mainly due to impacts from reduced capital investment levels
and decline.
Strategic progress
1
On 5 April, bp
signed an agreement to transfer its participating interests in six
blocks located in Foz do Amazonas basin off northern Brazil to
Petróleo Brasileiro S.A. (Petrobras). Subject to regulatory
approval, the transaction is expected to complete in
2021.
2
On 12 April, bp
announced the safe arrival in Texas US of the Argos floating
production platform, a major milestone for the Mad Dog 2 project in
the deepwater Gulf of Mexico. While in Texas, Argos will
undergo final preparatory work and regulatory inspections
before moving offshore (bp operator 60.5%, BHP 23.9%, Union Oil
Company of California 15.6%).
3
On 13 April, bp
announced an oil discovery in a high-quality Miocene reservoir at
the Puma West prospect in the US deepwater Gulf of Mexico.
Evaluation is ongoing (bp operator 50%, Chevron U.S.A. Inc. 25%,
Talos Energy 25%).
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Profit (loss) before interest and tax
|
|
1,494
|
|
76
|
|
(238)
|
|
Inventory holding (gains) losses*
|
|
(15)
|
|
(10)
|
|
59
|
|
RC profit (loss) before interest and tax
|
|
1,479
|
|
66
|
|
(179)
|
|
Net (favourable) adverse impact of adjusting items
|
|
86
|
|
497
|
|
1,074
|
|
Underlying RC profit before interest and tax
|
|
1,565
|
|
563
|
|
895
|
|
Taxation on an underlying RC basis
|
|
(729)
|
|
(275)
|
|
(503)
|
|
Underlying RC profit before interest
|
|
836
|
|
288
|
|
392
|
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,574
|
|
1,786
|
|
2,117
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
Exploration write-offs
|
|
56
|
|
112
|
|
95
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
Total adjusted EBITDA
|
|
3,195
|
|
2,461
|
|
3,107
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
Total capital expenditure
|
|
1,319
|
|
1,133
|
|
1,960
|
|
Top of
page 9
oil production & operations (continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
Production (net of
royalties)(a)
|
|
|
|
|
Liquids* (mb/d)
|
|
997
|
|
1,021
|
|
1,211
|
|
Natural gas (mmcf/d)
|
|
1,810
|
|
1,962
|
|
2,723
|
|
Total hydrocarbons* (mboe/d)
|
|
1,309
|
|
1,359
|
|
1,679
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
Liquids ($/bbl)
|
|
52.92
|
|
38.58
|
|
47.64
|
|
Natural gas ($/mcf)
|
|
4.11
|
|
2.38
|
|
1.44
|
|
Total hydrocarbons* ($/boe)
|
|
46.81
|
|
33.18
|
|
37.10
|
|
(a)
Includes bp’s
share of production of equity-accounted entities in the oil
production & operations segment.
(b)
Realizations are
based on sales by consolidated subsidiaries only – this
excludes equity-accounted entities.
Top of
page 10
customers & products
Financial results
1
The replacement
cost profit before interest and tax for the first quarter was $934
million, compared with $664 million for the same period in 2020.
The first quarter included a net adjusting gain of $278 million,
compared with a net charge of $257 million for the same period in
2020.
2
After excluding
adjusting items*, the underlying replacement cost profit* before
interest and tax for the first quarter was $656 million, compared
with $921 million for the same period in 2020.
3
The customers &
products result for the quarter reflects a weaker refining result,
the absence of earnings from our divested petrochemicals business,
a continued strong performance from our marketing businesses and a
stronger contribution from trading.
4
customers –
convenience and mobility results demonstrated continued resilience,
delivering material profit despite demand impacts from ongoing
COVID-19 restrictions, with retail fuel volumes lower by 9% and
aviation volumes lower by 45% compared to the same period last
year. Convenience performance continued to show strong momentum,
with convenience gross margin* growing by more than 10% year on
year (see page 30).
Castrol results
were also strong, higher than the same period in 2020, with
volumes, revenues and growth markets earnings materially
higher.
5
products – the
refining loss for the quarter reflects a materially weaker realized
margin which was impacted by narrower North American heavy crude
oil discounts, increased cost of renewable fuel credits in the US
and weaker diesel prices. The result for the quarter also reflected
a stronger contribution from trading.
Operational update
1
For the quarter
bp-operated refining availability* remained strong at 94.8%,
although utilization was around 6% lower than the same period in
2020, in part due to COVID-19 impacts on demand. The utilization
result was higher than the fourth quarter 2020.
Strategic progress
1
We continued to
progress our strategic agenda in redefining convenience, adding
further strategic convenience sites* to our network, supporting a
material and resilient convenience performance.
2
We also made strong
progress in our electrification agenda, announcing further plans to
accelerate the development, reach and utilization of our
network:
a
agreed to take a
stake alongside Daimler and BMW in Digital Charging Solutions
(DCS), a leading developer of digital charging software for
automotive manufacturers and fleet operators. As part of the
agreement, bp’s European charging network of 8,700 charging
points will be integrated into the DCS software system, which
already has a network of 228,000 charging points in 32 countries.
Completion of the transaction is subject to regulatory
approvals.
b
bp pulse announced
the rollout of new EV-only ultra-fast charging hubs, supporting the
expansion of its charging network across the UK.
3
Castrol launched a
range of advanced e-fluids, Castrol ON, designed for improved
electric vehicle performance, with more than half of the
world’s major vehicle manufacturers(a) now using them
as part of their factory fill.
4
In February we
received the final instalment of $1 billion for the sale of our
petrochemicals business to INEOS.
5
During the quarter,
we also safely ceased production at our Kwinana refinery in
preparation to convert it to an import terminal.
(a)
Based on LMCA data
for top 20 selling OEMs (total new car sales) in 2019.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Profit (loss) before interest and tax
|
|
2,539
|
|
1,895
|
|
(3,951)
|
|
Inventory holding (gains) losses*
|
|
(1,605)
|
|
(650)
|
|
4,615
|
|
RC profit before interest and tax
|
|
934
|
|
1,245
|
|
664
|
|
Net (favourable) adverse impact of adjusting items
|
|
(278)
|
|
(1,119)
|
|
257
|
|
Underlying RC profit before interest and tax
|
|
656
|
|
126
|
|
921
|
|
Of
which:(b)
|
|
|
|
|
customers – convenience & mobility
|
|
658
|
|
682
|
|
688
|
|
Castrol – included in customers
|
|
334
|
|
262
|
|
167
|
|
products – refining & trading
|
|
(2)
|
|
(589)
|
|
168
|
|
petrochemicals
|
|
—
|
|
33
|
|
65
|
|
Taxation on an underlying RC basis
|
|
(133)
|
|
100
|
|
(365)
|
|
Underlying RC profit before interest
|
|
523
|
|
226
|
|
556
|
|
(b)
A reconciliation to
RC profit before interest and tax by business is provided on page
30.
Top of
page 11
customers & products (continued)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Adjusted EBITDA*(a)
|
|
|
|
|
customers – convenience & mobility
|
|
982
|
|
1,006
|
|
975
|
|
Castrol – included in customers
|
|
373
|
|
304
|
|
205
|
|
products – refining & trading
|
|
419
|
|
(167)
|
|
578
|
|
petrochemicals
|
|
—
|
|
35
|
|
115
|
|
|
|
1,401
|
|
874
|
|
1,668
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
745
|
|
748
|
|
747
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
customers – convenience & mobility
|
|
316
|
|
401
|
|
340
|
|
Castrol – included in customers
|
|
41
|
|
69
|
|
48
|
|
products – refining & trading
|
|
216
|
|
365
|
|
262
|
|
petrochemicals
|
|
—
|
|
4
|
|
55
|
|
Total capital expenditure
|
|
532
|
|
770
|
|
657
|
|
(a)
A reconciliation to
RC profit before interest and tax by business is provided on page
30.
Retail(b)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
bp retail sites* – total (#)
|
|
20,300
|
|
20,300
|
|
18,900
|
|
bp retail sites in growth markets*
|
|
2,700
|
|
2,700
|
|
1,300
|
|
Strategic convenience sites*
|
|
2,000
|
|
1,900
|
|
1,700
|
|
(b)
Reported to the
nearest 100.
Marketing sales of refined products (mb/d)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
US
|
|
1,016
|
|
1,055
|
|
1,038
|
|
Europe
|
|
706
|
|
801
|
|
954
|
|
Rest of World
|
|
440
|
|
457
|
|
519
|
|
|
|
2,162
|
|
2,313
|
|
2,511
|
|
Trading/supply
sales of refined products(c)
|
|
314
|
370
|
|
457
|
|
Total sales volume of refined products
|
|
2,476
|
2,683
|
|
2,968
|
|
(c)
Comparative
information for 2020 has been restated for the changes to net
presentation of revenues and purchases relating to physically
settled derivative contracts effective 1 January 2021. For more
information see Note 1 basis of preparation - Voluntary change in accounting
policy.
Refining marker
margin*(d)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
bp average refining marker margin (RMM) ($/bbl)
|
|
8.7
|
|
5.9
|
|
8.8
|
|
(d)
In 2021 the RMM has
been updated to reflect changes in bp’s portfolio, and the
update of crude reference for Mediterranean region. On this basis
the fourth quarter and first quarter 2020 RMM would be $6.1/bbl and
$8.9/bbl respectively.
Refinery throughputs – operated refineries
(mb/d)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
US
|
|
725
|
|
708
|
|
748
|
|
Europe
|
|
747
|
|
720
|
|
835
|
|
Rest of World
|
|
129
|
|
200
|
|
223
|
|
Total refinery throughputs
|
|
1,601
|
|
1,628
|
|
1,806
|
|
bp-operated refining availability* (%)
|
|
94.8
|
|
96.1
|
|
96.1
|
|
Top of
page 12
Rosneft
Financial results
1
The replacement
cost (RC) profit before interest and tax and underlying RC profit*
before interest and tax for the first quarter was $363 million,
compared with a loss of $17 million for the same period in 2020.
There were no adjusting items* in the first quarter of 2021 and
2020.
2
Compared with the
same period in 2020, the result for the first quarter primarily
reflects positive impact of higher oil price and favourable foreign
exchange and duty lag effects partially offset by lower production
volumes due to the divestments announced in December
2020.
3
On 22 April 2021,
Rosneft announced that the board of directors had recommended the
annual general meeting (AGM) adopts a resolution to pay dividends
of 6.94 roubles per ordinary share, which constitutes 50% of the
company’s IFRS net profit for 2020. bp expects to receive
later this year a dividend of 13 billion roubles after a deduction
of withholding tax, subject to approval at Rosneft's
AGM.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021(a)
|
2020
|
2020
|
Profit
(loss) before interest and tax(b)(c)
|
|
451
|
|
295
|
|
(218)
|
|
Inventory holding (gains) losses*
|
|
(88)
|
|
(25)
|
|
201
|
|
RC profit (loss) before interest and tax
|
|
363
|
|
270
|
|
(17)
|
|
Net (favourable) adverse impact of adjusting items
|
|
—
|
|
41
|
|
—
|
|
Underlying RC profit (loss) before interest and tax
|
|
363
|
|
311
|
|
(17)
|
|
Taxation on an underlying RC basis
|
|
(35)
|
|
(31)
|
|
3
|
|
Underlying RC profit (loss) before interest
|
|
328
|
|
280
|
|
(14)
|
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021(a)
|
2020
|
2020
|
Production: Hydrocarbons (net
of royalties, bp share)
|
|
|
|
|
Liquids* (mb/d)
|
|
827
|
|
876
|
|
916
|
|
Natural gas (mmcf/d)
|
|
1,294
|
|
1,360
|
|
1,275
|
|
Total hydrocarbons* (mboe/d)
|
|
1,050
|
|
1,111
|
|
1,136
|
|
(a)
The operational and
financial information of the Rosneft segment for the first quarter
is based on preliminary operational and financial results of
Rosneft for the three months ended 31 March 2021. Actual results
may differ from these amounts. Amounts reported for the first
quarter are based on bp’s 22.03% average economic interest
for the quarter (fourth quarter 2020 22.01% and first quarter 2020
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 13
other businesses & corporate
Other
businesses & corporate comprises our innovation &
engineering business including bp ventures and Launchpad, regions,
cities & solutions, our corporate activities & functions,
and any residual costs of the Gulf of Mexico oil
spill.
Financial results
1
The replacement
cost loss before interest and tax for the first quarter was $678
million, compared with $566 million for the same period in 2020.
The first quarter included a net adjusting charge of $508 million,
including $447 million of fair value accounting effects*, compared
with a net charge of $134 million for the same period in
2020.
2
After excluding
adjusting items*, the underlying replacement cost loss* before
interest and tax for the first quarter was $170 million, compared
with $432 million for the same period in 2020, reflecting lower
foreign exchange impacts. The results also include a valuation gain
of $60 million up to the date of divestment of bp's holding in
Palantir.
Strategic progress
1
bp and Qantas
signed a memorandum of understanding on 15 January to collaborate
on opportunities to reduce carbon emissions in the aviation sector
and contribute to the development of a sustainable aviation fuel
industry in Australia.
2
On 22 February, bp
signed a memorandum of understanding with the Ministry of Energy of
the Republic of Azerbaijan to co-operate in assessing the potential
and conditions required for large-scale decarbonized and integrated
energy and mobility systems, including renewable energy projects in
the regions and cities of Azerbaijan.
3
bp and Infosys
signed a memorandum of understanding on 9 April to explore the
development of a digitally-enabled Energy as a Service offer at
Infosys campuses in India, which could be scaled to industrial
parks and cities in the future.
4
During the first
quarter bp divested its holding in Palantir for $443
million.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Profit (loss) before interest and tax
|
|
(678)
|
|
288
|
|
(566)
|
|
Inventory holding (gains) losses*
|
|
—
|
|
—
|
|
—
|
|
RC profit (loss) before interest and tax
|
|
(678)
|
|
288
|
|
(566)
|
|
Net (favourable) adverse impact of adjusting items
|
|
508
|
|
(397)
|
|
134
|
|
Underlying RC profit (loss) before interest and tax
|
|
(170)
|
|
(109)
|
|
(432)
|
|
Taxation on an underlying RC basis
|
|
54
|
|
55
|
|
100
|
|
Underlying RC profit (loss) before interest
|
|
(116)
|
|
(54)
|
|
(332)
|
|
Top of
page 14
Financial statements
Group income statement
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
|
|
|
|
|
Sales
and other operating revenues (Note 4)(a)
|
|
34,544
|
|
25,714
|
|
30,973
|
|
Earnings from joint ventures – after interest and
tax
|
|
160
|
|
214
|
|
(22)
|
|
Earnings from associates – after interest and
tax
|
|
601
|
|
575
|
|
(244)
|
|
Interest and other income
|
|
82
|
|
233
|
|
140
|
|
Gains on sale of businesses and fixed assets
|
|
1,105
|
|
2,757
|
|
16
|
|
Total revenues and other income
|
|
36,492
|
|
29,493
|
|
30,863
|
|
Purchases(a)
|
|
15,656
|
|
13,728
|
|
20,201
|
|
Production and manufacturing expenses
|
|
6,858
|
|
6,111
|
|
6,099
|
|
Production and similar taxes
|
|
253
|
|
228
|
|
203
|
|
Depreciation, depletion and amortization (Note 5)
|
|
3,367
|
|
3,426
|
|
4,059
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
373
|
|
1,168
|
|
1,149
|
|
Exploration expense
|
|
99
|
|
214
|
|
202
|
|
Distribution and administration expenses
|
|
2,615
|
|
2,769
|
|
2,684
|
|
Profit (loss) before interest and taxation
|
|
7,271
|
|
1,849
|
|
(3,734)
|
|
Finance costs
|
|
723
|
|
749
|
|
783
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
6
|
|
10
|
|
7
|
|
Profit (loss) before taxation
|
|
6,542
|
|
1,090
|
|
(4,524)
|
|
Taxation
|
|
1,642
|
|
(395)
|
|
(139)
|
|
Profit (loss) for the period
|
|
4,900
|
|
1,485
|
|
(4,385)
|
|
Attributable to
|
|
|
|
|
BP
shareholders
|
|
4,667
|
|
1,358
|
|
(4,365)
|
|
Non-controlling
interests
|
|
233
|
|
127
|
|
(20)
|
|
|
|
4,900
|
|
1,485
|
|
(4,385)
|
|
|
|
|
|
|
Earnings per share (Note 6)
|
|
|
|
|
Profit (loss) for the period attributable to BP
shareholders
|
|
|
|
|
Per ordinary share (cents)
|
|
|
|
|
Basic
|
|
22.99
|
|
6.71
|
|
(21.63)
|
|
Diluted
|
|
22.89
|
|
6.68
|
|
(21.63)
|
|
Per ADS (dollars)
|
|
|
|
|
Basic
|
|
1.38
|
|
0.40
|
|
(1.30)
|
|
Diluted
|
|
1.37
|
|
0.40
|
|
(1.30)
|
|
(a)
Numbers have been
restated as a result of changes to the net presentation of revenues
and purchases relating to physically settled derivative contracts
effective 1 January 2021. For more information see Note 1 basis of
preparation - Voluntary change in
accounting policy.
Top of
page 15
Condensed group statement of comprehensive income
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
|
|
|
|
|
Profit (loss) for the period
|
|
4,900
|
|
1,485
|
|
(4,385)
|
|
Other comprehensive income
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
Currency translation differences
|
|
(605)
|
|
1,594
|
|
(4,642)
|
|
Exchange (gains) losses on translation of foreign operations
reclassified to gain or loss on sale of businesses and fixed
assets
|
|
—
|
|
(357)
|
|
1
|
|
Cash flow hedges and costs of hedging
|
|
(62)
|
|
42
|
|
85
|
|
Share of items relating to equity-accounted entities, net of
tax
|
|
11
|
|
(105)
|
|
442
|
|
Income tax relating to items that may be reclassified
|
|
1
|
|
2
|
|
117
|
|
|
|
(655)
|
|
1,176
|
|
(3,997)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
Remeasurements
of the net pension and other post-retirement benefit liability or
asset(a)
|
|
2,026
|
|
333
|
|
1,719
|
|
Cash flow hedges that will subsequently be transferred to the
balance sheet
|
|
2
|
|
9
|
|
(8)
|
|
Income tax relating to items that will not be
reclassified
|
|
(588)
|
|
(89)
|
|
(623)
|
|
|
|
1,440
|
|
253
|
|
1,088
|
|
Other comprehensive income
|
|
785
|
|
1,429
|
|
(2,909)
|
|
Total comprehensive income
|
|
5,685
|
|
2,914
|
|
(7,294)
|
|
Attributable to
|
|
|
|
|
BP shareholders
|
|
5,460
|
|
2,740
|
|
(7,217)
|
|
Non-controlling interests
|
|
225
|
|
174
|
|
(77)
|
|
|
|
5,685
|
|
2,914
|
|
(7,294)
|
|
(a)
See Note 1 - Basis
of preparation - Pensions and other post-retirement benefits for
further information.
Top of
page 16
Condensed group statement of changes in equity
|
|
BP shareholders’
|
Non-controlling interests
|
Total
|
$ million
|
|
equity
|
Hybrid bonds
|
Other interest
|
equity
|
At 1 January 2021
|
|
71,250
|
|
12,076
|
|
2,242
|
|
85,568
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
5,460
|
|
124
|
|
101
|
|
5,685
|
|
Dividends
|
|
(1,068)
|
|
—
|
|
(51)
|
|
(1,119)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(4)
|
|
—
|
|
—
|
|
(4)
|
|
Share-based payments, net of tax
|
|
(45)
|
|
—
|
|
—
|
|
(45)
|
|
Payments on perpetual hybrid bonds
|
|
—
|
|
(55)
|
|
—
|
|
(55)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
366
|
|
—
|
|
190
|
|
556
|
|
At 31 March 2021
|
|
75,959
|
|
12,145
|
|
2,482
|
|
90,586
|
|
|
|
|
|
|
|
|
|
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
|
|
(7,217)
|
|
—
|
|
(77)
|
|
(7,294)
|
|
Dividends
|
|
(2,120)
|
|
—
|
|
(31)
|
|
(2,151)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
3
|
|
—
|
|
—
|
|
3
|
|
Repurchase of ordinary share capital
|
|
(776)
|
|
—
|
|
—
|
|
(776)
|
|
Share-based payments, net of tax
|
|
(15)
|
|
—
|
|
—
|
|
(15)
|
|
Share
of equity-accounted entities’ changes in equity, net of
tax
|
|
(5)
|
|
—
|
|
—
|
|
(5)
|
|
Transactions involving non-controlling interests, net of
tax
|
|
4
|
|
—
|
|
6
|
|
10
|
|
At 31 March 2020
|
|
88,286
|
|
—
|
|
2,194
|
|
90,480
|
|
Top of
page 17
Group balance sheet
|
|
31 March
|
31 December
|
$ million
|
|
2021
|
2020
|
Non-current assets
|
|
|
|
Property, plant and equipment
|
|
112,927
|
|
114,836
|
|
Goodwill
|
|
12,460
|
|
12,480
|
|
Intangible assets
|
|
6,145
|
|
6,093
|
|
Investments in joint ventures
|
|
9,641
|
|
8,362
|
|
Investments in associates
|
|
19,199
|
|
18,975
|
|
Other investments
|
|
2,351
|
|
2,746
|
|
Fixed assets
|
|
162,723
|
|
163,492
|
|
Loans
|
|
866
|
|
840
|
|
Trade and other receivables
|
|
4,239
|
|
4,351
|
|
Derivative financial instruments
|
|
7,298
|
|
9,755
|
|
Prepayments
|
|
542
|
|
533
|
|
Deferred tax assets
|
|
6,687
|
|
7,744
|
|
Defined benefit pension plan surpluses
|
|
9,453
|
|
7,957
|
|
|
|
191,808
|
|
194,672
|
|
Current assets
|
|
|
|
Loans
|
|
361
|
|
458
|
|
Inventories
|
|
20,873
|
|
16,873
|
|
Trade and other receivables
|
|
20,095
|
|
17,948
|
|
Derivative financial instruments
|
|
2,896
|
|
2,992
|
|
Prepayments
|
|
1,524
|
|
1,269
|
|
Current tax receivable
|
|
445
|
|
672
|
|
Other investments
|
|
216
|
|
333
|
|
Cash and cash equivalents
|
|
31,676
|
|
31,111
|
|
|
|
78,086
|
|
71,656
|
|
Assets classified as held for sale (Note 2)
|
|
31
|
|
1,326
|
|
|
|
78,117
|
|
72,982
|
|
Total assets
|
|
269,925
|
|
267,654
|
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
40,709
|
|
36,014
|
|
Derivative financial instruments
|
|
2,926
|
|
2,998
|
|
Accruals
|
|
4,298
|
|
4,650
|
|
Lease liabilities
|
|
1,874
|
|
1,933
|
|
Finance debt
|
|
5,181
|
|
9,359
|
|
Current tax payable
|
|
1,245
|
|
1,038
|
|
Provisions
|
|
4,448
|
|
3,761
|
|
|
|
60,681
|
|
59,753
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
34
|
|
46
|
|
|
|
60,715
|
|
59,799
|
|
Non-current liabilities
|
|
|
|
Other payables
|
|
11,958
|
|
12,112
|
|
Derivative financial instruments
|
|
4,985
|
|
5,404
|
|
Accruals
|
|
839
|
|
852
|
|
Lease liabilities
|
|
7,156
|
|
7,329
|
|
Finance debt
|
|
60,942
|
|
63,305
|
|
Deferred tax liabilities
|
|
7,159
|
|
6,831
|
|
Provisions
|
|
17,170
|
|
17,200
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
8,415
|
|
9,254
|
|
|
|
118,624
|
|
122,287
|
|
Total liabilities
|
|
179,339
|
|
182,086
|
|
Net assets
|
|
90,586
|
|
85,568
|
|
Equity
|
|
|
|
BP shareholders’ equity
|
|
75,959
|
|
71,250
|
|
Non-controlling interests
|
|
14,627
|
|
14,318
|
|
Total equity
|
|
90,586
|
|
85,568
|
|
Top of
page 18
Condensed group cash flow statement
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Operating activities
|
|
|
|
|
Profit (loss) before taxation
|
|
6,542
|
|
1,090
|
|
(4,524)
|
|
Adjustments
to reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,428
|
|
3,580
|
|
4,157
|
|
Impairment
and (gain) loss on sale of businesses and fixed assets
|
|
(732)
|
|
(1,589)
|
|
1,133
|
|
Earnings
from equity-accounted entities, less dividends
received
|
|
(633)
|
|
(538)
|
|
505
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
29
|
|
22
|
|
137
|
|
Share-based
payments
|
|
(46)
|
|
179
|
|
(6)
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(20)
|
|
(182)
|
|
(20)
|
|
Net
charge for provisions, less payments
|
|
902
|
|
866
|
|
(59)
|
|
Movements
in inventories and other current and non-current assets and
liabilities
|
|
(2,793)
|
|
(715)
|
|
683
|
|
Income
taxes paid
|
|
(568)
|
|
(444)
|
|
(1,054)
|
|
Net cash provided by operating activities
|
|
6,109
|
|
2,269
|
|
952
|
|
Investing activities
|
|
|
|
|
Expenditure
on property, plant and equipment, intangible and other
assets
|
|
(3,033)
|
|
(2,922)
|
|
(3,789)
|
|
Acquisitions, net of cash acquired
|
|
(1)
|
|
(17)
|
|
(17)
|
|
Investment in joint ventures
|
|
(742)
|
|
(529)
|
|
(18)
|
|
Investment in associates
|
|
(22)
|
|
(23)
|
|
(37)
|
|
Total cash capital expenditure
|
|
(3,798)
|
|
(3,491)
|
|
(3,861)
|
|
Proceeds from disposal of fixed assets
|
|
551
|
|
439
|
|
10
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
3,613
|
|
3,564
|
|
671
|
|
Proceeds from loan repayments
|
|
61
|
|
61
|
|
63
|
|
Cash provided from investing activities
|
|
4,225
|
|
4,064
|
|
744
|
|
Net cash used in investing activities
|
|
427
|
|
573
|
|
(3,117)
|
|
Financing activities
|
|
|
|
|
Net issue (repurchase) of shares (Note 6)
|
|
—
|
|
—
|
|
(776)
|
|
Lease liability payments
|
|
(560)
|
|
(631)
|
|
(569)
|
|
Proceeds from long-term financing
|
|
1,956
|
|
2,619
|
|
2,684
|
|
Repayments of long-term financing
|
|
(7,029)
|
|
(3,191)
|
|
(3,717)
|
|
Net increase (decrease) in short-term debt
|
|
222
|
|
(906)
|
|
2,517
|
|
Payments on perpetual hybrid bonds
|
|
(55)
|
|
(62)
|
|
—
|
|
Receipts relating to transactions involving non-controlling
interests (other)
|
|
668
|
|
173
|
|
9
|
|
Dividends paid - BP shareholders
|
|
(1,064)
|
|
(1,059)
|
|
(2,102)
|
|
-
non-controlling interests
|
|
(51)
|
|
(75)
|
|
(31)
|
|
Net cash provided by (used in) financing activities
|
|
(5,913)
|
|
(3,132)
|
|
(1,985)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(58)
|
|
336
|
|
(183)
|
|
Increase (decrease) in cash and cash equivalents
|
|
565
|
|
46
|
|
(4,333)
|
|
Cash and cash equivalents at beginning of period
|
|
31,111
|
|
31,065
|
|
22,472
|
|
Cash and cash equivalents at end of period
|
|
31,676
|
|
31,111
|
|
18,139
|
|
Top of
page 19
Notes
Note 1. Basis of preparation
The
interim financial information included in this report has been
prepared in accordance with IAS 34 'Interim Financial
Reporting'.
The
results for the interim periods are unaudited and, in the opinion
of management, include all adjustments necessary for a fair
presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in
conjunction with the consolidated financial statements and related
notes for the year ended 31 December 2020 included in BP Annual Report and Form 20-F
2020.
The
directors consider it appropriate to adopt the going concern basis
of accounting in preparing the interim financial statements. The
impact of COVID-19 and the current economic environment has been
considered as part of the going concern assessment. Forecast
liquidity has been assessed under a number of stressed scenarios
performed to support this assertion. Reverse stress tests performed
indicated that the group will continue to operate as a going
concern for at least 12 months from the balance sheet date even if
the Brent price fell to zero.
bp
prepares its consolidated financial statements included within BP
Annual Report and Form 20-F on the basis of International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB), IFRS as adopted by the European
Union (EU) and in accordance with the provisions of the UK
Companies Act 2006 as applicable to companies reporting under
international accounting standards. As a result of the UK's
withdrawal from the EU, with effect from 1 January 2021, the
consolidated financial statements are also prepared in accordance
with IFRS as adopted by the UK. IFRS as adopted by the UK does not
differ from IFRS as adopted by the EU. IFRS as adopted by the EU
and UK differ in certain respects from IFRS as issued by the IASB.
The differences have no impact on the group’s consolidated
financial statements for the periods presented.
The
financial information presented herein has been prepared in
accordance with the accounting policies expected to be used in
preparing BP Annual Report and
Form 20-F 2021 which are the same as those used in preparing
BP Annual Report and Form 20-F
2020 with the exception of the changes described in the
'Updates to significant accounting policies' section below. There
are no other new or amended standards or interpretations adopted
from 1 January 2021 onwards that have a significant impact on the
financial information.
Considerations in respect of COVID-19 and the current economic
environment
bp's
significant accounting judgements and estimates were disclosed in
BP Annual Report and Form 20-F
2020. These have been subsequently considered at the end of
this quarter to determine if any changes were required to those
judgements and estimates as a result of current market conditions.
The conditions also result in the valuation of certain assets and
liabilities remaining subject to more uncertainty, including those
set out below.
Impairment testing assumptions
The
group’s price assumptions are unchanged from those disclosed
in BP Annual Report and Form 20-F
2020 and a summary, in real 2020 terms, is provided
below:
|
|
|
2Q to 4Q 2021
|
2025
|
2030
|
2040
|
2050
|
Brent oil ($/bbl)
|
|
|
50
|
50
|
60
|
60
|
50
|
Henry Hub gas ($/mmBtu)
|
|
|
3.00
|
3.00
|
3.00
|
3.00
|
2.75
|
The
group has identified upstream oil and gas properties with carrying
amounts totalling approximately $44 billion where the headroom,
based on the most recent impairment tests performed, was less than
or equal to 20% of the carrying value. A change in price or other
assumptions within the next financial year may result in a
recoverable amount of one or more of these assets above or below
the current carrying amount and therefore there is a significant
risk of impairment reversals or charges in that
period.
The
discount rates used in value-in-use impairment testing as
disclosed in
BP Annual Report and Form 20-F
2020, are unchanged.
Provisions
The
nominal risk-free discount rate applied to provisions is reviewed
on a quarterly basis. The discount rate applied to the group's
provisions as disclosed in
BP Annual Report and Form 20-F
2020, is unchanged.
Pensions and other post-retirement benefits
The
group's defined benefit pension plans are reviewed quarterly to
determine any changes to the fair value of the plan assets or
present value of the defined benefit obligations. As a result of
the review during the first quarter of 2021, the group's total net
defined benefit pension plan surplus as at 31 March 2021 is $1.0
billion, compared to a deficit of $1.3 billion at 31 December 2020.
This change was predominantly driven by increases in the UK, US and
Eurozone discount rates partly offset by increases in inflation
rates and negative asset performance. The current environment is
likely to continue to affect the values of the plan assets and
obligations resulting in potential volatility in the amount of the
net defined benefit pension plan surplus/deficit
recognized.
Impairment of financial assets measured at amortized
cost
The
estimate of the loss allowance recognized on financial assets
measured at amortized cost using an expected credit loss approach
was determined not to be a significant accounting estimate in
preparing BP Annual Report and
Form 20-F 2020. Expected credit loss allowances are,
however, reviewed and updated quarterly. Allowances are recognized
on assets where there is evidence that the asset is credit-impaired
and on a forward-looking expected credit loss basis for assets that
are not credit-impaired. The current economic environment and
future credit risk outlook have been considered in updating the
estimate of loss allowances with no significant impact in the
quarter.
Top of
page 20
Note 1. Basis of preparation (continued)
The
group continues to believe that the calculation of expected credit
loss allowances is not a significant accounting estimate. The group
continues to apply its credit policy as disclosed in BP Annual Report and Form 20-F 2020 -
Financial statements - Note 29 Financial instruments and financial
risk factors - credit risk.
Other accounting judgements and estimates
All
other significant accounting judgements and estimates disclosed in
BP Annual Report and Form 20-F
2020 remain applicable and no new significant accounting
judgements or estimates have been identified specifically arising
from the impact of COVID-19.
Updates to significant accounting policies
Change in accounting policy - Interest Rate Benchmark Reform -
Phase II
Financial
authorities in the US, UK, EU and other territories are currently
undertaking reviews of key interest rate benchmarks such as the
London Inter-bank Offered Rate (LIBOR) with a view to replacing
them with alternative benchmarks. Following the completion of
consultation processes, these financial authorities have begun to
announce the timing of both benchmark transitions and continued
publication of synthetic benchmarks. Amendments to IFRS 9
'Financial instruments', IFRS 16 ‘Leases’ and other
IFRSs were issued by the IASB in August 2020 to provide practical
expedients and reliefs in relation to modifications of financial
instruments and leases that arise from transition from Inter-bank
Offered Rates to alternative risk-free rates. These amendments also
provide relief to certain hedge accounting requirements. bp adopted
these amendments from 1 January 2021 and they will be applied
prospectively.
bp has
set up an internal working group on interest rate benchmark reform
to monitor market developments and manage the transition to
alternative benchmark rates and is currently assessing the impact
on contracts and arrangements that are linked to existing interest
rate benchmarks, for example, borrowings, leases and derivative
contracts. bp is also participating on external committees and task
forces dedicated to interest rate benchmark reform.
Change in segmentation
During
the first quarter of 2021, the group's reportable segments changed
consistent with a change in the way that resources are allocated
and performance is assessed by the chief operating decision maker,
who for bp is the group chief executive, from that date. From the
first quarter of 2021, the group's reportable segments are gas
& low carbon energy, oil production & operations, customers
& products, and Rosneft. At 31 December 2020, the group's
reportable segments were Upstream, Downstream and
Rosneft.
Gas
& low carbon energy comprises regions with upstream businesses
that predominantly produce natural gas, gas marketing and trading
activities and the group's renewables businesses, including
biofuels, solar and wind. Gas producing regions were previously in
the Upstream segment. The group's renewables businesses were
previously part of 'Other businesses and corporate'.
Oil
production & operations comprises regions with upstream
activities that predominantly produce crude oil. These activities
were previously in the Upstream segment.
Customers
& products comprises the group’s customer-focused
businesses, spanning convenience and mobility, which includes fuels
retail and next-gen offers such as electrification, as well as
aviation, midstream, and Castrol lubricants. It also includes our
oil products businesses, refining & trading. The petrochemicals
business will also be reported in restated comparative information
as part of the customers and products segment up to its sale in
December 2020. The customers & products segment is, therefore,
substantially unchanged from the former Downstream segment with the
exception of the Petrochemicals disposal.
The
Rosneft segment is unchanged and continues to include
equity-accounted earnings from the group's investment in
Rosneft.
The
segment measure of profit or loss continues to be replacement cost
profit or loss before interest and tax, which reflects the
replacement cost of supplies by excluding from profit or loss
before interest and tax inventory holding gains and losses. See
Note 3 for further information.
Comparative
information for 2020 has been restated in Notes 3, 4 and 5 to
reflect the changes in reportable segments.
Voluntary change in accounting policy - Net presentation of
revenues and purchases relating to physically settled derivative
contracts
bp
routinely enters into transactions for the sale and purchase of
commodities that are physically settled and meet the definition of
a derivative financial instrument. These contracts are within the
scope of IFRS 9 and as such, prior to settlement, changes in the
fair value of these derivative contracts are presented as gains and
losses within other operating revenues. The group previously
presented revenues and purchases for such contracts on a gross
basis in the income statement upon physical settlement. These
transactions have historically represented a substantial portion of
the revenues and purchases reported in the group’s
consolidated financial statements.
The
change in strategic direction of the group supported by
organisational changes to implement the strategy from 1 January
2021, results in the group determining that the revenue and
corresponding purchases relating to such transactions should be
presented net, as gains or losses within other operating revenues,
from that date. Additionally the group’s trading activity has
continued to evolve over time from one of capturing third-party
physical trades to provide flow assurance to one with increasing
levels of optimisation, taking advantage of price volatility and
fluctuations in demand and supply, which will continue under the
new strategy, further supporting the change in presentation. The
new presentation provides reliable and more relevant information
for users of the accounts as the group’s revenue recognition
is more closely aligned with its assessment of ‘Scope
3’ emissions from its products, its ‘Net Zero’
ambition and how management monitors and manages performance of
such contracts. Comparative information for sales and other
operating revenues and purchases for 2020 has been restated as
shown in the table below. There is no significant impact on
comparative information for profit before income and tax or
earnings per share.
Top of
page 21
Note 1. Basis of preparation (continued)
In
addition, as disclosed in the group's 2020 financial statements, in
2020 revenues from physically settled derivative contracts were
reclassified as other operating revenues and were no longer
presented together with revenues from contracts with customers.In
these first quarter 2021 financial statements certain other similar
contracts have been reclassified as other operating revenues and
then been subject to net presentation as described above.
Comparative information for natural gas, LNG and NGLs, and non-oil
products and other revenue from contracts with customers in Note 4
has been amended to align with current period presentation as shown
in the table below.
|
|
First
|
First
|
|
Fourth
|
Fourth
|
|
|
|
quarter
|
quarter
|
|
quarter
|
quarter
|
|
|
|
2020
|
2020
|
Impact of net
|
2020
|
2020
|
Impact of net
|
$ million
|
|
|
Restated
|
presentation(a)
|
|
Restated
|
presentation(a)
|
Sales and other operating revenues (note 4)
|
|
|
|
|
gas & low carbon energy
|
|
6,052
|
|
5,525
|
|
(527)
|
|
4,091
|
|
2,371
|
|
(1,720)
|
|
oil production & operations
|
|
5,831
|
|
5,831
|
|
—
|
|
4,101
|
|
4,101
|
|
—
|
|
customers & products
|
|
53,964
|
|
25,814
|
|
(28,150)
|
|
41,513
|
|
24,158
|
|
(17,355)
|
|
other businesses & corporate
|
|
437
|
|
437
|
|
—
|
|
404
|
|
404
|
|
—
|
|
|
|
66,284
|
|
37,607
|
|
(28,677)
|
|
50,109
|
|
31,034
|
|
(19,075)
|
|
Less: sales and other revenues between segments
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,811
|
|
1,811
|
|
—
|
|
616
|
|
616
|
|
—
|
|
oil production & operations
|
|
5,501
|
|
5,501
|
|
—
|
|
3,782
|
|
3,782
|
|
—
|
|
customers & products
|
|
(782)
|
|
(782)
|
|
—
|
|
486
|
|
486
|
|
—
|
|
other businesses & corporate
|
|
104
|
|
104
|
|
—
|
|
436
|
|
436
|
|
—
|
|
|
|
6,634
|
|
6,634
|
|
—
|
|
5,320
|
|
5,320
|
|
—
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
4,241
|
|
3,714
|
|
(527)
|
|
3,475
|
|
1,755
|
|
(1,720)
|
|
oil production & operations
|
|
330
|
|
330
|
|
—
|
|
319
|
|
319
|
|
—
|
|
customers & products
|
|
54,746
|
|
26,596
|
|
(28,150)
|
|
41,027
|
|
23,672
|
|
(17,355)
|
|
other businesses & corporate
|
|
333
|
|
333
|
|
—
|
|
(32)
|
|
(32)
|
|
—
|
|
Total sales and other operating revenues
|
|
59,650
|
|
30,973
|
|
(28,677)
|
|
44,789
|
|
25,714
|
|
(19,075)
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
Crude oil
|
|
1,435
|
|
1,435
|
|
—
|
|
1,185
|
|
1,185
|
|
—
|
|
Oil products
|
|
20,254
|
|
20,254
|
|
—
|
|
16,216
|
|
16,216
|
|
—
|
|
Natural gas, LNG and NGLs
|
|
3,638
|
|
3,178
|
|
(460)
|
|
3,252
|
|
1,369
|
|
(1,883)
|
|
Non-oil products and other revenues from contracts with
customers
|
|
2,490
|
|
2,477
|
|
(13)
|
|
2,608
|
|
2,546
|
|
(62)
|
|
Revenues from contracts with customers
|
|
27,817
|
|
27,344
|
|
(473)
|
|
23,261
|
|
21,316
|
|
(1,945)
|
|
Other operating revenues
|
|
31,833
|
|
3,629
|
|
(28,204)
|
|
21,528
|
|
4,398
|
|
(17,130)
|
|
Total sales and other operating revenues
|
|
59,650
|
|
30,973
|
|
(28,677)
|
|
44,789
|
|
25,714
|
|
(19,075)
|
|
(a)
Total purchases for the first and fourth quarter 2020 have been
re-stated by the equal and opposite amount as total sales and other
operating revenues.
Top of
page 22
Note 2. Non-current assets held for sale
The
carrying amount of assets classified as held for sale at 31 March
2021 is $31 million, with associated liabilities of $34
million.
At 31
December 2020 the balance consists primarily of a 20% participating
interest from BP’s 60% participating interest in Block 61 in
Oman, which is reported in the gas & low carbon energy segment.
As announced on 1 February 2021, BP agreed to sell this interest to
PTT Exploration and Production Public Company Limited (PTTEP) of
Thailand for a total consideration of up to $2.6 billion, subject
to final adjustments. On 28 March, a royal decree was published
approving the sale and $2.4 billion was received in March
2021.
Note 3. Analysis of replacement cost profit (loss) before interest
and tax and reconciliation to profit (loss) before
taxation(a)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
gas & low carbon energy
|
|
3,430
|
|
(638)
|
|
1,070
|
|
oil production & operations
|
|
1,479
|
|
66
|
|
(179)
|
|
customers & products
|
|
934
|
|
1,245
|
|
664
|
|
Rosneft
|
|
363
|
|
270
|
|
(17)
|
|
other businesses & corporate
|
|
(678)
|
|
288
|
|
(566)
|
|
|
|
5,528
|
|
1,231
|
|
972
|
|
Consolidation adjustment – UPII*
|
|
13
|
|
(77)
|
|
178
|
|
RC profit (loss) before interest and tax*
|
|
5,541
|
|
1,154
|
|
1,150
|
|
Inventory holding gains (losses)*
|
|
|
|
|
gas & low carbon energy
|
|
22
|
|
10
|
|
(9)
|
|
oil production & operations
|
|
15
|
|
10
|
|
(59)
|
|
customers & products
|
|
1,605
|
|
650
|
|
(4,615)
|
|
Rosneft (net of tax)
|
|
88
|
|
25
|
|
(201)
|
|
Profit (loss) before interest and tax
|
|
7,271
|
|
1,849
|
|
(3,734)
|
|
Finance costs
|
|
723
|
|
749
|
|
783
|
|
Net
finance expense relating to pensions and other post-retirement
benefits
|
|
6
|
|
10
|
|
7
|
|
Profit (loss) before taxation
|
|
6,542
|
|
1,090
|
|
(4,524)
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
US
|
|
1,907
|
|
(21)
|
|
595
|
|
Non-US
|
|
3,634
|
|
1,175
|
|
555
|
|
|
|
5,541
|
|
1,154
|
|
1,150
|
|
(a)
Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 basis of
preparation - Change in
segmentation.
Top of
page 23
Note 4. Sales and other operating revenues(a)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
By segment
|
|
|
|
|
gas & low carbon energy
|
|
8,002
|
|
2,371
|
|
5,525
|
|
oil production & operations
|
|
5,155
|
|
4,101
|
|
5,831
|
|
customers & products
|
|
27,107
|
|
24,158
|
|
25,814
|
|
other businesses & corporate
|
|
436
|
|
404
|
|
437
|
|
|
|
40,700
|
|
31,034
|
|
37,607
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
gas & low carbon energy
|
|
1,032
|
|
616
|
|
1,811
|
|
oil production & operations
|
|
4,855
|
|
3,782
|
|
5,501
|
|
customers & products
|
|
110
|
|
486
|
|
(782)
|
|
other businesses & corporate
|
|
159
|
|
436
|
|
104
|
|
|
|
6,156
|
|
5,320
|
|
6,634
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
gas & low carbon energy
|
|
6,970
|
|
1,755
|
|
3,714
|
|
oil production & operations
|
|
300
|
|
319
|
|
330
|
|
customers & products
|
|
26,997
|
|
23,672
|
|
26,596
|
|
other businesses & corporate
|
|
277
|
|
(32)
|
|
333
|
|
Total sales and other operating revenues
|
|
34,544
|
|
25,714
|
|
30,973
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
US
|
|
14,491
|
|
8,436
|
|
9,665
|
|
Non-US
|
|
26,883
|
|
22,355
|
|
26,832
|
|
|
|
41,374
|
|
30,791
|
|
36,497
|
|
Less: sales and other operating revenues between areas
|
|
6,830
|
|
5,077
|
|
5,524
|
|
|
|
34,544
|
|
25,714
|
|
30,973
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
Crude oil
|
|
1,334
|
|
1,185
|
|
1,435
|
|
Oil products
|
|
19,278
|
|
16,216
|
|
20,254
|
|
Natural
gas, LNG and NGLs(b)
|
|
4,181
|
|
1,369
|
|
3,178
|
|
Non-oil
products and other revenues from contracts with
customers(b)
|
|
1,398
|
|
2,546
|
|
2,477
|
|
Revenue from contracts with customers
|
|
26,191
|
|
21,316
|
|
27,344
|
|
Other
operating revenues(c)
|
|
8,353
|
|
4,398
|
|
3,629
|
|
Total sales and other operating revenues
|
|
34,544
|
|
25,714
|
|
30,973
|
|
(a)
Comparative
information for 2020 has been restated for the changes in
reportable segments and also changes to net presentation of
revenues and purchases relating to physically settled derivative
contracts effective 1 January 2021. For more information see Note 1
Basis of preparation - Voluntary
change in accounting policy and Change in segmentation.
(b)
Comparative
information has been amended for certain contracts that have been
reclassified to other operating revenues and then been subject to
the net presentation described in Note 1 Basis of preparation -
Voluntary change in accounting
policy.
(c)
Principally relates
to commodity derivative transactions.
Top of
page 24
Note 5. Depreciation, depletion and amortization(a)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
gas & low carbon energy
|
|
854
|
|
721
|
|
1,038
|
|
oil production & operations
|
|
1,574
|
|
1,786
|
|
2,117
|
|
customers & products
|
|
745
|
|
748
|
|
747
|
|
other businesses & corporate
|
|
194
|
|
171
|
|
157
|
|
|
|
3,367
|
|
3,426
|
|
4,059
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
US
|
|
1,121
|
|
1,174
|
|
1,425
|
|
Non-US
|
|
2,246
|
|
2,252
|
|
2,634
|
|
|
|
3,367
|
|
3,426
|
|
4,059
|
|
(a)
Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 basis of
preparation - Change in
segmentation.
Note 6. Earnings per share and shares in issue
Basic
earnings per ordinary share (EpS) amounts are calculated by
dividing the profit (loss) for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the period. No share buybacks were carried out
during the quarter.
The
calculation of EpS is performed separately for each discrete
quarterly period, and for the year-to-date period. As a result, the
sum of the discrete quarterly EpS amounts in any particular
year-to-date period may not be equal to the EpS amount for the
year-to-date period.
For the
diluted EpS calculation the weighted average number of shares
outstanding during the period is adjusted for the number of shares
that are potentially issuable in connection with employee
share-based payment plans using the treasury stock
method.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Results for the period
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
4,667
|
|
1,358
|
|
(4,365)
|
|
Less: preference dividend
|
|
1
|
|
—
|
|
—
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
4,666
|
|
1,358
|
|
(4,365)
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
20,297,585
|
|
20,233,240
|
|
20,178,803
|
|
ADS
equivalent(c)
|
|
3,382,930
|
|
3,372,206
|
|
3,363,133
|
|
|
|
|
|
|
Weighted
average number of shares outstanding used to calculate diluted
earnings per share
|
|
20,388,628
|
|
20,329,326
|
|
20,178,803
|
|
ADS
equivalent(c)
|
|
3,398,104
|
|
3,388,221
|
|
3,363,133
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
20,331,023
|
|
20,264,027
|
|
20,197,527
|
|
ADS
equivalent(c)
|
|
3,388,503
|
|
3,377,337
|
|
3,366,254
|
|
(a)
Excludes treasury
shares and includes certain shares that will be issued in the
future under employee share-based payment plans.
(b)
If the inclusion of
potentially issuable shares would decrease loss per share, the
potentially issuable shares are excluded from the weighted average
number of shares outstanding used to calculate diluted earnings per
share. The numbers of potentially issuable shares that have been
excluded from the calculation for the first quarter 2020 74,240
thousand (ADS equivalent 12,374 thousand).
(c)
One ADS is
equivalent to six ordinary shares.
Top of
page 25
Note 7. Dividends
Dividends payable
BP
today announced an interim dividend of 5.25 cents per ordinary
share which is expected to be paid on 18 June 2021 to ordinary
shareholders and American Depositary Share (ADS) holders on the
register on 7 May 2021. The ex-dividend date will be 6 May 2021.
The corresponding amount in sterling is due to be announced on 8
June 2021, calculated based on the average of the market exchange
rates over three dealing days between 3 June 2021 and 7 June 2021.
Holders of ADSs are expected to receive $0.315 per ADS (less
applicable fees). The board has decided not to offer a scrip
dividend alternative in respect of the first quarter 2021 dividend.
Ordinary shareholders and ADS holders (subject to certain
exceptions) will be able to participate in a dividend reinvestment
programme. Details of the first quarter dividend and timetable are
available at bp.com/dividends and further details of
the dividend reinvestment programmes are available at bp.com/drip.
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
Dividends paid per ordinary share
|
|
|
|
|
cents
|
|
5.250
|
|
5.250
|
|
10.500
|
|
pence
|
|
3.768
|
|
3.917
|
|
8.156
|
|
Dividends paid per ADS (cents)
|
|
31.50
|
|
31.50
|
|
63.00
|
|
Note 8. Net debt
Net debt*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Finance
debt(a)
|
|
66,123
|
|
72,664
|
|
69,117
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
(1,134)
|
|
(2,612)
|
|
426
|
|
|
|
64,989
|
|
70,052
|
|
69,543
|
|
Less: cash and cash equivalents
|
|
31,676
|
|
31,111
|
|
18,139
|
|
Net debt
|
|
33,313
|
|
38,941
|
|
51,404
|
|
Total
equity(c)
|
|
90,586
|
|
85,568
|
|
90,480
|
|
Gearing*
|
|
26.9%
|
31.3%
|
36.2%
|
(a)
The fair value of
finance debt at 31 March 2021 was $67,775 million (31 March 2020
$67,500 million).
(b)
Derivative
financial instruments entered into for the purpose of managing
interest rate and foreign currency exchange risk associated with
net debt with a fair value liability position of $346 million
(fourth quarter 2020 liability of $236 million and first
quarter 2020 liability of $663 million) are not included in
the calculation of net debt shown above as hedge accounting is not
applied for these instruments.
(c)
Total equity in the
first quarter 2021 and fourth quarter 2020 includes perpetual
hybrid bonds issued in June 2020.
As part
of actively managing its debt portfolio, the group bought back
finance debt with an outstanding aggregate principal amount of $2.0
billion in January 2021 and a further $1.9 billion equivalent of
euro and sterling bonds in March 2021. Derivatives associated with
non-USD debt bought back were also terminated. There was no
significant impact on net debt or gearing as a result of these
transactions.
Note 9. Inventory valuation
A
provision of $80 million was held against hydrocarbon inventories
at 31 March 2021 ($216 million at 31 December 2020 and $3,596
million at 31 March 2020) to write them down to their net
realizable value. As a result of the changes in strategic direction
of the group and the evolution of the trading strategy set out in
Note 1, from 1 January, certain inventory, totalling $10.2 billion
as at 31 March 2021, is now treated as trading inventory and is
valued at fair value whereas the equivalent inventory was
previously valued at the lower of cost or net realisable value in
prior periods.
Note 10. Statutory accounts
The
financial information shown in this publication, which was approved
by the Board of Directors on 26 April 2021, is unaudited and does
not constitute statutory financial statements. Audited financial
information will be published in BP Annual Report and Form 20-F 2021. BP Annual
Report and Form 20-F 2020 has been filed with the Registrar
of Companies in England and Wales. The report of the auditor on
those accounts was unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis
without qualifying the report and did not contain a statement under
section 498(2) or section 498(3) of the UK Companies Act
2006.
Top of
page 26
Additional information
Capital expenditure*(a)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Capital expenditure
|
|
|
|
|
Organic capital expenditure*
|
|
2,906
|
|
2,949
|
|
3,539
|
|
Inorganic
capital expenditure*(b)
|
|
892
|
|
542
|
|
322
|
|
|
|
3,798
|
|
3,491
|
|
3,861
|
|
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Total capital expenditure by segment
|
|
|
|
|
gas
& low carbon energy(b)
|
|
1,885
|
|
1,470
|
|
1,184
|
|
oil production & operations
|
|
1,319
|
|
1,133
|
|
1,960
|
|
customers & products
|
|
532
|
|
770
|
|
657
|
|
other businesses & corporate
|
|
62
|
|
118
|
|
60
|
|
|
|
3,798
|
|
3,491
|
|
3,861
|
|
Total capital expenditure by geographical area
|
|
|
|
|
US
|
|
1,487
|
|
1,305
|
|
1,323
|
|
Non-US
|
|
2,311
|
|
2,186
|
|
2,538
|
|
|
|
3,798
|
|
3,491
|
|
3,861
|
|
(a)
Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 Basis of
preparation - Change in
segmentation.
(b)
Fourth quarter 2020
includes a $500 million deposit in respect of the strategic
partnership with Equinor and first quarter 2021 includes the final
payment of $712 million.
Top of
page 27
Adjusting items*(a)
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
gas & low carbon energy
|
|
|
|
|
Gains
on sale of businesses and fixed assets(b)
|
|
1,034
|
|
—
|
|
—
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
(123)
|
|
(23)
|
|
(3)
|
|
Environmental and other provisions
|
|
—
|
|
—
|
|
—
|
|
Restructuring,
integration and rationalization costs(c)
|
|
(8)
|
|
(87)
|
|
2
|
|
Fair
value accounting effects(d)
|
|
247
|
|
(677)
|
|
223
|
|
Other
|
|
10
|
|
(5)
|
|
1
|
|
|
|
1,160
|
|
(792)
|
|
223
|
|
oil production & operations
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
168
|
|
257
|
|
7
|
|
Impairment
and losses on sale of businesses and fixed assets(e)
|
|
(209)
|
|
(830)
|
|
(1,130)
|
|
Environmental and other provisions
|
|
(65)
|
|
20
|
|
(13)
|
|
Restructuring,
integration and rationalization costs(c)
|
|
(4)
|
|
(125)
|
|
(6)
|
|
Fair value accounting effects
|
|
—
|
|
—
|
|
—
|
|
Other
|
|
24
|
|
181
|
|
68
|
|
|
|
(86)
|
|
(497)
|
|
(1,074)
|
|
customers & products
|
|
|
|
|
Gains
on sale of businesses and fixed assets(f)
|
|
(97)
|
|
2,310
|
|
7
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
(43)
|
|
(313)
|
|
(5)
|
|
Environmental and other provisions
|
|
—
|
|
(33)
|
|
—
|
|
Restructuring,
integration and rationalization costs(c)
|
|
(41)
|
|
(522)
|
|
—
|
|
Fair
value accounting effects(d)
|
|
459
|
|
(284)
|
|
(259)
|
|
Other
|
|
—
|
|
(39)
|
|
—
|
|
|
|
278
|
|
1,119
|
|
(257)
|
|
Rosneft
|
|
|
|
|
Other
|
|
—
|
|
(41)
|
|
—
|
|
|
|
—
|
|
(41)
|
|
—
|
|
other businesses & corporate
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
—
|
|
190
|
|
2
|
|
Impairment and losses on sale of businesses and fixed
assets
|
|
(1)
|
|
(1)
|
|
—
|
|
Environmental and other provisions
|
|
—
|
|
(122)
|
|
(23)
|
|
Restructuring,
integration and rationalization costs(c)
|
|
(25)
|
|
(57)
|
|
(13)
|
|
Gulf of Mexico oil spill
|
|
(11)
|
|
(140)
|
|
(21)
|
|
Fair
value accounting effects(d)
|
|
(447)
|
|
450
|
|
—
|
|
Other
|
|
(24)
|
|
77
|
|
(79)
|
|
|
|
(508)
|
|
397
|
|
(134)
|
|
Total before interest and taxation
|
|
844
|
|
186
|
|
(1,242)
|
|
Finance
costs(g)(h)
|
|
(148)
|
|
(191)
|
|
(122)
|
|
Total before taxation
|
|
696
|
|
(5)
|
|
(1,364)
|
|
Taxation credit (charge) on adjusting items
|
|
12
|
|
648
|
|
310
|
|
Taxation
– impact of foreign exchange(i)
|
|
(13)
|
|
67
|
|
(365)
|
|
Total taxation on adjusting items
|
|
(1)
|
|
715
|
|
(55)
|
|
Total after taxation for period
|
|
695
|
|
710
|
|
(1,419)
|
|
(a)
Prior to 2021
adjusting items were reported under two different headings –
non-operating items and fair value accounting effects. Comparative
information for 2020 has been restated to reflect the changes in
reportable segments. For more information see Note 1 Basis of
preparation - Change in
segmentation.
(b)
First quarter 2021
relates to a gain from the divestment of a 20% stake in Oman Block
61.
(c)
First quarter 2021
and fourth quarter 2020 include recognized provisions for
restructuring costs associated with the reinvent programme that was
formalized in 2020.
(d)
For further
information, including the nature of fair value accounting effects
reported in each segment, see page 34.
(e)
Fourth quarter 2020
includes $156 million in relation to the likely disposal of an
exploration asset.
(f)
Fourth quarter 2020
includes a gain of $2.3 billion on the sale of our petrochemicals
business.
(g)
All periods
presented include the unwinding of discounting effects relating to
Gulf of Mexico oil spill payables. First quarter 2021 and fourth
quarter 2020 also include the income statement impact associated
with the buyback of finance debt. See Note 8 for further
information.
(h)
From first quarter
2021 bp is presenting temporary valuation differences associated
with the group’s interest rate and foreign currency exchange
risk management of finance debt as an adjusting item within finance
costs. In 2020 these amounts were presented within production and
manufacturing expenses and as an 'other' adjusting item in the
other business & corporate segment. Relevant amounts in the
comparative periods presented were not material.
(i)
bp is presenting
certain foreign exchange effects on tax as adjusting items. These
amounts represent the impact of: (i) foreign exchange on deferred
tax balances arising from the conversion of local currency tax base
amounts into functional currency, and (ii) taxable gains and losses
from the retranslation of US dollar-denominated intra-group loans
to local currency.
Top of
page 28
Net debt including leases
Net debt including leases*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Net debt
|
|
33,313
|
|
38,941
|
|
51,404
|
|
Lease liabilities
|
|
9,030
|
|
9,262
|
|
9,373
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
37
|
|
(7)
|
|
(159)
|
|
Net debt including leases
|
|
42,380
|
|
48,196
|
|
60,618
|
|
Total equity
|
|
90,586
|
|
85,568
|
|
90,480
|
|
Gearing including leases*
|
|
31.9%
|
36.0%
|
40.1%
|
Readily marketable inventory* (RMI)
|
|
31 March
|
31 December
|
$ million
|
|
2021
|
2020
|
RMI at fair value*
|
|
7,341
|
|
6,528
|
|
Paid-up RMI*
|
|
3,410
|
|
3,365
|
|
Readily
marketable inventory (RMI) is oil and oil products inventory held
and price risk-managed by bp’s trading & supply enabler
(T&S) which could be sold to generate funds if required.
Paid-up RMI is RMI that BP has paid for.
We
believe that disclosing the amounts of RMI and paid-up RMI is
useful to investors as it enables them to better understand and
evaluate the group’s inventories and liquidity position by
enabling them to see the level of discretionary inventory held by
T&S and to see builds or releases of liquid trading
inventory.
See the
Glossary on page 33 for a more detailed definition of RMI. RMI at
fair value, paid-up RMI and unpaid RMI are non-GAAP measures. A
reconciliation of total inventory as reported on the group balance
sheet to paid-up RMI is provided below.
|
|
31 March
|
31 December
|
$ million
|
|
2021
|
2020
|
Reconciliation of total inventory to paid-up RMI
|
|
|
|
Inventories as reported on the group balance sheet under
IFRS
|
|
20,873
|
|
16,873
|
|
Less: (a) inventories that are not oil and oil products and (b) oil
and oil product inventories that are not risk-managed by
T&S
|
|
(13,558)
|
|
(10,810)
|
|
|
|
7,315
|
|
6,063
|
|
Plus: difference between RMI at fair value and RMI on an IFRS
basis
|
|
26
|
|
465
|
|
RMI at fair value
|
|
7,341
|
|
6,528
|
|
Less: unpaid RMI* at fair value
|
|
(3,931)
|
|
(3,163)
|
|
Paid-up RMI
|
|
3,410
|
|
3,365
|
|
Gulf of Mexico oil spill
|
|
31 March
|
31 December
|
$ million
|
|
2021
|
2020
|
Gulf of Mexico oil spill payables and provisions
|
|
(11,354)
|
|
(11,436)
|
|
Of which - current
|
|
(1,296)
|
|
(1,444)
|
|
|
|
|
|
Deferred tax asset
|
|
4,684
|
|
5,471
|
|
Payables
and provisions presented in the table above reflect the latest
estimate for the remaining costs associated with the Gulf of Mexico
oil spill. Where amounts have been provided on an estimated basis,
the amounts ultimately payable may differ from the amounts provided
and the timing of payments is uncertain. Further information
relating to the Gulf of Mexico oil spill, including information on
the nature and expected timing of payments relating to provisions
and other payables, is provided in BP Annual Report and Form 20-F 2020 -
Financial statements - Notes 7, 9, 20, 22, 23, 29, and
33.
Top of
page 29
Working capital* reconciliation
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
Movements
in inventories and other current and non-current assets and
liabilities as per condensed group cash flow statement
|
|
(2,793)
|
|
(715)
|
|
683
|
|
Adjusted for Inventory holding gains (losses)* (Note
3)
|
|
1,642
|
|
670
|
|
(4,683)
|
|
Working capital release (build) after adjusting for net inventory
gains (losses)
|
|
(1,151)
|
|
(45)
|
|
(4,000)
|
|
Surplus cash flow reconciliation for first quarter
2021
|
|
First
|
|
|
quarter
|
$ million
|
|
2021
|
Sources:
|
|
|
Net cash provided by operating activities
|
|
6,109
|
|
Cash provided from investing activities
|
|
4,225
|
|
Receipts relating to transactions involving non-controlling
interests (other)
|
|
668
|
|
Cash inflow
|
|
11,002
|
|
|
|
|
Uses:
|
|
|
Lease liability payments
|
|
(560)
|
|
Payments on perpetual hybrid bonds
|
|
(55)
|
|
Dividends paid – BP shareholders
|
|
(1,064)
|
|
– non-controlling interests
|
|
(51)
|
|
Total capital expenditure
|
|
(3,798)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(58)
|
|
Cash outflow
|
|
(5,586)
|
|
|
|
|
Surplus (deficit) cash and cash equivalent
|
|
5,416
|
|
|
|
|
Net debt
|
|
|
Opening balance at 1 January 2021
|
|
38,941
|
|
Fair value and other movements on debt
|
|
(212)
|
|
Net debt target
|
|
35,000
|
|
Cash used to meet net debt target
|
|
3,729
|
|
|
|
|
Surplus cash flow
|
|
1,687
|
|
|
|
|
Top of
page 30
Reconciliation of customers & products RC profit by business
before interest and tax* to underlying RC profit before interest
and tax to adjusted EBITDA*
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
2020
|
RC profit before interest and tax – by
business
|
|
|
|
|
customers – convenience & mobility
|
|
586
|
|
239
|
|
684
|
|
Castrol – included in customers
|
|
340
|
|
141
|
|
167
|
|
products – refining & trading
|
|
447
|
|
(1,304)
|
|
(85)
|
|
petrochemicals
|
|
(99)
|
|
2,310
|
|
65
|
|
|
|
934
|
|
1,245
|
|
664
|
|
Less: Adjusting items
|
|
|
|
|
customers – convenience & mobility
|
|
(72)
|
|
(443)
|
|
(4)
|
|
Castrol – included in customers
|
|
6
|
|
(121)
|
|
—
|
|
products – refining & trading
|
|
449
|
|
(715)
|
|
(253)
|
|
petrochemicals
|
|
(99)
|
|
2,277
|
|
—
|
|
|
|
278
|
|
1,119
|
|
(257)
|
|
Underlying RC profit before interest and tax – by
business
|
|
|
|
|
customers – convenience & mobility
|
|
658
|
|
682
|
|
688
|
|
Castrol – included in customers
|
|
334
|
|
262
|
|
167
|
|
products – refining & trading
|
|
(2)
|
|
(589)
|
|
168
|
|
petrochemicals
|
|
—
|
|
33
|
|
65
|
|
|
|
656
|
|
126
|
|
921
|
|
Add back: Depreciation, depletion and amortization
|
|
|
|
|
customers – convenience & mobility
|
|
324
|
|
324
|
|
287
|
|
Castrol – included in customers
|
|
39
|
|
42
|
|
38
|
|
products – refining & trading
|
|
421
|
|
422
|
|
410
|
|
petrochemicals
|
|
—
|
|
2
|
|
50
|
|
|
|
745
|
|
748
|
|
747
|
|
Adjusted EBITDA – by business
|
|
|
|
|
customers – convenience & mobility
|
|
982
|
|
1,006
|
|
975
|
|
Castrol – included in customers
|
|
373
|
|
304
|
|
205
|
|
products – refining & trading
|
|
419
|
|
(167)
|
|
578
|
|
petrochemicals
|
|
—
|
|
35
|
|
115
|
|
|
|
1,401
|
|
874
|
|
1,668
|
|
Top of
page 31
Reconciliation of customers & products RC profit before
interest and tax* to convenience gross margin at constant foreign
exchange
|
|
First
|
First
|
|
|
quarter
|
quarter
|
$ million
|
|
2021
|
2020
|
RC profit before interest and tax for customers &
products
|
|
934
|
|
664
|
|
Less RC profit before interest and tax for refining & trading
and petrochemicals
|
|
348
|
|
(20)
|
|
RC profit before interest and tax for customers - convenience &
mobility
|
|
586
|
|
684
|
|
Net (favourable) adverse impact of adjusting items
|
|
72
|
|
4
|
|
Underlying RC profit before interest and tax for customers -
convenience & mobility
|
|
658
|
|
688
|
|
Less underlying RC profit (loss) for Castrol
|
|
334
|
|
167
|
|
Add back:
|
|
|
|
customers – convenience & mobility (excluding Castrol)
depreciation, depletion and amortization
|
|
285
|
|
249
|
|
customers – convenience & mobility (excluding Castrol)
production and manufacturing, distribution and administration
expenses and adjusted for aviation, B2B, midstream, retail fuels
and next-gen gross margin
|
|
(194)
|
|
(445)
|
|
Adjusted for earnings from equity-accounted entities in customers
– convenience & mobility (excluding Castrol)
|
|
(69)
|
|
(40)
|
|
Convenience gross margin
|
|
346
|
|
284
|
|
Foreign exchange effects
|
|
—
|
|
24
|
|
Convenience gross margin at constant foreign exchange
|
|
346
|
|
308
|
|
Top of
page 32
Realizations* and marker prices
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
Average realizations(a)
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
US
|
|
45.21
|
|
32.40
|
|
45.96
|
|
Europe
|
|
61.72
|
|
43.39
|
|
50.71
|
|
Rest of World
|
|
57.48
|
|
41.60
|
|
48.13
|
|
BP Average
|
|
53.20
|
|
38.42
|
|
47.47
|
|
Natural gas ($/mcf)
|
|
|
|
|
US
|
|
3.45
|
|
1.76
|
|
1.28
|
|
Europe
|
|
6.89
|
|
5.37
|
|
3.23
|
|
Rest of World
|
|
3.94
|
|
3.37
|
|
3.51
|
|
BP Average
|
|
3.98
|
|
3.10
|
|
2.83
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
US
|
|
36.91
|
|
24.20
|
|
29.94
|
|
Europe
|
|
55.34
|
|
39.39
|
|
43.97
|
|
Rest of World
|
|
36.06
|
|
29.28
|
|
31.61
|
|
BP Average
|
|
37.75
|
|
28.48
|
|
31.80
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
Brent
|
|
61.12
|
|
44.16
|
|
50.10
|
|
West Texas Intermediate
|
|
58.13
|
|
42.63
|
|
45.56
|
|
Western Canadian Select
|
|
46.12
|
|
31.57
|
|
28.71
|
|
Alaska North Slope
|
|
61.07
|
|
44.82
|
|
51.07
|
|
Mars
|
|
58.65
|
|
43.26
|
|
45.57
|
|
Urals (NWE – cif)
|
|
59.36
|
|
44.29
|
|
47.84
|
|
Average natural gas marker prices
|
|
|
|
|
Henry
Hub gas price(b) ($/mmBtu)
|
|
2.71
|
|
2.67
|
|
1.95
|
|
UK Gas – National Balancing Point (p/therm)
|
|
49.82
|
|
40.46
|
|
24.81
|
|
|
|
|
|
|
(a)
Based on sales of
consolidated subsidiaries only – this excludes equity-accounted
entities.
(b)
Henry Hub First of
Month Index.
Exchange rates
|
|
First
|
Fourth
|
First
|
|
|
quarter
|
quarter
|
quarter
|
|
|
2021
|
2020
|
2020
|
$/£ average rate for the period
|
|
1.38
|
|
1.32
|
|
1.28
|
|
$/£ period-end rate
|
|
1.37
|
|
1.36
|
|
1.24
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.21
|
|
1.19
|
|
1.10
|
|
$/€ period-end rate
|
|
1.17
|
|
1.23
|
|
1.10
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.77
|
|
0.73
|
|
0.66
|
|
$/AUD period-end rate
|
|
0.76
|
|
0.77
|
|
0.62
|
|
|
|
|
|
|
Rouble/$ average rate for the period
|
|
74.41
|
|
76.16
|
|
66.75
|
|
Rouble/$ period-end rate
|
|
76.09
|
|
74.44
|
|
78.14
|
|
Top of
page 33
Legal proceedings
For a
full discussion of the group’s material legal proceedings,
see pages 226-227 of bp Annual
Report and Form 20-F 2020.
Glossary
Non-GAAP
measures are provided for investors because they are closely
tracked by management to evaluate bp’s operating performance
and to make financial, strategic and operating decisions. Non-GAAP
measures are sometimes referred to as alternative performance
measures.
New
metrics have been introduced in 2021 to provide transparency
against key strategic value drivers.
Adjusted EBITDA is a non-GAAP measure and is defined as
underlying replacement cost (RC) profit* before interest and tax,
add back depreciation, depletion and amortization and exploration
write-offs (net of adjusting items). bp believes it is helpful to
disclose adjusted EBITDA because it reflects how the segment
measures underlying business delivery. The nearest equivalent
measure on an IFRS basis for the segment is RC profit or loss
before interest and tax. RC profit or loss before interest and tax
is the measure of profit or loss that is required to be disclosed
for each operating segment under IFRS.
Adjusting items are
items that bp discloses separately because it considers such
disclosures to be meaningful and relevant to investors. They are
items that management considers to be important to period-on-period
analysis of the group's results and are disclosed in order to
enable investors to better understand and evaluate the
group’s reported financial performance. Adjusting items
include fair value accounting effects. Adjusting items within
equity-accounted earnings are reported net of incremental income
tax reported by the equity-accounted entity. An analysis of
adjusting items by segment and type is shown on page 28. Prior to
2021 adjusting items were reported under two different headings
– non-operating items and fair value accounting
effects.
Bioenergy production is average thousands of barrels of
biofuel production per day during the period covered, net to bp.
This includes equivalent ethanol production, bp Bunge biopower for
grid export, biogas and refining co-processing and standalone
hydrogenated vegetable oil (HVO).
Capital expenditure is total cash capital expenditure as
stated in the condensed group cash flow statement.
Consolidation adjustment – UPII is unrealized profit
in inventory arising on inter-segment transactions.
Convenience gross margin is a non-GAAP measure. Convenience
gross margin is RC profit before interest and tax for convenience
& mobility, excluding adjusting items to derive underlying RC
profit before interest and tax. convenience & mobility
underlying RC profit before interest and tax is further adjusted by
subtracting underlying RC profit before interest and tax for
Castrol; adding-back depreciation, depletion and amortization,
production and manufacturing, distribution and administration
expenses for convenience and mobility (excluding Castrol);
subtracting earnings from equity-accounted entities in convenience
and mobility (excluding Castrol) and gross margin for retail fuels,
next-gen, aviation, B2B and midstream. Convenience gross margin
growth – the year-on-year change in convenience gross margin at
constant foreign exchange. This metric requires a
calculation based on convenience gross margin ($ billion) at
constant foreign exchange. The foreign exchange calculation
compares the current period value over the restated comparative
period value which results in the growth % at constant foreign
exchange rates. bp believes it is helpful to disclose the
convenience gross margin because this measure may help investors to
understand and evaluate, in the same way as management, our
progress against our strategic objectives of redefining
convenience. The nearest GAAP measure is RC profit before interest
and tax. A reconciliation to GAAP information is provided on page
30.
Developed renewables to final investment decision (FID)
– Total generating capacity for assets developed to FID by
all entities where bp has an equity share (proportionate to equity
share). If asset is subsequently sold bp will continue to record
capacity as developed to FID. If bp equity share increases
developed capacity to FID will increase proportionately to share
increase for any assets where bp held equity at the point of
FID.
Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-GAAP measure. The ETR on RC profit or loss is
calculated by dividing taxation on a RC basis by RC profit or loss
before tax. Information on RC profit or loss is provided below. bp
believes it is helpful to disclose the ETR on RC profit or loss
because this measure excludes the impact of price changes on the
replacement of inventories and allows for more meaningful
comparisons between reporting periods. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
Electric vehicle charge points are defined as charge points
operated by either bp or a bp joint venture.
Top of
page 34
Glossary (continued)
Fair value accounting effects are non-GAAP adjustments to
our IFRS profit (loss). They reflect the difference between the way
bp manages the economic exposure and internally measures
performance of certain activities and the way those activities are
measured under IFRS. Fair value accounting effects are included
within adjusting items. They relate to certain of the group's
commodity, interest rate and currency risk exposures as detailed
below. Other than as noted below, the fair value accounting effects
described are reported in both the gas & low carbon energy and
customer & products segments.
bp uses
derivative instruments to manage the economic exposure relating to
inventories above normal operating requirements of crude oil,
natural gas and petroleum products. Under IFRS, these inventories
are recorded at historical cost. The related derivative
instruments, however, are required to be recorded at fair value
with gains and losses recognized in the income statement. This is
because hedge accounting is either not permitted or not followed,
principally due to the impracticality of effectiveness-testing
requirements. Therefore, measurement differences in relation to
recognition of gains and losses occur. Gains and losses on these
inventories, other than net realizable value provisions, are not
recognized until the commodity is sold in a subsequent accounting
period. Gains and losses on the related derivative commodity
contracts are recognized in the income statement, from the time the
derivative commodity contract is entered into, on a fair value
basis using forward prices consistent with the contract
maturity.
bp
enters into physical commodity contracts to meet certain business
requirements, such as the purchase of crude for a refinery or the
sale of bp’s gas production. Under IFRS these physical
contracts are treated as derivatives and are required to be fair
valued when they are managed as part of a larger portfolio of
similar transactions. Gains and losses arising are recognized in
the income statement from the time the derivative commodity
contract is entered into.
IFRS
require that inventory held for trading is recorded at its fair
value using period-end spot prices, whereas any related derivative
commodity instruments are required to be recorded at values based
on forward prices consistent with the contract maturity. Depending
on market conditions, these forward prices can be either higher or
lower than spot prices, resulting in measurement
differences.
bp
enters into contracts for pipelines and other transportation,
storage capacity, oil and gas processing, liquefied natural gas
(LNG) and certain gas and power contracts that, under IFRS, are
recorded on an accruals basis. These
contracts are risk-managed using a variety of derivative
instruments that are fair valued under IFRS. This results in
measurement differences in relation to recognition of gains and
losses.
The way
that bp manages the economic exposures described above, and
measures performance internally, differs from the way these
activities are measured under IFRS. bp calculates this difference
for consolidated entities by comparing the IFRS result with
management’s internal measure of performance. Under
management’s internal measure of performance the inventory,
transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end
of the period. The
fair values of derivative instruments used to risk manage certain
oil, gas, power and other contracts, are deferred to match with the
underlying exposure and the commodity contracts for business
requirements are accounted for on an accruals basis. We believe
that disclosing management’s estimate of this difference
provides useful information for investors because it enables
investors to see the economic effect of these activities as a
whole.
Fair
value accounting effects also include changes in the fair value of
the near-term portions of LNG contracts that fall within bp’s
risk management framework. LNG contracts are not considered
derivatives, because there is insufficient market liquidity, and
they are therefore accrual accounted under IFRS. However, oil and
natural gas derivative financial instruments (used to risk manage
the near-term portions of the LNG contracts) are fair valued under
IFRS. The fair value accounting effect, which is reported in the
gas and low carbon energy segment, reduces the measurement
differences between that of the derivative financial instruments
used to risk manage the LNG contracts and the measurement of the
LNG contracts themselves, which therefore gives a better
representation of performance in each period.
In
addition, from the second quarter 2020 fair value accounting
effects include changes in the fair value of derivatives entered
into by the group to manage currency exposure and interest rate
risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which were issued on 17 June 2020
are classified as equity instruments and were recorded in the
balance sheet at that date at their USD equivalent issued value.
Under IFRS these equity instruments are not remeasured from period
to period, and do not qualify for application of hedge accounting.
The derivative instruments relating to the hybrid bonds, however,
are required to be recorded at fair value with mark to market gains
and losses recognized in the income statement. Therefore,
measurement differences in relation to the recognition of gains and
losses occur. The fair value accounting effect, which is reported
in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial
instruments that are recognized in the income statement. We
believe that this gives a better representation of performance, by
more appropriately reflecting the economic effect of these risk
management activities, in each period.
Top of
page 35
Glossary (continued)
Gearing and net debt are non-GAAP measures. Net debt is
calculated as finance debt, as shown in the balance sheet, plus the
fair value of associated derivative financial instruments that are
used to hedge foreign currency exchange and interest rate risks
relating to finance debt, for which hedge accounting is applied,
less cash and cash equivalents. Gearing is defined as the ratio of
net debt to the total of net debt plus total equity. bp believes
these measures provide useful information to investors. Net debt
enables investors to see the economic effect of finance debt,
related hedges and cash and cash equivalents in total. Gearing
enables investors to see how significant net debt is relative to
total equity. The derivatives are reported on the balance sheet
within the headings ‘Derivative financial instruments’.
The nearest equivalent GAAP measures on an IFRS basis are finance
debt and finance debt ratio. A reconciliation of finance debt to
net debt is provided on page 26.
We are
unable to present reconciliations of forward-looking information
for net debt or gearing to finance debt and total equity, because
without unreasonable efforts, we are unable to forecast accurately
certain adjusting items required to present a meaningful comparable
GAAP forward-looking financial measure. These items include fair
value asset (liability) of hedges related to finance debt and cash
and cash equivalents, that are difficult to predict in advance in
order to include in a GAAP estimate.
Gearing including leases and net debt including leases are
non-GAAP measures. Net debt including leases is calculated as net
debt plus lease liabilities, less the net amount of partner
receivables and payables relating to leases entered into on behalf
of joint operations. Gearing including leases is defined as the
ratio of net debt including leases to the total of net debt
including leases plus total equity. bp believes these measures
provide useful information to investors as they enable investors to
understand the impact of the group’s lease portfolio on net
debt and gearing. The nearest equivalent GAAP measures on an IFRS
basis are finance debt and finance debt ratio. A reconciliation of
finance debt to net debt including leases is provided on page
29.
Hydrocarbons –
Liquids and natural gas. Natural gas is converted to oil equivalent
at 5.8 billion cubic feet = 1 million barrels.
Inorganic capital expenditure is a non-GAAP measure.
Inorganic capital expenditure comprises consideration in business
combinations and certain other significant investments made by the
group. It is reported on a cash basis. bp believes that this
measure provides useful information as it allows investors to
understand how bp’s management invests funds in projects
which expand the group’s activities through acquisition. The
nearest equivalent measure on an IFRS basis is capital expenditure
on a cash basis. Further information and a reconciliation to GAAP
information is provided on page 27.
Installed renewables capacity is bp's share of capacity for
operating assets owned by entities where bp has an equity
share.
Inventory holding gains and losses are non-GAAP adjustments
to our IFRS profit (loss) and represent:
a.
the difference
between the cost of sales calculated using the replacement cost of
inventory and the cost of sales calculated on the first-in
first-out (FIFO) method after adjusting for any changes in
provisions where the net realizable value of the inventory is lower
than its cost. Under the FIFO method, which we use for IFRS
reporting of inventories other than for trading inventories, the
cost of inventory charged to the income statement is based on its
historical cost of purchase or manufacture, rather than its
replacement cost. In volatile energy markets, this can have a
significant distorting effect on reported income. The amounts
disclosed as inventory holding gains and losses represent the
difference between the charge to the income statement for inventory
on a FIFO basis (after adjusting for any related movements in net
realizable value provisions) and the charge that would have arisen
based on the replacement cost of inventory. For this purpose, the
replacement cost of inventory is calculated using data from each
operation’s production and manufacturing system, either on a
monthly basis, or separately for each transaction where the system
allows this approach; and
b.
an adjustment
relating to certain trading inventories that are not price risk
managed which relate to a minimum inventory volume that is required
to be held to maintain underlying business activities. This
adjustment represents the movement in fair value of the inventories
due to prices, on a grade by grade basis, during the period. This
is calculated from each operation’s inventory management
system on a monthly basis using the discrete monthly movement in
market prices for these inventories.
The
amounts disclosed are not separately reflected in the financial
statements as a gain or loss. No adjustment is made in respect of
the cost of inventories held as part of a trading position and
certain other temporary inventory positions that are price
risk-managed. See Replacement cost (RC) profit or loss definition
below.
Liquids – Liquids for oil production & operations,
gas & low carbon energy and Rosneft comprises crude oil,
condensate and natural gas liquids. For oil production &
operations and gas & low carbon energy, liquids also includes
bitumen.
Major projects have a bp net investment of at least $250
million, or are considered to be of strategic importance to bp or
of a high degree of complexity.
Operating cash flow is
net cash provided by (used in) operating activities as stated in
the condensed group cash flow statement.
Top of
page 36
Glossary (continued)
Organic capital expenditure is a non-GAAP measure. Organic
capital expenditure comprises capital expenditure less inorganic
capital expenditure. bp believes that this measure provides useful
information as it allows investors to understand how bp’s
management invests funds in developing and maintaining the
group’s assets. The nearest equivalent measure on an IFRS
basis is capital expenditure on a cash basis and a reconciliation
to GAAP information is provided on page 27.
We are
unable to present reconciliations of forward-looking information
for organic capital expenditure to total cash capital expenditure,
because without unreasonable efforts, we are unable to forecast
accurately the adjusting item, inorganic capital expenditure, that
is difficult to predict in advance in order to derive the nearest
GAAP estimate.
Production-sharing agreement/contract (PSA/PSC) is an
arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return, if
exploration is successful, the oil company receives entitlement to
variable physical volumes of hydrocarbons, representing recovery of
the costs incurred and a stipulated share of the production
remaining after such cost recovery.
Readily marketable inventory (RMI) is inventory held and
price risk-managed by our trading & supply enabler (T&S)
which could be sold to generate funds if required. It comprises oil
and oil products for which liquid markets are available and
excludes inventory which is required to meet operational
requirements and other inventory which is not price risk-managed.
RMI is reported at fair value. Inventory held by the Downstream
fuels business for the purpose of sales and marketing, and all
inventories relating to the lubricants and petrochemicals
businesses, are not included in RMI.
Paid-up
RMI excludes RMI which has not yet been paid for. For inventory
that is held in storage, a first-in first-out (FIFO) approach is
used to determine whether inventory has been paid for or not.
Unpaid RMI is RMI which has not yet been paid for by bp. RMI at
fair value, Paid-up RMI and Unpaid RMI are non-GAAP measures.
Further information is provided on page 29.
Realizations are the result of dividing revenue generated
from hydrocarbon sales, excluding revenue generated from purchases
made for resale and royalty volumes, by revenue generating
hydrocarbon production volumes. Revenue generating hydrocarbon
production reflects the bp share of production as adjusted for any
production which does not generate revenue. Adjustments may include
losses due to shrinkage, amounts consumed during processing, and
contractual or regulatory host committed volumes such as
royalties.
Refining availability represents
Solomon Associates’ operational availability for bp-operated
refineries, which is defined as the percentage of the year that a
unit is available for processing after subtracting the annualized
time lost due to turnaround activity and all planned mechanical,
process and regulatory downtime.
The
Refining marker
margin (RMM) is the average of regional indicator margins
weighted for bp’s crude refining capacity in each region.
Each regional marker margin is based on product yields and a marker
crude oil deemed appropriate for the region. The regional indicator
margins may not be representative of the margins achieved by bp in
any period because of bp’s particular refinery configurations
and crude and product slate.
Renewables pipeline – Renewable projects satisfying
criteria to the point they can be considered developed to final
investment decision (FID): Site based projects have obtained land
exclusivity rights, or for PPA based projects an offer has been
made to the counterparty, or for auction projects pre-qualification
criteria has been met, or for acquisition projects post a binding
offer being accepted.
Replacement cost (RC) profit or loss reflects the
replacement cost of inventories sold in the period and is arrived
at by excluding inventory holding gains and losses from profit or
loss. RC profit or loss for the group is not a recognized GAAP
measure. bp believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our
reported result under IFRS can be significant. Inventory holding
gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order
for investors to understand the operating performance of the group
excluding the impact of price changes on the replacement of
inventories, and to make comparisons of operating performance
between reporting periods, bp’s management believes it is
helpful to disclose this measure. The nearest equivalent measure on
an IFRS basis is profit or loss attributable to bp shareholders. A
reconciliation to GAAP information is provided on page 1. RC profit
or loss before interest and tax is the measure of profit or loss
that is required to be disclosed for each operating segment under
IFRS.
RC profit or loss per share is a non-GAAP measure. Earnings
per share is defined in Note 6. RC profit or loss per share is
calculated using the same denominator. The numerator used is RC
profit or loss attributable to bp shareholders rather than profit
or loss attributable to bp shareholders. bp believes it is helpful
to disclose the RC profit or loss per share because this measure
excludes the impact of price changes on the replacement of
inventories and allows for more meaningful comparisons between
reporting periods. The nearest equivalent measure on an IFRS basis
is basic earnings per share based on profit or loss for the period
attributable to bp shareholders.
Reported recordable injury frequency measures the number of
reported work-related employee and contractor incidents that result
in a fatality or injury per 200,000 hours worked. This represents
reported incidents occurring within bp’s operational HSSE
reporting boundary. That boundary includes bp’s own operated
facilities and certain other locations or situations. Reported
incidents are investigated throughout the year and as a result
there may be changes in previously reported incidents. Therefore
comparative movements are calculated against internal data
reflecting the final outcomes of such investigations, rather than
the previously reported comparative period, as this this represents
a more up to date reflection of the safety
environment.
Top of
page 37
Glossary (continued)
Retail sites include sites operated by dealers, jobbers,
franchisees or brand licensees or joint venture (JV) partners,
under the bp brand. These may move to and from the bp brand as
their fuel supply agreement or brand licence agreement expires and
are renegotiated in the normal course of business. Retail sites are
primarily branded bp, ARCO,
Amoco, Aral and Thorntons, and also includes sites in
India through our Jio-bp JV.
Retail sites in growth markets are retail sites that are
either bp branded or co-branded with our partners in China, Mexico
and Indonesia and also include sites in India through our Jio-bp
JV.
Solomon availability – See Refining availability
definition.
Strategic convenience sites are retail sites, within the bp
portfolio, which both sell bp branded fuel and carry one of the
strategic convenience brands (e.g. M&S, Rewe to Go). To be
considered a strategic convenience brand the convenience offer
should be a strategic differentiator in the market in which it
operates. Strategic convenience site count includes sites under a
pilot phase.
Surplus cash flow is a non-GAAP measure and refers to
surplus of sources of cash, after reaching the $35 billion net debt
target, including operating cash flow and divestment and other
proceeds, over uses, including leases, hybrid servicing costs,
dividend payments, cash capital expenditure and the cost of share
buybacks to offset the dilution from vesting of awards under
employee share schemes.
Technical service contract (TSC) – Technical service
contract is an arrangement through which an oil and gas company
bears the risks and costs of exploration, development and
production. In return, the oil and gas company receives entitlement
to variable physical volumes of hydrocarbons, representing recovery
of the costs incurred and a profit margin which reflects
incremental production added to the oilfield.
Tier 1 and tier 2 process safety events – Tier 1
events are losses of primary containment from a process of greatest
consequence – causing harm to a member of the workforce,
damage to equipment from a fire or explosion, a community impact or
exceeding defined quantities. Tier 2 events are those of lesser
consequence. These represent reported incidents occurring within
bp’s operational HSSE reporting boundary. That boundary
includes bp’s own operated facilities and certain other
locations or situations. Reported process safety events are
investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this this represents a more up to
date reflection of the safety environment.
Underlying effective tax rate (ETR) is a non-GAAP measure.
The underlying ETR is calculated by dividing taxation on an
underlying replacement cost (RC) basis by underlying RC profit or
loss before tax. Taxation on an underlying RC basis is taxation on
a RC basis for the period adjusted for taxation on adjusting items.
Information on underlying RC profit or loss is provided below. bp
believes it is helpful to disclose the underlying ETR because this
measure may help investors to understand and evaluate, in the same
manner as management, the underlying trends in bp’s
operational performance on a comparable basis, period on period.
The nearest equivalent measure on an IFRS basis is the ETR on
profit or loss for the period.
We are
unable to present reconciliations of forward-looking information
for underlying ETR to ETR on profit or loss for the period, because
without unreasonable efforts, we are unable to forecast accurately
certain adjusting items required to present a meaningful comparable
GAAP forward-looking financial measure. These items include the
taxation on inventory holding gains and losses and adjusting items,
that are difficult to predict in advance in order to include in a
GAAP estimate.
Underlying production – 2021 underlying production,
when compared with 2020, is production after adjusting for
acquisitions and divestments, curtailments, and entitlement impacts
in our production-sharing agreements/contracts and technical
service contract.
Underlying RC profit or loss is RC profit or loss after
adjusting for adjusting items. Underlying RC profit or loss and
adjustments for fair value accounting effects are not recognized
GAAP measures. See page 28 for additional information on the
adjusting items that are used to arrive at underlying RC profit or
loss in order to enable a full understanding of the events and
their financial impact. bp believes that underlying RC profit or
loss is a useful measure for investors because it is a measure
closely tracked by management to evaluate bp’s operating
performance and to make financial, strategic and operating
decisions and because it may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp’s operational performance on a comparable basis, period
on period, by adjusting for the effects of these adjusting items.
The nearest equivalent measure on an IFRS basis for the group is
profit or loss attributable to bp shareholders. The nearest
equivalent measure on an IFRS basis for segments is RC profit or
loss before interest and taxation. A reconciliation to GAAP
information is provided on page 1.
Underlying RC profit or loss per share is a non-GAAP
measure. Earnings per share is defined in Note 8. Underlying RC
profit or loss per share is calculated using the same denominator.
The numerator used is underlying RC profit or loss attributable to
bp shareholders rather than profit or loss attributable to bp
shareholders. bp believes it is helpful to disclose the underlying
RC profit or loss per share because this measure may help investors
to understand and evaluate, in the same manner as management, the
underlying trends in bp’s operational performance on a
comparable basis, period on period. The nearest equivalent measure
on an IFRS basis is basic earnings per share based on profit or
loss for the period attributable to bp shareholders.
upstream includes oil and natural gas field development and
production within the gas & low carbon energy and oil
production & operations segments. References to upstream
exclude Rosneft.
Top of
page 38
Glossary (continued)
upstream/hydrocarbon plant reliability (bp-operated) is
calculated taking 100% less the ratio of total unplanned plant
deferrals divided by installed production capacity. Unplanned plant
deferrals are associated with the topside plant and where
applicable the subsea equipment (excluding wells and reservoir).
Unplanned plant deferrals include breakdowns, which does not
include Gulf of Mexico weather related downtime.
upstream unit production cost is calculated as production
cost divided by units of production. Production cost does not
include ad valorem and severance taxes. Units of production are
barrels for liquids and thousands of cubic feet for gas. Amounts
disclosed are for bp subsidiaries only and do not include
bp’s share of equity-accounted entities.
Working capital is movements in inventories and other
current and non-current assets and liabilities as reported in the
condensed group cash flow statement.
Change
in working capital adjusted for inventory holding gains/losses is a
non-GAAP measure. It is calculated by adjusting for inventory
holding gains/losses reported in the period and this therefore
represents what would have been reported as movements in
inventories and other current and non-current assets and
liabilities, if the starting point in determining net cash provided
by operating activities had been replacement cost profit rather
than profit for the period. The nearest equivalent measure on an
IFRS basis for this is movements in inventories and other current
and non-current assets and liabilities.
bp
utilizes various arrangements in order to manage its working
capital including discounting of receivables and, in the supply and
trading business, the active management of supplier payment terms,
inventory and collateral.
Trade marks
Trade
marks of the bp group appear throughout this announcement. They
include:
bp, Amoco,
Aral, Castrol ON and
Thorntons
Top of
page 39
Cautionary statement
In order to utilize the ‘safe harbor’ provisions of the
United States Private Securities Litigation Reform Act of 1995 (the
‘PSLRA’) and the general doctrine of cautionary
statements, bp is providing the following cautionary statement: The
discussion in this results announcement contains certain forecasts,
projections and forward-looking statements - that is, statements
related to future, not past events and circumstances - with respect
to the financial condition, results of operations and businesses of
bp and certain of the plans and objectives of bp with respect to
these items. These statements may generally, but not always, be
identified by the use of words such as ‘will’,
‘expects’, ‘is expected to’,
‘aims’, ‘should’, ‘may’,
‘objective’, ‘is likely to’,
‘intends’, ‘believes’,
‘anticipates’, ‘plans’, ‘we
see’ or similar expressions. In particular, the following,
among other statements, are all forward looking in nature:
expectations regarding the COVID-19 pandemic, including its risks,
impacts, consequences and challenges and bp’s response, the
impact on bp’s financial performance (including cash flows
and net debt), operations and credit losses, and the impact on the
trading environment, oil and gas prices, and global GDP;
expectations regarding the shape of the COVID-19 recovery and the
pace of transition to a lower-carbon economy and energy system;
plans, expectations and assumptions regarding oil and gas demand,
supply or prices, the timing of production of reserves; plans and
expectations regarding the divestment programme, including the
amount and timing of proceeds in 2021, and plans and expectations
in respect of reaching $25 billion of proceeds by 2025 and
expectations that disposal proceeds in 2021 will be in the $5-6
billion range; expectations with respect to completion of
transactions and the timing and amount of proceeds of agreed
disposals; plans and expectations with respect to the total amount
of organic capital expenditure; plans and expectations with respect
to the total capital expenditure for 2021; plans and expectations
regarding net debt; plans and expectations regarding new joint
ventures and other agreements, including partnerships with Equinor,
EnBW, Amazon, RIC Energy, Qantas, Infosys, Australia and
Azerbaijan, as well as plans and expectations related to bp’s
Mad Dog 2 development in the Gulf of Mexico and bp’s hydrogen
production facility in Teesside (UK); plans and expectations with
respect to the development of EV charging networks in the UK and
Europe; expectations regarding quarterly dividends and share
buybacks including plans and expectations to return at least 60% of
surplus cash flow to shareholders and to offset dilution from
employee share schemes going forward; expectations regarding demand
for bp’s products; expectations regarding refining margins,
refinery utilization rates and product demand; expectations
regarding bp’s future financial performance and cash flows;
expectations regarding the underlying effective tax rate for 2021;
plans and expectations regarding bp’s renewable energy and
alternative energy businesses; expectations regarding reported and
underlying production and related major project ramp-up, capital
investments, divestment and maintenance activity; expectations
regarding price assumptions used in accounting estimates;
expectations regarding the timing and amount of future payments
relating to the Gulf of Mexico oil spill; and expectations
regarding operational and financial results or acquisitions or
divestments by Rosneft, and expectations with respect to Rosneft
dividends. By their nature, forward-looking statements involve risk
and uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp. Actual results may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the impact of
COVID-19, overall global economic and business conditions impacting
our business and demand for our products as well as the specific
factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and
societal expectations; the pace of development and adoption of
alternative energy solutions; the receipt of relevant third party
and/or regulatory approvals; the timing and level of maintenance
and/or turnaround activity; the timing and volume of refinery
additions and outages; the timing of bringing new fields onstream;
the timing, quantum and nature of certain acquisitions and
divestments; future levels of industry product supply, demand and
pricing, including supply growth in North America; OPEC quota
restrictions; PSA and TSC effects; operational and safety problems;
potential lapses in product quality; economic and financial market
conditions generally or in various countries and regions; political
stability and economic growth in relevant areas of the world;
changes in laws and governmental regulations; regulatory or legal
actions including the types of enforcement action pursued and the
nature of remedies sought or imposed; the actions of prosecutors,
regulatory authorities and courts; delays in the processes for
resolving claims; amounts ultimately payable and timing of payments
relating to the Gulf of Mexico oil spill; exchange rate
fluctuations; development and use of new technology; recruitment
and retention of a skilled workforce; the success or otherwise of
partnering; the actions of competitors, trading partners,
contractors, subcontractors, creditors, rating agencies and others;
our access to future credit resources; business disruption and
crisis management; the impact on our reputation of ethical
misconduct and non-compliance with regulatory obligations; trading
losses; major uninsured losses; decisions by Rosneft’s
management and board of directors; the actions of contractors;
natural disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and
acts of terrorism; cyber-attacks or sabotage; and other factors
discussed elsewhere in this report, as well those factors discussed
under “Risk factors” in bp Annual Report and Form 20-F
2020 as filed with the US Securities and Exchange
Commission.
Contacts
|
London
|
Houston
|
|
|
|
Press Office
|
David Nicholas
|
Brett Clanton
|
|
+44 (0)20 7496 4708
|
+1 281 366 8346
|
|
|
|
Investor Relations
|
Craig Marshall
|
Geoff Carr
|
bp.com/investors
|
+44 (0)20 7496 4962
|
+1 281 892 3065
|
BP
p.l.c.’s LEI Code 213800LH1BZH3D16G760
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
BP
p.l.c.
|
|
(Registrant)
|
|
|
Dated: 27
April 2021
|
|
|
/s/ Ben
J. S. Mathews
|
|
------------------------
|
|
Ben J.
S. Mathews
|
|
Company
Secretary
|
BP (NYSE:BP)
Historical Stock Chart
From Mar 2024 to Apr 2024
BP (NYSE:BP)
Historical Stock Chart
From Apr 2023 to Apr 2024