UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the period ended 31 December 2016
Commission File Number 1-06262
BP p.l.c.
(Translation of registrants name into English)
1 ST JAMESS SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NOS. 333-208478 AND 333-208478-01) OF BP CAPITAL MARKETS p.l.c. AND BP p.l.c.; THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-132619) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-173136) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207188) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207189) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210316) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210318) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
Form 6-K for the period ended 31 December 2016(a)
Page | ||||||
1. | 3-11, 25-32 | |||||
2. | 12-24 | |||||
3. | Legal proceedings | 33 | ||||
4. | Cautionary statement | 33 | ||||
5. | Computation of Ratio of Earnings to Fixed Charges | 34 | ||||
6. | Capitalization and Indebtedness | 35 | ||||
7. | Signatures | 36 |
(a) | In this Form 6-K, references to the full year 2016 and full year 2015 refer to the full year periods ended 31 December 2016 and 31 December 2015 respectively. References to fourth quarter 2016 and fourth quarter 2015 refer to the three-month periods ended 31 December 2016 and 31 December 2015 respectively. |
(b) | This discussion should be read in conjunction with the consolidated financial statements and related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, in BPs Annual Report on Form 20-F for the year ended 31 December 2015. |
2
Group results fourth quarter and full year 2016
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
(3,307 | ) | 497 | Profit (loss) for the period(a) |
115 | (6,482 | ) | ||||||||||
1,546 | (601 | ) | Inventory holding (gains) losses*, before tax |
(1,597 | ) | 1,889 | ||||||||||
(472 | ) | 176 | Taxation charge (credit) on inventory holding gains and losses |
483 | (569 | ) | ||||||||||
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(2,233 | ) | 72 | Replacement cost profit (loss)* |
(999 | ) | (5,162 | ) | |||||||||
2,703 | 481 | Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects*, before tax |
6,746 | 15,067 | ||||||||||||
(274 | ) | (153 | ) | Taxation charge (credit) on non-operating items and fair value accounting effects |
(3,162 | ) | (4,000 | ) | ||||||||
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196 | 400 | Underlying replacement cost profit* |
2,585 | 5,905 | ||||||||||||
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(18.01 | ) | 2.62 | Profit (loss) per ordinary share (cents) |
0.61 | (35.39 | ) | ||||||||||
(1.08 | ) | 0.16 | Profit (loss) per ADS (dollars) |
0.04 | (2.12 | ) | ||||||||||
(12.16 | ) | 0.38 | Replacement cost profit (loss) per ordinary share (cents)* |
(5.33 | ) | (28.18 | ) | |||||||||
(0.73 | ) | 0.02 | Replacement cost profit (loss) per ADS (dollars) |
(0.32 | ) | (1.69 | ) | |||||||||
1.06 | 2.11 | Underlying replacement cost profit per ordinary share (cents)* |
13.79 | 32.22 | ||||||||||||
0.06 | 0.13 | Underlying replacement cost profit per ADS (dollars) |
0.83 | 1.93 | ||||||||||||
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| BPs profit for the fourth quarter was $497 million, compared with a loss of $3,307 million for the same period in 2015. BPs fourth-quarter replacement cost (RC) profit was $72 million, compared with a loss of $2,233 million for the same period in 2015. After adjusting for a net charge for non-operating items of $180 million and net unfavourable fair value accounting effects of $148 million (both on a post-tax basis), underlying RC profit for the fourth quarter was $400 million, compared with $196 million for the same period in 2015. RC profit or loss for the group and underlying RC profit or loss are non-GAAP measures and further information is provided on page 5. |
| For the full year of 2016 the profit was $115 million, compared with a loss of $6,482 million for the full year of 2015. The RC loss for the full year of 2016 was $999 million, compared with a loss of $5,162 million for the full year of 2015. Both periods were impacted by charges associated with the Deepwater Horizon accident and oil spill following the settlement of federal, state and local government claims in 2015 and additional provisions this year, when a reliable estimate for the remaining material liabilities was determined. After adjusting for a net charge for non-operating items of $2,828 million and net unfavourable fair value accounting effects of $756 million (both on a post-tax basis), underlying RC profit for the full year was $2,585 million, compared with $5,905 million for the same period in 2015, predominantly due to lower results in the Upstream and Downstream segments. |
| Non-operating items for the quarter and full year reflect additional provisions recorded in relation to the Gulf of Mexico oil spill. Non-operating items also include a restructuring charge of $195 million for the quarter and $763 million for the full year. Cumulative restructuring charges from the beginning of the fourth quarter 2014 totalled $2.3 billion by the end of the fourth quarter 2016. |
| All amounts, including finance costs, relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a pre-tax charge of $799 million for the fourth quarter and $7,134 million for the full year. For further information on the Gulf of Mexico oil spill and its consequences see page 11 and Note 2 on page 18. |
| Net cash provided by operating activities for the fourth quarter and full year was $2.4 billion and $10.7 billion respectively, compared with $5.8 billion and $19.1 billion for the same periods in 2015. |
| Gross debt at 31 December 2016 was $58.3 billion compared with $53.2 billion a year ago. The ratio of gross debt to gross debt plus equity at 31 December 2016 was 37.6%, compared with 35.1% a year ago. Net debt* at 31 December 2016 was $35.5 billion, compared with $27.2 billion a year ago. The net debt ratio* at 31 December 2016 was 26.8%, compared with 21.6% a year ago. We continue to target a net debt ratio in the range of 20-30%. Net debt and the net debt ratio are non-GAAP measures. See page 23 for more information. |
| BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 31 March 2017. The corresponding amount in sterling will be announced on 20 March 2017. See page 22 for further information. |
* | For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 30. |
(a) | Profit attributable to BP shareholders. |
The commentaries above and following should be read in conjunction with the cautionary statement on page 33.
3
Group headlines (continued)
| Additions to non-current assets for the fourth quarter and full year was $7.5 billion and $21.2 billion respectively, compared with $6.4 billion and $20.1 billion for the same periods in 2015. Capital expenditure on an accruals basis* for the fourth quarter, excluding amounts relating to the renewal of a 10% interest in the Abu Dhabi onshore oil concession was $5.1 billion, compared with $6.1 billion for the same period in 2015. Of the $5.1 billion, $4.5 billion was organic capital expenditure*, compared with $5.5 billion in 2015. The renewal of a 10% interest in the Abu Dhabi onshore oil concession, for which new ordinary shares in BP were issued, is treated as organic capital expenditure. Capital expenditure on an accruals basis for the fourth quarter was $7.6 billion, compared with $6.1 billion for the same period in 2015. |
| For the full year, excluding amounts relating to the renewal of an interest in the Abu Dhabi onshore oil concession, capital expenditure on an accruals basis was $17.0 billion, of which organic capital expenditure was $16.0 billion, compared with $19.5 billion for the same period in 2015, of which organic capital expenditure was $18.7 billion. Capital expenditure on an accruals basis for the full year was $19.4 billion, compared with $19.5 billion for the same period in 2015. See page 25 for further information. In 2017, we expect organic capital expenditure to be in the range of $16-17 billion. |
| Disposal proceeds, as per the cash flow statement, were $0.5 billion for the fourth quarter, compared with $0.2 billion for the same period in 2015. For the full year, disposal proceeds were $2.6 billion, as per the cash flow statement, along with $0.6 billion received in relation to the sale of 20% from our shareholding in Castrol India Limited, giving total proceeds of $3.2 billion for the year, compared with $2.8 billion in 2015. In 2017, divestments are expected to be in the range of $4.5-5.5 billion. |
| The effective tax rate (ETR) on the profit or loss for the fourth quarter and full year was 12% and 107% respectively, compared with 19% and 33% for the same periods in 2015. The ETR on RC profit or loss* for the fourth quarter and full year is significantly impacted by the effect of non-operating items, fair value accounting effects and the reduction in the rate of the UK North Sea supplementary charge in the third quarter (and the first quarter 2015), and therefore is not a meaningful measure. |
| The adjusted ETR*, which eliminates the effect of these items, for the fourth quarter and full year was 10% and 23% respectively, compared with -20% and 31% for the same periods in 2015. The adjusted ETR for the fourth quarter 2016 was impacted by a high proportion of equity-accounted income (which is reported net of tax in the income statement) within RC profit, and reflects a benefit from the reassessment of the recognition of deferred tax assets and other items, partly offset by charges for foreign exchange impacts. The adjusted ETR for the fourth quarter 2015 reflected tax credits associated with losses in the Upstream segment offsetting tax charges arising elsewhere. The adjusted ETR for the full year is lower than last year predominantly due to changes in the geographical mix of profits and the absence of foreign exchange impacts. In the current environment, and reflecting the recent transaction to renew our interest in the Abu Dhabi onshore oil concession, the adjusted ETR in 2017 is expected to be in the region of 40%. |
| The reserves replacement ratio* on a combined basis of subsidiaries and equity-accounted entities including the impact of the Abu Dhabi renewal was estimated at 109%(a) for the year. |
| Reported production for the fourth quarter, including BPs share of Rosnefts production, was 3,338 thousand barrels of oil equivalent per day (mboe/d), compared with 3,342mboe/d for the same period in 2015 (see Upstream on page 7 and Rosneft on page 10). For the full year, the reported production was 3,268mboe/d, compared with 3,239mboe/d in 2015. Comparative periods have been restated, see page 7 for further information. |
| The charge for depreciation, depletion and amortization was $14.5 billion in 2016, compared with $15.2 billion in 2015. In 2017, we expect the charge to be higher than 2016. |
(a) | Includes estimated reserves data for Rosneft. The reserves replacement ratio will be finalized and reported in BP Annual Report and Form 20-F 2016. |
4
Analysis of RC profit (loss) before interest and tax
and reconciliation to profit (loss) for the period
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
RC profit (loss) before interest and tax* | ||||||||||||||||
(2,280 | ) | 692 | Upstream |
574 | (937 | ) | ||||||||||
838 | 899 | Downstream |
5,162 | 7,111 | ||||||||||||
235 | 158 | Rosneft |
590 | 1,310 | ||||||||||||
(955 | ) | (1,117 | ) | Other businesses and corporate(a) |
(8,157 | ) | (13,477 | ) | ||||||||
65 | (132 | ) | Consolidation adjustment - UPII* |
(196 | ) | (36 | ) | |||||||||
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(2,097 | ) | 500 | RC profit (loss) before interest and tax | (2,027 | ) | (6,029 | ) | |||||||||
(457 | ) | (484 | ) | Finance costs and net finance expense relating to pensions and other post-retirement benefits |
(1,865 | ) | (1,653 | ) | ||||||||
304 | 102 | Taxation on a RC basis | 2,950 | 2,602 | ||||||||||||
17 | (46 | ) | Non-controlling interests | (57 | ) | (82 | ) | |||||||||
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(2,233 | ) | 72 | RC profit (loss) attributable to BP shareholders | (999 | ) | (5,162 | ) | |||||||||
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(1,546 | ) | 601 | Inventory holding gains (losses) | 1,597 | (1,889 | ) | ||||||||||
472 | (176 | ) | Taxation (charge) credit on inventory holding gains and losses | (483 | ) | 569 | ||||||||||
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(3,307 | ) | 497 | Profit (loss) for the period attributable to BP shareholders | 115 | (6,482 | ) | ||||||||||
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(a) | Includes costs related to the Gulf of Mexico oil spill. See page 11 and also Note 2 on page 18 for further information on the accounting for the Gulf of Mexico oil spill. |
Analysis of underlying RC profit before interest and tax
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Underlying RC profit before interest and tax* | ||||||||||||||||
(728 | ) | 400 | Upstream |
(542 | ) | 1,193 | ||||||||||
1,218 | 877 | Downstream |
5,634 | 7,545 | ||||||||||||
235 | 135 | Rosneft |
567 | 1,310 | ||||||||||||
(299 | ) | (424 | ) | Other businesses and corporate |
(1,238 | ) | (1,221 | ) | ||||||||
65 | (132 | ) | Consolidation adjustment - UPII |
(196 | ) | (36 | ) | |||||||||
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491 | 856 | Underlying RC profit before interest and tax | 4,225 | 8,791 | ||||||||||||
(342 | ) | (359 | ) | Finance costs and net finance expense relating to pensions and other post-retirement benefits |
(1,371 | ) | (1,406 | ) | ||||||||
30 | (51 | ) | Taxation on an underlying RC basis | (212 | ) | (1,398 | ) | |||||||||
17 | (46 | ) | Non-controlling interests | (57 | ) | (82 | ) | |||||||||
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196 | 400 | Underlying RC profit attributable to BP shareholders | 2,585 | 5,905 | ||||||||||||
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Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 3 for the group and on pages 6-11 for the segments.
5
Upstream
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
(2,298 | ) | 711 | Profit (loss) before interest and tax | 634 | (967 | ) | ||||||||||
18 | (19 | ) | Inventory holding (gains) losses* | (60 | ) | 30 | ||||||||||
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(2,280 | ) | 692 | RC profit (loss) before interest and tax | 574 | (937 | ) | ||||||||||
1,552 | (292 | ) | Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects* |
(1,116 | ) | 2,130 | ||||||||||
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(728 | ) | 400 | Underlying RC profit (loss) before interest and tax*(a) | (542 | ) | 1,193 | ||||||||||
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(a) | See page 7 for a reconciliation to segment RC profit before interest and tax by region. |
Financial results
The replacement cost profit before interest and tax for the fourth quarter and full year was $692 million and $574 million respectively, compared with a loss of $2,280 million and $937 million for the same periods in 2015. The fourth quarter and full year included a net non-operating gain of $636 million and $1,753 million respectively, compared with a net non-operating charge of $1,639 million and $2,235 million for the same periods in 2015. Fair value accounting effects in the fourth quarter and full year had an unfavourable impact of $344 million and $637 million respectively, compared with a favourable impact of $87 million and $105 million in the same periods of 2015.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost result before interest and tax for the fourth quarter and full year was a profit of $400 million and a loss of $542 million respectively, compared with a loss of $728 million and a profit of $1,193 million for the same periods in 2015. The result for the fourth quarter mainly reflected lower costs including the benefits of simplification and efficiency activities and lower exploration write-offs, and higher liquids realizations. The result for the full year reflected lower liquids and gas realizations, lower gas marketing and trading results, and adverse foreign exchange impacts partly offset by lower costs including the benefits of simplification and efficiency activities, lower exploration write-offs, lower depreciation, depletion and amortization expense and lower rig cancellation charges.
Production
Production for the quarter was 2,186mboe/d, 5.5% lower than the fourth quarter of 2015. Underlying production* for the quarter increased by 1.8%, largely reflecting major project ramp-ups. For the full year, production was 2,208mboe/d, 0.5% lower than in 2015. Underlying production for the full year was broadly flat versus the same period in 2015.
Key events
On 8 November, BP and Oman Oil Company Exploration & Production signed an agreement with the government of the Sultanate of Oman amending the Oman Block 61 exploration and production-sharing agreement to extend the licence area adding more than 1,000 square kilometres to the south and west of the original 2,700 square kilometres of Block 61.
On 9 November, BP (50%), in partnership with Hess (25%) and Noble Energy (25%), was awarded three parcels in the Eastern Newfoundland region, Canada. BP (60%) was also awarded a fourth parcel in the same region in partnership with Noble Energy (40%).
On 25 November, BP announced an agreement to buy a 10% interest from ENI (operator, 60%) in the Shorouk concession offshore Egypt, which contains the Zohr gas field.
On 1 December, BP announced the sanction of the Mad Dog Phase 2 project in the Gulf of Mexico (BP operator, 60.5%, BHP 23.9%, and Chevron 15.6%).
On 4 December, the In Amenas compression project in Algeria achieved start-up with the introduction of gas into the new inlet compression facilities.
On 5 December, BP (33.3%), in partnership with Statoil (33.4%) and Total (33.3%), was awarded two blocks in the Saline Basin in Mexicos first round of deepwater exploration tenders.
On 8 December, BP achieved start-up of the Thunder Horse South Expansion project in the Gulf of Mexico.
On 17 December, BP renewed its onshore concession in the United Arab Emirates by signing an agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi and the Abu Dhabi National Oil Company that grants BP a 10% interest in the ADCO onshore oil concession, which is valid until the end of 2054. In addition, BP becomes a 10% shareholder in the Abu Dhabi Company for Onshore Petroleum Operations Limited which operates the concession.
On 19 December, BP announced the signing of agreements with Kosmos Energy to acquire a 62% working interest, including operatorship, of Kosmos exploration blocks in Mauritania and a 32.49% effective working interest in Kosmos Senegal exploration blocks. On 29 December, the Mauritanian oil ministry approved BP as development operator in Mauritania, and Kosmos as technical exploration operator.
On 23 December, BP-operated Azerbaijan International Operating Company (AIOC) and the State Oil Company of the Republic of Azerbaijan signed a letter of intent for the development until 2050 of the Azeri-Chirag-Gunashli field in the Azerbaijan sector of the Caspian Sea.
On 24 January, BP announced it has agreed to sell to EnQuest part of its interests in the Magnus oil field (25% of BPs 100% stake) and some associated infrastructure in the UK North Sea.
Outlook
We expect full-year 2017 underlying production to be higher than 2016. The actual reported outcome will depend on the exact timing of project start-ups, acquisition and divestment activities, OPEC quotas and entitlement impacts in our production-sharing agreements*. We expect first-quarter 2017 reported production to be higher than the fourth quarter 2016 reflecting the impact of the Abu Dhabi concession renewal.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 33.
6
Upstream
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Underlying RC profit (loss) before interest and tax | ||||||||||||||||
(852 | ) | (147 | ) | US | (1,270 | ) | (1,615 | ) | ||||||||
124 | 547 | Non-US | 728 | 2,808 | ||||||||||||
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(728 | ) | 400 | (542 | ) | 1,193 | |||||||||||
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Non-operating items(a) | ||||||||||||||||
(260 | ) | 21 | US(b) | 127 | (602 | ) | ||||||||||
(1,379 | ) | 615 | Non-US(c) | 1,626 | (1,633 | ) | ||||||||||
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(1,639 | ) | 636 | 1,753 | (2,235 | ) | |||||||||||
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Fair value accounting effects | ||||||||||||||||
(34 | ) | (274 | ) | US | (379 | ) | (66 | ) | ||||||||
121 | (70 | ) | Non-US | (258 | ) | 171 | ||||||||||
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87 | (344 | ) | (637 | ) | 105 | |||||||||||
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RC profit (loss) before interest and tax | ||||||||||||||||
(1,146 | ) | (400 | ) | US | (1,522 | ) | (2,283 | ) | ||||||||
(1,134 | ) | 1,092 | Non-US | 2,096 | 1,346 | |||||||||||
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(2,280 | ) | 692 | 574 | (937 | ) | |||||||||||
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Exploration expense | ||||||||||||||||
627 | 511 | US(b) | 693 | 960 | ||||||||||||
296 | (197 | ) | Non-US(c) | 1,028 | 1,393 | |||||||||||
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923 | 314 | 1,721 | 2,353 | |||||||||||||
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697 | 166 | Of which: Exploration expenditure written off(b)(c) | 1,274 | 1,829 | ||||||||||||
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Production (net of royalties)(d) | ||||||||||||||||
Liquids*(e)(mb/d) | ||||||||||||||||
401 | 406 | US | 391 | 379 | ||||||||||||
131 | 122 | Europe | 120 | 121 | ||||||||||||
740 | 650 | Rest of World(e) | 698 | 694 | ||||||||||||
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1,271 | 1,178 | 1,208 | 1,194 | |||||||||||||
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176 | 210 | Of which equity-accounted entities | 184 | 172 | ||||||||||||
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Natural gas (mmcf/d) | ||||||||||||||||
1,547 | 1,675 | US | 1,656 | 1,528 | ||||||||||||
287 | 268 | Europe | 264 | 266 | ||||||||||||
4,214 | 3,903 | Rest of World | 3,876 | 4,157 | ||||||||||||
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6,048 | 5,846 | 5,796 | 5,951 | |||||||||||||
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452 | 517 | Of which equity-accounted entities | 494 | 456 | ||||||||||||
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Total hydrocarbons*(e)(mboe/d) | ||||||||||||||||
668 | 694 | US | 676 | 643 | ||||||||||||
180 | 168 | Europe | 165 | 167 | ||||||||||||
1,466 | 1,323 | Rest of World(e) | 1,366 | 1,410 | ||||||||||||
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2,314 | 2,186 | 2,208 | 2,220 | |||||||||||||
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254 | 300 | Of which equity-accounted entities | 269 | 251 | ||||||||||||
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|||||||||
Average realizations*(f) | ||||||||||||||||
38.91 | 43.89 | Total liquids(e)(g)($/bbl) | 38.27 | 47.32 | ||||||||||||
3.47 | 3.08 | Natural gas ($/mcf) | 2.84 | 3.80 | ||||||||||||
30.34 | 31.40 | Total hydrocarbons(e)($/boe) | 28.24 | 35.46 | ||||||||||||
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(a) | See Notes 1 and 3 for more information on impairment of fixed assets in the fourth quarter and full year 2016. |
(b) | Fourth quarter and full year 2016 include the write-off of $147 million in relation to the value ascribed to licences in the deepwater Gulf of Mexico as part of the accounting for the acquisition of upstream assets from Devon Energy in 2011. The $147-million write-off has been classified within the other category of non-operating items. |
Fourth quarter and full year 2015 include the write-off of costs relating to the Gila discovery in the deepwater Gulf of Mexico.
(c) | Fourth quarter and full year 2016 include a $319-million reversal relating to Block KG D6 in India. This is classified in the other category of non-operating items. In addition, an impairment reversal of $234 million was also recorded in relation to this block. Full year includes a charge of $601 million relating to the BM-C-34 licence in Brazil, of which $334 million relates to the value ascribed to the licence as part of the accounting for the acquisition of upstream assets from Devon Energy in 2011. The $334-million write-off has been classified within the other category of non-operating items. Full year 2015 includes a $432-million write-off in Libya. |
(d) | Includes BPs share of production of equity-accounted entities in the Upstream segment. |
(e) | Production volume recognition methodology for our Technical Service Contract arrangement in Iraq has been simplified to exclude the impact of oil price movements on lifting imbalances. The comparative data for prior periods has been restated. |
There is no impact on the financial results.
(f) | Realizations are based on sales by consolidated subsidiaries only this excludes equity-accounted entities. |
(g) | Includes condensate, natural gas liquids and bitumen. |
Because of rounding, some totals may not agree exactly with the sum of their component parts.
7
Downstream
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
(644 | ) | 1,457 | Profit (loss) before interest and tax |
6,646 | 5,248 | |||||||||||
1,482 | (558 | ) | Inventory holding (gains) losses* |
(1,484 | ) | 1,863 | ||||||||||
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838 | 899 | RC profit before interest and tax |
5,162 | 7,111 | ||||||||||||
380 | (22 | ) | Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects* |
472 | 434 | |||||||||||
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1,218 | 877 | Underlying RC profit before interest and tax*(a) |
5,634 | 7,545 | ||||||||||||
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(a) | See page 9 for a reconciliation to segment RC profit before interest and tax by region and by business. |
Financial results
The replacement cost profit before interest and tax for the fourth quarter and full year was $899 million and $5,162 million respectively, compared with $838 million and $7,111 million for the same periods in 2015.
The 2016 results include a net non-operating charge of $77 million for the fourth quarter and $24 million for the full year, compared with a net non-operating charge of $548 million and $590 million for the same periods in 2015. Fair value accounting effects had a favourable impact of $99 million in the fourth quarter and an unfavourable impact of $448 million in the full year, compared with a favourable impact of $168 million and $156 million in the same periods of 2015.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the fourth quarter and full year was $877 million and $5,634 million respectively, compared with $1,218 million and $7,545 million for the same periods in 2015.
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 9.
Fuels business
The fuels business reported an underlying replacement cost profit before interest and tax of $417 million for the fourth quarter and $3,727 million for the full year, compared with $888 million and $5,995 million for the same periods in 2015. The results for the quarter and full year reflect a significantly weaker refining environment as well as the impact from a particularly large turnaround at the Whiting refinery. These adverse impacts were partly offset by an increased fuels marketing performance driven by retail growth, higher refining margin capture in our operations and lower costs from simplification and efficiency programmes.
The result for the fourth quarter was also impacted by a weak supply and trading performance.
On 28 December, BP announced that it will be establishing a strategic partnership with Woolworths in Australia. The agreement includes BP acquiring Woolworths fuel and convenience sites for a total consideration of $1.3 billion and entering into a strategic convenience partnership with them. The transaction is subject to regulatory approvals.
On 31 December, the previously-announced dissolution of our German refining joint operation with Rosneft was completed, which will simplify and refocus our refining business in the heart of Europe.
Lubricants business
The lubricants business reported an underlying replacement cost profit before interest and tax of $357 million for the fourth quarter and $1,523 million for the full year, compared with $294 million and $1,384 million for the same periods in 2015. The results for the quarter and full year reflect continued strong performance in our growth markets and premium brands as well as lower costs from simplification and efficiency programmes. This result for the year represents a record performance for lubricants.
Petrochemicals business
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $103 million for the fourth quarter and $384 million for the full year, compared with $36 million and $166 million for the same periods in 2015. The result for the full year reflects strong operations and margin capture supported by the continued rollout of our latest advanced technology. The results for the quarter and full year also benefited from a slightly improved environment, particularly in olefins and derivatives.
Outlook
Looking to the first quarter of 2017, we expect a similar level of refining margins and lower turnaround activity versus the fourth quarter.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 33.
8
Downstream
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Underlying RC profit before interest and tax - by region |
||||||||||||||||
477 | (371 | ) | US |
853 | 2,599 | |||||||||||
741 | 1,248 | Non-US |
4,781 | 4,946 | ||||||||||||
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1,218 | 877 | 5,634 | 7,545 | |||||||||||||
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|||||||||
Non-operating items |
||||||||||||||||
(196 | ) | (122 | ) | US |
(48 | ) | (86 | ) | ||||||||
(352 | ) | 45 | Non-US |
24 | (504 | ) | ||||||||||
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(548 | ) | (77 | ) | (24 | ) | (590 | ) | |||||||||
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|||||||||
Fair value accounting effects |
||||||||||||||||
124 | 22 | US |
(321 | ) | 102 | |||||||||||
44 | 77 | Non-US |
(127 | ) | 54 | |||||||||||
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|||||||||
168 | 99 | (448 | ) | 156 | ||||||||||||
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|||||||||
RC profit before interest and tax |
||||||||||||||||
405 | (471 | ) | US |
484 | 2,615 | |||||||||||
433 | 1,370 | Non-US |
4,678 | 4,496 | ||||||||||||
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|||||||||
838 | 899 | 5,162 | 7,111 | |||||||||||||
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|||||||||
Underlying RC profit before interest and tax - by business(a)(b) |
||||||||||||||||
888 | 417 | Fuels |
3,727 | 5,995 | ||||||||||||
294 | 357 | Lubricants |
1,523 | 1,384 | ||||||||||||
36 | 103 | Petrochemicals |
384 | 166 | ||||||||||||
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|||||||||
1,218 | 877 | 5,634 | 7,545 | |||||||||||||
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|||||||||
Non-operating items and fair value accounting effects(c) |
||||||||||||||||
(220 | ) | 103 | Fuels |
(390 | ) | (137 | ) | |||||||||
(17 | ) | (81 | ) | Lubricants |
(84 | ) | (143 | ) | ||||||||
(143 | ) | | Petrochemicals |
2 | (154 | ) | ||||||||||
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|||||||||
(380 | ) | 22 | (472 | ) | (434 | ) | ||||||||||
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|||||||||
RC profit before interest and tax(a)(b) |
||||||||||||||||
668 | 520 | Fuels |
3,337 | 5,858 | ||||||||||||
277 | 276 | Lubricants |
1,439 | 1,241 | ||||||||||||
(107 | ) | 103 | Petrochemicals |
386 | 12 | |||||||||||
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|||||||||
838 | 899 | 5,162 | 7,111 | |||||||||||||
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|||||||||
13.2 | 11.4 | BP average refining marker margin (RMM)* ($/bbl) |
11.8 | 17.0 | ||||||||||||
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|||||||||
Refinery throughputs (mb/d) |
||||||||||||||||
700 | 604 | US |
646 | 657 | ||||||||||||
776 | 806 | Europe |
803 | 794 | ||||||||||||
238 | 234 | Rest of World |
236 | 254 | ||||||||||||
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1,714 | 1,644 | 1,685 | 1,705 | |||||||||||||
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95.5 | 94.9 | Refining availability* (%) |
95.3 | 94.7 | ||||||||||||
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|||||||||
Marketing sales of refined products (mb/d) |
||||||||||||||||
1,267 | 1,146 | US |
1,134 | 1,158 | ||||||||||||
1,188 | 1,166 | Europe |
1,179 | 1,199 | ||||||||||||
476 | 540 | Rest of World |
512 | 478 | ||||||||||||
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2,931 | 2,852 | 2,825 | 2,835 | |||||||||||||
2,883 | 2,836 | Trading/supply sales of refined products |
2,775 | 2,770 | ||||||||||||
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|||||||||
5,814 | 5,688 | Total sales volumes of refined products |
5,600 | 5,605 | ||||||||||||
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Petrochemicals production (kte) |
||||||||||||||||
938 | 546 | US |
2,564 | 3,666 | ||||||||||||
727 | 930 | Europe |
3,729 | 3,527 | ||||||||||||
2,002 | 2,071 | Rest of World |
7,934 | 7,567 | ||||||||||||
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3,667 | 3,547 | 14,227 | 14,760 | |||||||||||||
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(a) | Segment-level overhead expenses are included in the fuels business result. |
(b) | BPs share of income from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany is reported in the fuels business. |
(c) | For Downstream, fair value accounting effects arise solely in the fuels business. |
9
Rosneft
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016(a) | $ million | 2016(a) | 2015 | ||||||||||||
189 | 182 | Profit before interest and tax(b) |
643 | 1,314 | ||||||||||||
46 | (24 | ) | Inventory holding (gains) losses* |
(53 | ) | (4 | ) | |||||||||
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235 | 158 | RC profit before interest and tax |
590 | 1,310 | ||||||||||||
| (23 | ) | Net charge (credit) for non-operating items* |
(23 | ) | | ||||||||||
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235 | 135 | Underlying RC profit before interest and tax* |
567 | 1,310 | ||||||||||||
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|
Financial results
Replacement cost profit before interest and tax for the fourth quarter and full year was $158 million and $590 million respectively, compared with $235 million and $1,310 million for the same periods in 2015.
After adjusting for non-operating items, the underlying replacement cost profit before interest and tax for the fourth quarter and full year was $135 million and $567 million respectively. There were no non-operating items in the fourth quarter and full year of 2015.
Compared with the same period in 2015, the result for the fourth quarter was primarily affected by increased government take, partially offset by favourable duty lag effects and higher oil prices. For the full year, the result was primarily affected by lower oil prices and increased government take, partially offset by favourable duty lag effects.
In June 2016 Rosnefts annual general meeting adopted a resolution to pay a dividend of 11.75 Russian roubles per ordinary share in relation to the 2015 annual results. BP received a dividend of $332 million, after the deduction of withholding tax, in July 2016.
Key events
On 7 December an agreement was signed to sell 19.5% from Rosneftegazs 69.5% shareholding in Rosneft to a consortium of international investors, comprising Qatar Investment Authority and Glencore. Following completion of the transaction in December, at the year-end Rosneftegazs shareholding in Rosneft was 50% plus one share. Rosneftegaz is Rosnefts largest shareholder and is wholly owned by the Russian government.
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016(a) | 2016(a) | 2015 | |||||||||||||
Production (net of royalties) (BP share) |
||||||||||||||||
811 | 919 | Liquids* (mb/d) |
840 | 813 | ||||||||||||
1,261 | 1,347 | Natural gas (mmcf/d) |
1,279 | 1,195 | ||||||||||||
1,028 | 1,152 | Total hydrocarbons* (mboe/d) |
1,060 | 1,019 | ||||||||||||
|
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|
|
|
(a) | The operational and financial information of the Rosneft segment for the fourth quarter and full year is based on preliminary operational and financial results of Rosneft for the full year ended 31 December 2016. Actual results may differ from these amounts. |
(b) | The Rosneft segment result includes equity-accounted earnings arising from BPs 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BPs purchase of its interest in Rosneft and the amortization of the deferred gain relating to the disposal of BPs interest in TNK-BP. These adjustments have increased the reported profit before interest and tax for the fourth quarter and full year of 2016, as shown in the table above, compared with the equivalent amount in Russian roubles that we expect Rosneft to report in its own financial statements under IFRS. BPs share of Rosnefts profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BPs share of Rosnefts earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation. |
10
Other businesses and corporate
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Profit (loss) before interest and tax |
||||||||||||||||
(328 | ) | (674 | ) | Gulf of Mexico oil spill |
(6,640 | ) | (11,709 | ) | ||||||||
(627 | ) | (443 | ) | Other |
(1,517 | ) | (1,768 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(955 | ) | (1,117 | ) | Profit (loss) before interest and tax |
(8,157 | ) | (13,477 | ) | ||||||||
| | Inventory holding (gains) losses* |
| | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(955 | ) | (1,117 | ) | RC profit (loss) before interest and tax |
(8,157 | ) | (13,477 | ) | ||||||||
Net charge (credit) for non-operating items* |
||||||||||||||||
328 | 674 | Gulf of Mexico oil spill |
6,640 | 11,709 | ||||||||||||
328 | 19 | Other |
279 | 547 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
656 | 693 | Net charge (credit) for non-operating items |
6,919 | 12,256 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(299 | ) | (424 | ) | Underlying RC profit (loss) before interest and tax* |
(1,238 | ) | (1,221 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Underlying RC profit (loss) before interest and tax |
||||||||||||||||
(107 | ) | 50 | US |
(276 | ) | (439 | ) | |||||||||
(192 | ) | (474 | ) | Non-US |
(962 | ) | (782 | ) | ||||||||
|
|
|
|
|
|
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|
|||||||||
(299 | ) | (424 | ) | (1,238 | ) | (1,221 | ) | |||||||||
|
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|
|
|
|
|
|
|||||||||
Non-operating items |
||||||||||||||||
(624 | ) | (672 | ) | US |
(6,824 | ) | (12,143 | ) | ||||||||
(32 | ) | (21 | ) | Non-US |
(95 | ) | (113 | ) | ||||||||
|
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|
|
|||||||||
(656 | ) | (693 | ) | (6,919 | ) | (12,256 | ) | |||||||||
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|
|||||||||
RC profit (loss) before interest and tax |
||||||||||||||||
(731 | ) | (622 | ) | US |
(7,100 | ) | (12,582 | ) | ||||||||
(224 | ) | (495 | ) | Non-US |
(1,057 | ) | (895 | ) | ||||||||
|
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|||||||||
(955 | ) | (1,117 | ) | (8,157 | ) | (13,477 | ) | |||||||||
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|
Other businesses and corporate comprises biofuels and wind businesses, shipping, treasury (which includes interest income on the groups cash and cash equivalents), corporate activities including centralized functions, and the costs of the Gulf of Mexico oil spill.
Financial results
The replacement cost loss before interest and tax for the fourth quarter and full year was $1,117 million and $8,157 million respectively, compared with $955 million and $13,477 million for the same periods in 2015.
The fourth-quarter result included a net non-operating charge of $693 million, compared with a net non-operating charge of $656 million in 2015. The charge for the quarter primarily relates to the Gulf of Mexico oil spill and reflects the latest estimate for claims and associated costs and other items. For the full year, the net non-operating charge was $6,919 million, compared with a net non-operating charge of $12,256 million a year ago, both primarily relating to costs for the Gulf of Mexico oil spill. For further information see Note 2 on page 18.
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the fourth quarter and full year was $424 million and $1,238 million respectively, compared with $299 million and $1,221 million for the same periods in 2015. The result for the quarter was impacted by adverse foreign exchange effects.
Biofuels
The net ethanol-equivalent production (which includes ethanol and sugar) for the fourth quarter and full year was 98 million litres and 733 million litres, compared with 189 million litres and 795 million litres for the same periods in 2015.
Wind
Net wind generation capacity*(a) was 1,474MW at 31 December 2016 compared with 1,588MW at 31 December 2015. BPs net share of wind generation for the fourth quarter and full year was 1,154GWh and 4,389GWh respectively, compared with 1,253GWh and 4,424GWh for the same periods in 2015.
Outlook
In 2017, Other businesses and corporate average quarterly charges, excluding non-operating items, are expected to be around $350 million although this will fluctuate from quarter to quarter.
(a) | Capacity figures include 22.5MW in the Netherlands managed by our Downstream segment at 31 December 2016, and 32MW at 31 December 2015. |
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 33.
11
Group income statement
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
49,172 | 51,007 | Sales and other operating revenues (Note 5) |
183,008 | 222,894 | ||||||||||||
(615 | ) | 489 | Earnings from joint ventures after interest and tax |
966 | (28 | ) | ||||||||||
303 | 263 | Earnings from associates after interest and tax |
994 | 1,839 | ||||||||||||
145 | 114 | Interest and other income |
506 | 611 | ||||||||||||
228 | 248 | Gains on sale of businesses and fixed assets |
1,132 | 666 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
49,233 | 52,121 | Total revenues and other income |
186,606 | 225,982 | ||||||||||||
36,893 | 37,883 | Purchases |
132,219 | 164,790 | ||||||||||||
6,448 | 6,595 | Production and manufacturing expenses(a) |
29,077 | 37,040 | ||||||||||||
263 | 199 | Production and similar taxes (Note 6) |
683 | 1,036 | ||||||||||||
3,881 | 3,642 | Depreciation, depletion and amortization |
14,505 | 15,219 | ||||||||||||
1,386 | (305 | ) | Impairment and losses on sale of businesses and fixed assets |
(1,664 | ) | 1,909 | ||||||||||
923 | 314 | Exploration expense |
1,721 | 2,353 | ||||||||||||
3,082 | 2,692 | Distribution and administration expenses |
10,495 | 11,553 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,643 | ) | 1,101 | Profit (loss) before interest and taxation |
(430 | ) | (7,918 | ) | |||||||||
379 | 434 | Finance costs(a) |
1,675 | 1,347 | ||||||||||||
78 | 50 | Net finance expense relating to pensions and other post-retirement benefits |
190 | 306 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(4,100 | ) | 617 | Profit (loss) before taxation |
(2,295 | ) | (9,571 | ) | |||||||||
(776 | ) | 74 | Taxation(a) |
(2,467 | ) | (3,171 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,324 | ) | 543 | Profit (loss) for the period |
172 | (6,400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Attributable to |
||||||||||||||||
(3,307 | ) | 497 | BP shareholders |
115 | (6,482 | ) | ||||||||||
(17 | ) | 46 | Non-controlling interests |
57 | 82 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,324 | ) | 543 | 172 | (6,400 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per share (Note 7) |
||||||||||||||||
Profit (loss) for the period attributable to BP shareholders |
||||||||||||||||
Per ordinary share (cents) |
||||||||||||||||
(18.01 | ) | 2.62 | Basic |
0.61 | (35.39 | ) | ||||||||||
(18.01 | ) | 2.60 | Diluted |
0.60 | (35.39 | ) | ||||||||||
Per ADS (dollars) |
||||||||||||||||
(1.08 | ) | 0.16 | Basic |
0.04 | (2.12 | ) | ||||||||||
(1.08 | ) | 0.16 | Diluted |
0.04 | (2.12 | ) | ||||||||||
|
|
|
|
|
|
|
|
(a) | See Note 2 for information on the impact of the Gulf of Mexico oil spill on these income statement line items. |
12
Financial statements (continued)
Group statement of comprehensive income
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
(3,324 | ) | 543 | Profit (loss) for the period |
172 | (6,400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income |
||||||||||||||||
Items that may be reclassified subsequently to profit or loss |
||||||||||||||||
(958 | ) | (777 | ) | Currency translation differences |
254 | (4,119 | ) | |||||||||
| 24 | Exchange gains (losses) on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets |
30 | 23 | ||||||||||||
| | Available-for-sale investments |
1 | 1 | ||||||||||||
(24 | ) | (204 | ) | Cash flow hedges marked to market |
(639 | ) | (178 | ) | ||||||||
29 | 86 | Cash flow hedges reclassified to the income statement |
196 | 249 | ||||||||||||
6 | 32 | Cash flow hedges reclassified to the balance sheet |
81 | 22 | ||||||||||||
(233 | ) | 172 | Share of items relating to equity-accounted entities, net of tax |
833 | (814 | ) | ||||||||||
(43 | ) | 97 | Income tax relating to items that may be reclassified |
13 | 257 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,223 | ) | (570 | ) | 769 | (4,559 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,570 | 3,484 | Items that will not be reclassified to profit or loss Remeasurements of the net pension and other post-retirement benefit liability or asset |
(2,496 | ) | 4,139 | |||||||||||
| | Share of items relating to equity-accounted entities, net of tax |
| (1 | ) | |||||||||||
(881 | ) | (765 | ) | Income tax relating to items that will not be reclassified |
739 | (1,397 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
1,689 | 2,719 | (1,757 | ) | 2,741 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
466 | 2,149 | Other comprehensive income |
(988 | ) | (1,818 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,858 | ) | 2,692 | Total comprehensive income |
(816 | ) | (8,218 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Attributable to |
||||||||||||||||
(2,836 | ) | 2,667 | BP shareholders |
(846 | ) | (8,259 | ) | |||||||||
(22 | ) | 25 | Non-controlling interests |
30 | 41 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,858 | ) | 2,692 | (816 | ) | (8,218 | ) | ||||||||||
|
|
|
|
|
|
|
|
13
Financial statements (continued)
Group statement of changes in equity
BP | ||||||||||||
shareholders | Non-controlling | Total | ||||||||||
$ million | equity | interests | equity | |||||||||
At 1 January 2016 |
97,216 | 1,171 | 98,387 | |||||||||
|
|
|
|
|
|
|||||||
Total comprehensive income |
(846 | ) | 30 | (816 | ) | |||||||
Dividends |
(4,611 | ) | (107 | ) | (4,718 | ) | ||||||
Share-based payments, net of tax(a) |
2,991 | | 2,991 | |||||||||
Share of equity-accounted entities change in equity, net of tax |
106 | | 106 | |||||||||
Transactions involving non-controlling interests |
430 | 463 | 893 | |||||||||
|
|
|
|
|
|
|||||||
At 31 December 2016 |
95,286 | 1,557 | 96,843 | |||||||||
|
|
|
|
|
|
|||||||
BP | ||||||||||||
shareholders | Non-controlling | Total | ||||||||||
$ million | equity | interests | equity | |||||||||
|
|
|
|
|
|
|||||||
At 1 January 2015 |
111,441 | 1,201 | 112,642 | |||||||||
|
|
|
|
|
|
|||||||
Total comprehensive income |
(8,259 | ) | 41 | (8,218 | ) | |||||||
Dividends |
(6,659 | ) | (91 | ) | (6,750 | ) | ||||||
Share-based payments, net of tax |
656 | | 656 | |||||||||
Share of equity-accounted entities change in equity, net of tax |
40 | | 40 | |||||||||
Transactions involving non-controlling interests |
(3 | ) | 20 | 17 | ||||||||
|
|
|
|
|
|
|||||||
At 31 December 2015 |
97,216 | 1,171 | 98,387 | |||||||||
|
|
|
|
|
|
(a) | Includes amounts relating to the issue of new ordinary shares in relation to the renewal of a 10% interest in the Abu Dhabi onshore oil concession. |
14
Financial statements (continued)
Group balance sheet
31 December | 31 December | |||||||
$ million | 2016 | 2015 | ||||||
Non-current assets |
||||||||
Property, plant and equipment |
129,757 | 129,758 | ||||||
Goodwill |
11,194 | 11,627 | ||||||
Intangible assets |
18,183 | 18,660 | ||||||
Investments in joint ventures |
8,609 | 8,412 | ||||||
Investments in associates |
14,092 | 9,422 | ||||||
Other investments |
1,033 | 1,002 | ||||||
|
|
|
|
|||||
Fixed assets |
182,868 | 178,881 | ||||||
Loans |
532 | 529 | ||||||
Trade and other receivables |
1,474 | 2,216 | ||||||
Derivative financial instruments |
4,359 | 4,409 | ||||||
Prepayments |
945 | 1,003 | ||||||
Deferred tax assets |
4,741 | 1,545 | ||||||
Defined benefit pension plan surpluses |
584 | 2,647 | ||||||
|
|
|
|
|||||
195,503 | 191,230 | |||||||
|
|
|
|
|||||
Current assets |
||||||||
Loans |
259 | 272 | ||||||
Inventories |
17,655 | 14,142 | ||||||
Trade and other receivables |
20,675 | 22,323 | ||||||
Derivative financial instruments |
3,016 | 4,242 | ||||||
Prepayments |
1,486 | 1,838 | ||||||
Current tax receivable |
1,194 | 599 | ||||||
Other investments |
44 | 219 | ||||||
Cash and cash equivalents |
23,484 | 26,389 | ||||||
|
|
|
|
|||||
67,813 | 70,024 | |||||||
Assets classified as held for sale |
| 578 | ||||||
|
|
|
|
|||||
67,813 | 70,602 | |||||||
|
|
|
|
|||||
Total assets |
263,316 | 261,832 | ||||||
|
|
|
|
|||||
Current liabilities |
||||||||
Trade and other payables |
37,915 | 31,949 | ||||||
Derivative financial instruments |
2,991 | 3,239 | ||||||
Accruals |
5,136 | 6,261 | ||||||
Finance debt |
6,634 | 6,944 | ||||||
Current tax payable |
1,666 | 1,080 | ||||||
Provisions |
4,012 | 5,154 | ||||||
|
|
|
|
|||||
58,354 | 54,627 | |||||||
Liabilities directly associated with assets classified as held for sale |
| 97 | ||||||
|
|
|
|
|||||
58,354 | 54,724 | |||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Other payables |
13,946 | 2,910 | ||||||
Derivative financial instruments |
5,513 | 4,283 | ||||||
Accruals |
469 | 890 | ||||||
Finance debt |
51,666 | 46,224 | ||||||
Deferred tax liabilities |
7,238 | 9,599 | ||||||
Provisions |
20,412 | 35,960 | ||||||
Defined benefit pension plan and other post-retirement benefit plan deficits |
8,875 | 8,855 | ||||||
|
|
|
|
|||||
108,119 | 108,721 | |||||||
|
|
|
|
|||||
Total liabilities |
166,473 | 163,445 | ||||||
|
|
|
|
|||||
Net assets |
96,843 | 98,387 | ||||||
|
|
|
|
|||||
Equity |
||||||||
BP shareholders equity |
95,286 | 97,216 | ||||||
Non-controlling interests |
1,557 | 1,171 | ||||||
|
|
|
|
|||||
Total equity |
96,843 | 98,387 | ||||||
|
|
|
|
15
Financial statements (continued)
Condensed group cash flow statement
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Operating activities |
||||||||||||||||
(4,100 | ) | 617 | Profit (loss) before taxation |
(2,295 | ) | (9,571 | ) | |||||||||
Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities |
||||||||||||||||
4,578 | 3,808 | Depreciation, depletion and amortization and exploration expenditure written off |
15,779 | 17,048 | ||||||||||||
1,158 | (553 | ) | Impairment and (gain) loss on sale of businesses and fixed assets |
(2,796 | ) | 1,243 | ||||||||||
1,028 | (605 | ) | Earnings from equity-accounted entities, less dividends received |
(855 | ) | (197 | ) | |||||||||
164 | 310 | Net charge for interest and other finance expense less net interest paid |
795 | 502 | ||||||||||||
167 | 150 | Share-based payments |
779 | 321 | ||||||||||||
(464 | ) | (347 | ) | Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans |
(467 | ) | (592 | ) | ||||||||
591 | (629 | ) | Net charge for provisions, less payments |
4,487 | 11,792 | |||||||||||
2,978 | 393 | Movements in inventories and other current and non-current assets and liabilities |
(3,198 | ) | 843 | |||||||||||
(294 | ) | (716 | ) | Income taxes paid |
(1,538 | ) | (2,256 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
5,806 | 2,428 | Net cash provided by operating activities |
10,691 | 19,133 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities |
||||||||||||||||
(5,126 | ) | (4,658 | ) | Capital expenditure |
(16,701 | ) | (18,648 | ) | ||||||||
(10 | ) | (1 | ) | Acquisitions, net of cash acquired |
(1 | ) | 23 | |||||||||
(87 | ) | (37 | ) | Investment in joint ventures |
(50 | ) | (265 | ) | ||||||||
(888 | ) | (226 | ) | Investment in associates |
(700 | ) | (1,312 | ) | ||||||||
17 | 391 | Proceeds from disposal of fixed assets |
1,372 | 1,066 | ||||||||||||
215 | 78 | Proceeds from disposal of businesses, net of cash disposed |
1,259 | 1,726 | ||||||||||||
1 | 7 | Proceeds from loan repayments |
68 | 110 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(5,878 | ) | (4,446 | ) | Net cash used in investing activities |
(14,753 | ) | (17,300 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities |
||||||||||||||||
185 | 3,069 | Proceeds from long-term financing |
12,442 | 8,173 | ||||||||||||
(3,559 | ) | (1,733 | ) | Repayments of long-term financing |
(6,685 | ) | (6,426 | ) | ||||||||
(124 | ) | 375 | Net increase (decrease) in short-term debt |
51 | 473 | |||||||||||
(5 | ) | 126 | Net increase (decrease) in non-controlling interests |
887 | (5 | ) | ||||||||||
(1,541 | ) | (1,182 | ) | Dividends paid BP shareholders |
(4,611 | ) | (6,659 | ) | ||||||||
(20 | ) | (24 | ) |
non-controlling interests |
(107 | ) | (91 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(5,064 | ) | 631 | Net cash provided by (used in) financing activities |
1,977 | (4,535 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(177 | ) | (649 | ) | Currency translation differences relating to cash and cash equivalents |
(820 | ) | (672 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(5,313 | ) | (2,036 | ) | Increase (decrease) in cash and cash equivalents |
(2,905 | ) | (3,374 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
31,702 | 25,520 | Cash and cash equivalents at beginning of period |
26,389 | 29,763 | ||||||||||||
26,389 | 23,484 | Cash and cash equivalents at end of period |
23,484 | 26,389 | ||||||||||||
|
|
|
|
|
|
|
|
16
Financial statements (continued)
Notes
1. | Basis of preparation |
The results for the interim periods and for the year ended 31 December 2016 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 2015 included in BP Annual Report and Form 20-F 2015.
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 European Union (EU) and in accordance with the provisions of the UK Companies Act 2006. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the groups 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 2016, which do not differ significantly from those used in BP Annual Report and Form 20-F 2015.
In BP Annual Report and Form 20-F 2015 we disclosed a significant estimate or judgement relating to provisions arising from the Gulf of Mexico oil spill in 2010. At that time, no reliable estimate could be made of any business economic loss (BEL) claims under the Plaintiffs Steering Committee (PSC) settlement that were not yet processed or processed but not yet paid, except where an eligibility notice had been issued and was not subject to appeal by BP within the Deepwater Horizon Court Supervised Settlement Program claims facility (DHCSSP). A reliable estimate could also not be made in relation to securities-related litigation and other litigation, including economic loss and property damage claims from parties excluded from and/or who opted out of the PSC settlement. No amounts were provided for these items and they were disclosed as contingent liabilities.
As a result of developments during the second quarter of 2016 sufficient information existed in order to make a reliable estimate of the amounts that BP will pay relating to all outstanding BEL claims under the DHCSSP, securities class actions and economic loss and property damage claims from parties who were excluded from and/or opted out of the PSC settlement. Liabilities for these items were therefore recognized in the financial statements in the second quarter of 2016. See Note 2 for further information.
In BP Annual Report and Form 20-F 2015 Financial statements Note 1 we disclosed a significant estimate or judgement relating to the recoverability of asset values, including oil and natural gas price assumptions used to estimate future cash flows and the discount rates applied to determine the recoverable amounts of assets when performing impairment tests. During the third quarter of 2016, the price assumptions and discount rates used in impairment tests were revised.
From the third quarter onwards, the long-term price assumptions used to determine recoverable amount based on fair value less costs of disposal from 2022 onwards were derived from $75 per barrel for Brent and $4/mmBtu for Henry Hub (both in 2015 prices) inflated for the remaining life of the asset. To determine the recoverable amount based on value in use, the price assumptions were inflated to 2022 but from 2022 onwards were not inflated.
For both value-in-use and fair value less costs of disposal impairment tests performed from the third quarter onwards, the price assumptions used have been set such that there is a gradual transition over a five-year period from current market prices to the long-term price assumptions for 2022, as noted above.
The post-tax discount rate applied to Upstream asset cash flows used to calculate fair value less costs of disposal from the third quarter onwards was 6%. For value-in-use calculations from the third quarter onwards the pre-tax discount rate applied was 9%. For both calculations a premium of 2% continues to be added for assets located in higher-risk countries.
See Note 3 for further information on impairment charges and reversals.
17
Financial statements (continued)
Notes
2. | Gulf of Mexico oil spill |
(a) Overview
The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2015 - Financial statements - Note 2 and Legal proceedings on page 237.
During the second quarter, significant progress was made in resolving outstanding claims arising from the 2010 Deepwater Horizon accident and oil spill and a reliable estimate was determined for all remaining material liabilities arising from the incident.
The group income statement includes a pre-tax charge of $799 million for the fourth quarter and $7,134 million for the full year in relation to the Gulf of Mexico oil spill. The cumulative pre-tax income statement charge since the incident, in April 2010, amounts to $62,585 million. The charge for the fourth quarter reflects the latest estimate for claims and associated costs, finance costs relating to unwinding of discounting effects and other items. The charge for the full year is primarily attributable to the recognition of additional provisions for claims, as well as the cost of the securities claims settlement with the certified class of post-explosion ADS purchasers which was agreed in June 2016 and functional costs.
The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for the periods presented. The income statement, balance sheet and cash flow statement impacts are included within the relevant line items in those statements as set out below.
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
Income statement | ||||||||||||||||
328 | 674 | Production and manufacturing expenses | 6,640 | 11,709 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(328 | ) | (674 | ) | Profit (loss) before interest and taxation | (6,640 | ) | (11,709 | ) | ||||||||
115 | 125 | Finance costs | 494 | 247 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(443 | ) | (799 | ) | Profit (loss) before taxation | (7,134 | ) | (11,956 | ) | ||||||||
(134 | ) | 268 | Taxation | 3,105 | 3,492 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(577 | ) | (531 | ) | Profit (loss) for the period | (4,029 | ) | (8,464 | ) | ||||||||
|
|
|
|
|
|
|
|
$ million | 31 December 2016 |
31 December 2015 |
||||||
Balance sheet |
||||||||
Current assets |
||||||||
Trade and other receivables |
194 | 686 | ||||||
Current liabilities |
||||||||
Trade and other payables |
(3,056 | ) | (693 | ) | ||||
Accruals |
| (40 | ) | |||||
Provisions |
(2,330 | ) | (3,076 | ) | ||||
|
|
|
|
|||||
Net current assets (liabilities) |
(5,192 | ) | (3,123 | ) | ||||
|
|
|
|
|||||
Non-current assets |
||||||||
Deferred tax assets |
2,973 | | ||||||
Non-current liabilities |
||||||||
Other payables |
(13,522 | ) | (2,057 | ) | ||||
Accruals |
| (186 | ) | |||||
Provisions |
(112 | ) | (13,431 | ) | ||||
Deferred tax liabilities |
5,119 | 5,200 | ||||||
|
|
|
|
|||||
Net non-current assets (liabilities) |
(5,542 | ) | (10,474 | ) | ||||
|
|
|
|
|||||
Net assets (liabilities) |
(10,734 | ) | (13,597 | ) | ||||
|
|
|
|
18
Financial statements (continued)
Notes
2. | Gulf of Mexico oil spill (continued) |
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
Cash flow statement - Operating activities | ||||||||||||||||
(443 | ) | (799 | ) | Profit (loss) before taxation | (7,134 | ) | (11,956 | ) | ||||||||
Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities |
||||||||||||||||
115 | 125 | Net charge for interest and other finance expense, less net interest paid | 494 | 247 | ||||||||||||
227 | (376 | ) | Net charge for provisions, less payments | 4,353 | 11,296 | |||||||||||
(36 | ) | (993 | ) | Movements in inventories and other current and non-current assets and liabilities | (4,818 | ) | (732 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(137 | ) | (2,043 | ) | Pre-tax cash flows | (7,105 | ) | (1,145 | ) | ||||||||
|
|
|
|
|
|
|
|
Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an outflow of $2,043 million and an outflow of $6,892 million in the fourth quarter and full year of 2016 respectively. For the same periods in 2015, the amounts were an outflow of $137 million and an outflow of $1,130 million respectively.
Trust fund
During the first half of 2016, the remaining cash in the Deepwater Horizon Oil Spill Trust (the Trust) was exhausted and BP commenced paying claims and other costs previously funded from the Trust. For certain costs, these payments are made by BP into a qualified settlement fund, the fund then distributes the amounts to claimants; $976 million was paid into a qualified settlement fund during the fourth quarter ($3,210 million during the full year).
(b) Provisions and contingent liabilities
Provisions
BP had recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, litigation and claims, and Clean Water Act penalties. Movements in the fourth quarter, all of which relate to litigation and claims provisions, are presented in the table below.
$ million | Total | |||
At 1 October 2016 |
5,132 | |||
Net increase in provision |
675 | |||
Reclassified to other payables |
(1,202 | ) | ||
Utilization paid by BP |
(1,051 | ) | ||
paid by settlement fund |
(1,112 | ) | ||
|
|
|||
At 31 December 2016 |
2,442 | |||
|
|
|||
Of which current |
2,330 | |||
non-current |
112 | |||
|
|
Movements in each class of provision during the full year are presented in the table below.
Environmental | Litigation and claims |
Clean Water Act penalties |
Total | |||||||||||||
$ million | ||||||||||||||||
At 1 January 2016 |
5,919 | 6,459 | 4,129 | 16,507 | ||||||||||||
Net increase in provision |
| 6,440 | | 6,440 | ||||||||||||
Unwinding of discount |
52 | 25 | 38 | 115 | ||||||||||||
Reclassified to other payables |
(5,970 | ) | (4,943 | ) | (4,167 | ) | (15,080 | ) | ||||||||
Utilization paid by BP |
(1 | ) | (2,086 | ) | | (2,087 | ) | |||||||||
paid by settlement fund or Trust |
| (3,453 | ) | | (3,453 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
At 31 December 2016 |
| 2,442 | | 2,442 | ||||||||||||
|
|
|
|
|
|
|
|
19
Financial statements (continued)
Notes
2. | Gulf of Mexico oil spill (continued) |
Environmental
The environmental provisions relating to natural resource damage costs and the early restoration framework agreement were reclassified to Other payables during the first quarter following approval by the Court in April 2016 of the Consent Decree between the United States, the Gulf states and BP. Remaining amounts related to early restoration were paid during the second quarter.
Litigation and claims
The litigation and claims provision includes amounts for the future cost of resolving claims by individuals and businesses for damage to real or personal property, lost profits or impairment of earning capacity and loss of subsistence use of natural resources. Claims administration costs and legal costs have also been provided for.
At 31 December 2015, the litigation and claims provision included amounts provided under the state claims settlement agreement with the Gulf states in relation to state claims that had not yet been paid. These amounts were reclassified to Other payables during the first quarter and are payable over 18 years.
Litigation and claims PSC settlement
The provision for the cost associated with the 2012 PSC settlement has been determined based upon an expected value of the remaining claims, including business economic loss claims. During the fourth quarter, significant progress was made in resolving business economic loss claims. Claims were determined by the DHCSSP in accordance with the PSC settlement agreement and in addition, certain claims were settled by BP. The provision has been increased in the fourth quarter to reflect the estimate of the cost of the remaining claims which are expected to be determined by the DHCSSP or resolved by BP, and associated costs. Amounts to resolve remaining claims are expected to be substantially paid in 2017. However, the amounts ultimately payable may differ from the amount provided and the timing of payment is uncertain.
Litigation and claims Other claims
An estimate of the cost of the remaining economic loss and property damage claims from individuals and businesses that either opted out of the PSC settlement and/or were excluded from that settlement, is recognized in provisions.
Clean Water Act penalties
The provision previously recognized for penalties under Section 311 of the Clean Water Act, as determined by the civil settlement with the United States, was reclassified to Other payables during the first quarter following approval by the Court of the Consent Decree. The amount is payable in instalments over 15 years, commencing April 2017. The unpaid balance of this penalty accrues interest at a fixed rate.
Further information on provisions is provided in BP Annual Report and Form 20-F 2015 Financial statements Note 2.
Contingent liabilities
Any further outstanding Deepwater Horizon related claims are not expected to have a material impact on the groups financial performance.
3. | Impairment of fixed assets |
Included within the line item in the income statement for Impairment and losses on sale of businesses and fixed assets is a net impairment reversal for the fourth quarter of $375 million. The net impairment reversal for the full year is $1,925 million.
The net impairment reversal in Upstream in the fourth quarter is $442 million, comprising impairment charges of $339 million offset by impairment reversals of $781 million. The impairment reversals include $234 million relating to assets in India, with the recoverable amount calculated on a fair value basis. In addition $319 million of exploration costs were written back relating to India.
The net impairment reversal in Upstream for the full year is $2,003 million, comprising impairment reversals of $3,025 million offset by impairment charges of $1,022 million. The impairment reversals related principally to assets in Angola and the North Sea, for which the recoverable amounts were calculated on a value-in-use basis.
See Note 1 for further information on changes in the discount rate and future price assumptions which have been applied since the third quarter.
20
Financial statements (continued)
Notes
4. | Analysis of replacement cost profit (loss) before interest and tax and reconciliation to profit (loss) before taxation |
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
(2,280 | ) | 692 | Upstream | 574 | (937 | ) | ||||||||||
838 | 899 | Downstream | 5,162 | 7,111 | ||||||||||||
235 | 158 | Rosneft | 590 | 1,310 | ||||||||||||
(955 | ) | (1,117 | ) | Other businesses and corporate(a) | (8,157 | ) | (13,477 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,162 | ) | 632 | (1,831 | ) | (5,993 | ) | ||||||||||
65 | (132 | ) | Consolidation adjustment - UPII* | (196 | ) | (36 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,097 | ) | 500 | RC profit (loss) before interest and tax* | (2,027 | ) | (6,029 | ) | |||||||||
Inventory holding gains (losses)* | ||||||||||||||||
(18 | ) | 19 | Upstream |
60 | (30 | ) | ||||||||||
(1,482 | ) | 558 | Downstream |
1,484 | (1,863 | ) | ||||||||||
(46 | ) | 24 | Rosneft (net of tax) |
53 | 4 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,643 | ) | 1,101 | Profit (loss) before interest and tax | (430 | ) | (7,918 | ) | |||||||||
379 | 434 | Finance costs | 1,675 | 1,347 | ||||||||||||
78 | 50 | Net finance expense relating to pensions and other post-retirement benefits | 190 | 306 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(4,100 | ) | 617 | Profit (loss) before taxation | (2,295 | ) | (9,571 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
RC profit (loss) before interest and tax | ||||||||||||||||
(1,429 | ) | (1,646 | ) | US | (8,311 | ) | (12,243 | ) | ||||||||
(668 | ) | 2,146 | Non-US | 6,284 | 6,214 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,097 | ) | 500 | (2,027 | ) | (6,029 | ) | ||||||||||
|
|
|
|
|
|
|
|
(a) | Includes costs related to the Gulf of Mexico oil spill. See Note 2 for further information. |
5. | Sales and other operating revenues |
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
By segment | ||||||||||||||||
10,212 | 9,129 | Upstream | 33,188 | 43,235 | ||||||||||||
43,463 | 46,834 | Downstream | 167,683 | 200,569 | ||||||||||||
556 | 424 | Other businesses and corporate | 1,667 | 2,048 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
54,231 | 56,387 | 202,538 | 245,852 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Less: sales and other operating revenues between segments | ||||||||||||||||
4,987 | 4,695 | Upstream | 17,581 | 21,949 | ||||||||||||
(133 | ) | 523 | Downstream | 1,291 | 68 | |||||||||||
205 | 162 | Other businesses and corporate | 658 | 941 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
5,059 | 5,380 | 19,530 | 22,958 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Third party sales and other operating revenues | ||||||||||||||||
5,225 | 4,434 | Upstream | 15,607 | 21,286 | ||||||||||||
43,596 | 46,311 | Downstream | 166,392 | 200,501 | ||||||||||||
351 | 262 | Other businesses and corporate | 1,009 | 1,107 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
49,172 | 51,007 | Total sales and other operating revenues | 183,008 | 222,894 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
By geographical area | ||||||||||||||||
16,936 | 18,642 | US | 68,772 | 78,281 | ||||||||||||
34,773 | 37,381 | Non-US | 128,771 | 158,519 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
51,709 | 56,023 | 197,543 | 236,800 | |||||||||||||
2,537 | 5,016 | Less: sales and other operating revenues between areas | 14,535 | 13,906 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
49,172 | 51,007 | 183,008 | 222,894 | |||||||||||||
|
|
|
|
|
|
|
|
21
Financial statements (continued)
Notes
6. | Production and similar taxes |
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
118 | 38 | US | 155 | 215 | ||||||||||||
145 | 161 | Non-US | 528 | 821 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
263 | 199 | 683 | 1,036 | |||||||||||||
|
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|
|
|
|
|
|
7. | Earnings per share and shares in issue |
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.
Fourth 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
Results for the period | ||||||||||||||||
(3,307 | ) | 497 | Profit (loss) for the period attributable to BP shareholders | 115 | (6,482 | ) | ||||||||||
1 | | Less: preference dividend | 1 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,308 | ) | 497 | Profit (loss) attributable to BP ordinary shareholders | 114 | (6,484 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Number of shares (thousand)(a)(b) | ||||||||||||||||
18,369,064 | 18,995,725 | Basic weighted average number of shares outstanding | 18,744,800 | 18,323,646 | ||||||||||||
3,061,510 | 3,165,954 | ADS equivalent | 3,124,133 | 3,053,941 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
18,369,064 | 19,107,599 | Weighted average number of shares outstanding used to calculate diluted earnings per share |
18,855,319 | 18,323,646 | ||||||||||||
3,061,510 | 3,184,599 | ADS equivalent | 3,142,553 | 3,053,941 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
18,412,392 | 19,438,990 | Shares in issue at period-end | 19,438,990 | 18,412,392 | ||||||||||||
3,068,732 | 3,239,831 | ADS equivalent | 3,239,831 | 3,068,732 | ||||||||||||
|
|
|
|
|
|
|
|
(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. |
8. | Dividends |
Dividends payable
BP today announced an interim dividend of 10.00 cents per ordinary share which is expected to be paid on 31 March 2017 to shareholders and American Depositary Share (ADS) holders on the register on 17 February 2017. The corresponding amount in sterling is due to be announced on 20 March 2017, calculated based on the average of the market exchange rates for the four dealing days commencing on 14 March 2017. Holders of ADSs are expected to receive $0.600 per ADS (less applicable fees). A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the fourth quarter dividend and timetable are available at bp.com/dividends and details of the scrip dividend programme are available at bp.com/scrip.
22
Financial statements (continued)
Notes
8. | Dividends (continued) |
Fourth quarter 2015 |
Fourth quarter 2016 |
Year 2016 |
Year 2015 |
|||||||||||||
Dividends paid per ordinary share | ||||||||||||||||
10.000 | 10.000 | cents |
40.000 | 40.000 | ||||||||||||
6.634 | 7.931 | pence |
29.418 | 26.383 | ||||||||||||
60.00 | 60.00 | Dividends paid per ADS (cents) | 240.00 | 240.00 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Scrip dividends | ||||||||||||||||
49.7 | 129.2 | Number of shares issued (millions) | 548.0 | 102.8 | ||||||||||||
289 | 710 | Value of shares issued ($ million) | 2,858 | 642 | ||||||||||||
|
|
|
|
|
|
|
|
9. | Net debt* |
Net debt ratio*
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
53,168 | 58,300 | Gross debt | 58,300 | 53,168 | ||||||||||||
379 | 697 | Fair value (asset) liability of hedges related to finance debt(a) | 697 | 379 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
53,547 | 58,997 | 58,997 | 53,547 | |||||||||||||
26,389 | 23,484 | Less: cash and cash equivalents | 23,484 | 26,389 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
27,158 | 35,513 | Net debt | 35,513 | 27,158 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
98,387 | 96,843 | Equity | 96,843 | 98,387 | ||||||||||||
21.6 | % | 26.8 | % | Net debt ratio | 26.8 | % | 21.6 | % | ||||||||
|
|
|
|
|
|
|
|
Analysis of changes in net debt
Fourth quarter 2015 |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
Opening balance | ||||||||||||||||
57,405 | 58,997 | Finance debt | 53,168 | 52,854 | ||||||||||||
(57 | ) | (1,113 | ) | Fair value (asset) liability of hedges related to finance debt(a) | 379 | (445 | ) | |||||||||
31,702 | 25,520 | Less: cash and cash equivalents | 26,389 | 29,763 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
25,646 | 32,364 | Opening net debt | 27,158 | 22,646 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Closing balance | ||||||||||||||||
53,168 | 58,300 | Finance debt | 58,300 | 53,168 | ||||||||||||
379 | 697 | Fair value (asset) liability of hedges related to finance debt(a) | 697 | 379 | ||||||||||||
26,389 | 23,484 | Less: cash and cash equivalents | 23,484 | 26,389 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
27,158 | 35,513 | Closing net debt | 35,513 | 27,158 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,512 | ) | (3,149 | ) | Decrease (increase) in net debt | (8,355 | ) | (4,512 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(5,136 | ) | (1,387 | ) | Movement in cash and cash equivalents (excluding exchange adjustments) | (2,085 | ) | (2,702 | ) | ||||||||
3,498 | (1,711 | ) | Net cash outflow (inflow) from financing (excluding share capital and dividends) | (5,808 | ) | (2,220 | ) | |||||||||
(33 | ) | (146 | ) | Other movements | 278 | 17 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,671 | ) | (3,244 | ) | Movement in net debt before exchange effects | (7,615 | ) | (4,905 | ) | ||||||||
159 | 95 | Exchange adjustments | (740 | ) | 393 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,512 | ) | (3,149 | ) | Decrease (increase) in net debt | (8,355 | ) | (4,512 | ) | ||||||||
|
|
|
|
|
|
|
|
(a) | 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 $1,962 million (fourth quarter 2015 liability of $1,617 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments. |
23
Financial statements (continued)
Notes
10. | Inventory valuation |
A provision of $501 million was held at 31 December 2016 ($1,295 million at 31 December 2015) to write inventories down to their net realizable value. The net movement charged to the income statement during the fourth quarter 2016 was $13 million (fourth quarter 2015 was a charge of $583 million).
11. | Statutory accounts |
The financial information shown in this publication, which was approved by the Board of Directors on 6 February 2017, is unaudited and does not constitute statutory financial statements. Audited financial information will be published in BP Annual Report and Form 20-F 2016.
24
Additional information
Reconciliation of additions to non-current assets to capital expenditure on an accruals basis
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
6,376 | 7,503 | Additions to non-current assets(a) |
21,204 | 20,080 | ||||||||||||
16 | 23 | Additions to other investments |
48 | 35 | ||||||||||||
(7 | ) | (4 | ) | Element of business combinations not related to non-current assets |
(4 | ) | (31 | ) | ||||||||
(246 | ) | 977 | (Additions to) reductions in decommissioning asset |
656 | (553 | ) | ||||||||||
(23 | ) | (926 | ) | Asset exchanges(b) |
(2,525 | ) | (73 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
6,116 | 7,573 | Capital expenditure on an accruals basis |
19,379 | 19,458 | ||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes additions to property, plant and equipment; goodwill; intangible assets; investments in joint ventures; and investments in associates. |
(b) | Fourth quarter 2016 principally relates to the dissolution of the groups German refining joint operation with Rosneft. Full year 2016 also relates to the contribution of BPs Norwegian upstream business into Aker BP ASA in exchange for a 30% interest in Aker BP ASA. |
Capital expenditure on an accruals basis*
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Capital expenditure on an accruals basis |
||||||||||||||||
5,531 | 6,955 | Organic capital expenditure*(a) |
18,440 | 18,747 | ||||||||||||
585 | 618 | Inorganic capital expenditure* |
939 | 711 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
6,116 | 7,573 | 19,379 | 19,458 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fourth | Fourth | |||||||||||||||
quarter | quarter | Year | Year | |||||||||||||
2015 | 2016 | $ million | 2016 | 2015 | ||||||||||||
Organic capital expenditure by segment |
||||||||||||||||
Upstream |
||||||||||||||||
1,313 | 717 | US |
2,989 | 4,518 | ||||||||||||
3,257 | 5,135 | Non-US(a) |
13,059 | 11,788 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,570 | 5,852 | 16,048 | 16,306 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Downstream |
||||||||||||||||
224 | 317 | US |
784 | 702 | ||||||||||||
610 | 659 | Non-US |
1,357 | 1,399 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
834 | 976 | 2,141 | 2,101 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other businesses and corporate |
||||||||||||||||
37 | 30 | US |
45 | 70 | ||||||||||||
90 | 97 | Non-US |
206 | 270 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
127 | 127 | 251 | 340 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
5,531 | 6,955 | 18,440 | 18,747 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Organic capital expenditure by geographical area |
||||||||||||||||
1,574 | 1,064 | US |
3,818 | 5,290 | ||||||||||||
3,957 | 5,891 | Non-US |
14,622 | 13,457 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
5,531 | 6,955 | 18,440 | 18,747 | |||||||||||||
|
|
|
|
|
|
|
|
(a) | Fourth quarter and full year 2016 include amounts relating to the renewal of a 10% interest in the Abu Dhabi onshore oil concession for which new ordinary shares in BP were issued. |
25
Additional information (continued)
Non-operating items*
Fourth |
Fourth quarter 2016 |
$ million | Year 2016 |
Year 2015 |
||||||||||||
Upstream |
||||||||||||||||
(853 | ) | 479 | Impairment and gain (loss) on sale of businesses and fixed assets(a) |
2,391 | (1,204 | ) | ||||||||||
| | Environmental and other provisions |
(8 | ) | (24 | ) | ||||||||||
(70 | ) | (71 | ) | Restructuring, integration and rationalization costs |
(373 | ) | (410 | ) | ||||||||
18 | (17 | ) | Fair value gain (loss) on embedded derivatives |
32 | 120 | |||||||||||
(734 | ) | 245 | Other(b) |
(289 | ) | (717 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,639 | ) | 636 | 1,753 | (2,235 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Downstream |
||||||||||||||||
(185 | ) | 72 | Impairment and gain (loss) on sale of businesses and fixed assets |
405 | 131 | |||||||||||
(9 | ) | 2 | Environmental and other provisions |
(73 | ) | (108 | ) | |||||||||
(351 | ) | (103 | ) | Restructuring, integration and rationalization costs |
(300 | ) | (607 | ) | ||||||||
|