REG - BP PLC - 2Q23 SEA part 1 of 1
01/08/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230801:nRSA8128Ha&default-theme=true
RNS Number : 8128H BP PLC 01 August 2023
Top of page 1
FOR IMMEDIATE RELEASE
London 1 August 2023
BP p.l.c. Group results
Second quarter and first half 2023((a))
"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/8128H_1-2023-7-31.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8128H_1-2023-7-31.pdf)
Performing while transforming
Financial summary Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) for the period attributable to bp shareholders 1,792 8,218 9,257 10,010 (11,127)
Inventory holding (gains) losses*, net of tax 549 452 (1,607) 1,001 (4,271)
Replacement cost (RC) profit (loss)* 2,341 8,670 7,650 11,011 (15,398)
Net (favourable) adverse impact of adjusting items*, net of tax 248 (3,707) 801 (3,459) 30,094
Underlying RC profit* 2,589 4,963 8,451 7,552 14,696
Operating cash flow* 6,293 7,622 10,863 13,915 19,073
Capital expenditure* (4,314) (3,625) (2,838) (7,939) (5,767)
Divestment and other proceeds((b)) 88 800 722 888 1,903
Surplus cash flow* (269) 2,283 6,546 2,014 10,584
Net issue (repurchase) of shares (2,073) (2,448) (2,288) (4,521) (3,880)
Net debt*((c)) 23,660 21,232 22,816 23,660 22,816
Adjusted EBITDA* 9,770 13,066 16,357 22,836 30,240
Announced dividend per ordinary share (cents per share) 7.270 6.610 6.006 13.880 11.466
Underlying RC profit per ordinary share* (cents) 14.77 27.74 43.58 42.65 75.55
Underlying RC profit per ADS* (dollars) 0.89 1.66 2.61 2.56 4.53
• Underlying RC profit $2.6bn; Operating cash flow $6.3bn • 10% increase in resilient dividend to 7.270 cents per ordinary share; • Delivering resilient hydrocarbons - 2Q23 start-up of two major projects*; • Continued progress in transformation to an IEC - acquisition of
further $1.5bn share buyback announced successful commissioning of Cherry Point refinery improvement projects TravelCenters of America; 4GW entry to German offshore wind; strong progress
across the five transition growth* engines
Another quarter of performing while transforming. Our underlying performance
was resilient with good cash delivery - during a period of significant
turnaround activity and weaker margins in our refining business. We're
delivering our strategy at pace - we've started up two major oil and gas
projects to help keep energy flowing today and we're accelerating our
transformation through our five transition growth engines. And we're
delivering for shareholders growing our dividend and announcing a further
share buyback. This reflects confidence in our performance and the outlook for
cash flow, as well as continued progress reducing our share count.
Bernard Looney
Chief executive officer
(a) This results announcement also represents bp's half-yearly
financial report (see page 16).
(b) Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more information on divestment and
other proceeds.
(c) See Note 10 for more information.
RC profit (loss), underlying RC profit (loss), surplus cash flow, net debt,
adjusted EBITDA, underlying RC profit per ordinary share and underlying RC
profit per ADS are non-IFRS measures. Inventory holding (gains) losses and
adjusting items are non-IFRS adjustments.
* For items marked with an asterisk throughout this document, definitions are
provided in the Glossary on page 35.
Top of page 2
Highlights
Underlying replacement cost profit* $2.6 billion
• Underlying replacement cost profit for the quarter was $2.6
billion, compared with $5.0 billion for the previous quarter. Compared to the
first quarter 2023, the result reflects: significantly lower realized refining
margins, a significantly higher level of turnaround and maintenance activity
and a weak oil trading result; lower oil and gas realizations; and an
exceptional gas marketing and trading result, albeit lower than the first
quarter.
• Reported profit for the quarter was $1.8 billion, compared with
$8.2 billion for the first quarter 2023. The reported result for the second
quarter is adjusted for inventory holding losses* of $0.5 billion (net of tax)
and a net adverse impact of adjusting items* of $0.2 billion (net of tax) to
derive the underlying replacement cost profit. Adjusting items include
impairments of $1.2 billion and favourable fair value accounting effects* of
$1.1 billion.
Operating cash flow* $6.3 billion
• Operating cash flow in the quarter of $6.3 billion includes $1.2
billion of Gulf of Mexico oil spill payments within a working capital* release
(after adjusting for inventory holding losses, fair value accounting effects
and other adjusting items) of $0.1 billion (see page 30).
• Capital expenditure* in the second quarter was $4.3 billion
including $1.1 billion for the acquisition of TravelCenters of America, net of
adjustments. bp continues to expect capital expenditure, including inorganic
capital expenditure*, of $16-18 billion in 2023.
• During the second quarter, bp completed $2.1 billion of share
buybacks. This included $225 million as part of the $675 million programme
announced on 7 February 2023 to offset the expected full-year dilution from
the vesting of awards under employee share schemes in 2023.
• The $1.75 billion share buyback programme announced with the first
quarter results was completed on 28 July 2023. Over the last four quarters bp
has completed over $10 billion of buybacks from surplus cash flow* and reduced
its issued share capital by over 9%.
• Net debt* was $23.7 billion at the end of the second quarter.
Growing distributions within an unchanged financial frame
• A resilient dividend is bp's first priority within its disciplined
financial frame, underpinned by a cash balance point* of around $40 per barrel
Brent, $11 per barrel RMM and $3 per mmBtu Henry Hub (all 2021 real).
• For the second quarter, bp has announced a dividend per ordinary
share of 7.270 cents, an increase of 10%.
• bp remains committed to using 60% of 2023 surplus cash flow for
share buybacks, subject to maintaining a strong investment grade credit
rating.
• bp intends to execute a further $1.5 billion share buyback prior
to reporting third quarter results.
• In setting the dividend per ordinary share and buyback each
quarter, the board will continue to take into account factors including the
cumulative level of and outlook for surplus cash flow, the cash balance point
and the maintenance of a strong investment grade credit rating.
• bp's guidance for distributions remains unchanged. Based on bp's
current forecasts, at around $60 per barrel Brent and subject to the board's
discretion each quarter, bp expects to be able to deliver share buybacks of
around $4.0 billion per annum, at the lower end of its $14-18 billion capital
expenditure range, and have capacity for an annual increase in the dividend
per ordinary share of around 4%.
Strong momentum in transformation to an integrated energy company
• In resilient hydrocarbons, during the second quarter bp announced
the start-up of the bp-operated Mad Dog Phase 2 project and the Reliance
operated KG D6-MJ project, together expected to add around 90 thousand barrels
of oil equivalent per day of net production by 2025. In addition, bp's Cherry
Point refinery in the US successfully commissioned the hydrocracker
improvement project and cooling water infrastructure project to improve
availability and reduce costs and CO(2) emissions.
• In convenience and mobility, bp completed the acquisition of
TravelCenters of America, adding a network of 288 sites, strategically located
on major highways across the US. The deal is expected to almost double bp's
global convenience gross margin*, and bring growth opportunities in four of
bp's five transition growth* engines. In July, bp and Lekkerland extended
their convenience partnership to deliver REWE To Go stores at Aral retail
sites until 2028. And during the first half 2023 bp grew energy sold from EV
charging by around 170% compared to the first half 2022.
• In low carbon energy, bp was awarded the rights to develop two
offshore wind projects, with total potential generating capacity of 4GW, in
the German tender round, marking its entry into offshore wind in continental
Europe. In addition, bp has made significant progress growing its pipeline of
hydrogen projects to reach 2.8mtpa at the end of the second quarter.
In the second quarter bp has continued to execute against its unchanged
financial frame. We have increased our dividend by 10%; we are investing with
discipline to advance our strategy; and we are committed to returning 60% of
2023 surplus cash flow through share buybacks with a further $1.5 billion
announced for the second quarter.
Murray Auchincloss
Chief financial officer
The commentary above contains forward-looking statements and should be read in
conjunction with the cautionary statement on page 41.
Top of page 3
Financial results
In addition to the highlights on page 2:
• Profit attributable to bp shareholders in the second quarter and half year
was $1.8 billion and $10.0 billion respectively, compared with a profit of
$9.3 billion and a loss of $11.1 billion in the same periods of 2022.
- After adjusting profit attributable to bp shareholders for inventory holding
losses* and net impact of adjusting items*, underlying replacement cost
profit* for the second quarter and half year was $2.6 billion and
$7.6 billion respectively, compared with $8.5 billion and $14.7 billion for
the same periods of 2022. This reduction in underlying replacement cost profit
for the second quarter and half year reflects lower oil and gas realizations,
the impact of portfolio changes in oil production & operations,
significantly lower refining margins, and a weak oil trading performance,
partly offset by a higher gas marketing and trading result.
- Adjusting items in the second quarter and half year had a net adverse
pre-tax impact of $0.6 billion and a net favourable pre-tax impact of
$3.3 billion respectively, compared with an adverse pre-tax impact of
$0.3 billion and $31.1 billion in the same periods of 2022.
- Adjusting items for the second quarter and half year of 2023 include a
favourable impact of pre-tax fair value accounting effects*, relative to
management's internal measure of performance, of $1.1 billion and $5.3 billion
respectively, compared with an adverse pre-tax impact of $0.8 billion and
$6.6 billion in the same periods of 2022. This is primarily due to a decline
in the forward price of LNG during the periods, but an increase in the
comparative periods. Under IFRS, reported earnings include the mark-to-market
value of the hedges used to risk-manage LNG contracts, but not of the LNG
contracts themselves. The underlying result includes the mark-to-market value
of the hedges but also recognizes changes in value of the LNG contracts being
risk managed.
- Adjusting items for the half year 2022 include a pre-tax charge of
$24.0 billion relating to bp's decision to exit its 19.75% shareholding in
Rosneft. A further $1.5 billion pre-tax charge relating to bp's decision to
exit its other businesses with Rosneft in Russia is also included.
• The effective tax rate (ETR) on RC profit or loss* for the second quarter
and half year was 41% and 32% respectively, compared with 33% and -62% for the
same periods in 2022. Excluding adjusting items, the underlying ETR* for the
second quarter and half year was 43% and 41% respectively, compared with 29%
and 30% for the same periods a year ago. The higher underlying ETR for the
second quarter and half year reflects changes in the geographical mix of
profits and the UK Energy Profits Levy on North Sea profits. ETR on RC profit
or loss and underlying ETR are non-IFRS measures.
• Operating cash flow* for the second quarter and half year was
$6.3 billion and $13.9 billion respectively, compared with $10.9 billion
and $19.1 billion for the same periods in 2022, consistent with the movements
in underlying replacement cost profit in the periods.
• Capital expenditure* in the second quarter and half year was $4.3 billion
and $7.9 billion respectively, compared with $2.8 billion and $5.8 billion
in the same periods of 2022, reflecting the inorganic $1.1 billion spend on
the acquisition of TravelCenters of America in the second quarter 2023.
• Total divestment and other proceeds for the second quarter and half year
were $0.1 billion and $0.9 billion respectively, compared with $0.7 billion
and $1.9 billion for the same periods in 2022. There were no other proceeds
for the second quarter and half year of 2023. Other proceeds for the second
quarter and half year of 2022 were $0.4 billion and $0.6 billion respectively
of proceeds from the disposal of a loan note related to the Alaska divestment.
• At the end of the second quarter, net debt* was $23.7 billion, compared
with $21.2 billion at the end of the first quarter 2023 and $22.8 billion at
the end of the second quarter 2022.
Top of page 4
Analysis of RC profit (loss) before interest and tax and reconciliation to
profit (loss) for the period
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
RC profit (loss) before interest and tax
gas & low carbon energy 2,289 7,347 2,737 9,636 1,213
oil production & operations 2,568 3,317 7,237 5,885 11,068
customers & products 555 2,680 3,531 3,235 5,512
other businesses & corporate (297) (90) (1,028) (387) (25,747)
Of which:
other businesses & corporate excluding Rosneft (297) (90) (1,028) (387) (1,714)
Rosneft - - - - (24,033)
Consolidation adjustment - UPII* (30) (22) (21) (52) 13
RC profit (loss) before interest and tax 5,085 13,232 12,456 18,317 (7,941)
Finance costs and net finance expense relating to pensions and other (859) (785) (539) (1,644) (1,183)
post-retirement benefits
Taxation on a RC basis (1,724) (3,573) (3,988) (5,297) (5,681)
Non-controlling interests (161) (204) (279) (365) (593)
RC profit (loss) attributable to bp shareholders* 2,341 8,670 7,650 11,011 (15,398)
Inventory holding gains (losses)* (732) (600) 2,146 (1,332) 5,647
Taxation (charge) credit on inventory holding gains and losses 183 148 (539) 331 (1,376)
Profit (loss) for the period attributable to bp shareholders 1,792 8,218 9,257 10,010 (11,127)
Analysis of underlying RC profit (loss) before interest and tax
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Underlying RC profit (loss) before interest and tax
gas & low carbon energy 2,233 3,456 3,080 5,689 6,675
oil production & operations 2,777 3,319 5,902 6,096 10,585
customers & products 796 2,759 4,006 3,555 6,162
other businesses & corporate (170) (296) (201) (466) (460)
Of which:
other businesses & corporate excluding Rosneft (170) (296) (201) (466) (460)
Rosneft - - - - -
Consolidation adjustment - UPII (30) (22) (21) (52) 13
Underlying RC profit before interest and tax 5,606 9,216 12,766 14,822 22,975
Finance costs and net finance expense relating to pensions and other (740) (681) (509) (1,421) (995)
post-retirement benefits
Taxation on an underlying RC basis (2,116) (3,368) (3,527) (5,484) (6,691)
Non-controlling interests (161) (204) (279) (365) (593)
Underlying RC profit attributable to bp shareholders* 2,589 4,963 8,451 7,552 14,696
Reconciliations of underlying RC profit attributable to bp shareholders to the
nearest equivalent IFRS measure are provided on page 1 for the group and on
pages 6-15 for the segments.
Operating Metrics
Operating metrics First half 2023 vs First half 2022
Tier 1 and tier 2 process safety events* 20 -4
Reported recordable injury frequency* 0.237 +23.8%
upstream* production((a)) (mboe/d) 2,301 +3.4%
upstream unit production costs*((b)) ($/boe) 5.94 -9.1%
bp-operated upstream plant reliability* 95.0% -0.3
bp-operated refining availability*((a)) 95.9% 1.5
(a) See Operational updates on pages 6, 9 and 11. Because of
rounding, upstream production may not agree exactly with the sum of gas &
low carbon energy and oil production & operations.
(b) Mainly reflecting impact of portfolio changes.
Top of page 5
Outlook & Guidance
Macro outlook
• For the third quarter, bp expects oil prices to be supported by seasonal
demand and the OPEC+ production restrictions.
• During the third quarter, bp expects the risk of an earlier than normal
seasonal fill of European gas storage to continue to weigh on European gas and
Asian LNG prices absent disruptions to supply. In the US, Henry Hub gas prices
are expected to find support from coal-to-gas switching in the power sector.
• In the third quarter, bp expects industry refining margins to remain above
historical average levels, supported by low product inventories and seasonal
demand in the US.
3Q23 guidance
• Looking ahead, bp expects third-quarter 2023 reported upstream* production
to be broadly flat compared to second quarter 2023. Within this, bp expects
production from oil production & operations to be lower and gas & low
carbon energy to be higher, including the effects of seasonal maintenance in
higher margin regions offset by major project* delivery.
• In its customers business, bp expects seasonally higher volumes. In
refining, bp expects a lower level of turnaround and maintenance activity
compared to the second quarter.
2023 guidance
In addition to the guidance on page 2:
• bp now expects both reported and underlying upstream production to be
higher compared with 2022. Within this, bp expects underlying production* from
oil production & operations to be higher and production from gas & low
carbon energy to be slightly lower. bp now expects four major project
start-ups during 2023, with Greater Tortue Ahmeyim (GTA) Phase 1 now expected
to start-up during the first quarter of 2024.
• bp continues to expect the other businesses & corporate underlying
annual charge to be in a range of $1.1-1.3 billion for 2023. The charge may
vary from quarter to quarter.
• bp continues to expect the depreciation, depletion and amortization to be
slightly above 2022.
• bp continues to expect the underlying ETR* for 2023 to be around 40% but
it is sensitive to the impact that volatility in the current price environment
may have on the geographical mix of the group's profits and losses.
• Having realized $16.8 billion of divestment and other proceeds since the
second quarter of 2020, bp continues to expect divestment and other proceeds
of $2-3 billion in 2023 and continues to expect to reach $25 billion of
divestment and other proceeds between the second half of 2020 and 2025.
• bp continues to expect Gulf of Mexico oil spill payments for the year to
be around $1.3 billion pre-tax including the $1.2 billion pre-tax payment made
during the second quarter.
• bp continues to expect capital expenditure* of $16-18 billion in 2023
including inorganic capital expenditure*.
• bp is committed to maintaining a strong investment grade credit rating,
targeting further progress within an 'A' grade credit rating. For 2023 bp
continues to intend to allocate 40% of surplus cash flow* to further
strengthening the balance sheet.
• For 2023 and subject to maintaining a strong investment grade credit
rating, bp remains committed to using 60% of surplus cash flow for share
buybacks.
• In setting the dividend per ordinary share and buyback each quarter, the
board will continue to take into account factors including the cumulative
level of and outlook for surplus cash flow, the cash balance point* and the
maintenance of a strong investment grade credit rating.
• Based on bp's current forecasts, at around $60 per barrel Brent and
subject to the board's discretion each quarter, bp continues to expect to be
able to deliver share buybacks of around $4.0 billion per annum, at the lower
end of its $14-18 billion capital expenditure range, and have capacity for an
annual increase in the dividend per ordinary share of around 4%.
The commentary above contains forward-looking statements and should be read in
conjunction with the cautionary statement on page 41.
Top of page 6
gas & low carbon energy*
Financial results
• The replacement cost (RC) profit before interest and tax for the
second quarter and half year was $2,289 million and $9,636 million
respectively, compared with $2,737 million and $1,213 million for the same
periods in 2022. The second quarter and half year are adjusted by a favourable
impact of net adjusting items* of $56 million and $3,947 million respectively,
compared with an adverse impact of net adjusting items of $343 million and
$5,462 million for the same periods in 2022. Adjusting items include impacts
of fair value accounting effects*, relative to management's internal measure
of performance, which are a favourable impact of $1,222 million and $5,156
million for the second quarter and half year in 2023 and an adverse impact of
$74 million and $5,089 million for the same periods in 2022. Under IFRS,
reported earnings include the mark-to-market value of the hedges used to
risk-manage LNG contracts, but not of the LNG contracts themselves. The
underlying result includes the mark-to-market value of the hedges but also
recognizes changes in value of the LNG contracts being risk managed, which
decreased as forward prices fell during the first half. Adjusting items also
include a net impairment charge of $1,058 million and $1,060 million
respectively, compared with net charges of $265 million and $517 million for
the same periods in 2022.
• After adjusting RC profit before interest and tax for adjusting
items, the underlying RC profit before interest and tax* for the second
quarter and half year was $2,233 million and $5,689 million respectively,
compared with $3,080 million and $6,675 million for the same periods in 2022.
• The underlying RC profit for the second quarter and for the half
year, compared with the same periods in 2022, both reflect lower realizations
and a higher depreciation, depletion and amortization charge partially offset
by a higher gas marketing and trading result.
Operational update
• Reported production for the quarter was 903mboe/d, 2.2% lower
than the same period in 2022. Underlying production* was 2.9% lower, mainly
due to lower base performance partially offset by new project delivery.
• Reported production for the half year was 936mboe/d, 0.9% lower
than the same period in 2022. Underlying production was 2.0% lower, also
mainly due to lower base performance partially offset by new project delivery.
• Renewables pipeline* at the end of the quarter was 39.6GW (bp
net), including 16.6GW bp net share of Lightsource bp's (LSbp's) pipeline. The
renewables pipeline increased by 2.4GW during the half year due to additions
to LSbp's portfolio. In addition, there is over 10GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
• On 30 June bp and Reliance (operator) announced that
production has commenced from MJ, the last of three new deepwater developments
in the KG D6 block off the coast of India. Production from the fields is
expected to account for around one third of India's current domestic gas
production and meet approximately 15% of India's gas demand.
• This builds on the progress announced in our first-quarter
results, which comprised the following: bp signed an agreement with Shell to
purchase Shell's 27% interest in the Browse project, offshore Australia,
subject to approvals; bp and its partners confirmed the development concept
for the second phase of the bp-operated Greater Tortue Ahmeyim (GTA) liquefied
natural gas project, to take forward to the next stage of evaluation; bp and
our co-venturers in the Shah Deniz Consortium have secured additional capacity
in the Trans Adriatic Pipeline (TAP); bp announced that it had completed the
sale of its upstream business in Algeria to Eni; and bp confirmed that,
together with ADNOC, it has made a non-binding offer to take NewMed Energy
private.
low carbon energy
• Hydrogen and CCS
◦ Hydrogen pipeline* grew by 1.0mtpa in the first half to 2.8mtpa,
reflecting projects moving into concept development in the US and Oman.
• Offshore wind
◦ On 12 July, bp was awarded the rights to develop two North Sea
offshore wind projects in Germany. The sites are located 130km and 150km
offshore, in water depths of about 40m, and have a total potential generating
capacity of 4GW, raising our global offshore wind pipeline to 9.3GW.
• These events build on the progress announced in our
first-quarter results, which comprised the following: it was announced that
three bp-led hydrogen and CCS projects in north-east England - Net Zero
Teesside Power gas-fired power station and CCS, H2Teesside blue hydrogen* and
HyGreen Teesside green hydrogen* - have been chosen by the UK government to go
to the next stage of development; bp signed an agreement with Harbour Energy
to take a 40% stake in the Viking carbon capture and storage (CCS) project in
the North Sea; and bp launched plans for low-carbon green hydrogen cluster in
Spain's Valencia region. bp announced a successful bid in the Innovation and
Targeted Oil and Gas (INTOG) Scottish offshore wind leasing round, bp's first
step in floating offshore wind; and bp and Deep Wind Offshore announced the
formation of a joint venture to develop offshore wind opportunities in South
Korea.
Top of page 7
gas & low carbon energy (continued)
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit before interest and tax 2,289 7,348 2,728 9,637 1,229
Inventory holding (gains) losses* - (1) 9 (1) (16)
RC profit before interest and tax 2,289 7,347 2,737 9,636 1,213
Net (favourable) adverse impact of adjusting items (56) (3,891) 343 (3,947) 5,462
Underlying RC profit before interest and tax 2,233 3,456 3,080 5,689 6,675
Taxation on an underlying RC basis (575) (961) (717) (1,536) (1,726)
Underlying RC profit before interest 1,658 2,495 2,363 4,153 4,949
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,407 1,440 1,203 2,847 2,458
Exploration write-offs
Exploration write-offs (1) (1) - (2) (2)
Adjusted EBITDA*
Total adjusted EBITDA 3,639 4,895 4,283 8,534 9,131
Capital expenditure*
gas 697 647 681 1,344 1,323
low carbon energy 190 366 142 556 361
Total capital expenditure 887 1,013 823 1,900 1,684
Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
Production (net of royalties)((a))
Liquids* (mb/d) 103 114 112 108 116
Natural gas (mmcf/d) 4,641 4,962 4,709 4,801 4,803
Total hydrocarbons* (mboe/d) 903 969 924 936 944
Average realizations*((b))
Liquids((c)) ($/bbl) 73.57 79.44 105.50 76.42 95.40
Natural gas ($/mcf) 5.53 7.41 8.42 6.49 8.15
Total hydrocarbons*((c)) ($/boe) 36.96 46.95 55.79 42.01 53.31
(a) Includes bp's share of production of equity-accounted entities
in the gas & low carbon energy segment.
(b) Realizations are based on sales by consolidated subsidiaries only
- this excludes equity-accounted entities.
(c) A minor amendment has been made to the first quarter of 2023.
Top of page 8
gas & low carbon energy (continued)
30 June 2023 31 March 2023 30 June 2022
low carbon energy((d))
Renewables (bp net, GW)
Installed renewables capacity* 2.4 2.2 2.0
Developed renewables to FID* 6.1 5.9 4.4
Renewables pipeline 39.6 38.8 25.8
of which by geographical area:
Renewables pipeline - Americas 17.8 17.5 16.9
Renewables pipeline - Asia Pacific((e)) 12.2 12.2 1.4
Renewables pipeline - Europe 9.5 8.9 7.2
Renewables pipeline - Other 0.1 0.1 0.2
of which by technology:
Renewables pipeline - offshore wind 5.3 5.3 5.2
Renewables pipeline - onshore wind 6.3 6.3 -
Renewables pipeline - solar 28.1 27.2 20.6
Total Developed renewables to FID and Renewables pipeline 45.7 44.7 30.1
(d) Because of rounding, some totals may not agree exactly with the
sum of their component parts.
(e) 30 June 2023 and 31 March 2023 include 10.3GW of onshore wind
and solar pipeline in support of hydrogen.
Top of page 9
oil production & operations
Financial results
• The replacement cost (RC) profit before interest and tax for the
second quarter and half year was $2,568 million and $5,885 million
respectively, compared with $7,237 million and $11,068 million for the same
periods in 2022. The second quarter and half year are adjusted by an adverse
impact of net adjusting items* of $209 million and $211 million respectively,
compared with a favourable impact of net adjusting items of $1,335 million and
$483 million for the same periods in 2022.
• After adjusting items, the underlying RC profit before interest
and tax* for the second quarter and half year was $2,777 million and $6,096
million respectively, compared with $5,902 million and $10,585 million for the
same periods in 2022.
• The underlying RC profit for the second quarter and half year
compared to the same periods in 2022, reflects lower realizations, and the
impact of portfolio changes, partly offset by higher volumes.
Operational update
• Reported production for the quarter was 1,369mboe/d, 7.5% higher
than the second quarter of 2022. Underlying production* for the quarter was
5.5% higher compared with the second quarter of 2022 reflecting bpx energy
performance, improved base performance and major projects*.
• Reported production for the half year was 1,365mboe/d, 6.6%
higher than the same period of 2022. Underlying production for the half year
was 5.8% higher compared with the same period of 2022 reflecting base
performance, bpx energy performance and major projects.
Strategic Progress
• During the second quarter bp has been awarded 36 lease blocks in
the Gulf of Mexico lease sale 259, which includes 22 leases that may provide
options to further enhance our resource positions at Kaskida and Tiber.
• In May bp drilled a successful appraisal well in the southwest
part of the Mad Dog field and is considering an extension of the current
development through a multi-well tie-back to Argos (bp 60.5% operator).
• Evaluating options to progress a bp operated Tiber development
project in the Gulf of Mexico.
• On 28 June the Norwegian Ministry of Petroleum and Energy
approved a total of nine plans for development and operation to Aker BP (bp
15.9%), with estimated recoverable reserves to be above 700 million barrels of
oil equivalent.
• Construction on the topside (upper) unit of the Azeri Central
East (ACE) platform has been completed, sailaway is due to occur in the third
quarter 2023. The ACE project is the next stage of development of the giant
Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea
(bp 30.37% operator).
• These events build on the progress announced in our
first-quarter results:
◦ Azule Energy (bp and Eni's 50:50 joint venture in Angola) has
taken the final investment decision for the Agogo Integrated West Hub
Development oil project;
◦ MiQ, the non-profit global leader in methane certification,
announced that it has independently audited and certified bp as the first
energy major in the US to verify the methane intensity of its entire US
onshore portfolio of natural gas;
◦ bp announced start-up of the Mad Dog Phase 2 Argos platform. bp
expects to safely and systematically ramp up production through 2023; and
◦ moving forward with concept selection for a bp-operated Kaskida
development project in the Gulf of Mexico.
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit before interest and tax 2,568 3,318 7,230 5,886 11,062
Inventory holding (gains) losses* - (1) 7 (1) 6
RC profit before interest and tax 2,568 3,317 7,237 5,885 11,068
Net (favourable) adverse impact of adjusting items 209 2 (1,335) 211 (483)
Underlying RC profit before interest and tax 2,777 3,319 5,902 6,096 10,585
Taxation on an underlying RC basis (1,413) (1,766) (2,295) (3,179) (4,207)
Underlying RC profit before interest 1,364 1,553 3,607 2,917 6,378
Top of page 10
oil production & operations (continued)
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,370 1,327 1,371 2,697 2,800
Exploration write-offs
Exploration write-offs 242 51 79 293 130
Adjusted EBITDA*
Total adjusted EBITDA 4,389 4,697 7,352 9,086 13,515
Capital expenditure*
Total capital expenditure 1,478 1,520 1,208 2,998 2,462
Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
Production (net of royalties)((a))
Liquids* (mb/d) 1,000 1,005 935 1,003 941
Natural gas (mmcf/d) 2,140 2,060 1,964 2,100 1,964
Total hydrocarbons* (mboe/d) 1,369 1,360 1,274 1,365 1,280
Average realizations*((b))
Liquids ($/bbl) 69.19 71.63 100.34 70.40 92.00
Natural gas((c)) ($/mcf) 3.23 6.57 9.83 4.90 9.69
Total hydrocarbons*((c)) ($/boe) 54.57 62.36 90.03 58.40 83.52
(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.
(c) Realizations calculation methodology has been changed to reflect
gas price fluctuations within the North Sea region. Second quarter 2022 and
first half 2022 were restated. There is no impact on financial results.
Top of page 11
customers & products
Financial results
• The replacement cost (RC) profit before interest and tax for the
second quarter and half year was $555 million and $3,235 million respectively,
compared with $3,531 million and $5,512 million for the same periods in 2022.
The second quarter and half year are adjusted by an adverse impact of net
adjusting items* of $241 million and $320 million respectively, compared with
an adverse impact of net adjusting items of $475 million and $650 million for
the same periods in 2022. Adjusting items include impacts of fair value
accounting effects*, relative to management's internal measure of performance,
which are an adverse impact of $109 million for the quarter and $32 million
for the half year in 2023, compared with an adverse impact of $62 million and
$439 million for the same periods in 2022.
• After adjusting items, the underlying RC profit before interest
and tax* for the second quarter and half year was $796 million and $3,555
million respectively, compared with $4,006 million and $6,162 million for the
same periods in 2022.
• The customers & products results for the second quarter and
half year were significantly lower than the same periods in 2022, primarily
reflecting a lower refining result and a weak oil trading performance.
• customers - the convenience and mobility results, excluding
Castrol, for the second quarter and half year were higher than the same
periods in 2022. The benefits of a stronger performance in retail fuels and
year on year growth in convenience, before the uplift from the acquisition of
TravelCenters of America, were partially offset by higher costs, including
increased expenditure in our transition growth* engines and the impact of
inflation.
Castrol results for the second quarter and half year were lower than the same
periods in 2022, with the impact of higher margins more than offset by adverse
foreign exchange impacts and higher costs.
• products - the products results for the second quarter and half
year were lower compared with the same periods in 2022. In refining, the
results reflected significantly lower refining margins and a higher level of
turnaround activity, compared to the same periods in 2022. The results also
reflected a weak contribution from oil trading compared to the exceptional
result in the same periods last year.
Operational update
• bp-operated refining availability* for the second quarter and
half year was 95.7% and 95.9% respectively, higher compared with 93.9% and
94.4% for the same periods in 2022.
Strategic progress
• In May, bp completed its purchase of TravelCenters of America,
one of the biggest networks of highway travel centres in the US, adding a
network of 288 sites, strategically located on major highways across the US.
The deal is expected to almost double bp's global convenience gross margin*
and brings growth opportunities in four of bp's five transition growth*
engines.
• In July, bp and Lekkerland extended their successful partnership
to deliver REWE To Go stores at Aral retail sites until 2028. This is bp's
largest European convenience supply agreement and brings together Germany's
largest forecourt brand with one of the country's leading convenience
specialists in support of bp's convenience growth engine delivery.
• EV charge points* installed and energy sold in the first half
grew by around 70% and around 170% respectively, compared to the same period
last year, with charge points now at more than 27,000.
• In May, Castrol opened its new EV lab at Castrol China
Technology Centre in Shanghai, to focus on developing and testing EV fluids.
The expansion supports bp's strategy to drive lower-carbon mobility in China
and to help customers achieve their sustainability goals. In addition, in
June, Castrol signed a strategic co-operation protocol with Yiwu TNFia, one of
the largest automobile service chains in East China, positioning Castrol to
expand its share of products in Yiwu TNFia's large and growing network of auto
workshops.
• In May, bp's Cherry Point refinery in the US successfully
commissioned the hydrocracker improvement project and cooling water
infrastructure project. The new vacuum tower and cooling water tower are now
online and are expected to improve availability, reduce maintenance costs and
CO(2) emissions.
• These events build on the progress announced in our
first-quarter results, including:
◦ bp signed a new agreement with Rontec, one of the UK's largest
roadside retail networks, to supply around two billion litres of fuel over the
next five years to more than 60 of Rontec's sites;
◦ bp pulse signed a strategic collaboration agreement with Iberdrola
to accelerate EV charging infrastructure roll-out in Spain and Portugal. bp
and Iberdrola intend to form a joint venture with plans to invest up to €1
billion and install 5,000 fast((a)) EV charge points by 2025 and around 11,000
by 2030. The formation of the joint venture is subject to regulatory approval;
◦ bp announced a new global mobility agreement with Uber, which will
see the companies work together to help accelerate Uber's commitment to become
a global zero-tailpipe emissions mobility platform by 2040;
◦ bp completed the sale of its 50% interest in the bp-Husky Toledo
refinery in Ohio, US, to Cenovus Energy, its partner in the facility.
(a) "fast charging" includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
Top of page 12
customers & products (continued)
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) before interest and tax (177) 2,078 5,693 1,901 11,149
Inventory holding (gains) losses* 732 602 (2,162) 1,334 (5,637)
RC profit before interest and tax 555 2,680 3,531 3,235 5,512
Net (favourable) adverse impact of adjusting items 241 79 475 320 650
Underlying RC profit before interest and tax 796 2,759 4,006 3,555 6,162
Of which:((a))
customers - convenience & mobility 701 391 679 1,092 1,201
Castrol - included in customers 171 161 223 332 479
products - refining & trading 95 2,368 3,327 2,463 4,961
Taxation on an underlying RC basis (271) (777) (783) (1,048) (1,183)
Underlying RC profit before interest 525 1,982 3,223 2,507 4,979
(a) A reconciliation to RC profit before interest and tax by
business is provided on page 32.
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Adjusted EBITDA*((b))
customers - convenience & mobility 1,149 732 994 1,881 1,842
Castrol - included in customers 213 200 261 413 556
products - refining & trading 541 2,824 3,727 3,365 5,752
1,690 3,556 4,721 5,246 7,594
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 894 797 715 1,691 1,432
Capital expenditure*
customers - convenience & mobility 1,452 458 334 1,910 681
Castrol - included in customers 44 68 43 112 95
products - refining & trading 406 532 341 938 709
Total capital expenditure 1,858 990 675 2,848 1,390
(b) A reconciliation to RC profit before interest and tax by business
is provided on page 32.
Retail((c)) Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
bp retail sites* - total (#) 21,100 20,700 20,600 21,100 20,600
Strategic convenience sites* 2,750 2,450 2,200 2,750 2,200
(c) Reported to the nearest 50.
Marketing sales of refined products (mb/d) Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
US 1,275 1,078 1,163 1,177 1,138
Europe 1,056 973 1,032 1,015 958
Rest of World 472 462 439 467 455
2,803 2,513 2,634 2,659 2,551
Trading/supply sales of refined products 353 333 369 343 361
Total sales volume of refined products 3,156 2,846 3,003 3,002 2,912
Top of page 13
customers & products (continued)
Refining marker margin* Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
bp average refining marker margin (RMM)((d)) ($/bbl) 24.7 28.1 45.5 26.4 32.2
(d) The RMM in the quarter is calculated based on bp's current
refinery portfolio. On a comparative basis, the second quarter and half year
2022 RMM would be $45.4/bbl and $32.5/bbl respectively.
Refinery throughputs (mb/d) Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
US 638 686 637 662 698
Europe 726 832 841 779 824
Rest of World - - 2 - 43
Total refinery throughputs 1,364 1,518 1,480 1,441 1,565
bp-operated refining availability* (%) 95.7 96.1 93.9 95.9 94.4
Top of page 14
other businesses & corporate
Other businesses & corporate comprises innovation & engineering, bp
ventures, Launchpad, regions, corporates & solutions, our corporate
activities & functions and any residual costs of the Gulf of Mexico oil
spill. It also includes Rosneft results up to 27 February 2022.
Financial results
• The replacement cost (RC) loss before interest and tax for the
second quarter and half year was $297 million and $387 million respectively,
compared with $1,028 million and $25,747 million for the same periods in 2022.
The second quarter and half year are adjusted by an adverse impact of net
adjusting items* of $127 million and a favourable impact of net adjusting
items of $79 million respectively, compared with an adverse impact of net
adjusting items of $827 million and $25,287 million for the same periods in
2022. Adjusting items include impacts of fair value accounting effects* which
are an adverse impact of $48 million for the quarter and a favourable impact
of $197 million for the half year in 2023, an adverse impact of $686 million
and $1,111 million for the same periods in 2022. The adjusting items for the
half year in 2022 mainly relate to Rosneft.
• After adjusting RC loss for net adjusting items, the underlying
RC loss before interest and tax* for the second quarter and half year was $170
million and $466 million respectively, compared with $201 million and $460
million for the same periods in 2022.
Strategic progress
• In June bp ventures invested $10 million in WasteFuel, which is
planning to develop a global network of plants to convert municipal and
agricultural waste into bio-methanol, a biofuel which could play a significant
role in decarbonizing hard-to-abate sectors like shipping.
• In April bp ventures completed the investment of €7.5 million
in Service4Charger, which offers intelligent, scalable e-mobility solutions
and full-service implementation, including the planning, installation,
operation, and maintenance of charging infrastructure for electric vehicles
(EVs).
• These events build on the progress announced in our
first-quarter results in which bp ventures invested $11 million in Magenta
Mobility, one of India's largest providers of electric mobility for last-mile
delivery, the journey from hub to customer.
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) before interest and tax (297) (90) (1,028) (387) (25,747)
Inventory holding (gains) losses* - - - - -
RC profit (loss) before interest and tax (297) (90) (1,028) (387) (25,747)
Net (favourable) adverse impact of adjusting items((a)) 127 (206) 827 (79) 25,287
Underlying RC profit (loss) before interest and tax (170) (296) (201) (466) (460)
Taxation on an underlying RC basis 10 29 167 39 190
Underlying RC profit (loss) before interest (160) (267) (34) (427) (270)
(a) Includes fair value accounting effects relating to the hybrid
bonds that were issued on 17 June 2020. See page 36 for more information.
other businesses & corporate (excluding Rosneft)
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) before interest and tax (297) (90) (1,028) (387) (1,714)
Inventory holding (gains) losses* - - - - -
RC profit (loss) before interest and tax (297) (90) (1,028) (387) (1,714)
Net (favourable) adverse impact of adjusting items 127 (206) 827 (79) 1,254
Underlying RC profit (loss) before interest and tax (170) (296) (201) (466) (460)
Taxation on an underlying RC basis 10 29 167 39 190
Underlying RC profit (loss) before interest (160) (267) (34) (427) (270)
Top of page 15
other businesses & corporate (continued)
other businesses & corporate (Rosneft)
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) before interest and tax - - - - (24,033)
Inventory holding (gains) losses* - - - - -
RC profit (loss) before interest and tax - - - - (24,033)
Net (favourable) adverse impact of adjusting items - - - - 24,033
Underlying RC profit (loss) before interest and tax - - - - -
Taxation on an underlying RC basis - - - - -
Underlying RC profit (loss) before interest - - - - -
Top of page 16
This results announcement also represents BP's half-yearly financial report
for the purposes of the Disclosure Guidance and Transparency Rules made by the
UK Financial Conduct Authority. In this context: (i) the condensed set of
financial statements can be found on pages 18-27; (ii) pages 1-15, and 28-41
comprise the interim management report; and (iii) the directors'
responsibility statement and auditors' independent review report can be found
on pages 16-17.
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, the condensed set
of financial statements on pages 18-27 has been prepared in accordance with
United Kingdom adopted IAS 34 'Interim Financial Reporting', and that the
interim management report on pages 1-15, and 28-41 includes a fair review of
the information required by the Disclosure Guidance and Transparency Rules.
The directors of BP p.l.c. are listed on pages 80-83 of bp Annual Report and
Form 20-F 2022.
By order of the board
Bernard Looney Murray Auchincloss
Chief Executive Officer Chief Financial Officer
31 July 2023 31 July 2023
Top of page 17
Independent review report to BP p.l.c.
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2023 which comprises the group income statement, condensed group
statement of comprehensive income, condensed group statement of changes in
equity, group balance sheet, condensed cash flow statement and related notes 1
to 11.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in Note 1, the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB), IFRS as
adopted by the UK, and European Union (EU). The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with United Kingdom adopted International Accounting Standard 34,
'Interim Financial Reporting'.
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do
so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
31 July 2023
The maintenance and integrity of the BP p.l.c. website are the responsibility
of the directors; the review work carried out by the statutory auditors does
not involve consideration of these matters and, accordingly, the statutory
auditors accept no responsibility for any changes that may have occurred to
the financial information since it was initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Top of page 18
Financial statements
Group income statement
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Sales and other operating revenues (Note 6) 48,538 56,182 67,866 104,720 117,124
Earnings from joint ventures - after interest and tax 360 195 62 555 441
Earnings from associates - after interest and tax 231 173 127 404 998
Interest and other income 378 248 142 626 336
Gains on sale of businesses and fixed assets (28) 153 1,309 125 1,827
Total revenues and other income 49,479 56,951 69,506 106,430 120,726
Purchases 29,172 29,122 39,141 58,294 66,949
Production and manufacturing expenses 6,231 6,982 7,601 13,213 14,576
Production and similar taxes 404 474 624 878 1,129
Depreciation, depletion and amortization (Note 7) 3,923 3,800 3,512 7,723 7,137
Net impairment and losses on sale of businesses and fixed assets (Note 4) 1,269 88 445 1,357 26,476
Exploration expense 293 106 128 399 220
Distribution and administration expenses 3,834 3,747 3,453 7,581 6,533
Profit (loss) before interest and taxation 4,353 12,632 14,602 16,985 (2,294)
Finance costs 920 843 556 1,763 1,220
Net finance (income) expense relating to pensions and other post-retirement (61) (58) (17) (119) (37)
benefits
Profit (loss) before taxation 3,494 11,847 14,063 15,341 (3,477)
Taxation 1,541 3,425 4,527 4,966 7,057
Profit (loss) for the period 1,953 8,422 9,536 10,375 (10,534)
Attributable to
bp shareholders 1,792 8,218 9,257 10,010 (11,127)
Non-controlling interests 161 204 279 365 593
1,953 8,422 9,536 10,375 (10,534)
Earnings per share (Note 8)
Profit (loss) for the period attributable to bp shareholders
Per ordinary share (cents)
Basic 10.22 45.93 47.74 56.53 (57.21)
Diluted 10.01 45.06 47.18 55.40 (57.21)
Per ADS (dollars)
Basic 0.61 2.76 2.86 3.39 (3.43)
Diluted 0.60 2.70 2.83 3.32 (3.43)
Top of page 19
Condensed group statement of comprehensive income
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) for the period 1,953 8,422 9,536 10,375 (10,534)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Currency translation differences((a)) 11 453 (2,454) 464 (4,203)
Exchange (gains) losses on translation of foreign operations reclassified to - - - - 10,791
gain or loss on sale of businesses and fixed assets((b))
Cash flow hedges and costs of hedging (56) 546 99 490 321
Share of items relating to equity-accounted entities, net of tax (27) (203) 59 (230) 144
Income tax relating to items that may be reclassified 71 (76) (70) (5) (172)
(1) 720 (2,366) 719 6,881
Items that will not be reclassified to profit or loss
Remeasurements of the net pension and other post-retirement benefit liability (855) (87) (392) (942) 1,736
or asset
Cash flow hedges that will subsequently be transferred to the balance sheet - - (3) - (4)
Income tax relating to items that will not be reclassified 308 23 179 331 (489)
(547) (64) (216) (611) 1,243
Other comprehensive income (548) 656 (2,582) 108 8,124
Total comprehensive income 1,405 9,078 6,954 10,483 (2,410)
Attributable to
bp shareholders 1,240 8,861 6,742 10,101 (2,936)
Non-controlling interests 165 217 212 382 526
1,405 9,078 6,954 10,483 (2,410)
(a) Second quarter 2022 is principally affected by movements in the
Pound Sterling against the US dollar. First half 2022 principally affected by
movements in the Pound Sterling and Russian rouble against the US dollar.
(b) First half 2022 predominantly relates to the loss of significant
influence over Rosneft.
Top of page 20
Condensed group statement of changes in equity
bp shareholders' Non-controlling interests Total
$ million equity Hybrid bonds Other interest equity
At 1 January 2023 67,553 13,390 2,047 82,990
Total comprehensive income 10,101 288 94 10,483
Dividends (2,348) - (135) (2,483)
Repurchase of ordinary share capital (5,166) - - (5,166)
Share-based payments, net of tax 205 - - 205
Issue of perpetual hybrid bonds (1) 133 - 132
Payments on perpetual hybrid bonds (5) (409) - (414)
Transactions involving non-controlling interests, net of tax - - (144) (144)
At 30 June 2023 70,339 13,402 1,862 85,603
bp shareholders' Non-controlling interests Total
$ million equity((a)) Hybrid bonds Other interest equity
At 1 January 2022 75,463 13,041 1,935 90,439
Total comprehensive income (2,936) 254 272 (2,410)
Dividends (2,130) - (128) (2,258)
Cash flow hedges transferred to the balance sheet, net of tax (1) - - (1)
Issue of ordinary share capital((b)) 820 - - 820
Repurchase of ordinary share capital (4,490) - - (4,490)
Share-based payments, net of tax 380 - - 380
Issue of perpetual hybrid bonds (2) 130 - 128
Payments on perpetual hybrid bonds 15 (394) - (379)
Transactions involving non-controlling interests, net of tax (510) - (156) (666)
At 30 June 2022 66,609 13,031 1,923 81,563
(a) In 2022 $9.2 billion of the opening foreign currency translation
reserve has been moved to the profit and loss account reserve as a result of
bp's decision to exit its shareholding in Rosneft and its other businesses
with Rosneft in Russia.
(b) Relates to ordinary shares issued as non-cash consideration for
the acquisition of the public units of BP Midstream Partners LP.
Top of page 21
Group balance sheet
30 June 31 December
$ million 2023 2022
Non-current assets
Property, plant and equipment 108,126 106,044
Goodwill 12,206 11,960
Intangible assets 10,447 10,200
Investments in joint ventures 13,081 12,400
Investments in associates 7,941 8,201
Other investments 2,328 2,670
Fixed assets 154,129 151,475
Loans 1,468 1,271
Trade and other receivables 1,209 1,092
Derivative financial instruments 10,655 12,841
Prepayments 685 576
Deferred tax assets 3,747 3,908
Defined benefit pension plan surpluses 8,860 9,269
180,753 180,432
Current assets
Loans 304 315
Inventories 23,349 28,081
Trade and other receivables 27,701 34,010
Derivative financial instruments 12,042 11,554
Prepayments 1,673 2,092
Current tax receivable 660 621
Other investments 671 578
Cash and cash equivalents 28,914 29,195
95,314 106,446
Assets classified as held for sale (Note 3) - 1,242
95,314 107,688
Total assets 276,067 288,120
Current liabilities
Trade and other payables 56,183 63,984
Derivative financial instruments 6,351 12,618
Accruals 6,004 6,398
Lease liabilities 2,465 2,102
Finance debt 2,338 3,198
Current tax payable 3,550 4,065
Provisions 4,574 6,332
81,465 98,697
Liabilities directly associated with assets classified as held for sale (Note - 321
3)
81,465 99,018
Non-current liabilities
Other payables 9,282 10,387
Derivative financial instruments 11,071 13,537
Accruals 1,245 1,233
Lease liabilities 8,496 6,447
Finance debt 47,400 43,746
Deferred tax liabilities 10,648 10,526
Provisions 15,572 14,992
Defined benefit pension plan and other post-retirement benefit plan deficits 5,285 5,244
108,999 106,112
Total liabilities 190,464 205,130
Net assets 85,603 82,990
Equity
bp shareholders' equity 70,339 67,553
Non-controlling interests 15,264 15,437
Total equity 85,603 82,990
Top of page 22
Condensed group cash flow statement
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Operating activities
Profit (loss) before taxation 3,494 11,847 14,063 15,341 (3,477)
Adjustments to reconcile profit (loss) before taxation to net cash provided by
operating activities
Depreciation, depletion and amortization and exploration expenditure written 4,164 3,850 3,591 8,014 7,265
off
Net impairment and (gain) loss on sale of businesses and fixed assets 1,297 (65) (864) 1,232 24,649
Earnings from equity-accounted entities, less dividends received (31) 1 72 (30) (1,021)
Net charge for interest and other finance expense, less net interest paid 102 63 (46) 165 138
Share-based payments 243 (22) 208 221 378
Net operating charge for pensions and other post-retirement benefits, less (47) (43) (36) (90) (182)
contributions and benefit payments for unfunded plans
Net charge for provisions, less payments (221) (1,099) 796 (1,320) 1,280
Movements in inventories and other current and non-current assets and (742) (3,755) (4,416) (4,497) (6,187)
liabilities
Income taxes paid (1,966) (3,155) (2,505) (5,121) (3,770)
Net cash provided by operating activities 6,293 7,622 10,863 13,915 19,073
Investing activities
Expenditure on property, plant and equipment, intangible and other assets (3,453) (3,129) (2,666) (6,582) (5,268)
Acquisitions, net of cash acquired (Note 2) (804) 52 3 (752) (5)
Investment in joint ventures (50) (540) (159) (590) (453)
Investment in associates (7) (8) (16) (15) (41)
Total cash capital expenditure (4,314) (3,625) (2,838) (7,939) (5,767)
Proceeds from disposal of fixed assets 28 15 202 43 670
Proceeds from disposal of businesses, net of cash disposed 60 785 111 845 660
Proceeds from loan repayments 21 6 16 27 45
Cash provided from investing activities 109 806 329 915 1,375
Net cash used in investing activities (4,205) (2,819) (2,509) (7,024) (4,392)
Financing activities
Net issue (repurchase) of shares (Note 8) (2,073) (2,448) (2,288) (4,521) (3,880)
Lease liability payments (620) (555) (472) (1,175) (970)
Proceeds from long-term financing 3,643 2,395 - 6,038 2,002
Repayments of long-term financing (2,828) (799) (4,573) (3,627) (5,465)
Net increase (decrease) in short-term debt (348) (529) (688) (877) (964)
Issue of perpetual hybrid bonds 87 45 62 132 128
Payments relating to perpetual hybrid bonds (250) (236) (161) (486) (309)
Payments relating to transactions involving non-controlling interests (Other - (180) (1) (180) (6)
interest)
Receipts relating to transactions involving non-controlling interests (Other 2 7 - 9 7
interest)
Dividends paid - bp shareholders (1,153) (1,183) (1,062) (2,336) (2,130)
- non-controlling interests (67) (68) (63) (135) (128)
Net cash provided by (used in) financing activities (3,607) (3,551) (9,246) (7,158) (11,715)
Currency translation differences relating to cash and cash equivalents - (14) (414) (14) (539)
Increase (decrease) in cash and cash equivalents (1,519) 1,238 (1,306) (281) 2,427
Cash and cash equivalents at beginning of period 30,433 29,195 34,414 29,195 30,681
Cash and cash equivalents at end of period 28,914 30,433 33,108 28,914 33,108
Top of page 23
Notes
Note 1. Basis of preparation
The interim financial information included in this report has been prepared in
accordance with IAS 34 'Interim Financial Reporting'.
The results for the interim periods are unaudited and, in the opinion of
management, include all adjustments necessary for a fair presentation of the
results for each period. All such adjustments are of a normal recurring
nature. This report should be read in conjunction with the consolidated
financial statements and related notes for the year ended 31 December 2022
included in BP Annual Report and Form 20-F 2022.
The directors consider it appropriate to adopt the going concern basis of
accounting in preparing these interim financial statements.
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 UK, and European Union (EU), and in accordance
with the provisions of the UK Companies Act 2006 as applicable to companies
reporting under international accounting standards. IFRS as adopted by the UK
does not differ from IFRS as adopted by the EU except for Pillar Two
amendments noted below. IFRS as adopted by the UK and EU 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 2023 which are the same as those used in preparing BP Annual
Report and Form 20-F 2022.
In May 2023 the IASB issued International Tax Reform - Pillar Two Model Rules
- Amendments to IAS 12 Income Taxes to clarify the application of IAS 12 to
tax legislation enacted or substantively enacted to implement Pillar Two of
the Organisation for Economic Co-operation and Development's Base Erosion and
Profit Shifting project, which aims to address the tax challenges arising from
the digitalisation of the economy. The amendments include a mandatory
temporary exception from accounting for deferred tax on such tax law. The
amendments were adopted by the UK in July and are yet to be adopted by the EU,
however no impact is expected on the financial statements for 2023.
There are no other new or amended standards or interpretations adopted from 1
January 2023 onwards, including IFRS 17 'Insurance Contracts,' that have a
significant impact on the financial information.
In July 2023 the UK government enacted legislation to implement the Pillar Two
rules. The legislation is effective for bp from 1 January 2024 and includes an
income inclusion rule and a domestic minimum tax, which together are designed
to ensure a minimum effective tax rate of 15% in each country in which the
group operates. Similar legislation is being enacted by other governments
around the world. As a result of the amendments to IAS 12, no impact is
expected on the financial statements in 2023, and work is ongoing to assess
the potential impact in the 2024 financial statements.
Significant accounting judgements and estimates
bp's significant accounting judgements and estimates were disclosed in BP
Annual Report and Form 20-F 2022. These have been subsequently considered at
the end of each quarter to determine if any changes were required to those
judgements and estimates. No significant changes were identified.
Investment in Rosneft
Since the first quarter 2022, bp accounts for its interest in Rosneft and its
other businesses with Rosneft within Russia, as financial assets measured at
fair value within 'Other investments'. It is considered by management that any
measure of fair value, other than nil, would be subject to such high
measurement uncertainty that no estimate would provide useful information even
if it were accompanied by a description of the estimate made in producing it
and an explanation of the uncertainties that affect the estimate. Accordingly,
it is not currently possible to estimate any carrying value other than zero
when determining the measurement of the interest in Rosneft and the other
businesses with Rosneft within Russia as at 30 June 2023.
Note 2. Business combinations
The group undertook a number of business combinations during the first half of
2023. Total consideration paid in cash for the second quarter and half year
2023 amounted to $1,313 million and $1,250 million respectively, offset by
cash acquired of $509 million and $498 million respectively.
The provisional fair value of the net assets (including goodwill) recognized
from business combinations, inclusive of measurement period adjustments for
business combinations in previous periods, for the half year 2023 was
$1,223 million. This principally related to the acquisition of TravelCenters
of America.
Top of page 24
Note 3. Non-current assets held for sale
There were no assets or liabilities classified as held for sale at 30 June
2023.
Note 4. Impairment and losses on sale of businesses and fixed assets
Net impairment charges and losses on sale of businesses and fixed assets for
the second quarter and half year were $1,269 million and $1,357 million
respectively, compared with net charges of $445 million and $26,476 million
for the same periods in 2022 and include net impairment charges for the second
quarter and half year of $1,208 million and $1,167 million respectively,
compared with net charges of $402 million and $14,788 million for the same
periods in 2022.
Second quarter and half year 2023 impairments includes a net impairment charge
of $1,058 million and $1,060 million respectively, compared with net charges
of $265 million and $517 million for the same periods in 2022 in the gas
& low carbon energy segment.
The impairment charge and the loss on sale of businesses and fixed assets for
2022 mainly relates to bp's investment in Rosneft, which has been reported in
other businesses and corporate.
Note 5. Analysis of replacement cost profit (loss) before interest and tax and
reconciliation to profit (loss) before taxation
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
gas & low carbon energy 2,289 7,347 2,737 9,636 1,213
oil production & operations 2,568 3,317 7,237 5,885 11,068
customers & products 555 2,680 3,531 3,235 5,512
other businesses & corporate (297) (90) (1,028) (387) (25,747)
5,115 13,254 12,477 18,369 (7,954)
Consolidation adjustment - UPII* (30) (22) (21) (52) 13
RC profit (loss) before interest and tax 5,085 13,232 12,456 18,317 (7,941)
Inventory holding gains (losses)*
gas & low carbon energy - 1 (9) 1 16
oil production & operations - 1 (7) 1 (6)
customers & products (732) (602) 2,162 (1,334) 5,637
Profit (loss) before interest and tax 4,353 12,632 14,602 16,985 (2,294)
Finance costs 920 843 556 1,763 1,220
Net finance expense/(income) relating to pensions and other post-retirement (61) (58) (17) (119) (37)
benefits
Profit (loss) before taxation 3,494 11,847 14,063 15,341 (3,477)
RC profit (loss) before interest and tax*
US 2,244 3,075 3,322 5,319 5,599
Non-US 2,841 10,157 9,134 12,998 (13,540)
5,085 13,232 12,456 18,317 (7,941)
Top of page 25
Note 6. Sales and other operating revenues
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
By segment
gas & low carbon energy 10,428 17,886 13,243 28,314 21,409
oil production & operations 5,777 6,153 9,504 11,930 17,662
customers & products 38,051 38,882 55,557 76,933 97,720
other businesses & corporate 590 738 516 1,328 968
54,846 63,659 78,820 118,505 137,759
Less: sales and other operating revenues between segments
gas & low carbon energy 840 536 1,621 1,376 3,569
oil production & operations 5,236 6,261 8,753 11,497 15,789
customers & products (180) 144 392 (36) 1,084
other businesses & corporate 412 536 188 948 193
6,308 7,477 10,954 13,785 20,635
External sales and other operating revenues
gas & low carbon energy 9,588 17,350 11,622 26,938 17,840
oil production & operations 541 (108) 751 433 1,873
customers & products 38,231 38,738 55,165 76,969 96,636
other businesses & corporate 178 202 328 380 775
Total sales and other operating revenues 48,538 56,182 67,866 104,720 117,124
By geographical area
US 20,065 19,160 27,331 39,225 46,483
Non-US 38,492 46,350 54,331 84,842 97,128
58,557 65,510 81,662 124,067 143,611
Less: sales and other operating revenues between areas 10,019 9,328 13,796 19,347 26,487
48,538 56,182 67,866 104,720 117,124
Revenues from contracts with customers
Sales and other operating revenues include the following in relation to
revenues from contracts with customers:
Crude oil 520 637 2,034 1,157 4,178
Oil products 31,218 30,141 43,267 61,359 75,018
Natural gas, LNG and NGLs 5,841 9,644 8,944 15,485 19,624
Non-oil products and other revenues from contracts with customers 2,750 1,872 1,825 4,622 4,170
Revenue from contracts with customers 40,329 42,294 56,070 82,623 102,990
Other operating revenues((a)) 8,209 13,888 11,796 22,097 14,134
Total sales and other operating revenues 48,538 56,182 67,866 104,720 117,124
(a) Principally relates to commodity derivative transactions
including sales of bp own production in trading books.
( )
Top of page 26
Note 7. Depreciation, depletion and amortization
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Total depreciation, depletion and amortization by segment
gas & low carbon energy 1,407 1,440 1,203 2,847 2,458
oil production & operations 1,370 1,327 1,371 2,697 2,800
customers & products 894 797 715 1,691 1,432
other businesses & corporate 252 236 223 488 447
3,923 3,800 3,512 7,723 7,137
Total depreciation, depletion and amortization by geographical area
US 1,338 1,254 1,159 2,592 2,242
Non-US 2,585 2,546 2,353 5,131 4,895
3,923 3,800 3,512 7,723 7,137
Note 8. 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.
Against the authority granted at bp's 2022 annual general meeting,
329 million ordinary shares repurchased for cancellation were settled during
the second quarter 2023 for a total cost of $2,073 million. A further
152 million ordinary shares were repurchased between the end of the reporting
period and the date when the financial statements are authorised for issue for
a total cost of $917 million. This amount, plus a further $224 million, has
been accrued at 30 June 2023. The number of shares in issue is reduced when
shares are repurchased, but is not reduced in respect of the period-end
commitment to repurchase shares subsequent to the end of the period.
The calculation of EpS is performed separately for each discrete quarterly
period, and for the year-to-date period. As a result, the sum of the discrete
quarterly EpS amounts in any particular year-to-date period may not be equal
to the EpS amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares
outstanding during the period is adjusted for the number of shares that are
potentially issuable in connection with employee share-based payment plans
using the treasury stock method.
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Results for the period
Profit (loss) for the period attributable to bp shareholders 1,792 8,218 9,257 10,010 (11,127)
Less: preference dividend 1 - 1 1 1
Profit (loss) attributable to bp ordinary shareholders 1,791 8,218 9,256 10,009 (11,128)
Number of shares (thousand)((a)(b))
Basic weighted average number of shares outstanding 17,523,778 17,891,455 19,388,427 17,706,388 19,451,040
ADS equivalent((c)) 2,920,629 2,981,909 3,231,404 2,951,064 3,241,840
Weighted average number of shares outstanding used to calculate diluted 17,900,984 18,238,522 19,619,628 18,068,256 19,451,040
earnings per share
ADS equivalent((c)) 2,983,497 3,039,753 3,269,938 3,011,376 3,241,840
Shares in issue at period-end 17,379,366 17,703,285 19,135,400 17,379,366 19,135,400
ADS equivalent((c)) 2,896,561 2,950,547 3,189,233 2,896,561 3,189,233
(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 half 2022 are 202,620 thousand (ADS equivalent
33,770 thousand).
(c) One ADS is equivalent to six ordinary shares.
Top of page 27
Note 9. Dividends
Dividends payable
BP today announced an interim dividend of 7.270 cents per ordinary share which
is expected to be paid on 22 September 2023 to ordinary shareholders and
American Depositary Share (ADS) holders on the register on 11 August 2023. The
ex-dividend date will be 10 August 2023. The corresponding amount in sterling
is due to be announced on 5 September 2023, calculated based on the average of
the market exchange rates over three dealing days between 30 August 2023 and 1
September 2023. Holders of ADSs are expected to receive $0.43620 per ADS (less
applicable fees). The board has decided not to offer a scrip dividend
alternative in respect of the second quarter 2023 dividend. Ordinary
shareholders and ADS holders (subject to certain exceptions) will be able to
participate in a dividend reinvestment programme. Details of the second
quarter dividend and timetable are available at bp.com/dividends and further
details of the dividend reinvestment programmes are available at bp.com/drip.
Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
Dividends paid per ordinary share
cents 6.610 6.610 5.460 13.220 10.920
pence 5.309 5.551 4.356 10.860 8.515
Dividends paid per ADS (cents) 39.66 39.66 32.76 79.32 65.52
Note 10. Net debt
Net debt* Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Finance debt((a)) 49,738 48,595 52,866 49,738 52,866
Fair value (asset) liability of hedges related to finance debt((b)) 2,836 3,070 3,058 2,836 3,058
52,574 51,665 55,924 52,574 55,924
Less: cash and cash equivalents 28,914 30,433 33,108 28,914 33,108
Net debt((c)) 23,660 21,232 22,816 23,660 22,816
Total equity 85,603 87,181 81,563 85,603 81,563
Gearing* 21.7% 19.6% 21.9% 21.7% 21.9%
(a) The fair value of finance debt at 30 June 2023 was
$45,580 million (31 March 2023 $45,071 million, 30 June 2022 $49,056
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 $98 million at 30 June 2023
(first quarter 2023 liability of $97 million and second quarter 2022
liability of $246 million) are not included in the calculation of net debt
shown above as hedge accounting is not applied for these instruments.
(c) Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet and for which
the associated cash flows are presented as operating cash flows in the group
cash flow statement.
As part of actively managing its debt portfolio, in the second quarter the
group bought back $1.7 billion equivalent of finance debt consisting entirely
of euro bonds (first quarter 2023 $nil, second quarter 2022 $4.5 billion USD
bonds). Year to date the group has bought back a total of $1.7 billion
equivalent of finance debt ($4.5 billion for the comparative period in 2022).
Derivatives associated with non-US dollar debt bought back were also
terminated. These transactions have no significant impact on net debt or
gearing.
Note 11. Statutory accounts
The financial information shown in this publication, which was approved by the
Board of Directors on 31 July 2023, is unaudited and does not constitute
statutory financial statements. Audited financial information will be
published in BP Annual Report and Form 20-F 2023. BP Annual Report and Form
20-F 2022 has been filed with the Registrar of Companies in England and Wales.
The report of the auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying the report and did not contain a statement under
section 498(2) or section 498(3) of the UK Companies Act 2006.
Top of page 28
Additional information
Capital expenditure*
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Capital expenditure
Organic capital expenditure* 3,233 3,495 2,845 6,728 5,418
Inorganic capital expenditure*((a)) 1,081 130 (7) 1,211 349
4,314 3,625 2,838 7,939 5,767
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Capital expenditure by segment
gas & low carbon energy 887 1,013 823 1,900 1,684
oil production & operations 1,478 1,520 1,208 2,998 2,462
customers & products((a)) 1,858 990 675 2,848 1,390
other businesses & corporate 91 102 132 193 231
4,314 3,625 2,838 7,939 5,767
Capital expenditure by geographical area
US 2,661 1,697 1,253 4,358 2,350
Non-US 1,653 1,928 1,585 3,581 3,417
4,314 3,625 2,838 7,939 5,767
(a) Second quarter and first half 2023 include $1.1 billion, net of
adjustments, in respect of the TravelCenters of America acquisition.
Top of page 29
Adjusting items*
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
gas & low carbon energy
Gains on sale of businesses and fixed assets 1 15 - 16 9
Net impairment and losses on sale of businesses and fixed assets((a)) (1,058) (2) (265) (1,060) (517)
Environmental and other provisions - - - - -
Restructuring, integration and rationalization costs 1 - 1 1 5
Fair value accounting effects((b)(c)) 1,222 3,934 (74) 5,156 (5,089)
Other (110) (56) (5) (166) 130
56 3,891 (343) 3,947 (5,462)
oil production & operations
Gains on sale of businesses and fixed assets((d)) (31) 137 1,278 106 1,527
Net impairment and losses on sale of businesses and fixed assets (140) 8 268 (132) (936)
Environmental and other provisions (44) (49) (204) (93) (146)
Restructuring, integration and rationalization costs (1) - (7) (1) (17)
Fair value accounting effects - - - - -
Other 7 (98) - (91) 55
(209) (2) 1,335 (211) 483
customers & products
Gains on sale of businesses and fixed assets 2 1 31 3 292
Net impairment and losses on sale of businesses and fixed assets (36) (83) (434) (119) (447)
Environmental and other provisions (1) (10) (35) (11) (35)
Restructuring, integration and rationalization costs 1 (2) 9 (1) 10
Fair value accounting effects((c)) (109) 77 (62) (32) (439)
Other (98) (62) 16 (160) (31)
(241) (79) (475) (320) (650)
other businesses & corporate
Gains on sale of businesses and fixed assets - - - - (1)
Net impairment and losses on sale of businesses and fixed assets (31) (6) (15) (37) (16)
Environmental and other provisions (17) (14) (89) (31) (92)
Restructuring, integration and rationalization costs - (10) (3) (10) 10
Fair value accounting effects((c)) (48) 245 (686) 197 (1,111)
Rosneft - - - - (24,033)
Gulf of Mexico oil spill (18) (9) (21) (27) (40)
Other (13) - (13) (13) (4)
(127) 206 (827) 79 (25,287)
Total before interest and taxation (521) 4,016 (310) 3,495 (30,916)
Finance costs((e)) (119) (104) (30) (223) (188)
Total before taxation (640) 3,912 (340) 3,272 (31,104)
Taxation on adjusting items((f)) 160 (205) (461) (45) 1,010
Taxation - tax rate change effect of UK energy profits levy((g)) 232 - - 232 -
Total after taxation for period((h)) (248) 3,707 (801) 3,459 (30,094)
(a) See Note 4 for further information.
(b) Under IFRS bp marks-to-market the value of the hedges used to
risk-manage LNG contracts, but not the contracts themselves, resulting in a
mismatch in accounting treatment. The fair value accounting effect includes
the change in value of LNG contracts that are being risk managed, and the
underlying result reflects how bp risk-manages its LNG contracts.
(c) For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and 36.
(d) Second quarter and first half 2022 include gains of $904 million
related to the deemed disposal of 12% of the group's interest in Aker BP, an
associate of bp, following completion of Aker BP's acquisition of Lundin
Energy, and $361 million in relation to the disposal of the group's interest
in the Rumaila field in Iraq to Basra Energy Company, an associate of bp.
(e) Includes the unwinding of discounting effects relating to Gulf
of Mexico oil spill payables, the income statement impact associated with
the buyback of finance debt (see Note 10 for further information) and
temporary valuation differences associated with the group's interest rate and
foreign currency exchange risk management of finance debt.
(f) Includes certain foreign exchange effects on tax as adjusting
items. These amounts represent the impact of: (i) foreign exchange on deferred
tax balances arising from the conversion of local currency tax base amounts
into functional currency, and (ii) taxable gains and losses from the
retranslation of US dollar-denominated intra-group loans to local currency.
(g) Second quarter 2023 includes a revision to the deferred tax
impact of the introduction of the UK Energy Profits Levy (EPL) on temporary
differences existing at 31 December 2022 that are expected to unwind over the
period 1 January 2023 to 31 March 2028. The EPL increases the headline rate of
tax to 75% and applies to taxable profits from bp's North Sea business made
from 1 January 2023 until 31 March 2028.
(h) Second quarter and first half 2023 include a $34-million charge
and a $78-million charge respectively for the EU Solidarity Contribution.
Top of page 30
Net debt including leases
Net debt including leases* Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Net debt 23,660 21,232 22,816 23,660 22,816
Lease liabilities 10,961 8,605 8,056 10,961 8,056
Net partner (receivable) payable for leases entered into on behalf of joint (136) 19 14 (136) 14
operations
Net debt including leases 34,485 29,856 30,886 34,485 30,886
Total equity 85,603 87,181 81,563 85,603 81,563
Gearing including leases* 28.7% 25.5% 27.5% 28.7% 27.5%
Gulf of Mexico oil spill
30 June 31 December
$ million 2023 2022
Gulf of Mexico oil spill payables and provisions (8,549) (9,566)
Of which - current (1,111) (1,216)
Deferred tax asset 1,293 1,444
During the second quarter pre-tax payments of $1,204 million were made
relating to the 2016 consent decree and settlement agreement with the United
States and the five Gulf coast states. Payables and provisions presented in
the table above reflect the latest estimate for the remaining costs associated
with the Gulf of Mexico oil spill. Where amounts have been provided on an
estimated basis, the amounts ultimately payable may differ from the amounts
provided and the timing of payments is uncertain. Further information relating
to the Gulf of Mexico oil spill, including information on the nature and
expected timing of payments relating to provisions and other payables, is
provided in BP Annual Report and Form 20-F 2022 - Financial statements -
Notes 7, 22, 23, 29, and 33.
Working capital* reconciliation
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Movements in inventories and other current and non-current assets and (742) (3,755) (4,416) (4,497) (6,187)
liabilities as per condensed group cash flow statement((a))
Adjusted for inventory holding gains (losses)* (Note 5) (732) (600) 2,146 (1,332) 5,647
Adjusted for fair value accounting effects relating to subsidiaries 1,053 4,242 (676) 5,295 (6,493)
Other adjusting items((b)) 558 (1,298) 1,011 (740) 1,449
Working capital release (build) after adjusting for net inventory gains 137 (1,411) (1,935) (1,274) (5,584)
(losses), fair value accounting effects and other adjusting items
(a) The movement in working capital includes outflows relating to
the Gulf of Mexico oil spill on a pre-tax basis of $1,204 million and
$1,216 million in the second quarter and first half of 2023 respectively. For
the same periods in 2022 the amount was an outflow of $1,209 million and
$1,256 million respectively.
(b) Other adjusting items relate to the non-cash movement of US
emissions obligations carried as a provision that will be settled by
allowances held as inventory.
Top of page 31
Surplus cash flow* reconciliation
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Sources:
Net cash provided by operating activities 6,293 7,622 10,863 13,915 19,073
Cash provided from investing activities 109 806 329 915 1,375
Other((a)) (42) (59) 365 (101) 485
Cash inflow 6,360 8,369 11,557 14,729 20,933
Uses:
Lease liability payments (620) (555) (472) (1,175) (970)
Payments on perpetual hybrid bonds (250) (236) (161) (486) (309)
Dividends paid - BP shareholders (1,153) (1,183) (1,062) (2,336) (2,130)
- non-controlling interests (67) (68) (63) (135) (128)
Total capital expenditure* (4,314) (3,625) (2,838) (7,939) (5,767)
Net repurchase of shares relating to employee share schemes (225) (225) - (450) (500)
Payments relating to transactions involving non-controlling interests - (180) (1) (180) (6)
Currency translation differences relating to cash and cash equivalents - (14) (414) (14) (539)
Cash outflow (6,629) (6,086) (5,011) (12,715) (10,349)
Surplus cash flow (269) 2,283 6,546 2,014 10,584
(a) Other includes adjustments for net operating cash received or
paid which is held on behalf of third parties for medium-term deferred payment
and prior periods have been adjusted accordingly. Second quarter and first
half 2022 include $409 million and $573 million respectively of proceeds from
the disposal of a loan note related to the Alaska divestment. The cash was
received in the fourth quarter 2021, was reported as a financing cash flow and
was not included in other proceeds at the time due to potential recourse from
the counterparty. The proceeds were recognized as the potential recourse
reduces and by end second quarter 2022 all were recognized.
Top of page 32
Adjusted earnings before interest, taxation, depreciation and amortization
(adjusted EBITDA)*
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
Profit (loss) for the period 1,953 8,422 9,536 10,375 (10,534)
Finance costs 920 843 556 1,763 1,220
Net finance (income) expense relating to pensions and other post-retirement (61) (58) (17) (119) (37)
benefits
Taxation 1,541 3,425 4,527 4,966 7,057
Profit (loss) before interest and tax 4,353 12,632 14,602 16,985 (2,294)
Inventory holding (gains) losses*, before tax 732 600 (2,146) 1,332 (5,647)
RC profit (loss) before interest and tax 5,085 13,232 12,456 18,317 (7,941)
Net (favourable) adverse impact of adjusting items*, before interest and tax 521 (4,016) 310 (3,495) 30,916
Underlying RC profit before interest and tax 5,606 9,216 12,766 14,822 22,975
Add back:
Depreciation, depletion and amortization 3,923 3,800 3,512 7,723 7,137
Exploration expenditure written off 241 50 79 291 128
Adjusted EBITDA 9,770 13,066 16,357 22,836 30,240
Reconciliation of customers & products RC profit before interest and tax
to underlying RC profit before interest and tax* to adjusted EBITDA* by
business
Second First Second First First
quarter quarter quarter half half
$ million 2023 2023 2022 2023 2022
RC profit before interest and tax for customers & products 555 2,680 3,531 3,235 5,512
Less: Adjusting items* gains (charges) (241) (79) (475) (320) (650)
Underlying RC profit before interest and tax for customers & products 796 2,759 4,006 3,555 6,162
By business:
customers - convenience & mobility 701 391 679 1,092 1,201
Castrol - included in customers 171 161 223 332 479
products - refining & trading 95 2,368 3,327 2,463 4,961
Add back: Depreciation, depletion and amortization 894 797 715 1,691 1,432
By business:
customers - convenience & mobility 448 341 315 789 641
Castrol - included in customers 42 39 38 81 77
products - refining & trading 446 456 400 902 791
Adjusted EBITDA for customers & products 1,690 3,556 4,721 5,246 7,594
By business:
customers - convenience & mobility 1,149 732 994 1,881 1,842
Castrol - included in customers 213 200 261 413 556
products - refining & trading 541 2,824 3,727 3,365 5,752
Top of page 33
Realizations* and marker prices
Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
Average realizations((a))
Liquids* ($/bbl)
US 60.53 62.66 89.80 61.59 80.41
Europe 75.14 79.26 113.92 77.06 108.72
Rest of World((b)) 79.35 82.55 106.77 80.98 97.82
BP Average((b)) 69.76 72.58 100.94 71.17 92.41
Natural gas ($/mcf)
US 1.58 2.47 6.28 2.01 5.12
Europe((c)) 12.46 26.83 26.78 19.80 30.73
Rest of World 5.53 7.41 8.42 6.49 8.15
BP Average((c)) 4.91 7.20 8.77 6.06 8.52
Total hydrocarbons* ($/boe)
US 40.84 45.00 69.71 42.89 61.21
Europe((c)) 74.20 107.07 129.12 90.00 132.87
Rest of World((b)) 45.97 54.63 71.65 50.37 66.98
BP Average((b)(c)) 46.27 54.96 74.65 50.62 69.73
Average oil marker prices ($/bbl)
Brent 78.05 81.17 113.93 79.66 107.94
West Texas Intermediate 73.56 75.97 108.77 74.76 101.99
Western Canadian Select 60.07 56.67 90.25 58.37 85.08
Alaska North Slope 78.26 79.02 112.17 78.64 104.15
Mars 73.17 74.24 105.27 73.70 99.35
Urals (NWE - cif) 54.56 46.19 77.29 50.24 82.40
Average natural gas marker prices
Henry Hub gas price((d)) ($/mmBtu) 2.09 3.44 7.17 2.77 6.06
UK Gas - National Balancing Point (p/therm) 83.18 130.81 130.11 107.76 182.73
(a) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(b) A minor amendment has been made to the first quarter of 2023.
(c) Realizations calculation methodology has been changed to reflect
gas price fluctuations within the North Sea region. Second quarter 2022 and
first half 2022 were restated. There is no impact on financial results.
(d) Henry Hub First of Month Index.
Exchange rates
Second First Second First First
quarter quarter quarter half half
2023 2023 2022 2023 2022
$/£ average rate for the period 1.25 1.21 1.26 1.23 1.30
$/£ period-end rate 1.26 1.24 1.21 1.26 1.21
$/€ average rate for the period 1.09 1.07 1.06 1.08 1.09
$/€ period-end rate 1.09 1.09 1.05 1.09 1.05
$/AUD average rate for the period 0.67 0.68 0.71 0.68 0.72
$/AUD period-end rate 0.66 0.67 0.69 0.66 0.69
Top of page 34
Principal risks and uncertainties
The principal risks and uncertainties affecting bp are described in the Risk
factors section of bp Annual Report and Form 20-F 2022 (pages 73-75) and are
summarized below. There are no material changes in those principal risks and
uncertainties for the remaining six months of the financial year.
The risks and uncertainties summarized below, separately or in combination,
could have a material adverse effect on the implementation of our strategy,
our business, financial performance, results of operations, cash flows,
liquidity, prospects, shareholder value and returns and reputation.
Strategic and commercial risks
• Prices and markets - our financial performance is impacted by
fluctuating prices of oil, gas and refined products, technological change,
exchange rate fluctuations, and the general macroeconomic outlook.
• Accessing and progressing hydrocarbon resources and low carbon
opportunities - inability to access and progress hydrocarbon resources and low
carbon opportunities could adversely affect delivery of our strategy.
• Major project* delivery - failure to invest in the best
opportunities or deliver major projects successfully could adversely affect
our financial performance.
• Geopolitical - exposure to a range of political developments and
consequent changes to the operating and regulatory environment could cause
business disruption.
• Liquidity, financial capacity and financial, including credit,
exposure - failure to work within our financial framework could impact our
ability to operate and result in financial loss.
• Joint arrangements and contractors - varying levels of control
over the standards, operations and compliance of our partners, contractors and
sub-contractors could result in legal liability and reputational damage.
• Digital infrastructure, cyber security and data protection -
breach or failure of our or third parties' digital infrastructure or cyber
security, including loss or misuse of sensitive information could damage our
operations, increase costs and damage our reputation.
• Climate change and the transition to a lower carbon economy -
developments in policy, law, regulation, technology and markets, including
societal and investor sentiment, related to the issue of climate change and
the transition to a lower carbon economy could increase costs, reduce
revenues, constrain our operations and affect our business plans and financial
performance.
• Competition - inability to remain efficient, maintain a
high-quality portfolio of assets and innovate could negatively impact delivery
of our strategy in a highly competitive market.
• Talent and capability - inability to attract, develop and retain
people with necessary skills and capabilities could negatively impact delivery
of our strategy.
• Crisis management and business continuity - failure to address
an incident effectively could potentially disrupt our business.
• Insurance - our insurance strategy could expose the group to
material uninsured losses.
Safety and operational risks
• Process safety, personal safety, and environmental risks -
exposure to a wide range of health, safety, security and environmental risks
could cause harm to people, the environment and our assets and result in
regulatory action, legal liability, business interruption, increased costs,
damage to our reputation and potentially denial of our licence to operate.
• Drilling and production - challenging operational environments
and other uncertainties could impact drilling and production activities.
• Security - hostile acts against our employees and activities
could cause harm to people and disrupt our operations.
• Product quality - supplying customers with off-specification
products could damage our reputation, lead to regulatory action and legal
liability, and impact our financial performance.
Compliance and control risks
• Ethical misconduct and non-compliance - ethical misconduct or
breaches of applicable laws by our businesses or our employees could be
damaging to our reputation, and could result in litigation, regulatory action
and penalties.
• Regulation - changes in the law and regulation could increase
costs, constrain our operations and affect our strategy, business plans and
financial performance.
• Trading and treasury trading activities - ineffective oversight
of trading and treasury trading activities could lead to business disruption,
financial loss, regulatory intervention or damage to our reputation and affect
our permissions to trade.
• Reporting - failure to accurately report our data could lead to
regulatory action, legal liability and reputational damage.
Top of page 35
Legal proceedings
The following discussion sets out the material developments in the group's
material legal proceedings during the first half of 2023. For a full
discussion of the group's material legal proceedings, see pages 258-259 of bp
Annual Report and Form 20-F 2022.
Other legal proceedings
Climate change BP p.l.c., BP America Inc. and BP Products North America Inc.
are co-defendants with other oil and gas companies in over 20 lawsuits brought
in various state and federal courts on behalf of various governmental and
private parties. The lawsuits generally assert claims under a variety of legal
theories seeking to hold the defendant companies responsible for impacts
allegedly caused by and/or relating to climate change. Underlying many of the
legal theories are allegations regarding deceptive communication and
disinformation to the public. The lawsuits seek remedies including payment of
money and other forms of equitable relief. If such suits were successful, the
cost of the remedies sought in the various cases could be substantial. Over
the last several years, defendants removed each lawsuit to federal court and
the removals were contested by plaintiffs, eventually resulting in multiple
decisions by several Circuit Court of Appeals rejecting defendants' attempts
to have the cases moved to federal court. The US Supreme Court recently
declined to review the various Circuit Court of Appeals decisions.
Accordingly, the cases will proceed in the various state courts. Due to these
jurisdictional challenges, the lawsuits all remain at relatively early stages.
While it is not possible to predict the outcome of these legal actions, bp
believes that it has valid defences, and it intends to defend such actions
vigorously.
Glossary
Non-IFRS 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-IFRS measures are sometimes referred to
as alternative performance measures.
Adjusted EBITDA is a non-IFRS measure presented for bp's operating segments
and is defined as replacement cost (RC) profit before interest and tax,
excluding net adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs (net of
adjusting items). Adjusted EBITDA by business is a further analysis of
adjusted EBITDA for the customers & products businesses. bp believes it is
helpful to disclose adjusted EBITDA by operating segment and by business
because it reflects how the segments measure underlying business delivery. The
nearest equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or loss that is
required to be disclosed for each operating segment under IFRS. A
reconciliation to IFRS information is provided on page 32 for the customers
& products businesses.
Adjusted EBITDA for the group is defined as profit or loss for the period,
adjusting for finance costs and net finance (income) or expense relating to
pensions and other post-retirement benefits and taxation, inventory holding
gains or losses before tax, net adjusting items before interest and tax, and
adding back depreciation, depletion and amortization (pre-tax) and exploration
expenditure written-off (net of adjusting items, pre-tax). The nearest
equivalent measure on an IFRS basis for the group is profit or loss for the
period. A reconciliation to GAAP information is provided on page 32 for the
group.
Adjusting items are items that bp discloses separately because it considers
such disclosures to be meaningful and relevant to investors. They are items
that management considers to be important to period-on-period analysis of the
group's results and are disclosed in order to enable investors to better
understand and evaluate the group's reported financial performance. Adjusting
items include gains and losses on the sale of businesses and fixed assets,
impairments, environmental and other provisions, restructuring, integration
and rationalization costs, fair value accounting effects, financial impacts
relating to Rosneft for the 2022 financial reporting period and costs relating
to the Gulf of Mexico oil spill and other items. Adjusting items within
equity-accounted earnings are reported net of incremental income tax reported
by the equity-accounted entity. Adjusting items are used as a reconciling
adjustment to derive underlying RC profit or loss and related underlying
measures which are non-IFRS measures. An analysis of adjusting items by
segment and type is shown on page 29.
Blue hydrogen - Hydrogen made from natural gas in combination with carbon
capture and storage (CCS).
Capital expenditure is total cash capital expenditure as stated in the
condensed group cash flow statement. Capital expenditure for the operating
segments and customers & products businesses is presented on the same
basis.
Cash balance point is defined as the implied Brent oil price 2021 real to
balance bp's sources and uses of cash assuming an average bp refining marker
margin around $11/bbl and Henry Hub at $3/mmBtu in 2021 real terms.
Consolidation adjustment - UPII is unrealized profit in inventory arising on
inter-segment transactions.
Convenience gross margin is a non-IFRS measure. It is calculated as RC profit
before interest and tax for the customers & products segment, excluding RC
profit before interest and tax for the refining & trading business, and
adjusting items* (as defined above) for the convenience & mobility
business to derive underlying RC profit before interest and tax for the
convenience & mobility business; subtracting underlying RC profit before
interest and tax for the Castrol business; adding back depreciation, depletion
and amortization, production and manufacturing, distribution and
administration expenses for convenience & mobility (excluding Castrol);
subtracting earnings from equity-accounted entities in the convenience &
mobility business (excluding Castrol) and gross margin for the retail fuels,
EV charging, aviation, B2B and midstream businesses. bp believes it is helpful
because this measure may help investors to understand and evaluate, in the
same way as management, our progress against our strategic objectives of
convenience growth. The nearest IFRS measure is RC profit before interest and
tax for the customers & products segment.
Top of page 36
Glossary (continued)
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-IFRS
measure. The ETR on RC profit or loss is calculated by dividing taxation on a
RC basis by RC profit or loss before tax. Taxation on a RC basis for the group
is calculated as taxation as stated on the group income statement adjusted for
taxation on inventory holding gains and losses. Information on RC profit or
loss is provided below. bp believes it is helpful to disclose the ETR on RC
profit or loss because this measure excludes the impact of price changes on
the replacement of inventories and allows for more meaningful comparisons
between reporting periods. Taxation on a RC basis and ETR on RC profit or loss
are non-IFRS measures. The nearest equivalent measure on an IFRS basis is the
ETR on profit or loss for the period.
Electric vehicle charge points / EV charge points are defined as the number of
connectors on a charging device, operated by either bp or a bp joint venture.
Fair value accounting effects are non-IFRS 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.
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.
These include:
• 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.
• 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, represents the change in
value of LNG contacts that are being risk managed and which is reflected in
the underlying result, but not in reported earnings. Management believes that
this gives a better representation of performance in each period.
Furthermore, the fair values of derivative instruments used to risk manage
certain other oil, gas, power and other contracts, are deferred to match with
the underlying exposure. The commodity contracts for business requirements are
accounted for on an accruals basis.
In addition, 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
Top of page 37
Glossary (continued)
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.
Gas & low carbon energy segment comprises our gas and low carbon
businesses. Our gas business includes regions with upstream activities that
predominantly produce natural gas, integrated gas and power, and gas trading.
Our low carbon business includes solar, offshore and onshore wind, hydrogen
and CCS and power trading. Power trading includes trading of both renewable
and non-renewable power.
Gearing and net debt are non-IFRS measures. Net debt is calculated as finance
debt, as shown in the balance sheet, plus the fair value of associated
derivative financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for which hedge
accounting is applied, less cash and cash equivalents. Net debt does not
include accrued interest, which is reported within other receivables and other
payables on the balance sheet and for which the associated cash flows are
presented as operating cash flows in the group cash flow statement. Gearing is
defined as the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors. Net debt
enables investors to see the economic effect of finance debt, related hedges
and cash and cash equivalents in total. Gearing enables investors to see how
significant net debt is relative to total equity. The derivatives are reported
on the balance sheet within the headings 'Derivative financial instruments'.
The nearest equivalent measures on an IFRS basis are finance debt and finance
debt ratio. A reconciliation of finance debt to net debt is provided on page
27.
We are unable to present reconciliations of forward-looking information for
net debt or gearing to finance debt and total equity, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to present a meaningful comparable IFRS 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 an IFRS estimate.
Gearing including leases and net debt including leases are non-IFRS 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
measures on an IFRS basis are finance debt and finance debt ratio. A
reconciliation of finance debt to net debt including leases is provided on
page 30.
Green hydrogen - Hydrogen produced by electrolysis of water using renewable
power.
Hydrocarbons - Liquids and natural gas. Natural gas is converted to oil
equivalent at 5.8 billion cubic feet = 1 million barrels.
Hydrogen pipeline - Hydrogen projects which have not been developed to final
investment decision (FID) but which have advanced to the concept development
stage.
Inorganic capital expenditure is a subset of capital expenditure on a cash
basis and a non-IFRS 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 IFRS information is provided on page 28.
Installed renewables capacity is bp's share of capacity for operating assets
owned by entities where bp has an equity share.
Inventory holding gains and losses are non-IFRS 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.
Top of page 38
Glossary (continued)
Liquids - Liquids comprises crude oil, condensate and natural gas liquids. For
the oil production & operations segment, it also includes bitumen.
Low carbon activity - An activity relating to low carbon including: renewable
electricity; bioenergy; electric vehicles and other future mobility solutions;
trading and marketing low carbon products; blue or green hydrogen and carbon
capture, use and storage (CCUS).
Note that, while there is some overlap of activities, these terms do not mean
the same as bp's strategic focus area of low carbon energy or our low carbon
energy sub-segment, reported within the gas & low carbon energy segment.
Major projects have a bp net investment of at least $250 million, or are
considered to be of strategic importance to bp or of a high degree of
complexity.
Operating cash flow is net cash provided by (used in) operating activities as
stated in the condensed group cash flow statement.
Organic capital expenditure is a non-IFRS measure. Organic capital expenditure
comprises capital expenditure on a cash basis less inorganic capital
expenditure. bp believes that this measure provides useful information as it
allows investors to understand how bp's management invests funds in developing
and maintaining the group's assets. The nearest equivalent measure on an IFRS
basis is capital expenditure on a cash basis and a reconciliation to IFRS
information is provided on page 28.
We are unable to present reconciliations of forward-looking information for
organic capital expenditure to total cash capital expenditure, because without
unreasonable efforts, we are unable to forecast accurately the adjusting item,
inorganic capital expenditure, that is difficult to predict in advance in
order to derive the nearest IFRS estimate.
Production-sharing agreement/contract (PSA/PSC) is an arrangement through
which an oil and gas company bears the risks and costs of exploration,
development and production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a stipulated share of the
production remaining after such cost recovery.
Realizations are the result of dividing revenue generated from hydrocarbon
sales, excluding revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes. Revenue
generating hydrocarbon production reflects the bp share of production as
adjusted for any production which does not generate revenue. Adjustments may
include losses due to shrinkage, amounts consumed during processing, and
contractual or regulatory host committed volumes such as royalties. For the
gas & low carbon energy and oil production & operations segments,
realizations include transfers between businesses.
Refining availability represents Solomon Associates' operational availability
for bp-operated refineries, which is defined as the percentage of the year
that a unit is available for processing after subtracting the annualized time
lost due to turnaround activity and all planned mechanical, process and
regulatory downtime.
The Refining marker margin (RMM) is the average of regional indicator margins
weighted for bp's crude refining capacity in each region. Each regional marker
margin is based on product yields and a marker crude oil deemed appropriate
for the region. The regional indicator margins may not be representative of
the margins achieved by bp in any period because of bp's particular refinery
configurations and crude and product slate.
Renewables pipeline - Renewable projects satisfying the following criteria
until the point they can be considered developed to final investment decision
(FID): Site based projects that have obtained land exclusivity rights, or for
PPA based projects an offer has been made to the counterparty, or for auction
projects pre-qualification criteria has been met, or for acquisition projects
post a binding offer being accepted.
Replacement cost (RC) profit or loss / RC profit or loss attributable to bp
shareholders reflects the replacement cost of inventories sold in the period
and is calculated as profit or loss attributable to bp shareholders, adjusting
for inventory holding gains and losses (net of tax). RC profit or loss for the
group is not a recognized IFRS 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 IFRS information is
provided on page 1. RC profit or loss before interest and tax is bp's measure
of profit or loss that is required to be disclosed for each operating segment
under IFRS.
Reported recordable injury frequency measures the number of reported
work-related employee and contractor incidents that result in a fatality or
injury per 200,000 hours worked. This represents reported incidents occurring
within bp's operational HSSE reporting boundary. That boundary includes bp's
own operated facilities and certain other locations or situations. Reported
incidents are investigated throughout the year and as a result there may be
changes in previously reported incidents. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of such
investigations, rather than the previously reported comparative period, as
this this represents a more up to date reflection of the safety environment.
Retail sites include sites operated by dealers, jobbers, franchisees or brand
licensees or joint venture (JV) partners, under the bp brand. These may move
to and from the bp brand as their fuel supply agreement or brand licence
agreement expires and are renegotiated in the normal course of business.
Retail sites are primarily branded bp, ARCO, Amoco, Aral and Thorntons, and
also includes sites in India through our Jio-bp JV.
Solomon availability - See Refining availability definition.
Top of page 39
Glossary (continued)
Strategic convenience sites are retail sites, within the bp portfolio, which
sell bp-branded vehicle energy (e.g. bp, Aral, Arco, Amoco, Thorntons,
TravelCenters of America and bp pulse) and either carry one of the strategic
convenience brands (e.g. M&S, Rewe to Go) or a differentiated convenience
offer. To be considered a strategic convenience site, the convenience offer
should have a demonstrable level of differentiation in the market in which it
operates. Strategic convenience site count includes sites under a pilot phase.
Surplus cash flow does not represent the residual cash flow available for
discretionary expenditures. It is a non-IFRS financial measure that should be
considered in addition to, not as a substitute for or superior to, net cash
provided by operating activities, reported in accordance with IFRS. bp
believes it is helpful to disclose the surplus cash flow because this measure
forms part of bp's financial frame.
Surplus cash flow refers to the net surplus of sources of cash over uses of
cash, after reaching the $35 billion net debt target. Sources of cash include
net cash provided by operating activities, cash provided from investing
activities and cash receipts relating to transactions involving
non-controlling interests. Uses of cash include lease liability payments,
payments on perpetual hybrid bond, dividends paid, cash capital expenditure,
the cash cost of share buybacks to offset the dilution from vesting of awards
under employee share schemes, cash payments relating to transactions involving
non-controlling interests and currency translation differences relating to
cash and cash equivalents as presented on the condensed group cash flow
statement.
For the second quarter and first half of 2022, the sources of cash includes
other proceeds related to the proceeds from the disposal of a loan note
related to the Alaska divestment. The cash was received in the fourth quarter
2021, was reported as a financing cash flow and was not included in other
proceeds at the time due to potential recourse from the counterparty. The
proceeds are being recognized as the potential recourse reduces. See page 31
for the components of our sources of cash and uses of cash.
Technical service contract (TSC) - Technical service contract is an
arrangement through which an oil and gas company bears the risks and costs of
exploration, development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin which reflects
incremental production added to the oilfield.
Tier 1 and tier 2 process safety events - Tier 1 events are losses of primary
containment from a process of greatest consequence - causing harm to a member
of the workforce, damage to equipment from a fire or explosion, a community
impact or exceeding defined quantities. Tier 2 events are those of lesser
consequence. These represent reported incidents occurring within bp's
operational HSSE reporting boundary. That boundary includes bp's own operated
facilities and certain other locations or situations. Reported process safety
events are investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of such
investigations, rather than the previously reported comparative period, as
this this represents a more up to date reflection of the safety environment.
Transition growth - Activities, represented by a set of transition growth
engines, that transition bp toward its objective to be an Integrated Energy
Company, and that comprise our low carbon activity* alongside other businesses
that support transition, such as our power trading & marketing business
and convenience.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR
is calculated by dividing taxation on an underlying replacement cost (RC)
basis by underlying RC profit or loss before tax. Taxation on an underlying RC
basis for the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and losses and
total taxation on adjusting items. Information on underlying RC profit or loss
is provided below. Taxation on an underlying RC basis presented for the
operating segments is calculated through an allocation of taxation on an
underlying RC basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to understand and
evaluate, in the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period. Taxation on
an underlying RC basis and underlying ETR are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss for the
period.
We are unable to present reconciliations of forward-looking information for
underlying ETR to ETR on profit or loss for the period, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to present a meaningful comparable IFRS 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 an IFRS estimate.
Underlying production - 2023 underlying production, when compared with 2022,
is production after adjusting for acquisitions and divestments, curtailments,
and entitlement impacts in our production-sharing agreements/contracts and
technical service contract*.
Underlying RC profit or loss / underlying RC profit or loss attributable to bp
shareholders is a non-IFRS measure and is RC profit or loss* (as defined on
page 38) after excluding net adjusting items and related taxation. See page 29
for additional information on the adjusting items that are used to arrive at
underlying RC profit or loss in order to enable a full understanding of the
items and their financial impact.
Top of page 40
Glossary (continued)
Underlying RC profit or loss before interest and tax for the operating
segments or customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating segments
and excluding net adjusting items for the respective operating segment or
business.
bp believes that underlying RC profit or loss is a useful measure for
investors because it is a measure closely tracked by management to evaluate
bp's operating performance and to make financial, strategic and operating
decisions and because it may help investors to understand and evaluate, in the
same manner as management, the underlying trends in bp's operational
performance on a comparable basis, period on period, by adjusting for the
effects of these adjusting items. The nearest equivalent measure on an IFRS
basis for the group is profit or loss attributable to bp shareholders. The
nearest equivalent measure on an IFRS basis for segments and businesses is RC
profit or loss before interest and taxation. A reconciliation to IFRS
information is provided on page 1 for the group and pages 6-15 for the
segments.
Underlying RC profit or loss per share / underlying RC profit or loss per ADS
is a non-IFRS measure. Earnings per share is defined in Note 8. Underlying RC
profit or loss per ordinary share is calculated using the same denominator as
earnings per share as defined in the consolidated financial statements. The
numerator used is underlying RC profit or loss attributable to bp shareholders
rather than profit or loss attributable to bp shareholders. Underlying RC
profit or loss per ADS is calculated as outlined above for underlying RC
profit or loss per share except the denominator is adjusted to reflect one ADS
equivalent to six ordinary shares. bp believes it is helpful to disclose the
underlying RC profit or loss per ordinary share and per ADS because these
measures may help investors to understand and evaluate, in the same manner as
management, the underlying trends in bp's operational performance on a
comparable basis, period on period. The nearest equivalent measure on an IFRS
basis is basic earnings per share based on profit or loss for the period
attributable to bp shareholders.
upstream includes oil and natural gas field development and production within
the gas & low carbon energy and oil production & operations segments.
upstream/hydrocarbon plant reliability (bp-operated) is calculated taking 100%
less the ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and bpx energy. Unplanned
plant deferrals are associated with the topside plant and where applicable the
subsea equipment (excluding wells and reservoir). Unplanned plant deferrals
include breakdowns, which does not include Gulf of Mexico weather related
downtime.
upstream unit production cost is calculated as production cost divided by
units of production. Production cost does not include ad valorem and severance
taxes. Units of production are barrels for liquids and thousands of cubic feet
for gas. Amounts disclosed are for bp subsidiaries only and do not include
bp's share of equity-accounted entities.
Working capital is movements in inventories and other current and non-current
assets and liabilities as reported in the condensed group cash flow statement.
Change in working capital adjusted for inventory holding gains/losses, fair
value accounting effects relating to subsidiaries and other adjusting items is
a non-IFRS measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period and fair value accounting effects relating
to subsidiaries reported within adjusting items for the period. From 2022, it
is adjusted for other adjusting items relating to the non-cash movement of US
emissions obligations carried as a provision that will be settled by
allowances held as inventory. This represents what would have been reported as
movements in inventories and other current and non-current assets and
liabilities, if the starting point in determining net cash provided by
operating activities had been underlying replacement cost profit rather than
profit for the period. The nearest equivalent measure on an IFRS basis for
this is movements in inventories and other current and non-current assets and
liabilities.
bp utilizes various arrangements in order to manage its working capital
including discounting of receivables and, in the supply and trading business,
the active management of supplier payment terms, inventory and collateral.
Trade marks
Trade marks of the bp group appear throughout this announcement. They include:
bp, Amoco, Aral, bp pulse, Castrol and Thorntons
Top of page 41
Cautionary statement
In order to utilize the 'safe harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995 (the 'PSLRA') and the general
doctrine of cautionary statements, bp is providing the following cautionary
statement:
The discussion in this results announcement contains certain forecasts,
projections and forward-looking statements - that is, statements related to
future, not past events and circumstances - with respect to the financial
condition, results of operations and businesses of bp and certain of the plans
and objectives of bp with respect to these items. These statements may
generally, but not always, be identified by the use of words such as 'will',
'expects', 'is expected to', 'aims', 'should', 'may', 'objective', 'is likely
to', 'intends', 'believes', 'anticipates', 'plans', 'we see' or similar
expressions.
In particular, the following, among other statements, are all forward looking
in nature: plans, expectations and assumptions regarding oil and gas demand,
supply, prices or volatility; expectations regarding reserves; expectations
regarding upstream production and bp's customers & products business;
expectations regarding refining margins; expectations regarding turnaround and
maintenance activity, including those in refining; expectations regarding
production from oil production & operations and from gas & low carbon
energy; expectations regarding bp's business, financial performance, results
of operations and cash flows; expectations regarding future project start-ups;
expectations with regards to bp's transformation to an IEC; expectations
regarding price assumptions used in accounting estimates; bp's plans and
expectations regarding the amount and timing of share buybacks and quarterly
and interim dividends; plans and expectations regarding bp's credit rating,
including in respect of maintaining a strong investment grade credit rating;
plans and expectations regarding the allocation of surplus cash flow to share
buybacks and strengthening the balance sheet; plans and expectations with
respect to the total depreciation, depletion and amortization and the other
businesses & corporate underlying annual charge for 2023; plans and
expectations regarding the factors taken into account in setting the dividend
per ordinary share and buyback each quarter; plans and expectations regarding
investments, collaborations and partnerships in electric vehicle (EV) charging
infrastructure; plans and expectations related to bp's transition growth
engines of bioenergy, convenience, EV charging, hydrogen and renewables and
power, including expectations regarding convenience gross margin; expectations
relating to bp's development of its wind pipeline; plans and expectations
regarding the amount or timing of payments related to divestment and other
proceeds, and the timing, quantum and nature of certain acquisitions and
divestments, including the amount and timing of proceeds; expectations
regarding the underlying effective tax rate for 2023; expectations regarding
the timing and amount of future payments relating to the Gulf of Mexico oil
spill; plans and expectations regarding capital expenditure, including that
capital expenditure will be around $16-18 billion in 2023; expectations
regarding greenhouse gas emissions; expectations regarding legal proceedings,
including those related to climate change; plans and expectations regarding
bp-operated projects and ventures, and its projects, joint ventures,
partnerships and agreements with commercial entities and other third party
partners.
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 or outcomes, 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 effects of bp's plan to exit its shareholding in Rosneft
and other investments in Russia, the impact of COVID-19, overall global
economic and business conditions impacting bp's business and demand for bp's
products as well as the specific factors identified in the discussions
accompanying such forward-looking statements; changes in consumer preferences
and societal expectations; the pace of development and adoption of alternative
energy solutions; developments in policy, law, regulation, technology and
markets, including societal and investor sentiment related to the issue of
climate change; the receipt of relevant third party and/or regulatory
approvals; the timing and level of maintenance and/or turnaround activity; the
timing and volume of refinery additions and outages; the timing of bringing
new fields onstream; the timing, quantum and nature of certain acquisitions
and divestments; future levels of industry product supply, demand and pricing,
including supply growth in North America and continued base oil and additive
supply shortages; OPEC+ quota restrictions; PSA and TSC effects; operational
and safety problems; potential lapses in product quality; economic and
financial market conditions generally or in various countries and regions;
political stability and economic growth in relevant areas of the world;
changes in laws and governmental regulations and policies, including related
to climate change; changes in social attitudes and customer preferences;
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; bp's
access to future credit resources; business disruption and crisis management;
the impact on bp's reputation of ethical misconduct and non-compliance with
regulatory obligations; trading losses; major uninsured losses; the
possibility that international sanctions or other steps taken by any competent
authorities or any other relevant persons may limit or otherwise impact bp's
ability to sell its interests in Rosneft, or the price for which it could sell
such interests; 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, including under
"Principal risks and uncertainties," as well as those factors discussed under
"Risk factors" in bp's Annual Report and Form 20-F 2022 as filed with the US
Securities and Exchange Commission.
This announcement contains inside information. The person responsible for
arranging the release of this announcement on behalf of BP p.l.c. is Ben
Mathews, Company Secretary.
Top of page 42
Contacts
London Houston
Press Office David Nicholas Megan Baldino
+44 (0) 7831 095541 +1 907 529 9029
Investor Relations Craig Marshall Graham Collins
bp.com/investors +44 (0) 203 401 5592 +1 832 753 5116
BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BIGDRLBXDGXBRecent news on BP
See all newsREG - BP PLC - Total Voting Rights
AnnouncementREG - BP PLC - Transaction in Own Shares
AnnouncementREG - BP PLC - Transaction in Own Shares
AnnouncementREG - BP PLC - Transaction in Own Shares
AnnouncementREG - BP PLC - Transaction in Own Shares
Announcement