BP p.l.c. / Key word(s): Half Year Results
BP p.l.c.: 2Q24 SEA Part 1 of 1
30-Jul-2024 / 08:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the
Regulation (EU) No 596/2014, transmitted by EQS News - a service of
EQS Group AG.
The issuer is solely responsible for the content of this
announcement.
Top of page 1
FOR IMMEDIATE RELEASE |
|
London 30 July 2024 |
|
BP p.l.c. Group results |
Second quarter and first half
2024(a) |
“For a printer friendly version of this announcement please
click on the link below to open a PDF version of the
announcement”
Strong cash generation, growing distributions
Financial summary |
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit (loss) for the period attributable to bp
shareholders |
|
(129) |
2,263 |
1,792 |
|
2,134 |
10,010 |
Inventory holding (gains) losses*, net of tax |
|
113 |
(657) |
549 |
|
(544) |
1,001 |
Replacement cost (RC) profit (loss)* |
|
(16) |
1,606 |
2,341 |
|
1,590 |
11,011 |
Net (favourable) adverse impact of adjusting
items*, net of tax |
|
2,772 |
1,117 |
248 |
|
3,889 |
(3,459) |
Underlying RC profit* |
|
2,756 |
2,723 |
2,589 |
|
5,479 |
7,552 |
Operating cash flow* |
|
8,100 |
5,009 |
6,293 |
|
13,109 |
13,915 |
Capital expenditure* |
|
(3,691) |
(4,278) |
(4,314) |
|
(7,969) |
(7,939) |
Divestment and other proceeds(b) |
|
760 |
413 |
88 |
|
1,173 |
888 |
Net issue (repurchase) of shares |
|
(1,751) |
(1,750) |
(2,073) |
|
(3,501) |
(4,521) |
Net debt*(c) |
|
22,614 |
24,015 |
23,660 |
|
22,614 |
23,660 |
Adjusted EBITDA* |
|
9,639 |
10,306 |
9,770 |
|
19,945 |
22,836 |
Announced dividend per ordinary share (cents per
share) |
|
8.000 |
7.270 |
7.270 |
|
15.270 |
13.880 |
Underlying RC profit per ordinary share*
(cents) |
|
16.61 |
16.24 |
14.77 |
|
32.86 |
42.65 |
Underlying RC profit per ADS* (dollars) |
|
1.00 |
0.97 |
0.89 |
|
1.97 |
2.56 |
Highlights
- Strong operating cash flow and lower net debt:
underlying RC profit $2.8 billion; strong operating cash flow of
$8.1 billion; net debt reduced to $22.6 billion.
- Robust operations: 2Q24 bp-operated upstream plant
reliability* 96.1%; 2Q24 bp-operated refining availability*
96.4%.
- Growing shareholder distributions: Dividend per
ordinary share of 8 cents; $1.75 billion share buyback announced
for 2Q24, delivering on our commitment to announce $3.5 billion for
the first half of 2024; committed to announcing $3.5 billion share
buyback for the second half of 2024.
- Six priorities in action: Advancing growth projects,
taking FID on Kaskida in Gulf of Mexico; re-focusing bioenergy
business with agreement to take full ownership of bp Bunge
Bioenergia and high grading biofuels portfolio.
Our businesses continue to operate safely and
efficiently. We are driving focus across the business and reducing
costs, all while building momentum in our drive to 2025. Our recent
go-ahead of the Kaskida development in the Gulf of Mexico business,
and decision to take full ownership of bp Bunge Bioenergia while
scaling back plans for new biofuels projects, demonstrate our
commitment to delivering as a simpler, more focused and higher
value company. This all supports growing returns for shareholders,
as we have announced today. |
|
Murray Auchincloss
Chief executive officer |
|
- This results announcement also represents bp's half-yearly
financial report (see page 15).
- Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more information on other
proceeds.
- See Note 9 for more information.
RC profit (loss), underlying RC profit, 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 33.
Top of page 2
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We generated strong operating cash flow* in the
quarter, which helped reduce net debt* to $22.6 billion. Our
decision to increase our dividend by 10%, and extend our buyback
programme commitment to 4Q 2024, reflects the confidence we have in
our performance and outlook for cash generation. We are maintaining
a disciplined financial frame and remain committed to growing value
and returns for bp. |
|
Kate Thomson Chief financial
officer |
|
|
Highlights |
|
|
2Q24 underlying replacement cost
(RC) profit* $2.8 billion |
|
|
|
Underlying RC profit for the quarter was $2.8
billion, compared with $2.7 billion for the previous quarter.
Compared with the first quarter 2024, the result reflects an
average gas marketing and trading result, significantly lower
realized refining margins, stronger fuels margins and lower
taxation. The underlying effective tax rate (ETR)* in the quarter
was 33% which reflects the impact of the reassessment of the
recognition of deferred tax assets. |
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|
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Reported loss for the quarter was $0.1 billion,
compared with a profit of $2.3 billion for the first quarter 2024.
The reported result for the second quarter is adjusted for
inventory holding losses* of $0.1 billion (net of tax) and a
net adverse impact of adjusting items* of $2.8 billion (net of tax)
to derive the underlying RC profit. Adjusting items post-tax
include a net charge of $1.5 billion relating to asset impairments
and associated onerous contract provisions, including those
relating to the ongoing review of the Gelsenkirchen refinery and
adverse post-tax fair value accounting effects* of $0.9
billion. |
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Segment results |
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Gas & low carbon energy: The RC loss before
interest and tax for the second quarter 2024 was $0.3 billion,
compared with a profit of $1.0 billion for the previous
quarter. After adjusting RC loss before interest and tax for a net
adverse impact of adjusting items of $1.7 billion, the
underlying RC profit before interest and tax* for the second
quarter was $1.4 billion, compared with $1.7 billion in
the first quarter 2024. The second quarter underlying result
reflects an average gas marketing and trading result compared with
a strong result in the first quarter, partially offset by the
absence of foreign exchange losses from the devaluation of the
Egyptian pound and lower exploration write-offs. |
|
|
|
Oil production & operations: The RC profit
before interest and tax for the second quarter 2024 was
$3.3 billion, compared with $3.1 billion for the previous
quarter. After adjusting RC profit before interest and tax for a
net favourable impact of adjusting items of $0.2 billion, the
underlying RC profit before interest and tax for the second quarter
was $3.1 billion, compared with $3.1 billion in the first
quarter 2024. The second quarter underlying result reflects higher
realizations partially offset by higher exploration
write-offs. |
|
|
|
Customers & products: The RC loss before
interest and tax for the second quarter 2024 was $0.1 billion,
compared with a profit of $1.0 billion for the previous
quarter. After adjusting RC loss before interest and tax for a net
adverse impact of adjusting items of $1.3 billion, the
underlying RC profit before interest and tax for the second quarter
was $1.1 billion, compared with $1.3 billion in the first
quarter 2024. The customers second quarter underlying result was
higher by $0.4 billion, reflecting stronger fuels margins,
convenience performance and seasonal volumes, and continued quarter
on quarter momentum in Castrol. The products second quarter
underlying result was lower by $0.6 billion, reflecting
significantly lower realized refining margins mainly relating to
weaker middle distillate margins and narrower North American heavy
crude oil differentials, and a higher level of turnaround activity,
partially offset by the absence of the first quarter impacts of the
Whiting refinery outage. The oil trading contribution was weak
following a strong result in the first quarter. |
|
|
Operating cash flow* $8.1
billion and net debt* reduced to $22.6 billion |
|
|
|
Operating cash flow in the quarter of $8.1 billion
was strong. This includes a working capital* release of $0.5
billion (after adjusting for inventory holding losses, fair value
accounting effects and other adjusting items). This largely
reflects a partial unwind of previous quarters' working capital
build, partially offset by the settlement payment for the Gulf of
Mexico (see page 29). Net debt reduced to $22.6 billion, largely
driven by strong operating cash flow. |
|
|
Growing distributions within an
unchanged financial frame |
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|
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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 8 cents. |
|
|
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bp is committed to maintaining a strong investment
grade credit rating. Through the cycle, we are targeting to further
improve our credit metrics within an 'A' grade credit range. |
|
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bp continues to invest with discipline and a
returns focused approach in our transition growth* engines and in
our oil, gas and refining businesses. For 2024 and 2025 we expect
capital expenditure of around $16 billion per annum. |
|
|
|
The $1.75 billion share buyback programme
announced with the first quarter results was completed on 26 July
2024. Related to the second quarter results, bp intends to execute
a $1.75 billion share buyback prior to reporting the third quarter
results. Furthermore, bp is committed to announcing $3.5 billion
for the second half of 2024. At current market conditions and
subject to maintaining a strong investment grade credit rating, bp
plans share buybacks of at least $14 billion through 2025 as part
of our commitment, on a point forward basis, to returning at least
80% of surplus cash flow* to shareholders. |
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|
|
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 maintaining a strong
investment grade credit rating. |
|
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
39. |
Top of page 3
Financial results
In addition to the highlights on page 2:
- Profit or loss attributable to bp shareholders in the second
quarter and half year was a loss of $0.1 billion and a profit
of $2.1 billion respectively, compared with a profit of
$1.8 billion and $10.0 billion in the same periods of
2023.
- After adjusting loss or profit attributable to bp shareholders
for inventory holding losses or gains* and net impact of adjusting
items*, underlying replacement cost (RC) profit* for the second
quarter and half year was $2.8 billion and $5.5 billion
respectively, compared with $2.6 billion and $7.6 billion
for the same periods of 2023. The underlying RC profit for the
second quarter mainly reflects an average gas marketing and trading
result compared with an exceptional result in the second quarter
2023, lower industry refining margins, a significantly lower level
of turnaround activity in customers & products, increased
volume in oil production & operations, and lower taxation. For
the half year, the reduction mainly reflects a lower gas marketing
and trading result, lower industry refining margins and lower gas
realizations, partially offset by increased volume in oil
production & operations and lower taxation.
- Adjusting items in the second quarter and half year had a net
adverse pre-tax impact of $3.1 billion and $4.3 billion
respectively, compared with a net adverse pre-tax impact of
$0.6 billion and a net favourable pre-tax impact of
$3.3 billion in the same periods of 2023.
- Adjusting items for the second quarter and half year of 2024
include an adverse impact of pre-tax fair value accounting
effects*, relative to management's internal measure of performance,
of $1.0 billion and $1.2 billion respectively, compared with a
favourable pre-tax impact of $1.1 billion and
$5.3 billion in the same periods of 2023. This is primarily
due to an increase in the forward price of LNG over the quarter and
half year 2024, compared to a decline in the comparative periods of
2023.
- Adjusting items for the second quarter and half year of 2024
include an adverse pre-tax impact of asset impairments of $1.3
billion and $1.9 billion respectively, compared with an adverse
pre-tax impact of $1.2 billion and $1.2 billion in the same
periods of 2023. In second quarter and half year 2024 there was
also an adverse impact of $0.7 billion and $0.9 billion
respectively of onerous contract provisions associated with those
impairments.
- The effective tax rate (ETR) on RC profit or loss* for the
second quarter and half year was 87% and 63% respectively, compared
with 41% and 32% for the same periods in 2023. Excluding adjusting
items, the underlying ETR* for the second quarter and half year was
33% and 38%, compared with 43% and 41% for the same periods a year
ago. The lower underlying ETR for the second quarter and half year
reflects the impact of the reassessment of the recognition of
deferred tax assets. ETR on RC profit or loss and underlying ETR
are non-IFRS measures.
- Operating cash flow* for the second quarter and half year was
$8.1 billion and $13.1 billion respectively, compared
with $6.3 billion and $13.9 billion for the same periods
in 2023. The quarter-on-quarter variance has arisen as a result of
a higher working capital* release and timings of payments relating
to provisions, and the year-on-year variance is driven by the lower
underlying profit partly offset by lower tax payments.
- Capital expenditure* in the second quarter and half year was
$3.7 billion and $8.0 billion respectively, compared with
$4.3 billion and $7.9 billion in the same periods of
2023. Second quarter and half year 2023 include $1.1 billion in
respect of the TravelCenters of America acquisition.
- Total divestment and other proceeds for the second quarter and
half year were $0.8 billion and $1.2 billion
respectively, compared with $0.1 billion and $0.9 billion
for the same periods in 2023. Other proceeds for the second quarter
and half year 2024 were $0.5 billion of proceeds from the sale of a
49% interest in a controlled affiliate holding certain midstream
assets offshore US. There were no other proceeds for the same
periods in 2023.
- At the end of the second quarter, net debt* was $22.6 billion,
compared with $24.0 billion at the end of the first quarter
2024 and $23.7 billion at the end of the second quarter 2023
reflecting strong operating cash flow.
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 |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
RC profit (loss) before interest and
tax |
|
|
|
|
|
|
|
gas & low carbon energy |
|
(315) |
1,036 |
2,289 |
|
721 |
9,636 |
oil production & operations |
|
3,267 |
3,060 |
2,568 |
|
6,327 |
5,885 |
customers & products |
|
(133) |
988 |
555 |
|
855 |
3,235 |
other businesses & corporate |
|
(180) |
(300) |
(297) |
|
(480) |
(387) |
Consolidation adjustment – UPII* |
|
(73) |
32 |
(30) |
|
(41) |
(52) |
RC profit before interest and tax |
|
2,566 |
4,816 |
5,085 |
|
7,382 |
18,317 |
Finance costs and net finance expense relating to
pensions and other post-retirement benefits |
|
(1,176) |
(1,034) |
(859) |
|
(2,210) |
(1,644) |
Taxation on a RC basis |
|
(1,207) |
(2,030) |
(1,724) |
|
(3,237) |
(5,297) |
Non-controlling interests |
|
(199) |
(146) |
(161) |
|
(345) |
(365) |
RC profit (loss) attributable to bp
shareholders* |
|
(16) |
1,606 |
2,341 |
|
1,590 |
11,011 |
Inventory holding gains (losses)* |
|
(136) |
851 |
(732) |
|
715 |
(1,332) |
Taxation (charge) credit on inventory holding
gains and losses |
|
23 |
(194) |
183 |
|
(171) |
331 |
Profit (loss) for the period attributable to bp
shareholders |
|
(129) |
2,263 |
1,792 |
|
2,134 |
10,010 |
Analysis of underlying RC profit (loss) before interest and
tax
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Underlying RC profit (loss) before interest and
tax |
|
|
|
|
|
|
|
gas & low carbon energy |
|
1,402 |
1,658 |
2,233 |
|
3,060 |
5,689 |
oil production & operations |
|
3,094 |
3,125 |
2,777 |
|
6,219 |
6,096 |
customers & products |
|
1,149 |
1,289 |
796 |
|
2,438 |
3,555 |
other businesses & corporate |
|
(158) |
(154) |
(170) |
|
(312) |
(466) |
Consolidation adjustment – UPII |
|
(73) |
32 |
(30) |
|
(41) |
(52) |
Underlying RC profit before interest and tax |
|
5,414 |
5,950 |
5,606 |
|
11,364 |
14,822 |
Finance costs and net finance expense relating to
pensions and other post-retirement benefits |
|
(971) |
(942) |
(740) |
|
(1,913) |
(1,421) |
Taxation on an underlying RC basis |
|
(1,488) |
(2,139) |
(2,116) |
|
(3,627) |
(5,484) |
Non-controlling interests |
|
(199) |
(146) |
(161) |
|
(345) |
(365) |
Underlying RC profit attributable to bp
shareholders* |
|
2,756 |
2,723 |
2,589 |
|
5,479 |
7,552 |
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 6-14 for the segments.
Operating Metrics
Operating metrics |
|
First half 2024 |
|
vs First half 2023 |
Tier 1 and tier 2 process safety
events* |
|
23 |
|
+3 |
Reported recordable injury frequency* |
|
0.262 |
|
+2.7% |
upstream*
production(a) (mboe/d) |
|
2,379 |
|
+3.4% |
upstream unit production
costs*(b) ($/boe) |
|
6.17 |
|
+4.0% |
bp-operated upstream plant
reliability* |
|
95.5% |
|
+0.5 |
bp-operated refining
availability*(a) |
|
93.4% |
|
-2.5 |
- 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.
- Mainly reflecting portfolio mix.
Top of page 5
Outlook & Guidance
3Q 2024 guidance
- Looking ahead, bp expects third quarter 2024 reported upstream*
production to be lower compared with second-quarter 2024, including
in higher margin regions.
- In its customers business, bp expects fuels margins to remain
sensitive to movements in cost of supply, and seasonally higher
volumes compared to the second quarter.
- In products, bp expects realized refining margins to continue
to be sensitive to relative movements in product cracks and North
American heavy crude oil differentials. In addition bp expects a
similar level of turnaround activity to the second quarter.
- bp expects income taxes paid in the third quarter to be around
$1 billion higher than the second quarter 2024 mainly due to the
timing of instalment payments, which are typically higher in the
third quarter each year.
2024 guidance
In addition to the guidance on page 2:
- bp continues to expect both reported and underlying upstream
production* to be slightly higher compared with 2023. Within this,
bp continues to expect underlying production from oil production
& operations to be higher and production from gas & low
carbon energy to be lower.
- In its customers business, bp continues to expect growth from
convenience, including a full year contribution from TravelCenters
of America; a stronger contribution from Castrol underpinned
by volume growth in focus markets; and continued margin growth from
bp pulse driven by higher energy sold. In addition, bp continues to
expect fuels margins to remain sensitive to the cost of
supply.
- In products, bp continues to expect a lower level of industry
refining margins relative to 2023, with realized margins impacted
by narrower North American heavy crude oil differentials. bp now
expects refinery turnaround activity to have a lower financial
impact compared to 2023 reflecting the lower margin environment,
with phasing of activity in 2024 heavily weighted towards the
second half, with a higher impact in the fourth quarter.
- bp continues to expect the other businesses & corporate
underlying annual charge to be around $1.0 billion for 2024. The
charge may vary from quarter to quarter.
- bp continues to expect the depreciation, depletion and
amortization to be slightly higher than 2023.
- bp continues to expect the underlying ETR* for 2024 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.
- bp continues to expect capital expenditure* for 2024 to be
around $16 billion, and continues to expect the phasing to be split
broadly evenly between the first half and the second half.
- bp continues to expect divestment and other proceeds of $2-3
billion in 2024, weighted towards the second half. Having realized
$18.9 billion of divestment and other proceeds since the second
quarter of 2020, bp 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 settlement payments for
the year to be around $1.2 billion pre-tax including $1.1 billion
pre-tax paid during the second quarter.
bp expects to update on our medium-term plans at the same time
as our full year results in February 2025.
The commentary above contains forward-looking statements and
should be read in conjunction with the cautionary statement on page
39. |
Top of page 6
gas & low carbon energy*
Financial results
- The replacement cost (RC) result before interest and tax for
the second quarter and half year was a loss of $315 million and a
profit of $721 million respectively, compared with a profit of
$2,289 million and $9,636 million for the same periods in 2023. The
second quarter and half year are adjusted by an adverse impact of
net adjusting items* of $1,717 million and $2,339 million
respectively, compared with a favourable impact of net adjusting
items of $56 million and $3,947 million for the same periods in
2023. Adjusting items include impacts of fair value accounting
effects*, relative to management's internal measure of performance,
which are an adverse impact of $1,011 million and $898 million for
the second quarter and half year in 2024 and a favourable impact of
$1,222 million and $5,156 million for the same periods in 2023.
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.
- After adjusting RC loss or profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax*
for the second quarter and half year was $1,402 million and $3,060
million respectively, compared with $2,233 million and $5,689
million for the same periods in 2023.
- The underlying RC profit for the second quarter compared with
the same period in 2023, reflects an average gas marketing and
trading result compared with an exceptional result in the second
quarter 2023, partly offset by a lower depreciation, depletion and
amortization charge. The underlying RC profit for the half year,
compared with the same period in 2023, reflects a lower gas
marketing and trading result and lower realizations, partly offset
by a lower depreciation, depletion and amortization charge.
Operational update
- Reported production for the quarter was 899mboe/d, 0.5% lower
than the same period in 2023. Underlying production* was 0.4%
higher, mainly due to ramp-up of major projects*, partially offset
by base decline.
- Reported production for the half year was 907mboe/d, 3.2% lower
than the same period in 2023. Underlying production was 1.6% lower,
mainly due to base decline partially offset by major projects.
Reported production includes the effect of the disposal of the
Algeria business in 2023.
- Renewables pipeline* at the end of the quarter was 59.0GW (bp
net), including 21.1GW bp net share of Lightsource bp's (LSbp's)
pipeline. The renewables pipeline increased by 0.7GW net during the
half year. In addition, there is over 10GW (bp net) of early stage
opportunities in LSbp's hopper.
Strategic progress
gas
- On 4 June bp announced that the floating production storage and
offloading (FPSO) vessel, a key component of the Greater Tortue
Ahmeyim (GTA) Phase 1 LNG development, has arrived at its final
location offshore on the maritime border of Mauritania and Senegal,
following the arrival of the FLNG vessel in the first quarter.
- On 4 June bp signed a new five-year gas agreement with Turkish
state-owned pipeline company BOTAS. This is the fourth contract
between Shah Deniz and BOTAS stretching back to the start of
production from the Caspian Sea field in 2006.
- On 21 June bp approved the final investment decision for the
Coconut project offshore Trinidad and Tobago.
- On 24 July bp and its partner the National Gas Company of
Trinidad and Tobago Limited were awarded an exploration and
production licence by the Bolivarian Republic of Venezuela for the
development of the Cocuina gas discovery. Cocuina is the Venezuelan
portion of the cross-border Manakin-Cocuina gas field.
- These events build on the progress announced in our
first-quarter results, which comprised the following:
ADNOC and bp announced that they have agreed to form a new joint
venture (JV) in Egypt (bp 51%, ADNOC 49%). Subject to regulatory
approvals and clearances, the formation of the JV is expected to
complete during the second half of 2024; and bp and the Korea Gas
Corporation signed an agreement for bp to supply up to 9.8 million
tonnes of LNG over an 11 year period starting in 2026 from bp's
global LNG portfolio.
low carbon energy
- On 13 June bp signed an agreement with OQ and Dredging,
Environmental and Marine Engineering NV (DEME) to acquire a 49%
stake and operatorship in the Hyport green hydrogen* project in
Duqm, Oman, subject to regulatory approvals, which could produce
around 57,000 tonnes per annum of green hydrogen.
- On 15 July bp announced its 100MW industrial-scale green
hydrogen project has been awarded funding as part of the European
IPCEI (Important Projects of Common European interest) Hy2Infra
wave. The project, located next to bp’s Lingen refinery in Germany,
is expected to be bp’s first fully owned and operated large-scale
green hydrogen plant.
- These events build on the progress announced in our
first-quarter results, which comprised the following:
bp announced it has received all the necessary regulatory
approvals and it is now 100% owner of the Beacon US offshore wind
projects and Equinor the Empire projects; and our UK joint ventures
Net Zero Teesside Power (bp 75%, Equinor 25%) and the Northern
Endurance Partnership (bp 45%, Equinor 45%, Total Energies 10%)
announced the selection of contractors for engineering,
procurement, and construction contracts with a combined value of
around $5 billion. The final award of contracts is subject to the
receipt of relevant regulatory clearances and positive FID by the
projects and the UK government.
Top of page 7
gas & low carbon energy (continued)
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit (loss) before interest and tax |
|
(315) |
1,036 |
2,289 |
|
721 |
9,637 |
Inventory holding (gains) losses* |
|
— |
— |
— |
|
— |
(1) |
RC profit (loss) before interest and tax |
|
(315) |
1,036 |
2,289 |
|
721 |
9,636 |
Net (favourable) adverse impact of adjusting
items |
|
1,717 |
622 |
(56) |
|
2,339 |
(3,947) |
Underlying RC profit before interest and
tax |
|
1,402 |
1,658 |
2,233 |
|
3,060 |
5,689 |
Taxation on an underlying RC basis |
|
(369) |
(518) |
(575) |
|
(887) |
(1,536) |
Underlying RC profit before interest |
|
1,033 |
1,140 |
1,658 |
|
2,173 |
4,153 |
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Depreciation, depletion and
amortization |
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization |
|
1,209 |
1,293 |
1,407 |
|
2,502 |
2,847 |
|
|
|
|
|
|
|
|
Exploration write-offs |
|
|
|
|
|
|
|
Exploration write-offs |
|
28 |
203 |
(1) |
|
231 |
(2) |
|
|
|
|
|
|
|
|
Adjusted EBITDA* |
|
|
|
|
|
|
|
Total adjusted EBITDA |
|
2,639 |
3,154 |
3,639 |
|
5,793 |
8,534 |
|
|
|
|
|
|
|
|
Capital expenditure* |
|
|
|
|
|
|
|
gas |
|
869 |
639 |
697 |
|
1,508 |
1,344 |
low carbon energy |
|
136 |
659 |
190 |
|
795 |
556 |
Total capital expenditure |
|
1,005 |
1,298 |
887 |
|
2,303 |
1,900 |
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Production (net of
royalties)(a) |
|
|
|
|
|
|
|
Liquids* (mb/d) |
|
98 |
102 |
103 |
|
100 |
108 |
Natural gas (mmcf/d) |
|
4,648 |
4,708 |
4,641 |
|
4,678 |
4,801 |
Total hydrocarbons* (mboe/d) |
|
899 |
914 |
903 |
|
907 |
936 |
|
|
|
|
|
|
|
|
Average realizations*(b) |
|
|
|
|
|
|
|
Liquids ($/bbl) |
|
79.92 |
76.92 |
73.57 |
|
78.38 |
76.42 |
Natural gas ($/mcf) |
|
5.47 |
5.45 |
5.53 |
|
5.46 |
6.49 |
Total hydrocarbons ($/boe) |
|
36.85 |
36.64 |
36.96 |
|
36.75 |
42.01 |
- Includes bp’s share of production of equity-accounted entities
in the gas & low carbon energy segment.
- Realizations are based on sales by consolidated subsidiaries
only – this excludes equity-accounted entities.
Top of page 8
gas & low carbon energy (continued)
|
|
30 June |
31 March |
30 June |
low carbon
energy(c) |
|
2024 |
2024 |
2023 |
|
|
|
|
|
Renewables (bp net, GW) |
|
|
|
|
Installed renewables capacity* |
|
2.7 |
2.7 |
2.4 |
|
|
|
|
|
Developed renewables to FID* |
|
6.5 |
6.2 |
6.1 |
Renewables pipeline |
|
59.0 |
58.5 |
39.6 |
of which by geographical area: |
|
|
|
|
Renewables pipeline – Americas |
|
18.4 |
18.1 |
17.8 |
Renewables pipeline – Asia Pacific |
|
21.5 |
21.3 |
12.2 |
Renewables pipeline – Europe |
|
15.5 |
15.7 |
9.5 |
Renewables pipeline – Other |
|
3.5 |
3.5 |
0.1 |
of which by technology: |
|
|
|
|
Renewables pipeline – offshore wind |
|
9.6 |
9.6 |
5.3 |
Renewables pipeline – onshore wind |
|
12.7 |
12.7 |
6.3 |
Renewables pipeline – solar |
|
36.7 |
36.2 |
28.1 |
Total Developed renewables to FID and
Renewables pipeline |
|
65.5 |
64.7 |
45.7 |
- Because of rounding, some totals may not agree exactly with the
sum of their component parts.
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 $3,267 million and $6,327
million respectively, compared with $2,568 million and $5,885
million for the same periods in 2023. The second quarter and half
year are adjusted by a favourable impact of net adjusting items* of
$173 million and $108 million respectively, compared with an
adverse impact of net adjusting items of $209 million and $211
million for the same periods in 2023.
- 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 $3,094 million and $6,219 million
respectively, compared with $2,777 million and $6,096 million for
the same periods in 2023.
- The underlying RC profit for the second quarter and half year,
compared with the same periods in 2023, primarily reflect increased
volume, higher liquids realizations and lower exploration
write-offs partly offset by increased depreciation charges and
higher costs.
Operational update
- Reported production for the quarter was 1,481mboe/d, 8.2%
higher than the second quarter of 2023. Underlying production* for
the quarter was 8.3% higher compared with the second quarter of
2023 reflecting bpx energy performance and major projects* partly
offset by base performance.
- Reported production for the half year was 1,472mboe/d, 7.9%
higher than the half year of 2023. Underlying production for the
quarter was 7.9% higher compared with the half year of 2023
reflecting bpx energy performance and major projects* partly offset
by base performance.
Strategic Progress
- In the Gulf of Mexico bp acquired a 30% interest in the Hess
operated Vancouver prospect.
- bp has been awarded a 10% interest in the ADNOC-operated LNG
facility in Abu Dhabi, ADNOC and its partners approved the final
investment decision in June. Subject to obtaining necessary
regulatory approvals, the project is expected to have an LNG
production capacity of 9.6mmt per annum.
- bp made the final investment decision on the Kaskida project in
the deepwater Gulf of Mexico. Kaskida will be bp's sixth hub in the
Gulf of Mexico and is expected to have a production capacity of
80,000 barrels of crude oil per day (bp 100%).
- These events build on the progress announced in our
first-quarter results:
The start-up of oil production from the new Azeri Central East
(ACE) platform in the Azerbaijan sector of the Caspian Sea; bpx
energy brought online 'Checkmate', its third central processing
facility in the Permian Basin; Final investment decision on the
Atlantis Drill Center Expansion which will be a two well tie back
to the Atlantis facility in the Gulf of Mexico; the award of a
licence for two blocks in the central North Sea, consolidating our
position around our Eastern Trough Area Project (ETAP) central
processing facility; Aker BP was awarded interest in 27 licences
(of which it will operate 17) in the North Sea and Norwegian Sea;
and Azule Energy announced it had agreed to acquire a 42.5%
interest in exploration block 2914A (PEL85), Orange Basin.
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit before interest and tax |
|
3,268 |
3,059 |
2,568 |
|
6,327 |
5,886 |
Inventory holding (gains) losses* |
|
(1) |
1 |
— |
|
— |
(1) |
RC profit before interest and tax |
|
3,267 |
3,060 |
2,568 |
|
6,327 |
5,885 |
Net (favourable) adverse impact of adjusting
items |
|
(173) |
65 |
209 |
|
(108) |
211 |
Underlying RC profit before interest and
tax |
|
3,094 |
3,125 |
2,777 |
|
6,219 |
6,096 |
Taxation on an underlying RC basis |
|
(1,171) |
(1,509) |
(1,413) |
|
(2,680) |
(3,179) |
Underlying RC profit before interest |
|
1,923 |
1,616 |
1,364 |
|
3,539 |
2,917 |
Top of page 10
oil production & operations (continued)
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Depreciation, depletion and
amortization |
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization |
|
1,698 |
1,657 |
1,370 |
|
3,355 |
2,697 |
|
|
|
|
|
|
|
|
Exploration write-offs |
|
|
|
|
|
|
|
Exploration write-offs |
|
99 |
3 |
242 |
|
102 |
293 |
|
|
|
|
|
|
|
|
Adjusted EBITDA* |
|
|
|
|
|
|
|
Total adjusted EBITDA |
|
4,891 |
4,785 |
4,389 |
|
9,676 |
9,086 |
|
|
|
|
|
|
|
|
Capital expenditure* |
|
|
|
|
|
|
|
Total capital expenditure |
|
1,534 |
1,776 |
1,478 |
|
3,310 |
2,998 |
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Production (net of
royalties)(a) |
|
|
|
|
|
|
|
Liquids* (mb/d) |
|
1,085 |
1,056 |
1,000 |
|
1,071 |
1,003 |
Natural gas (mmcf/d) |
|
2,292 |
2,364 |
2,140 |
|
2,328 |
2,100 |
Total hydrocarbons* (mboe/d) |
|
1,481 |
1,463 |
1,369 |
|
1,472 |
1,365 |
|
|
|
|
|
|
|
|
Average realizations*(b) |
|
|
|
|
|
|
|
Liquids ($/bbl) |
|
73.01 |
70.53 |
69.19 |
|
71.79 |
70.40 |
Natural gas ($/mcf) |
|
2.02 |
2.66 |
3.23 |
|
2.35 |
4.90 |
Total hydrocarbons ($/boe) |
|
55.78 |
54.11 |
54.57 |
|
54.94 |
58.40 |
- Includes bp’s share of production of equity-accounted entities
in the oil production & operations segment.
- Realizations are based on sales by consolidated subsidiaries
only – this excludes equity-accounted entities.
Top of page 11
customers & products
Financial results
- The replacement cost (RC) result before interest and tax for
the second quarter and half year was a loss of $133 million and a
profit of $855 million respectively, compared with a profit of $555
million and $3,235 million for the same periods in 2023. The second
quarter and half year are adjusted by an adverse impact of net
adjusting items* of $1,282 million and $1,583 million respectively,
mainly related to an impairment of the Gelsenkirchen refinery and
associated onerous contract provisions, compared with an adverse
impact of net adjusting items of $241 million and $320 million for
the same periods in 2023.
- After adjusting RC loss or profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax*
for the second quarter and half year was $1,149 million and $2,438
million respectively, compared with $796 million and $3,555 million
for the same periods in 2023.
- The customers & products result for the second quarter was
higher than the same period in 2023. The result for the half year
was significantly lower than the same period in 2023, primarily
reflecting a lower refining result.
- customers – the customers result for the
second quarter and first half was stronger compared to the same
periods in 2023. The result benefited from higher retail fuels
margins, a stronger Castrol result
driven by higher volumes and margins, continued growth in
convenience, and favourable foreign exchange movements. This was
partly offset by a weaker European midstream performance driven by
biofuels margins. The contribution of TravelCenters of America
continues to be impacted by the US freight recession.
- products – the products result for the second
quarter was higher compared with the same period last year. In
refining, the result for the second quarter was impacted by lower
industry refining margins and benefited from a significantly lower
level of turnaround activity. The oil trading contribution for the
second quarter was weak. The products result for the first half was
significantly lower compared with the same period in 2023,
primarily reflecting a lower refining result. In refining, in
addition to the second quarter factors noted above, the first
quarter result was impacted by lower industry refining margins and
the plant-wide power outage at the Whiting refinery.
Operational update
- bp-operated refining availability* for the second quarter and
half year was 96.4% and 93.4%, compared with 95.7% and 95.9% for
the same periods in 2023, with the half year lower mainly due to
the first quarter Whiting refinery power outage.
Strategic progress
- On 22 May bp entered into a binding agreement to acquire fuel
and convenience retailer, X Convenience, expanding its network with
the addition of over 50 sites in South and Western Australia.
Subject to customary regulatory approvals, the transaction is
currently anticipated to close in the first half of 2025.
- On 24 May, bp Southern Africa (Pty) Ltd (bpSA) and Shell
Downstream South Africa (Pty) Ltd (SDSA) agreed the sale of their
respective 50% ownership assets to the South African state-owned
entity, Central Energy Fund SOC Ltd (CEF). The sale is subject to
regulatory approvals and currently anticipated to close by the end
of fourth quarter 2024.
- On 19 June 2024 bp completed the sale of its 8.3% shareholding
in Channel Infrastructure, which owns and operates New Zealand’s
Marsden Point fuel import terminal. Our long-term terminal storage
agreements with Channel Infrastructure to meet bp’s foreseeable
import and supply requirements are unaffected by the sale of these
shares.
- On 20 June bp agreed to acquire Bunge’s 50% holding interest in
its bp Bunge Bioenergia joint venture, one of Brazil’s leading
biofuels-producing companies, with capacity to produce around
50,000 barrels a day of ethanol equivalent from sugarcane. Subject
to regulatory approvals, the transaction is currently anticipated
to close by end 2024.
- In June bp also announced it was scaling back plans for
development of new SAF and renewable diesel biofuels projects at
its existing sites, pausing planning for two potential projects
while continuing to assess three for progression.
- In June Castrol announced an investment of up to $50
million in Gogoro Inc., a global technology leader in two-wheeler
battery-swapping ecosystems that enable smart mobility solutions
for cities, as part of diversification opportunities beyond its
core lubricants and fluids business under its new ‘Onward, Upward,
Forward’ strategy.
- EV charge points* installed and energy sold in the first half
grew by around 30% and around two-fold respectively, compared to
the same period last year, with charge points now at around 35,700.
In July, bp pulse signed a deal with Simon Property Group to
install and operate up to 900 ultra-fast(a) charging
bays at up to 75 sites across the US, with initial sites expected
to open to the public in early 2026. In addition, ADAC, the leading
automobile association in Germany with over 20 million members,
announced bp pulse as their new exclusive EV charging partner from
1 August.
- During the second quarter bp’s Archaea Energy started up three
renewable natural gas (RNG) landfill plants with total capacity of
more than 2 million mmBtu per annum, and also will be commissioning
four additional plants targeting start-up in the third
quarter.
- These events build on the progress announced in our first
quarter results, including:
- bp announced plans to transform the Gelsenkirchen refinery site
by the end of the decade.
- bp’s Archaea Energy brought online its largest Archaea Modular
Design (AMD) RNG plant in Kansas City, Missouri and completed the
purchase of Sunshine Gas Producers with its facility in
California.
- "ultra-fast" includes charger capacity of ≥150kW.
Top of page 12
customers & products (continued)
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit (loss) before interest and tax |
|
(270) |
1,840 |
(177) |
|
1,570 |
1,901 |
Inventory holding (gains) losses* |
|
137 |
(852) |
732 |
|
(715) |
1,334 |
RC profit (loss) before interest and tax |
|
(133) |
988 |
555 |
|
855 |
3,235 |
Net (favourable) adverse impact of adjusting
items |
|
1,282 |
301 |
241 |
|
1,583 |
320 |
Underlying RC profit before interest and
tax |
|
1,149 |
1,289 |
796 |
|
2,438 |
3,555 |
Of which:(a) |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
790 |
370 |
701 |
|
1,160 |
1,092 |
Castrol – included in customers |
|
211 |
184 |
171 |
|
395 |
332 |
products – refining & trading |
|
359 |
919 |
95 |
|
1,278 |
2,463 |
Taxation on an underlying RC basis |
|
(125) |
(333) |
(271) |
|
(458) |
(1,048) |
Underlying RC profit before interest |
|
1,024 |
956 |
525 |
|
1,980 |
2,507 |
- A reconciliation to RC profit before interest and tax by
business is provided on page 30.
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Adjusted
EBITDA*(b) |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
1,281 |
854 |
1,149 |
|
2,135 |
1,881 |
Castrol – included in customers |
|
253 |
226 |
213 |
|
479 |
413 |
products – refining & trading |
|
807 |
1,379 |
541 |
|
2,186 |
3,365 |
|
|
2,088 |
2,233 |
1,690 |
|
4,321 |
5,246 |
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization |
|
|
|
|
|
|
|
Total depreciation, depletion and
amortization |
|
939 |
944 |
894 |
|
1,883 |
1,691 |
|
|
|
|
|
|
|
|
Capital expenditure* |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
497 |
566 |
1,452 |
|
1,063 |
1,910 |
Castrol – included in customers |
|
74 |
43 |
44 |
|
117 |
112 |
products – refining & trading |
|
548 |
554 |
406 |
|
1,102 |
938 |
Total capital expenditure |
|
1,045 |
1,120 |
1,858 |
|
2,165 |
2,848 |
- A reconciliation to RC profit before interest and tax by
business is provided on page 30.
Top of page 13
customers & products (continued)
Retail(c) |
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
bp retail sites* – total (#) |
|
21,200 |
21,150 |
21,100 |
|
21,200 |
21,100 |
Strategic convenience sites* |
|
2,950 |
2,900 |
2,750 |
|
2,950 |
2,750 |
- Reported to the nearest 50.
Marketing sales of refined products
(mb/d) |
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
US |
|
1,271 |
1,080 |
1,275 |
|
1,177 |
1,177 |
Europe |
|
1,077 |
940 |
1,056 |
|
1,008 |
1,015 |
Rest of World |
|
462 |
469 |
472 |
|
465 |
467 |
|
|
2,810 |
2,489 |
2,803 |
|
2,650 |
2,659 |
Trading/supply sales of refined products |
|
387 |
352 |
353 |
|
370 |
343 |
Total sales volume of refined products |
|
3,197 |
2,841 |
3,156 |
|
3,020 |
3,002 |
Refining marker margin* |
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
bp average refining marker margin (RMM)
($/bbl) |
|
20.6 |
20.6 |
24.7 |
|
20.6 |
26.4 |
Refinery throughputs (mb/d) |
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
US |
|
670 |
525 |
638 |
|
598 |
662 |
Europe |
|
722 |
830 |
726 |
|
775 |
779 |
Total refinery throughputs |
|
1,392 |
1,355 |
1,364 |
|
1,373 |
1,441 |
bp-operated refining availability*
(%) |
|
96.4 |
90.4 |
95.7 |
|
93.4 |
95.9 |
Top of page 14
other businesses & corporate
Other businesses & corporate comprises technology, bp
ventures, launchpad, regions, corporates & solutions, our
corporate activities & functions and any residual costs of the
Gulf of Mexico oil spill.
Financial results
- The replacement cost (RC) loss before interest and tax for the
second quarter and half year was $180 million and $480 million
respectively, compared with a loss of $297 million and $387 million
for the same periods in 2023. The second quarter and half year are
adjusted by an adverse impact of net adjusting items* of $22
million and $168 million respectively, compared with an adverse
impact of net adjusting items of $127 million and a favourable
impact of $79 million for the same periods in 2023. Adjusting items
include impacts of fair value accounting effects* which are an
adverse impact of $29 million for the quarter and $222 million for
the half year in 2024, and an adverse impact of $48 million and a
favourable impact of $197 million for the same periods in
2023.
- After adjusting RC loss before interest and tax for adjusting
items, the underlying RC loss before interest and tax* for the
second quarter and half year was $158 million and $312 million
respectively, compared with a loss of $170 million and $466 million
for the same periods in 2023.
Strategic progress
- In May bp ventures announced the investment of $10 million in
Hysata to expand the production of its high efficiency electrolyser
technology.
- This event builds on the progress announced in our
first-quarter results in which bp launchpad divested all of its
100% shareholding in Insight Analytics Solutions Holdings Limited
(“Onyx”) to Macquarie Capital.
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit (loss) before interest and tax |
|
(180) |
(300) |
(297) |
|
(480) |
(387) |
Inventory holding (gains) losses* |
|
— |
— |
— |
|
— |
— |
RC profit (loss) before interest and tax |
|
(180) |
(300) |
(297) |
|
(480) |
(387) |
Net (favourable) adverse impact of adjusting
items(a) |
|
22 |
146 |
127 |
|
168 |
(79) |
Underlying RC profit (loss) before interest and
tax |
|
(158) |
(154) |
(170) |
|
(312) |
(466) |
Taxation on an underlying RC basis |
|
3 |
99 |
10 |
|
102 |
39 |
Underlying RC profit (loss) before
interest |
|
(155) |
(55) |
(160) |
|
(210) |
(427) |
- Includes fair value accounting effects relating to hybrid
bonds. See page 34 for more information.
Top of page 15
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 17-26; (ii) pages 1-14, and 27-39 comprise the
interim management report; and (iii) the directors’ responsibility
statement and auditors’ independent review report can be found on
pages 15-16.
Statement of directors’ responsibilities
The directors confirm that, to the best of their knowledge, the
condensed set of financial statements on pages 17-26 has been
prepared in accordance with United Kingdom adopted IAS 34 ‘Interim
Financial Reporting’, and that the interim management report on
pages 1-14, and 27-39 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 83-85 of bp
Annual Report and Form 20-F 2023, with the following
exceptions: Paula Rosput Reynolds and Sir John Sawers retired at
the 2024 Annual General Meeting on 25 April 2024.
By order of the board
Murray Auchincloss |
Kate Thomson |
Chief Executive Officer |
Chief Financial Officer |
29 July 2024 |
29 July 2024 |
Top of page 16
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 2024 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 10.
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 2024 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), and in accordance with the provisions of the
UK Companies Act 2006 as applicable to companies reporting under
international accounting standards. 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
29 July 2024
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 17
Financial statements
Group income statement
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
Sales and other operating revenues (Note
5) |
|
47,299 |
48,880 |
48,538 |
|
96,179 |
104,720 |
Earnings from joint ventures – after
interest and tax |
|
250 |
178 |
360 |
|
428 |
555 |
Earnings from associates – after
interest and tax |
|
266 |
298 |
231 |
|
564 |
404 |
Interest and other income |
|
414 |
381 |
378 |
|
795 |
626 |
Gains on sale of businesses and fixed
assets |
|
21 |
224 |
(28) |
|
245 |
125 |
Total revenues and other income |
|
48,250 |
49,961 |
49,479 |
|
98,211 |
106,430 |
Purchases |
|
28,891 |
27,647 |
29,172 |
|
56,538 |
58,294 |
Production and manufacturing expenses |
|
6,692 |
6,847 |
6,231 |
|
13,539 |
13,213 |
Production and similar taxes |
|
484 |
444 |
404 |
|
928 |
878 |
Depreciation, depletion and amortization (Note
6) |
|
4,098 |
4,150 |
3,923 |
|
8,248 |
7,723 |
Net impairment and losses on sale of businesses
and fixed assets (Note 3) |
|
1,309 |
737 |
1,269 |
|
2,046 |
1,357 |
Exploration expense |
|
179 |
247 |
293 |
|
426 |
399 |
Distribution and administration expenses |
|
4,167 |
4,222 |
3,834 |
|
8,389 |
7,581 |
Profit (loss) before interest and taxation |
|
2,430 |
5,667 |
4,353 |
|
8,097 |
16,985 |
Finance costs |
|
1,216 |
1,075 |
920 |
|
2,291 |
1,763 |
Net finance (income) expense relating to
pensions and other post-retirement benefits |
|
(40) |
(41) |
(61) |
|
(81) |
(119) |
Profit (loss) before taxation |
|
1,254 |
4,633 |
3,494 |
|
5,887 |
15,341 |
Taxation |
|
1,184 |
2,224 |
1,541 |
|
3,408 |
4,966 |
Profit (loss) for the period |
|
70 |
2,409 |
1,953 |
|
2,479 |
10,375 |
Attributable to |
|
|
|
|
|
|
|
bp shareholders |
|
(129) |
2,263 |
1,792 |
|
2,134 |
10,010 |
Non-controlling interests |
|
199 |
146 |
161 |
|
345 |
365 |
|
|
70 |
2,409 |
1,953 |
|
2,479 |
10,375 |
|
|
|
|
|
|
|
|
Earnings per share (Note 7) |
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders |
|
|
|
|
|
|
|
Per ordinary share (cents) |
|
|
|
|
|
|
|
Basic |
|
(0.78) |
13.57 |
10.22 |
|
12.85 |
56.53 |
Diluted |
|
(0.78) |
13.25 |
10.01 |
|
12.54 |
55.40 |
Per ADS (dollars) |
|
|
|
|
|
|
|
Basic |
|
(0.05) |
0.81 |
0.61 |
|
0.77 |
3.39 |
Diluted |
|
(0.05) |
0.80 |
0.60 |
|
0.75 |
3.32 |
Top of page 18
Condensed group statement of comprehensive income
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
Profit (loss) for the period |
|
70 |
2,409 |
1,953 |
|
2,479 |
10,375 |
Other comprehensive income |
|
|
|
|
|
|
|
Items that may be reclassified subsequently to
profit or loss |
|
|
|
|
|
|
|
Currency translation differences |
|
(142) |
(448) |
11 |
|
(590) |
464 |
Cash flow hedges and costs of hedging |
|
(100) |
(115) |
(56) |
|
(215) |
490 |
Share of items relating to equity-accounted
entities, net of tax |
|
10 |
(8) |
(27) |
|
2 |
(230) |
Income tax relating to items that may be
reclassified |
|
40 |
(4) |
71 |
|
36 |
(5) |
|
|
(192) |
(575) |
(1) |
|
(767) |
719 |
Items that will not be reclassified to profit
or loss |
|
|
|
|
|
|
|
Remeasurements of the net pension and other
post-retirement benefit liability or asset |
|
(240) |
(66) |
(855) |
|
(306) |
(942) |
Remeasurements of equity investments |
|
(17) |
(13) |
— |
|
(30) |
— |
Cash flow hedges that will subsequently be
transferred to the balance sheet |
|
— |
(3) |
— |
|
(3) |
— |
Income tax relating to items that will not be
reclassified(a) |
|
59 |
674 |
308 |
|
733 |
331 |
|
|
(198) |
592 |
(547) |
|
394 |
(611) |
Other comprehensive income |
|
(390) |
17 |
(548) |
|
(373) |
108 |
Total comprehensive income |
|
(320) |
2,426 |
1,405 |
|
2,106 |
10,483 |
Attributable to |
|
|
|
|
|
|
|
bp shareholders |
|
(520) |
2,303 |
1,240 |
|
1,783 |
10,101 |
Non-controlling interests |
|
200 |
123 |
165 |
|
323 |
382 |
|
|
(320) |
2,426 |
1,405 |
|
2,106 |
10,483 |
- First quarter and first half 2024 include a $658-million credit
in respect of the reduction in the deferred tax liability on
defined benefit pension plan surpluses following the reduction in
the rate of the authorized surplus payments tax charge in the UK
from 35% to 25%.
Top of page 19
Condensed group statement of changes in equity
|
|
bp shareholders’ |
Non-controlling
interests |
Total |
$ million |
|
equity |
Hybrid bonds |
Other interest |
equity |
At 1 January 2024 |
|
70,283 |
13,566 |
1,644 |
85,493 |
|
|
|
|
|
|
Total comprehensive income |
|
1,783 |
310 |
13 |
2,106 |
Dividends |
|
(2,431) |
— |
(186) |
(2,617) |
Cash flow hedges transferred to the balance
sheet, net of tax |
|
(4) |
— |
— |
(4) |
Repurchase of ordinary share capital |
|
(3,502) |
— |
— |
(3,502) |
Share-based payments, net of tax |
|
654 |
— |
— |
654 |
Issue of perpetual hybrid bonds(a) |
|
(4) |
1,300 |
— |
1,296 |
Redemption of perpetual hybrid bonds, net of
tax(a) |
|
9 |
(1,300) |
— |
(1,291) |
Payments on perpetual hybrid bonds |
|
— |
(419) |
— |
(419) |
Transactions involving non-controlling
interests, net of tax |
|
236 |
— |
247 |
483 |
At 30 June 2024 |
|
67,024 |
13,457 |
1,718 |
82,199 |
|
|
|
|
|
|
|
|
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 |
- During the first quarter 2024 BP Capital Markets PLC issued
$1.3 billion of US dollar perpetual subordinated hybrid bonds with
a coupon fixed for an initial period up to 2034 of 6.45% and
voluntarily bought back $1.3 billion of the non-call 2025 4.375% US
dollar hybrid bond issued in 2020. Taken together these
transactions had no significant impact on net debt or gearing.
Top of page 20
Group balance sheet
|
|
30 June |
31 December |
$ million |
|
2024 |
2023 |
Non-current assets |
|
|
|
Property, plant and equipment |
|
100,293 |
104,719 |
Goodwill |
|
12,390 |
12,472 |
Intangible assets |
|
10,301 |
9,991 |
Investments in joint ventures |
|
12,346 |
12,435 |
Investments in associates |
|
7,852 |
7,814 |
Other investments |
|
1,943 |
2,189 |
Fixed assets |
|
145,125 |
149,620 |
Loans |
|
2,162 |
1,942 |
Trade and other receivables |
|
1,971 |
1,767 |
Derivative financial instruments |
|
10,262 |
9,980 |
Prepayments |
|
661 |
623 |
Deferred tax assets |
|
5,060 |
4,268 |
Defined benefit pension plan surpluses |
|
7,520 |
7,948 |
|
|
172,761 |
176,148 |
Current assets |
|
|
|
Loans |
|
212 |
240 |
Inventories |
|
23,345 |
22,819 |
Trade and other receivables |
|
28,890 |
31,123 |
Derivative financial instruments |
|
7,940 |
12,583 |
Prepayments |
|
2,147 |
2,520 |
Current tax receivable |
|
978 |
837 |
Other investments |
|
708 |
843 |
Cash and cash equivalents |
|
34,891 |
33,030 |
|
|
99,111 |
103,995 |
Assets classified as held for sale (Note
2) |
|
1,512 |
151 |
|
|
100,623 |
104,146 |
Total assets |
|
273,384 |
280,294 |
Current liabilities |
|
|
|
Trade and other payables |
|
57,660 |
61,155 |
Derivative financial instruments |
|
4,339 |
5,250 |
Accruals |
|
5,703 |
6,527 |
Lease liabilities |
|
2,593 |
2,650 |
Finance debt |
|
4,142 |
3,284 |
Current tax payable |
|
2,894 |
2,732 |
Provisions |
|
4,016 |
4,418 |
|
|
81,347 |
86,016 |
Liabilities directly associated with assets
classified as held for sale (Note 2) |
|
31 |
62 |
|
|
81,378 |
86,078 |
Non-current liabilities |
|
|
|
Other payables |
|
8,913 |
10,076 |
Derivative financial instruments |
|
12,032 |
10,402 |
Accruals |
|
1,096 |
1,310 |
Lease liabilities |
|
8,104 |
8,471 |
Finance debt |
|
50,844 |
48,670 |
Deferred tax liabilities |
|
9,125 |
9,617 |
Provisions |
|
14,571 |
14,721 |
Defined benefit pension plan and other
post-retirement benefit plan deficits |
|
5,122 |
5,456 |
|
|
109,807 |
108,723 |
Total liabilities |
|
191,185 |
194,801 |
Net assets |
|
82,199 |
85,493 |
Equity |
|
|
|
bp shareholders’ equity |
|
67,024 |
70,283 |
Non-controlling interests |
|
15,175 |
15,210 |
Total equity |
|
82,199 |
85,493 |
Top of page 21
Condensed group cash flow statement
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Operating activities |
|
|
|
|
|
|
|
Profit (loss) before taxation |
|
1,254 |
4,633 |
3,494 |
|
5,887 |
15,341 |
Adjustments to reconcile profit (loss) before
taxation to net cash provided by operating activities |
|
|
|
|
|
|
|
Depreciation, depletion and amortization and
exploration expenditure written off |
|
4,225 |
4,356 |
4,164 |
|
8,581 |
8,014 |
Net impairment and (gain) loss on sale of
businesses and fixed assets |
|
1,288 |
513 |
1,297 |
|
1,801 |
1,232 |
Earnings from equity-accounted entities, less
dividends received |
|
19 |
(96) |
(31) |
|
(77) |
(30) |
Net charge for interest and other finance
expense, less net interest paid |
|
524 |
192 |
102 |
|
716 |
165 |
Share-based payments |
|
507 |
161 |
243 |
|
668 |
221 |
Net operating charge for pensions and other
post-retirement benefits, less contributions and benefit payments
for unfunded plans |
|
(34) |
(32) |
(47) |
|
(66) |
(90) |
Net charge for provisions, less payments |
|
764 |
(683) |
(221) |
|
81 |
(1,320) |
Movements in inventories and other current and
non-current assets and liabilities |
|
1,556 |
(2,131) |
(742) |
|
(575) |
(4,497) |
Income taxes paid |
|
(2,003) |
(1,904) |
(1,966) |
|
(3,907) |
(5,121) |
Net cash provided by operating activities |
|
8,100 |
5,009 |
6,293 |
|
13,109 |
13,915 |
Investing activities |
|
|
|
|
|
|
|
Expenditure on property, plant and equipment,
intangible and other assets |
|
(3,463) |
(3,718) |
(3,453) |
|
(7,181) |
(6,582) |
Acquisitions, net of cash acquired |
|
(116) |
(106) |
(804) |
|
(222) |
(752) |
Investment in joint ventures |
|
(95) |
(353) |
(50) |
|
(448) |
(590) |
Investment in associates |
|
(17) |
(101) |
(7) |
|
(118) |
(15) |
Total cash capital expenditure |
|
(3,691) |
(4,278) |
(4,314) |
|
(7,969) |
(7,939) |
Proceeds from disposal of fixed assets |
|
35 |
66 |
28 |
|
101 |
43 |
Proceeds from disposal of businesses, net of
cash disposed |
|
219 |
347 |
60 |
|
566 |
845 |
Proceeds from loan repayments |
|
24 |
16 |
21 |
|
40 |
27 |
Cash provided from investing activities |
|
278 |
429 |
109 |
|
707 |
915 |
Net cash used in investing activities |
|
(3,413) |
(3,849) |
(4,205) |
|
(7,262) |
(7,024) |
Financing activities |
|
|
|
|
|
|
|
Net issue (repurchase) of shares (Note 7) |
|
(1,751) |
(1,750) |
(2,073) |
|
(3,501) |
(4,521) |
Lease liability payments |
|
(679) |
(694) |
(620) |
|
(1,373) |
(1,175) |
Proceeds from long-term financing |
|
2,736 |
2,259 |
3,643 |
|
4,995 |
6,038 |
Repayments of long-term financing |
|
(623) |
(674) |
(2,828) |
|
(1,297) |
(3,627) |
Net increase (decrease) in short-term debt |
|
49 |
16 |
(348) |
|
65 |
(877) |
Issue of perpetual hybrid bonds(a) |
|
— |
1,296 |
87 |
|
1,296 |
132 |
Redemption of perpetual hybrid bonds(a) |
|
— |
(1,288) |
— |
|
(1,288) |
— |
Payments relating to perpetual hybrid
bonds |
|
(271) |
(256) |
(250) |
|
(527) |
(486) |
Payments relating to transactions involving
non-controlling interests (Other interest) |
|
— |
— |
— |
|
— |
(180) |
Receipts relating to transactions involving
non-controlling interests (Other interest) |
|
508 |
16 |
2 |
|
524 |
9 |
Dividends paid - bp shareholders |
|
(1,204) |
(1,219) |
(1,153) |
|
(2,423) |
(2,336) |
- non-controlling interests |
|
(60) |
(126) |
(67) |
|
(186) |
(135) |
Net cash provided by (used in) financing
activities |
|
(1,295) |
(2,420) |
(3,607) |
|
(3,715) |
(7,158) |
Currency translation differences relating to cash and cash
equivalents |
|
(11) |
(260) |
— |
|
(271) |
(14) |
Increase (decrease) in cash and cash
equivalents |
|
3,381 |
(1,520) |
(1,519) |
|
1,861 |
(281) |
Cash and cash equivalents at beginning of period |
|
31,510 |
33,030 |
30,433 |
|
33,030 |
29,195 |
Cash and cash equivalents at end of period |
|
34,891 |
31,510 |
28,914 |
|
34,891 |
28,914 |
- See Condensed group statement of changes in equity -
footnote (a) for further information.
Top of page 22
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 2023 included in bp Annual
Report and Form 20-F 2023.
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. 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 2024 which are the same as those used in
preparing bp Annual Report and Form 20-F 2023.
There are no other new or amended standards or interpretations
adopted from 1 January 2024 onwards that have a significant impact
on the financial information.
Significant accounting judgements and estimates
bp's significant accounting judgements and estimates were
disclosed in bp Annual Report and Form 20-F 2023. These have
been subsequently considered at the end of this quarter to
determine if any changes were required to those judgements and
estimates.
Provisions
The nominal risk-free discount rate applied to provisions is
reviewed on a quarterly basis. The discount rate applied to the
group's provisions was revised to 4.5% in the second quarter (31
December 2023 4.0%) to reflect higher US Treasury yields. The
principal impact of this rate increase was a $0.8 billion decrease
in the decommissioning provision with a corresponding decrease in
the carrying amount of property, plant and equipment of $0.6
billion.
Note 2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 30
June 2024 is $1,512 million, with associated liabilities of
$31 million. These relate to the transactions described
below.
On 14 February 2024, bp and ADNOC announced that they had agreed
to form a new joint venture (JV) in Egypt (51% bp and 49% ADNOC).
As part of the agreement, bp will contribute its interests in three
development concessions, as well as exploration agreements, in
Egypt to the new JV. ADNOC will make a proportionate cash
contribution. Subject to regulatory approvals and clearances, the
formation of the JV is expected to complete during the second half
of 2024. The carrying amount of assets classified as held for sale
at 30 June 2024 is $1,408 million, with associated liabilities
of $23 million.
On 16 November 2023, bp entered into an agreement to sell its
Türkiye ground fuels business to Petrol Ofisi. This includes the
group's interest in three joint venture terminals in Türkiye.
Completion of the sale is subject to regulatory approvals. The
carrying amount of assets classified as held for sale at 30 June
2024 is $104 million, with associated liabilities of
$8 million. Cumulative foreign exchange losses within reserves
of approximately $930 million are expected to be recycled to
the group income statement at completion.
Note 3. 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
$1,309 million and $2,046 million respectively, compared
with net charges of $1,269 million and $1,357 million for
the same periods in 2023 and include net impairment charges for the
second quarter and half year of $1,296 million and
$1,945 million respectively, compared with net impairment
charges of $1,208 million and $1,167 million for the same
periods in 2023.
Top of page 23
Note 4. 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 |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
gas & low carbon energy |
|
(315) |
1,036 |
2,289 |
|
721 |
9,636 |
oil production & operations |
|
3,267 |
3,060 |
2,568 |
|
6,327 |
5,885 |
customers & products |
|
(133) |
988 |
555 |
|
855 |
3,235 |
other businesses & corporate |
|
(180) |
(300) |
(297) |
|
(480) |
(387) |
|
|
2,639 |
4,784 |
5,115 |
|
7,423 |
18,369 |
Consolidation adjustment – UPII* |
|
(73) |
32 |
(30) |
|
(41) |
(52) |
RC profit (loss) before interest and tax |
|
2,566 |
4,816 |
5,085 |
|
7,382 |
18,317 |
Inventory holding gains (losses)* |
|
|
|
|
|
|
|
gas & low carbon energy |
|
— |
— |
— |
|
— |
1 |
oil production & operations |
|
1 |
(1) |
— |
|
— |
1 |
customers & products |
|
(137) |
852 |
(732) |
|
715 |
(1,334) |
Profit (loss) before interest and tax |
|
2,430 |
5,667 |
4,353 |
|
8,097 |
16,985 |
Finance costs |
|
1,216 |
1,075 |
920 |
|
2,291 |
1,763 |
Net finance expense/(income) relating to
pensions and other post-retirement benefits |
|
(40) |
(41) |
(61) |
|
(81) |
(119) |
Profit (loss) before taxation |
|
1,254 |
4,633 |
3,494 |
|
5,887 |
15,341 |
|
|
|
|
|
|
|
|
RC profit (loss) before interest and
tax* |
|
|
|
|
|
|
|
US |
|
1,545 |
1,610 |
2,244 |
|
3,155 |
5,319 |
Non-US |
|
1,021 |
3,206 |
2,841 |
|
4,227 |
12,998 |
|
|
2,566 |
4,816 |
5,085 |
|
7,382 |
18,317 |
Top of page 24
Note 5. Sales and other operating revenues
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
By segment |
|
|
|
|
|
|
|
gas & low carbon energy |
|
5,809 |
8,675 |
10,428 |
|
14,484 |
28,314 |
oil production & operations |
|
6,659 |
6,432 |
5,777 |
|
13,091 |
11,930 |
customers & products |
|
41,100 |
39,895 |
38,051 |
|
80,995 |
76,933 |
other businesses & corporate |
|
526 |
606 |
590 |
|
1,132 |
1,328 |
|
|
54,094 |
55,608 |
54,846 |
|
109,702 |
118,505 |
|
|
|
|
|
|
|
|
Less: sales and other operating revenues
between segments |
|
|
|
|
|
|
|
gas & low carbon energy |
|
371 |
270 |
840 |
|
641 |
1,376 |
oil production & operations |
|
5,982 |
5,913 |
5,236 |
|
11,895 |
11,497 |
customers & products |
|
25 |
293 |
(180) |
|
318 |
(36) |
other businesses & corporate |
|
417 |
252 |
412 |
|
669 |
948 |
|
|
6,795 |
6,728 |
6,308 |
|
13,523 |
13,785 |
|
|
|
|
|
|
|
|
External sales and other operating
revenues |
|
|
|
|
|
|
|
gas & low carbon energy |
|
5,438 |
8,405 |
9,588 |
|
13,843 |
26,938 |
oil production & operations |
|
677 |
519 |
541 |
|
1,196 |
433 |
customers & products |
|
41,075 |
39,602 |
38,231 |
|
80,677 |
76,969 |
other businesses & corporate |
|
109 |
354 |
178 |
|
463 |
380 |
Total sales and other operating revenues |
|
47,299 |
48,880 |
48,538 |
|
96,179 |
104,720 |
|
|
|
|
|
|
|
|
By geographical area |
|
|
|
|
|
|
|
US |
|
20,340 |
19,858 |
20,065 |
|
40,198 |
39,225 |
Non-US |
|
36,832 |
39,208 |
38,492 |
|
76,040 |
84,842 |
|
|
57,172 |
59,066 |
58,557 |
|
116,238 |
124,067 |
Less: sales and other operating revenues
between areas |
|
9,873 |
10,186 |
10,019 |
|
20,059 |
19,347 |
|
|
47,299 |
48,880 |
48,538 |
|
96,179 |
104,720 |
|
|
|
|
|
|
|
|
Revenues from contracts with
customers |
|
|
|
|
|
|
|
Sales and other operating revenues include the
following in relation to revenues from contracts with
customers: |
|
|
|
|
|
|
|
Crude oil |
|
538 |
548 |
520 |
|
1,086 |
1,157 |
Oil products |
|
32,548 |
29,840 |
31,218 |
|
62,388 |
61,359 |
Natural gas, LNG and NGLs |
|
4,987 |
5,751 |
5,841 |
|
10,738 |
15,485 |
Non-oil products and other revenues from
contracts with customers |
|
3,108 |
2,928 |
2,750 |
|
6,036 |
4,622 |
Revenue from contracts with customers |
|
41,181 |
39,067 |
40,329 |
|
80,248 |
82,623 |
Other operating revenues(a) |
|
6,118 |
9,813 |
8,209 |
|
15,931 |
22,097 |
Total sales and other operating revenues |
|
47,299 |
48,880 |
48,538 |
|
96,179 |
104,720 |
- Principally relates to commodity derivative transactions
including sales of bp own production in trading books.
Top of page 25
Note 6. Depreciation, depletion and amortization
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Total depreciation, depletion and
amortization by segment |
|
|
|
|
|
|
|
gas & low carbon energy |
|
1,209 |
1,293 |
1,407 |
|
2,502 |
2,847 |
oil production & operations |
|
1,698 |
1,657 |
1,370 |
|
3,355 |
2,697 |
customers & products |
|
939 |
944 |
894 |
|
1,883 |
1,691 |
other businesses & corporate |
|
252 |
256 |
252 |
|
508 |
488 |
|
|
4,098 |
4,150 |
3,923 |
|
8,248 |
7,723 |
Total depreciation, depletion and
amortization by geographical area |
|
|
|
|
|
|
|
US |
|
1,703 |
1,570 |
1,338 |
|
3,273 |
2,592 |
Non-US |
|
2,395 |
2,580 |
2,585 |
|
4,975 |
5,131 |
|
|
4,098 |
4,150 |
3,923 |
|
8,248 |
7,723 |
Note 7. 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. 116 million and 163
million ordinary shares repurchased for cancellation were settled
during the second quarter 2024 against the authority granted at
bp's 2023 and 2024 annual general meetings respectively, for a
total cost of $1,751 million. A further 125 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 $748 million. This amount has been
accrued at 30 June 2024. 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 |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Results for the period |
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders |
|
(129) |
2,263 |
1,792 |
|
2,134 |
10,010 |
Less: preference dividend |
|
1 |
— |
1 |
|
1 |
1 |
Less: (gain) loss on redemption of perpetual
hybrid
bonds(a) |
|
— |
(10) |
— |
|
(10) |
— |
Profit (loss) attributable to bp ordinary
shareholders |
|
(130) |
2,273 |
1,791 |
|
2,143 |
10,009 |
|
|
|
|
|
|
|
|
Number of shares
(thousand)(b)(c) |
|
|
|
|
|
|
|
Basic weighted average number of shares
outstanding |
|
16,590,173 |
16,751,887 |
17,523,778 |
|
16,670,999 |
17,706,388 |
ADS equivalent(d) |
|
2,765,028 |
2,791,981 |
2,920,629 |
|
2,778,499 |
2,951,064 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
used to calculate diluted earnings per share |
|
16,590,173 |
17,153,505 |
17,900,984 |
|
17,090,967 |
18,068,256 |
ADS equivalent(d) |
|
2,765,028 |
2,858,917 |
2,983,497 |
|
2,848,494 |
3,011,376 |
|
|
|
|
|
|
|
|
Shares in issue at period-end |
|
16,491,420 |
16,687,850 |
17,379,366 |
|
16,491,420 |
17,379,366 |
ADS equivalent(d) |
|
2,748,570 |
2,781,308 |
2,896,561 |
|
2,748,570 |
2,896,561 |
- See Condensed group statement of changes in equity -
footnote (a) for further information.
- 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 second
quarter 2024 are 374,406 thousand (ADS equivalent 62,401
thousand).
- Excludes treasury shares and includes certain shares that will
be issued in the future under employee share-based payment
plans.
- One ADS is equivalent to six ordinary shares.
Top of page 26
Note 8. Dividends
Dividends payable
bp today announced an interim dividend of 8.000 cents per
ordinary share which is expected to be paid on 20 September 2024 to
ordinary shareholders and American Depositary Share (ADS) holders
on the register on 9 August 2024. The ex-dividend date will be 8
August 2024 for ordinary shareholders and 9 August 2024 for ADS
holders. The corresponding amount in sterling is due to be
announced on 3 September 2024, calculated based on the average of
the market exchange rates over three dealing days between 28 August
2024 and 30 August 2024. Holders of ADSs are expected to receive
$0.48 per ADS (less applicable fees). The board has decided not to
offer a scrip dividend alternative in respect of the second quarter
2024 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 |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Dividends paid per ordinary share |
|
|
|
|
|
|
|
cents |
|
7.270 |
7.270 |
6.610 |
|
14.540 |
13.220 |
pence |
|
5.683 |
5.692 |
5.309 |
|
11.375 |
10.860 |
Dividends paid per ADS (cents) |
|
43.62 |
43.62 |
39.66 |
|
87.24 |
79.32 |
Note 9. Net debt
Net debt* |
|
30 June |
31 March |
30 June |
$ million |
|
2024 |
2024 |
2023 |
Finance debt(a) |
|
54,986 |
53,013 |
49,738 |
Fair value (asset) liability of hedges related
to finance debt(b) |
|
2,519 |
2,512 |
2,836 |
|
|
57,505 |
55,525 |
52,574 |
Less: cash and cash equivalents |
|
34,891 |
31,510 |
28,914 |
Net debt(c) |
|
22,614 |
24,015 |
23,660 |
Total equity |
|
82,199 |
84,940 |
85,603 |
Gearing* |
|
21.6% |
22.0% |
21.7% |
- The fair value of finance debt at 30 June 2024 was
$50,677 million (31 March 2024 $49,263 million, 30 June 2023
$45,580 million).
- Derivative financial instruments entered into for the purpose
of managing foreign currency exchange risk associated with net debt
with a fair value liability position of $144 million at
30 June 2024 (first quarter 2024 liability of $96 million
and second quarter 2023 liability of $98 million) are not
included in the calculation of net debt shown above as hedge
accounting is not applied for these instruments.
- 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.
Note 10. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 29 July 2024, is unaudited
and does not constitute statutory financial statements. Audited
financial information will be published in bp Annual Report and
Form 20-F 2024. bp Annual Report and Form 20-F 2023 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 27
Additional information
Capital expenditure*
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Capital expenditure |
|
|
|
|
|
|
|
Organic capital expenditure* |
|
3,586 |
3,979 |
3,233 |
|
7,565 |
6,728 |
Inorganic capital
expenditure*(a) |
|
105 |
299 |
1,081 |
|
404 |
1,211 |
|
|
3,691 |
4,278 |
4,314 |
|
7,969 |
7,939 |
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Capital expenditure by segment |
|
|
|
|
|
|
|
gas & low carbon energy |
|
1,005 |
1,298 |
887 |
|
2,303 |
1,900 |
oil production & operations |
|
1,534 |
1,776 |
1,478 |
|
3,310 |
2,998 |
customers & products(a) |
|
1,045 |
1,120 |
1,858 |
|
2,165 |
2,848 |
other businesses & corporate |
|
107 |
84 |
91 |
|
191 |
193 |
|
|
3,691 |
4,278 |
4,314 |
|
7,969 |
7,939 |
Capital expenditure by geographical
area |
|
|
|
|
|
|
|
US |
|
1,636 |
1,776 |
2,661 |
|
3,412 |
4,358 |
Non-US |
|
2,055 |
2,502 |
1,653 |
|
4,557 |
3,581 |
|
|
3,691 |
4,278 |
4,314 |
|
7,969 |
7,939 |
- Second quarter and first half 2023 include $1.1 billion, net of
adjustments, in respect of the TravelCenters of America
acquisition.
Top of page 28
Adjusting items*
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
gas & low carbon energy |
|
|
|
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
8 |
2 |
1 |
|
10 |
16 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(590) |
(536) |
(1,058) |
|
(1,126) |
(1,060) |
Environmental and other provisions |
|
— |
— |
— |
|
— |
— |
Restructuring, integration and rationalization
costs |
|
— |
— |
1 |
|
— |
1 |
Fair value accounting
effects(a)(b) |
|
(1,011) |
113 |
1,222 |
|
(898) |
5,156 |
Other |
|
(124) |
(201) |
(110) |
|
(325) |
(166) |
|
|
(1,717) |
(622) |
56 |
|
(2,339) |
3,947 |
oil production & operations |
|
|
|
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
7 |
184 |
(31) |
|
191 |
106 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(29) |
(120) |
(140) |
|
(149) |
(132) |
Environmental and other provisions |
|
195 |
(77) |
(44) |
|
118 |
(93) |
Restructuring, integration and rationalization
costs |
|
— |
— |
(1) |
|
— |
(1) |
Fair value accounting effects |
|
— |
— |
— |
|
— |
— |
Other |
|
— |
(52) |
7 |
|
(52) |
(91) |
|
|
173 |
(65) |
(209) |
|
108 |
(211) |
customers & products |
|
|
|
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
4 |
5 |
2 |
|
9 |
3 |
Net impairment and losses on sale of businesses
and fixed assets |
|
(678) |
(96) |
(36) |
|
(774) |
(119) |
Environmental and other provisions |
|
7 |
— |
(1) |
|
7 |
(11) |
Restructuring, integration and rationalization
costs |
|
— |
1 |
1 |
|
1 |
(1) |
Fair value accounting
effects(b) |
|
25 |
(144) |
(109) |
|
(119) |
(32) |
Other(c) |
|
(640) |
(67) |
(98) |
|
(707) |
(160) |
|
|
(1,282) |
(301) |
(241) |
|
(1,583) |
(320) |
other businesses & corporate |
|
|
|
|
|
|
|
Gains on sale of businesses and fixed
assets |
|
— |
32 |
— |
|
32 |
— |
Net impairment and losses on sale of businesses
and fixed assets |
|
(11) |
26 |
(31) |
|
15 |
(37) |
Environmental and other provisions |
|
28 |
(9) |
(17) |
|
19 |
(31) |
Restructuring, integration and rationalization
costs |
|
1 |
11 |
— |
|
12 |
(10) |
Fair value accounting
effects(b) |
|
(29) |
(193) |
(48) |
|
(222) |
197 |
Gulf of Mexico oil spill |
|
(8) |
(11) |
(18) |
|
(19) |
(27) |
Other |
|
(3) |
(2) |
(13) |
|
(5) |
(13) |
|
|
(22) |
(146) |
(127) |
|
(168) |
79 |
Total before interest and taxation |
|
(2,848) |
(1,134) |
(521) |
|
(3,982) |
3,495 |
Finance costs(d) |
|
(205) |
(92) |
(119) |
|
(297) |
(223) |
Total before taxation |
|
(3,053) |
(1,226) |
(640) |
|
(4,279) |
3,272 |
Taxation on adjusting items(e) |
|
585 |
109 |
160 |
|
694 |
(45) |
Taxation – tax rate change effect of UK energy
profits levy(f) |
|
(304) |
— |
232 |
|
(304) |
232 |
Total after taxation for period |
|
(2,772) |
(1,117) |
(248) |
|
(3,889) |
3,459 |
- 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.
- For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and
34.
- Second quarter and first half 2024 include recognition of
onerous contract provisions related to the Gelsenkirchen refinery.
The unwind of these provisions will be reported as an adjusting
item as the contractual obligations are settled.
- Includes the unwinding of discounting effects relating to Gulf
of Mexico oil spill payables and the income statement impact of
temporary valuation differences associated with the group’s
interest rate and foreign currency exchange risk management of
finance debt. Second quarter and first half 2023 also include the
income statement impact associated with the buyback of finance
debt.
- 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.
- Second quarter and first half 2024 and second quarter and first
half 2023 include revisions 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 before 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.
Top of page 29
Net debt including leases
Net debt including leases* |
|
30 June |
31 March |
30 June |
$ million |
|
2024 |
2024 |
2023 |
Net debt* |
|
22,614 |
24,015 |
23,660 |
Lease liabilities |
|
10,697 |
11,057 |
10,961 |
Net partner (receivable) payable for leases
entered into on behalf of joint operations |
|
(112) |
(130) |
(136) |
Net debt including leases |
|
33,199 |
34,942 |
34,485 |
Total equity |
|
82,199 |
84,940 |
85,603 |
Gearing including leases* |
|
28.8% |
29.1% |
28.7% |
Gulf of Mexico oil spill
|
|
30 June |
31 December |
$ million |
|
2024 |
2023 |
Gulf of Mexico oil spill payables and
provisions |
|
(7,785) |
(8,735) |
Of which - current |
|
(1,104) |
(1,133) |
|
|
|
|
Deferred tax asset |
|
1,180 |
1,320 |
During the second quarter pre-tax payments of $1,129 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 2023 - Financial statements - Notes
7, 22, 23, 29, and 33.
Working capital* reconciliation
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Movements in inventories and other current and
non-current assets and liabilities as per condensed group cash flow
statement(a) |
|
1,556 |
(2,131) |
(742) |
|
(575) |
(4,497) |
Adjusted for inventory holding gains (losses)*
(Note 4) |
|
(136) |
851 |
(732) |
|
715 |
(1,332) |
Adjusted for fair value accounting effects*
relating to subsidiaries |
|
(1,071) |
(274) |
1,053 |
|
(1,345) |
5,295 |
Other adjusting items(b) |
|
182 |
(834) |
558 |
|
(652) |
(740) |
Working capital release (build) after adjusting
for net inventory gains (losses), fair value accounting effects and
other adjusting items |
|
531 |
(2,388) |
137 |
|
(1,857) |
(1,274) |
- The movement in working capital includes outflows relating to
the Gulf of Mexico oil spill on a pre-tax basis of
$1,129 million and $1,136 million in the second quarter
and first half of 2024 respectively (first quarter 2024
$7 million, second quarter 2023 $1,204 million, first
half 2023 $1,216 million).
- 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 30
Adjusted earnings before interest, taxation, depreciation and
amortization (adjusted EBITDA)*
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
$ million |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Profit for the period |
|
70 |
2,409 |
1,953 |
|
2,479 |
10,375 |
Finance costs |
|
1,216 |
1,075 |
920 |
|
2,291 |
1,763 |
Net finance (income) expense relating to
pensions and other post-retirement benefits |
|
(40) |
(41) |
(61) |
|
(81) |
(119) |
Taxation |
|
1,184 |
2,224 |
1,541 |
|
3,408 |
4,966 |
Profit before interest and tax |
|
2,430 |
5,667 |
4,353 |
|
8,097 |
16,985 |
Inventory holding (gains) losses*, before
tax |
|
136 |
(851) |
732 |
|
(715) |
1,332 |
RC profit before interest and tax |
|
2,566 |
4,816 |
5,085 |
|
7,382 |
18,317 |
Net (favourable) adverse impact of adjusting
items*, before interest and tax |
|
2,848 |
1,134 |
521 |
|
3,982 |
(3,495) |
Underlying RC profit before interest and
tax |
|
5,414 |
5,950 |
5,606 |
|
11,364 |
14,822 |
Add back: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
4,098 |
4,150 |
3,923 |
|
8,248 |
7,723 |
Exploration expenditure written off |
|
127 |
206 |
241 |
|
333 |
291 |
Adjusted EBITDA |
|
9,639 |
10,306 |
9,770 |
|
19,945 |
22,836 |
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 |
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
RC profit before interest and tax for
customers & products |
|
(133) |
988 |
555 |
|
855 |
3,235 |
Less: Adjusting items* gains (charges) |
|
(1,282) |
(301) |
(241) |
|
(1,583) |
(320) |
Underlying RC profit before interest and
tax for customers & products |
|
1,149 |
1,289 |
796 |
|
2,438 |
3,555 |
By business: |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
790 |
370 |
701 |
|
1,160 |
1,092 |
Castrol – included in customers |
|
211 |
184 |
171 |
|
395 |
332 |
products – refining & trading |
|
359 |
919 |
95 |
|
1,278 |
2,463 |
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and
amortization |
|
939 |
944 |
894 |
|
1,883 |
1,691 |
By business: |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
491 |
484 |
448 |
|
975 |
789 |
Castrol – included in customers |
|
42 |
42 |
42 |
|
84 |
81 |
products – refining & trading |
|
448 |
460 |
446 |
|
908 |
902 |
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers &
products |
|
2,088 |
2,233 |
1,690 |
|
4,321 |
5,246 |
By business: |
|
|
|
|
|
|
|
customers – convenience & mobility |
|
1,281 |
854 |
1,149 |
|
2,135 |
1,881 |
Castrol – included in customers |
|
253 |
226 |
213 |
|
479 |
413 |
products – refining & trading |
|
807 |
1,379 |
541 |
|
2,186 |
3,365 |
Top of page 31
Realizations* and marker prices
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
Average realizations(a) |
|
|
|
|
|
|
|
Liquids* ($/bbl) |
|
|
|
|
|
|
|
US |
|
65.88 |
62.20 |
60.53 |
|
64.11 |
61.59 |
Europe |
|
80.55 |
85.00 |
75.14 |
|
82.90 |
77.06 |
Rest of World |
|
83.58 |
79.83 |
79.35 |
|
81.67 |
80.98 |
bp average |
|
73.73 |
71.24 |
69.76 |
|
72.49 |
71.17 |
Natural gas ($/mcf) |
|
|
|
|
|
|
|
US |
|
1.29 |
1.69 |
1.58 |
|
1.49 |
2.01 |
Europe |
|
9.49 |
10.27 |
12.46 |
|
9.94 |
19.80 |
Rest of World |
|
5.47 |
5.45 |
5.53 |
|
5.46 |
6.49 |
bp average |
|
4.47 |
4.62 |
4.91 |
|
4.55 |
6.06 |
Total hydrocarbons* ($/boe) |
|
|
|
|
|
|
|
US |
|
44.26 |
41.50 |
40.84 |
|
42.90 |
42.89 |
Europe |
|
73.21 |
76.65 |
74.20 |
|
75.08 |
90.00 |
Rest of World |
|
47.49 |
46.61 |
45.97 |
|
47.05 |
50.37 |
bp average |
|
47.49 |
46.42 |
46.27 |
|
46.95 |
50.62 |
Average oil marker prices ($/bbl) |
|
|
|
|
|
|
|
Brent |
|
84.97 |
83.16 |
78.05 |
|
84.06 |
79.66 |
West Texas Intermediate |
|
80.82 |
77.01 |
73.56 |
|
78.95 |
74.76 |
Western Canadian Select |
|
67.20 |
59.45 |
60.07 |
|
63.56 |
58.37 |
Alaska North Slope |
|
86.42 |
81.33 |
78.26 |
|
83.91 |
78.64 |
Mars |
|
81.37 |
76.90 |
73.17 |
|
79.17 |
73.70 |
Urals (NWE – cif) |
|
72.79 |
68.34 |
54.56 |
|
70.55 |
50.24 |
Average natural gas marker prices |
|
|
|
|
|
|
|
Henry Hub gas price(b)($/mmBtu) |
|
1.89 |
2.25 |
2.09 |
|
2.07 |
2.77 |
UK Gas – National Balancing Point
(p/therm) |
|
76.57 |
68.72 |
83.18 |
|
72.62 |
107.76 |
- Based on sales of consolidated subsidiaries only – this
excludes equity-accounted entities.
- Henry Hub First of Month Index.
Exchange rates
|
|
Second |
First |
Second |
|
First |
First |
|
|
quarter |
quarter |
quarter |
|
half |
half |
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
$/£ average rate for the period |
|
1.26 |
1.27 |
1.25 |
|
1.26 |
1.23 |
$/£ period-end rate |
|
1.27 |
1.26 |
1.26 |
|
1.27 |
1.26 |
|
|
|
|
|
|
|
|
$/€ average rate for the period |
|
1.08 |
1.09 |
1.09 |
|
1.08 |
1.08 |
$/€ period-end rate |
|
1.07 |
1.08 |
1.09 |
|
1.07 |
1.09 |
|
|
|
|
|
|
|
|
$/AUD average rate for the period |
|
0.66 |
0.66 |
0.67 |
|
0.66 |
0.68 |
$/AUD period-end rate |
|
0.67 |
0.65 |
0.66 |
|
0.67 |
0.66 |
|
|
|
|
|
|
|
|
Top of page 32
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
2023 (pages 77-79) 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, including non-operated joint ventures (NOJVs),
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 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 33
Legal proceedings
For a full discussion of the group’s material legal proceedings,
see pages 242-243 of bp Annual Report and Form 20-F
2023.
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 30 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 IFRS information is
provided on page 30 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 and
charges, restructuring, integration and rationalization costs, fair
value accounting effects 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 28.
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, gas & low carbon energy
businesses 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.
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 at the time of FID). If asset is subsequently sold bp will
continue to record capacity as developed to 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 as adjusted to be reflective of
bp’s accounting share of joint arrangements.
Top of page 34
Glossary (continued)
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 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.
Top of page 35
Glossary (continued)
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 26.
We are unable to present reconciliations of forward-looking
information for net debt or gearing to finance debt and total
equity, because without unreasonable efforts, we are unable to
forecast accurately certain adjusting items required to present a
meaningful comparable 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 29.
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 27.
Installed renewables capacity is bp's share of capacity
for operating assets owned by entities where bp has an equity
share.
Inventory holding gains and losses are non-IFRS
adjustments to our IFRS profit (loss) and represent:
- 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
- an adjustment relating to certain trading inventories that are
not price risk managed which relate to a minimum inventory volume
that is required to be held to maintain underlying business
activities. This adjustment represents the movement in fair value
of the inventories due to prices, on a grade by grade basis, during
the period. This is calculated from each operation’s inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not separately reflected in the
financial statements as a gain or loss. No adjustment is made in
respect of the cost of inventories held as part of a trading
position and certain other temporary inventory positions that are
price risk-managed. See Replacement cost (RC) profit or loss
definition below.
Liquids – Liquids 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.
Top of page 36
Glossary (continued)
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 27.
We are unable to present reconciliations of forward-looking
information for organic capital expenditure to total cash capital
expenditure, because without unreasonable efforts, we are unable to
forecast accurately the adjusting item, inorganic capital
expenditure, that is difficult to predict in advance in order to
derive the nearest 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 power purchase agreement
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 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,
Thorntons and TravelCenters of America and also includes
sites in India through our Jio-bp JV.
Solomon availability – See Refining availability
definition.
Strategic convenience sites are retail sites, within the
bp portfolio, which sell bp-supplied vehicle energy (e.g.
bp, Aral, Arco, Amoco, Thorntons, bp pulse,
TA and PETRO) and either carry one of the strategic convenience
brands (e.g. M&S, Rewe to Go) or a differentiated bp-controlled
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.
Top of page 37
Glossary (continued)
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.
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 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 and 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 – 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 / underlying RC profit or loss
attributable to bp shareholders is a non-IFRS measure and is RC
profit or loss* (as defined on page 36) after excluding net
adjusting items and related taxation. See page 28 for additional
information on the adjusting items that are used to arrive at
underlying RC profit or loss in order to enable a full
understanding of the items and their financial impact.
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 6-14 for the segments.
Top of page 38
Glossary (continued)
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 7. 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
ordinary 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 ordinary 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 costs are 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; fair value accounting effects relating to
subsidiaries reported within adjusting items for the period; and
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, PETRO, TA, Thorntons and
Gigahub
Top of page 39
Cautionary statement
In order to utilize the ‘safe harbor’ provisions of the
United States Private Securities Litigation Reform Act of 1995 (the
‘PSLRA’) and the general doctrine of cautionary statements, bp is
providing the following cautionary statement:
The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is,
statements related to future, not past events and circumstances -
with respect to the financial condition, results of operations and
businesses of bp and certain of the plans and objectives of bp with
respect to these items. These statements may generally, but not
always, be identified by the use of words such as ‘will’,
‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’,
‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we
see’ or similar expressions.
In particular, the following, among other statements, are all
forward looking in nature: plans, expectations and assumptions
regarding oil and gas demand, supply, prices or volatility;
expectations regarding reserves; expectations regarding production
and volumes; expectations regarding bp’s customers & products
business; expectations regarding margins, including sensitivity of
fuels margin to costs of supply; expectations regarding underlying
effective tax rate; expectations regarding turnaround and
maintenance activity; expectations regarding financial performance,
results of operations and cash flows; expectations regarding future
project start-ups; expectations regarding the timing of bp’s
updates of medium-term plans; expectations regarding shareholders
returns; expectations regarding bp’s convenience businesses,
including TravelCenters of America, Castrol and bp pulse; bp’s
plans and expectations regarding the amount and timing of share
buybacks and dividends; plans and expectations regarding bp’s
credit rating, including in respect of maintaining a strong
investment grade credit rating and targeting further improvements
in credit metrics; plans and expectations regarding the allocation
of surplus cash flow to share buybacks and strengthening the
balance sheet; plans and expectations regarding LNG sales and
purchases; plans and expectations regarding bp’s investments,
including the formation of a joint venture with ADNOC in Egypt, the
award of an interest in ADNOC’s planned Ruwais LNG project and the
sale of bp’s Türkiye ground fuels business; plans and expectations
regarding investments, collaborations and partnerships in electric
vehicle (EV) charging infrastructure; plans and expectations for
the development of the Kaskida project following bp’s final
investment decision; plans and expectations related to bp’s
transition growth engines, including expected capital expenditures;
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; expectations
regarding the timing and amount of future payments relating to the
Gulf of Mexico oil spill; expectations regarding bp’s development
of hydrogen, offshore wind and UK CCS projects; plans and
expectations regarding; plans and expectations regarding bioenergy,
including progress in biofuels and bp’s ownership of bp Bunge
Bioenergia; plans and expectations regarding bp’s guidance for 2024
and the third quarter of 2024, including expected growth, margins,
the other businesses & corporate underlying annual charge,
timing and amount of divestment and other proceeds, depreciation,
depletion and amortization; plans and expectations regarding
capital expenditure for 2024 and 2025; 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, 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 including ongoing
approvals required for the continued developments of approved
projects; 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 governmental
authorities or any other relevant persons may 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 factors discussed under “Risk factors” in bp’s Annual
Report and Form 20-F for fiscal year 2023 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 40
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bp.com/investors |
+44 (0) 203 401 5592 |
+1 832 753 5116 |
BP p.l.c.’s LEI Code 213800LH1BZH3D16G760
End of Inside Information
30-Jul-2024 CET/CEST The EQS Distribution Services include
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