TIDMBP.
RNS Number : 8138E
BP PLC
01 November 2022
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FOR IMMEDIATE RELEASE
London 1 November 2022
BP p.l.c. Group results
Third quarter and nine months 2022
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Performing while transforming
Financial summary Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- -------- -------
Profit (loss) for the period attributable
to bp shareholders (2,163) 9,257 (2,544) (13,290) 5,239
Inventory holding (gains) losses*, net
of tax 2,186 (1,607) (390) (2,085) (2,468)
---------------------------------------------- ------- ------- ------- -------- -------
Replacement cost (RC) profit (loss)* 23 7,650 (2,934) (15,375) 2,771
Net (favourable) adverse impact of adjusting
items*, net of tax 8,127 801 6,256 38,221 5,979
---------------------------------------------- ------- ------- ------- -------- -------
Underlying RC profit* 8,150 8,451 3,322 22,846 8,750
---------------------------------------------- ------- ------- ------- -------- -------
Operating cash flow* 8,288 10,863 5,976 27,361 17,496
Capital expenditure* (3,194) (2,838) (2,903) (8,961) (9,215)
---------------------------------------------- ------- ------- ------- -------- -------
Divestment and other proceeds(a) 606 722 313 2,509 5,367
---------------------------------------------- ------- ------- ------- -------- -------
Surplus cash flow* 3,530 6,590 933 14,209 3,315
---------------------------------------------- ------- ------- ------- -------- -------
Net issue (repurchase) of shares(b) (2,876) (2,288) (926) (6,756) (1,426)
---------------------------------------------- ------- ------- ------- -------- -------
Net debt*(c) 22,002 22,816 31,971 22,002 31,971
Announced dividend per ordinary share
(cents per share) 6.006 6.006 5.460 17.472 16.170
Underlying RC profit per ordinary share*
(cents) 43.15 43.58 16.48 118.61 43.22
---------------------------------------------- ------- ------- ------- -------- -------
Underlying RC profit per ADS* (dollars) 2.59 2.61 0.99 7.12 2.59
---------------------------------------------- ------- ------- ------- -------- -------
-- Net debt reduced -- Further $2.5 -- High-grading -- Accelerating
to $22.0 billion billion share buyback hydrocarbons portfolio transformation
announced - formation of Azule to an IEC - agreed
Energy; final investment to acquire Archaea
decision at Cypre; Energy - a leading
agreed divestment US biogas producer;
of Algeria agreement with
Hertz to advance
North America fleet
EV charging strategy
This quarter's results reflect us continuing to perform while transforming.
We remain focused on helping to solve the energy trilemma - secure, affordable
and lower carbon energy. We are providing the oil and gas the world needs
today - while at the same time - investing to accelerate the energy transition.
Our agreement on Archaea Energy is the most recent step in our strategic
transformation of bp.
Bernard Looney
Chief executive officer
(a) Divestment proceeds are disposal proceeds as per the
condensed group cash flow statement. See page 3 for more
information on divestment and other proceeds.
(b) Nine months 2022 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.
(c) 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 33 .
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Highlights
Underlying replacement cost profit* $8.2 billion
* Underlying replacement cost profit was $8.2 billion,
compared with $8.5 billion for the previous quarter.
Compared to the second quarter, the result was
impacted by weaker refining margins, an average oil
trading result and lower liquids realizations, partly
offset by an exceptional gas marketing and trading
result and higher gas realizations.
* Reported loss for the quarter was $2.2 billion,
compared with a profit of $9.3 billion for the second
quarter 2022. The reported result for the third
quarter includes inventory holding losses net of tax
of $2.2 billion and a charge for adjusting items* net
of tax of $8.1 billion. This charge includes adverse
fair value accounting effects* of $10.1 billion,
primarily due to further increases in forward gas
prices compared to the end of the second quarter,
partly offset by $2.0 billion gain on sale relating
to the formation of Azule Energy.
Operating cash flow* $8.3 billion; net debt* reduced to $22.0 billion
* Operating cash flow in the quarter was $8.3 billion
including a working capital build (after adjusting
for inventory holding losses* and fair value
accounting effects) of $6.2 billion, mainly due to
the increase in the forward price of LNG.
* Looking forward, the outlook for working capital
remains subject to a number of factors, including
price. However, following the build in working
capital as a result of rising gas prices since 2021,
we now expect the working capital movement to include
a release of around $7 billion, weighted toward the
second-half of 2023 and 2024, primarily as LNG
cargoes are delivered.
* Capital expenditure* in the quarter was $3.2 billion.
bp now expects capital expenditure of around $15.5
billion in 2022, if the acquisition of Archaea Energy
completes before year end.
* During the third quarter, bp completed share buybacks
of $2.9 billion. The $3.5 billion share buyback
programme announced with the second quarter results
was completed on 27 October 2022.
* Net debt fell for the tenth successive quarter to
reach $22.0 billion at the end of the third quarter.
Further $2.5 billion share buyback within disciplined financial
frame
* During the third quarter bp generated surplus cash
flow* of $3.5 billion and intends to execute a $2.5
billion share buyback prior to announcing its
fourth-quarter results, bringing total announced
share buybacks from 2022 surplus cash flow to $8.5
billion, equivalent to 60% of 2022 surplus cash flow
year to date.
* 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.
* In setting the buyback each quarter, the board will
continue to take into account factors including the
cumulative level of and outlook for surplus cash
flow.
* Against the authority granted at bp's 2022 annual
general meeting to repurchase up to 1.95 billion
shares, bp had repurchased 677 million shares at 31
October.
Progressing transformation to an Integrated Energy Company
* In resilient hydrocarbons bp is accelerating its
biogas strategy - part of its bioenergy Transition
Growth Engine - agreeing to acquire Archaea Energy a
leading US biogas company. bp has also continued to
make progress high-grading its portfolio: completing
the creation of Azule Energy a 50:50 joint venture
combining its Angolan assets with those of Eni;
taking the final investment decision on the Cypre
project offshore Trinidad; and announcing an
agreement to sell its upstream business in Algeria to
Eni.
* In convenience and mobility bp continued to advance
its growth strategy in EV charging and convenience:
announcing plans to collaborate with Hertz in North
America to install a national network of EV charging
solutions for Hertz and its customers powered by bp
pulse; and expanding its partnership with leading
retailer REWE in Germany, to install fast, reliable,
convenient charging for customers while they shop.
* In low carbon energy bp continued to progress its
renewables and hydrogen strategy. In Australia, bp
closed its acquisition of a 40.5% stake in AREH, one
of the world's largest planned renewables and green
hydrogen* energy hubs. And in the UK, two bp-led
projects - H2Teesside and Net Zero Teesside Power -
have been shortlisted in Phase 2 of the UK
government's cluster sequencing process for support
of carbon capture, use and storage (CCUS).
Third quarter results show bp continuing to execute its disciplined financial
frame. Net debt fell for the tenth successive quarter; we are investing
with discipline; and we are delivering on our commitment to shareholder
distributions - announcing a further $2.5 billion share buyback.
Murray Auchincloss
Chief financial officer
The commentary above contains forward-looking statements and should be
read in conjunction with the cautionary statement on page 39.
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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:
-- Loss attributable to bp shareholders in the third quarter was
$2.2 billion compared with a loss of $2.5 billion in the same
period of 2021. Loss attributable to bp shareholders in the nine
months was $13.3 billion compared with a profit of $5.2 billion in
the same period of 2021.
-- Adjusting items* in the third quarter and nine months were an
adverse pre-tax impact of $8.3 billion and $39.4 billion
respectively, compared with an adverse pre-tax impact of $6.4
billion and $5.7 billion in the same periods of 2021.
-- As a result of bp's two nominated directors stepping-down
from the Rosneft board on 27 February, 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 nine-month result, the loss of significant influence and an
impairment assessment led to a net pre-tax charge of $24.0 billion
classified as an adjusting item, reducing equity by $14.4 billion.
A further $1.5 billion pre-tax charge relating to bp's decision to
exit its other businesses with Rosneft in Russia is also included
in the nine-month result, reducing equity by $1.2 billion. See Note
1 for further information.
-- Adjusting items for the third quarter and nine months 2022
also include adverse fair value accounting effects* of $10.1
billion and $16.7 billion respectively compared to an adverse
pre-tax impact of $6.1 billion and $7.2 billion respectively in the
same periods of 2021. Under IFRS, reported earnings include the
mark-to-market value of the hedges used to risk-manage LNG
contracts, but not of the LNG contracts themselves. The underlying
result includes the mark-to-market value of the hedges and
recognises changes in value of the LNG contracts being risk
managed.
-- Adjusting items for the third quarter and nine months 2022
also include a non-taxable gain of $2.0 billion arising from the
contribution of bp's Angolan business to Azule Energy.
-- There were pre-tax inventory holding losses of $2.9 billion
and gains of $2.8 billion for the third quarter and nine months
2022 respectively. The loss arose in the third quarter due to falls
in crude and product prices, compared to the significant increases
in the first half of the year.
-- The effective tax rate (ETR) on RC profit or loss* for the
third quarter and nine months was 96% and -242% respectively,
compared with -175% and 57% for the same periods in 2021. Excluding
adjusting items, the underlying ETR* for the third quarter and nine
months was 37% and 33% respectively, compared with 35% and 31% for
the same periods a year ago. The higher underlying ETR for the
third quarter and nine months reflects the UK Energy Profits Levy
on North Sea profits and the absence of equity-accounted earnings
from Rosneft, partly offset by changes in the geographical mix of
profits. ETR on RC profit or loss and underlying ETR are non-GAAP
measures.
-- Operating cash flow* for the third quarter and nine months
2022 was $8.3 billion and $27.4 billion respectively, compared with
$6.0 billion and $17.5 billion for the same periods last year.
-- Capital expenditure* in the third quarter and nine months
2022 was $3.2 billion and $9.0 billion respectively, compared with
$2.9 billion and $9.2 billion in the same periods of 2021.
-- Total divestment and other proceeds for the third quarter and
nine months were $0.6 billion and $2.5 billion respectively,
compared with $0.3 billion and $5.4 billion for the same periods in
2021. Other proceeds for the nine months 2022 consist of $0.6
billion of proceeds from the disposal of a loan note related to the
Alaska divestment. See page 31 for further information.
-- At the end of the third quarter, net debt* was $22.0 billion,
compared with $22.8 billion at the end of the second quarter 2022
and $32.0 billion at the end of the third quarter 2021.
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Analysis of RC profit (loss) before interest and tax and
reconciliation to profit (loss) for the period
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
--------------------------------------------------- ------- ------- ------- -------- -------
RC profit (loss) before interest and
tax
gas & low carbon energy (2,956) 2,737 (4,135) (1,743) 222
oil production & operations 6,965 7,237 2,692 18,033 7,289
customers & products 2,586 3,531 1,060 8,098 2,634
other businesses & corporate(a) (1,093) (1,028) 118 (26,840) 21
Of which:
other businesses & corporate excluding
Rosneft (1,093) (1,028) (750) (2,807) (1,853)
Rosneft - - 868 (24,033) 1,874
Consolidation adjustment - UPII* (21) (21) (42) (8) (60)
--------------------------------------------------- ------- ------- ------- -------- -------
RC profit (loss) before interest and
tax 5,481 12,456 (307) (2,460) 10,106
Finance costs and net finance expense
relating to pensions and other post-retirement
benefits (633) (539) (688) (1,816) (2,104)
Taxation on a RC basis (4,646) (3,988) (1,740) (10,327) (4,561)
Non-controlling interests (179) (279) (199) (772) (670)
--------------------------------------------------- ------- ------- ------- -------- -------
RC profit (loss) attributable to bp shareholders* 23 7,650 (2,934) (15,375) 2,771
Inventory holding gains (losses)* (2,868) 2,146 500 2,779 3,183
Taxation (charge) credit on inventory
holding gains and losses 682 (539) (110) (694) (715)
--------------------------------------------------- ------- ------- ------- -------- -------
Profit (loss) for the period attributable
to bp shareholders (2,163) 9,257 (2,544) (13,290) 5,239
--------------------------------------------------- ------- ------- ------- -------- -------
Analysis of underlying RC profit (loss) before interest and
tax
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------- ------- ------- ------- -------- -------
Underlying RC profit (loss) before interest
and tax
gas & low carbon energy 6,240 3,080 1,807 12,915 5,317
oil production & operations 5,211 5,902 2,461 15,796 6,268
customers & products 2,725 4,006 1,158 8,887 2,641
other businesses & corporate(a) (405) (201) 550 (865) 1,127
Of which:
other businesses & corporate excluding
Rosneft (405) (201) (373) (865) (848)
Rosneft - - 923 - 1,975
Consolidation adjustment - UPII (21) (21) (42) (8) (60)
------------------------------------------------- ------- ------- ------- -------- -------
Underlying RC profit before interest
and tax 13,750 12,766 5,934 36,725 15,293
Finance costs and net finance expense
relating to pensions and other post-retirement
benefits (565) (509) (513) (1,560) (1,579)
Taxation on an underlying RC basis (4,856) (3,527) (1,900) (11,547) (4,294)
Non-controlling interests (179) (279) (199) (772) (670)
------------------------------------------------- ------- ------- ------- -------- -------
Underlying RC profit attributable to
bp shareholders* 8,150 8,451 3,322 22,846 8,750
------------------------------------------------- ------- ------- ------- -------- -------
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.
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Operating Metrics
Operating metrics Nine months vs Nine
2022 months 2021
------------------------------------------- ----------- ------------
Tier 1 and tier 2 process safety events* 32 -18
Reported recordable injury frequency* 0.184 +23.0%
upstream* production(a) (mboe/d) 2,249 +3.2%
upstream unit production costs*(b) ($/boe) 6.25 -10.2%
bp-operated hydrocarbon plant reliability* 95.8% +1.5
bp-operated refining availability*(a) 94.4% -0.2
-------------------------------------------- ----------- ------------
(a) See Operational updates on pages 6, 9 and 11.
(b) Reflecting higher volumes and lower cost including impact of
conversion to equity-accounted entities.
Outlook & Guidance
Macro outlook
-- bp expects oil prices to remain elevated in the fourth
quarter due to the recent OPEC+ supply cut reducing supply amid
ongoing uncertainty associated with Russian oil exports.
-- bp expects global gas prices to remain elevated and volatile
during the fourth quarter due to a lack of supply to Europe with
the outlook heavily dependent on Russian pipeline flows or other
supply disruptions.
-- bp expects industry refining margins to remain elevated in
the fourth quarter due to sanctioning of Russian crude and product
and energy prices are also expected to remain high.
4Q22 guidance
-- bp expects fourth-quarter 2022 upstream* production on a
reported basis to be slightly lower compared with the third-quarter
2022, primarily in our gas regions.
-- In our customers and products business, we expect lower
marketing margins and seasonally lower volumes and, in Castrol,
base oil prices to remain elevated. There also remains an elevated
level of uncertainty due to the ongoing impacts of the conflict in
Ukraine, COVID-19 restrictions and inflationary pressure. In
refining, we expect margins to remain high, the benefits of which
will be partially offset by elevated energy prices, a higher level
of turnaround activity, and operational impacts following the
shutdown of the bp-Husky Toledo refinery in Ohio, US.
2022 Guidance
In addition to the guidance on page 2:
-- bp now expects reported upstream production to be slightly
higher compared with 2021 despite the absence of production from
our Russia incorporated joint ventures. On an underlying basis, we
expect upstream production to be 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 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.
-- bp now expects capital expenditure of around $15.5 billion in
2022, if the acquisition of Archaea Energy completes before year
end.
-- bp now expects divestment and other proceeds to be slightly
over $3 billion in 2022. Against a target of $25 billion of
divestment and other proceeds between the second half of 2020 and
2025 bp has now received $15.3 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 39.
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gas & low carbon energy
Financial results
-- The replacement cost loss before interest and tax for the
third quarter and nine months was $2,956 million and $1,743 million
respectively, compared with a loss of $4,135 million and a profit
of $222 million for the same periods in 2021. The third quarter and
nine months include an adverse impact of net adjusting items* of
$9,196 million and $14,658 million respectively, compared with an
adverse impact of net adjusting items of $5,942 million and $5,095
million for the same periods in 2021.
-- After excluding adjusting items, the underlying replacement
cost profit before interest and tax* for the third quarter and nine
months was $6,240 million and $12,915 million respectively,
compared with $1,807 million and $5,317 million for the same
periods in 2021. Adjusting items include adverse fair value
accounting effects* of $9,224 million for the quarter and $14,313
million for the nine months, primarily arising from a further
significant increase in forward gas prices during the third
quarter. Under IFRS, reported earnings include the mark-to-market
value of the hedges used to risk-manage LNG contracts, but not of
the LNG contracts themselves. The underlying result includes the
mark-to-market value of the hedges and recognises changes in value
of the LNG contracts being risk managed.
-- The underlying replacement cost profit for the third quarter,
compared with the same period in 2021, reflects higher
realizations, higher production and an exceptional gas marketing
and trading result. For the nine months the result reflects higher
realizations, higher production and an exceptional gas marketing
and trading result, partially offset by a higher depreciation,
depletion and amortization charge.
Operational update
-- Reported production for the quarter was 981mboe/d, 10.4%
higher than the same period in 2021. Underlying production* was
4.7% higher, mainly due to major project* start-ups in 2021, partly
offset by base decline.
-- Reported production for the nine months was 957mboe/d, 7.4%
higher than the same period in 2021. Underlying production for the
nine months was 7.7% higher due to major project start-ups in 2021,
partly offset by base decline.
-- Renewables pipeline* at the end of the quarter was 26.9GW (bp
net). The renewables pipeline increased by 1.1GW during the quarter
due to net increases in the solar pipeline. The renewables pipeline
increased by 3.8GW for the nine months, 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 October bp signed a 30-month exploration and production
sharing contract for the BirAllah gas resource in Mauritania. Under
the terms of the agreement bp and its partners Kosmos Energy and
Societe Mauritanienne des Hydrocarbures can continue to assess and
develop commercial and technical options for the project.
-- On 24 September bp announced Cypre, bp's third subsea gas
development in Trinidad and Tobago, which is expected to start
drilling next year with first gas expected in 2025. The project is
planned to have seven wells and subsea trees and be tied back into
bp's Juniper platform.
-- On 12 September bp announced it has agreed to purchase EDF
Energy Services, expanding bp's presence in the US commercial and
industrial retail power and gas business. Subject to regulatory
approvals, completion is expected by the end of year.
-- On 7 September bp announced that it had agreed to sell its
upstream business in Algeria to Eni, including its interests in the
gas-producing In Amenas and In Salah concessions. bp holds working
interests of 33.15% and 45.89% in the In Salah and In Amenas
projects respectively. Both are operated by joint ventures co-owned
by bp, Equinor and Sonatrach. Completion is subject to customary
governmental and other approvals.
low carbon energy
-- On 12 October bp submitted a bid to the UK government for our
proposed flagship green hydrogen* project. HyGreen Teesside is one
of the UK's largest proposed green hydrogen plants and aims to
produce an initial 80 megawatts (MW) of hydrogen by 2025 and 500MW
by 2030.
-- In September bp closed its 40.5% investment in AREH (Asian
Renewable Energy Hub) project 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 15 August bp-led projects H2Teesside and Net Zero Teesside
Power were shortlisted in Phase 2 of the UK government's cluster
sequencing process for support of CCUS.
Top of page 7
gas & low carbon energy (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- ------- -------
Profit (loss) before interest and tax (2,970) 2,728 (4,120) (1,741) 263
Inventory holding (gains) losses* 14 9 (15) (2) (41)
---------------------------------------------- ------- ------- ------- ------- -------
RC profit (loss) before interest and
tax (2,956) 2,737 (4,135) (1,743) 222
Net (favourable) adverse impact of adjusting
items 9,196 343 5,942 14,658 5,095
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 6,240 3,080 1,807 12,915 5,317
Taxation on an underlying RC basis (1,478) (717) (389) (3,204) (1,168)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 4,762 2,363 1,418 9,711 4,149
---------------------------------------------- ------- ------- ------- ------- -------
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ ------- ------- ------- ------ ------
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,177 1,203 1,230 3,635 3,199
------------------------------------------------ ------- ------- ------- ------ ------
Exploration write-offs
----------------------------------------------- ------- ------- ------- ------ ------
Exploration write-offs 10 - 14 8 41
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*
----------------------------------------------- ------- ------- ------- ------ ------
Total adjusted EBITDA 7,427 4,283 3,051 16,558 8,557
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
gas 872 681 736 2,195 2,252
low carbon energy(a) 86 142 336 447 1,452
------------------------------------------------ ------- ------- ------- ------ ------
Total capital expenditure 958 823 1,072 2,642 3,704
------------------------------------------------ ------- ------- ------- ------ ------
(a) Nine months 2021 includes $712 million in respect of the
remaining payment to Equinor for our investment in our strategic US
offshore wind partnership and $326 million as a lease option fee
deposit paid to The Crown Estate in connection with our
participation in the UK Round 4 Offshore Wind Leasing together with
our partner EnBW.
Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
Production (net of royalties)(b)
Liquids* (mb/d) 117 112 109 117 110
Natural gas (mmcf/d) 5,011 4,709 4,520 4,873 4,527
Total hydrocarbons* (mboe/d) 981 924 889 957 891
---------------------------------- ------- ------- ------- ------ ------
Average realizations* (c)
Liquids ($/bbl) 88.03 105.50 66.39 92.93 61.11
Natural gas ($/mcf) 9.85 8.42 5.26 8.74 4.44
Total hydrocarbons* ($/boe) 60.80 55.79 34.91 55.91 30.21
---------------------------------- ------- ------- ------- ------ ------
(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 September 30 June 30 September
low carbon energy(a) 2022 2022 2021
Renewables (bp net, GW)
Installed renewables capacity* 2.0 2.0 1.7
-------------------------------------------------- ------------ ------- ------------
Developed renewables to FID* 4.6 4.4 3.6
Renewables pipeline 26.9 25.8 23.3
of which by geographical area:
================================================= ------------ ------- ------------
Renewables pipeline - Americas 17.5 16.9 16.8
Renewables pipeline - Asia Pacific 1.7 1.4 1.1
Renewables pipeline - Europe 7.6 7.2 5.2
Renewables pipeline - Other 0.1 0.2 0.2
================================================== ------------ ------- ------------
of which by technology:
================================================= ------------ ------- ------------
Renewables pipeline - offshore wind 5.2 5.2 3.7
Renewables pipeline - solar 21.7 20.6 19.6
================================================== ------------ ------- ------------
Total Developed renewables to FID and Renewables
pipeline 31.5 30.1 26.9
-------------------------------------------------- ------------ ------- ------------
(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
third quarter and nine months was $6,965 million and $18,033
million respectively, compared with $2,692 million and $7,289
million for the same periods in 2021. The third quarter and nine
months include a favourable impact of net adjusting items* of
$1,754 million and $2,237 million respectively, compared with a
favourable impact of net adjusting items of $231 million and $1,021
million for the same periods in 2021.
-- After excluding adjusting items, the underlying replacement
cost profit before interest and tax* for the third quarter and nine
months was $5,211 million and $15,796 million respectively,
compared with a profit of $2,461 million and $6,268 million for the
same periods in 2021.
-- The underlying replacement cost profit for the third quarter
and nine months, compared with the same periods in 2021, reflects
higher realizations.
Operational update
-- Reported production for the quarter was 1,317mboe/d, broadly
flat with the third quarter of 2021. Underlying production* for the
quarter was 2.4% higher compared with the third quarter of 2021
reflecting reduced weather impacts in the US Gulf of Mexico and bpx
energy performance partly offset by seasonal maintenance.
-- Reported production for the nine months was 1,292mboe/d,
broadly flat with the same period of 2021. Underlying production
for the nine months was 2.6% higher compared with the same period
of 2021 reflecting bpx energy performance, major projects* and
reduced weather impacts in the US Gulf of Mexico partly offset by
base performance.
Strategic progress
-- 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.
-- Following the announcement on 13 June that bp had agreed to
sell its 50% interest in the Sunrise oil sands project in Alberta,
Canada, to Calgary-based Cenovus Energy the transaction completed
on 31 August 2022. As part of the deal, bp acquired Cenovus's
interest in the Bay du Nord project in Eastern Canada, adding to
its sizeable acreage position offshore Newfoundland and
Labrador.
-- As a result of project commissioning issues, bp now expects
start-up of the Mad Dog Phase 2 project in the Gulf of Mexico to be
delayed until 2023 (bp operator 60.5%, Woodside Energy 23.9%,
Chevron 15.6%).
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- ------- -------
Profit before interest and tax 6,966 7,230 2,691 18,028 7,297
Inventory holding (gains) losses* (1) 7 1 5 (8)
---------------------------------------------- ------- ------- ------- ------- -------
RC profit before interest and tax 6,965 7,237 2,692 18,033 7,289
Net (favourable) adverse impact of adjusting
items (1,754) (1,335) (231) (2,237) (1,021)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 5,211 5,902 2,461 15,796 6,268
Taxation on an underlying RC basis (2,921) (2,295) (1,220) (7,128) (2,888)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 2,290 3,607 1,241 8,668 3,380
---------------------------------------------- ------- ------- ------- ------- -------
Top of page 10
oil production & operations (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ ------- ------- ------- ------ ------
Depreciation, depletion and amortization
----------------------------------------------- ------- ------- ------- ------ ------
Total depreciation, depletion and amortization 1,381 1,371 1,767 4,181 4,900
------------------------------------------------ ------- ------- ------- ------ ------
Exploration write-offs
----------------------------------------------- ------- ------- ------- ------ ------
Exploration write-offs 180 79 16 310 80
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*
----------------------------------------------- ------- ------- ------- ------ ------
Total adjusted EBITDA 6,772 7,352 4,244 20,287 11,248
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
----------------------------------------------- ------- ------- ------- ------ ------
Total capital expenditure 1,386 1,208 1,099 3,848 3,566
------------------------------------------------ ------- ------- ------- ------ ------
Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
Production (net of royalties)(a)
Liquids* (mb/d) 959 935 975 947 970
Natural gas (mmcf/d) 2,075 1,964 1,961 2,001 1,853
Total hydrocarbons* (mboe/d) 1,317 1,274 1,313 1,292 1,289
---------------------------------- ------- ------- ------- ------ ------
Average realizations* (b)
Liquids ($/bbl) 93.14 100.34 65.53 92.35 59.60
Natural gas ($/mcf) 11.73 7.97 5.61 9.75 4.59
Total hydrocarbons* ($/boe) 86.21 87.46 57.72 83.42 52.35
---------------------------------- ------- ------- ------- ------ ------
(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
third quarter and nine months was $2,586 million and $8,098 million
respectively, compared with $1,060 million and $2,634 million for
the same periods in 2021. The third quarter and nine months
included an adverse impact of net adjusting items* of $139 million
and $789 million respectively, compared with an adverse impact of
net adjusting items of $98 million and $7 million for the same
periods in 2021.
-- After excluding adjusting items, the underlying replacement
cost profit before interest and tax* for the third quarter and nine
months was $2,725 million and $8,887 million respectively, compared
with $1,158 million and $2,641 million for the same periods in
2021.
-- The customers & products result for the third quarter,
compared with the same period in 2021, reflects the benefit of
higher performance in the refining and customers businesses. The
result for the nine months reflects a higher performance in both
refining and oil trading.
-- customers - the convenience and mobility results, excluding
Castrol, for the third quarter and nine months were higher than the
same periods in 2021. The results benefited from improved retail,
midstream including biofuels and aviation performance, partially
offset by adverse foreign exchange impacts and inflationary
pressure. Convenience continued to show strong momentum, despite a
challenging environment.
Castrol results for the third quarter and nine months were lower
than the same periods in 2021, due to increasing input costs and
ongoing COVID restrictions, particularly in China, as well as
adverse foreign exchange impacts.
-- products - the products results for the third quarter and
nine months were higher compared with the same periods in 2021. In
refining for the quarter and nine months, higher realized margins
were partially offset by higher energy costs and turnaround and
maintenance activity. The result for the nine months also reflects
an exceptionally strong oil trading performance in the first half
of 2022.
Operational update
-- Utilization for the third quarter and nine months was higher
than the same periods in 2021. bp-operated refining availability*
for the third quarter and nine months was 94.3% and 94.4%
respectively, lower compared with 95.6% and 94.6% for the same
periods in 2021. The third quarter was impacted by a higher level
of unplanned maintenance. Following a fire at the bp-Husky Toledo
refinery in Ohio, US, the refinery has been shut down since 20
September, with investigations ongoing.
Strategic progress
-- We made strong progress in accelerating our electric vehicle
(EV) charging ambition across key markets through a focus on
'on-the-go' charging and fleets:
EV charge points* in the quarter grew by more than 60% compared
to the same period last year;
In August, bp and Hertz signed a memorandum of understanding
(MOU) for the development of a national network of EV charging
solutions across North America powered by bp pulse;
In August, bp and Avatr technology Co. Ltd. signed a strategic
collaboration agreement to accelerate the development of an EV
ultra-fast charging network in China, with the intent to roll out
more than 100 charging hubs in 19 cities by the end of 2023.
-- In October, bp announced the expansion of its strategic
partnership with leading retailer REWE in Germany, to install fast,
reliable, convenient charging for customers at up to 180 of their
sites.
-- In September, Air bp signed an MOU with China National
Aviation Fuel (CNAF) to explore opportunities to help decarbonize
the aviation sector, and in October made its first commercial
delivery of sustainable aviation fuel to Aberdeen International
Airport.
-- In September, Castrol and Renault Group announced the
extension of their lubricants aftermarket supply partnership until
2027.
-- On 8 August 2022, bp announced an agreement to sell its 50%
interest in the bp-Husky Toledo refinery in Ohio US to Cenovus
Energy Inc., its partner in the facility.
Top of page 12
customers & products (continued)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- ------- -------
Profit (loss) before interest and tax (269) 5,693 1,511 10,880 5,577
Inventory holding (gains) losses* 2,855 (2,162) (451) (2,782) (2,943)
---------------------------------------------- ------- ------- ------- ------- -------
RC profit (loss) before interest and
tax 2,586 3,531 1,060 8,098 2,634
Net (favourable) adverse impact of adjusting
items 139 475 98 789 7
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest
and tax 2,725 4,006 1,158 8,887 2,641
Of which:(a)
customers - convenience & mobility 1,137 679 806 2,338 2,415
Castrol - included in customers 151 223 231 630 830
products - refining & trading 1,588 3,327 352 6,549 226
Taxation on an underlying RC basis (725) (783) (314) (1,908) (570)
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit before interest 2,000 3,223 844 6,979 2,071
---------------------------------------------- ------- ------- ------- ------- -------
(a) A reconciliation to RC profit before interest and tax by business is provided on page 31.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ ------- ------- ------- ------ ------
Adjusted EBITDA*(b)
customers - convenience & mobility 1,448 994 1,130 3,290 3,392
Castrol - included in customers 187 261 267 743 944
products - refining & trading 1,974 3,727 775 7,726 1,495
3,422 4,721 1,905 11,016 4,887
------- ------- ------- ------ ------
Depreciation, depletion and amortization
----------------------------------------------- ------- ------- ------- ------ ------
Total depreciation, depletion and amortization 697 715 747 2,129 2,246
------------------------------------------------ ------- ------- ------- ------ ------
Capital expenditure*
customers - convenience & mobility 404 334 301 1,085 872
Castrol - included in customers 42 43 37 137 120
products - refining & trading 309 341 296 1,018 776
Total capital expenditure 713 675 597 2,103 1,648
------------------------------------------------ ------- ------- ------- ------ ------
(b) A reconciliation to RC profit before interest and tax by business is provided on page 31.
Retail(c) Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
bp retail sites* - total (#) 20,550 20,600 20,350 20,550 20,350
bp retail sites in growth markets* 2,600 2,650 2,650 2,600 2,650
Strategic convenience sites* 2,250 2,200 2,050 2,250 2,050
-------------------------------------- ------- ------- ------- ------ ------
(c) Reported to the nearest 50.
Marketing sales of refined products Third Second Third Nine Nine
(mb/d)
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
US 1,143 1,163 1,161 1,140 1,103
Europe 1,098 1,032 968 1,005 838
Rest of World 451 439 439 454 450
------------------------------------------ ------- ------- ------- ------ ------
2,692 2,634 2,568 2,599 2,391
Trading/supply sales of refined products 355 369 425 359 392
------------------------------------------ ------- ------- ------- ------ ------
Total sales volume of refined products 3,047 3,003 2,993 2,958 2,783
------------------------------------------ ------- ------- ------- ------ ------
Top of page 13
customers & products (continued)
Refining marker margin*(d) Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
bp average refining marker margin (RMM)
($/bbl) 35.5 45.5 15.2 33.4 12.6
----------------------------------------- ------- ------- ------- ------ ------
(d) The RMM in the quarter is calculated based on bp's current
refinery portfolio. On a comparative basis, the third quarter and
nine months 2021 RMM would be $15.7/bbl and $13.0/bbl
respectively.
Refinery throughputs (mb/d) Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
US 703 637 737 700 719
Europe 809 841 804 818 771
Rest of World - 2 81 29 87
---------------------------------------- ------- ------- ------- ------ ------
Total refinery throughputs 1,512 1,480 1,622 1,547 1,577
---------------------------------------- ------- ------- ------- ------ ------
bp-operated refining availability* (%) 94.3 93.9 95.6 94.4 94.6
---------------------------------------- ------- ------- ------- ------ ------
Top of page 14
other businesses & corporate
Other businesses & corporate comprises innovation &
engineering, bp ventures, Launchpad, regions, corporates &
solutions, our corporate activities & functions and any
residual costs of the Gulf of Mexico oil spill. From first quarter
2022 the results of Rosneft, previously reported as a separate
segment, are also included in other businesses & corporate.
Comparative information for 2021 has been restated to reflect the
changes in reportable segments. For more information see Note 1
Basis of Preparation - Investment in Rosneft.
Financial results
-- The replacement cost loss before interest and tax for the
third quarter and nine months was $1,093 million and $26,840
million respectively, compared with a profit of $118 million and
$21 million for the same periods in 2021. The third quarter and
nine months included an adverse impact of net adjusting items* of
$688 million and $25,975 million respectively, compared with an
adverse impact of net adjusting items of $432 million and $1,106
million for the same periods in 2021. The adjusting items for the
nine months of 2022 mainly relate to Rosneft. Fair value accounting
effects* for the third quarter and nine months had an adverse
impact of $785 million and $1,896 million respectively, compared
with an adverse impact of $263 million and $637 million for the
same periods in 2021.
-- After excluding adjusting items, the underlying replacement
cost loss before interest and tax* for the third quarter and nine
months was $405 million and $865 million respectively, compared
with a profit of $550 million and $1,127 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 third quarter and nine months was
$405 million and $865 million respectively, compared with $373
million and $848 million for the same periods in 2021.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- -------- ------
Profit (loss) before interest and tax (1,093) (1,028) 153 (26,840) 212
Inventory holding (gains) losses* - - (35) - (191)
---------------------------------------------- ------- ------- ------- -------- ------
RC profit (loss) before interest and
tax (1,093) (1,028) 118 (26,840) 21
Net (favourable) adverse impact of adjusting
items(a) 688 827 432 25,975 1,106
---------------------------------------------- ------- ------- ------- -------- ------
Underlying RC profit (loss) before interest
and tax (405) (201) 550 (865) 1,127
Taxation on an underlying RC basis 206 167 (82) 396 (30)
---------------------------------------------- ------- ------- ------- -------- ------
Underlying RC profit (loss) before interest (199) (34) 468 (469) 1,097
---------------------------------------------- ------- ------- ------- -------- ------
(a) Includes fair value accounting effects relating to the
hybrid bonds that were issued on 17 June 2020. See page 34 for more
information.
other businesses & corporate (excluding Rosneft)
Strategic progress
-- On 20 September, bp ventures invested $6 million (as a part
of a $8 million investment round) in the all-electric ride-hailing
business Freebee. Freebee provides free, on-demand, 100% electric
transportation in the US as part of the public transit network of
many municipalities, colleges and universities, and private
entities such as corporate business parks and hotels and
resorts.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- ------- -------
Profit (loss) before interest and tax (1,093) (1,028) (750) (2,807) (1,853)
Inventory holding (gains) losses* - - - - -
--------------------------------------------- ------- ------- ------- ------- -------
RC profit (loss) before interest and
tax (1,093) (1,028) (750) (2,807) (1,853)
Net (favourable) adverse impact of adjusting
items 688 827 377 1,942 1,005
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit (loss) before interest
and tax (405) (201) (373) (865) (848)
Taxation on an underlying RC basis 206 167 11 396 166
---------------------------------------------- ------- ------- ------- ------- -------
Underlying RC profit (loss) before interest (199) (34) (362) (469) (682)
---------------------------------------------- ------- ------- ------- ------- -------
Top of page 15
other businesses & corporate (Rosneft)
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------- ------- ------- ------- -------- ------
Profit (loss) before interest and tax - - 903 (24,033) 2,065
Inventory holding (gains) losses* - - (35) - (191)
---------------------------------------------- ------- ------- ------- -------- ------
RC profit (loss) before interest and
tax - - 868 (24,033) 1,874
Net (favourable) adverse impact of adjusting
items - - 55 24,033 101
---------------------------------------------- ------- ------- ------- -------- ------
Underlying RC profit (loss) before interest
and tax - - 923 - 1,975
Taxation on an underlying RC basis - - (93) - (196)
---------------------------------------------- ------- ------- ------- -------- ------
Underlying RC profit (loss) before interest - - 830 - 1,779
---------------------------------------------- ------- ------- ------- -------- ------
Top of page 16
Financial statements
Group income statement
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
--------------------------------------------------- ------- ------- ------- -------- -------
Sales and other operating revenues (Note 5) 55,011 67,866 36,174 172,135 107,185
Earnings from joint ventures - after interest
and tax 498 62 197 939 300
Earnings from associates - after interest
and tax 275 127 1,103 1,273 2,560
Interest and other income 159 142 158 495 322
Gains on sale of businesses and fixed assets 1,866 1,309 235 3,693 1,590
--------------------------------------------------- ------- ------- ------- -------- -------
Total revenues and other income 57,809 69,506 37,867 178,535 111,957
Purchases 39,993 39,141 23,937 106,942 60,834
Production and manufacturing expenses 7,193 7,601 6,026 21,769 19,446
Production and similar taxes 639 624 354 1,768 902
Depreciation, depletion and amortization (Note
6) 3,467 3,512 3,944 10,604 10,942
Net impairment and losses on sale of businesses
and fixed assets (Note 3) 417 445 220 26,893 (2,344)
Exploration expense 225 128 116 445 322
Distribution and administration expenses 3,262 3,453 3,077 9,795 8,566
--------------------------------------------------- ------- ------- ------- -------- -------
Profit (loss) before interest and taxation 2,613 14,602 193 319 13,289
Finance costs 649 556 693 1,869 2,098
Net finance (income) expense relating to pensions
and other post-retirement benefits (16) (17) (5) (53) 6
--------------------------------------------------- ------- ------- ------- -------- -------
Profit (loss) before taxation 1,980 14,063 (495) (1,497) 11,185
Taxation 3,964 4,527 1,850 11,021 5,276
--------------------------------------------------- ------- ------- ------- -------- -------
Profit (loss) for the period (1,984) 9,536 (2,345) (12,518) 5,909
--------------------------------------------------- ------- ------- ------- -------- -------
Attributable to
bp shareholders (2,163) 9,257 (2,544) (13,290) 5,239
Non-controlling interests 179 279 199 772 670
--------------------------------------------------- ------- ------- ------- -------- -------
(1,984) 9,536 (2,345) (12,518) 5,909
------- ------- ------- -------- -------
Earnings per share (Note 7)
Profit (loss) for the period attributable
to bp shareholders
Per ordinary share (cents)
Basic (11.45) 47.74 (12.63) (69.01) 25.88
Diluted (11.45) 47.18 (12.63) (69.01) 25.72
Per ADS (dollars)
Basic (0.69) 2.86 (0.76) (4.14) 1.55
Diluted (0.69) 2.83 (0.76) (4.14) 1.54
--------------------------------------------------- ------- ------- ------- -------- -------
Top of page 17
Condensed group statement of comprehensive income
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
----------------------------------------------- ------- ------- ------- -------- ------
Profit (loss) for the period (1,984) 9,536 (2,345) (12,518) 5,909
----------------------------------------------- ------- ------- ------- -------- ------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Currency translation differences(a) (1,725) (2,454) (599) (5,928) (302)
Exchange (gains) losses on translation
of foreign operations reclassified to
gain or loss on sale of businesses and
fixed assets(b) - - - 10,791 -
Cash flow hedges and costs of hedging (142) 99 (398) 179 (667)
Share of items relating to equity-accounted
entities, net of tax (134) 59 (3) 10 (60)
Income tax relating to items that may
be reclassified (54) (70) 80 (226) 89
----------------------------------------------- ------- ------- ------- -------- ------
(2,055) (2,366) (920) 4,826 (940)
------- ------- ------- -------- ------
Items that will not be reclassified to
profit or loss
Remeasurements of the net pension and
other post-retirement benefit liability
or asset(c) 112 (392) 494 1,848 3,110
Cash flow hedges that will subsequently
be transferred to the balance sheet (1) (3) (2) (5) 1
Income tax relating to items that will
not be reclassified 19 179 (130) (470) (883)
----------------------------------------------- ------- ------- ------- -------- ------
130 (216) 362 1,373 2,228
------- ------- ------- -------- ------
Other comprehensive income (1,925) (2,582) (558) 6,199 1,288
----------------------------------------------- ------- ------- ------- -------- ------
Total comprehensive income (3,909) 6,954 (2,903) (6,319) 7,197
----------------------------------------------- ------- ------- ------- -------- ------
Attributable to
bp shareholders (4,042) 6,742 (3,084) (6,978) 6,559
Non-controlling interests 133 212 181 659 638
----------------------------------------------- ------- ------- ------- -------- ------
(3,909) 6,954 (2,903) (6,319) 7,197
------- ------- ------- -------- ------
(a) Third and second quarter 2022 are principally affected by
movements in the Pound Sterling against the US dollar. Nine months
2022 is principally affected by movements in the Russian rouble and
Pound Sterling against the US dollar.
(b) See Note 1 Basis of preparation - Investment in Rosneft.
(c) See Note 1 Basis of preparation - Pensions and other
post-retirement benefits for further information.
Top of page 18
Condensed group statement of changes in equity
bp shareholders' Non-controlling interests Total
Hybrid
$ million equity(a) bonds Other interest equity
--------------------------------------- ---------------- -------- ----------------- -------
At 1 January 2022 75,463 13,041 1,935 90,439
Total comprehensive income (6,978) 383 276 (6,319)
Dividends (3,267) - (194) (3,461)
Issue of ordinary share capital(b) 820 - - 820
Repurchase of ordinary share
capital (7,988) - - (7,988)
Share-based payments, net of
tax 631 - - 631
Issue of perpetual hybrid bonds (3) 325 - 322
Payments on perpetual hybrid
bonds 15 (462) - (447)
Transactions involving non-controlling
interests, net of tax (512) - (152) (664)
---------------------------------------- ---------------- -------- ----------------- -------
At 30 September 2022 58,181 13,287 1,865 73,333
---------------------------------------- ---------------- -------- ----------------- -------
bp shareholders' Non-controlling interests Total
Hybrid
$ million equity bonds Other interest equity
--------------------------------------- ---------------- -------- ----------------- -------
At 1 January 2021 71,250 12,076 2,242 85,568
Total comprehensive income 6,559 377 261 7,197
Dividends (3,236) - (245) (3,481)
Cash flow hedges transferred
to the balance sheet, net of
tax (8) - - (8)
Repurchase of ordinary share
capital (1,897) - - (1,897)
Share-based payments, net of
tax 407 - - 407
Share of equity-accounted entities'
changes in equity, net of tax 558 - - 558
Issue of perpetual hybrid bonds (24) 883 - 859
Payments on perpetual hybrid
bonds (7) (431) - (438)
Transactions involving non-controlling
interests, net of tax 873 - (372) 501
---------------------------------------- ---------------- -------- ----------------- -------
At 30 September 2021 74,475 12,905 1,886 89,266
---------------------------------------- ---------------- -------- ----------------- -------
(a) In 2022 $9.2 billion of the opening foreign currency
translation reserve has been moved to the profit and loss account
reserve as a result of bp's decision to exit its shareholding in
Rosneft and its other businesses with Rosneft in Russia. For more
information see Note 1.
(b) Relates to ordinary shares issued as non-cash consideration
for the acquisition of the public units of BP Midstream Partners
LP.
Top of page 19
Group balance sheet
30 September 31 December
$ million 2022 2021
-------------------------------------------------------- ------------ -----------
Non-current assets
Property, plant and equipment 105,045 112,902
Goodwill 11,145 12,373
Intangible assets 6,311 6,451
Investments in joint ventures 14,673 9,982
Investments in associates(a) 7,836 21,001
Other investments 2,597 2,544
-------------------------------------------------------- ------------ -----------
Fixed assets 147,607 165,253
Loans 1,185 922
Trade and other receivables 1,094 2,693
Derivative financial instruments 9,333 7,006
Prepayments 549 479
Deferred tax assets 5,271 6,410
Defined benefit pension plan surpluses 10,003 11,919
-------------------------------------------------------- ------------ -----------
175,042 194,682
------------ -----------
Current assets
Loans 285 355
Inventories 29,492 23,711
Trade and other receivables 34,817 27,139
Derivative financial instruments 11,491 5,744
Prepayments 1,148 2,486
Current tax receivable 293 542
Other investments 300 280
Cash and cash equivalents 29,304 30,681
-------------------------------------------------------- ------------ -----------
107,130 90,938
Assets classified as held for sale (Note 2) 1,310 1,652
-------------------------------------------------------- ------------ -----------
108,440 92,590
------------ -----------
Total assets 283,482 287,272
-------------------------------------------------------- ------------ -----------
Current liabilities
Trade and other payables 56,270 52,611
Derivative financial instruments 24,461 7,565
Accruals 6,327 5,638
Lease liabilities 1,842 1,747
Finance debt 3,877 5,557
Current tax payable 4,120 1,554
Provisions 6,857 5,256
-------------------------------------------------------- ------------ -----------
103,754 79,928
Liabilities directly associated with assets classified
as held for sale (Note 2) 388 359
-------------------------------------------------------- ------------ -----------
104,142 80,287
------------ -----------
Non-current liabilities
Other payables 9,313 10,567
Derivative financial instruments 16,430 6,356
Accruals 1,024 968
Lease liabilities 6,053 6,864
Finance debt 42,683 55,619
Deferred tax liabilities 9,016 8,780
Provisions 16,517 19,572
Defined benefit pension plan and other post-retirement
benefit plan deficits 4,971 7,820
-------------------------------------------------------- ------------ -----------
106,007 116,546
------------ -----------
Total liabilities 210,149 196,833
-------------------------------------------------------- ------------ -----------
Net assets 73,333 90,439
-------------------------------------------------------- ------------ -----------
Equity
bp shareholders' equity 58,181 75,463
Non-controlling interests 15,152 14,976
-------------------------------------------------------- ------------ -----------
Total equity 73,333 90,439
-------------------------------------------------------- ------------ -----------
(a) See Note 1 Basis of preparation - Investment in Rosneft.
Top of page 20
Condensed group cash flow statement
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
-------------------------------------------------- ------- ------- ------- -------- --------
Operating activities
Profit (loss) before taxation 1,980 14,063 (495) (1,497) 11,185
Adjustments to reconcile profit (loss) before
taxation to net cash provided by operating
activities
Depreciation, depletion and amortization
and exploration expenditure written off 3,657 3,591 3,976 10,922 11,063
Net impairment and (gain) loss on sale of
businesses and fixed assets (1,449) (864) (15) 23,200 (3,934)
Earnings from equity-accounted entities,
less dividends received (391) 72 (784) (1,412) (1,956)
Net charge for interest and other finance
expense, less net interest paid 72 (46) 63 210 392
Share-based payments 251 208 219 629 401
Net operating charge for pensions and other
post-retirement benefits, less contributions
and benefit payments for unfunded plans (15) (36) (80) (197) (471)
Net charge for provisions, less payments 173 796 666 1,453 2,740
Movements in inventories and other current
and non-current assets and liabilities 6,764 (4,416) 3,850 577 1,083
Income taxes paid (2,754) (2,505) (1,424) (6,524) (3,007)
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash provided by operating activities 8,288 10,863 5,976 27,361 17,496
-------------------------------------------------- ------- ------- ------- -------- --------
Investing activities
Expenditure on property, plant and equipment,
intangible and other assets (3,105) (2,666) (2,647) (8,373) (8,115)
Acquisitions, net of cash acquired (3) 3 (53) (8) (54)
Investment in joint ventures (40) (159) (70) (493) (859)
Investment in associates (46) (16) (133) (87) (187)
-------------------------------------------------- ------- ------- ------- -------- --------
Total cash capital expenditure (3,194) (2,838) (2,903) (8,961) (9,215)
Proceeds from disposal of fixed assets 12 202 (19) 682 625
Proceeds from disposal of businesses, net
of cash disposed 594 111 332 1,254 4,067
Proceeds from loan repayments 15 16 33 60 161
================================================== ======= ======= ======= ======== ========
Cash provided from investing activities 621 329 346 1,996 4,853
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash used in investing activities (2,573) (2,509) (2,557) (6,965) (4,362)
-------------------------------------------------- ------- ------- ------- -------- --------
Financing activities
Net issue (repurchase) of shares (Note 7) (2,876) (2,288) (926) (6,756) (1,426)
Lease liability payments (478) (472) (506) (1,448) (1,580)
Proceeds from long-term financing 1 - 2,398 2,003 6,339
Repayments of long-term financing (4,035) (4,573) (6,745) (9,500) (13,841)
Net increase (decrease) in short-term debt (618) (688) (81) (1,582) 108
Issue of perpetual hybrid bonds 194 62 859 322 859
Payments relating to perpetual hybrid bonds (180) (161) (55) (489) (438)
Payments relating to transactions involving
non-controlling interests (Other interest) (2) (1) (560) (8) (560)
Receipts relating to transactions involving
non-controlling interests (Other interest) 3 - - 10 671
Dividends paid - bp shareholders (1,140) (1,062) (1,101) (3,270) (3,227)
- non-controlling interests (66) (63) (87) (194) (245)
-------------------------------------------------- ------- ------- ------- -------- --------
Net cash provided by (used in) financing
activities (9,197) (9,246) (6,804) (20,912) (13,340)
-------------------------------------------------- ------- ------- ------- -------- --------
Currency translation differences relating
to cash and cash equivalents (322) (414) (177) (861) (211)
-------------------------------------------------- ------- ------- ------- -------- --------
Increase (decrease) in cash and cash equivalents (3,804) (1,306) (3,562) (1,377) (417)
-------------------------------------------------- ------- ------- ------- -------- --------
Cash and cash equivalents at beginning of
period 33,108 34,414 34,256 30,681 31,111
Cash and cash equivalents at end of period 29,304 33,108 30,694 29,304 30,694
-------------------------------------------------- ------- ------- ------- -------- --------
Top of page 21
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.
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.
Provisions
The nominal risk-free discount rate applied to provisions is
reviewed on a quarterly basis. The discount rate applied to the
group's provisions was revised to 2.5% in the third quarter (31
December 2021 2.0%) to reflect increasing US Treasury yields. The
principal impact of this rate increase was a $1.2 billion decrease
in the decommissioning provision with a corresponding decrease in
the carrying amount of property, plant and equipment of $0.9
billion.
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 third quarter of 2022, the group's total net
defined benefit plan surplus as at 30 September 2022 is $5.0
billion, compared to a surplus of $5.3 billion at 30 June 2022 and
$4.1 billion at 31 December 2021. The movement for the nine months
principally reflects net actuarial gains reported in other
comprehensive income arising from significant increases in the UK,
US and Eurozone discount rates partly offset by negative asset
performance and increases in inflation rates, and foreign exchange.
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 September 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. bp did not participate in the meeting.
In line with the resolution, bp would be entitled to total
dividends of 49 billion roubles before withholding tax for the
second half of 2021. bp has not been formally notified of any such
payment having been made. Russia has imposed restrictions on the
payments of dividends to certain foreign shareholders, including
those based in the UK, requiring such dividends to be paid in
roubles into restricted bank accounts and a requirement for
approval of the Russian government for transfers from any such bank
accounts out of Russia. Given the restrictions applicable to such
accounts, management considers that the criteria for recognising
any dividend income from Rosneft for the nine months to 30
September 2022 have not been met.
As a result of bp's decision to exit its shareholding in Rosneft
in the first quarter 2022, the group has ceased to report Rosneft
as a separate segment in its financial reporting for 2022. Rosneft
results up to 27 February 2022 are included within other businesses
& corporate (OB&C), and 2021 comparatives have been
restated to include the Rosneft segment as per the table below.
Top of page 22
Note 1. Basis of preparation (continued)
OB&C Rosneft OB&C OB&C Rosneft OB&C
(as previously (as previously restated (as previously (as previously restated
reported) reported) reported) reported)
Third Third Third Nine Nine Nine
quarter quarter quarter months months months
$ million 2021 2021 2021 2021 2021 2021
-------------------------- --------------- --------------- --------- --------------- --------------- ---------
Profit (loss) before
interest
and tax (750) 903 153 (1,853) 2,065 212
Inventory holding (gains)
losses* - (35) (35) - (191) (191)
-------------------------- --------------- --------------- --------- --------------- --------------- ---------
RC profit (loss) before
interest
and tax (750) 868 118 (1,853) 1,874 21
Net (favourable) adverse
impact of adjusting items 377 55 432 1,005 101 1,106
-------------------------- --------------- --------------- --------- --------------- --------------- ---------
Underlying RC profit
(loss)
before interest and tax (373) 923 550 (848) 1,975 1,127
Taxation on an underlying
RC basis 11 (93) (82) 166 (196) (30)
-------------------------- --------------- --------------- --------- --------------- --------------- ---------
Underlying RC profit
(loss)
before interest (362) 830 468 (682) 1,779 1,097
-------------------------- --------------- --------------- --------- --------------- --------------- ---------
Since the first quarter 2022, bp has also determined that its
other businesses with Rosneft within Russia, which are included in
the oil production & operations segment also have a fair value
of nil and are subject to similar sanctions and restrictions with
respect to the receipt of dividends as described above. Management
considers that the criteria for recognising dividend income from
other businesses with Rosneft within Russia that declared a
dividend in the third quarter 2022 have not been met.
The total pre-tax charge for the nine months to 30 September
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 30 September 2022 EU ministers reached political agreement on
a proposed regulation to address high energy prices. The regulation
includes a temporary solidarity contribution on the oil, gas, coal
and refinery sectors. Any impact to bp will be accounted for once
the legislation has been substantively enacted.
Top of page 23
Note 2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 30
September 2022 is $1,310 million, with associated liabilities of
$388 million. These relate to the transactions described below.
On 7 September 2022, bp announced that it had agreed to sell its
upstream business in Algeria to Eni. Completion is subject to
customary governmental and other approvals. Assets of $498 million
and associated liabilities of $46 million have been classified as
held for sale in the group balance sheet at 30 September 2022.
On 8 August 2022, bp announced an agreement to sell its 50%
interest in the bp-Husky Toledo refinery in Ohio US, to Cenovus
Energy Inc., its partner in the facility. Following a fire at the
refinery, it has been shut down since 20 September, with
investigations ongoing. Assets of $812 million and associated
liabilities of $342 million have been classified as held for sale
in the group balance sheet at 30 September 2022.
Transactions that were classified as held for sale during 2022,
but completed during the third quarter, are described below.
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. The
transaction closed on 31 August 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. The
transaction closed on 1 August 2022 and, from that date, bp
reported an equity accounted investment in Azule Energy. This
investment was initially recognized at a fair value of $4,922
million (net of deferred gain) and the transaction resulted in a
non-taxable accounting gain of $1,951 million on completion and a
deferred gain of the same amount that will be recognized over time
as the Azule Energy assets are depreciated.
Note 3. Impairment and losses on sale of businesses and fixed
assets(a)
Net impairment reversals and losses on sale of businesses and
fixed assets for the third quarter were a charge of $417 million
and net impairment charges and losses on sale of businesses and
fixed assets for the nine months were $26,893 million, compared
with net charges of $220 million and reversals of $2,344 million
for the same periods in 2021 and include net impairment reversals
for the third quarter of $11 million and charges for the nine
months of $14,777 million, compared with net charges of $256
million and reversals of $2,488 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 $6 million and $523 million for the third
quarter and nine months respectively, compared with net charges of
$197 million and reversals of $951 million for the same periods in
2021.
oil production & operations segment
In the oil production & operations segment there was a net
impairment reversal of $43 million and charge of $336 million for
the third quarter and nine months respectively, compared with net
charges of $5 million and reversals of $1,652 million for the same
periods in 2021.
Impairment charges for the nine months 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 an
impairment reversal of $1 million and net charge of $13,492 million
for the third quarter and nine months respectively, compared with a
net impairment reversal of $2 million and charge of $51 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 nine months mainly relates to bp's investment
in Rosneft - see Note 1.
(a) All disclosures are pre-tax .
Top of page 24
Note 4. Analysis of replacement cost profit (loss) before
interest and tax and reconciliation to profit (loss) before
taxation
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------- ------- ------- ------- -------- ------
gas & low carbon energy (2,956) 2,737 (4,135) (1,743) 222
oil production & operations 6,965 7,237 2,692 18,033 7,289
customers & products 2,586 3,531 1,060 8,098 2,634
other businesses & corporate(a) (1,093) (1,028) 118 (26,840) 21
---------------------------------------- ------- ------- ------- -------- ------
5,502 12,477 (265) (2,452) 10,166
Consolidation adjustment - UPII* (21) (21) (42) (8) (60)
---------------------------------------- ------- ------- ------- -------- ------
RC profit (loss) before interest and
tax 5,481 12,456 (307) (2,460) 10,106
Inventory holding gains (losses)*
gas & low carbon energy (14) (9) 15 2 41
oil production & operations 1 (7) (1) (5) 8
customers & products (2,855) 2,162 451 2,782 2,943
other businesses & corporate(a) - - 35 - 191
---------------------------------------- ------- ------- ------- -------- ------
Profit (loss) before interest and tax 2,613 14,602 193 319 13,289
Finance costs 649 556 693 1,869 2,098
Net finance expense/(income) relating
to pensions and other post-retirement
benefits (16) (17) (5) (53) 6
---------------------------------------- ------- ------- ------- -------- ------
Profit (loss) before taxation 1,980 14,063 (495) (1,497) 11,185
---------------------------------------- ------- ------- ------- -------- ------
RC profit (loss) before interest and
tax*
US 3,954 3,322 1,964 9,553 4,826
Non-US 1,527 9,134 (2,271) (12,013) 5,280
---------------------------------------- ------- ------- ------- -------- ------
5,481 12,456 (307) (2,460) 10,106
------- ------- ------- -------- ------
(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 25
Note 5. Sales and other operating revenues
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------------------- ------- ------- ------- ------- -------
By segment
gas & low carbon energy 8,053 13,243 2,554 29,462 16,295
oil production & operations 8,599 9,504 6,285 26,261 17,037
customers & products 47,831 55,557 34,382 145,551 92,649
other businesses & corporate 552 516 423 1,520 1,240
---------------------------------------------------- ------- ------- ------- ------- -------
65,035 78,820 43,644 202,794 127,221
------- ------- ------- ------- -------
Less: sales and other operating revenues between
segments
gas & low carbon energy 2,785 1,621 1,269 6,354 3,364
oil production & operations 7,589 8,753 5,423 23,378 15,206
customers & products (276) 392 354 808 576
other businesses & corporate (74) 188 424 119 890
---------------------------------------------------- ------- ------- ------- ------- -------
10,024 10,954 7,470 30,659 20,036
------- ------- ------- ------- -------
External sales and other operating revenues
gas & low carbon energy 5,268 11,622 1,285 23,108 12,931
oil production & operations 1,010 751 862 2,883 1,831
customers & products 48,107 55,165 34,028 144,743 92,073
other businesses & corporate 626 328 (1) 1,401 350
---------------------------------------------------- ------- ------- ------- ------- -------
Total sales and other operating revenues 55,011 67,866 36,174 172,135 107,185
---------------------------------------------------- ------- ------- ------- ------- -------
By geographical area
US 22,451 27,331 15,372 68,934 45,168
Non-US 45,111 54,331 28,578 142,239 85,161
---------------------------------------------------- ------- ------- ------- ------- -------
67,562 81,662 43,950 211,173 130,329
Less: sales and other operating revenues between
areas 12,551 13,796 7,776 39,038 23,144
---------------------------------------------------- ------- ------- ------- ------- -------
55,011 67,866 36,174 172,135 107,185
------- ------- ------- ------- -------
Revenues from contracts with customers
Sales and other operating revenues include
the following in relation to revenues from
contracts with customers:
Crude oil 1,322 2,034 1,275 5,500 3,900
Oil products 40,036 43,267 27,699 115,054 71,628
Natural gas, LNG and NGLs 11,106 8,944 5,475 30,730 13,929
Non-oil products and other revenues from contracts
with customers 2,267 1,825 2,275 6,437 5,276
---------------------------------------------------- ------- ------- ------- ------- -------
Revenue from contracts with customers 54,731 56,070 36,724 157,721 94,733
---------------------------------------------------- ------- ------- ------- ------- -------
Other operating revenues(a) 280 11,796 (550) 14,414 12,452
---------------------------------------------------- ------- ------- ------- ------- -------
Total sales and other operating revenues 55,011 67,866 36,174 172,135 107,185
---------------------------------------------------- ------- ------- ------- ------- -------
(a) Principally relates to commodity derivative transactions
including sales of bp own production in trading books.
Top of page 26
Note 6. Depreciation, depletion and amortization
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ ------- ------- ------- ------ ------
Total depreciation, depletion and amortization
by segment
gas & low carbon energy 1,177 1,203 1,230 3,635 3,199
oil production & operations 1,381 1,371 1,767 4,181 4,900
customers & products 697 715 747 2,129 2,246
other businesses & corporate 212 223 200 659 597
------------------------------------------------ ------- ------- ------- ------ ------
3,467 3,512 3,944 10,604 10,942
------- ------- ------- ------ ------
Total depreciation, depletion and amortization
by geographical area
US 1,180 1,159 1,206 3,422 3,488
Non-US 2,287 2,353 2,738 7,182 7,454
------------------------------------------------ ------- ------- ------- ------ ------
3,467 3,512 3,944 10,604 10,942
------- ------- ------- ------ ------
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, 571 million ordinary shares
repurchased for cancellation were settled during the third quarter
2022 for a total cost of $2,876 million. This brings the total
number of shares repurchased and settled in the nine months to
1,314 million for a total cost of $6,756 million. A further 239
million ordinary shares were repurchased and settled in October for
a total cost of $1,235 million which has been accrued at 30
September 2022. The number of shares in issue is reduced when
shares are repurchased, but is not reduced in respect of the
period-end commitment to repurchase shares subsequent to the end of
the period.
165 million new ordinary shares were issued in April 2022 as
non-cash consideration for the acquisition of the public units of
BP Midstream Partners LP.
The calculation of EpS is performed separately for each discrete
quarterly period, and for the year-to-date period. As a result, the
sum of the discrete quarterly EpS amounts in any particular
year-to-date period may not be equal to the EpS amount for the
year-to-date period.
For the diluted EpS calculation the weighted average number of
shares outstanding during the period is adjusted for the number of
shares that are potentially issuable in connection with employee
share-based payment plans using the treasury stock method.
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Results for the period
Profit (loss) for the period attributable
to bp shareholders (2,163) 9,257 (2,544) (13,290) 5,239
Less: preference dividend - 1 1 1 2
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit (loss) attributable to
bp ordinary shareholders (2,163) 9,256 (2,545) (13,291) 5,237
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Number of shares (thousand) (a)(b)
Basic weighted average number
of shares outstanding 18,885,725 19,388,427 20,150,186 19,260,486 20,239,365
ADS equivalent(c) 3,147,620 3,231,404 3,358,364 3,210,081 3,373,228
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Weighted average number of shares
outstanding used to calculate
diluted earnings per share 18,885,725 19,619,628 20,150,186 19,260,486 20,359,280
ADS equivalent(c) 3,147,620 3,269,938 3,358,364 3,210,081 3,393,213
------------------------------------------- ---------- ---------- ---------- ---------- ----------
Shares in issue at period-end 18,566,848 19,135,400 20,008,900 18,566,848 20,008,900
ADS equivalent(c) 3,094,474 3,189,233 3,334,816 3,094,474 3,334,816
------------------------------------------- ---------- ---------- ---------- ---------- ----------
(a) Excludes treasury shares and includes certain shares that
will be issued in the future under employee share-based payment
plans.
(b) If the inclusion of potentially issuable shares would
decrease loss per share, the potentially issuable shares are
excluded from the weighted average number of shares outstanding
used to calculate diluted earnings per share. The numbers of
potentially issuable shares that have been excluded from the
calculation for the third quarter 2022, third quarter 2021 and nine
months 2022 are 274,005 thousand (ADS equivalent 45,668 thousand),
123,543 thousand (ADS equivalent 20,591 thousand) and 217,311
thousand (ADS equivalent 36,218 thousand).
(c) One ADS is equivalent to six ordinary shares.
Top of page 27
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 16 December 2022 to
ordinary shareholders and American Depositary Share (ADS) holders
on the register on 11 November 2022. The ex-dividend date will be 9
November 2022 for ADS holders and 10 November 2022 for ordinary
shareholders. The corresponding amount in sterling is due to be
announced on 6 December 2022, calculated based on the average of
the market exchange rates over three dealing days between 30
November 2022 and 2 December 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
third 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 third quarter
dividend and timetable are available at bp.com/dividends and
further details of the dividend reinvestment programmes are
available at bp.com/drip.
Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
Dividends paid per ordinary share
cents 6.006 5.460 5.460 16.926 15.960
pence 5.168 4.356 3.953 13.683 11.433
Dividends paid per ADS (cents) 36.04 32.76 32.76 101.56 95.76
----------------------------------- ------- ------- ------- ------ ------
Note 9. Net debt
Net debt* Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
---------------------------------------- -------- -------- -------- -------- --------
Finance debt(a) 46,560 52,866 63,214 46,560 63,214
Fair value (asset) liability of hedges
related to finance debt(b) 4,746 3,058 (549) 4,746 (549)
---------------------------------------- -------- -------- -------- -------- --------
51,306 55,924 62,665 51,306 62,665
Less: cash and cash equivalents 29,304 33,108 30,694 29,304 30,694
---------------------------------------- -------- -------- -------- -------- --------
Net debt(c) 22,002 22,816 31,971 22,002 31,971
---------------------------------------- -------- -------- -------- -------- --------
Total equity 73,333 81,563 89,266 73,333 89,266
Gearing* 23.1% 21.9% 26.4% 23.1% 26.4%
---------------------------------------- -------- -------- -------- -------- --------
(a) The fair value of finance debt at 30 September 2022 was
$41,414 million (30 June 2022 $49,056 million, 30 September 2021
$65,316 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 $116 million at 30 September 2022 (second quarter 2022 liability
of $246 million and third quarter 2021 liability of $151 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 third
quarter the group bought back $2.9 billion of finance debt (second
quarter 2022 $4.5 billion, third quarter 2021 $4.2 billion
equivalent) consisting entirely of US dollar bonds. Year to date
the group has bought back a total of $7.4 billion of finance debt
($8.1 billion equivalent for the comparative period in 2021).
Derivatives associated with non-US dollar debt bought back in
relevant comparative periods were also terminated. These
transactions have no significant impact on net debt or gearing.
Note 10. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 31 October 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 28
Additional information
Capital expenditure*
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
----------------------------------- ------- ------- ------- ------ ------
Capital expenditure
Organic capital expenditure* 3,191 2,845 2,850 8,609 8,267
Inorganic capital expenditure*(a) 3 (7) 53 352 948
----------------------------------- ------- ------- ------- ------ ------
3,194 2,838 2,903 8,961 9,215
------- ------- ------- ------ ------
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------- ------- ------- ------- ------ ------
Capital expenditure by segment
gas & low carbon energy(a) 958 823 1,072 2,642 3,704
oil production & operations 1,386 1,208 1,099 3,848 3,566
customers & products 713 675 597 2,103 1,648
other businesses & corporate 137 132 135 368 297
------- ------- ------- ------ ------
3,194 2,838 2,903 8,961 9,215
------- ------- ------- ------ ------
Capital expenditure by geographical
area
US 1,377 1,253 1,176 3,727 3,553
Non-US 1,817 1,585 1,727 5,234 5,662
------------------------------------- ------- ------- ------- ------ ------
3,194 2,838 2,903 8,961 9,215
------- ------- ------- ------ ------
(a) Nine months 2021 includes the final payment of $712 million
in respect of the strategic partnership with Equinor.
Top of page 29
Adjusting items*
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ ------- ------- ------- -------- -------
gas & low carbon energy
Gains on sale of businesses and fixed
assets(a) 3 - - 12 1,034
Net impairment and losses on sale of
businesses and fixed assets(b) (6) (265) (197) (523) 950
Environmental and other provisions - - - - -
Restructuring, integration and rationalization
costs - 1 - 5 (29)
Fair value accounting effects(c)(d) (9,224) (74) (5,808) (14,313) (6,872)
Other 31 (5) 63 161 (178)
------------------------------------------------ ------- ------- ------- -------- -------
(9,196) (343) (5,942) (14,658) (5,095)
------- ------- ------- -------- -------
oil production & operations
Gains on sale of businesses and fixed
assets(e) 1,851 1,278 261 3,378 645
Net impairment and losses on sale of
businesses and fixed assets(b) (326) 268 33 (1,262) 1,575
Environmental and other provisions 244 (204) (68) 98 (909)
Restructuring, integration and rationalization
costs 3 (7) 4 (14) (90)
Fair value accounting effects - - - - -
Other (18) - 1 37 (200)
------------------------------------------------ ------- ------- ------- -------- -------
1,754 1,335 231 2,237 1,021
------- ------- ------- -------- -------
customers & products
Gains on sale of businesses and fixed
assets 10 31 (25) 302 (114)
Net impairment and losses on sale of
businesses and fixed assets (85) (434) (58) (532) (136)
Environmental and other provisions (1) (35) (1) (36) (9)
Restructuring, integration and rationalization
costs (4) 9 16 6 (35)
Fair value accounting effects(d) (59) (62) (30) (498) 290
Other - 16 - (31) (3)
------------------------------------------------ ------- ------- ------- -------- -------
(139) (475) (98) (789) (7)
------- ------- ------- -------- -------
other businesses & corporate(f)
Gains on sale of businesses and fixed
assets 1 - - - -
Net impairment and losses on sale of
businesses and fixed assets - (15) 1 (16) (50)
Environmental and other provisions 67 (89) (65) (25) (137)
Restructuring, integration and rationalization
costs 6 (3) (12) 16 (111)
Fair value accounting effects(d) (785) (686) (263) (1,896) (637)
Rosneft(f) - - (55) (24,033) (101)
Gulf of Mexico oil spill (21) (21) (17) (61) (46)
Other 44 (13) (21) 40 (24)
------------------------------------------------ ------- ------- ------- -------- -------
(688) (827) (432) (25,975) (1,106)
Total before interest and taxation (8,269) (310) (6,241) (39,185) (5,187)
Finance costs(g) (68) (30) (175) (256) (525)
------------------------------------------------ ------- ------- ------- -------- -------
Total before taxation (8,337) (340) (6,416) (39,441) (5,712)
Taxation on adjusting items(h) 988 (461) 160 1,998 (267)
Taxation - tax rate change effect of
UK energy profits levy(i) (778) - - (778) -
------------------------------------------------ ------- ------- ------- -------- -------
Total after taxation for period (8,127) (801) (6,256) (38,221) (5,979)
------------------------------------------------ ------- ------- ------- -------- -------
(a) Nine months 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 value of the hedges used
to risk-manage LNG contracts, but not the contracts themselves,
resulting in a mismatch in accounting treatment. The fair value
accounting effect represents the change in value of LNG contracts
that are being risk managed, and the underlying result reflects how
bp risk-manages its LNG contracts.
(d) For further information, including the nature of fair value
accounting effects reported in each segment, see pages 3, 6 and
34.
(e) Third quarter and nine months 2022 include a non-taxable
gain of $1,951 million arising from the contribution of bp's
Angolan business to Azule Energy. Second quarter and nine months
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 30
(i) Third quarter and nine months 2022 includes the deferred tax
impact of the UK Energy Profits Levy on existing temporary
differences unwinding over the period 1 October 2022 to 31 December
2025. The levy increases 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.
Net debt including leases
Net debt including leases* Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
----------------------------------------- -------- -------- -------- -------- --------
Net debt 22,002 22,816 31,971 22,002 31,971
Lease liabilities 7,895 8,056 8,628 7,895 8,628
Net partner (receivable) payable for
leases entered into on behalf of joint
operations 22 14 111 22 111
Net debt including leases 29,919 30,886 40,710 29,919 40,710
----------------------------------------- -------- -------- -------- -------- --------
Total equity 73,333 81,563 89,266 73,333 89,266
Gearing including leases* 29.0% 27.5% 31.3% 29.0% 31.3%
----------------------------------------- -------- -------- -------- -------- --------
Gulf of Mexico oil spill
30 September 31 December
$ million 2022 2021
Gulf of Mexico oil spill payables and provisions (9,464) (10,433)
-------------------------------------------------- ------------ -----------
Of which - current (1,204) (1,279)
Deferred tax asset 2,255 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
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------ -------- ------- ------- -------- -------
Movements in inventories and other current
and non-current assets and liabilities
as per condensed group cash flow statement(a) 6,764 (4,416) 3,850 577 1,083
Adjusted for inventory holding gains
(losses)* (Note 4 excluding Rosneft) (2,868) 2,146 465 2,779 2,992
Adjusted for fair value accounting effects
relating to subsidiaries (10,068) (676) (6,101) (16,561) (7,219)
------------------------------------------------ -------- ------- ------- -------- -------
Working capital release (build) after
adjusting for net inventory gains (losses)
and fair value accounting effects (6,172) (2,946) (1,786) (13,205) (3,144)
------------------------------------------------ -------- ------- ------- -------- -------
(a) The movement in working capital includes outflows relating
to the Gulf of Mexico oil spill on a pre-tax basis of $29 million
and $1,285 million in the third quarter and nine months of 2022
respectively. For the same periods in 2021 the amount was an
outflow of $36 million and $1,375 million respectively.
Top of page 31
Surplus cash flow* reconciliation
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------------- ------- ------- ------- -------- --------
Sources:
Net cash provided by operating activities 8,288 10,863 5,976 27,361 17,496
Cash provided from investing activities 621 329 346 1,996 4,853
Other proceeds(a) - 409 - 573 -
Receipts relating to transactions involving
non-controlling interests 3 - - 10 671
------------------------------------------------- ------- ------- ------- -------- --------
Cash inflow 8,912 11,601 6,322 29,940 23,020
------------------------------------------------- ------- ------- ------- -------- --------
Uses:
Lease liability payments (478) (472) (506) (1,448) (1,580)
Payments on perpetual hybrid bonds (180) (161) (55) (489) (438)
Dividends paid - BP shareholders (1,140) (1,062) (1,101) (3,270) (3,227)
- non-controlling interests (66) (63) (87) (194) (245)
Total capital expenditure* (3,194) (2,838) (2,903) (8,961) (9,215)
Net repurchase of shares relating to
employee share schemes - - - (500) (500)
Payments relating to transactions involving
non-controlling interests (2) (1) (560) (8) (560)
Currency translation differences relating
to cash and cash equivalents (322) (414) (177) (861) (211)
------------------------------------------------- ------- ------- ------- -------- --------
Cash outflow (5,382) (5,011) (5,389) (15,731) (15,976)
------------------------------------------------- ------- ------- ------- -------- --------
Cash used to meet net debt target - - - - 3,729
Surplus cash flow 3,530 6,590 933 14,209 3,315
------------------------------------------------- ------- ------- ------- -------- --------
(a) Other proceeds for the second quarter and nine months 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 were recognized.
Reconciliation of customers & products RC profit before
interest and tax to underlying RC profit before interest and tax*
to adjusted EBITDA* by business
Third Second Third Nine Nine
quarter quarter quarter months months
$ million 2022 2022 2021 2022 2021
------------------------------------------ ------- ------- ------- ------ ------
RC profit before interest and tax for
customers & products 2,586 3,531 1,060 8,098 2,634
Less: Adjusting items* gains (charges) (139) (475) (98) (789) (7)
Underlying RC profit before interest
and tax for customers & products 2,725 4,006 1,158 8,887 2,641
By business:
customers - convenience & mobility 1,137 679 806 2,338 2,415
Castrol - included in customers 151 223 231 630 830
products - refining & trading 1,588 3,327 352 6,549 226
Add back: Depreciation, depletion and
amortization 697 715 747 2,129 2,246
By business:
customers - convenience & mobility 311 315 324 952 977
Castrol - included in customers 36 38 36 113 114
products - refining & trading 386 400 423 1,177 1,269
Adjusted EBITDA for customers & products 3,422 4,721 1,905 11,016 4,887
By business:
customers - convenience & mobility 1,448 994 1,130 3,290 3,392
Castrol - included in customers 187 261 267 743 944
products - refining & trading 1,974 3,727 775 7,726 1,495
------------------------------------------ ------- ------- ------- ------ ------
Top of page 32
Realizations* and marker prices
Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
Average realizations (a)
Liquids* ($/bbl)
US 82.23 89.80 59.87 81.05 52.92
Europe 94.21 113.92 74.02 104.12 67.79
Rest of World 101.82 106.77 68.67 98.93 63.51
BP Average 92.44 100.94 65.63 92.42 59.78
--------------------------------------------- ------- ------- ------- ------ ------
Natural gas ($/mcf)
US 7.25 6.28 3.51 5.88 3.33
Europe 34.37 16.06 17.07 28.15 10.96
Rest of World 9.85 8.42 5.26 8.74 4.44
BP Average 10.31 8.31 5.35 8.99 4.48
--------------------------------------------- ------- ------- ------- ------ ------
Total hydrocarbons* ($/boe)
US 66.82 69.71 45.39 63.19 41.24
Europe 132.68 106.29 81.99 125.03 66.51
Rest of World 71.19 71.65 45.13 68.34 40.45
BP Average 73.76 73.24 47.57 70.56 42.37
--------------------------------------------- ------- ------- ------- ------ ------
Average oil marker prices ($/bbl)
Brent 100.84 113.93 73.51 105.51 67.92
West Texas Intermediate 91.63 108.77 70.54 98.46 65.06
Western Canadian Select 69.02 90.25 56.95 79.72 52.06
Alaska North Slope 98.84 112.17 72.66 102.34 67.53
Mars 89.54 105.27 69.09 96.01 64.67
Urals (NWE - cif) 71.24 77.29 70.63 78.58 65.60
--------------------------------------------- ------- ------- ------- ------ ------
Average natural gas marker prices
Henry Hub gas price(b) ($/mmBtu) 8.20 7.17 4.02 6.78 3.19
UK Gas - National Balancing Point (p/therm) 281.01 130.11 118.81 216.37 78.38
--------------------------------------------- ------- ------- ------- ------ ------
(a) Based on sales of consolidated subsidiaries only - this
excludes equity-accounted entities.
(b) Henry Hub First of Month Index.
Exchange rates
Third Second Third Nine Nine
quarter quarter quarter months months
2022 2022 2021 2022 2021
------- ------- ------- ------ ------
$/GBP average rate for the period 1.18 1.26 1.38 1.25 1.39
$/GBP period-end rate 1.12 1.21 1.34 1.12 1.34
$/EUR average rate for the period 1.01 1.06 1.18 1.06 1.20
$/EUR period-end rate 0.98 1.05 1.16 0.98 1.16
$/AUD average rate for the period 0.68 0.71 0.73 0.71 0.76
$/AUD period-end rate 0.65 0.69 0.72 0.65 0.72
Rouble/$ average rate for the period 60.24 67.50 73.52 71.89 74.04
Rouble/$ period-end rate 58.40 54.68 72.78 58.40 72.78
-------------------------------------- ------- ------- ------- ------ ------
Top of page 33
Legal proceedings
For a full discussion of the group's material legal proceedings,
see pages 248-249 of bp Annual Report and Form 20-F 2021.
Glossary
Non-GAAP measures are provided for investors because they are
closely tracked by management to evaluate bp's operating
performance and to make financial, strategic and operating
decisions. Non-GAAP measures are sometimes referred to as
alternative performance measures.
Adjusted 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
29.
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 34
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, represents the change in value
of LNG contracts that are being risk managed (which is reflected in
the underlying result, but not in reported earnings). This 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 35
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
27.
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
30.
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 28.
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 36
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 28 .
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 (e.g. bp, Aral,
ARCO, Amoco, Thorntons and Pulse) and either carry one of the
strategic convenience brands (e.g. M&S, Rewe to Go) or a
differentiated convenience offer. To be considered a strategic
convenience site, the convenience offer should have a demonstrable
level of differentiation in the market in which it operates.
Strategic convenience site count includes sites under a pilot
phase, but excludes sites in growth markets.
Top of page 37
Glossary (continued)
Surplus cash flow does not represent the residual cash flow
available for discretionary expenditures. It is a non-GAAP
financial measure that should be considered in addition to, not as
a substitute for or superior to, net cash provided by operating
activities, reported in accordance with IFRS.
Surplus cash flow refers to the net surplus of sources of cash
over uses of cash, after reaching the $35 billion net debt target.
Sources of cash include net cash provided by operating activities,
cash provided from investing activities and cash receipts relating
to transactions involving non-controlling interests. Uses of cash
include lease liability payments, payments on perpetual hybrid
bond, dividends paid, cash capital expenditure, the cash cost of
share buybacks to offset the dilution from vesting of awards under
employee share schemes, cash payments relating to transactions
involving non-controlling interests and currency translation
differences relating to cash and cash equivalents as presented on
the condensed group cash flow statement.
For the nine months 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 31 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 36) after excluding net
adjusting items and related taxation. See page 29 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.
Top of page 38
Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit or
loss per ADS is a non-GAAP measure. Earnings per share is defined
in Note 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.
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 39
Cautionary statement
In order to utilize the 'safe harbor' provisions of the United
States Private Securities Litigation Reform Act of 1995 (the
'PSLRA') and the general doctrine of cautionary statements, bp is
providing the following cautionary statement: The discussion in
this results announcement contains certain forecasts, projections
and forward-looking statements - that is, statements related to
future, not past events and circumstances - with respect to the
financial condition, results of operations and businesses of bp and
certain of the plans and objectives of bp with respect to these
items. These statements may generally, but not always, be
identified by the use of words such as 'will', 'expects', 'is
expected to', 'aims', 'should', 'may', 'objective', 'is likely to',
'intends', 'believes', 'anticipates', 'plans', 'we see' or similar
expressions.
In particular, the following, among other statements, are all
forward looking in nature: expectations regarding the conflict in
Ukraine, related sanctions on Russia and inflationary pressures,
including the impacts and consequences on demand and supply; plans,
expectations and assumptions regarding oil and gas demand, supply,
prices or volatility and storage levels; expectations regarding
upstream production and bp's customers & products business;
expectations regarding future working capital; expectations
regarding major projects; expectations regarding refining margins;
expectations regarding bp's business, financial performance,
results of operations and cash flows; expectations regarding future
project start-ups; expectations with regards to bp's transformation
to an IEC; expectations regarding price assumptions used in
accounting estimates; bp's plans and expectations regarding the
amount and timing of share buybacks and quarterly and interim
dividends; plans and expectations regarding bp's credit rating,
including in respect of maintaining a strong investment grade
credit rating; plans and expectations regarding the allocation of
surplus cash flow to share buybacks and strengthening the balance
sheet; plans and expectations regarding bp's exit of its
shareholding in Rosneft and other investments in Russia; plans and
expectations with respect to the total depreciation, depletion and
amortization and other businesses & corporate underlying annual
charge for 2022; plans and expectations regarding investments,
collaborations and partnerships in charging infrastructure,
including in North America, the UK, Germany and China; plans and
expectations regarding the divestment programme, including the
amount and timing of proceeds; plans and expectations regarding
bp's renewable energy business; 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 bp's defined benefit pension
plans; plans and expectations regarding capital expenditure,
including that capital expenditure will be around $15.5 billion in
2022; plans and expectations regarding projects, joint ventures and
other partnerships and agreements, including partnerships and other
collaborations with Hertz, REWE, Renault Group and Avatr Technology
Co. Ltd. as well as plans and expectations regarding the
acquisition of Archaea Energy, the sale of its interest in the
bp-Husky Toledo refinery to Cenovus Energy Inc. and related
operational impacts, the sale of bp's upstream business in Algeria
to Eni, the Cypre subsea gas development in Trinidad and Tobago and
its relation to bp's Juniper platform, the purchase of EDF Energy
Services, the Asian Renewable Energy Hub in Western Australia, the
development of EV charge points, the HyGreen Teesside green
hydrogen project and the Mad Dog Phase 2 project in the Gulf of
Mexico.
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.
Top of page 40
Contacts
London Houston
Press Office David Nicholas Megan Baldino
+44 (0) 7831 095541 +1 907 529 9029
Investor Relations Craig Marshall Graham Collins
bp.com/investors +44 (0) 203 401 5592 +1 832 753 5116
BP p.l.c.'s LEI Code 213800LH1BZH3D16G760
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