BP p.l.c. / 1Q24 Trading statement part 1 of 1
BP p.l.c.: Release of a capital market information
09.04.2024 / 07:45 CET/CEST
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announcement.
FOR IMMEDIATE RELEASE |
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London 9 April 2024 |
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BP p.l.c. Trading Statement |
First quarter 2024 trading statement
The following Trading Statement provides a summary of BP
p.l.c.'s (bp) current estimates and expectations for the first
quarter of 2024, including data on the economic environment as well
as group performance during the period.
The information presented is not comprehensive of all factors
which may impact bp's group results for the first quarter 2024 and
is not an estimate of those results. Also refer to bp's fourth
quarter and full year 2023 group results announcement on 6 February
2024 for guidance items which continue to apply unless explicitly
stated. A summary of that guidance is also provided in the Appendix
to this Trading Statement. All information provided is subject to
the finalization of bp's financial reporting processes and actual
results may vary.
bp's group results for the first quarter 2024 are expected to be
published on 7 May 2024.
Updated 1Q24 guidancea
- Upstream productionb in the first quarter is
expected to be higher compared to the prior quarter, with
production higher in oil production & operations and
slightly higher in gas & low carbon energy.
- In the gas & low carbon energy segment,
realizationsc compared to the prior quarter are
expected to have an adverse impact in the range of $0.2-0.4
billion, including declines in non-Henry Hub natural gas marker
prices. There is also expected to be an adverse impact of around
$0.2 billion as a result of the devaluation of the Egyptian
Pound. In addition, the gas marketing and trading result is
expected to be strong following a strong result in the fourth
quarter 2023.
- In the oil production & operations segment,
realizationsc compared to the prior quarter are
expected to have an adverse impact in the range of $0.3-0.6
billion, including price lags on bp's production in the Gulf of
Mexico and the UAE and also declines in non-Henry Hub natural gas
marker prices.
- The customers and products segment, compared to the prior
quarter, is expected to be impacted by the following factors: in
products, improving realized refining margins, expected to result
in a benefit in the range of $0.1-0.2 billion; a significantly
lower level of turnaround activity than the prior quarter, offset
by the impacts of the 1 February plant-wide power outage at the
Whiting refinery which, after a phased start-up, resumed normal
operations on 15 March; the oil trading result is expected to be
strong following a weak result in the fourth quarter 2023; and in
customers, significantly weaker fuel margins, seasonally lower
volumes, and the absence of one-off positive effects that impacted
the prior quarter.
- Other items: Net debt is expected to increase in the first
quarter mainly reflecting a working capital build plus phasing of
capex and divestment and other proceeds as previously guided.
a All
impacts influence bp's underlying RC profit before interest and
tax, unless stated otherwise.
b Includes
bp's share of production of equity-accounted entities.
c Realizations
are based on sales by consolidated subsidiaries only - this
excludes equity-accounted entities.
Trading conditions
Brent averaged $83.16/bbl in the first quarter 2024 compared to
$84.34/bbl in the fourth quarter 2023.
US gas Henry Hub first of month index averaged $2.25/mmBtu
in the first quarter compared to $2.88/mmBtu in the fourth quarter
2023.
The bp average refining marker margin averaged $20.6/bbl in the
first quarter compared to $18.5/bbl in the fourth quarter 2023.
Further information on prices and bp's current rules of thumb
can be found at the following link: bp.com Rules of Thumb
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 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. 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 (without limitation): price
fluctuations in crude oil and natural gas; changes in demand for
bp's products; currency fluctuations; drilling and production
results; reserves estimates; sales volume and sales mix numbers;
supply and demand imbalances including as a result of direct or
indirect restrictions on production; regional pricing differentials
and refining margins; seasonal impacts on product demand and
operating expenses; resolution of trading and derivative positions
for the quarter; 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; 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 as well as those
factors discussed under "Risk factors" in bp's Annual Report and
Form-20F 2023 as filed with the US Securities and Exchange
Commission. Furthermore, additional factors may exist that will be
relevant to bp's group results for the first quarter of 2024 that
are not currently known or fully understood. Neither BP plc nor any
of its subsidiaries assumes any obligation to update, revise or
supplement any forward-looking statement contained in this
announcement to reflect future circumstances, events or
information.
The contents of websites referred to in this announcement do not
form part of this announcement.
Appendix: Guidance issued in 4Q23 Stock Exchange
Announcementa
Guidance Area |
Full Year 2024 |
1Q24 vs 4Q23 |
Reported and underlying* upstream production |
Slightly higher than 2023, of which Oil production
& operations higher and Gas & low carbon energy lower |
• expected to
be higher |
Customers |
Growth from convenience, including TravelCenters
of America; stronger Castrol, bp pulse margin growth; fuels margins
to remain sensitive to movements in cost of supply |
• expect
seasonally lower volumes across most businesses
• absence of fourth quarter
one-off positive effects
• fuels margins to remain
sensitive to movements in cost of supply |
Products |
Lower level of industry refining margins, with
realized margins impacted by narrower North American heavy crude
oil differentials; turnaround activity broadly in line with 2023
but heavily weighted towards the second half |
•
significantly lower levels of refinery turnaround activity
• lower industry refining
margins with a larger reduction in realized margins due to narrower
North American heavy crude oil differentials |
OB&C |
Around $1.0bn charge; quarterly charges may
vary |
|
DD&A |
Slightly higher than 2023 |
|
Underlying effective tax rate*b |
Expected to be around 40% |
|
Capital expenditure* |
Around $16bn, weighted to the first half |
|
Divestment and other proceeds |
$2-3bn, weighted to the second half |
|
Gulf of Mexico oil spill payments |
~$1.2bn pre-tax, of which $1.1bn 2Q |
|
a Refer
to bp's fourth quarter and full year 2023 group results
announcement and bp.com for full text.
b Underlying
effective tax rate 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.
* See Glossary.
Contacts
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London |
Houston |
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Press Office |
David Nicholas |
Paul Takahashi |
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+44 (0) 7831 095541 |
+1 713 903 9729 |
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Investor Relations |
Craig Marshall |
Graham Collins |
bp.com/investors |
+44 (0) 203 401 5592 |
+1 832 753 5116 |
Glossary
Underlying production - 2024 underlying production,
when compared with 2023, 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 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.
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.
Capital expenditure is total cash capital
expenditure as stated in the condensed group cash flow statement.
Capital expenditure for the operating segments, gas & low
carbon energy businesses and customers & products businesses is
presented on the same basis.
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.
BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
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