SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the
period ended 07 February,
2023
BP p.l.c.
(Translation
of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.
Form
20-F |X| Form 40-F
---------------
----------------
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of
1934.
Yes No
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Exhibit
1.1
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4Q22
Part 1 of 1 dated 07 February 2023
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Exhibit 1.1
Top of page 1
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FOR IMMEDIATE RELEASE
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London 7 February 2023
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BP p.l.c. Group results
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Fourth quarter and full year 2022
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"For a printer friendly version of this announcement please click
on the link below to open a PDF version of the
announcement"
http://www.rns-pdf.londonstockexchange.com/rns/0874P_1-2023-2-6.pdf
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Performing while transforming
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Financial summary
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Fourth
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Third
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Fourth
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quarter
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quarter
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quarter
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Year
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Year
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$ million
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2022
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2022
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2021
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2022
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2021
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Profit (loss) for the period attributable to bp
shareholders
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10,803
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(2,163)
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2,326
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(2,487)
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7,565
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Inventory holding (gains) losses*, net of tax
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1,066
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2,186
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(358)
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(1,019)
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(2,826)
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Replacement cost (RC) profit (loss)*
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11,869
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23
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1,968
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(3,506)
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4,739
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Net (favourable) adverse impact of adjusting items*, net of
tax
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(7,062)
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8,127
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2,097
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31,159
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8,076
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Underlying RC profit*
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4,807
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8,150
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4,065
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27,653
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12,815
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Operating cash flow*
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13,571
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8,288
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6,116
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40,932
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23,612
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Capital expenditure*
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(7,369)
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(3,194)
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(3,633)
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(16,330)
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(12,848)
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Divestment and other proceeds(a)
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614
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606
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2,265
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3,123
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7,632
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Surplus cash flow*
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5,080
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3,530
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2,993
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19,289
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6,308
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Net issue (repurchase) of shares(b)
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(3,240)
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(2,876)
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(1,725)
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(9,996)
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(3,151)
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Net debt*(c)
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21,422
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22,002
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30,613
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21,422
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30,613
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Return on average capital employed (ROACE)* (%)
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30.5%
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13.3%
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Adjusted
earnings before interest, taxation, depreciation and amortization
(adjusted EBITDA)*
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60,747
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37,315
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Adjusted
earnings before interest, depreciation and amortization (adjusted
EBIDA)*
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45,695
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30,783
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Announced dividend per ordinary share (cents per
share)
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6.610
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6.006
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5.460
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24.082
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21.630
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Underlying RC profit per ordinary share* (cents)
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26.44
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43.15
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20.53
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145.63
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63.65
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Underlying RC profit per ADS* (dollars)
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1.59
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2.59
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1.23
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8.74
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3.82
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● Net debt reduced to $21.4bn; 2022 ROACE 30.5%
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● 10% increase in resilient dividend to 6.61 cents per
ordinary share; further $2.75bn share buyback
announced
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● Delivering resilient hydrocarbons - Cassia C start-up;
first LNG cargo loaded at Coral Sul FLNG; 20-year extension to
Tangguh PSC*
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● Continued progress in transformation to an IEC -
accelerating biogas strategy with completion of Archaea Energy
acquisition; >65% increase in EV charge points in
2022
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Throughout 2022, bp continued to focus on delivery of our
Integrated Energy Company strategy. We are helping provide the
energy the world needs today and - at the same time - investing
with discipline into our transition and the energy transition - as
demonstrated by the Archaea Energy acquisition. We are
strengthening bp, with our strongest upstream plant reliability on
record and our lowest production costs in 16 years, helping to
generate strong returns and reducing debt for the 11th quarter in a
row. Importantly, we are delivering for our shareholders - with
buybacks and a growing dividend. This is exactly what we said we
would do and will continue to do - performing while
transforming.
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Bernard Looney
Chief executive officer
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(a)
Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more
information on divestment and other proceeds.
(b)
Full year 2022 excludes the ordinary shares issued as non-cash
consideration for the acquisition of the public units of BP
Midstream Partners LP. See Note 8 for more
information.
(c)
See Note 10 for more information.
RC profit (loss), underlying RC profit (loss), surplus cash flow,
net debt, ROACE, adjusted EBITDA, adjusted EBIDA, underlying RC
profit per ordinary share and underlying RC profit per ADS are
non-GAAP measures. Inventory holding (gains) losses and adjusting
items are non-GAAP adjustments.
* For items marked with an asterisk throughout this document,
definitions are provided in the Glossary on page
36.
Top
of page 2
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Highlights
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Underlying replacement cost profit* $4.8 billion
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●
Underlying replacement cost profit for the quarter was $4.8
billion, compared with $8.2 billion for the previous quarter.
Compared to the third quarter, the result was impacted by a below
average gas marketing and trading result after the exceptional
result in the third quarter, lower oil and gas realizations, a
higher level of refinery turnaround and maintenance activity, and
lower marketing margins and seasonally lower volumes. An underlying
ETR* of 40% in the fourth quarter brings the full year
underlying ETR* to 34%.
●
Reported profit for the quarter was $10.8 billion, compared
with a loss of $2.2 billion for the third quarter 2022. The
reported result for the fourth quarter is adjusted by inventory
holding losses net of tax of $1.1 billion and a gain for
adjusting items* net of tax of $7.1 billion to derive the
underlying replacement cost profit. Adjusting items include
favourable fair value accounting effects* of $13.2 billion before
tax, primarily due to a decrease in forward gas prices compared to
the end of the third quarter.
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Net debt* reduced to $21.4 billion; further $2.75 billion
share buyback announced
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●
Operating cash flow* in the quarter was $13.6
billion including a working capital release (after adjusting
for inventory holding losses*, fair value accounting effects and
other adjusting items) of $4.2 billion (see page
31).
●
Capital expenditure* in the fourth quarter and full year
was $7.4 billion and $16.3
billion respectively. Within this, inorganic spend was $3.5
billion in the fourth quarter and full year, including $3.0 billion
for Archaea Energy, net of adjustments, and $0.5 billion for the
earlier than expected completion of the acquisition of EDF Energy
Services.
●
During the fourth quarter, bp completed share buybacks of $3.2
billion. The $2.5 billion share buyback programme announced with
the third quarter results was completed on 3 February
2023.
●
In the fourth quarter, bp generated surplus cash flow* of $5.1
billion and intends to execute a $2.75 billion share buyback
from surplus cash flow prior to announcing its first-quarter-2023
results. bp has now announced share buybacks from surplus cash flow
equivalent to 60% of cumulative surplus cash flow since the start
of 2021.
●
Net debt fell for the eleventh successive quarter to
reach $21.4 billion at the end of the fourth
quarter.
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Growing distributions; updating disciplined financial
frame
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●
A resilient dividend remains bp's first priority within its
disciplined financial frame. It is underpinned by a cash balance
point* of $40 per barrel Brent, $11 per barrel RMM and $3 per mmBtu
Henry Hub (all 2021 real).
●
For the fourth quarter, bp has announced a dividend per ordinary
share of 6.610 cents an increase of around 10%. This
increase is underpinned by strong underlying performance and
supported by the confidence we have in delivering higher adjusted
EBITDA* as a result of our updated investment plans.
●
bp is committed to maintaining a strong investment grade credit
rating, targeting further progress within an 'A' grade credit
rating. For 2023 bp intends to allocate 40% of surplus cash flow to
further strengthening the balance sheet.
●
bp continues to focus on disciplined investment allocation. For
2023 bp expects capital expenditure of $16-18 billion and for
2024-30 now expects capital expenditure in a range of $14-18
billion including inorganic capital expenditure*.
●
For 2023 and subject to maintaining a strong investment grade
credit rating, bp remains committed to using 60% of surplus cash
flow for share buybacks.
●
Based on bp's current forecasts, at around $60 per barrel Brent and
subject to the board's discretion each quarter, bp expects to be
able to deliver share buybacks of around $4.0 billion per annum, at
the lower end of its capital expenditure range, and have capacity
for an annual increase in the dividend per ordinary share of around
4%.
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Continued progress in transformation to an Integrated Energy
Company
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●
In a separate
announcement,
bp has today provided an update on the significant progress made in
executing its transformation to an Integrated Energy Company (IEC)
since outlining its new strategy.
●
In resilient hydrocarbons bp has accelerated its biogas strategy -
part of its bioenergy Transition Growth Engine - completing the
acquisition of Archaea Energy a leading US biogas company.
Delivering on its focus on cost and efficiency, in 2022 bp
delivered its lowest upstream unit production cost* since 2006 and
highest upstream plant reliability* on record.
● In convenience and
mobility bp continues to make strategic progress, announcing an
exclusive agreement in the UK with Marks and Spencer (M&S) to
install fast(a) charge
points to around 70 of their stores, adding up to 900 charge points
within the next two years; and increasing the number of EV charge
points by over 65% versus 2021.
●
In low carbon energy bp has continued to make rapid progress
building its portfolio of green hydrogen* projects, signing
memoranda of understanding (MoUs) with both Mauritania and Egypt to
explore the potential for large scale green hydrogen
developments.
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During 2022 bp delivered four quarters of robust underlying
financial performance. We have raised our dividend by 21% since 4Q
2021, reduced net debt by $9.2 billion, invested with discipline
and announced $11.25 billion of share buybacks. As we look to 2023,
we remain focused on the disciplined delivery of our financial
frame, with its five priorities, underpinned by a $40/bbl balance
point, unchanged.
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Murray Auchincloss
Chief financial officer
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(a)
"fast charging" includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
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The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
42.
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Top of page 3
Financial results
At 31 December 2021, the group's reportable segments were gas &
low carbon energy, oil production & operations, customers &
products and Rosneft. The group has ceased to report Rosneft as a
separate segment in the group's financial reporting for 2022. From
the first quarter of 2022, the group's reportable segments are gas
& low carbon energy, oil production & operations and
customers & products. For more information see Note 1 Basis of
preparation - Investment in
Rosneft. For the period from 1
January 2022 to 27 February 2022, net income from Rosneft is
classified as an adjusting item.
In addition to the highlights on page 2:
●
Profit attributable to bp shareholders in the fourth
quarter was $10.8 billion compared
with $2.3 billion in the same period of 2021.
Loss attributable to bp shareholders in the full
year was $2.5 billion compared with a profit
of $7.6 billion in the same period
of 2021.
-
The increase in the underlying replacement cost profit for both
periods reflects higher gas and liquids realizations and higher
refining margins, partially offset by higher tax and the absence of
bp share of earnings from Rosneft. The fourth quarter result
also reflects an adverse impact of turnaround and maintenance
activity, and the year a favourable impact of strong trading
performance.
-
Adjusting items* in the fourth quarter and full year were
a favourable pre-tax impact of $9.7 billion and an
adverse pre-tax impact
of $29.8 billion respectively, compared with an
adverse pre-tax impact
of $3.0 billion and $8.7 billion in
the same periods of 2021.
◦
As a result of bp's two nominated directors stepping-down from the
Rosneft board on 27 February 2022, bp determined that it no longer
meets the criteria set out under IFRS for having "significant
influence" over Rosneft. bp therefore no longer equity accounts for
its interest in Rosneft from that date, treating it prospectively
as a financial asset measured at fair value. Within the full
year result, the loss of significant influence and an
impairment assessment led to a net pre-tax charge of
$24.0 billion classified as an adjusting item, reducing equity
by $14.4 billion. A further $1.5 billion pre-tax charge relating to
bp's decision to exit its other businesses with Rosneft in Russia
is also included in the full year result, reducing equity
by $1.2 billion. See Note 1 for further information.
◦
Adjusting items for the fourth quarter and full year 2022
also include increases in pre-tax fair value accounting effects*
of $13.2 billion and decreases of $3.5
billion respectively, compared with a decreasing pre-tax
impact of $0.9 billion and $8.1 billion in the same periods of
2021. Under IFRS, reported earnings include the mark-to-market
value of the hedges used to risk-manage LNG contracts, but not of
the LNG contracts themselves. The underlying result includes the
mark-to-market value of the hedges but also recognizes changes in
value of the LNG contracts being risk managed.
◦
Adjusting items for the fourth quarter also includes net impairment
charges of $3.6 billion principally as a result of
expected portfolio changes in our oil production & operations
segment, the annual review of price assumptions used for investment
appraisal and value-in-use impairment testing and the annual review
of discount rates used for impairment tests. The full
year 2022 also includes a non-taxable gain of
$2.0 billion arising from the contribution of bp's Angolan
business to Azule Energy.
●
The effective tax rate (ETR) on RC profit or loss* for
the fourth quarter and full year was 33%
and 117% respectively, compared with 38% and 51% for
the same periods in 2021. Excluding adjusting items, the
underlying ETR* for the fourth quarter and full
year was 40% and 34% respectively, compared
with 34% and 32% for the same periods a year ago. The
higher underlying ETR for the fourth quarter and full
year reflects the UK Energy Profits Levy on North Sea profits
and the absence of equity-accounted earnings from Rosneft, for the
full year this is partly offset by changes in the geographical mix
of profits. ETR on RC profit or loss and underlying ETR are
non-GAAP measures.
●
Operating cash flow* for the fourth quarter and full
year 2022
was $13.6 billion and $40.9 billion respectively,
compared
with $6.1 billion and $23.6 billion for
the same periods in 2021 primarily as an outcome of higher
underlying profits and working capital movements.
●
Capital expenditure* in the fourth quarter and full
year 2022
was $7.4 billion and $16.3 billion respectively,
compared
with $3.6 billion and $12.8 billion in
the same periods of 2021, higher as a result of acquisitions
completed during the fourth quarter 2022.
●
Total divestment and other proceeds for the fourth quarter and
full
year were $0.6 billion and $3.1 billion respectively,
compared
with $2.3 billion and $7.6 billion for
the same periods in 2021. Other proceeds for the full
year 2022 consist of $0.6 billion of proceeds from the
disposal of a loan note related to the Alaska divestment.
See page 32 for further information.
●
At the end of the fourth quarter, net debt*
was $21.4 billion, compared
with $22.0 billion at the end of
the third quarter 2022
and $30.6 billion at the end of
the fourth quarter 2021.
Top of page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
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Fourth
|
Third
|
Fourth
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|
|
quarter
|
quarter
|
quarter
|
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Year
|
Year
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$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
RC profit (loss) before interest and tax
|
|
|
|
|
|
|
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gas
& low carbon energy
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16,439
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(2,956)
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1,911
|
|
14,696
|
2,133
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oil
production & operations
|
|
1,688
|
6,965
|
3,212
|
|
19,721
|
10,501
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|
customers
& products
|
|
771
|
2,586
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(426)
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|
8,869
|
2,208
|
|
other businesses &
corporate(a)
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103
|
(1,093)
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(369)
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(26,737)
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(348)
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Of
which:
|
|
|
|
|
|
|
|
|
other
businesses & corporate excluding Rosneft
|
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103
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(1,093)
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(924)
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|
(2,704)
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(2,777)
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|
Rosneft
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|
-
|
-
|
555
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|
(24,033)
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2,429
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Consolidation
adjustment - UPII*
|
|
147
|
(21)
|
(7)
|
|
139
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(67)
|
|
RC profit loss before interest and tax
|
|
19,148
|
5,481
|
4,321
|
|
16,688
|
14,427
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|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(818)
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(633)
|
(751)
|
|
(2,634)
|
(2,855)
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|
Taxation on a RC basis
|
|
(6,103)
|
(4,646)
|
(1,350)
|
|
(16,430)
|
(5,911)
|
|
Non-controlling interests
|
|
(358)
|
(179)
|
(252)
|
|
(1,130)
|
(922)
|
|
RC profit (loss) attributable to bp shareholders*
|
|
11,869
|
23
|
1,968
|
|
(3,506)
|
4,739
|
|
Inventory holding gains (losses)*
|
|
(1,428)
|
(2,868)
|
472
|
|
1,351
|
3,655
|
|
Taxation (charge) credit on inventory holding gains and
losses
|
|
362
|
682
|
(114)
|
|
(332)
|
(829)
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
10,803
|
(2,163)
|
2,326
|
|
(2,487)
|
7,565
|
Analysis of underlying RC profit (loss) before interest and
tax
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
3,148
|
6,240
|
2,211
|
|
16,063
|
7,528
|
|
oil
production & operations
|
|
4,428
|
5,211
|
4,024
|
|
20,224
|
10,292
|
|
customers
& products
|
|
1,902
|
2,725
|
611
|
|
10,789
|
3,252
|
|
other businesses &
corporate(a)
|
|
(306)
|
(405)
|
210
|
|
(1,171)
|
1,337
|
|
Of
which:
|
|
|
|
|
|
|
|
|
other
businesses & corporate excluding Rosneft
|
|
(306)
|
(405)
|
(535)
|
|
(1,171)
|
(1,383)
|
|
Rosneft
|
|
-
|
-
|
745
|
|
-
|
2,720
|
|
Consolidation
adjustment - UPII
|
|
147
|
(21)
|
(7)
|
|
139
|
(67)
|
|
Underlying RC profit before interest and tax
|
|
9,319
|
13,750
|
7,049
|
|
46,044
|
22,342
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(649)
|
(565)
|
(494)
|
|
(2,209)
|
(2,073)
|
|
Taxation on an underlying RC basis
|
|
(3,505)
|
(4,856)
|
(2,238)
|
|
(15,052)
|
(6,532)
|
|
Non-controlling interests
|
|
(358)
|
(179)
|
(252)
|
|
(1,130)
|
(922)
|
|
Underlying RC profit attributable to bp shareholders*
|
|
4,807
|
8,150
|
4,065
|
|
27,653
|
12,815
|
Reconciliations of underlying RC profit attributable to bp
shareholders to the nearest equivalent IFRS measure are provided
on page 1 for the group and on pages 6-15 for
the segments.
(a) From first
quarter 2022 the results of Rosneft, previously reported as a
separate segment, are also included in other businesses &
corporate. Comparative information for 2021 has been restated to
reflect the changes in reportable segments. For more information
see Note 1 Basis of preparation
- Investment
in Rosneft.
Top of page 5
Operating Metrics
|
Operating metrics
|
|
Year 2022
|
|
vs Year 2021
|
|
Tier 1 and tier 2 process safety events*
|
|
50
|
|
-12
|
|
Reported recordable injury frequency*
|
|
0.187
|
|
+14.1%
|
|
upstream*
production(a) (mboe/d)
|
|
2,253
|
|
+1.6%
|
|
upstream unit production
costs*(b) ($/boe)
|
|
6.07
|
|
-11.0%
|
|
bp-operated hydrocarbon plant reliability*
|
|
96.0%
|
|
+2.0
|
|
bp-operated refining
availability*(a)
|
|
94.5%
|
|
-0.3
|
(a)
See Operational updates on
pages 6, 9 and 11.
(b)
Reflecting higher volumes and lower costs including impact of
conversion to equity-accounted entities.
Reserves replacement ratio*
The organic reserves replacement ratio (RRR) on a combined basis of
subsidiaries and equity-accounted entities was 20% for the year
(2021 50%). The decrease is largely due to price related reserves
reductions in our production-sharing agreements*. The announced
exit from Russia is treated as a divestment and therefore impacts
only total RRR, not organic.
Outlook & Guidance
Macro outlook
●
In the first quarter, bp expects oil prices to remain supported by
recovering Chinese demand, ongoing uncertainty around the level of
Russian exports and low inventory levels.
●
bp expects the outlook for global gas prices during the first
quarter to remain dependent on weather in the Northern Hemisphere
and the pace of Chinese demand recovery.
●
bp expects industry refining margins to remain elevated in the
first quarter due to sanctioning of Russian crude and
product.
1Q23 guidance
●
Looking ahead, we expect first-quarter 2023 reported upstream*
production to be broadly flat compared to fourth quarter
2022.
●
In our customers business, we expect seasonally lower volumes and
in Castrol base oil prices to remain high, although lower than the
fourth quarter 2022. In refining, we expect margins to remain
elevated and a lower level of turnaround activity.
2023 guidance
In
addition to the guidance on page 2:
●
bp expects both reported and underlying upstream production to be
broadly flat compared with 2022. Within this, bp expects underlying
production* from oil production & operations to be slightly
higher and production from gas & low carbon energy to be lower.
bp expects the start-up of Mad Dog Phase 2 in the second quarter of
2023 and first gas from the Tangguh expansion and GTA Phase 1
Tortue projects in the fourth quarter of 2023.
●
bp expects the other businesses & corporate underlying annual
charge to be in a range of $1.1-1.3 billion for 2023. The charge
may vary from quarter to quarter.
●
bp expects the depreciation, depletion and amortization to be
slightly above 2022.
●
The underlying ETR* for 2023 is expected to be around 40% but 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 expects capital expenditure* of $16-18 billion in 2023 including
inorganic capital expenditure*.
●
Having realized $15.9 billion of divestment and other proceeds
since the second quarter of 2020, bp now expects divestment and
other proceeds of $2-3 billion in 2023 and continues to expect to
reach $25 billion of divestment and other proceeds between the
second half of 2020 and 2025.
●
bp expects Gulf of Mexico oil spill payments for the year to be
around $1.3 billion pre-tax including $1.2 billion pre-tax to be
paid during the second quarter.
●
Against the authority granted at bp's 2022 annual general meeting
to repurchase up to 1.95 billion shares, bp has repurchased 1.11
billion shares.
●
In setting the dividend per ordinary share and buyback each
quarter, the board will continue to take into account factors
including the cumulative level of and outlook for surplus cash
flow*, the cash balance point* and the maintenance of a strong
investment grade credit rating.
|
The commentary above contains forward-looking statements and should
be read in conjunction with the cautionary statement on page
42.
|
Top of page 6
gas & low carbon energy*
Financial results
●
The replacement cost profit before interest and tax for
the fourth quarter and full year was $16,439
million and $14,696 million respectively, compared
with $1,911 million and $2,133 million for the
same periods in 2021. The fourth quarter and full
year is adjusted by a favourable impact of net adjusting
items* of $13,291 million and adverse impact
of $1,367 million respectively to derive the underlying
replacement cost profit, compared with adverse impacts of net
adjusting items of $300 million and $5,395
million for the same periods in 2021.
●
After adjusting items, the underlying replacement
cost profit before interest and tax* for the fourth
quarter and full year was $3,148
million and $16,063 million respectively, compared
with $2,211 million and $7,528 million for the
same periods in 2021. Adjusting items include
favourable fair value accounting effects* of $12,502
million for the quarter and an adverse effect of $1,811
million for the full year. The adjusting items for the
fourth quarter primarily arose from a significant decrease in
forward gas prices during the quarter. Under IFRS, reported
earnings include the mark-to-market value of the hedges used to
risk-manage LNG contracts, but not of the LNG contracts themselves.
The underlying result includes the mark-to-market value of the
hedges but also recognizes changes in value of the LNG contracts
being risk managed, which decreased as forward prices
fell.
●
The underlying replacement cost profit for the fourth quarter,
compared with the same period in 2021, reflects higher
realizations, partially offset by lower production and a lower gas
marketing and trading result. For the full year the
result reflects higher realizations, higher production and an
exceptional gas marketing and trading result.
Operational update
●
Reported production for the quarter was 956mboe/d, 1.8% lower than
the same period in 2021. Underlying production* was 2.4%
lower, mainly due to base decline in Trinidad.
●
Reported production for the full year was 957mboe/d, 4.9%
higher than the same period in 2021. Underlying production for
the full year was 4.9% higher due to the ramp-up of major
projects*.
● Renewables
pipeline* at the end of the quarter was 37.2GW (bp net). The
renewables pipeline increased by 10.3GW during the quarter due to
additions to the renewables pipeline in support of hydrogen in
Australia. The renewables pipeline increased by 14.1GW for the full
year, primarily as a result of bp and its partner EnBW being
awarded a lease option off the east coast of Scotland to develop an
offshore wind project (1.45GW bp net) in the first quarter of 2022,
net additions to Lightsource bp's pipeline, and the additions to
the renewables pipeline in the fourth quarter in support of
hydrogen in Australia.
Strategic progress
gas
●
On 23 December the government of Indonesia granted a 20-year
extension, to 2055, of the Tangguh production-sharing contract*
(Tangguh PSC) to bp (40.22% and operator), and its Tangguh PSC
partners.
●
On 29 November bp announced its Cassia C development offshore
Trinidad had safely delivered first gas. Cassia C is bp Trinidad
and Tobago's (bp 70%) first offshore compression platform and its
biggest offshore facility.
●
On 28 November bp was awarded two exploration blocks in the
Mediterranean sea, offshore Egypt by the Egyptian Natural Gas
Holding Company. The Northwest Abu Qir Offshore Area (bp 82.75%
operator, Wintershall-Dea 17.25%) is located west of the recently
awarded North King Mariout block (bp 100%) and north of the Raven
field. The Bellatrix-Seti East block (bp 50%, Eni 50% operator) is
located west of the Atoll field and North Tabya
blocks.
●
On 8 December Trinidad's Ministry of Energy and Energy Industries
announced that it had reached agreement with the Atlantic LNG
shareholders, including bp, on substantial commercial terms
for the consolidation of its operations into a single entity which
is a key milestone towards unlocking the energy future for Trinidad
and Tobago. The new structure is expected to be effective in
October 2024 and will enable increased focus on operational
efficiency and reliability and underpin future upstream
investments.
●
On 14 November bp began lifting cargoes of LNG from Mozambique's
first LNG project. bp has a long-term agreement to purchase 100% of
the LNG output from the facility that has the capacity to produce
up to 3.4 million tonnes of LNG per year.
low carbon energy
●
On 8 November and 8 December bp signed memoranda of understanding
with the governments of Mauritania and Egypt, respectively to
explore the potential for establishing green hydrogen* production
facilities in the countries.
●
Lightsource bp brought 2.7GW to FID (1.34GW bp net)
in full year 2022, an increase of 32% compared with 2.0GW
(1.0GW bp net) in 2021, and divested 0.9GW of projects (0.45GW
bp net) during the year, resulting in $0.1 billion of gains on
disposal recognized in bp's share of equity-accounted
earnings.
●
On 9 December bp announced it will partner with Shell and
Lightsource bp to develop a 148 megawatt-peak
solar project in Trinidad and Tobago following approval
by the country's government. It is the country's first
commercial-scale renewable energy project.
●
On 14 December bp agreed with its Flat Ridge 2 joint venture
partner to purchase their 50% ownership in that wind farm. bp now
owns 100%, adding an additional 235MW of capacity to bp's renewable
portfolio.
Top of page 7
gas & low carbon energy (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
16,429
|
(2,970)
|
1,903
|
|
14,688
|
2,166
|
|
Inventory holding (gains) losses*
|
|
10
|
14
|
8
|
|
8
|
(33)
|
|
RC profit (loss) before interest and tax
|
|
16,439
|
(2,956)
|
1,911
|
|
14,696
|
2,133
|
|
Net (favourable) adverse impact of adjusting items
|
|
(13,291)
|
9,196
|
300
|
|
1,367
|
5,395
|
|
Underlying RC profit before interest and tax
|
|
3,148
|
6,240
|
2,211
|
|
16,063
|
7,528
|
|
Taxation on an underlying RC basis
|
|
(1,163)
|
(1,478)
|
(509)
|
|
(4,367)
|
(1,677)
|
|
Underlying RC profit before interest
|
|
1,985
|
4,762
|
1,702
|
|
11,696
|
5,851
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,373
|
1,177
|
1,265
|
|
5,008
|
4,464
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
(6)
|
10
|
2
|
|
2
|
43
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
4,515
|
7,427
|
3,478
|
|
21,073
|
12,035
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
gas
|
|
1,032
|
872
|
928
|
|
3,227
|
3,180
|
|
low carbon energy(a)(b)
|
|
577
|
86
|
109
|
|
1,024
|
1,561
|
|
Total capital expenditure
|
|
1,609
|
958
|
1,037
|
|
4,251
|
4,741
|
(a)
Full year 2021 includes $712 million in respect of the remaining
payment to Equinor for our investment in our strategic US offshore
wind partnership and $326 million as a lease option fee deposit
paid to The Crown Estate in connection with our participation in
the UK Round 4 Offshore Wind Leasing together with our partner
EnBW.
(b)
Fourth quarter and full year 2022 include $504 million in respect
of the acquisition of EDF Energy Services. Power trading is
reported under low carbon energy.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Production (net of
royalties)(b)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
121
|
117
|
122
|
|
118
|
113
|
|
Natural gas (mmcf/d)
|
|
4,844
|
5,011
|
4,941
|
|
4,866
|
4,632
|
|
Total hydrocarbons* (mboe/d)
|
|
956
|
981
|
974
|
|
957
|
912
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(c)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
80.50
|
88.03
|
71.63
|
|
89.86
|
63.60
|
|
Natural gas ($/mcf)
|
|
9.40
|
9.85
|
6.94
|
|
8.91
|
5.11
|
|
Total hydrocarbons* ($/boe)
|
|
57.60
|
60.80
|
43.68
|
|
56.34
|
33.75
|
(c)
Includes bp's share of production of equity-accounted entities in
the gas & low carbon energy segment.
(d)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
Top of page 8
gas & low carbon energy (continued)
|
|
|
31 December 2022
|
30 September 2022
|
31 December 2021
|
|
|
|
|
low carbon energy(a)
|
|
|
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
|
Installed renewables capacity*
|
|
2.2
|
2.0
|
1.9
|
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
5.8
|
4.6
|
4.4
|
|
Renewables pipeline
|
|
37.2
|
26.9
|
23.1
|
|
of which by geographical area:
|
|
|
|
|
|
Renewables
pipeline - Americas
|
|
17.0
|
17.5
|
16.2
|
|
Renewables pipeline - Asia
Pacific(b)
|
|
11.8
|
1.7
|
1.4
|
|
Renewables
pipeline - Europe
|
|
8.3
|
7.6
|
5.3
|
|
Renewables
pipeline - Other
|
|
0.1
|
0.1
|
0.2
|
|
of which by technology:
|
|
|
|
|
|
Renewables
pipeline - offshore wind
|
|
5.2
|
5.2
|
3.7
|
|
Renewables
pipeline - onshore wind
|
|
6.3
|
-
|
-
|
|
Renewables
pipeline - solar
|
|
25.7
|
21.7
|
19.4
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
43.0
|
31.5
|
27.5
|
(a)
Because of rounding, some totals may not agree exactly with the sum
of their component parts.
(b)
31 December 2022 includes 10.3GW of onshore wind and solar pipeline
in support of hydrogen.
Top of page 9
oil production & operations
Financial results
●
The replacement cost profit before interest and tax for
the fourth quarter and full year was $1,688
million and $19,721 million respectively, compared
with $3,212 million and $10,501 million for the
same periods in 2021. The fourth quarter and full
year is adjusted by an adverse impact of net adjusting items*
of $2,740 million and $503
million respectively to derive the underlying replacement cost
profit, compared with an adverse impact of net adjusting items
of $812 million and a favourable impact of $209
million for the same periods in 2021. Adjusting
items in the fourth quarter principally relate to impairments
as a result of expected portfolio changes. See Note
4 and page 30 for more information.
●
After adjusting items, the underlying replacement
cost profit before interest and tax* for the fourth
quarter and full year was $4,428
million and $20,224 million respectively, compared
with $4,024 million and $10,292 million for the
same periods in 2021.
● The
underlying replacement cost profit for the fourth quarter compared
to the same quarter in 2021, reflects higher oil and gas
realizations, partly offset by the impact of portfolio changes. For
the full year the result reflects primarily higher
realizations.
Operational update
●
Reported production for the quarter was 1,309mboe/d, 3.6% lower
than the fourth quarter of 2021. Underlying production* for the
quarter was flat compared with the fourth quarter of
2021.
●
Reported production for the full year was 1,297mboe/d, 0.8% lower
than the same period of 2021. Underlying production for the full
year was 2.1% higher compared with the same period of 2021
reflecting bpx energy performance, major projects* and reduced
weather impacts in the US Gulf of Mexico partly offset by base
performance.
●
Progressed operational performance in upstream* in 2022, delivering
the highest bp-operated hydrocarbon plant reliability* on record at
96%.
Strategic Progress
●
On 16 December bp was awarded operatorship of the Bumerangue block,
in the Santos Pre Salt Basin, in Brazil.
●
On 7 November the National Agency for Petroleum, Gas and Biofuels
(ANPG), ExxonMobil Angola and the Angola Block 15 partners
announced a new discovery at the Bavuca South-1 exploration well.
Azule Energy, the bp and ENI 50:50 joint venture, owns 42% of block
15.
●
In the Permian, methane flaring intensity averaged <0.5% in
2022, the lowest recorded in BPX Energy.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit before interest and tax
|
|
1,686
|
6,966
|
3,212
|
|
19,714
|
10,509
|
|
Inventory holding (gains) losses*
|
|
2
|
(1)
|
-
|
|
7
|
(8)
|
|
RC profit before interest and tax
|
|
1,688
|
6,965
|
3,212
|
|
19,721
|
10,501
|
|
Net (favourable) adverse impact of adjusting items
|
|
2,740
|
(1,754)
|
812
|
|
503
|
(209)
|
|
Underlying RC profit before interest and tax
|
|
4,428
|
5,211
|
4,024
|
|
20,224
|
10,292
|
|
Taxation on an underlying RC basis
|
|
(2,015)
|
(2,921)
|
(1,235)
|
|
(9,143)
|
(4,123)
|
|
Underlying RC profit before interest
|
|
2,413
|
2,290
|
2,789
|
|
11,081
|
6,169
|
Top of page 10
oil production & operations (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,383
|
1,381
|
1,628
|
|
5,564
|
6,528
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
73
|
180
|
45
|
|
383
|
125
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
5,884
|
6,772
|
5,697
|
|
26,171
|
16,945
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,430
|
1,386
|
1,272
|
|
5,278
|
4,838
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
966
|
959
|
1,004
|
|
952
|
978
|
|
Natural gas (mmcf/d)
|
|
1,989
|
2,075
|
2,053
|
|
1,998
|
1,903
|
|
Total hydrocarbons* (mboe/d)
|
|
1,309
|
1,317
|
1,358
|
|
1,297
|
1,307
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
80.43
|
93.14
|
71.07
|
|
89.62
|
62.57
|
|
Natural gas(c) ($/mcf)
|
|
10.20
|
12.12
|
8.73
|
|
10.46
|
5.49
|
|
Total hydrocarbons*(c) ($/boe)
|
|
74.60
|
86.83
|
66.19
|
|
82.23
|
55.65
|
(a)
Includes bp's share of production of equity-accounted entities in
the oil production & operations segment.
(b)
Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
(c)
Realizations calculation methodology has been changed to reflect
gas price fluctuations within the North Sea region. All
comparatives are restated. There is no impact on financial
results.
Top of page 11
customers & products
Financial results
●
The replacement cost profit before interest and tax for
the fourth quarter and full year was $771
million and $8,869 million respectively, compared
with a loss of $426 million and a profit of $2,208 million for the
same periods in 2021. The fourth quarter and full year is adjusted
by an adverse impact of net adjusting items* of $1,131 million and
$1,920 million respectively to derive the underlying replacement
cost profit, mainly relating to impairment charges (see Note 4),
compared with an adverse impact of net adjusting items of $1,037
million and $1,044 million for the same periods
in 2021.
●
After adjusting items, the underlying replacement
cost profit before interest and tax* for the fourth
quarter and full year was $1,902
million and $10,789 million respectively, compared
with a profit of $611 million and $3,252
million for the same periods in 2021.
●
The customers & products result for
the fourth quarter and full year were higher than the
same periods in 2021. This reflects a stronger performance in
refining and oil trading.
● customers -
the convenience and mobility results, excluding Castrol, for
the fourth quarter and full year were higher compared
with the same periods in 2021. The benefits of a stronger
convenience, retail fuels and aviation performance were partially
offset by inflationary cost pressures. The full year result also
included higher midstream performance, including biofuels, and
adverse foreign exchange impacts.
Castrol
results for the fourth quarter and full
year were
lower than the same periods in 2021, due to higher input costs,
ongoing COVID restrictions, notably in China, and adverse foreign
exchange impacts.
● products -
the products results for the fourth quarter and full
year were higher compared with the same periods in 2021. In
refining, the fourth quarter and full year results benefited from
higher realized margins, partially offset by higher energy costs,
and turnaround and maintenance activity. In
oil trading the fourth quarter and full year results were higher
compared to the same period in 2021. The full year result benefited
from an exceptionally strong oil trading performance in the first
half of 2022.
Operational update
● Utilization
for the full year was similar to 2021, however the
fourth
quarter was
lower compared to the same period in 2021, primarily
due to the
bp-Husky Toledo refinery shutdown and a higher level of
maintenance activity. bp-operated refining availability* for
the fourth quarter and full year was 95.0%
and 94.5% respectively, compared with 95.4%
and 94.8% for the same periods in 2021.
Strategic progress
●
Strategic convenience sites* grew to 2,400, an increase of more
than 250 compared to 2021.
● In December,
bp announced an exclusive agreement in the UK with its convenience
partner M&S for bp pulse to install fast(a) charge
points in around 70 of their stores, with initial ambition to
add up to 900 charge points within the next two years. This follows
bp's announcement in October that its strategic partnership with
REWE in Germany has been expanded to include the installation of
fast(a) charge
points at up to 180 of their sites.
● EV charge
points* installed and energy sold grew by more than 65% and around
150% respectively, compared to 2021, with charge points now at
around 22,000. In addition, we continued to build momentum in
fleets. In October, bp announced plans to establish a bp pulse
Gigahub network, a series of large, EV fast(a) charging
hubs designed to serve ride-hail and taxi fleets, near US airports
and high-demand locations, with an initial location near Los
Angeles Airport in collaboration with Hertz.
●
In November, Castrol announced an investment in Ki Mobility
solutions (KMS) to create a co-branded service and maintenance
network in India, supported by KMS's digitally integrated
multi-brand service platform. The investment supports Castrol's aim
to grow its presence in service and maintenance for both EV and
non-EV vehicles.
● In
December, bp completed its purchase of Archaea Energy Inc., a
leading provider of renewable natural gas, marking a milestone in
the growth of bp's strategic bioenergy business. Bioenergy is one
of five strategic transition growth engines that bp intends to grow
rapidly through this decade.
●
In November, bp announced its Cherry Point refinery in the US had
doubled its renewable diesel production capacity compared to the
fourth quarter in 2021. The refinery now has the capability to
co-process more than 7,000 barrels a day of renewable
diesel.
●
Following a fire at the bp-Husky Toledo refinery in Ohio, US, the
refinery remains shut down. bp continues to work with Cenovus
Energy, its partner in the facility, on the announced sale of bp's
50% interest in the refinery to Cenovus Energy.
(a)
"fast charging" includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
Top
of page 12
customers & products (continued)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
(645)
|
(269)
|
(14)
|
|
10,235
|
5,563
|
|
Inventory holding (gains) losses*
|
|
1,416
|
2,855
|
(412)
|
|
(1,366)
|
(3,355)
|
|
RC profit (loss) before interest and tax
|
|
771
|
2,586
|
(426)
|
|
8,869
|
2,208
|
|
Net (favourable) adverse impact of adjusting items
|
|
1,131
|
139
|
1,037
|
|
1,920
|
1,044
|
|
Underlying RC profit before interest and tax
|
|
1,902
|
2,725
|
611
|
|
10,789
|
3,252
|
|
Of which:(a)
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
628
|
1,137
|
637
|
|
2,966
|
3,052
|
|
Castrol - included in customers
|
|
70
|
151
|
207
|
|
700
|
1,037
|
|
products
- refining & trading
|
|
1,274
|
1,588
|
(26)
|
|
7,823
|
200
|
|
Taxation on an underlying RC basis
|
|
(400)
|
(725)
|
(640)
|
|
(2,308)
|
(1,210)
|
|
Underlying RC profit before interest
|
|
1,502
|
2,000
|
(29)
|
|
8,481
|
2,042
|
(a)
A reconciliation to RC profit before interest and tax by business
is provided on page 34.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
962
|
1,448
|
966
|
|
4,252
|
4,358
|
|
Castrol - included in customers
|
|
110
|
187
|
243
|
|
853
|
1,187
|
|
products - refining & trading
|
|
1,681
|
1,974
|
399
|
|
9,407
|
1,894
|
|
|
|
2,643
|
3,422
|
1,365
|
|
13,659
|
6,252
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
741
|
697
|
754
|
|
2,870
|
3,000
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
customers - convenience & mobility
|
|
694
|
404
|
692
|
|
1,779
|
1,564
|
|
Castrol - included in customers
|
|
98
|
42
|
53
|
|
235
|
173
|
|
products - refining & trading(c)
|
|
3,455
|
309
|
532
|
|
4,473
|
1,308
|
|
Total capital expenditure
|
|
4,149
|
713
|
1,224
|
|
6,252
|
2,872
|
(b)
A reconciliation to RC profit before interest and tax by business
is provided on page 34.
(c)
Fourth quarter and full year 2022 include $3,030
million in respect of the Archaea Energy
acquisition.
|
Retail(d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
bp retail sites* - total (#)
|
|
20,650
|
20,550
|
20,500
|
|
20,650
|
20,500
|
|
bp
retail sites in growth markets*
|
|
2,650
|
2,600
|
2,700
|
|
2,650
|
2,700
|
|
Strategic
convenience sites*
|
|
2,400
|
2,250
|
2,150
|
|
2,400
|
2,150
|
(d)
Reported to the nearest 50.
|
Marketing sales of refined products (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
US
|
|
1,126
|
1,143
|
1,151
|
|
1,136
|
1,115
|
|
Europe
|
|
1,069
|
1,098
|
936
|
|
1,021
|
863
|
|
Rest of World
|
|
461
|
451
|
496
|
|
456
|
461
|
|
|
|
2,656
|
2,692
|
2,583
|
|
2,613
|
2,439
|
|
Trading/supply sales of refined products
|
|
325
|
355
|
395
|
|
350
|
393
|
|
Total sales volume of refined products
|
|
2,981
|
3,047
|
2,978
|
|
2,963
|
2,832
|
Top of page 13
customers & products (continued)
|
Refining marker
margin*(e)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
bp average refining marker margin (RMM) ($/bbl)
|
|
32.2
|
35.5
|
15.1
|
|
33.1
|
13.2
|
(e) The RMM in the
quarter is calculated based on bp's current refinery portfolio. On
a comparative basis, the fourth quarter and full year 2021 RMM
would be $15.3/bbl and $13.6/bbl respectively.
|
Refinery throughputs (mb/d)
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
US
|
|
615
|
703
|
720
|
|
678
|
719
|
|
Europe
|
|
763
|
809
|
833
|
|
804
|
787
|
|
Rest of World
|
|
-
|
-
|
91
|
|
22
|
88
|
|
Total refinery throughputs
|
|
1,378
|
1,512
|
1,644
|
|
1,504
|
1,594
|
|
bp-operated refining availability* (%)
|
|
95.0
|
94.3
|
95.4
|
|
94.5
|
94.8
|
Top of page 14
other businesses & corporate
Other businesses & corporate comprises innovation &
engineering, bp ventures, Launchpad, regions, corporates &
solutions, our corporate activities & functions and any
residual costs of the Gulf of Mexico oil spill. From first quarter
2022 the results of Rosneft, previously reported as a separate
segment, are also included in other businesses & corporate.
Comparative information for 2021 has been restated to reflect the
changes in reportable segments. For more information see Note
1 Basis of Preparation - Investment in
Rosneft.
Financial results
●
The replacement cost result before interest and tax for
the fourth quarter and full year was
a profit of $103 million and a loss
of $26,737 million respectively, compared with
a loss of $369 million and $348
million for the same periods in 2021. The fourth
quarter and full year is adjusted by a
favourable impact of net adjusting items* of $409
million and an adverse impact of $25,566
million respectively to derive the underlying replacement cost
profit, compared with an adverse impact of net adjusting
items of $579 million and $1,685 million for
the same periods in 2021. The adjusting items for the full
year of 2022 mainly relate to Rosneft. Fair value accounting
effects* for the fourth quarter and full year had a
favourable impact of $515 million and an adverse
impact of $1,381 million respectively, compared
with an adverse impact of $212
million and $849 million for the same periods
in 2021.
●
After adjusting items, the underlying replacement
cost loss before interest and tax* for the fourth
quarter and full year was $306
million and $1,171 million respectively, compared
with a profit of $210 million and $1,337
million for the same periods in 2021.
●
For other businesses & corporate excluding Rosneft, after
excluding adjusting items, the underlying replacement cost loss
before interest and tax for the fourth quarter and full
year was $306 million and $1,171
million respectively, compared with $535
million and $1,383 million for the same periods in
2021.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
103
|
(1,093)
|
(301)
|
|
(26,737)
|
(89)
|
|
Inventory holding (gains) losses*
|
|
-
|
-
|
(68)
|
|
-
|
(259)
|
|
RC profit (loss) before interest and tax
|
|
103
|
(1,093)
|
(369)
|
|
(26,737)
|
(348)
|
|
Net (favourable) adverse impact of adjusting
items(a)
|
|
(409)
|
688
|
579
|
|
25,566
|
1,685
|
|
Underlying RC profit (loss) before interest and tax
|
|
(306)
|
(405)
|
210
|
|
(1,171)
|
1,337
|
|
Taxation on an underlying RC basis
|
|
43
|
206
|
55
|
|
439
|
25
|
|
Underlying RC profit (loss) before interest
|
|
(263)
|
(199)
|
265
|
|
(732)
|
1,362
|
(a)
Includes fair value accounting effects relating to the hybrid bonds
that were issued on 17 June 2020. See page 37 for more
information.
other businesses & corporate (excluding Rosneft)
Strategic progress
● We
have taken the decision to no longer seek new companies for bp's
Launchpad accelerator, with our focus now to scale and build
businesses within our 5 transition growth engines - bioenergy,
convenience, EV charging, renewables and hydrogen.
●
In December, bp ventures made a $20-million AUD investment in 5B
Holdings Pty Ltd, an Australian renewable company with technology
that enables rapid deployment of solar power at scale.
●
On 2 February 2023, bp and Chubu Electric signed a memorandum of
understanding to explore opportunities for decarbonisation in Japan
and the wider Asia region, including plans for a feasibility study
for a carbon capture, utilization, and storage (CCUS) hub in the
Nagoya port area.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
103
|
(1,093)
|
(924)
|
|
(2,704)
|
(2,777)
|
|
Inventory holding (gains) losses*
|
|
-
|
-
|
-
|
|
-
|
-
|
|
RC profit (loss) before interest and tax
|
|
103
|
(1,093)
|
(924)
|
|
(2,704)
|
(2,777)
|
|
Net (favourable) adverse impact of adjusting items
|
|
(409)
|
688
|
389
|
|
1,533
|
1,394
|
|
Underlying RC profit (loss) before interest and tax
|
|
(306)
|
(405)
|
(535)
|
|
(1,171)
|
(1,383)
|
|
Taxation on an underlying RC basis
|
|
43
|
206
|
128
|
|
439
|
294
|
|
Underlying RC profit (loss) before interest
|
|
(263)
|
(199)
|
(407)
|
|
(732)
|
(1,089)
|
Top of page 15
other businesses & corporate (Rosneft)
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
-
|
-
|
623
|
|
(24,033)
|
2,688
|
|
Inventory holding (gains) losses*
|
|
-
|
-
|
(68)
|
|
-
|
(259)
|
|
RC profit (loss) before interest and tax
|
|
-
|
-
|
555
|
|
(24,033)
|
2,429
|
|
Net (favourable) adverse impact of adjusting items
|
|
-
|
-
|
190
|
|
24,033
|
291
|
|
Underlying RC profit (loss) before interest and tax
|
|
-
|
-
|
745
|
|
-
|
2,720
|
|
Taxation on an underlying RC basis
|
|
-
|
-
|
(73)
|
|
-
|
(269)
|
|
Underlying RC profit (loss) before interest
|
|
-
|
-
|
672
|
|
-
|
2,451
|
Top of page 16
Financial statements
Group income statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues (Note 6)
|
|
69,257
|
55,011
|
50,554
|
|
241,392
|
157,739
|
|
Earnings from joint ventures - after interest and
tax
|
|
189
|
498
|
243
|
|
1,128
|
543
|
|
Earnings from associates - after interest and
tax
|
|
129
|
275
|
896
|
|
1,402
|
3,456
|
|
Interest and other income
|
|
608
|
159
|
259
|
|
1,103
|
581
|
|
Gains on sale of businesses and fixed assets
|
|
173
|
1,866
|
286
|
|
3,866
|
1,876
|
|
Total revenues and other income
|
|
70,356
|
57,809
|
52,238
|
|
248,891
|
164,195
|
|
Purchases
|
|
34,101
|
39,993
|
32,089
|
|
141,043
|
92,923
|
|
Production and manufacturing expenses
|
|
6,841
|
7,193
|
6,397
|
|
28,610
|
25,843
|
|
Production and similar taxes
|
|
557
|
639
|
406
|
|
2,325
|
1,308
|
|
Depreciation, depletion and amortization (Note 7)
|
|
3,714
|
3,467
|
3,863
|
|
14,318
|
14,805
|
|
Net impairment and losses on sale of businesses and fixed assets
(Note 4)
|
|
3,629
|
417
|
1,223
|
|
30,522
|
(1,121)
|
|
Exploration expense
|
|
140
|
225
|
102
|
|
585
|
424
|
|
Distribution and administration expenses
|
|
3,654
|
3,262
|
3,365
|
|
13,449
|
11,931
|
|
Profit (loss) before interest and taxation
|
|
17,720
|
2,613
|
4,793
|
|
18,039
|
18,082
|
|
Finance costs
|
|
834
|
649
|
759
|
|
2,703
|
2,857
|
|
Net
finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(16)
|
(16)
|
(8)
|
|
(69)
|
(2)
|
|
Profit (loss) before taxation
|
|
16,902
|
1,980
|
4,042
|
|
15,405
|
15,227
|
|
Taxation
|
|
5,741
|
3,964
|
1,464
|
|
16,762
|
6,740
|
|
Profit (loss) for the period
|
|
11,161
|
(1,984)
|
2,578
|
|
(1,357)
|
8,487
|
|
Attributable to
|
|
|
|
|
|
|
|
|
bp
shareholders
|
|
10,803
|
(2,163)
|
2,326
|
|
(2,487)
|
7,565
|
|
Non-controlling
interests
|
|
358
|
179
|
252
|
|
1,130
|
922
|
|
|
|
11,161
|
(1,984)
|
2,578
|
|
(1,357)
|
8,487
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Note 8)
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
|
|
|
|
|
|
|
Per
ordinary share (cents)
|
|
|
|
|
|
|
|
|
Basic
|
|
59.43
|
(11.45)
|
11.75
|
|
(13.10)
|
37.57
|
|
Diluted
|
|
58.36
|
(11.45)
|
11.66
|
|
(13.10)
|
37.33
|
|
Per
ADS (dollars)
|
|
|
|
|
|
|
|
|
Basic
|
|
3.57
|
(0.69)
|
0.70
|
|
(0.79)
|
2.25
|
|
Diluted
|
|
3.50
|
(0.69)
|
0.70
|
|
(0.79)
|
2.24
|
Top of page 17
Condensed group statement of comprehensive income
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
11,161
|
(1,984)
|
2,578
|
|
(1,357)
|
8,487
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|
Currency translation
differences(a)
|
|
2,142
|
(1,725)
|
(619)
|
|
(3,786)
|
(921)
|
|
Exchange (gains) losses on translation of foreign
operations reclassified to gain or loss on sale of businesses and
fixed assets(b)
|
|
(32)
|
-
|
36
|
|
10,759
|
36
|
|
Cash
flow hedges and costs of hedging
|
|
584
|
(142)
|
408
|
|
763
|
(259)
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
392
|
(134)
|
104
|
|
402
|
44
|
|
Income
tax relating to items that may be reclassified
|
|
(108)
|
(54)
|
(24)
|
|
(334)
|
65
|
|
|
|
2,978
|
(2,055)
|
(95)
|
|
7,804
|
(1,035)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
Remeasurements of the net pension and other
post-retirement benefit liability or asset(c)
|
|
(1,508)
|
112
|
1,306
|
|
340
|
4,416
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
1
|
(1)
|
-
|
|
(4)
|
1
|
|
Income
tax relating to items that will not be reclassified
|
|
538
|
19
|
(434)
|
|
68
|
(1,317)
|
|
|
|
(969)
|
130
|
872
|
|
404
|
3,100
|
|
Other comprehensive income
|
|
2,009
|
(1,925)
|
777
|
|
8,208
|
2,065
|
|
Total comprehensive income
|
|
13,170
|
(3,909)
|
3,355
|
|
6,851
|
10,552
|
|
Attributable to
|
|
|
|
|
|
|
|
|
bp
shareholders
|
|
12,760
|
(4,042)
|
3,095
|
|
5,782
|
9,654
|
|
Non-controlling
interests
|
|
410
|
133
|
260
|
|
1,069
|
898
|
|
|
|
13,170
|
(3,909)
|
3,355
|
|
6,851
|
10,552
|
(a)
Fourth and third quarter 2022 are principally affected by movements
in the Pound Sterling against the US dollar. Full year 2022 is
principally affected by movements in the Russian rouble and Pound
Sterling against the US dollar.
(b) See Note 1 Basis of
preparation - Investment in
Rosneft.
(c) See Note 1 Basis
of preparation - Pensions and other
post-retirement benefits for further information.
Top of page 18
Condensed group statement of changes in equity
|
|
|
bp shareholders'
|
Non-controlling interests
|
Total
|
|
$ million
|
|
equity(a)
|
Hybrid bonds
|
Other interest
|
equity
|
|
At 1 January 2022
|
|
75,463
|
13,041
|
1,935
|
90,439
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
5,782
|
519
|
550
|
6,851
|
|
Dividends
|
|
(4,365)
|
-
|
(294)
|
(4,659)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
1
|
-
|
-
|
1
|
|
Issue of ordinary share capital(b)
|
|
820
|
-
|
-
|
820
|
|
Repurchase of ordinary share capital
|
|
(10,493)
|
-
|
-
|
(10,493)
|
|
Share-based payments, net of tax
|
|
847
|
-
|
-
|
847
|
|
Issue of perpetual hybrid bonds
|
|
(4)
|
374
|
-
|
370
|
|
Payments on perpetual hybrid bonds
|
|
15
|
(544)
|
-
|
(529)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
(513)
|
-
|
(144)
|
(657)
|
|
At 31 December 2022
|
|
67,553
|
13,390
|
2,047
|
82,990
|
|
|
|
|
|
|
|
|
|
|
bp shareholders'
|
Non-controlling interests
|
Total
|
|
$ million
|
|
equity
|
Hybrid bonds
|
Other interest
|
equity
|
|
At 1 January 2021
|
|
71,250
|
12,076
|
2,242
|
85,568
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
9,654
|
507
|
391
|
10,552
|
|
Dividends
|
|
(4,316)
|
-
|
(311)
|
(4,627)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(10)
|
-
|
-
|
(10)
|
|
Repurchase of ordinary share capital
|
|
(3,151)
|
-
|
-
|
(3,151)
|
|
Share-based payments, net of tax
|
|
632
|
-
|
-
|
632
|
|
Share
of equity-accounted entities' changes in equity, net of
tax
|
|
556
|
-
|
-
|
556
|
|
Issue of perpetual hybrid bonds
|
|
(26)
|
950
|
-
|
924
|
|
Payments on perpetual hybrid bonds
|
|
(7)
|
(492)
|
-
|
(499)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
881
|
-
|
(387)
|
494
|
|
At 31 December 2021
|
|
75,463
|
13,041
|
1,935
|
90,439
|
(a)
In 2022 $9.2 billion of the opening foreign currency translation
reserve has been moved to the profit and loss account reserve as a
result of bp's decision to exit its shareholding in Rosneft and its
other businesses with Rosneft in Russia. For more information see
Note 1.
(b)
Relates to ordinary shares issued as non-cash consideration for the
acquisition of the public units of BP Midstream Partners
LP.
Top of page 19
Group balance sheet
|
|
|
31 December
|
31 December
|
|
$ million
|
|
2022
|
2021
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
106,044
|
112,902
|
|
Goodwill
|
|
11,960
|
12,373
|
|
Intangible assets
|
|
10,200
|
6,451
|
|
Investments in joint ventures
|
|
12,400
|
9,982
|
|
Investments in associates(a)
|
|
8,201
|
21,001
|
|
Other investments
|
|
2,670
|
2,544
|
|
Fixed assets
|
|
151,475
|
165,253
|
|
Loans
|
|
1,271
|
922
|
|
Trade and other receivables
|
|
1,092
|
2,693
|
|
Derivative financial instruments
|
|
12,841
|
7,006
|
|
Prepayments
|
|
576
|
479
|
|
Deferred tax assets
|
|
3,908
|
6,410
|
|
Defined benefit pension plan surpluses
|
|
9,269
|
11,919
|
|
|
|
180,432
|
194,682
|
|
Current assets
|
|
|
|
|
Loans
|
|
315
|
355
|
|
Inventories
|
|
28,081
|
23,711
|
|
Trade and other receivables
|
|
34,010
|
27,139
|
|
Derivative financial instruments
|
|
11,554
|
5,744
|
|
Prepayments
|
|
2,092
|
2,486
|
|
Current tax receivable
|
|
621
|
542
|
|
Other investments
|
|
578
|
280
|
|
Cash and cash equivalents
|
|
29,195
|
30,681
|
|
|
|
106,446
|
90,938
|
|
Assets classified as held for sale (Note 3)
|
|
1,242
|
1,652
|
|
|
|
107,688
|
92,590
|
|
Total assets
|
|
288,120
|
287,272
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
63,984
|
52,611
|
|
Derivative financial instruments
|
|
12,618
|
7,565
|
|
Accruals
|
|
6,398
|
5,638
|
|
Lease liabilities
|
|
2,102
|
1,747
|
|
Finance debt
|
|
3,198
|
5,557
|
|
Current tax payable
|
|
4,065
|
1,554
|
|
Provisions
|
|
6,332
|
5,256
|
|
|
|
98,697
|
79,928
|
|
Liabilities directly associated with assets classified as held for
sale (Note 3)
|
|
321
|
359
|
|
|
|
99,018
|
80,287
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
10,387
|
10,567
|
|
Derivative financial instruments
|
|
13,537
|
6,356
|
|
Accruals
|
|
1,233
|
968
|
|
Lease liabilities
|
|
6,447
|
6,864
|
|
Finance debt
|
|
43,746
|
55,619
|
|
Deferred tax liabilities
|
|
10,526
|
8,780
|
|
Provisions
|
|
14,992
|
19,572
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
5,244
|
7,820
|
|
|
|
106,112
|
116,546
|
|
Total liabilities
|
|
205,130
|
196,833
|
|
Net assets
|
|
82,990
|
90,439
|
|
Equity
|
|
|
|
|
bp shareholders' equity
|
|
67,553
|
75,463
|
|
Non-controlling interests
|
|
15,437
|
14,976
|
|
Total equity
|
|
82,990
|
90,439
|
(a) See Note 1 Basis
of preparation - Investment in
Rosneft.
Top of page 20
Condensed group cash flow statement
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Profit (loss) before taxation
|
|
16,902
|
1,980
|
4,042
|
|
15,405
|
15,227
|
|
Adjustments
to reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,781
|
3,657
|
3,909
|
|
14,703
|
14,972
|
|
Net
impairment and (gain) loss on sale of businesses and fixed
assets
|
|
3,456
|
(1,449)
|
937
|
|
26,656
|
(2,997)
|
|
Earnings
from equity-accounted entities, less dividends
received
|
|
582
|
(391)
|
(201)
|
|
(830)
|
(2,157)
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
186
|
72
|
74
|
|
396
|
466
|
|
Share-based
payments
|
|
166
|
251
|
226
|
|
795
|
627
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(60)
|
(15)
|
(184)
|
|
(257)
|
(655)
|
|
Net
charge for provisions, less payments
|
|
(1,013)
|
173
|
194
|
|
440
|
2,934
|
|
Movements
in inventories and other current and non-current assets and
liabilities
|
|
(6,847)
|
6,764
|
(1,709)
|
|
(6,270)
|
(626)
|
|
Income
taxes paid
|
|
(3,582)
|
(2,754)
|
(1,172)
|
|
(10,106)
|
(4,179)
|
|
Net cash provided by operating activities
|
|
13,571
|
8,288
|
6,116
|
|
40,932
|
23,612
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditure on property, plant and equipment, intangible and other
assets
|
|
(3,696)
|
(3,105)
|
(2,772)
|
|
(12,069)
|
(10,887)
|
|
Acquisitions, net of cash acquired (Note 2)
|
|
(3,522)
|
(3)
|
(132)
|
|
(3,530)
|
(186)
|
|
Investment in joint ventures
|
|
(107)
|
(40)
|
(581)
|
|
(600)
|
(1,440)
|
|
Investment in associates
|
|
(44)
|
(46)
|
(148)
|
|
(131)
|
(335)
|
|
Total cash capital expenditure
|
|
(7,369)
|
(3,194)
|
(3,633)
|
|
(16,330)
|
(12,848)
|
|
Proceeds from disposal of fixed assets
|
|
27
|
12
|
520
|
|
709
|
1,145
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
587
|
594
|
1,745
|
|
1,841
|
5,812
|
|
Proceeds from loan repayments
|
|
7
|
15
|
36
|
|
67
|
197
|
|
Cash provided from investing activities
|
|
621
|
621
|
2,301
|
|
2,617
|
7,154
|
|
Net cash used in investing activities
|
|
(6,748)
|
(2,573)
|
(1,332)
|
|
(13,713)
|
(5,694)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares (Note 8)
|
|
(3,240)
|
(2,876)
|
(1,725)
|
|
(9,996)
|
(3,151)
|
|
Lease liability payments
|
|
(513)
|
(478)
|
(502)
|
|
(1,961)
|
(2,082)
|
|
Proceeds from long-term financing
|
|
10
|
1
|
648
|
|
2,013
|
6,987
|
|
Repayments of long-term financing
|
|
(2,197)
|
(4,035)
|
(2,963)
|
|
(11,697)
|
(16,804)
|
|
Net increase (decrease) in short-term debt
|
|
190
|
(618)
|
969
|
|
(1,392)
|
1,077
|
|
Issue of perpetual hybrid bonds
|
|
48
|
194
|
65
|
|
370
|
924
|
|
Payments relating to perpetual hybrid bonds
|
|
(219)
|
(180)
|
(100)
|
|
(708)
|
(538)
|
|
Payments
relating to transactions involving non-controlling interests (Other
interest)
|
|
(1)
|
(2)
|
-
|
|
(9)
|
(560)
|
|
Receipts
relating to transactions involving non-controlling interests (Other
interest)
|
|
1
|
3
|
12
|
|
11
|
683
|
|
Dividends paid - bp shareholders
|
|
(1,088)
|
(1,140)
|
(1,077)
|
|
(4,358)
|
(4,304)
|
|
-
non-controlling interests
|
|
(100)
|
(66)
|
(66)
|
|
(294)
|
(311)
|
|
Net cash provided by (used in) financing activities
|
|
(7,109)
|
(9,197)
|
(4,739)
|
|
(28,021)
|
(18,079)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
177
|
(322)
|
(58)
|
|
(684)
|
(269)
|
|
Increase (decrease) in cash and cash equivalents
|
|
(109)
|
(3,804)
|
(13)
|
|
(1,486)
|
(430)
|
|
Cash and cash equivalents at beginning of period
|
|
29,304
|
33,108
|
30,694
|
|
30,681
|
31,111
|
|
Cash and cash equivalents at end of period
|
|
29,195
|
29,304
|
30,681
|
|
29,195
|
30,681
|
Top of page 21
Notes
Note 1. Basis of preparation
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 2021 included
in BP
Annual Report and Form 20-F 2021.
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
2022 which are the same as
those used in preparing BP Annual Report and Form
20-F 2021. There are
no new or amended standards or interpretations adopted from 1
January 2022 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 2021. These have been subsequently considered at the
end of each quarter to determine if any changes were required to
those judgements and estimates.
Impairment testing assumptions
The group's value-in-use impairment testing price assumptions for
Brent oil and Henry Hub gas were revised during the fourth quarter
from those disclosed in the BP Annual Report and Form 20-F
2021. Prices disclosed are in
real 2021 terms. The Brent oil assumption up to 2030 was
increased to $70 per barrel to reflect near term supply constraints
before steadily declining to $45 per barrel by 2050 continuing to
reflect the assumption that as the energy system decarbonises,
falling oil demand will cause oil prices to decline. The price
assumptions for Henry Hub gas up to 2035 and up to 2050 were
increased to $4 per mmBtu and $3.50 per mmBtu respectively to
reflect the increased demand for US gas production to offset
reducing Russian gas flows. A summary of the group's price
assumptions for value-in-use impairment testing, in real 2021
terms, is provided below:
|
|
|
|
2023
|
2025
|
2030
|
2040
|
2050
|
|
Brent oil ($/bbl)
|
|
|
77
|
70
|
70
|
59
|
45
|
|
Henry Hub gas ($/mmBtu)
|
|
|
4.00
|
4.00
|
4.00
|
3.50
|
3.50
|
The post-tax discount rates used for value-in-use impairment
testing of assets other than low carbon energy assets was
increased to 7% (31 December 2021: 6%) reflecting rising costs of
capital.
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 3.5% in the fourth quarter (31
December 2021 2.0%) to reflect increasing US Treasury yields. The
principal impact of this rate increase was a $2.1 billion decrease
in the decommissioning provision with a corresponding decrease in
the carrying amount of property, plant and equipment of $1.6
billion in the fourth quarter.
Pensions and other post-retirement benefits
The group's defined benefit plans are reviewed quarterly to
determine any changes to the fair value of the plan assets or
present value of the defined benefit obligations. As a result of
the review during the fourth quarter of 2022, the group's total net
defined benefit plan surplus as at 31 December 2022 is $4.0
billion, compared to a surplus of $5.0 billion at 30 September 2022
and $4.1 billion at 31 December 2021. The movement for the year
principally reflects net actuarial gains reported in other
comprehensive income arising from significant increases in the UK,
US and Eurozone discount rates largely offset by negative asset
performance. The current environment is likely to continue to
affect the values of the plan assets and obligations resulting in
potential volatility in the amount of the net defined benefit
pension plan surplus/deficit recognized.
Investment in Rosneft
On 27 February 2022, bp announced it will exit its shareholding in
Rosneft and bp's two nominated Rosneft directors both stepped down
from Rosneft's board. As a result, the significant judgement on
significant influence over Rosneft was reassessed and a new
significant estimate was identified for the fair value of bp's
equity investment in Rosneft. From that date, bp accounts for its
interest in Rosneft as a financial asset measured at fair value
within 'Other investments'. Russia has implemented a number of
counter-sanctions including restrictions on the divestment from
Russian assets by foreign investors. Further, bp is not able to
sell its Rosneft shares on the Moscow Stock Exchange and is unable
to ascribe probabilities to possible outcomes of any exit process.
As a result, it is considered that any measure of fair value, other
than nil, would be subject to such high measurement uncertainty
that no estimate would provide useful information even if it were
accompanied by a description of the estimate made in producing it
and an explanation of the uncertainties that affect the estimate.
Accordingly, it is not
currently possible to estimate any carrying value other than zero
when determining the measurement of the interest in Rosneft as at
31 December 2022.
Top of page 22
Note 1. Basis of preparation (continued)
During the year ended 31
December 2022, Rosneft
held shareholders meetings to approve resolutions to pay dividends.
bp did not participate in those meetings. In line with the
resolutions, bp would be entitled to dividend income. Russia has
imposed restrictions on the payments of dividends to certain
foreign shareholders, including those based in the UK, requiring
such dividends to be paid in roubles into restricted
bank
accounts and a requirement for approval of the Russian government
for transfers from any such bank accounts out of Russia. Given the
restrictions applicable to such accounts, management considers that
the criteria for recognising any dividend income from Rosneft for
the year ended 31 December 2022 have not been
met.
As a result of bp's decision to exit its shareholding in Rosneft in
the first quarter 2022, the group has ceased to report Rosneft as a
separate segment in its financial reporting for 2022. Rosneft
results up to 27 February 2022 are included within other businesses
& corporate (OB&C), and 2021 comparatives have been
restated to include the Rosneft segment as per the table
below.
|
|
|
OB&C
(as previously reported)
|
Rosneft
(as previously reported)
|
OB&C restated
|
OB&C
(as previously reported)
|
Rosneft
(as previously reported)
|
OB&C restated
|
|
|
|
Fourth
|
Fourth
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
Year
|
Year
|
Year
|
|
$ million
|
|
2021
|
2021
|
2021
|
2021
|
2021
|
2021
|
|
|
|
|
|
|
Profit (loss) before interest and tax
|
|
(924)
|
623
|
(301)
|
(2,777)
|
2,688
|
(89)
|
|
Inventory holding (gains) losses*
|
|
-
|
(68)
|
(68)
|
-
|
(259)
|
(259)
|
|
RC profit (loss) before interest and tax
|
|
(924)
|
555
|
(369)
|
(2,777)
|
2,429
|
(348)
|
|
Net (favourable) adverse impact of adjusting items
|
|
389
|
190
|
579
|
1,394
|
291
|
1,685
|
|
Underlying RC profit (loss) before interest and tax
|
|
(535)
|
745
|
210
|
(1,383)
|
2,720
|
1,337
|
|
Taxation on an underlying RC basis
|
|
128
|
(73)
|
55
|
294
|
(269)
|
25
|
|
Underlying RC profit (loss) before interest
|
|
(407)
|
672
|
265
|
(1,089)
|
2,451
|
1,362
|
Since the first quarter 2022, bp has also determined that its other
businesses with Rosneft within Russia, which are included in the
oil production & operations segment also have a fair value of
nil and are subject to similar sanctions and restrictions with
respect to the receipt of dividends as described above. Management
considers that the criteria
for recognising dividend income from other businesses with Rosneft
within Russia that declared a dividend in the fourth quarter 2022
have not been met.
The total pre-tax charge for the year to 31 December 2022 relating
to bp's investment in Rosneft and other businesses with Rosneft in
Russia is $25,520 million.
Note 2. Business combinations
The group undertook a number of business combinations during 2022.
For the fourth quarter and full year 2022, total consideration paid
in cash amounted to $3,663 million and $3,671 million respectively,
offset by cash acquired of $141 million.
Archaea Energy
On 28 December 2022, bp acquired 100% of the issued common stock of
Archaea Energy Inc. a leading producer of renewable natural gas
(RNG) in the US, that was listed on the New York Stock
Exchange.
The acquisition expands bp's presence in the US biogas industry,
enhancing its ability to support customers' decarbonization goals
and progressing its aim to reduce the average lifecycle carbon
intensity of the energy products it sells.
The total cash consideration for the transaction, all paid at
completion, was $3,137 million.
The transaction has been accounted for as a business combination
using the acquisition method. The provisional fair values of the
identifiable assets and liabilities acquired, as at the date of
acquisition, are shown in the table below. The goodwill recognized
reflects the part of the project development pipeline that did not
qualify for separate recognition at the acquisition date and
goodwill arising from recognition of deferred tax liabilities on
fair value uplifts. The goodwill balance is not expected to be
deductible for tax purposes.
The transaction included a step acquisition of the Mavrix LLC joint
venture, which bp and Archaea Energy each held a 50% interest in
prior to this transaction. The fair value of bp's interest in
Mavrix LLC immediately before the acquisition date was $373 million
and the gain recognized in 'Interest and other income' as a result
of remeasuring this interest to fair value was $267
million.
Top of page 23
Note 2. Business combinations (continued)
|
|
|
Year
|
|
$ million
|
|
2022
|
|
Assets
|
|
|
|
Property
plant and equipment
|
|
885
|
|
Goodwill
|
|
409
|
|
Intangible
assets
|
|
3,475
|
|
Investments
in equity-accounted entities
|
|
917
|
|
Inventory
|
|
42
|
|
Trade
and other receivables
|
|
67
|
|
Cash
and cash equivalents
|
|
107
|
|
Liabilities
|
|
|
|
Trade
and other payables
|
|
(1,032)
|
|
Finance
debt
|
|
(1,044)
|
|
Deferred
tax liabilities
|
|
(293)
|
|
Provisions
|
|
(16)
|
|
Non-controlling interests
|
|
(7)
|
|
Total consideration
|
|
3,510
|
|
Of which:
|
|
|
|
Cash
|
|
3,137
|
|
Fair
value of previously held interest in Mavrix LLC
|
|
373
|
As the transaction completed shortly prior to the end of the
reporting period, the acquisition-date fair values of the assets
and liabilities acquired are provisional. As we gain further
understanding of the acquired assets and development pipeline,
these fair values may be subsequently adjusted, including
goodwill.
An analysis of the cash flows relating to the acquisition included
within the cash flow statement for the full year 2022 is
provided below.
|
|
|
Year
|
|
$ million
|
|
2022
|
|
Transaction costs of the acquisition (included in cash flows from
operating activities)
|
|
56
|
|
Cash consideration paid, net of cash acquired (included in cash
flows from investing activities)
|
|
3,030
|
|
Total net cash outflow for the acquisition
|
|
3,086
|
|
Settlement of acquired debt and warrants liabilities immediately
after completion (included in cash flows from financing
activities)
|
|
1,044
|
|
Total net cash outflow related to the acquisition
|
|
4,130
|
The revenues and profit before tax generated by the acquired
activities from the date of acquisition to 31 December 2022 were
immaterial. If the business combination had taken place on 1
January 2022, it is estimated that the acquired activities would
have generated revenues of $370 million and losses before tax of
$169 million.
Other acquisitions
The fair value of the net assets (including goodwill) recognized
from other business combinations in the fourth quarter and full
year was $611 million. This principally related to the acquisitions
of the Flat Ridge 2 wind farm and EDF Energy Services in North
America.
Top of page 24
Note 3. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 31
December 2022 is $1,242 million, with associated liabilities of
$321 million. These relate to the transactions described
below.
On 7 September 2022, bp announced that it had agreed to sell its
upstream business in Algeria to Eni. Completion is subject to
customary governmental and other approvals. Assets of $511 million
and associated liabilities of $48 million have been classified as
held for sale in the group balance sheet at 31 December
2022.
On 8 August 2022, bp announced an agreement to sell its 50%
interest in the bp-Husky Toledo refinery in Ohio US, to Cenovus
Energy, its partner in the facility. Following a fire at the
refinery, it has been shut down since 20 September 2022. Assets of
$731 million and associated liabilities of $273 million have been
classified as held for sale in the group balance sheet at 31
December 2022.
Note 4. Impairment and losses on sale of businesses and fixed
assets(a)
Net impairment reversals and losses on sale of businesses and fixed
assets for the fourth quarter were a charge of $3,629 million
and net impairment charges and losses on sale of businesses and
fixed assets for the full year were $30,522 million, compared
with net charges of $1,223 million and reversals of
$1,121 million for the same periods in 2021 and include net
impairment charges for the quarter of $3,564 million and for
the full year of $18,341 million, compared with net charges of
$1,137 million and reversals of $1,351 million for the
same periods in 2021.
gas & low carbon energy segment
In the gas & low carbon energy segment there was a net
impairment reversal of $1,111 million and $588 million
for the fourth quarter and full year respectively, compared with
net reversals of $553 million and $1,504 million for the
same periods in 2021 respectively.
oil production & operations segment
In the oil production & operations segment there was a net
impairment charge of $3,251 million and $3,587 million
for the fourth quarter and full year respectively, compared with
net charges of $790 million and reversals of $862 million
for the same periods in 2021.
Impairment charges in the fourth quarter principally relate to
expected portfolio changes with recoverable amounts of those cash
generating units based on their fair value less costs to
sell.
Impairment charges for the year ended 31 December 2022 included
charges related to the decision to exit other businesses with
Rosneft within Russia.
customers and products
In the customer and products segment there was a net impairment
charge of $1,380 million and $1,806 million for the
fourth quarter and full year 2022 respectively compared with net
charges of $885 million and $949 million for the same
periods in 2021. 2022 impairment charges principally relate to
changes in long-term economic assumptions in the Products business
and announced portfolio changes. The recoverable amounts of the
cash generating units were based on value-in-use
calculations.
other businesses and corporate
In the other businesses and corporate segment there was an
impairment charge of $44 million and $13,536 million for
the fourth quarter and full year respectively, compared with net
impairment charges of $15 million and $66 million for the
same periods in 2021.
The impairment charge and the loss on sale of businesses and fixed
assets for the year mainly relates to bp's investment in Rosneft -
see Note 1.
(a)
All disclosures are pre-tax.
Top of page 25
Note 5. Analysis of replacement cost profit (loss) before interest
and tax and reconciliation to profit (loss) before
taxation
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
gas & low carbon energy
|
|
16,439
|
(2,956)
|
1,911
|
|
14,696
|
2,133
|
|
oil production & operations
|
|
1,688
|
6,965
|
3,212
|
|
19,721
|
10,501
|
|
customers & products
|
|
771
|
2,586
|
(426)
|
|
8,869
|
2,208
|
|
other businesses & corporate(a)
|
|
103
|
(1,093)
|
(369)
|
|
(26,737)
|
(348)
|
|
|
|
19,001
|
5,502
|
4,328
|
|
16,549
|
14,494
|
|
Consolidation adjustment - UPII*
|
|
147
|
(21)
|
(7)
|
|
139
|
(67)
|
|
RC profit (loss) before interest and tax
|
|
19,148
|
5,481
|
4,321
|
|
16,688
|
14,427
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
(10)
|
(14)
|
(8)
|
|
(8)
|
33
|
|
oil
production & operations
|
|
(2)
|
1
|
-
|
|
(7)
|
8
|
|
customers
& products
|
|
(1,416)
|
(2,855)
|
412
|
|
1,366
|
3,355
|
|
other businesses &
corporate(a)
|
|
-
|
-
|
68
|
|
-
|
259
|
|
Profit (loss) before interest and tax
|
|
17,720
|
2,613
|
4,793
|
|
18,039
|
18,082
|
|
Finance costs
|
|
834
|
649
|
759
|
|
2,703
|
2,857
|
|
Net
finance expense/(income) relating to pensions and other
post-retirement benefits
|
|
(16)
|
(16)
|
(8)
|
|
(69)
|
(2)
|
|
Profit (loss) before taxation
|
|
16,902
|
1,980
|
4,042
|
|
15,405
|
15,227
|
|
|
|
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
|
US
|
|
1,404
|
3,954
|
959
|
|
10,957
|
5,785
|
|
Non-US
|
|
17,744
|
1,527
|
3,362
|
|
5,731
|
8,642
|
|
|
|
19,148
|
5,481
|
4,321
|
|
16,688
|
14,427
|
(a)From first quarter 2022 the results of Rosneft,
previously reported as a separate segment, are also included in
other businesses & corporate. Comparative information for 2021
has been restated to reflect the changes in reportable segments.
For more information see Note 1 Basis of preparation
- Investment in
Rosneft.
Top of page 26
Note 6. Sales and other operating revenues
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
By segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
26,793
|
8,053
|
14,545
|
|
56,255
|
30,840
|
|
oil production & operations
|
|
6,932
|
8,599
|
7,482
|
|
33,193
|
24,519
|
|
customers & products
|
|
43,072
|
47,831
|
37,446
|
|
188,623
|
130,095
|
|
other businesses & corporate
|
|
779
|
552
|
484
|
|
2,299
|
1,724
|
|
|
|
77,576
|
65,035
|
59,957
|
|
280,370
|
187,178
|
|
|
|
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
(441)
|
2,785
|
1,199
|
|
5,913
|
4,563
|
|
oil production & operations
|
|
6,916
|
7,589
|
7,202
|
|
30,294
|
22,408
|
|
customers & products
|
|
610
|
(276)
|
650
|
|
1,418
|
1,226
|
|
other businesses & corporate
|
|
1,234
|
(74)
|
352
|
|
1,353
|
1,242
|
|
|
|
8,319
|
10,024
|
9,403
|
|
38,978
|
29,439
|
|
|
|
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
27,234
|
5,268
|
13,346
|
|
50,342
|
26,277
|
|
oil production & operations
|
|
16
|
1,010
|
280
|
|
2,899
|
2,111
|
|
customers & products
|
|
42,462
|
48,107
|
36,796
|
|
187,205
|
128,869
|
|
other businesses & corporate
|
|
(455)
|
626
|
132
|
|
946
|
482
|
|
Total sales and other operating revenues
|
|
69,257
|
55,011
|
50,554
|
|
241,392
|
157,739
|
|
|
|
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
|
|
|
|
US
|
|
18,563
|
22,451
|
17,927
|
|
87,497
|
63,095
|
|
Non-US
|
|
61,593
|
45,111
|
43,423
|
|
203,832
|
128,584
|
|
|
|
80,156
|
67,562
|
61,350
|
|
291,329
|
191,679
|
|
Less: sales and other operating revenues between areas
|
|
10,899
|
12,551
|
10,796
|
|
49,937
|
33,940
|
|
|
|
69,257
|
55,011
|
50,554
|
|
241,392
|
157,739
|
|
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude oil
|
|
809
|
1,322
|
1,583
|
|
6,309
|
5,483
|
|
Oil products
|
|
34,800
|
40,036
|
29,790
|
|
149,854
|
101,418
|
|
Natural gas, LNG and NGLs
|
|
11,040
|
11,106
|
10,449
|
|
41,770
|
24,378
|
|
Non-oil products and other revenues from contracts with
customers
|
|
1,459
|
2,267
|
806
|
|
7,896
|
6,082
|
|
Revenue from contracts with customers
|
|
48,108
|
54,731
|
42,628
|
|
205,829
|
137,361
|
|
Other operating revenues(a)
|
|
21,149
|
280
|
7,926
|
|
35,563
|
20,378
|
|
Total sales and other operating revenues
|
|
69,257
|
55,011
|
50,554
|
|
241,392
|
157,739
|
(a)
Principally relates to commodity derivative transactions including
sales of bp own production in trading books.
Top of page 27
Note 7. Depreciation, depletion and amortization
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,373
|
1,177
|
1,265
|
|
5,008
|
4,464
|
|
oil production & operations
|
|
1,383
|
1,381
|
1,628
|
|
5,564
|
6,528
|
|
customers & products
|
|
741
|
697
|
754
|
|
2,870
|
3,000
|
|
other businesses & corporate
|
|
217
|
212
|
216
|
|
876
|
813
|
|
|
|
3,714
|
3,467
|
3,863
|
|
14,318
|
14,805
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
|
US
|
|
1,202
|
1,180
|
1,209
|
|
4,624
|
4,697
|
|
Non-US
|
|
2,512
|
2,287
|
2,654
|
|
9,694
|
10,108
|
|
|
|
3,714
|
3,467
|
3,863
|
|
14,318
|
14,805
|
Note 8. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by
dividing the profit (loss) for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the period. Against the authority granted at
bp's 2022 annual general meeting, 586 million ordinary
shares repurchased for cancellation were settled during the fourth
quarter 2022 for a total cost of $3,240 million. This
brings the total number of shares repurchased and settled in the
full year to 1,900 million for a total cost
of $9,996 million. A further 84 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 $497 million which has been accrued at 31 December
2022. 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.
165 million new ordinary shares were issued in April 2022 as
non-cash consideration for the acquisition of the public units of
BP Midstream Partners LP.
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.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Results for the period
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
10,803
|
(2,163)
|
2,326
|
|
(2,487)
|
7,565
|
|
Less: preference dividend
|
|
-
|
-
|
-
|
|
1
|
2
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
10,803
|
(2,163)
|
2,326
|
|
(2,488)
|
7,563
|
|
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
18,178,821
|
18,885,725
|
19,800,620
|
|
18,987,936
|
20,128,862
|
|
ADS equivalent(c)
|
|
3,029,803
|
3,147,620
|
3,300,103
|
|
3,164,656
|
3,354,810
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding used to calculate diluted
earnings per share
|
|
18,509,421
|
18,885,725
|
19,947,023
|
|
18,987,936
|
20,260,388
|
|
ADS equivalent(c)
|
|
3,084,903
|
3,147,620
|
3,324,503
|
|
3,164,656
|
3,376,731
|
|
|
|
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
17,974,112
|
18,566,848
|
19,642,221
|
|
17,974,112
|
19,642,221
|
|
ADS equivalent(c)
|
|
2,995,685
|
3,094,474
|
3,273,703
|
|
2,995,685
|
3,273,703
|
(a)
Excludes treasury shares and includes certain shares that will be
issued in the future under employee share-based payment
plans.
(b)
If the inclusion of potentially issuable shares would decrease loss
per share, the potentially issuable shares are excluded from the
weighted average number of shares outstanding used to calculate
diluted earnings per share. The numbers of potentially issuable
shares that have been excluded from the calculation for the third
quarter 2022 and full year 2022 are 274,005 thousand (ADS
equivalent 45,668 thousand) and 242,289 thousand (ADS equivalent
40,381 thousand).
(c)
One ADS is equivalent to six ordinary shares.
Top of page 28
Note 9. Dividends
Dividends payable
BP today announced an interim dividend of 6.610 cents per
ordinary share which is expected to be paid on 31 March
2023 to ordinary shareholders and American Depositary Share
(ADS) holders on the register on 17 February 2023. The
ex-dividend date will be 16 February 2023. The corresponding
amount in sterling is due to be announced on 14 March 2023,
calculated based on the average of the market exchange rates over
three dealing days between 8 March 2023 and 10 March
2023. Holders of ADSs are expected to
receive $0.39660 per ADS (less applicable fees). The
board has decided not to offer a scrip dividend alternative in
respect of the fourth quarter 2022 dividend. Ordinary shareholders
and ADS holders (subject to certain exceptions) will be able to
participate in a dividend reinvestment programme. Details of
the fourth quarter dividend and timetable are available
at bp.com/dividends and
further details of the dividend reinvestment programmes are
available at bp.com/drip.
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
|
cents
|
|
6.006
|
6.006
|
5.460
|
|
22.932
|
21.420
|
|
pence
|
|
4.940
|
5.168
|
4.105
|
|
18.624
|
15.538
|
|
Dividends paid per ADS (cents)
|
|
36.04
|
36.04
|
32.76
|
|
137.59
|
128.52
|
Note 10. Net debt
|
Net debt*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Finance debt(a)
|
|
46,944
|
46,560
|
61,176
|
|
46,944
|
61,176
|
|
Fair value (asset) liability of hedges related to finance
debt(b)
|
|
3,673
|
4,746
|
118
|
|
3,673
|
118
|
|
|
|
50,617
|
51,306
|
61,294
|
|
50,617
|
61,294
|
|
Less: cash and cash equivalents
|
|
29,195
|
29,304
|
30,681
|
|
29,195
|
30,681
|
|
Net debt(c)
|
|
21,422
|
22,002
|
30,613
|
|
21,422
|
30,613
|
|
Total equity
|
|
82,990
|
73,333
|
90,439
|
|
82,990
|
90,439
|
|
Gearing*
|
|
20.5%
|
23.1%
|
25.3%
|
|
20.5%
|
25.3%
|
(a)
The fair value of finance debt at 31 December 2022
was $42,590 million (30 September 2022 $41,414
million, 31 December 2021 $62,946 million).
(b)
Derivative financial instruments entered into for the purpose of
managing interest rate and foreign currency exchange risk
associated with net debt with a fair value liability position
of $91 million at 31 December 2022
(third quarter 2022 liability
of $116 million and fourth
quarter 2021 liability of $166 million) are not
included in the calculation of net debt shown above as hedge
accounting is not applied for these instruments.
(c)
Net debt does not include accrued interest, which is reported
within other receivables and other payables on the balance sheet
and for which the associated cash flows are presented as operating
cash flows in the group cash flow statement.
As part of actively managing its debt portfolio, year to date the
group has bought back a total of $7.4 billion of finance debt
($11.0 billion equivalent for the comparative period in 2021,
fourth quarter 2022 $nil, fourth quarter 2021 $2.9 billion)
consisting entirely of US dollar bonds. Derivatives associated with
non-US dollar debt bought back in relevant comparative periods were
also terminated. These transactions have no significant impact on
net debt or gearing.
Note 11. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 6 February 2023, is unaudited
and does not constitute statutory financial statements. Audited
financial information will be published in BP Annual Report and Form
20-F 2022. BP Annual Report and Form
20-F 2021 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 29
Additional information
Capital expenditure*
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
Organic capital expenditure*
|
|
3,861
|
3,191
|
3,512
|
|
12,470
|
11,779
|
|
Inorganic capital expenditure*(a)(b)
|
|
3,508
|
3
|
121
|
|
3,860
|
1,069
|
|
|
|
7,369
|
3,194
|
3,633
|
|
16,330
|
12,848
|
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy(a)
|
|
1,609
|
958
|
1,037
|
|
4,251
|
4,741
|
|
oil production & operations
|
|
1,430
|
1,386
|
1,272
|
|
5,278
|
4,838
|
|
customers & products(b)
|
|
4,149
|
713
|
1,224
|
|
6,252
|
2,872
|
|
other businesses & corporate
|
|
181
|
137
|
100
|
|
549
|
397
|
|
|
|
7,369
|
3,194
|
3,633
|
|
16,330
|
12,848
|
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
|
US
|
|
4,929
|
1,377
|
1,305
|
|
8,656
|
4,858
|
|
Non-US
|
|
2,440
|
1,817
|
2,328
|
|
7,674
|
7,990
|
|
|
|
7,369
|
3,194
|
3,633
|
|
16,330
|
12,848
|
(a)
Full year 2021 includes the final payment of $712 million in
respect of the strategic partnership with Equinor.
(b)
Fourth quarter and full year 2022 include $3,030
million in respect of the Archaea Energy
acquisition.
Top of page 30
Adjusting items*
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
gas & low carbon energy
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets(a)
|
|
33
|
3
|
-
|
|
45
|
1,034
|
|
Net impairment and losses on sale of businesses and fixed
assets(b)
|
|
1,111
|
(6)
|
553
|
|
588
|
1,503
|
|
Environmental and other provisions
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Restructuring, integration and rationalization costs
|
|
3
|
-
|
(4)
|
|
8
|
(33)
|
|
Fair value accounting effects(c)(d)
|
|
12,502
|
(9,224)
|
(790)
|
|
(1,811)
|
(7,662)
|
|
Other
|
|
(358)
|
31
|
(59)
|
|
(197)
|
(237)
|
|
|
|
13,291
|
(9,196)
|
(300)
|
|
(1,367)
|
(5,395)
|
|
oil production & operations
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets(e)
|
|
68
|
1,851
|
224
|
|
3,446
|
869
|
|
Net impairment and losses on sale of businesses and fixed
assets(b)
|
|
(3,246)
|
(326)
|
(799)
|
|
(4,508)
|
776
|
|
Environmental and other provisions(f)
|
|
420
|
244
|
(235)
|
|
518
|
(1,144)
|
|
Restructuring, integration and rationalization costs
|
|
3
|
3
|
(2)
|
|
(11)
|
(92)
|
|
Fair value accounting effects
|
|
-
|
-
|
-
|
|
-
|
-
|
|
Other
|
|
15
|
(18)
|
-
|
|
52
|
(200)
|
|
|
|
(2,740)
|
1,754
|
(812)
|
|
(503)
|
209
|
|
customers & products
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
72
|
10
|
62
|
|
374
|
(52)
|
|
Net impairment and losses on sale of businesses and fixed
assets(b)
|
|
(1,451)
|
(85)
|
(961)
|
|
(1,983)
|
(1,097)
|
|
Environmental and other provisions
|
|
(65)
|
(1)
|
(102)
|
|
(101)
|
(111)
|
|
Restructuring, integration and rationalization costs
|
|
12
|
(4)
|
24
|
|
18
|
(11)
|
|
Fair value accounting effects(d)
|
|
189
|
(59)
|
146
|
|
(309)
|
436
|
|
Other(g)
|
|
112
|
-
|
(206)
|
|
81
|
(209)
|
|
|
|
(1,131)
|
(139)
|
(1,037)
|
|
(1,920)
|
(1,044)
|
|
other businesses &
corporate(h)
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
1
|
1
|
-
|
|
1
|
-
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(1)
|
-
|
(9)
|
|
(17)
|
(59)
|
|
Environmental and other provisions
|
|
(67)
|
67
|
(144)
|
|
(92)
|
(281)
|
|
Restructuring, integration and rationalization costs
|
|
3
|
6
|
(2)
|
|
19
|
(113)
|
|
Fair value accounting effects(d)
|
|
515
|
(785)
|
(212)
|
|
(1,381)
|
(849)
|
|
Rosneft(h)
|
|
-
|
-
|
(190)
|
|
(24,033)
|
(291)
|
|
Gulf of Mexico oil spill
|
|
(23)
|
(21)
|
(24)
|
|
(84)
|
(70)
|
|
Other
|
|
(19)
|
44
|
2
|
|
21
|
(22)
|
|
|
|
409
|
(688)
|
(579)
|
|
(25,566)
|
(1,685)
|
|
Total before interest and taxation
|
|
9,829
|
(8,269)
|
(2,728)
|
|
(29,356)
|
(7,915)
|
|
Finance costs(i)
|
|
(169)
|
(68)
|
(257)
|
|
(425)
|
(782)
|
|
Total before taxation
|
|
9,660
|
(8,337)
|
(2,985)
|
|
(29,781)
|
(8,697)
|
|
Taxation on adjusting items(j)
|
|
(1,542)
|
988
|
888
|
|
456
|
621
|
|
Taxation - tax rate change effect of UK energy profits
levy(k)
|
|
(1,056)
|
(778)
|
-
|
|
(1,834)
|
-
|
|
Total after taxation for period(l)
|
|
7,062
|
(8,127)
|
(2,097)
|
|
(31,159)
|
(8,076)
|
(a) Full
year 2021 relates to a gain from the divestment of a 20% stake
in Oman Block 61.
(b)
See Note 4 for further information.
(c)
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.
(d)
For further information, including the nature of fair value
accounting effects reported in each segment, see
pages 3, 6 and 37.
(e)
Third quarter and full year 2022 include a non-taxable
gain of $1,951 million arising from the contribution
of bp's Angolan business to Azule Energy. Full year 2022
also includes gains of $904 million related to the deemed disposal
of 12% of the group's interest in Aker BP, an associate of bp,
following completion of Aker
BP's
acquisition of Lundin Energy, and $361 million in relation to the
disposal of the group's interest in the Rumaila field in Iraq to
Basra Energy Company, an associate of bp.
(f)
Full year 2021 includes adjustments relating to the change in
discount rate on retained decommissioning provisions and the
recognition of a decommissioning provision in relation to certain
assets previously sold to a third party where the decommissioning
obligation transferred may revert to bp due to the financial
condition of
the
current owner. 2022 includes a provision reversal relating to the
change in discount rate on retained decommissioning
provisions.
(g)
Fourth quarter and full year 2021 include amounts arising in
relation to the amendment of the timing of recognition of certain
customer incentives in our customers business.
(h)
From first quarter 2022 the results of Rosneft, previously reported
as a separate segment, are also included in other businesses &
corporate. Comparative information for 2021 has been restated to
reflect the changes in reportable segments. For more information
see Note 1 Basis of preparation - Investment in
Rosneft.
Top of page 31
(i)
Includes the unwinding of discounting effects relating to Gulf of
Mexico oil spill payables, the income statement impact associated
with the buyback of finance debt (see Note 10 for further
information) and temporary valuation differences associated with
the group's interest rate and foreign currency exchange risk
management
of
finance debt.
(j)
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.
(k)
Fourth quarter and full year 2022 include the deferred tax impact
of the UK Energy Profits Levy (EPL) on existing temporary
differences unwinding over the period 1 January 2023 to 31 March
2028. The revised EPL substantively enacted in the fourth quarter
2022 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. Third quarter 2022 includes the deferred tax impact of
the original UK EPL enacted in the third quarter which increased
the headline rate of tax to 65% on taxable profits between 26 May
2022 and 31 December 2025. The revised
EPL
supersedes
the original EPL from 1 January 2023.
(l)
Fourth quarter and full year 2022 include a
$505-million charge in respect of the EU Solidarity
Contribution.
Net debt including leases
|
Net debt including leases*
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Net debt
|
|
21,422
|
22,002
|
30,613
|
|
21,422
|
30,613
|
|
Lease liabilities
|
|
8,549
|
7,895
|
8,611
|
|
8,549
|
8,611
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
19
|
22
|
187
|
|
19
|
187
|
|
Net debt including leases
|
|
29,990
|
29,919
|
39,411
|
|
29,990
|
39,411
|
|
Total
equity
|
|
82,990
|
73,333
|
90,439
|
|
82,990
|
90,439
|
|
Gearing including leases*
|
|
26.5%
|
29.0%
|
30.4%
|
|
26.5%
|
30.4%
|
Gulf of Mexico oil spill
|
|
|
31 December
|
31 December
|
|
$ million
|
|
2022
|
2021
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(9,566)
|
(10,433)
|
|
Of
which - current
|
|
(1,216)
|
(1,279)
|
|
|
|
|
|
|
Deferred tax asset
|
|
1,444
|
3,959
|
During the second quarter pre-tax payments of $1,204 million were
made relating to the 2016 consent decree and settlement agreement
with the United States and the five Gulf coast states. Payables and
provisions presented in the table above reflect the latest estimate
for the remaining costs associated with the Gulf of Mexico oil
spill. Where amounts have been provided on an estimated basis, the
amounts ultimately payable may differ from the amounts provided and
the timing of payments is uncertain. Further information relating
to the Gulf of Mexico oil spill, including information on the
nature and expected timing of payments relating to provisions and
other payables, is provided in BP Annual Report and Form 20-F
2021 - Financial
statements - Notes 6, 8, 19, 21, 22, 28, and
32.
Working capital* reconciliation
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Movements in inventories and other current and
non-current assets and liabilities as per condensed group cash flow
statement(a)
|
|
(6,847)
|
6,764
|
(1,709)
|
|
(6,270)
|
(626)
|
|
Adjusted for inventory holding gains (losses)* (Note 4 excluding
Rosneft)
|
|
(1,428)
|
(2,868)
|
404
|
|
1,351
|
3,396
|
|
Adjusted for fair value accounting effects relating to
subsidiaries
|
|
13,288
|
(10,068)
|
(856)
|
|
(3,273)
|
(8,075)
|
|
Other adjusting items(b)
|
|
(815)
|
645
|
(85)
|
|
1,279
|
1,563
|
|
Working capital release (build) after adjusting for net inventory
gains (losses), fair value accounting effects and other adjusting
items
|
|
4,198
|
(5,527)
|
(2,246)
|
|
(6,913)
|
(3,742)
|
(a)
The movement in working capital includes outflows relating to the
Gulf of Mexico oil spill on a pre-tax basis
of $1 million and $1,286 million in
the fourth quarter and full year 2022 respectively. For the
same periods in 2021 the amount was an outflow of $7 million
and $1,382 million respectively.
(b)
Other adjusting items relate to the non-cash movement of US
emissions obligations carried as a provision that will be settled
by allowances held as inventory.
Top of page 32
Surplus cash flow* reconciliation
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Sources:
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
13,571
|
8,288
|
6,116
|
|
40,932
|
23,612
|
|
Cash provided from investing activities
|
|
621
|
621
|
2,301
|
|
2,617
|
7,154
|
|
Other proceeds(a)
|
|
-
|
-
|
-
|
|
573
|
-
|
|
Receipts relating to transactions involving non-controlling
interests
|
|
1
|
3
|
12
|
|
11
|
683
|
|
Cash inflow
|
|
14,193
|
8,912
|
8,429
|
|
44,133
|
31,449
|
|
|
|
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
|
|
|
|
Lease liability payments
|
|
(513)
|
(478)
|
(502)
|
|
(1,961)
|
(2,082)
|
|
Payments on perpetual hybrid bonds
|
|
(219)
|
(180)
|
(100)
|
|
(708)
|
(538)
|
|
Dividends paid - BP shareholders
|
|
(1,088)
|
(1,140)
|
(1,077)
|
|
(4,358)
|
(4,304)
|
|
-
non-controlling interests
|
|
(100)
|
(66)
|
(66)
|
|
(294)
|
(311)
|
|
Total capital expenditure*
|
|
(7,369)
|
(3,194)
|
(3,633)
|
|
(16,330)
|
(12,848)
|
|
Net repurchase of shares relating to employee share
schemes
|
|
-
|
-
|
-
|
|
(500)
|
(500)
|
|
Payments relating to transactions involving non-controlling
interests
|
|
(1)
|
(2)
|
-
|
|
(9)
|
(560)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
177
|
(322)
|
(58)
|
|
(684)
|
(269)
|
|
Cash outflow
|
|
(9,113)
|
(5,382)
|
(5,436)
|
|
(24,844)
|
(21,412)
|
|
|
|
|
|
|
|
|
|
|
Cash used to meet net debt target
|
|
-
|
-
|
-
|
|
-
|
3,729
|
|
|
|
|
|
|
|
|
|
|
Surplus cash flow
|
|
5,080
|
3,530
|
2,993
|
|
19,289
|
6,308
|
(a)
Other proceeds for the year 2022 includes $573 million of proceeds
from the disposal of a loan note related to the Alaska divestment.
The cash was received in the fourth quarter 2021, reported as a
financing cash flow and was not included in other proceeds at the
time due to potential recourse from the counterparty. The proceeds
have been recognized as the potential recourse reduces and by end
second quarter 2022 all proceeds were recognized.
Top of page 33
Adjusted earnings before interest, taxation, depreciation and
amortization (adjusted EBITDA)*
|
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2021
|
|
Profit (loss) for the period
|
|
(1,357)
|
8,487
|
|
Finance costs
|
|
2,703
|
2,857
|
|
Net finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(69)
|
(2)
|
|
Taxation
|
|
16,762
|
6,740
|
|
Profit before interest and tax
|
|
18,039
|
18,082
|
|
Inventory holding (gains) losses*, before tax
|
|
(1,351)
|
(3,655)
|
|
RC profit before interest and tax
|
|
16,688
|
14,427
|
|
Net (favourable) adverse impact of adjusting items*, before
interest and tax
|
|
29,356
|
7,915
|
|
Underlying RC profit before interest and tax
|
|
46,044
|
22,342
|
|
Add back:
|
|
|
|
|
Depreciation, depletion and amortization
|
|
14,318
|
14,805
|
|
Exploration expenditure written off
|
|
385
|
168
|
|
Adjusted EBITDA
|
|
60,747
|
37,315
|
Adjusted earnings before interest, depreciation and amortization
(adjusted EBIDA)*
|
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2021
|
|
Profit (loss) for the period
|
|
(1,357)
|
8,487
|
|
Finance costs
|
|
2,703
|
2,857
|
|
Net finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(69)
|
(2)
|
|
Taxation
|
|
16,762
|
6,740
|
|
Profit before interest and tax
|
|
18,039
|
18,082
|
|
Inventory holding (gains) losses*, before tax
|
|
(1,351)
|
(3,655)
|
|
RC profit before interest and tax
|
|
16,688
|
14,427
|
|
Net (favourable) adverse impact of adjusting items*, before
interest and tax
|
|
29,356
|
7,915
|
|
Underlying RC profit before interest and tax
|
|
46,044
|
22,342
|
|
Taxation on an underlying RC basis
|
|
(15,052)
|
(6,532)
|
|
|
|
30,992
|
15,810
|
|
Add back:
|
|
|
|
|
Depreciation, depletion and amortization
|
|
14,318
|
14,805
|
|
Exploration expenditure written off
|
|
385
|
168
|
|
Adjusted EBIDA
|
|
45,695
|
30,783
|
Top of page 34
Return on average capital employed (ROACE)*
|
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2021
|
|
Profit for the year attributable to bp shareholders
|
|
(2,487)
|
7,565
|
|
Inventory holding (gains) losses*, net of tax
|
|
(1,019)
|
(2,826)
|
|
Net (favourable) adverse impact of adjusting items*, after
taxation
|
|
31,159
|
8,076
|
|
Underlying replacement cost (RC) profit*
|
|
27,653
|
12,815
|
|
Interest expense, net of tax(a)
|
|
1,336
|
1,127
|
|
Non-controlling interests
|
|
1,130
|
922
|
|
Adjusted underlying RC profit
|
|
30,119
|
14,864
|
|
Total equity
|
|
82,990
|
90,439
|
|
Finance debt
|
|
46,944
|
61,176
|
|
Capital employed
|
|
129,934
|
151,615
|
|
Less: Goodwill
|
|
11,960
|
12,373
|
|
Cash
and cash equivalents
|
|
29,195
|
30,681
|
|
|
|
88,779
|
108,561
|
|
Average capital employed (excluding goodwill and cash and cash
equivalents)
|
|
98,670
|
111,601
|
|
ROACE
|
|
30.5%
|
13.3%
|
(a)
Finance costs, as reported in the Group income statement, were
$2,703 million (2021 $2,857 million). Interest expense which
totals $1,632 million (2021 $1,322 million) on a pre-tax basis is
finance costs excluding lease interest of $257 million (2021 $306
million), unwinding of discount on provisions and other payables of
$808 million (2021 $890 million) and other adjusting items related
to finance costs of $6 million (2021 $339 million). Interest
expense included above is calculated on a post-tax
basis.
Reconciliation of customers & products RC profit before
interest and tax to underlying RC profit before interest and tax*
to adjusted EBITDA* by business
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
RC profit before interest and tax for customers &
products
|
|
771
|
2,586
|
(426)
|
|
8,869
|
2,208
|
|
Less: Adjusting items* gains (charges)
|
|
(1,131)
|
(139)
|
(1,037)
|
|
(1,920)
|
(1,044)
|
|
Underlying RC profit before interest and tax for customers
& products
|
|
1,902
|
2,725
|
611
|
|
10,789
|
3,252
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
628
|
1,137
|
637
|
|
2,966
|
3,052
|
|
Castrol - included in customers
|
|
70
|
151
|
207
|
|
700
|
1,037
|
|
products
- refining & trading
|
|
1,274
|
1,588
|
(26)
|
|
7,823
|
200
|
|
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and amortization
|
|
741
|
697
|
754
|
|
2,870
|
3,000
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
334
|
311
|
329
|
|
1,286
|
1,306
|
|
Castrol - included in customers
|
|
40
|
36
|
36
|
|
153
|
150
|
|
products
- refining & trading
|
|
407
|
386
|
425
|
|
1,584
|
1,694
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers & products
|
|
2,643
|
3,422
|
1,365
|
|
13,659
|
6,252
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
- convenience & mobility
|
|
962
|
1,448
|
966
|
|
4,252
|
4,358
|
|
Castrol - included in customers
|
|
110
|
187
|
243
|
|
853
|
1,187
|
|
products
- refining & trading
|
|
1,681
|
1,974
|
399
|
|
9,407
|
1,894
|
Top of page 35
Realizations* and marker prices
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Average realizations(a)
|
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
|
US
|
|
71.21
|
82.23
|
65.25
|
|
78.40
|
56.15
|
|
Europe
|
|
86.62
|
94.21
|
80.49
|
|
99.90
|
70.82
|
|
Rest of World
|
|
89.38
|
101.82
|
74.19
|
|
97.03
|
66.23
|
|
BP Average
|
|
80.44
|
92.44
|
71.12
|
|
89.65
|
62.69
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
|
US
|
|
4.84
|
7.25
|
4.59
|
|
5.61
|
3.68
|
|
Europe(b)
|
|
35.56
|
36.72
|
29.21
|
|
33.45
|
14.59
|
|
Rest of World
|
|
9.40
|
9.85
|
6.94
|
|
8.91
|
5.11
|
|
BP Average(b)
|
|
9.59
|
10.41
|
7.38
|
|
9.29
|
5.20
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
|
US
|
|
55.67
|
66.82
|
51.09
|
|
61.21
|
43.88
|
|
Europe(b)
|
|
130.61
|
137.66
|
112.26
|
|
133.48
|
75.22
|
|
Rest of World
|
|
64.73
|
71.19
|
52.93
|
|
67.49
|
43.72
|
|
BP Average(b)
|
|
66.18
|
74.08
|
56.05
|
|
69.95
|
45.79
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
|
Brent
|
|
88.87
|
100.84
|
79.76
|
|
101.32
|
70.91
|
|
West Texas Intermediate
|
|
82.82
|
91.63
|
77.32
|
|
94.58
|
68.10
|
|
Western Canadian Select
|
|
53.52
|
69.02
|
59.71
|
|
73.28
|
53.90
|
|
Alaska North Slope
|
|
87.89
|
98.84
|
79.74
|
|
98.76
|
70.56
|
|
Mars
|
|
78.81
|
89.54
|
75.21
|
|
91.74
|
67.28
|
|
Urals (NWE - cif)
|
|
61.04
|
71.24
|
77.66
|
|
74.16
|
68.65
|
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
|
Henry Hub gas price(c) ($/mmBtu)
|
|
6.26
|
8.20
|
5.84
|
|
6.65
|
3.85
|
|
UK Gas - National Balancing Point (p/therm)
|
|
166.54
|
281.01
|
226.24
|
|
203.81
|
115.78
|
(a)
Based on sales of consolidated subsidiaries only - this excludes equity-accounted
entities.
(b) Realizations
calculation methodology has been changed to reflect gas price
fluctuations within the North Sea region. All comparatives are
restated. There is no impact on financial results.
(c)
Henry Hub First of Month Index.
Exchange rates
|
|
|
Fourth
|
Third
|
Fourth
|
|
|
|
|
|
|
quarter
|
quarter
|
quarter
|
|
Year
|
Year
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
$/£ average rate for the period
|
|
1.17
|
1.18
|
1.35
|
|
1.23
|
1.38
|
|
$/£ period-end rate
|
|
1.21
|
1.12
|
1.35
|
|
1.21
|
1.35
|
|
|
|
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.02
|
1.01
|
1.14
|
|
1.05
|
1.18
|
|
$/€ period-end rate
|
|
1.07
|
0.98
|
1.13
|
|
1.07
|
1.13
|
|
|
|
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.66
|
0.68
|
0.73
|
|
0.69
|
0.75
|
|
$/AUD period-end rate
|
|
0.68
|
0.65
|
0.73
|
|
0.68
|
0.73
|
|
|
|
|
|
|
|
|
|
|
Rouble/$ average rate for the period
|
|
63.12
|
60.24
|
72.72
|
|
69.69
|
73.71
|
|
Rouble/$ period-end rate
|
|
73.52
|
58.40
|
74.66
|
|
73.52
|
74.66
|
Top of page 36
Legal proceedings
For a full discussion of the group's material legal proceedings,
see pages 248-249 of bp Annual Report and Form 20-F
2021.
Glossary
Non-GAAP measures are provided for investors because they are
closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions. Non-GAAP measures are sometimes referred to as
alternative performance measures.
Adjusted EBIDA is a non-GAAP measure and 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 taxation on an underlying RC basis, and adding back
depreciation, depletion and amortization (pre-tax) and exploration
expenditure written-off (net of adjusting items, pre-tax). bp
believes that adjusted EBIDA 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. The nearest equivalent measure on an IFRS basis
is profit or loss for the period. A reconciliation of profit or
loss for the period to adjusted EBIDA is provided on page
33.
Adjusted EBITDA is a non-GAAP 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.
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 of profit or
loss for the period to adjusted EBITDA is provided on page
33.
Adjusting items are items that bp discloses
separately because it considers such disclosures to be meaningful
and relevant to investors. They are items that management considers
to be important to period-on-period analysis of the group's results
and are disclosed in order to enable investors to better understand
and evaluate the group's reported financial performance. Adjusting
items include gains and losses on the sale of businesses and fixed
assets, impairments, environmental and other provisions,
restructuring, integration and rationalization costs, fair value
accounting effects, financial impacts relating to Rosneft for the
2022 financial reporting period and costs relating to the Gulf of
Mexico oil spill and other items. Adjusting items within
equity-accounted earnings are reported net of incremental income
tax reported by the equity-accounted entity. Adjusting items are
used as a reconciling adjustment to derive underlying RC profit or
loss and related underlying measures which are non-GAAP measures.
An analysis of adjusting items by segment and type is shown
on page 30.
Blue hydrogen - Hydrogen made from natural gas
in combination with carbon capture and storage
(CCS).
Capital expenditure is total cash capital expenditure
as stated in the condensed group cash flow statement. Capital
expenditure for the operating segments and customers & products
businesses is presented on the same basis.
Cash balance point is defined as the implied
Brent oil price 2021 real to balance bp's sources and uses of cash
assuming an average bp refining marker margin around $11/bbl and
Henry Hub at $3/mmBtu in 2021 real terms.
Consolidation adjustment - UPII is unrealized profit in inventory
arising on inter-segment transactions.
Developed renewables to final investment decision
(FID) - Total generating capacity for
assets developed to FID by all entities where bp has an equity
share (proportionate to equity share). If asset is subsequently
sold bp will continue to record capacity as developed to FID. If bp
equity share increases developed capacity to FID will increase
proportionately to share increase for any assets where bp held
equity at the point of FID.
Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement.
Effective tax rate (ETR) on replacement cost (RC) profit or
loss is a non-GAAP measure. The ETR on
RC profit or loss is calculated by dividing taxation on a RC basis
by RC profit or loss before tax. 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-GAAP 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.
Top of page 37
Glossary (continued)
Fair value accounting effects are non-GAAP adjustments to our
IFRS profit (loss). They reflect the difference between the way bp
manages the economic exposure and internally measures performance
of certain activities and the way those activities are measured
under IFRS. Fair value accounting effects are included within
adjusting items. They relate to certain of the group's commodity,
interest rate and currency risk exposures as detailed below. Other
than as noted below, the fair value accounting effects described
are reported in both the gas & low carbon energy and customer
& products segments.
bp uses derivative instruments to manage the economic exposure
relating to inventories above normal operating requirements of
crude oil, natural gas and petroleum products. Under IFRS, these
inventories are recorded at historical cost. The related derivative
instruments, however, are required to be recorded at fair value
with gains and losses recognized in the income statement. This is
because hedge accounting is either not permitted or not followed,
principally due to the impracticality of effectiveness-testing
requirements. Therefore, measurement differences in relation to
recognition of gains and losses occur. Gains and losses on these
inventories, other than net realizable value provisions, are not
recognized until the commodity is sold in a subsequent accounting
period. Gains and losses on the related derivative commodity
contracts are recognized in the income statement, from the time the
derivative commodity contract is entered into, on a fair value
basis using forward prices consistent with the contract
maturity.
bp enters into physical commodity contracts to meet certain
business requirements, such as the purchase of crude for a refinery
or the sale of bp's gas production. Under IFRS these physical
contracts are treated as derivatives and are required to be fair
valued when they are managed as part of a larger portfolio of
similar transactions. Gains and losses arising are recognized in
the income statement from the time the derivative commodity
contract is entered into.
IFRS require that inventory held for trading is recorded at its
fair value using period-end spot prices, whereas any related
derivative commodity instruments are required to be recorded at
values based on forward prices consistent with the contract
maturity. Depending on market conditions, these forward prices can
be either higher or lower than spot prices, resulting in
measurement differences.
bp enters into contracts for pipelines and other transportation,
storage capacity, oil and gas processing, liquefied natural gas
(LNG) and certain gas and power contracts that, under IFRS, are
recorded on an accruals basis. These contracts are risk-managed
using a variety of derivative instruments that are fair valued
under IFRS. This results in measurement differences in relation to
recognition of gains and losses.
The way that bp manages the economic exposures described above, and
measures performance internally, differs from the way these
activities are measured under IFRS. bp calculates this difference
for consolidated entities by comparing the IFRS result with
management's internal measure of performance. 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.
Top of page 38
Glossary (continued)
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, power trading and our
share in bp Bunge Bioenergia. Power trading includes trading of
both renewable and non-renewable power.
Gearing and net debt are non-GAAP measures. Net debt
is calculated as finance debt, as shown in the balance sheet, plus
the fair value of associated derivative financial instruments that
are used to hedge foreign currency exchange and interest rate risks
relating to finance debt, for which hedge accounting is applied,
less cash and cash equivalents. 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 GAAP measures on an
IFRS basis are finance debt and finance debt ratio. A
reconciliation of finance debt to net debt is provided on page
28.
We are unable to present reconciliations of forward-looking
information for net debt or gearing to finance debt and total
equity, because without unreasonable efforts, we are unable to
forecast accurately certain adjusting items required to present a
meaningful comparable GAAP forward-looking financial measure. These
items include fair value asset (liability) of hedges related to
finance debt and cash and cash equivalents, that are difficult to
predict in advance in order to include in a GAAP
estimate.
Gearing including leases and net debt including
leases are non-GAAP measures. Net debt
including leases is calculated as net debt plus lease liabilities,
less the net amount of partner receivables and payables relating to
leases entered into on behalf of joint operations. Gearing
including leases is defined as the ratio of net debt including
leases to the total of net debt including leases plus total equity.
bp believes these measures provide useful information to investors
as they enable investors to understand the impact of the group's
lease portfolio on net debt and gearing. The nearest equivalent
GAAP measures on an IFRS basis are finance debt and finance debt
ratio. A reconciliation of finance debt to net debt including
leases is provided on page 31.
Green hydrogen - Hydrogen made from solar, wind
and hydro-electricity.
Hydrocarbons - Liquids and natural gas.
Natural gas is converted to oil equivalent at 5.8 billion cubic
feet = 1 million barrels.
Inorganic capital expenditure is a subset of capital
expenditure on a cash basis and a non-GAAP measure. Inorganic
capital expenditure comprises consideration in business
combinations and certain other significant investments made by the
group. It is reported on a cash basis. bp believes that this
measure provides useful information as it allows investors to
understand how bp's management invests funds in projects which
expand the group's activities through acquisition. The nearest
equivalent measure on an IFRS basis is capital expenditure on a
cash basis. Further information and a reconciliation to GAAP
information is provided on page 29.
Installed renewables capacity is bp's share of capacity for
operating assets owned by entities where bp has an equity
share.
Inventory holding gains and losses are non-GAAP adjustments to our
IFRS profit (loss) and represent:
a.
the difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on
the first-in first-out (FIFO) method after adjusting for any
changes in provisions where the net realizable value of the
inventory is lower than its cost. Under the FIFO method, which we
use for IFRS reporting of inventories other than for trading
inventories, the cost of inventory charged to the income statement
is based on its historical cost of purchase or manufacture, rather
than its replacement cost. In volatile energy markets, this can
have a significant distorting effect on reported income. The
amounts disclosed as inventory holding gains and losses represent
the difference between the charge to the income statement for
inventory on a FIFO basis (after adjusting for any related
movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For
this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system,
either on a monthly basis, or separately for each transaction where
the system allows this approach; and
b.
an adjustment relating to certain trading inventories that are not
price risk managed which relate to a minimum inventory volume that
is required to be held to maintain underlying business activities.
This adjustment represents the movement in fair value of the
inventories due to prices, on a grade by grade basis, during the
period. This is calculated from each operation's inventory
management system on a monthly basis using the discrete monthly
movement in market prices for these inventories.
The amounts disclosed are not separately reflected in the financial
statements as a gain or loss. No adjustment is made in respect of
the cost of inventories held as part of a trading position and
certain other temporary inventory positions that are price
risk-managed. See Replacement cost (RC) profit or loss definition
below.
Liquids -
Liquids comprises crude oil, condensate and natural gas liquids.
For the oil production & operations segment, it also includes
bitumen.
Major projects have a bp net investment of at
least $250 million, or are considered to be of strategic importance
to bp or of a high degree of complexity.
Operating cash flow is net cash provided by (used in)
operating activities as stated in the condensed group cash flow
statement.
Top of page 39
Glossary (continued)
Organic capital expenditure is a non-GAAP 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 GAAP
information is provided on page 29.
We are unable to present reconciliations of forward-looking
information for organic capital expenditure to total cash capital
expenditure, because without unreasonable efforts, we are unable to
forecast accurately the adjusting item, inorganic capital
expenditure, that is difficult to predict in advance in order to
derive the nearest GAAP estimate.
Production-sharing agreement/contract (PSA/PSC) is an arrangement through which
an oil and gas company bears the risks and costs of exploration,
development and production. In return, if exploration is
successful, the oil company receives entitlement to variable
physical volumes of hydrocarbons, representing recovery of the
costs incurred and a stipulated share of the production remaining
after such cost recovery.
Realizations are the result of dividing
revenue generated from hydrocarbon sales, excluding revenue
generated from purchases made for resale and royalty volumes, by
revenue generating hydrocarbon production volumes. Revenue
generating hydrocarbon production reflects the bp share of
production as adjusted for any production which does not generate
revenue. Adjustments may include losses due to shrinkage, amounts
consumed during processing, and contractual or regulatory host
committed volumes such as royalties. For the gas & low carbon
energy and oil production & operations segments, realizations
include transfers between businesses.
Refining availability represents Solomon Associates'
operational availability for bp-operated refineries, which is
defined as the percentage of the year that a unit is available for
processing after subtracting the annualized time lost due to
turnaround activity and all planned mechanical, process and
regulatory downtime.
The Refining marker margin
(RMM) is the average of
regional indicator margins weighted for bp's crude refining
capacity in each region. Each regional marker margin is based on
product yields and a marker crude oil deemed appropriate for the
region. The regional indicator margins may not be representative of
the margins achieved by bp in any period because of bp's particular
refinery configurations and crude and product
slate.
Renewables pipeline - Renewable projects satisfying
the following criteria until the point they can be considered
developed to final investment decision (FID): Site based projects
that have obtained land exclusivity rights, or for PPA based
projects an offer has been made to the counterparty, or for auction
projects pre-qualification criteria has been met, or for
acquisition projects post a binding offer being
accepted.
Replacement cost (RC) profit or loss / RC profit or loss
attributable to bp shareholders reflects the replacement cost of
inventories sold in the period and is calculated as profit or loss
attributable to bp shareholders, adjusting for inventory holding
gains and losses (net of tax). RC profit or loss for the group is
not a recognized GAAP measure. bp believes this measure is useful
to illustrate to investors the fact that crude oil and product
prices can vary significantly from period to period and that the
impact on our reported result under IFRS can be significant.
Inventory holding gains and losses vary from period to period due
to changes in prices as well as changes in underlying inventory
levels. In order for investors to understand the operating
performance of the group excluding the impact of price changes on
the replacement of inventories, and to make comparisons of
operating performance between reporting periods, bp's management
believes it is helpful to disclose this measure. The nearest
equivalent measure on an IFRS basis is profit or loss attributable
to bp shareholders. A reconciliation to GAAP information is
provided on page 1. RC profit or loss
before interest and tax is bp's measure of profit or loss that is
required to be disclosed for each operating segment under
IFRS.
Reported recordable injury frequency measures the number of reported
work-related employee and contractor incidents that result in a
fatality or injury per 200,000 hours worked. This represents
reported incidents occurring within bp's operational HSSE reporting
boundary. That boundary includes bp's own operated facilities and
certain other locations or situations. Reported incidents are
investigated throughout the year and as a result there may be
changes in previously reported incidents. Therefore comparative
movements are calculated against internal data reflecting the final
outcomes of such investigations, rather than the previously
reported comparative period, as this this represents a more up to
date reflection of the safety environment.
Reserves replacement ratio - the extent to which the year's
production has been replaced by proved reserves added to our
reserve base. The ratio is expressed in oil-equivalent terms and
includes changes resulting from discoveries, improved recovery and
extensions and revisions to previous estimates, but excludes
changes resulting from acquisitions and
disposals.
Retail sites include sites operated by
dealers, jobbers, franchisees or brand licensees or joint venture
(JV) partners, under the bp brand. These may move to and from the
bp brand as their fuel supply agreement or brand licence agreement
expires and are renegotiated in the normal course of business.
Retail sites are primarily branded bp,
ARCO, Amoco, Aral and Thorntons,
and also includes sites in India through our Jio-bp
JV.
Retail sites in growth markets are retail sites that are either
bp branded or co-branded with our partners in China, Mexico and
Indonesia and also include sites in India through our Jio-bp
JV.
Top of page 40
Glossary (continued)
Return on average capital employed (ROACE) is a non-GAAP measure and is
defined as underlying replacement cost profit, which is defined as
profit or loss attributable to bp shareholders adjusted for
inventory holding gains and losses, adjusting items and related
taxation on inventory holding gains and losses and adjusting items
total taxation, after adding back non-controlling interest and
interest expense net of tax, divided by the average of the
beginning and ending balances of total equity plus finance debt,
excluding cash and cash equivalents and goodwill as presented on
the group balance sheet over the periods presented. Interest
expense before tax is finance costs as presented on the group
income statement, excluding lease interest, the unwinding of the
discount on provisions and other payables and other adjusting items
reported in finance costs. bp believes it is helpful to disclose
the ROACE because this measure gives an indication of the company's
capital efficiency. The nearest GAAP measures of the numerator and
denominator are profit or loss for the period attributable to bp
shareholders and total equity respectively. The reconciliation of the
numerator and denominator is provided on page
34.
Solomon availability - See Refining availability
definition.
Strategic convenience sites are retail sites, within the bp
portfolio, which sell bp-branded vehicle energy
(e.g. bp, Aral,
Arco, Amoco, Thorntons and
Pulse) and either carry one of the strategic convenience brands
(e.g. M&S, Rewe to Go) or a differentiated convenience offer.
To be considered a strategic convenience site, the convenience
offer should have a demonstrable level of differentiation in the
market in which it operates. Strategic convenience site count
includes sites under a pilot phase.
Surplus cash flow does not represent the residual
cash flow available for discretionary expenditures. It is a
non-GAAP financial measure that should be considered in addition
to, not as a substitute for or superior to, net cash provided by
operating activities, reported in accordance with IFRS. bp believes
it is helpful to disclose the surplus cash flow because this
measure forms part of bp's financial frame.
Surplus cash flow refers to the net surplus of sources of cash over
uses of cash, after reaching the $35 billion net debt target.
Sources of cash include net cash provided by operating activities,
cash provided from investing activities and cash receipts relating
to transactions involving non-controlling interests. Uses of cash
include lease liability payments, payments on perpetual hybrid
bond, dividends paid, cash capital expenditure, the cash cost of
share buybacks to offset the dilution from vesting of awards under
employee share schemes, cash payments relating to transactions
involving non-controlling interests and currency translation
differences relating to cash and cash equivalents as presented on
the condensed group cash flow statement.
For the full year of 2022, the sources of cash includes other
proceeds related to the proceeds from the disposal of a loan note
related to the Alaska divestment. The cash was received in the
fourth quarter 2021, was reported as a financing cash flow and was
not included in other proceeds at the time due to potential
recourse from the counterparty. The proceeds are being recognized
as the potential recourse reduces. See page 32 for the
components of our sources of cash and uses of
cash.
Technical service contract (TSC) - Technical service contract is
an arrangement through which an oil and gas company bears the risks
and costs of exploration, development and production. In return,
the oil and gas company receives entitlement to variable physical
volumes of hydrocarbons, representing recovery of the costs
incurred and a profit margin which reflects incremental production
added to the oilfield.
Tier 1 and tier 2 process safety events - Tier 1 events are losses of
primary containment from a process of greatest consequence -
causing harm to a member of the workforce, damage to equipment from
a fire or explosion, a community impact or exceeding defined
quantities. Tier 2 events are those of lesser consequence. These
represent reported incidents occurring within bp's operational HSSE
reporting boundary. That boundary includes bp's own operated
facilities and certain other locations or situations. Reported
process safety events are investigated throughout the year and as a
result there may be changes in previously reported events.
Therefore comparative movements are calculated against internal
data reflecting the final outcomes of such investigations, rather
than the previously reported comparative period, as this this
represents a more up to date reflection of the safety
environment.
Underlying effective tax rate (ETR) is a non-GAAP measure. The
underlying ETR is calculated by dividing taxation on an underlying
replacement cost (RC) basis by underlying RC profit or loss before
tax. Taxation on an underlying RC basis 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-GAAP 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 GAAP forward-looking financial measure. These
items include the taxation on inventory holding gains and losses
and adjusting items, that are difficult to predict in advance in
order to include in a GAAP estimate.
Underlying production - 2022 underlying production,
when compared with 2021, 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-GAAP measure and is RC
profit or loss* (as defined on page 39) after excluding net
adjusting items and related taxation. See page 30 for
additional information on the adjusting items that are used to
arrive at underlying RC profit or loss in order to enable a full
understanding of the items and their financial
impact.
Top of page 41
Glossary (continued)
Underlying RC profit or loss before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating
segments and excluding net adjusting items for the respective
operating segment or business.
bp believes that underlying RC profit or loss is a useful measure
for investors because it is a measure closely tracked by management
to evaluate bp's operating performance and to make financial,
strategic and operating decisions and because it may help investors
to understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period, by adjusting for the effects of these
adjusting items. The nearest equivalent measure on an IFRS basis
for the group is profit or loss attributable to bp shareholders.
The nearest equivalent measure on an IFRS basis for segments and
businesses is RC profit or loss before interest and
taxation. A reconciliation to GAAP
information is provided on page 1 for the group
and pages 6-15 for the segments.
Underlying RC profit or loss per share / underlying RC profit or
loss per ADS is a non-GAAP measure. Earnings
per share is defined in Note 8. Underlying RC profit or loss
per ordinary share is calculated using the same denominator as
earnings per share as defined in the consolidated financial
statements. The numerator used is underlying RC profit or loss
attributable to bp shareholders rather than profit or loss
attributable to bp shareholders. Underlying RC profit or loss per
ADS is calculated as outlined above for underlying RC profit or
loss per share except the denominator is adjusted to reflect one
ADS equivalent to six ordinary shares. bp believes it is helpful to
disclose the underlying RC profit or loss per ordinary share and
per ADS because these measures may help investors to understand and
evaluate, in the same manner as management, the underlying trends
in bp's operational performance on a comparable basis, period on
period. The nearest equivalent measure on an IFRS basis is basic
earnings per share based on profit or loss for the period
attributable to bp shareholders.
upstream includes oil and natural gas
field development and production within the gas & low carbon
energy and oil production & operations
segments.
upstream/hydrocarbon plant reliability (bp-operated) is calculated
taking 100% less the ratio of total unplanned plant deferrals
divided by installed production capacity, excluding non-operated
assets and bpx energy. Unplanned plant deferrals are associated
with the topside plant and where applicable the subsea equipment
(excluding wells and reservoir). Unplanned plant deferrals include
breakdowns, which does not include Gulf of Mexico weather related
downtime.
upstream unit production cost is calculated as production cost
divided by units of production. Production cost does not include ad
valorem and severance taxes. Units of production are barrels for
liquids and thousands of cubic feet for gas. Amounts disclosed are
for bp subsidiaries only and do not include bp's share of
equity-accounted entities.
Working capital is movements in inventories and
other current and non-current assets and liabilities as reported in
the condensed group cash flow statement.
Change in working capital adjusted for inventory holding
gains/losses, fair value accounting effects relating to
subsidiaries and other adjusting items is a non-GAAP measure. It is
calculated by adjusting for inventory holding gains/losses reported
in the period and from the second quarter 2021 onwards, it is also
adjusted for fair value accounting effects relating to subsidiaries
reported within adjusting items for the period. For 2022, it is
adjusted for other adjusting items relating to the non-cash
movement of US emissions obligations carried as a provision that
will be settled by allowances held as inventory. This represents
what would have been reported as movements in inventories and other
current and non-current assets and liabilities, if the starting
point in determining net cash provided by operating activities had
been underlying replacement cost profit rather than profit for the
period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets
and liabilities.
bp utilizes various arrangements in order to manage its working
capital including discounting of receivables and, in the supply and
trading business, the active management of supplier payment terms,
inventory and collateral.
Trade marks
Trade marks of the bp group appear throughout this announcement.
They include:
bp, Amoco, Aral, Castrol
ON and Thorntons
Top of page 42
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 upstream production and bp's customers &
products business; expectations regarding refining margins;
expectations regarding production from oil production and
operations, gas and low carbon energy; expectations regarding bp's
business, financial performance, results of operations and cash
flows; expectations regarding future project start-ups;
expectations with regards to bp's transformation to an IEC;
expectations regarding price assumptions used in accounting
estimates; bp's plans and expectations regarding the amount and
timing of share buybacks and quarterly and interim dividends; plans
and expectations regarding bp's credit rating, including in respect
of maintaining a strong investment grade credit rating; plans and
expectations regarding the allocation of surplus cash flow to share
buybacks and strengthening the balance sheet; plans and
expectations regarding bp's exit of its shareholding in Rosneft and
other investments in Russia; plans and expectations with respect to
the total depreciation, depletion and amortization and business and
corporate underlying annual charge for 2023; plans and expectations
regarding the factors taken into account in setting the dividend
per ordinary share and buyback each quarter; plans and expectations
regarding investments, collaborations and partnerships in charging
infrastructure; plans related to bp's Launchpad accelerator; plans
and expectations related to bp's transition growth engines of
bioenergy, convenience, EV charging, renewables and hydrogen; plans
and expectations regarding divestments, including the amount and
timing of proceeds; plans and expectations regarding bp's renewable
energy business; expectations regarding the underlying effective
tax rate for 2023; expectations regarding the timing and amount of
future payments relating to the Gulf of Mexico oil spill;
expectations regarding bp's defined benefit pension plans; plans
and expectations regarding capital expenditure, including that
capital expenditure will be around $16-18 billion in 2023; plans
and expectations regarding bp's work in the biogas industry; plans
and expectations regarding projects, joint ventures and other
partnerships and agreements, including partnerships and other
collaborations with M&S, Mauritania, Egypt, REWE, Hertz, Chubu
Electric and KMS as well as plans and expectations regarding the
Mad Dog Phase 2 project in the Gulf of Mexico, the Tangguh
expansion in Indonesia, operations in Trinidad and Tobago and
Mozambique, the partnership with Shell and Lightsource bp to
develop a solar project in Trinidad and Tobago, GTA Phase 1 Tortue
projects, bp ventures' investments in 5B Holdings Pty Ltd, the sale
of its interest in the bp-Husky Toledo refinery to Cenovus Energy
and related operational impacts, the sale of bp's upstream business
in Algeria to Eni and the development of EV charge
points.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp.
Actual results or outcomes, may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the effects of
bp's plan to exit its shareholding in Rosneft and other investments
in Russia, the impact of COVID-19, overall global economic and
business conditions impacting bp's business and demand for bp's
products as well as the specific factors identified in the
discussions accompanying such forward-looking statements; changes
in consumer preferences and societal expectations; the pace of
development and adoption of alternative energy solutions;
developments in policy, law, regulation, technology and markets,
including societal and investor sentiment related to the issue of
climate change; the receipt of relevant third party and/or
regulatory approvals; the timing and level of maintenance and/or
turnaround activity; the timing and volume of refinery additions
and outages; the timing of bringing new fields onstream; the
timing, quantum and nature of certain acquisitions and divestments;
future levels of industry product supply, demand and pricing,
including supply growth in North America and continued base oil and
additive supply shortages; OPEC+ quota restrictions; PSA and TSC
effects; operational and safety problems; potential lapses in
product quality; economic and financial market conditions generally
or in various countries and regions; political stability and
economic growth in relevant areas of the world; changes in laws and
governmental regulations and policies, including related to climate
change; changes in social attitudes and customer preferences;
regulatory or legal actions including the types of enforcement
action pursued and the nature of remedies sought or imposed; the
actions of prosecutors, regulatory authorities and courts; delays
in the processes for resolving claims; amounts ultimately payable
and timing of payments relating to the Gulf of Mexico oil spill;
exchange rate fluctuations; development and use of new technology;
recruitment and retention of a skilled workforce; the success or
otherwise of partnering; the actions of competitors, trading
partners, contractors, subcontractors, creditors, rating agencies
and others; bp's access to future credit resources; business
disruption and crisis management; the impact on bp's reputation of
ethical misconduct and non-compliance with regulatory obligations;
trading losses; major uninsured losses; the possibility that
international sanctions or other steps or actions taken by any
competent authorities or any other relevant persons may impact
Rosneft's business or outlook, bp's ability to sell its interests
in Rosneft, or the price for which bp 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, as
well as those factors discussed under "Risk factors" in bp's Annual
Report and Form 20-F 2021 as filed with the US Securities and
Exchange Commission and those factors discussed under "Principal
risks and uncertainties" in bp's Report on Form 6-K regarding
results for the six-month period ended 30 June 2022 as filed with
the US Securities and Exchange Commission.
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of BP p.l.c. is Ben Mathews, Company Secretary.
Top of page 43
Contacts
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BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BP
p.l.c.
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(Registrant)
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Dated: 07
February 2023
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/s/ Ben
J. S. Mathews
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------------------------
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Ben J.
S. Mathews
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Company
Secretary
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