Form 6-K BP PLC For: Aug 02
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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 2 August, 2022
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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2Q22
Part 1 of 1 dated 2 August 2022
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Exhibit 1.1
Top of page 1
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FOR IMMEDIATE RELEASE
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London 2 August 2022
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BP p.l.c. Group results
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Second quarter and first half 2022(a)
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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/5341U_1-2022-8-1.pdf
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Performing while transforming
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Financial summary
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Second
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First
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Second
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First
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First
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quarter
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quarter
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quarter
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half
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half
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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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9,257
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(20,384)
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3,116
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(11,127)
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7,783
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Inventory holding (gains) losses*, net of tax
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(1,607)
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(2,664)
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(736)
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(4,271)
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(2,078)
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Replacement cost (RC) profit (loss)*
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7,650
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(23,048)
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2,380
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(15,398)
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5,705
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Net (favourable) adverse impact of adjusting items*, net of
tax
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801
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29,293
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418
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30,094
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(277)
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Underlying RC profit*
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8,451
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6,245
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2,798
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14,696
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5,428
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Operating cash flow*
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10,863
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8,210
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5,411
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19,073
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11,520
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Capital expenditure*
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(2,838)
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(2,929)
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(2,514)
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(5,767)
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(6,312)
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Divestment
and other proceeds(b)
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722
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1,181
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215
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1,903
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5,054
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Surplus cash flow*
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6,590
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4,089
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695
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10,679
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2,382
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Net
issue (repurchase) of shares(c)
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(2,288)
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(1,592)
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(500)
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(3,880)
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(500)
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Net
debt*(d)
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22,816
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27,457
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32,706
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22,816
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32,706
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Announced dividend per ordinary share (cents per
share)
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6.006
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5.460
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5.460
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11.466
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10.710
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Underlying RC profit per ordinary share* (cents)
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43.58
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32.00
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13.80
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75.55
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26.75
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Underlying RC profit per ADS* (dollars)
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2.61
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1.92
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0.83
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4.53
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1.61
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● Net debt reduced to $22.8 billion; further share buyback
announced
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● 10% increase in resilient dividend per ordinary share;
unchanged financial frame;
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● Delivering resilient hydrocarbons - Brazil and Indonesia
renewal options; high-grading Canadian portfolio
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● Continued progress in transformation to an IEC - momentum
in EV charging and hydrogen
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Today’s results show that bp continues to perform while
transforming. Our people have continued to work hard throughout the
quarter helping to solve the energy trilemma – secure,
affordable and lower carbon energy. We do this by providing the oil
and gas the world needs today – while at the same time,
investing to accelerate the energy transition.
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Bernard Looney
Chief executive officer
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(a)
This results
announcement also represents bp's half-yearly financial report (see
page 16).
(b)
Divestment proceeds
are disposal proceeds as per the condensed group cash flow
statement. See page 3 for more information on divestment and other
proceeds.
(c)
Excludes the
ordinary shares issued as non-cash consideration for the
acquisition of the public units of BP Midstream Partners LP. See
Note 7 for more information.
(d)
See Note 9 for more
information.
RC profit (loss), underlying RC profit (loss), surplus cash flow
and net debt 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* $8.5 billion
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●
Underlying replacement cost profit was $8.5 billion, compared with
$6.2 billion for the previous quarter. This was driven by strong
realized refining margins, continuing exceptional oil trading
performance and higher liquids realizations. This was partly offset
by an average gas marketing and trading contribution, down from the
exceptional result in the first quarter, including an impact from
the ongoing outage at Freeport LNG.
● Reported
profit for the quarter was $9.3 billion, compared with a loss of
$20.4 billion for the first quarter 2022. The reported result for
the second quarter includes a charge for adjusting items* before
tax of $0.3 billion within which are adverse fair value accounting
effects* of $0.8 billion. The first quarter loss included a
post-tax
charge of $24.4
billion relating to bp's decision to exit its 19.75% shareholding
in Rosneft and its other businesses with Rosneft in
Russia.
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Operating cash flow* $10.9 billion; net debt* reduced to $22.8
billion
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● Operating
cash flow in the quarter of $10.9 billion includes $1.2 billion of
Gulf of Mexico oil spill payments within a working capital* build
of $2.9 billion (after adjusting for inventory holding gains* and
fair value accounting effects).
● During
the second quarter bp executed share buybacks of $2.3 billion. The
$2.5-billion programme announced with the first-quarter 2022
results was completed on 22 July.
● Net
debt fell for the ninth successive quarter to reach $22.8 billion
at the end of the second quarter.
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Growing distributions within an unchanged financial
frame
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● A
resilient dividend is bp’s first priority within its
disciplined financial frame.
● It
is underpinned by an average 2021-5 cash balance point* of around
$40 per barrel Brent, $11 per barrel RMM and $3 per mmBtu Henry Hub
(all 2020 real).
● bp
has announced a 10% increase in its quarterly dividend to 6.006
cents per ordinary share
● This
increase reflects the underlying performance and cash generation of
the business, which has enabled strong progress in delivering share
buybacks and net debt reduction.
● Looking
ahead, on average, based on bp's current forecasts, bp continues to
expect to have capacity for an annual increase in the dividend per
ordinary share of around 4% through 2025 at around $60 per barrel
Brent and subject to the board’s discretion each
quarter.
● During
the second quarter bp generated surplus cash flow* of $6.6 billion
and intends to execute a $3.5 billion share buyback prior to
announcing its third-quarter results. bp has now announced share
buybacks from 2021 and first-half 2022 surplus cash flow equivalent
to 60% of the cumulative surplus cash flow.
● For
2022 and subject to maintaining a strong investment grade credit
rating, bp remains committed to using 60% of surplus cash flow for
share buybacks and intends to allocate the remaining 40% to further
strengthen the balance sheet.
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Progressing transformation to an Integrated Energy
Company
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● In
resilient hydrocarbons bp has strengthened its renewal options
partnering with Petrobras in a successful Drill Stem Test at the
Cabo Frio discovery in the Campos Basin offshore Brazil and
participating in the Timpan-1 discovery offshore Indonesia. bp
continues to high-grade its portfolio, agreeing to acquire a 35%
interest in the undeveloped Bay du Nord discovery offshore Canada
as part of the transaction to sell its 50% interest in the Sunrise
oil sands project.
● In
convenience and mobility bp has continued to progress its EV
charging strategy, recently announcing expansion plans with
Iberdrola in Spain and Portugal and signing a contract to operate
China's largest fast(a) EV charging
hub.
● In
low carbon energy bp has announced plans to take a 40.5% stake in
the AREH project to lead and operate one of the world’s
largest planned renewables and green hydrogen* energy hubs based in
Western Australia; has announced its intent to partner with
Iberdrola to develop large-scale integrated green hydrogen
production in Spain, Portugal and the UK; and has continued to
progress its renewables strategy, submitting bids for two offshore
wind leases in the Netherlands.
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bp continues to build a track record of delivery against its
disciplined financial frame, which remains unchanged. Net debt fell
for the ninth successive quarter; we are investing with discipline
to advance our strategy; and we are delivering on our commitment to
shareholder distributions - raising our dividend by 10% and
announcing a further $3.5 billion share buyback.
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Murray Auchincloss
Chief financial officer
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●
“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, any 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 second quarter was $9.3 billion
compared with $3.1 billion in the same period of 2021 largely
as a result of higher realizations. Loss attributable to bp
shareholders in the half year was $11.1 billion compared with
a profit of $7.8 billion in the same period of
2021.
●
Adjusting items* in
the second quarter and half year were an adverse pre-tax impact of
$0.3 billion and $31.1 billion respectively, compared
with a favourable pre-tax impact of $8 million and
$704 million in the same periods of 2021.
●
As a result of bp's
two nominated directors stepping-down from the Rosneft board on 27
February, 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 first quarter and first half
results, 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 first quarter and first half results, reducing equity by
$1.2 billion. See Note 1 for further information.
●
Adjusting items for
the second quarter and half year 2022 also include adverse fair
value accounting effects* of $0.8 billion and
$6.6 billion respectively, primarily arising from the changes
in the fair value of derivatives entered into by the group to
manage currency exposure and interest rate risks relating to hybrid
bonds and the increase in forward gas prices.
●
Pre-tax inventory
holding gains of $2.1 billion and $5.6 billion for the
second quarter and half year 2022 respectively arose due to
significant increases in most crude and product prices during the
periods.
●
The effective tax
rate (ETR) on RC profit or loss* for the second quarter and half
year was 33% and -62% respectively, compared with 37% and 31% for
the same periods in 2021. Excluding adjusting items, the underlying
ETR* for the second quarter and half year was 29% and 30%
respectively, compared with 27% and 29% for the same periods a year
ago. The higher underlying ETR for the second quarter and half year
reflects the absence of equity-accounted earnings from Rosneft. ETR
on RC profit or loss and underlying ETR are non-GAAP
measures.
●
Operating cash
flow* for the second quarter and half year 2022 was
$10.9 billion and $19.1 billion respectively, compared
with $5.4 billion and $11.5 billion for the same periods
last year. The increase is driven largely as a result of higher
realizations.
●
Capital
expenditure* in the second quarter and half year 2022 was
$2.8 billion and $5.8 billion respectively, compared with
$2.5 billion and $6.3 billion in the same periods of
2021.
●
Total divestment
and other proceeds for the second quarter and half year were
$0.7 billion and $1.9 billion respectively, compared with
$0.2 billion and $5.1 billion for the same periods in
2021. Other proceeds for the second quarter and half year 2022
consist of $0.4 billion and $0.6 billion respectively of proceeds
from the disposal of a loan note related to the Alaska divestment.
See page 33 for further information.
●
At the end of the
second quarter, net debt* was $22.8 billion, compared with
$27.5 billion at the end of the first quarter 2022 and
$32.7 billion at the end of the second quarter
2021.
●
On 11 July 2022 the
UK government introduced legislation which imposes a new levy on
the profits of UK oil and gas companies. The new levy will increase
the headline rate of tax from 40% to 65% on profits from bp’s
North Sea business made from 26 May 2022 until 31 December 2025.
The introduction of the levy will result in a one-off non-cash
deferred tax charge of an estimated $0.8 billion to reflect the
higher tax rate now applicable to existing temporary differences
unwinding over the period 1 October 2022 to 31 December 2025. As
the legislation was substantively enacted after 30 June 2022, this
charge will be presented within adjusting items in the third
quarter 2022.
Top of
page 4
Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
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Second
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First
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Second
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First
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First
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quarter
|
quarter
|
quarter
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|
half
|
half
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$ million
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2022
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2022
|
2021
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2022
|
2021
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RC profit (loss) before interest and tax
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gas
& low carbon energy
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2,737
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(1,524)
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927
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1,213
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4,357
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oil
production & operations
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7,237
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3,831
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3,118
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11,068
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4,597
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customers
& products
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3,531
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1,981
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640
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5,512
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1,574
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other
businesses & corporate(a)
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(1,028)
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(24,719)
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218
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(25,747)
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(97)
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Of
which:
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other
businesses & corporate excluding Rosneft
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(1,028)
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(686)
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(425)
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(1,714)
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(1,103)
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Rosneft
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—
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(24,033)
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643
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(24,033)
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1,006
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Consolidation
adjustment – UPII*
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(21)
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34
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(31)
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13
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(18)
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RC profit (loss) before interest and tax
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12,456
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(20,397)
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4,872
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(7,941)
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10,413
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Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
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(539)
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(644)
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(687)
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(1,183)
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(1,416)
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Taxation on a RC basis
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(3,988)
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(1,693)
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(1,567)
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(5,681)
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(2,821)
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Non-controlling interests
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|
(279)
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(314)
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(238)
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(593)
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(471)
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RC profit (loss) attributable to bp shareholders*
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7,650
|
(23,048)
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2,380
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(15,398)
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5,705
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Inventory holding gains (losses)*
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2,146
|
3,501
|
953
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|
5,647
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2,683
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Taxation (charge) credit on inventory holding gains and
losses
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(539)
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(837)
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(217)
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(1,376)
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(605)
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|
Profit (loss) for the period attributable to bp
shareholders
|
|
9,257
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(20,384)
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3,116
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|
(11,127)
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7,783
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Analysis of underlying RC profit (loss) before interest and
tax
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Underlying RC profit (loss) before interest and tax
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
3,080
|
3,595
|
1,240
|
|
6,675
|
3,510
|
|
oil
production & operations
|
|
5,902
|
4,683
|
2,242
|
|
10,585
|
3,807
|
|
customers
& products
|
|
4,006
|
2,156
|
827
|
|
6,162
|
1,483
|
|
other
businesses & corporate(a)
|
|
(201)
|
(259)
|
384
|
|
(460)
|
577
|
|
Of
which:
|
|
|
|
|
|
|
|
|
other
businesses & corporate excluding Rosneft
|
|
(201)
|
(259)
|
(305)
|
|
(460)
|
(475)
|
|
Rosneft
|
|
—
|
—
|
689
|
|
—
|
1,052
|
|
Consolidation
adjustment – UPII
|
|
(21)
|
34
|
(31)
|
|
13
|
(18)
|
|
Underlying RC profit before interest and tax
|
|
12,766
|
10,209
|
4,662
|
|
22,975
|
9,359
|
|
Finance
costs and net finance expense relating to pensions and other
post-retirement benefits
|
|
(509)
|
(486)
|
(485)
|
|
(995)
|
(1,066)
|
|
Taxation on an underlying RC basis
|
|
(3,527)
|
(3,164)
|
(1,141)
|
|
(6,691)
|
(2,394)
|
|
Non-controlling interests
|
|
(279)
|
(314)
|
(238)
|
|
(593)
|
(471)
|
|
Underlying RC profit attributable to bp shareholders*
|
|
8,451
|
6,245
|
2,798
|
|
14,696
|
5,428
|
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
|
|
First half 2022
|
|
vs First half 2021
|
|
Tier 1 and tier 2 process safety events*
|
|
24
|
|
-8
|
|
Reported recordable injury frequency*
|
|
0.197
|
|
+15.9%
|
|
upstream* production(a)
(mboe/d)
|
|
2,224
|
|
+2.6%
|
|
upstream unit production costs*(b)
($/boe)
|
|
6.53
|
|
-10.9%
|
|
bp-operated hydrocarbon plant reliability*
|
|
95.3%
|
|
+1.6
|
|
bp-operated refining availability*(a)
|
|
94.4%
|
|
+0.3
|
(a)
See Operational
updates on pages 6, 9 and 11.
(b)
Reflecting higher
volumes and lower costs including phasing impacts.
Macro outlook
●
bp expects oil
prices to remain elevated in the third quarter due to ongoing
disruption to Russian supply, reduced levels of spare capacity and
with inventory levels significantly below the five year
average.
●
bp expects gas
prices to remain elevated and volatile during the third quarter due
to a lack of supply to Europe with the outlook heavily dependent on
Russian pipeline flows or other supply disruptions.
●
In the third
quarter of 2022, bp expects industry refining margins to remain
elevated due to ongoing supply disruptions.
3Q22 guidance
●
Looking ahead, we
expect third-quarter 2022 upstream* production on a reported basis
to be broadly flat compared with the second-quarter 2022, with
improved base performance offset by planned maintenance activity in
high margin regions.
●
In our customers
& products business, there remains an elevated level of
uncertainty due to the ongoing impacts of the conflict in Ukraine
and consumer demand changes driven by inflationary pressures. We
expect high base oil prices to persist in Castrol. In refining, we
expect margins to remain high, the benefits of which will be
partially offset by a continued high level of turnaround activity
and elevated energy prices.
2022 Guidance
In
addition to the guidance on page 2:
●
We continue to
expect reported upstream production to be broadly flat compared
with 2021 despite the absence of production from our Russia
incorporated joint ventures. On an underlying basis, we expect
upstream production to be slightly higher.
●
bp continues to
expect the other businesses & corporate underlying annual
charge to be in a range of $1.2-1.4 billion for 2022. The charge
may vary from quarter to quarter.
●
bp continues to
expect the depreciation, depletion and amortization to be at a
similar level to 2021.
●
The underlying ETR*
for 2022 is now expected to be around 35% 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. The
reduction from prior guidance of around 40% reflects changes in the
geographical mix of the group's profits and losses and additional
recognition of deferred tax assets, partly offset by the impact of
the new levy on UK oil and gas profits.
●
bp continues to
expect capital expenditure to be in a range of $14-15 billion for
2022.
●
bp continues to
expect divestment and other proceeds for the year of $2-3 billion.
Against a target of $25 billion of divestment and other proceeds
between the second half of 2020 and 2025 bp has now received almost
$14.7 billion of proceeds.
●
bp continues to
expect Gulf of Mexico oil spill payments for the year to be around
$1.4 billion pre-tax including the $1.2 billion pre-tax paid during
the second quarter.
●
For 2022, and
subject to maintaining a strong investment grade credit rating, bp
remains committed to using 60% of surplus cash flow* for share
buybacks and intends to allocate the remaining 40% to further
strengthen the balance sheet.
●
On average, based
on bp’s current forecasts, at around $60 per barrel Brent and
subject to the board’s discretion each quarter, bp continues
to expect to be able to deliver share buybacks of around $4.0
billion per annum and have capacity for an annual increase in the
dividend per ordinary share of around 4% through 2025.
●
In setting the
dividend per ordinary share and the buyback each quarter, the board
will 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 second quarter and half
year was $2,737 million and $1,213 million respectively, compared
with $927 million and $4,357 million for the same periods in 2021.
The second quarter and half year include an adverse impact of net
adjusting items* of $343 million and $5,462 million respectively,
compared with an adverse impact of net adjusting items of $313
million and a favourable impact of $847 million for the same
periods in 2021.
●
After excluding
adjusting items, the underlying replacement cost profit before
interest and tax* for the second quarter and half year was $3,080
million and $6,675 million respectively, compared with $1,240
million and $3,510 million for the same periods in 2021. Adjusting
items include adverse fair value accounting effects* of $74 million
for the quarter and $5,089 million for the half year, primarily
arising from the increase in forward gas prices during the first
quarter.
●
The underlying
replacement cost profit for the second quarter, compared with the
same period in 2021, reflects higher realizations and higher
production. Gas marketing and trading delivered an average result
in the second quarter. The result includes management’s best
estimate of the impact of the recent outage at Freeport LNG leading
to a significant reduction in the number of cargoes expected to be
received. For the half year the result reflects higher realizations
and higher production partially offset by a higher depreciation,
depletion and amortization charge and a lower gas marketing and
trading result.
Operational update
●
Reported production
for the quarter was 924mboe/d, 5.5% higher than the same period in
2021. Underlying production* was 7.5% higher, mainly due to major
project* start-ups in 2021, partly offset by base
decline.
●
Reported production
for the half year was 944mboe/d, 5.9% higher than the same period
in 2021 due to major project start-ups in 2021, partly offset by
base decline and the partial divestment in Oman in the first
quarter of 2021. Underlying production for the half year was 9.2%
higher.
●
Renewables
pipeline* at the end of the quarter was 25.8GW (bp net). The
renewables pipeline increased by 2.7GW during the half 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 with a total generating capacity of around 2.9GW
(1.45GW bp net) in the first quarter, and additions to the
Lightsource bp pipeline.
Strategic progress
gas
●
On 11 July Harbour
Energy announced drilling completion of the Timpan-1 exploration
well located 150 kilometres offshore Indonesia. The successful well
was drilled on the Andaman II licence offshore North Sumatra,
Indonesia. The partners in the licence are Premier Oil Andaman Ltd,
a Harbour Energy Co. (40%, operator), bp (30%) and Mubadala
(30%).
●
On 27 June bp was
awarded a new exploration block, offshore Egypt. The King Mariout
Offshore area, with 100% bp working interest, is located
approximately 20 kilometres west of the Raven field in the
Mediterranean Sea.
●
On 20 June bp
signed 30-year Agung I and Agung II production-sharing contracts*
with the government of Indonesia.
●
These events build
on the progress announced in our first-quarter results, which
comprised the following: bp increased its shareholding in the Shah
Deniz gas project in the Caspian Sea, offshore Azerbaijan, by 1.16%
to 29.99%; construction started on the Gas Natural Acu (GNA) 2
power plant at the Port of Acu, Rio de Janeiro state, Brazil, which
is expected to have an installed capacity of 1.7GW; bp and the
Korea Gas Corporation (KOGAS) signed a long-term agreement to
supply 1.58 million tonnes of liquified natural gas (LNG) per year
from 2025 to KOGAS through a new 18-year contract.
low carbon energy
●
On 15 June bp
announced it has agreed to acquire a 40.5% equity stake in, and to
become operator of the Asian Renewable Energy Hub (AREH) in the
Pilbara region of Western Australia, which has the potential to be
one of the largest renewables and green hydrogen* hubs in the
world. The other partners are InterContinental Energy (26.4%), CWP
Global (17.8%) and Macquarie Capital and Macquarie's Green
Investment Group (15.3%).
●
On 24 May bp
announced that Abu Dhabi’s ADNOC would join bp’s blue
hydrogen* project H2Teesside, Masdar signed a memorandum of
understanding to acquire a stake in bp’s proposed HyGreen
Teesside green hydrogen project, and that bp and ADNOC would
commence a study for a new world-scale blue hydrogen project in Abu
Dhabi.
●
On 12 May bp
submitted bids for two individual offshore wind leases in the
Netherlands – Hollandse Kust West sites VI and VII –
with potential for combined 1.4GW generating capacity. The bids
underpin plans for further integrated clean energy investments by
bp in the Netherlands, and propose creating innovative solutions to
enhance the Dutch North Sea ecosystem.
●
These events build
on the progress announced in our first-quarter results, which
included the following: bp announced it is partnering with Marubeni
to explore a selected offshore wind development opportunity in
Japan. bp will acquire a 49% interest in a project to jointly bid
in the Ishikari licence round; bp and partner HyCC announced plans
to develop H2-Fifty, a 250MW green hydrogen production plant in the
port area of Rotterdam; bp submitted bids for our H2Teesside
hydrogen project and Net Zero Teesside Power project as part of the
UK government’s Phase 2 of cluster sequencing for carbon
capture, usage and storage (CCUS) deployment.
Top of
page 7
gas & low carbon energy (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
2,728
|
(1,499)
|
931
|
|
1,229
|
4,383
|
|
Inventory holding (gains) losses*
|
|
9
|
(25)
|
(4)
|
|
(16)
|
(26)
|
|
RC profit (loss) before interest and tax
|
|
2,737
|
(1,524)
|
927
|
|
1,213
|
4,357
|
|
Net (favourable) adverse impact of adjusting items
|
|
343
|
5,119
|
313
|
|
5,462
|
(847)
|
|
Underlying RC profit before interest and tax
|
|
3,080
|
3,595
|
1,240
|
|
6,675
|
3,510
|
|
Taxation on an underlying RC basis
|
|
(717)
|
(1,009)
|
(244)
|
|
(1,726)
|
(779)
|
|
Underlying RC profit before interest
|
|
2,363
|
2,586
|
996
|
|
4,949
|
2,731
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,203
|
1,255
|
1,115
|
|
2,458
|
1,969
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
—
|
(2)
|
21
|
|
(2)
|
27
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
4,283
|
4,848
|
2,376
|
|
9,131
|
5,506
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
gas
|
|
681
|
642
|
705
|
|
1,323
|
1,516
|
|
low
carbon energy(a)
|
|
142
|
219
|
42
|
|
361
|
1,116
|
|
Total capital expenditure
|
|
823
|
861
|
747
|
|
1,684
|
2,632
|
(a)
First half 2021
includes $712 million in respect of the remaining payment to
Equinor for our investment in our strategic US offshore wind
partnership and $326 million as a lease option fee deposit paid to
The Crown Estate in connection with our participation in the UK
Round 4 Offshore Wind Leasing together with our partner
EnBW.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Production (net of
royalties)(b)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
112
|
121
|
109
|
|
116
|
111
|
|
Natural gas (mmcf/d)
|
|
4,709
|
4,897
|
4,440
|
|
4,803
|
4,531
|
|
Total hydrocarbons* (mboe/d)
|
|
924
|
966
|
875
|
|
944
|
892
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(c)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
105.50
|
86.09
|
61.69
|
|
95.40
|
58.61
|
|
Natural gas ($/mcf)
|
|
8.42
|
7.88
|
4.14
|
|
8.15
|
4.04
|
|
Total hydrocarbons* ($/boe)
|
|
55.79
|
50.91
|
28.97
|
|
53.31
|
27.89
|
(b)
Includes bp’s
share of production of equity-accounted entities in the gas &
low carbon energy segment.
(c)
Realizations are
based on sales by consolidated subsidiaries only – this
excludes equity-accounted entities.
Top of
page 8
gas & low carbon energy (continued)
|
|
|
30 June 2022
|
31 March 2022
|
30 June 2021
|
|
|
|
|||
|
low carbon energy(a)
|
|
|||
|
|
|
|
|
|
|
Renewables (bp net, GW)
|
|
|
|
|
|
Installed renewables capacity*
|
|
2.0
|
1.9
|
1.6
|
|
|
|
|
|
|
|
Developed renewables to FID*
|
|
4.4
|
4.4
|
3.7
|
|
Renewables pipeline
|
|
25.8
|
24.9
|
21.2
|
|
of which by geographical area:
|
|
|
|
|
|
Renewables
pipeline – Americas
|
|
16.9
|
16.3
|
15.3
|
|
Renewables
pipeline – Asia Pacific
|
|
1.4
|
1.4
|
0.8
|
|
Renewables
pipeline – Europe
|
|
7.2
|
7.0
|
5.1
|
|
Renewables
pipeline – Other
|
|
0.2
|
0.2
|
—
|
|
of which by technology:
|
|
|
|
|
|
Renewables
pipeline – offshore wind
|
|
5.2
|
5.2
|
3.7
|
|
Renewables
pipeline – solar
|
|
20.6
|
19.7
|
17.5
|
|
Total Developed renewables to FID and Renewables
pipeline
|
|
30.1
|
29.2
|
24.9
|
(a)
Because of
rounding, some totals may not agree exactly with the sum of their
component parts.
Top of
page 9
oil production & operations
Financial results
●
The replacement
cost profit before interest and tax for the second quarter and half
year was $7,237 million and $11,068 million respectively, compared
with $3,118 million and $4,597 million for the same periods in
2021. The second quarter and half year include a favourable impact
of net adjusting items* of $1,335 million and $483 million
respectively, which includes a favourable impact of $904 million
from Aker BP's acquisition of Lundin Energy's exploration and
production business, compared with a favourable impact of net
adjusting items of $876 million and $790 million for the same
periods in 2021.
●
After excluding
adjusting items, the underlying replacement cost profit before
interest and tax* for the second quarter and half year was $5,902
million and $10,585 million respectively, compared with $2,242
million and $3,807 million for the same periods in
2021.
●
The underlying
replacement cost profit for the second quarter and half year,
compared with the same periods in 2021, reflects higher
realizations and higher production.
Operational update
●
Reported production
for the quarter was 1,274mboe/d, 2.3% higher than the second
quarter of 2021. Underlying production* for the quarter was 5.5%
higher compared with the second quarter of 2021 reflecting bpx
energy performance, major projects* and lower seasonal maintenance
partly offset by base performance.
●
Reported production
for the half year was 1,280mboe/d, broadly flat compared with the
same period of 2021. Underlying production for the half year was
2.8% higher compared with the same period of 2021 reflecting bpx
energy performance, and major projects partly offset by base
performance.
Strategic progress
●
On 13 June bp
announced that it has agreed to sell its 50% interest in the
Sunrise oil sands project in Alberta, Canada, to Calgary-based
Cenovus Energy. As part of the deal, bp has agreed to acquire
Cenovus’s interest in the Bay du Nord project in Eastern
Canada, adding to its sizeable acreage position offshore
Newfoundland and Labrador. Subject to regulatory approvals the
transaction is expected to complete in 2022.
●
On 30 June Aker BP
completed the acquisition of Lundin Energy’s exploration and
production business. The combined firm, in which bp now owns a
15.9% stake, is the second-largest operating company on the
Norwegian continental shelf.
●
On 11 July our
partner Petrobras announced a successful Drill Stem Test at the
Cabo Frio discovery in the Campos Basin offshore Brazil, evaluating
a thick interval of pre-salt carbonate rocks and confirming good
productivity (bp 50%, Petrobras operator 50%).
●
The hook-up and
commissioning programme of the Mad Dog Phase 2 Argos platform
topsides is proceeding to plan, with a successful wells campaign
nearing completion. An issue with two of the subsea production
flexible joints was detected during testing. This is being assessed
and an update on whether the expected project start-up in 2022 is
impacted will be provided in due course, as appropriate (bp
operator 60.5%, Woodside Energy 23.9%, Chevron 15.6%).
●
On 1 August bp and
Eni completed the formation of Azule Energy, an independent
incorporated 50:50 joint venture between bp and Eni, that combines
the two companies’ Angolan businesses.
●
These events build
on the progress announced in our first-quarter results, which
included the start-up of the Herschel Expansion major project* in
the deepwater Gulf of Mexico. Phase 1 of the project comprises
development of a new subsea production system and the first of up
to three wells tied to the Na Kika platform.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit before interest and tax
|
|
7,230
|
3,832
|
3,112
|
|
11,062
|
4,606
|
|
Inventory holding (gains) losses*
|
|
7
|
(1)
|
6
|
|
6
|
(9)
|
|
RC profit before interest and tax
|
|
7,237
|
3,831
|
3,118
|
|
11,068
|
4,597
|
|
Net (favourable) adverse impact of adjusting items
|
|
(1,335)
|
852
|
(876)
|
|
(483)
|
(790)
|
|
Underlying RC profit before interest and tax
|
|
5,902
|
4,683
|
2,242
|
|
10,585
|
3,807
|
|
Taxation on an underlying RC basis
|
|
(2,295)
|
(1,912)
|
(939)
|
|
(4,207)
|
(1,668)
|
|
Underlying RC profit before interest
|
|
3,607
|
2,771
|
1,303
|
|
6,378
|
2,139
|
Top of
page 10
oil production & operations (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
1,371
|
1,429
|
1,559
|
|
2,800
|
3,133
|
|
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
|
|
|
|
|
|
|
Exploration write-offs
|
|
79
|
51
|
8
|
|
130
|
64
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
|
|
7,352
|
6,163
|
3,809
|
|
13,515
|
7,004
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
Total capital expenditure
|
|
1,208
|
1,254
|
1,148
|
|
2,462
|
2,467
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Production (net of
royalties)(a)
|
|
|
|
|
|
|
|
|
Liquids* (mb/d)
|
|
935
|
948
|
938
|
|
941
|
967
|
|
Natural gas (mmcf/d)
|
|
1,964
|
1,964
|
1,786
|
|
1,964
|
1,798
|
|
Total hydrocarbons* (mboe/d)
|
|
1,274
|
1,286
|
1,245
|
|
1,280
|
1,277
|
|
|
|
|
|
|
|
|
|
|
Average realizations*(b)
|
|
|
|
|
|
|
|
|
Liquids ($/bbl)
|
|
100.34
|
83.47
|
60.55
|
|
92.00
|
56.69
|
|
Natural gas ($/mcf)
|
|
7.97
|
9.40
|
3.90
|
|
8.67
|
4.00
|
|
Total hydrocarbons* ($/boe)
|
|
87.46
|
76.64
|
52.47
|
|
82.12
|
49.61
|
(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.
Top of
page 11
customers & products
Financial results
●
The replacement
cost profit before interest and tax for the second quarter and half
year was
$3,531 million and $5,512 million respectively, compared with $640
million and $1,574 million for the same periods in 2021. The second
quarter and half year included an adverse impact of net adjusting
items* of $475 million and $650 million respectively, compared with
an adverse impact of net adjusting items of $187 million and a
favourable impact of $91 million for the same periods in
2021.
●
After excluding
adjusting items, the underlying replacement cost profit before
interest and tax* for the second quarter and half year was $4,006
million and $6,162 million respectively, compared with $827 million
and $1,483 million for the same periods in 2021.
●
The customers &
products results for the second quarter and half year reflect the
benefit of significantly higher refining margins and an exceptional
oil trading contribution.
●
customers –
the convenience and mobility results, excluding Castrol, for the
quarter and half year were lower than the same periods in 2021. The
benefits of a robust convenience performance and higher aviation
volumes were more than offset by a challenging macro
environment, with rising crude prices and inflation impacting
margins, costs and customer purchasing behaviour. In addition, the
results were impacted by adverse foreign exchange
movements.
Castrol results for the quarter and half year were lower than the
same periods in 2021. Base oil prices continued to increase, and
COVID lockdowns in China, along with rising inflation, impacted
results.
●
products – the
products results for the quarter and half year were higher compared
to the same periods in 2021. In refining, the result benefited from
the capture of significantly higher margins, partially offset by
increased energy costs and higher turnaround and maintenance
activity. In addition, the contribution from oil trading was
exceptional.
Operational update
●
Utilization for the
second quarter and half year was higher than the same periods in
2021 despite higher planned maintenance, mainly due to lower COVID
related demand impacts. bp-operated refining availability* for the
second quarter and half year was 93.9% and 94.4% respectively,
higher compared with 93.5% and 94.1% for the same periods in
2021.
Strategic progress
●
In July, bp and
Iberdrola announced their intent to form a strategic collaboration
to accelerate electric vehicle (EV) charging infrastructure
roll-out and green hydrogen* production. This includes plans to
install 5,000 fast(a) EV charge
points by 2025 and up to a total of 11,000 by 2030 in Spain and
Portugal, and to develop large-scale integrated green hydrogen
production hubs in Spain, Portugal and the UK, aiming for up to
600ktpa production capacity by 2030.
●
In June, bp signed
a contract with Shenzhen Huize New Energy Co. Ltd to operate
China’s largest fast(a) EV charging
hub, in Shenzhen, offering charging options for consumers, fleets
and heavy-duty truck users.
●
In July, bp has
signed a new supply contract and brand partnership with Julius
Stiglechner GmbH, in Austria, to establish the bp brand in the
majority of the 160 Stiglechner filling station network by the end
of 2023. In addition, bp and Stiglechner will explore further
opportunities in EV charging and convenience in
Austria.
●
In June, Castrol,
which has expertise in coolants, signed a memorandum of
understanding with Submer, liquid cooling specialists, to
accelerate the adoption of liquid immersion coolants for data
centres. Castrol and Submer will also explore solutions for the
recovery and reuse of waste heat produced in data
centres.
●
In July, bp and
leading gas and engineering company BOC, a Linde company, announced
a new agreement to build a hydrogen refuelling station at the bp
truckstop in Queensland. It will be the first service station in
Australia with hydrogen refuelling capability.
●
These events build on the progress
announced in our first-quarter results: completed the sale of our
retail assets in Switzerland to Oel Pool AG; launched our strategic
partnership with Volkswagen Group to roll-out an EV
fast(a)
charging network in UK and
Europe; announced a ten year plan to invest £1 billion
to support the roll-out EV charging infrastructure across the UK;
signed a global convenience partnership with Uber and announced the
pilot of checkout-free technology in the US; signed a 10-year
strategic agreement with Nuseed, with plans to accelerate market
adoption of Nuseed Carinata; bp’s Lingen refinery became
Germany’s first production facility to use co-processing on
an industrial scale to produce sustainable aviation fuel (SAF);
acquired a stake in Green Biofuels Ltd, the UK’s largest
provider of low emission hydrogenated vegetable oil fuels; Air bp
signed a strategic collaboration agreement with DHL Express and a
SAF supply contract with Rolls-Royce; Castrol signed a strategic
cooperation agreement with BYD for the supply of the Castrol ON
range of EV fluids and a new commercial agreement with Tesco to
stock a range of Castrol products; BP Midstream Partners LP became
a wholly-owned subsidiary of bp in April; SAPREF shareholders
(bp and Shell), announced the pause of refinery operations in South
Africa for an indefinite period from the end of March 2022; in
April, the New Zealand Whangarei refinery, in which bp holds a
share, converted to an import-only terminal.
(a)
“fast
charging” includes rapid charging ≥50kW and ultra-fast
charging ≥150kW.
Top of
page 12
customers & products (continued)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
5,693
|
5,456
|
1,527
|
|
11,149
|
4,066
|
|
Inventory holding (gains) losses*
|
|
(2,162)
|
(3,475)
|
(887)
|
|
(5,637)
|
(2,492)
|
|
RC profit (loss) before interest and tax
|
|
3,531
|
1,981
|
640
|
|
5,512
|
1,574
|
|
Net (favourable) adverse impact of adjusting items
|
|
475
|
175
|
187
|
|
650
|
(91)
|
|
Underlying RC profit before interest and tax
|
|
4,006
|
2,156
|
827
|
|
6,162
|
1,483
|
|
Of
which:(a)
|
|
|
|
|
|
|
|
|
customers
– convenience & mobility
|
|
679
|
522
|
951
|
|
1,201
|
1,609
|
|
Castrol – included in customers
|
|
223
|
256
|
265
|
|
479
|
599
|
|
products
– refining & trading
|
|
3,327
|
1,634
|
(124)
|
|
4,961
|
(126)
|
|
Taxation on an underlying RC basis
|
|
(783)
|
(400)
|
(123)
|
|
(1,183)
|
(256)
|
|
Underlying RC profit before interest
|
|
3,223
|
1,756
|
704
|
|
4,979
|
1,227
|
(a)
A reconciliation to
RC profit before interest and tax by business is provided on page
33.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Adjusted EBITDA*(b)
|
|
|
|
|
|
|
|
|
customers – convenience & mobility
|
|
994
|
848
|
1,280
|
|
1,842
|
2,262
|
|
Castrol – included in customers
|
|
261
|
295
|
304
|
|
556
|
677
|
|
products – refining & trading
|
|
3,727
|
2,025
|
301
|
|
5,752
|
720
|
|
|
|
4,721
|
2,873
|
1,581
|
|
7,594
|
2,982
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization
|
|
715
|
717
|
754
|
|
1,432
|
1,499
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure*
|
|
|
|
|
|
|
|
|
customers – convenience & mobility
|
|
334
|
347
|
255
|
|
681
|
571
|
|
Castrol – included in customers
|
|
43
|
52
|
42
|
|
95
|
83
|
|
products – refining & trading
|
|
341
|
368
|
264
|
|
709
|
480
|
|
Total capital expenditure
|
|
675
|
715
|
519
|
|
1,390
|
1,051
|
(b)
A reconciliation to
RC profit before interest and tax by business is provided on page
33.
|
Retail(c)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
bp retail sites* – total (#)
|
|
20,600
|
20,550
|
20,300
|
|
20,600
|
20,300
|
|
bp
retail sites in growth markets*
|
|
2,650
|
2,650
|
2,700
|
|
2,650
|
2,700
|
|
Strategic
convenience sites*
|
|
2,200
|
2,150
|
2,000
|
|
2,200
|
2,000
|
(c)
Reported to the
nearest 50.
|
Marketing sales of refined products (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
US
|
|
1,163
|
1,113
|
1,131
|
|
1,138
|
1,074
|
|
Europe
|
|
1,032
|
883
|
838
|
|
958
|
772
|
|
Rest of World
|
|
439
|
471
|
469
|
|
455
|
455
|
|
|
|
2,634
|
2,467
|
2,438
|
|
2,551
|
2,301
|
|
Trading/supply sales of refined products
|
|
369
|
352
|
415
|
|
361
|
376
|
|
Total sales volume of refined products
|
|
3,003
|
2,819
|
2,853
|
|
2,912
|
2,677
|
Top of
page 13
customers & products (continued)
|
Refining marker
margin*(d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
bp average refining marker margin (RMM) ($/bbl)
|
|
45.5
|
18.9
|
13.7
|
|
32.2
|
11.2
|
(d)
The RMM in the
quarter is calculated based on bp’s current refinery
portfolio. On a comparative basis, the second quarter and half year
2021 RMM would be $14.2/bbl and $11.6/bbl
respectively.
|
Refinery throughputs (mb/d)
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
US
|
|
637
|
758
|
692
|
|
698
|
709
|
|
Europe
|
|
841
|
807
|
763
|
|
824
|
755
|
|
Rest of World
|
|
2
|
85
|
52
|
|
43
|
90
|
|
Total refinery throughputs
|
|
1,480
|
1,650
|
1,507
|
|
1,565
|
1,554
|
|
bp-operated refining availability* (%)
|
|
93.9
|
95.0
|
93.5
|
|
94.4
|
94.1
|
Top of
page 14
other businesses & corporate
Other
businesses & corporate comprises innovation & engineering,
bp ventures, Launchpad, regions, cities & 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 loss before interest and tax for the second quarter and half
year was $1,028 million and $25,747 million respectively, compared
with a profit of $218 million and a loss of $97 million for the
same periods in 2021. The second quarter and half year included an
adverse impact of net adjusting items* of $827 million and $25,287
million respectively, compared with an adverse impact of net
adjusting items of $166 million and $674 million for the same
periods in 2021. The adjusting items for the half year of 2022
mainly relate to Rosneft.
●
Fair value
accounting effects* for the second quarter and half year had an
adverse impact of $686 million and $1,111 million respectively,
compared with a favourable impact of $73 million and an adverse
impact of $374 million for the same periods in 2021.
●
After excluding
adjusting items, the underlying replacement cost loss before
interest and tax* for the second quarter and half year was $201
million and $460 million respectively, compared with a profit of
$384 million and $577 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 second quarter and half year was $201
million and $460 million respectively, compared with $305 million
and $475 million for the same periods in 2021, reflecting mainly
foreign exchange impacts.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
(1,028)
|
(24,719)
|
286
|
|
(25,747)
|
59
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
(68)
|
|
—
|
(156)
|
|
RC profit (loss) before interest and tax
|
|
(1,028)
|
(24,719)
|
218
|
|
(25,747)
|
(97)
|
|
Net
(favourable) adverse impact of adjusting items(a)
|
|
827
|
24,460
|
166
|
|
25,287
|
674
|
|
Underlying RC profit (loss) before interest and tax
|
|
(201)
|
(259)
|
384
|
|
(460)
|
577
|
|
Taxation on an underlying RC basis
|
|
167
|
23
|
33
|
|
190
|
52
|
|
Underlying RC profit (loss) before interest
|
|
(34)
|
(236)
|
417
|
|
(270)
|
629
|
(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
●
On 5 July, bp and
Thyssenkrupp Steel signed a memorandum of understanding (MoU)
focused on the development of long-term supply of low carbon
hydrogen and renewable power to support decarbonization of
steel.
●
This event builds
on the progress announced in our first-quarter results, which
comprised the following: bp and AENA signed an agreement to work on
the decarbonization of the energy and mobility system of the
airports operated by AENA, starting with Valencia airport; the
Australian Federal Government announced that bp’s Kwinana
Integrated Clean Energy Hub project in Perth, Western Australia had
been awarded up to A$70 million (US$52 million) of grant
funding.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
(1,028)
|
(686)
|
(425)
|
|
(1,714)
|
(1,103)
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
—
|
|
—
|
—
|
|
RC profit (loss) before interest and tax
|
|
(1,028)
|
(686)
|
(425)
|
|
(1,714)
|
(1,103)
|
|
Net (favourable) adverse impact of adjusting items
|
|
827
|
427
|
120
|
|
1,254
|
628
|
|
Underlying RC profit (loss) before interest and tax
|
|
(201)
|
(259)
|
(305)
|
|
(460)
|
(475)
|
|
Taxation on an underlying RC basis
|
|
167
|
23
|
101
|
|
190
|
155
|
|
Underlying RC profit (loss) before interest
|
|
(34)
|
(236)
|
(204)
|
|
(270)
|
(320)
|
Top of
page 15
other businesses & corporate (Rosneft)
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Profit (loss) before interest and tax
|
|
—
|
(24,033)
|
711
|
|
(24,033)
|
1,162
|
|
Inventory holding (gains) losses*
|
|
—
|
—
|
(68)
|
|
—
|
(156)
|
|
RC profit (loss) before interest and tax
|
|
—
|
(24,033)
|
643
|
|
(24,033)
|
1,006
|
|
Net (favourable) adverse impact of adjusting items
|
|
—
|
24,033
|
46
|
|
24,033
|
46
|
|
Underlying RC profit (loss) before interest and tax
|
|
—
|
—
|
689
|
|
—
|
1,052
|
|
Taxation on an underlying RC basis
|
|
—
|
—
|
(68)
|
|
—
|
(103)
|
|
Underlying RC profit (loss) before interest
|
|
—
|
—
|
621
|
|
—
|
949
|
Top of
page 16
This
results announcement also represents BP’s half-yearly
financial report for the purposes of the Disclosure Guidance and
Transparency Rules made by the UK Financial Conduct Authority. In
this context: (i) the condensed set of financial statements can be
found on pages 18-29; (ii) pages 1-15, and 30-43 comprise the
interim management report; and (iii) the directors’
responsibility statement and auditors’ independent review
report can be found on pages 16-17.
Statement of directors’ responsibilities
The
directors confirm that, to the best of their knowledge, the
condensed set of financial statements on pages 18-29 has been
prepared in accordance with United Kingdom adopted IAS 34
‘Interim Financial Reporting’, and that the interim
management report on pages 1-15, and 30-43 includes a fair review
of the information required by the Disclosure Guidance and
Transparency Rules.
The
directors of BP p.l.c. are listed on pages 84-87 of bp Annual Report and Form 20-F
2021.
By
order of the board
|
Bernard Looney
|
Murray Auchincloss
|
|
Chief Executive Officer
|
Chief Financial Officer
|
|
1 August 2022
|
1 August 2022
|
Top of
page 17
Independent review report to BP p.l.c.
Conclusion
We have
been engaged by the company to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2022 which comprises the group income
statement, condensed group statement of comprehensive income,
condensed group statement of changes in equity, group balance
sheet, condensed cash flow statement and related notes 1 to
10.
Based
on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2022
is not prepared, in all material respects, in accordance with
United Kingdom adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United
Kingdom’s Financial Conduct Authority.
Basis for Conclusion
We
conducted our review in accordance with International Standard on
Review Engagements (UK) 2410 “Review of Interim Financial
Information Performed by the Independent Auditor of the
Entity” (ISRE(UK) 2410) issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim
financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As
disclosed in Note 1, the annual financial statements of the group
are prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), IFRS as adopted by the UK, and European
Union (EU). The condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance
with United Kingdom adopted International Accounting Standard 34,
“Interim Financial Reporting”.
Conclusion Relating to Going Concern
Based
on our review procedures, which are less extensive than those
performed in an audit as described in the Basis for Conclusion
section of this report, nothing has come to our attention to
suggest that the directors have inappropriately adopted the going
concern basis of accounting or that the directors have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This
conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410; however future events or conditions
may cause the entity to cease to continue as a going
concern.
Responsibilities of the directors
The
directors are responsible for preparing the half-yearly financial
report in accordance with the Disclosure Guidance and Transparency
Rules of the United Kingdom’s Financial Conduct
Authority.
In
preparing the half-yearly financial report, the directors are
responsible for assessing the group’s ability to continue as
a going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do
so.
Auditor’s Responsibilities for the review of the financial
information
In
reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of
financial statements in the half-yearly financial report. Our
Conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This
report is made solely to the company in accordance with ISRE (UK)
2410. Our work has been undertaken so that we might state to the
company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Deloitte LLP
Statutory
Auditor
London,
United Kingdom
1
August 2022
The
maintenance and integrity of the BP p.l.c. website are the
responsibility of the directors; the review work carried out by the
statutory auditors does not involve consideration of these matters
and, accordingly, the statutory auditors accept no responsibility
for any changes that may have occurred to the financial information
since it was initially presented on the website.
Legislation
in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other
jurisdictions.
Top of
page 18
Financial statements
Group income statement
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues (Note 5)
|
|
67,866
|
49,258
|
36,467
|
|
117,124
|
71,011
|
|
Earnings from joint ventures – after interest and
tax
|
|
62
|
379
|
(57)
|
|
441
|
103
|
|
Earnings from associates – after interest and
tax
|
|
127
|
871
|
856
|
|
998
|
1,457
|
|
Interest and other income
|
|
142
|
194
|
82
|
|
336
|
164
|
|
Gains on sale of businesses and fixed assets
|
|
1,309
|
518
|
250
|
|
1,827
|
1,355
|
|
Total revenues and other income
|
|
69,506
|
51,220
|
37,598
|
|
120,726
|
74,090
|
|
Purchases
|
|
39,141
|
27,808
|
21,241
|
|
66,949
|
36,897
|
|
Production and manufacturing expenses
|
|
7,601
|
6,975
|
6,562
|
|
14,576
|
13,420
|
|
Production and similar taxes
|
|
624
|
505
|
295
|
|
1,129
|
548
|
|
Depreciation, depletion and amortization (Note 6)
|
|
3,512
|
3,625
|
3,631
|
|
7,137
|
6,998
|
|
Net impairment and losses on sale of businesses and fixed assets
(Note 3)
|
|
445
|
26,031
|
(2,937)
|
|
26,476
|
(2,564)
|
|
Exploration expense
|
|
128
|
92
|
107
|
|
220
|
206
|
|
Distribution and administration expenses
|
|
3,453
|
3,080
|
2,874
|
|
6,533
|
5,489
|
|
Profit (loss) before interest and taxation
|
|
14,602
|
(16,896)
|
5,825
|
|
(2,294)
|
13,096
|
|
Finance costs
|
|
556
|
664
|
682
|
|
1,220
|
1,405
|
|
Net
finance (income) expense relating to pensions and other
post-retirement benefits
|
|
(17)
|
(20)
|
5
|
|
(37)
|
11
|
|
Profit (loss) before taxation
|
|
14,063
|
(17,540)
|
5,138
|
|
(3,477)
|
11,680
|
|
Taxation
|
|
4,527
|
2,530
|
1,784
|
|
7,057
|
3,426
|
|
Profit (loss) for the period
|
|
9,536
|
(20,070)
|
3,354
|
|
(10,534)
|
8,254
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
9,257
|
(20,384)
|
3,116
|
|
(11,127)
|
7,783
|
|
Non-controlling
interests
|
|
279
|
314
|
238
|
|
593
|
471
|
|
|
|
9,536
|
(20,070)
|
3,354
|
|
(10,534)
|
8,254
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to BP
shareholders
|
|
|
|
|
|
|
|
|
Per
ordinary share (cents)
|
|
|
|
|
|
|
|
|
Basic
|
|
47.74
|
(104.46)
|
15.37
|
|
(57.21)
|
38.36
|
|
Diluted
|
|
47.18
|
(104.46)
|
15.30
|
|
(57.21)
|
38.16
|
|
Per
ADS (dollars)
|
|
|
|
|
|
|
|
|
Basic
|
|
2.86
|
(6.27)
|
0.92
|
|
(3.43)
|
2.30
|
|
Diluted
|
|
2.83
|
(6.27)
|
0.92
|
|
(3.43)
|
2.29
|
Top of
page 19
Condensed group statement of comprehensive income
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
9,536
|
(20,070)
|
3,354
|
|
(10,534)
|
8,254
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
|
|
|
|
Currency
translation differences(a)
|
|
(2,454)
|
(1,749)
|
902
|
|
(4,203)
|
297
|
|
Exchange (gains)
losses on translation of foreign operations reclassified to gain or
loss on sale of businesses and fixed assets(b)
|
|
—
|
10,791
|
—
|
|
10,791
|
—
|
|
Cash
flow hedges and costs of hedging
|
|
99
|
222
|
(207)
|
|
321
|
(269)
|
|
Share
of items relating to equity-accounted entities, net of
tax
|
|
59
|
85
|
(68)
|
|
144
|
(57)
|
|
Income
tax relating to items that may be reclassified
|
|
(70)
|
(102)
|
8
|
|
(172)
|
9
|
|
|
|
(2,366)
|
9,247
|
635
|
|
6,881
|
(20)
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
Remeasurements of
the net pension and other post-retirement benefit liability or
asset(c)
|
|
(392)
|
2,128
|
590
|
|
1,736
|
2,616
|
|
Cash
flow hedges that will subsequently be transferred to the balance
sheet
|
|
(3)
|
(1)
|
1
|
|
(4)
|
3
|
|
Income
tax relating to items that will not be reclassified
|
|
179
|
(668)
|
(165)
|
|
(489)
|
(753)
|
|
|
|
(216)
|
1,459
|
426
|
|
1,243
|
1,866
|
|
Other comprehensive income
|
|
(2,582)
|
10,706
|
1,061
|
|
8,124
|
1,846
|
|
Total comprehensive income
|
|
6,954
|
(9,364)
|
4,415
|
|
(2,410)
|
10,100
|
|
Attributable to
|
|
|
|
|
|
|
|
|
BP
shareholders
|
|
6,742
|
(9,678)
|
4,183
|
|
(2,936)
|
9,643
|
|
Non-controlling
interests
|
|
212
|
314
|
232
|
|
526
|
457
|
|
|
|
6,954
|
(9,364)
|
4,415
|
|
(2,410)
|
10,100
|
(a)
Second quarter 2022
is principally affected by movements in the Pound Sterling against
the US dollar. Comparative periods are principally affected by
movements in the Russian rouble against the US dollar. Both
currency movements contribute towards the first half 2022
movement.
(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 20
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
|
|
(2,936)
|
254
|
272
|
(2,410)
|
|
Dividends
|
|
(2,130)
|
—
|
(128)
|
(2,258)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(1)
|
—
|
—
|
(1)
|
|
Issue
of ordinary share capital(b)
|
|
820
|
—
|
—
|
820
|
|
Repurchase of ordinary share capital
|
|
(4,490)
|
—
|
—
|
(4,490)
|
|
Share-based payments, net of tax
|
|
380
|
—
|
—
|
380
|
|
Issue of perpetual hybrid bonds
|
|
(2)
|
130
|
—
|
128
|
|
Payments on perpetual hybrid bonds
|
|
15
|
(394)
|
—
|
(379)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
(510)
|
—
|
(156)
|
(666)
|
|
At 30 June 2022
|
|
66,609
|
13,031
|
1,923
|
81,563
|
|
|
|
|
|
|
|
|
|
|
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
|
|
9,643
|
249
|
208
|
10,100
|
|
Dividends
|
|
(2,134)
|
—
|
(158)
|
(2,292)
|
|
Cash
flow hedges transferred to the balance sheet, net of
tax
|
|
(6)
|
—
|
—
|
(6)
|
|
Repurchase of ordinary share capital
|
|
(500)
|
—
|
—
|
(500)
|
|
Share-based payments, net of tax
|
|
188
|
—
|
—
|
188
|
|
Share
of equity-accounted entities’ changes in equity, net of
tax
|
|
(3)
|
—
|
—
|
(3)
|
|
Payments on perpetual hybrid bonds
|
|
(7)
|
(376)
|
—
|
(383)
|
|
Transactions
involving non-controlling interests, net of tax
|
|
366
|
—
|
194
|
560
|
|
At 30 June 2021
|
|
78,797
|
11,949
|
2,486
|
93,232
|
(a)
In 2022 $9.2
billion of the opening foreign currency translation reserve has
been moved to 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 21
Group balance sheet
|
|
|
30 June
|
31 December
|
|
$ million
|
|
2022
|
2021
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
107,151
|
112,902
|
|
Goodwill
|
|
11,462
|
12,373
|
|
Intangible assets
|
|
6,433
|
6,451
|
|
Investments in joint ventures
|
|
9,290
|
9,982
|
|
Investments
in associates(a)
|
|
8,042
|
21,001
|
|
Other investments
|
|
2,682
|
2,544
|
|
Fixed assets
|
|
145,060
|
165,253
|
|
Loans
|
|
1,097
|
922
|
|
Trade and other receivables
|
|
1,155
|
2,693
|
|
Derivative financial instruments
|
|
8,379
|
7,006
|
|
Prepayments
|
|
525
|
479
|
|
Deferred tax assets
|
|
4,965
|
6,410
|
|
Defined benefit pension plan surpluses
|
|
11,152
|
11,919
|
|
|
|
172,333
|
194,682
|
|
Current assets
|
|
|
|
|
Loans
|
|
282
|
355
|
|
Inventories
|
|
34,257
|
23,711
|
|
Trade and other receivables
|
|
39,114
|
27,139
|
|
Derivative financial instruments
|
|
10,180
|
5,744
|
|
Prepayments
|
|
2,581
|
2,486
|
|
Current tax receivable
|
|
290
|
542
|
|
Other investments
|
|
130
|
280
|
|
Cash and cash equivalents
|
|
33,108
|
30,681
|
|
|
|
119,942
|
90,938
|
|
Assets classified as held for sale (Note 2)
|
|
6,858
|
1,652
|
|
|
|
126,800
|
92,590
|
|
Total assets
|
|
299,133
|
287,272
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
64,015
|
52,611
|
|
Derivative financial instruments
|
|
19,309
|
7,565
|
|
Accruals
|
|
5,427
|
5,638
|
|
Lease liabilities
|
|
1,735
|
1,747
|
|
Finance debt
|
|
6,479
|
5,557
|
|
Current tax payable
|
|
3,817
|
1,554
|
|
Provisions
|
|
6,154
|
5,256
|
|
|
|
106,936
|
79,928
|
|
Liabilities directly associated with assets classified as held for
sale (Note 2)
|
|
2,571
|
359
|
|
|
|
109,507
|
80,287
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
|
9,124
|
10,567
|
|
Derivative financial instruments
|
|
12,918
|
6,356
|
|
Accruals
|
|
896
|
968
|
|
Lease liabilities
|
|
6,321
|
6,864
|
|
Finance debt
|
|
46,387
|
55,619
|
|
Deferred tax liabilities
|
|
8,360
|
8,780
|
|
Provisions
|
|
18,229
|
19,572
|
|
Defined benefit pension plan and other post-retirement benefit plan
deficits
|
|
5,828
|
7,820
|
|
|
|
108,063
|
116,546
|
|
Total liabilities
|
|
217,570
|
196,833
|
|
Net assets
|
|
81,563
|
90,439
|
|
Equity
|
|
|
|
|
BP
shareholders’ equity
|
|
66,609
|
75,463
|
|
Non-controlling interests
|
|
14,954
|
14,976
|
|
Total equity
|
|
81,563
|
90,439
|
(a)
See Note 1 Basis of
preparation - Investment in
Rosneft.
Top of
page 22
Condensed group cash flow statement
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Profit (loss) before taxation
|
|
14,063
|
(17,540)
|
5,138
|
|
(3,477)
|
11,680
|
|
Adjustments to
reconcile profit (loss) before taxation to net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization and exploration expenditure written
off
|
|
3,591
|
3,674
|
3,659
|
|
7,265
|
7,087
|
|
Net
impairment and (gain) loss on sale of businesses and fixed
assets
|
|
(864)
|
25,513
|
(3,187)
|
|
24,649
|
(3,919)
|
|
Earnings from
equity-accounted entities, less dividends received
|
|
72
|
(1,093)
|
(539)
|
|
(1,021)
|
(1,172)
|
|
Net
charge for interest and other finance expense, less net interest
paid
|
|
(46)
|
184
|
300
|
|
138
|
329
|
|
Share-based
payments
|
|
208
|
170
|
228
|
|
378
|
182
|
|
Net
operating charge for pensions and other post-retirement benefits,
less contributions and benefit payments for unfunded
plans
|
|
(36)
|
(146)
|
(371)
|
|
(182)
|
(391)
|
|
Net
charge for provisions, less payments
|
|
796
|
484
|
1,172
|
|
1,280
|
2,074
|
|
Movements in
inventories and other current and non-current assets and
liabilities
|
|
(4,416)
|
(1,771)
|
26
|
|
(6,187)
|
(2,767)
|
|
Income
taxes paid
|
|
(2,505)
|
(1,265)
|
(1,015)
|
|
(3,770)
|
(1,583)
|
|
Net cash provided by operating activities
|
|
10,863
|
8,210
|
5,411
|
|
19,073
|
11,520
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditure on
property, plant and equipment, intangible and other
assets
|
|
(2,666)
|
(2,602)
|
(2,435)
|
|
(5,268)
|
(5,468)
|
|
Acquisitions, net of cash acquired
|
|
3
|
(8)
|
—
|
|
(5)
|
(1)
|
|
Investment in joint ventures
|
|
(159)
|
(294)
|
(47)
|
|
(453)
|
(789)
|
|
Investment in associates
|
|
(16)
|
(25)
|
(32)
|
|
(41)
|
(54)
|
|
Total cash capital expenditure
|
|
(2,838)
|
(2,929)
|
(2,514)
|
|
(5,767)
|
(6,312)
|
|
Proceeds from disposal of fixed assets
|
|
202
|
468
|
93
|
|
670
|
644
|
|
Proceeds from disposal of businesses, net of cash
disposed
|
|
111
|
549
|
122
|
|
660
|
3,735
|
|
Proceeds from loan repayments
|
|
16
|
29
|
67
|
|
45
|
128
|
|
Cash provided from investing activities
|
|
329
|
1,046
|
282
|
|
1,375
|
4,507
|
|
Net cash used in investing activities
|
|
(2,509)
|
(1,883)
|
(2,232)
|
|
(4,392)
|
(1,805)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Net issue (repurchase) of shares (Note 7)
|
|
(2,288)
|
(1,592)
|
(500)
|
|
(3,880)
|
(500)
|
|
Lease liability payments
|
|
(472)
|
(498)
|
(514)
|
|
(970)
|
(1,074)
|
|
Proceeds from long-term financing
|
|
—
|
2,002
|
1,985
|
|
2,002
|
3,941
|
|
Repayments of long-term financing
|
|
(4,573)
|
(892)
|
(67)
|
|
(5,465)
|
(7,096)
|
|
Net increase (decrease) in short-term debt
|
|
(688)
|
(276)
|
(33)
|
|
(964)
|
189
|
|
Issue of perpetual hybrid bonds
|
|
62
|
66
|
—
|
|
128
|
—
|
|
Payments relating to perpetual hybrid bonds
|
|
(161)
|
(148)
|
(328)
|
|
(309)
|
(383)
|
|
Payments
relating to transactions involving non-controlling interests (Other
interest)
|
|
(1)
|
(5)
|
—
|
|
(6)
|
—
|
|
Receipts
relating to transactions involving non-controlling interests (Other
interest)
|
|
—
|
7
|
3
|
|
7
|
671
|
|
Dividends paid - BP shareholders
|
|
(1,062)
|
(1,068)
|
(1,062)
|
|
(2,130)
|
(2,126)
|
|
-
non-controlling interests
|
|
(63)
|
(65)
|
(107)
|
|
(128)
|
(158)
|
|
Net cash provided by (used in) financing activities
|
|
(9,246)
|
(2,469)
|
(623)
|
|
(11,715)
|
(6,536)
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(414)
|
(125)
|
24
|
|
(539)
|
(34)
|
|
Increase (decrease) in cash and cash equivalents
|
|
(1,306)
|
3,733
|
2,580
|
|
2,427
|
3,145
|
|
Cash and cash equivalents at beginning of period
|
|
34,414
|
30,681
|
31,676
|
|
30,681
|
31,111
|
|
Cash and cash equivalents at end of period
|
|
33,108
|
34,414
|
34,256
|
|
33,108
|
34,256
|
Top of
page 23
Notes
Note 1. Basis of preparation
The
interim financial information included in this report has been
prepared in accordance with IAS 34 'Interim Financial
Reporting'.
The
results for the interim periods are unaudited and, in the opinion
of management, include all adjustments necessary for a fair
presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in
conjunction with the consolidated financial statements and related
notes for the year ended 31 December 2021 included in BP Annual Report and Form 20-F
2021.
The
directors consider it appropriate to adopt the going concern basis
of accounting in preparing these interim financial
statements.
bp
prepares its consolidated financial statements included within BP
Annual Report and Form 20-F on the basis of International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB), IFRS as adopted by the UK, and
European Union (EU), and in accordance with the provisions of the
UK Companies Act 2006 as applicable to companies reporting under
international accounting standards. IFRS as adopted by the UK does
not differ from IFRS as adopted by the EU. IFRS as adopted by the
UK and EU differ in certain respects from IFRS as issued by the
IASB. The differences have no impact on the group’s
consolidated financial statements for the periods
presented.
The
financial information presented herein has been prepared in
accordance with the accounting policies expected to be used in
preparing BP Annual Report and
Form 20-F 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.
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 second quarter of 2022, the group's total net defined
benefit plan surplus as at 30 June 2022 is $5.3 billion, compared
to a surplus of $6.2 billion at 31 March 2022 and $4.1 billion at
31 December 2021. The movement for the six months principally
reflects net actuarial gains reported in other comprehensive income
arising from increases in the UK, US and Eurozone discount rates
and decreases in certain long-term inflation rates partly 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
30 June 2022.
At
Rosneft's annual general meeting on 30 June 2022, shareholders
approved a resolution to pay dividends of 23.63 roubles per
ordinary share for the second half of 2021 (49 billion roubles bp
share before withholding tax). Russia has imposed restrictions on
the payment of dividends to certain foreign shareholders, requiring
such dividends to be paid in roubles into a restricted bank account
and a requirement for approval of the Russian government for
transfers from such bank accounts out of Russia. It is not clear in
what circumstances such approval would be given. Given the
restrictions applicable to such accounts, management considers that
the criteria for recognising dividend income from Rosneft in the
second quarter 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.
Top of
page 24
Note 1. Basis of preparation (continued)
|
|
|
OB&C
(as previously reported)
|
Rosneft
(as previously reported)
|
OB&C restated
|
OB&C
(as previously reported)
|
Rosneft
(as previously reported)
|
OB&C restated
|
|
|
|
Second
|
Second
|
Second
|
First
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
half
|
half
|
half
|
|
$ million
|
|
2021
|
2021
|
2021
|
2021
|
2021
|
2021
|
|
|
|
|
|
||||
|
Profit (loss) before interest and tax
|
|
(425)
|
711
|
286
|
(1,103)
|
1,162
|
59
|
|
Inventory holding (gains) losses*
|
|
—
|
(68)
|
(68)
|
—
|
(156)
|
(156)
|
|
RC profit (loss) before interest and tax
|
|
(425)
|
643
|
218
|
(1,103)
|
1,006
|
(97)
|
|
Net (favourable) adverse impact of adjusting items
|
|
120
|
46
|
166
|
628
|
46
|
674
|
|
Underlying RC profit (loss) before interest and tax
|
|
(305)
|
689
|
384
|
(475)
|
1,052
|
577
|
|
Taxation on an underlying RC basis
|
|
101
|
(68)
|
33
|
155
|
(103)
|
52
|
|
Underlying RC profit (loss) before interest
|
|
(204)
|
621
|
417
|
(320)
|
949
|
629
|
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. None of the
other businesses with Rosneft within Russia declared a dividend in
the second quarter 2022.
The
total pre-tax charge in the first half of 2022 relating to
bp’s investment in Rosneft and other businesses with Rosneft
in Russia is $25,520 million.
Events after the reporting period
On 11
July 2022 the UK government introduced legislation which imposes a
new levy on the profits of UK oil and gas companies. The new levy
will increase the headline rate of tax from 40% to 65% on profits
from bp’s North Sea business made from 26 May 2022 until 31
December 2025. The introduction of the levy will result in a
one-off non-cash deferred tax charge of an estimated $0.8 billion
to reflect the higher tax rate now applicable to existing temporary
differences unwinding over the period 1 October 2022 to 31 December
2025. As the legislation was substantively enacted after 30 June
2022, this charge will be presented in the third quarter
2022.
Top of
page 25
Note 2. Non-current assets held for sale
The
carrying amount of assets classified as held for sale at 30 June
2022 is $6,858 million, with associated liabilities of $2,571
million.
On 12
June 2022, bp entered into an agreement to sell its 50% interest in
the Sunrise oil sands project in Canada to Cenovus Energy Inc. for
C$600 million (Canadian dollars) cash (subject to customary closing
adjustments), up to C$600 million of contingent consideration
expiring after two years and Cenovus’s 35% position in the
undeveloped Bay du Nord project offshore Canada. Subject to
customary regulatory approvals, the transaction is expected to
close during the second half of 2022. Assets of $1,407 million and
associated liabilities of $369 million have been classified as held
for sale in the group balance sheet at 30 June 2022.
On 11
March 2022, bp and Eni signed an agreement to form Azule Energy, an
independent incorporated 50:50 joint venture, through the
combination of the two companies’ Angolan businesses. Assets
of $5,451 million and associated liabilities of $2,202 million
remained classified as held for sale in the group balance sheet at
30 June 2022. The transaction closed on 1 August 2022 and, from
that date, bp will report an equity accounted investment in Azule
Energy.
Transactions
that were classified as held for sale during 2022, but completed
during the second quarter, are described below.
On 21
December 2021, Aker BP, an equity-accounted associate of bp,
announced the proposed acquisition of Lundin Energy’s
exploration and production business for consideration in cash and
new Aker BP shares. The acquisition was completed on 30 June 2022.
Prior to completion, bp held a 27.9% interest in Aker BP and
following the transaction, bp’s interest is now 15.9% of the
combined company. This dilution of bp's interest is reported as a
non-cash deemed disposal of a portion of bp's investment in Aker
BP. $595 million of bp’s investment in Aker BP was classified
as held for sale in the group balance sheet at 31 March 2022 and an
accounting gain on deemed disposal of $904 million was recognized
in the second quarter 2022.
As
announced in August 2021, bp and PetroChina agreed to establish
Basra Energy Company Limited (BECL) to own and manage the
companies' interests in the Rumaila field in Iraq. The transaction
closed on 1 June 2022 and bp now reports an equity accounted
investment in BECL.
Note 3. Impairment and losses on sale of businesses and fixed
assets(a)
Net
impairment charges and losses on sale of businesses and fixed
assets for the second quarter and half year were $445 million
and $26,476 million respectively, compared with net reversals
of $2,937 million and $2,564 million for the same periods
in 2021 and include net impairment charges for the second quarter
and half year of $402 million and $14,788 million
respectively, compared with net reversals of $2,964 million
and $2,744 million for the same periods in
2021.
gas & low carbon energy segment
In the
gas & low carbon energy segment there was a net impairment
charge of $265 million and $517 million for the second
quarter and half year respectively, compared with net reversals of
$1,270 million and $1,148 million for the same periods in
2021.
oil production & operations segment
In the
oil production & operations segment there was a net impairment
reversal of $245 million and charge of $379 million for
the second quarter and half year respectively, compared with net
reversals of $1,756 million and $1,657 million for the
same periods in 2021.
Impairment
charges for the first half 2022 included charges related to the
decision to exit other businesses with Rosneft within
Russia.
other businesses and corporate
In the
other businesses and corporate segment there was a net impairment
charge of $14 million and $13,493 million for the second
quarter and half year respectively, compared with a net impairment
charge of $56 million and $53 million for the same
periods in 2021 and a loss on sale of businesses and fixed assets
of $11,082 million.
The
impairment charge and the loss on sale of businesses and fixed
assets for the half year mainly relates to bp's investment in
Rosneft - see Note 1.
(a)
All disclosures are
pre-tax.
Top of
page 26
Note 4. Analysis of replacement cost profit (loss) before interest
and tax and reconciliation to profit (loss) before
taxation
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
gas & low carbon energy
|
|
2,737
|
(1,524)
|
927
|
|
1,213
|
4,357
|
|
oil production & operations
|
|
7,237
|
3,831
|
3,118
|
|
11,068
|
4,597
|
|
customers & products
|
|
3,531
|
1,981
|
640
|
|
5,512
|
1,574
|
|
other
businesses & corporate(a)
|
|
(1,028)
|
(24,719)
|
218
|
|
(25,747)
|
(97)
|
|
|
|
12,477
|
(20,431)
|
4,903
|
|
(7,954)
|
10,431
|
|
Consolidation adjustment – UPII*
|
|
(21)
|
34
|
(31)
|
|
13
|
(18)
|
|
RC profit (loss) before interest and tax
|
|
12,456
|
(20,397)
|
4,872
|
|
(7,941)
|
10,413
|
|
Inventory holding gains (losses)*
|
|
|
|
|
|
|
|
|
gas
& low carbon energy
|
|
(9)
|
25
|
4
|
|
16
|
26
|
|
oil
production & operations
|
|
(7)
|
1
|
(6)
|
|
(6)
|
9
|
|
customers
& products
|
|
2,162
|
3,475
|
887
|
|
5,637
|
2,492
|
|
other
businesses & corporate(a)
|
|
—
|
—
|
68
|
|
—
|
156
|
|
Profit (loss) before interest and tax
|
|
14,602
|
(16,896)
|
5,825
|
|
(2,294)
|
13,096
|
|
Finance costs
|
|
556
|
664
|
682
|
|
1,220
|
1,405
|
|
Net
finance expense/(income) relating to pensions and other
post-retirement benefits
|
|
(17)
|
(20)
|
5
|
|
(37)
|
11
|
|
Profit (loss) before taxation
|
|
14,063
|
(17,540)
|
5,138
|
|
(3,477)
|
11,680
|
|
|
|
|
|
|
|
|
|
|
RC profit (loss) before interest and tax*
|
|
|
|
|
|
|
|
|
US
|
|
3,322
|
2,277
|
955
|
|
5,599
|
2,862
|
|
Non-US
|
|
9,134
|
(22,674)
|
3,917
|
|
(13,540)
|
7,551
|
|
|
|
12,456
|
(20,397)
|
4,872
|
|
(7,941)
|
10,413
|
(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 27
Note 5. Sales and other operating revenues
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
By segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
13,243
|
8,166
|
5,739
|
|
21,409
|
13,741
|
|
oil production & operations
|
|
9,504
|
8,158
|
5,597
|
|
17,662
|
10,752
|
|
customers & products
|
|
55,557
|
42,163
|
31,160
|
|
97,720
|
58,267
|
|
other businesses & corporate
|
|
516
|
452
|
381
|
|
968
|
817
|
|
|
|
78,820
|
58,939
|
42,877
|
|
137,759
|
83,577
|
|
|
|
|
|
|
|
|
|
|
Less: sales and other operating revenues between
segments
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,621
|
1,948
|
1,063
|
|
3,569
|
2,095
|
|
oil production & operations
|
|
8,753
|
7,036
|
4,928
|
|
15,789
|
9,783
|
|
customers & products
|
|
392
|
692
|
112
|
|
1,084
|
222
|
|
other businesses & corporate
|
|
188
|
5
|
307
|
|
193
|
466
|
|
|
|
10,954
|
9,681
|
6,410
|
|
20,635
|
12,566
|
|
|
|
|
|
|
|
|
|
|
External sales and other operating revenues
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
11,622
|
6,218
|
4,676
|
|
17,840
|
11,646
|
|
oil production & operations
|
|
751
|
1,122
|
669
|
|
1,873
|
969
|
|
customers & products
|
|
55,165
|
41,471
|
31,048
|
|
96,636
|
58,045
|
|
other businesses & corporate
|
|
328
|
447
|
74
|
|
775
|
351
|
|
Total sales and other operating revenues
|
|
67,866
|
49,258
|
36,467
|
|
117,124
|
71,011
|
|
|
|
|
|
|
|
|
|
|
By geographical area
|
|
|
|
|
|
|
|
|
US
|
|
27,331
|
19,152
|
15,305
|
|
46,483
|
29,796
|
|
Non-US
|
|
54,331
|
42,797
|
29,700
|
|
97,128
|
56,583
|
|
|
|
81,662
|
61,949
|
45,005
|
|
143,611
|
86,379
|
|
Less: sales and other operating revenues between areas
|
|
13,796
|
12,691
|
8,538
|
|
26,487
|
15,368
|
|
|
|
67,866
|
49,258
|
36,467
|
|
117,124
|
71,011
|
|
|
|
|
|
|
|
|
|
|
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
Sales and other operating revenues include the following in
relation to revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
Crude oil
|
|
2,034
|
2,144
|
1,291
|
|
4,178
|
2,625
|
|
Oil products
|
|
43,267
|
31,751
|
24,651
|
|
75,018
|
43,929
|
|
Natural gas, LNG and NGLs
|
|
8,944
|
10,680
|
4,273
|
|
19,624
|
8,454
|
|
Non-oil products and other revenues from contracts with
customers
|
|
1,825
|
2,345
|
1,603
|
|
4,170
|
3,001
|
|
Revenue from contracts with customers
|
|
56,070
|
46,920
|
31,818
|
|
102,990
|
58,009
|
|
Other
operating revenues(a)
|
|
11,796
|
2,338
|
4,649
|
|
14,134
|
13,002
|
|
Total sales and other operating revenues
|
|
67,866
|
49,258
|
36,467
|
|
117,124
|
71,011
|
(a)
Principally relates
to commodity derivative transactions.
Top of
page 28
Note 6. Depreciation, depletion and amortization
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Total depreciation, depletion and amortization by
segment
|
|
|
|
|
|
|
|
|
gas & low carbon energy
|
|
1,203
|
1,255
|
1,115
|
|
2,458
|
1,969
|
|
oil production & operations
|
|
1,371
|
1,429
|
1,559
|
|
2,800
|
3,133
|
|
customers & products
|
|
715
|
717
|
754
|
|
1,432
|
1,499
|
|
other businesses & corporate
|
|
223
|
224
|
203
|
|
447
|
397
|
|
|
|
3,512
|
3,625
|
3,631
|
|
7,137
|
6,998
|
|
Total depreciation, depletion and amortization by geographical
area
|
|
|
|
|
|
|
|
|
US
|
|
1,159
|
1,083
|
1,161
|
|
2,242
|
2,282
|
|
Non-US
|
|
2,353
|
2,542
|
2,470
|
|
4,895
|
4,716
|
|
|
|
3,512
|
3,625
|
3,631
|
|
7,137
|
6,998
|
Note 7. Earnings per share and shares in issue
Basic
earnings per ordinary share (EpS) amounts are calculated by
dividing the profit (loss) for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the period. As part of the share buyback
programme announced on 27 April 2021, 443 million ordinary shares
were repurchased for cancellation during the second quarter 2022
for a total cost of $2,288 million. This brings the total
number of shares repurchased in the first half to 743 million for a
total cost of $3,880 million. A further 133 million ordinary
shares were repurchased in July for a total cost of $613 million.
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.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Results for the period
|
|
|
|
|
|
|
|
|
Profit (loss) for the period attributable to bp
shareholders
|
|
9,257
|
(20,384)
|
3,116
|
|
(11,127)
|
7,783
|
|
Less: preference dividend
|
|
1
|
—
|
—
|
|
1
|
1
|
|
Profit (loss) attributable to bp ordinary shareholders
|
|
9,256
|
(20,384)
|
3,116
|
|
(11,128)
|
7,782
|
|
|
|
|
|
|
|
|
|
|
Number of shares (thousand)(a)(b)
|
|
|
|
|
|
|
|
|
Basic
weighted average number of shares outstanding
|
|
19,388,427
|
19,514,477
|
20,272,111
|
|
19,451,040
|
20,285,083
|
|
ADS
equivalent(c)
|
|
3,231,404
|
3,252,412
|
3,378,685
|
|
3,241,840
|
3,380,847
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to calculate diluted earnings per
share
|
|
19,619,628
|
19,514,477
|
20,366,731
|
|
19,451,040
|
20,394,877
|
|
ADS
equivalent(c)
|
|
3,269,938
|
3,252,412
|
3,394,455
|
|
3,241,840
|
3,399,146
|
|
|
|
|
|
|
|
|
|
|
Shares in issue at period-end
|
|
19,135,400
|
19,409,157
|
20,224,314
|
|
19,135,400
|
20,224,314
|
|
ADS
equivalent(c)
|
|
3,189,233
|
3,234,859
|
3,370,719
|
|
3,189,233
|
3,370,719
|
(a)
Excludes treasury
shares and includes certain shares that will be issued in the
future under employee share-based payment plans.
(b)
If the inclusion of
potentially issuable shares would decrease loss per share, the
potentially issuable shares are excluded from the weighted average
number of shares outstanding used to calculate diluted earnings per
share. The numbers of potentially issuable shares that have been
excluded from the calculation for the first quarter and first half
2022 are 179,226 thousand (ADS equivalent 29,871 thousand) and
202,620 thousand (ADS equivalent 33,770 thousand)
respectively.
(c)
One ADS is
equivalent to six ordinary shares.
Top of
page 29
Note 8. Dividends
Dividends payable
BP
today announced an interim dividend of 6.006 cents per ordinary
share which is expected to be paid on 23 September 2022 to ordinary
shareholders and American Depositary Share (ADS) holders on the
register on 12 August 2022. The ex-dividend date will be 11 August
2022. The corresponding amount in sterling is due to be announced
on 6 September 2022, calculated based on the average of the market
exchange rates over three dealing days between 31 August 2022 and 2
September 2022. Holders of ADSs are expected to receive $0.36036
per ADS (less applicable fees). The board has decided not to offer
a scrip dividend alternative in respect of the second 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 second quarter dividend and timetable are
available at bp.com/dividends and further details of
the dividend reinvestment programmes are available at bp.com/drip.
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Dividends paid per ordinary share
|
|
|
|
|
|
|
|
|
cents
|
|
5.460
|
5.460
|
5.250
|
|
10.920
|
10.500
|
|
pence
|
|
4.356
|
4.160
|
3.712
|
|
8.515
|
7.480
|
|
Dividends paid per ADS (cents)
|
|
32.76
|
32.76
|
31.50
|
|
65.52
|
63.00
|
Note 9. Net debt
|
Net debt*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Finance
debt(a)
|
|
52,866
|
60,606
|
68,247
|
|
52,866
|
68,247
|
|
Fair
value (asset) liability of hedges related to finance
debt(b)
|
|
3,058
|
1,265
|
(1,285)
|
|
3,058
|
(1,285)
|
|
|
|
55,924
|
61,871
|
66,962
|
|
55,924
|
66,962
|
|
Less: cash and cash equivalents
|
|
33,108
|
34,414
|
34,256
|
|
33,108
|
34,256
|
|
Net
debt(c)
|
|
22,816
|
27,457
|
32,706
|
|
22,816
|
32,706
|
|
Total equity
|
|
81,563
|
78,519
|
93,232
|
|
81,563
|
93,232
|
|
Gearing*
|
|
21.9%
|
25.9%
|
26.0%
|
|
21.9%
|
26.0%
|
(a)
The fair value of
finance debt at 30 June 2022 was $49,056 million (31 March 2022
$59,601 million, 30 June 2021 $70,589 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 $246 million
at 30 June 2022 (first quarter 2022 liability of $173 million
and second quarter 2021 liability of $308 million) are not
included in the calculation of net debt shown above as hedge
accounting is not applied for these instruments.
(c)
Net debt does not
include accrued interest, which is reported within other
receivables and other payables on the balance sheet and for which
the associated cash flows are presented as operating cash flows in
the group cash flow statement.
As part
of actively managing its debt portfolio, in the second quarter the
group bought back $4.5 billion of finance debt (first quarter 2022
$nil, second quarter 2021 $nil) consisting entirely of US dollar
bonds. Year to date the group has bought back a total of $4.5
billion of finance debt ($3.9 billion equivalent for the
comparative period in 2021 consisting of US dollar, euro and
sterling bonds). Derivatives associated with non-US dollar debt
bought back in the comparative period were also terminated. In
addition, on 25 July 2022 the group exercised its option to redeem
finance debt with an outstanding aggregate principal amount of $2.9
billion on 24 August 2022. These transactions have no significant
impact on net debt or gearing.
Note 10. Statutory accounts
The
financial information shown in this publication, which was approved
by the Board of Directors on 1 August 2022, 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 30
Additional information
Capital expenditure*
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
Organic capital expenditure*
|
|
2,845
|
2,573
|
2,511
|
|
5,418
|
5,417
|
|
Inorganic
capital expenditure*(a)
|
|
(7)
|
356
|
3
|
|
349
|
895
|
|
|
|
2,838
|
2,929
|
2,514
|
|
5,767
|
6,312
|
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Capital expenditure by segment
|
|
|
|
|
|
|
|
|
gas
& low carbon energy(a)
|
|
823
|
861
|
747
|
|
1,684
|
2,632
|
|
oil production & operations
|
|
1,208
|
1,254
|
1,148
|
|
2,462
|
2,467
|
|
customers & products
|
|
675
|
715
|
519
|
|
1,390
|
1,051
|
|
other businesses & corporate
|
|
132
|
99
|
100
|
|
231
|
162
|
|
|
|
2,838
|
2,929
|
2,514
|
|
5,767
|
6,312
|
|
Capital expenditure by geographical area
|
|
|
|
|
|
|
|
|
US
|
|
1,253
|
1,097
|
890
|
|
2,350
|
2,377
|
|
Non-US
|
|
1,585
|
1,832
|
1,624
|
|
3,417
|
3,935
|
|
|
|
2,838
|
2,929
|
2,514
|
|
5,767
|
6,312
|
(a)
First half 2021
includes the final payment of $712 million in respect of the
strategic partnership with Equinor.
Top of
page 31
Adjusting items*
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
gas & low carbon energy
|
|
|
|
|
|
|
|
|
Gains
on sale of businesses and fixed assets(a)
|
|
—
|
9
|
—
|
|
9
|
1,034
|
|
Net
impairment and losses on sale of businesses and fixed
assets(b)
|
|
(265)
|
(252)
|
1,270
|
|
(517)
|
1,147
|
|
Environmental and other provisions
|
|
—
|
—
|
—
|
|
—
|
—
|
|
Restructuring, integration and rationalization costs
|
|
1
|
4
|
(21)
|
|
5
|
(29)
|
|
Fair
value accounting effects(c)(d)
|
|
(74)
|
(5,015)
|
(1,311)
|
|
(5,089)
|
(1,064)
|
|
Other
|
|
(5)
|
135
|
(251)
|
|
130
|
(241)
|
|
|
|
(343)
|
(5,119)
|
(313)
|
|
(5,462)
|
847
|
|
oil production & operations
|
|
|
|
|
|
|
|
|
Gains
on sale of businesses and fixed assets(e)
|
|
1,278
|
249
|
216
|
|
1,527
|
384
|
|
Net
impairment and losses on sale of businesses and fixed
assets(b)
|
|
268
|
(1,204)
|
1,751
|
|
(936)
|
1,542
|
|
Environmental and other provisions
|
|
(204)
|
58
|
(776)
|
|
(146)
|
(841)
|
|
Restructuring, integration and rationalization costs
|
|
(7)
|
(10)
|
(90)
|
|
(17)
|
(94)
|
|
Fair value accounting effects
|
|
—
|
—
|
—
|
|
—
|
—
|
|
Other
|
|
—
|
55
|
(225)
|
|
55
|
(201)
|
|
|
|
1,335
|
(852)
|
876
|
|
483
|
790
|
|
customers & products
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
31
|
261
|
8
|
|
292
|
(89)
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(434)
|
(13)
|
(35)
|
|
(447)
|
(78)
|
|
Environmental and other provisions
|
|
(35)
|
—
|
(8)
|
|
(35)
|
(8)
|
|
Restructuring, integration and rationalization costs
|
|
9
|
1
|
(10)
|
|
10
|
(51)
|
|
Fair
value accounting effects(d)
|
|
(62)
|
(377)
|
(139)
|
|
(439)
|
320
|
|
Other
|
|
16
|
(47)
|
(3)
|
|
(31)
|
(3)
|
|
|
|
(475)
|
(175)
|
(187)
|
|
(650)
|
91
|
|
other businesses &
corporate(f)
|
|
|
|
|
|
|
|
|
Gains on sale of businesses and fixed assets
|
|
—
|
(1)
|
—
|
|
(1)
|
—
|
|
Net impairment and losses on sale of businesses and fixed
assets
|
|
(15)
|
(1)
|
(50)
|
|
(16)
|
(51)
|
|
Environmental and other provisions
|
|
(89)
|
(3)
|
(72)
|
|
(92)
|
(72)
|
|
Restructuring, integration and rationalization costs
|
|
(3)
|
13
|
(74)
|
|
10
|
(99)
|
|
Fair
value accounting effects(d)
|
|
(686)
|
(425)
|
73
|
|
(1,111)
|
(374)
|
|
Rosneft(f)
|
|
—
|
(24,033)
|
(46)
|
|
(24,033)
|
(46)
|
|
Gulf of Mexico oil spill
|
|
(21)
|
(19)
|
(18)
|
|
(40)
|
(29)
|
|
Other
|
|
(13)
|
9
|
21
|
|
(4)
|
(3)
|
|
|
|
(827)
|
(24,460)
|
(166)
|
|
(25,287)
|
(674)
|
|
Total before interest and taxation
|
|
(310)
|
(30,606)
|
210
|
|
(30,916)
|
1,054
|
|
Finance
costs(g)
|
|
(30)
|
(158)
|
(202)
|
|
(188)
|
(350)
|
|
Total before taxation
|
|
(340)
|
(30,764)
|
8
|
|
(31,104)
|
704
|
|
Total
taxation(h)
|
|
(461)
|
1,471
|
(426)
|
|
1,010
|
(427)
|
|
Total after taxation for period
|
|
(801)
|
(29,293)
|
(418)
|
|
(30,094)
|
277
|
(a)
First half 2021
relates to a gain from the divestment of a 20% stake in Oman Block
61.
(b)
See Note 3 for
further information.
(c)
Under IFRS bp
marks-to-market the derivative financial instruments used to
risk-manage LNG contracts, but does not mark-to-market the physical
LNG contracts themselves, resulting in a mismatch in accounting
treatment. The fair value accounting effect reduces this mismatch,
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 page 37.
(e)
Second quarter and
first half 2022 include gains of $904 million related to the deemed
disposal of 12% of the group's interest in Aker BP, an associate of
bp, following completion of Aker BP's acquisition of Lundin Energy,
and $361 million in relation to the disposal of the group's
interest in the Rumaila field in Iraq to Basra Energy Company, an
associate of bp.
(f)
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.
(g)
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 9 for further information) and
temporary valuation differences associated with the group’s
interest rate and foreign currency exchange risk management of
finance debt.
(h)
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.
Top of
page 32
Net debt including leases
|
Net debt including leases*
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Net debt
|
|
22,816
|
27,457
|
32,706
|
|
22,816
|
32,706
|
|
Lease liabilities
|
|
8,056
|
8,466
|
8,863
|
|
8,056
|
8,863
|
|
Net
partner (receivable) payable for leases entered into on behalf of
joint operations
|
|
14
|
206
|
109
|
|
14
|
109
|
|
Net debt including leases
|
|
30,886
|
36,129
|
41,678
|
|
30,886
|
41,678
|
|
Total
equity
|
|
81,563
|
78,519
|
93,232
|
|
81,563
|
93,232
|
|
Gearing including leases*
|
|
27.5%
|
31.5%
|
30.9%
|
|
27.5%
|
30.9%
|
Gulf of Mexico oil spill
|
|
|
30 June
|
31 December
|
|
$ million
|
|
2022
|
2021
|
|
Gulf of Mexico oil spill payables and provisions
|
|
(9,390)
|
(10,433)
|
|
Of
which - current
|
|
(1,217)
|
(1,279)
|
|
|
|
|
|
|
Deferred tax asset
|
|
2,340
|
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
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ 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)
|
|
(4,416)
|
(1,771)
|
26
|
|
(6,187)
|
(2,767)
|
|
Adjusted for inventory holding gains (losses)* (Note 4 excluding
Rosneft)
|
|
2,146
|
3,501
|
885
|
|
5,647
|
2,527
|
|
Adjusted for fair value accounting effects relating to
subsidiaries
|
|
(676)
|
(5,817)
|
(1,377)
|
|
(6,493)
|
(1,118)
|
|
Working capital release (build) after adjusting for net inventory
gains (losses) and fair value accounting effects
|
|
(2,946)
|
(4,087)
|
(466)
|
|
(7,033)
|
(1,358)
|
(a)
The movement in
working capital includes outflows relating to the Gulf of Mexico
oil spill on a pre-tax basis of $1,209 million and
$1,256 million in the second quarter and first half of 2022
respectively. For the same periods in 2021 the amount was an
outflow of $1,204 million and $1,339 million
respectively.
Top of
page 33
Surplus cash flow* reconciliation
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Sources:
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
10,863
|
8,210
|
5,411
|
|
19,073
|
11,520
|
|
Cash provided from investing activities
|
|
329
|
1,046
|
282
|
|
1,375
|
4,507
|
|
Other
proceeds(a)
|
|
409
|
164
|
—
|
|
573
|
—
|
|
Receipts relating to transactions involving non-controlling
interests
|
|
—
|
7
|
3
|
|
7
|
671
|
|
Cash inflow
|
|
11,601
|
9,427
|
5,696
|
|
21,028
|
16,698
|
|
|
|
|
|
|
|
|
|
|
Uses:
|
|
|
|
|
|
|
|
|
Lease liability payments
|
|
(472)
|
(498)
|
(514)
|
|
(970)
|
(1,074)
|
|
Payments on perpetual hybrid bonds
|
|
(161)
|
(148)
|
(328)
|
|
(309)
|
(383)
|
|
Dividends paid – BP shareholders
|
|
(1,062)
|
(1,068)
|
(1,062)
|
|
(2,130)
|
(2,126)
|
|
–
non-controlling interests
|
|
(63)
|
(65)
|
(107)
|
|
(128)
|
(158)
|
|
Total capital expenditure*
|
|
(2,838)
|
(2,929)
|
(2,514)
|
|
(5,767)
|
(6,312)
|
|
Net repurchase of shares relating to employee share
schemes
|
|
—
|
(500)
|
(500)
|
|
(500)
|
(500)
|
|
Payments relating to transactions involving non-controlling
interests
|
|
(1)
|
(5)
|
—
|
|
(6)
|
—
|
|
Currency translation differences relating to cash and cash
equivalents
|
|
(414)
|
(125)
|
24
|
|
(539)
|
(34)
|
|
Cash outflow
|
|
(5,011)
|
(5,338)
|
(5,001)
|
|
(10,349)
|
(10,587)
|
|
|
|
|
|
|
|
|
|
|
Cash used to meet net debt target
|
|
—
|
—
|
—
|
|
—
|
3,729
|
|
|
|
|
|
|
|
|
|
|
Surplus cash flow
|
|
6,590
|
4,089
|
695
|
|
10,679
|
2,382
|
(a)
Other proceeds for
the second quarter and first half 2022 include $409 million and
$573 million respectively of proceeds from the disposal of a loan
note related to the Alaska divestment. The cash was received in the
fourth quarter 2021, 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 have been recognized.
Reconciliation of customers & products RC profit before
interest and tax to underlying RC profit before interest and tax*
to adjusted EBITDA* by business
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
$ million
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
RC profit before interest and tax for customers &
products
|
|
3,531
|
1,981
|
640
|
|
5,512
|
1,574
|
|
Less: Adjusting items* gains (charges)
|
|
(475)
|
(175)
|
(187)
|
|
(650)
|
91
|
|
Underlying RC profit before interest and tax for customers
& products
|
|
4,006
|
2,156
|
827
|
|
6,162
|
1,483
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
– convenience & mobility
|
|
679
|
522
|
951
|
|
1,201
|
1,609
|
|
Castrol – included in customers
|
|
223
|
256
|
265
|
|
479
|
599
|
|
products
– refining & trading
|
|
3,327
|
1,634
|
(124)
|
|
4,961
|
(126)
|
|
|
|
|
|
|
|
|
|
|
Add back: Depreciation, depletion and amortization
|
|
715
|
717
|
754
|
|
1,432
|
1,499
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
– convenience & mobility
|
|
315
|
326
|
329
|
|
641
|
653
|
|
Castrol – included in customers
|
|
38
|
39
|
39
|
|
77
|
78
|
|
products
– refining & trading
|
|
400
|
391
|
425
|
|
791
|
846
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA for customers & products
|
|
4,721
|
2,873
|
1,581
|
|
7,594
|
2,982
|
|
By business:
|
|
|
|
|
|
|
|
|
customers
– convenience & mobility
|
|
994
|
848
|
1,280
|
|
1,842
|
2,262
|
|
Castrol – included in customers
|
|
261
|
295
|
304
|
|
556
|
677
|
|
products
– refining & trading
|
|
3,727
|
2,025
|
301
|
|
5,752
|
720
|
Top of
page 34
Realizations* and marker prices
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Average realizations(a)
|
|
|
|
|
|
|
|
|
Liquids* ($/bbl)
|
|
|
|
|
|
|
|
|
US
|
|
89.80
|
70.34
|
53.64
|
|
80.41
|
49.36
|
|
Europe
|
|
113.92
|
104.41
|
69.19
|
|
108.72
|
64.83
|
|
Rest of World
|
|
106.77
|
88.84
|
64.44
|
|
97.82
|
61.04
|
|
BP Average
|
|
100.94
|
83.80
|
60.69
|
|
92.41
|
56.91
|
|
Natural gas ($/mcf)
|
|
|
|
|
|
|
|
|
US
|
|
6.28
|
3.90
|
3.03
|
|
5.12
|
3.24
|
|
Europe
|
|
16.06
|
33.77
|
8.94
|
|
25.02
|
7.78
|
|
Rest of World
|
|
8.42
|
7.88
|
4.13
|
|
8.15
|
4.03
|
|
BP Average
|
|
8.31
|
8.24
|
4.08
|
|
8.28
|
4.03
|
|
Total hydrocarbons* ($/boe)
|
|
|
|
|
|
|
|
|
US
|
|
69.71
|
52.17
|
41.14
|
|
61.21
|
39.02
|
|
Europe
|
|
106.29
|
134.62
|
63.85
|
|
121.37
|
58.93
|
|
Rest of World
|
|
71.65
|
62.38
|
40.27
|
|
66.98
|
38.16
|
|
BP Average
|
|
73.24
|
64.70
|
41.84
|
|
68.96
|
39.77
|
|
Average oil marker prices ($/bbl)
|
|
|
|
|
|
|
|
|
Brent
|
|
113.93
|
102.23
|
68.97
|
|
107.94
|
64.98
|
|
West Texas Intermediate
|
|
108.77
|
95.22
|
66.19
|
|
101.99
|
62.22
|
|
Western Canadian Select
|
|
90.25
|
79.90
|
53.10
|
|
85.08
|
49.57
|
|
Alaska North Slope
|
|
112.17
|
96.13
|
68.58
|
|
104.15
|
64.89
|
|
Mars
|
|
105.27
|
93.43
|
66.01
|
|
99.35
|
62.39
|
|
Urals (NWE – cif)
|
|
77.29
|
87.26
|
66.69
|
|
82.40
|
62.96
|
|
Average natural gas marker prices
|
|
|
|
|
|
|
|
|
Henry
Hub gas price(b) ($/mmBtu)
|
|
7.17
|
4.96
|
2.83
|
|
6.06
|
2.77
|
|
UK Gas – National Balancing Point (p/therm)
|
|
130.11
|
232.84
|
64.79
|
|
182.73
|
57.19
|
(a)
Based on sales of
consolidated subsidiaries only – this excludes equity-accounted
entities.
(b)
Henry Hub First of
Month Index.
Exchange rates
|
|
|
Second
|
First
|
Second
|
|
First
|
First
|
|
|
|
quarter
|
quarter
|
quarter
|
|
half
|
half
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
$/£ average rate for the period
|
|
1.26
|
1.34
|
1.40
|
|
1.30
|
1.39
|
|
$/£ period-end rate
|
|
1.21
|
1.32
|
1.38
|
|
1.21
|
1.38
|
|
|
|
|
|
|
|
|
|
|
$/€ average rate for the period
|
|
1.06
|
1.12
|
1.21
|
|
1.09
|
1.21
|
|
$/€ period-end rate
|
|
1.05
|
1.12
|
1.19
|
|
1.05
|
1.19
|
|
|
|
|
|
|
|
|
|
|
$/AUD average rate for the period
|
|
0.71
|
0.72
|
0.77
|
|
0.72
|
0.77
|
|
$/AUD period-end rate
|
|
0.69
|
0.75
|
0.75
|
|
0.69
|
0.75
|
|
|
|
|
|
|
|
|
|
|
Rouble/$ average rate for the period
|
|
67.50
|
88.48
|
74.20
|
|
77.95
|
74.31
|
|
Rouble/$ period-end rate
|
|
54.68
|
82.59
|
72.70
|
|
54.68
|
72.70
|
Top of
page 35
Principal risks and uncertainties
The
principal risks and uncertainties affecting bp are described in the
Risk factors section of bp Annual
Report and Form 20-F 2021 (pages 76-79) and are summarized
below. There are no material changes in those principal risks and
uncertainties for the remaining six months of the financial
year.
The
risks and uncertainties summarized below, separately or in
combination, could have a material adverse effect on the
implementation of our strategy, our business, financial
performance, results of operations, cash flows, liquidity,
prospects, shareholder value and returns and
reputation.
Strategic and commercial risks
●
Prices and markets – our financial
performance is impacted by fluctuating prices of oil, gas and
refined products, technological change, exchange rate fluctuations,
and the general macroeconomic outlook.
●
Accessing and progressing hydrocarbon resources
and low carbon opportunities – inability to access and
progress hydrocarbon resources and low carbon opportunities could
adversely affect delivery of our strategy.
●
Major project* delivery – failure
to invest in the best opportunities or deliver major projects
successfully could adversely affect our financial
performance.
●
Geopolitical – exposure to a range
of political developments and consequent changes to the operating
and regulatory environment could cause business
disruption.
●
Liquidity, financial capacity and financial,
including credit, exposure – failure to work within
our financial framework could impact our ability to operate and
result in financial loss.
●
Joint arrangements and contractors
– varying levels of control over the standards, operations
and compliance of our partners, contractors and sub-contractors
could result in legal liability and reputational
damage.
●
Digital infrastructure, cyber security and data
protection – breach or failure of our or third
parties’ digital infrastructure or cyber security, including
loss or misuse of sensitive information could damage our
operations, increase costs and damage our reputation.
●
Climate change and the transition to a lower
carbon economy – developments in policy, law,
regulation, technology and markets, including societal and investor
sentiment, related to the issue of climate change could increase
costs, reduce revenues, constrain our operations and affect our
business plans and financial performance.
●
Competition – inability to remain
efficient, maintain a high-quality portfolio of assets and innovate
could negatively impact delivery of our strategy in a highly
competitive market.
●
Talent and capability – inability
to attract, develop and retain people with necessary skills and
capabilities could negatively impact delivery of our
strategy.
●
Crisis management and business
continuity – failure to address an incident
effectively could potentially disrupt our business.
●
Insurance – our insurance strategy
could expose the group to material uninsured losses.
Safety and operational risks
●
Process safety, personal safety, and
environmental risks – exposure to a wide range of
health, safety, security and environmental risks could cause harm
to people, the environment and our assets and result in regulatory
action, legal liability, business interruption, increased costs,
damage to our reputation and potentially denial of our licence to
operate.
●
Drilling and production –
challenging operational environments and other uncertainties could
impact drilling and production activities.
●
Security – hostile acts against
our employees and activities could cause harm to people and disrupt
our operations.
●
Product quality – supplying
customers with off-specification products could damage our
reputation, lead to regulatory action and legal liability, and
impact our financial performance.
Compliance and control risks
●
Ethical misconduct and non-compliance
– ethical misconduct or breaches of applicable laws by our
businesses or our employees could be damaging to our reputation,
and could result in litigation, regulatory action and
penalties.
●
Regulation – changes in the law
and regulation could increase costs, constrain our operations and
affect our business plans and financial performance.
●
Trading and treasury trading activities
– ineffective oversight of trading and treasury trading
activities could lead to business disruption, financial loss,
regulatory intervention or damage to our reputation and affect our
permissions to trade.
●
Reporting – failure to accurately
report our data could lead to regulatory action, legal liability
and reputational damage.
Top of
page 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.
Submission of resolutions passed at Annual General Meetings to the
National Storage Mechanism
In
accordance with Listing Rules 9.6.2 and 9.6.3, copies of all
resolutions passed by BP p.l.c. other than resolutions concerning
ordinary business transacted at the company's previous Annual
General Meetings have been submitted to the national storage
mechanism and are available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
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 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*, 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.
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
31.
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, on average over 2021-25, 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 2020 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. 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. The
fair values of derivative instruments used to risk manage certain
oil, gas, power and other contracts, are deferred to match with the
underlying exposure and the commodity contracts for business
requirements are accounted for on an accruals basis. 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.
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, reduces the measurement
differences between that of the derivative financial instruments
used to risk manage the LNG contracts and the measurement of the
LNG contracts themselves, which therefore gives a better
representation of performance in each period.
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)
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 29.
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
32.
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 30.
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
30.
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.
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.
Solomon availability – See Refining availability
definition.
Strategic convenience sites are retail sites, within the bp
portfolio, which sell bp-branded vehicle energy and carry one of
the strategic convenience brands (e.g. M&S, Thorntons, Rewe to
Go). To be considered a strategic convenience brand 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, but exclude sites in growth
markets.
Top of
page 40
Glossary (continued)
Surplus cash flow is a non-GAAP measure and 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
first half of 2022, the sources of cash includes other proceeds
related to the proceeds from the disposal of a loan note related to
the Alaska divestment. The cash was received in the fourth quarter
2021, was reported as a financing cash flow and was not included in
other proceeds at the time due to potential recourse from the
counterparty. The proceeds are being recognized as the potential
recourse reduces. See page 33 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 31 for additional
information on the adjusting items that are used to arrive at
underlying RC profit or loss in order to enable a full
understanding of the items and their financial impact.
Underlying RC profit or loss before interest and tax for the
operating segments or customers & products businesses is
calculated as RC profit or loss (as defined above) including profit
or loss attributable to non-controlling interests before interest
and tax for the operating segments and excluding net adjusting
items for the respective operating segment or
business.
bp
believes that underlying RC profit or loss is a useful measure for
investors because it is a measure closely tracked by management to
evaluate bp’s operating performance and to make financial,
strategic and operating decisions and because it may help investors
to understand and evaluate, in the same manner as management, the
underlying trends in bp’s operational performance on a
comparable basis, period on period, by adjusting for the effects of
these adjusting items. The nearest equivalent measure on an IFRS
basis for the group is profit or loss attributable to bp
shareholders. The nearest equivalent measure on an IFRS basis for
segments and businesses is RC profit or loss before interest and
taxation. A reconciliation to GAAP information is provided on page
1 for the group and pages 6-15 for the segments.
Underlying RC profit or loss per share is a non-GAAP
measure. Earnings per share is defined in Note 7. Underlying RC
profit or loss per ordinary share is calculated using the same
denominator as earnings per share as defined in the consolidated
financial statements. The numerator used is underlying RC profit or
loss attributable to bp shareholders rather than profit or loss
attributable to bp 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.
Top of
page 41
Glossary (continued)
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 and
fair value accounting effects relating to subsidiaries 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. 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. In the context of describing working capital after
adjusting for Gulf of Mexico oil spill outflows, change in working
capital also excludes movements in inventories and other current
and non-current assets and liabilities relating to the Gulf of
Mexico oil spill.
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: expectations regarding the conflict in
Ukraine and inflationary pressures, including the impacts and
consequences on demand; plans, expectations and assumptions
regarding oil and gas demand, supply, prices or volatility and
storage levels; expectations regarding major project ramp-up,
divestment and maintenance activity; expectations regarding
refining margins and product demand; expectations regarding
implementation of bp’s strategy, bp’s business,
financial performance, results of operations, cash flows,
liquidity, prospects, shareholder value and returns and reputation;
expectations regarding future hydrocarbon production and project
ramp-up; 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 other businesses & corporate underlying annual
charge for 2022; plans and expectations regarding investments in
the UK, including in charging infrastructure; plans and
expectations regarding the divestment programme, including the
amount and timing of proceeds; plans and expectations regarding
bp’s renewable energy and alternative energy businesses;
expectations regarding the UK government’s new levy on the
profits of UK oil and gas companies; expectations regarding the
underlying effective tax rate for 2022; expectations regarding the
timing and amount of future payments relating to the Gulf of Mexico
oil spill; expectations regarding the impact of the recent outage
at Freeport LNG; plans and expectations regarding bp’s
defined benefit pension plans; plans and expectations regarding
capital expenditure, including that capital expenditure will be
within a range of $14-15 billion in 2022; plans and expectations
regarding projects, joint ventures and other partnerships and
agreements, including partnerships and other collaborations with
Iberdrola, Eni, Korea Gas Corporation, ADNOC, Masdar, Marubeni,
HyCC, Shenzhen Huize New Energy Co. Ltd, Julius Stiglechner GmbH,
Submer, and AENA, as well as plans and expectations regarding the
operation of China’s largest fast EV charging hub, the
Herschel Expansion project in the Gulf of Mexico, the Gas Natural
Acu power plant in Brazil, the Asian Renewable Energy Hub in
Western Australia, submission of bids for offshore wind leases in
the Netherlands, the sale of its interest in the Sunrise oil sands
project, the acquisition of an interest in the Bay du Nord project,
the building of a hydrogen refuelling station at the bp truckstop
in Queensland, the development of EV charge points and the HyGreen
Teesside green hydrogen project.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp.
Actual results or outcomes, may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the extent and duration of the impact of current market
conditions including the volatility of oil prices, the effects of
bp’s plan to exit its shareholding in Rosneft and other
investments in Russia, the impact of COVID-19, overall global
economic and business conditions impacting bp’s business and
demand for bp’s products as well as the specific factors
identified in the discussions accompanying such forward-looking
statements; changes in consumer preferences and societal
expectations; the pace of development and adoption of alternative
energy solutions; developments in policy, law, regulation,
technology and markets, including societal and investor sentiment
related to the issue of climate change; the receipt of relevant
third party and/or regulatory approvals; the timing and level of
maintenance and/or turnaround activity; the timing and volume of
refinery additions and outages; the timing of bringing new fields
onstream; the timing, quantum and nature of certain acquisitions
and divestments; future levels of industry product supply, demand
and pricing, including supply growth in North America and continued
base oil and additive supply shortages; OPEC+ quota restrictions;
PSA and TSC effects; operational and safety problems; potential
lapses in product quality; economic and financial market conditions
generally or in various countries and regions; political stability
and economic growth in relevant areas of the world; changes in laws
and governmental regulations and policies, including related to
climate change; changes in social attitudes and customer
preferences; regulatory or legal actions including the types of
enforcement action pursued and the nature of remedies sought or
imposed; the actions of prosecutors, regulatory authorities and
courts; delays in the processes for resolving claims; amounts
ultimately payable and timing of payments relating to the Gulf of
Mexico oil spill; exchange rate fluctuations; development and use
of new technology; recruitment and retention of a skilled
workforce; the success or otherwise of partnering; the actions of
competitors, trading partners, contractors, subcontractors,
creditors, rating agencies and others; bp’s access to future
credit resources; business disruption and crisis management; the
impact on bp’s reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major
uninsured losses; the possibility that international sanctions or
other steps taken by governmental 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 possibility that actions of any
competent authorities or any other relevant persons may limit
bp’s ability to sell its interests in Rosneft, or the price
for which it could sell such interests; the actions of contractors;
natural disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and
acts of terrorism; cyber-attacks or sabotage; and other factors
discussed elsewhere in this report, 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.
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
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Contacts
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London
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Houston
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Press Office
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David Nicholas
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Megan Baldino
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+44 (0) 7831 095541
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+1
907 529 9029
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Investor Relations
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Craig Marshall
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Graham Collins
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bp.com/investors
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+44 (0) 203 401 5592
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+1 832 753 5116
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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: 2
August 2022
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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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