REG - BP PLC - BP Annual Report and Form 20-F 2016 <Origin Href="QuoteRef">BP.L</Origin> - Part 2

BPAnnouncement

06/04/2017 11:10

- Part 2: For the preceding part double click  ID:nRSF8108Ba 

during the year (2015 $6.7 billion, 2014 $5.9 billion). 
 
Net debt 
 
Gross debt at the end of 2016 increased by $5.1 billion from the end of 2015.
The gross debt ratio at the end of 2016 increased by 2.5%. Net debt at the end
of 2016 increased by $8.4 billion from the 2015 year-end position. The net
debt ratio at the end of 2016 increased by 5.2%. 
 
We continue to target a net debt ratio in the range of 20-30%. Net debt and
the net debt ratio are non-GAAP measures. See Financial statements - Note 26
for gross debt, which is the nearest equivalent measure on an IFRS basis, and
for further information on net debt. 
 
The total cash and cash equivalents at the end of 2016 were $2.9 billion lower
than 2015. 
 
For information on financing the group's activities, see Financial statements
- Note 28 and Liquidity and capital resources on page 242. 
 
4.   Extracted in full and unedited text from "Upstream", BP Annual Report and
Form 20-F 2016, pages 25-26: 
 
Upstream 
 
Sales and other operating revenues for 2016 decreased compared with 2015,
primarily reflecting lower liquids and gas realizations, and lower gas
marketing and trading revenues. The decrease in 2015 compared with 2014
primarily reflected significantly lower liquids and gas realizations and lower
gas marketing and trading revenues partly offset by higher production. 
 
Replacement cost loss before interest and tax for the segment included a net
non-operating gain of $1,753 million. This primarily relates to the reversal
of impairment charges associated with a number of assets, following a
reduction in the discount rate applied and changes to future price
assumptions. See Financial statements - Note 4 for further information. Fair
value accounting effects had an unfavourable impact of $637 million relative
to management's view of performance. 
 
The 2015 result included a net non-operating charge of $2,235 million,
primarily related to a net impairment charge associated with a number of
assets, following a further fall in oil and gas prices and changes to other
assumptions. Fair value accounting effects had a favourable impact of $105
million relative to management's view of performance. The 2014 result included
a net non-operating charge of $6,298 million, primarily related to impairments
associated with several assets, mainly in the North Sea and Angola reflecting
the impact of the lower near-term price environment, revisions to reserves and
increases in expected decommissioning cost estimates. Fair value accounting
effects had a favourable impact of $31 million relative to management's view
of performance. 
 
After adjusting for non-operating items and fair value accounting effects, the
underlying RC result before interest and tax was a loss, compared with a
profit in 2015. This lower result primarily reflected lower liquids and gas
realizations, as well as adverse foreign exchange impacts and lower gas
marketing and trading results. This was partly offset by lower costs including
the benefits of simplification and efficiency activities, lower exploration
write-offs, lower depreciation, depletion and amortization expense and lower
rig cancellation charges. 
 
Compared with 2014 the 2015 result reflected significantly lower liquids and
gas realizations, as well as rig cancellation charges and lower gas marketing
and trading results, partly offset by lower costs including benefits from
simplification and efficiency activities and lower exploration write-offs, and
higher production. 
 
Additions to non-current assets were $17.9 billion and organic capital
expenditure on an accruals basis was $16.0 billion. Excluding the Abu Dhabi
onshore oil concession renewal for which shares were used as consideration,
organic capital expenditure was $13.6 billion, significantly lower than the
$16.3 billion in 2015. 
 
In total, disposal transactions generated $0.8 billion in proceeds in 2016,
with a corresponding reduction in net proved reserves of 241mmboe within our
subsidiaries. 
 
The major disposal transaction during 2016 was the transfer of our Norway
assets to Aker BP. More information on disposals is provided in Upstream
analysis by region on page 244 and Financial statements - Note 4. 
 
5.   Extracted in full and unedited text from "Downstream", BP Annual Report
and Form 20-F 2016, page 31: 
 
Downstream 
 
Sales and other operating revenues in 2016 and 2015 were lower due to lower
crude and product prices. 
 
Replacement cost profit before interest and tax for the year ended 31 December
2016 included a net non-operating charge of $24 million, mainly relating to a
gain on disposal in our fuels business which was more than offset by
restructuring and other charges. The 2015 result included a net non-operating
charge of $590 million, mainly relating to restructuring charges, while the
2014 result included a net non-operating charge of $1,570 million, primarily
relating to impairment charges in our petrochemicals and fuels businesses. In
addition, fair value accounting effects had an unfavourable impact of $448
million, compared with a favourable impact of $156 million in 2015 and $867
million in 2014. 
 
After adjusting for non-operating items and fair value accounting effects,
underlying RC profit before interest and tax in 2016 was $5,634 million. 
 
Additions to non-current assets in 2016 included the asset exchange relating
to the dissolution of our German refining joint operation with Rosneft as well
as organic capital expenditure. 
 
Our fuels business 
 
Underlying RC profit before interest and tax was lower compared with 2015
reflecting a significantly weaker refining environment and the impact from a
particularly large turnaround at Whiting refinery, partially offset by lower
costs reflecting the benefits from our simplification and efficiency
programmes, an increased fuels marketing performance driven by retail growth
and higher refining margin capture in our operations. Compared with 2014, the
2015 result was higher reflecting a strong refining environment, improved
refining margin optimization and operations, and lower costs from
simplification and efficiency programmes. 
 
Extracted in full and unedited text from "Our lubricants business", BP Annual
Report and Form 20-F 2016, page 33: 
 
Our lubricants business 
 
The lubricants business delivered an underlying RC profit before interest and
tax that was higher compared with 2015 - which in turn was higher than 2014.
In fact this 2016 result was a record performance for lubricants. Both the
2016 and 2015 results reflected continued strong performance in growth markets
and premium brands as well as lower costs achieved through simplification and
efficiency programmes. 
 
Extracted in full and unedited text from "Our petrochemicals business", BP
Annual Report and Form 20-F 2016, page 34: 
 
Our petrochemicals business 
 
In 2016 the petrochemicals business delivered a higher underlying RC profit
before interest and tax compared with 2015 - which in turn was higher than
2014. The result reflected strong operations and margin capture supported by
the continued rollout of our latest advanced technology, as well as benefits
from a slightly improved environment particularly in olefins and derivatives.
Compared with 2014, the 2015 result reflected improved operational performance
and benefited from our simplification and efficiency programmes leading to
lower costs. 
 
6.   Extracted in full and unedited text from "Rosneft", BP Annual Report and
Form 20-F 2016, page 36: 
 
Rosneft 
 
Financial results 
 
Replacement cost (RC) profit before interest and tax for the segment for 2016
and 2014 included non-operating gains of $23 million and $225 million
respectively whereas the 2015 result did not include any non-operating items. 
 
After adjusting for non-operating items, the decrease in the underlying RC
profit before interest and tax compared with 2015 primarily reflected lower oil
prices and increased government take, partially offset by favourable duty lag
effects. Compared with 2014, the 2015 result primarily was affected by lower
oil prices and foreign exchange, partially offset by favourable duty lag
effects. See also Financial statements - Notes 16 and 31 for other foreign
exchange effects. 
 
7.   Extracted in full and unedited text from "Other business and corporate",
BP Annual Report and Form 20-F 2016, page 37: 
 
Other businesses and corporate 
 
The replacement cost (RC) loss before interest and tax for the year ended 31
December 2016 was $8.2 billion (2015 $13.5 billion, 2014 $2.8 billion). The
2016 result included a net charge for non-operating items of $6,919 million
primarily relating to costs for the Gulf of Mexico oil spill (2015 $12,256
million, 2014 $1,451 million).  For further information, see Gulf of Mexico
oil spill and Financial statements - Note 2. 
 
After adjusting for these non-operating items, the underlying RC loss before
interest and tax for the year ended 31 December 2016 was $1.2 billion, similar
to prior years (2015 $1.2 billion, 2014 $1.3 billion). 
 
8.   Extracted in full and unedited text from "Gulf of Mexico oil spill", BP
Annual Report and Form 20-F 2016, page 37: 
 
Gulf of Mexico Oil Spill 
 
Following the 2015 settlements with the United States and the Gulf states,
that were approved by the federal district court in 2016, further significant
progress was made in 2016 towards resolving outstanding claims arising from
the 2010 Deepwater Horizon accident and oil spill. 
 
This included: 
 
•     Progress in resolving the outstanding business economic loss claims
under the Plaintiffs' Steering Committee (PSC) settlement. 
 
•     Progress in resolving economic loss and property damage claims from
individuals and businesses that either opted out of the PSC settlement and/or
were excluded from that settlement. 
 
•     The finalization by the claims administrator of six of the claims
categories under the PSC settlement, the largest of which was the seafood
compensation programme. 
 
•     The settlement of the class action brought by ADS holders who purchased
their shares after the accident. 
 
As a result of this progress, we have clarified the remaining material
uncertainties arising from the incident. 
 
The cumulative pre-tax income statement charge since the incident, in April
2010, amounted to $62.6 billion. 
 
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