BP plc · LSE:BP.
BP — FY2015 Earnings Presentation
33 slides from BP's earnings presentation, Feb 2, 2016
Slide 1: Full Year & 4Q 2015 Results
Full Year & 4Q 2015 Results 2 February 2016 DWG, Azerbaijan
Slide 2: Jess Mitchell, Head of Group Investor Relations
Jess Mitchell Head of Group Investor Relations Whiting refinery, Indiana
Slide 3: Cautionary statement
Cautionary statement Forward-looking statements - cautionary statement This presentation and the associated slides and discussion contain forward-looking statements – that is, statements related to future, not past events – with respect to the financial condition, results of operations and business
Slide 4: Bob Dudley, Group Chief Executive
Bob Dudley Group Chief Executive PSVM, Angola
Slide 5: Agenda
Agenda Overview Full year and 4Q 2015 results Business update Looking ahead Q&A 5
Slide 6: Oil price environment: Lower for longer, but not lower forever
Oil price environment Lower for longer, but not lower forever Global oil supply & demand OECD industry inventories mmbd mbbls 98 3,100 2010 to 2014 monthly average range 3,000 2014 to 2015 inventories 96 2,900 94 2,800 2,700 92 Supply Demand 2,600 90 2,500 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 Jan-14 Aug-14
Slide 7: 2015 – Delivery in challenging times
2015 – Delivery in challenging times • Safe, reliable and efficient delivery in our businesses • Resetting capital and cash costs – Ongoing optimisation of capital expenditure – Material and sustainable reduction in cash costs • $10bn of divestments agreed over 2014-15 • Settlement agreements with U
Slide 8: Our proposition for value growth
Our proposition for value growth A clear set of enduring principles • Relentless focus on safety and reliability • A balanced portfolio with distinctive capabilities • Portfolio actively managed for value over volume • Continued capital and cost discipline • Growing sustainable free cash flow and di
Slide 9: Group full year 2015 results
Group full year 2015 results • Underlying replacement cost profit of $5.9bn(1) • Underlying operating cash flow of $20.3bn(2) • Organic capital expenditure of $18.7bn(3) • Divestment proceeds of $2.8bn • Gearing at 21.6% • Dividend paid of $6.7bn • Reserves replacement ratio of 61%(4) (1) Post-tax u
Slide 10: Capital and cost discipline
Capital and cost discipline Group cash costs(1) • Significant reduction in the cash cost base – 2015 cash costs $3.4bn lower than 2014 – Simplification and efficiency across the Group – Focus on sustainable change 2010 2011 2012 2013 2014 2015 • Optimising capital expenditure Organic capital expendi
Slide 11: Safety performance
Safety performance Loss of Primary Containment (LOPC) and Recordable injury frequency(1) Process Safety Events (PSE) 400 0.6 0.5 Number of instances 300 0.4 200 0.3 0.2 100 0.1 0 0.0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 American Petroleum Institute LOPC excl. L48 Tier 1 PSE BP Group US
Slide 12: Brian Gilvary, Chief Financial Officer
Brian Gilvary Chief Financial Officer Whiting refinery, Indiana
Slide 13: Environment
Environment Brent oil price(1) Henry Hub gas price(1) Refining Marker Margin(2) 60 2.6 20 55 2.4 18 50 2.2 16 $/mmbtu $/bbl $/bbl 45 2.0 14 40 1.8 12 35 1.6 10 30 1.4 8 Oct 15 Nov 15 Dec 15 Oct 15 Nov 15 Dec 15 Oct 15 Nov 15 Dec 15 (1) Source: Thomson Reuters Datastream (2) Refining Marker Margin ba
Slide 14: 4Q 2015 Summary
4Q 2015 Summary Underlying earnings figures are adjusted for the costs associated with the Gulf of Mexico oil spill, other non-operating items and fair value accounting effects $bn 4Q14 3Q15 4Q15 % Y-o-Y % Q-o-Q (1) Replacement cost profit before Upstream 2.2 0.8 (0.7) interest and tax (RCPBIT) (2)
Slide 15: Upstream (excluding Russia)
Upstream (excluding Russia) Realisations(1) Volume Underlying RCPBIT(2) 100 18 3,000 3 16 2,750 2.2 80 14 2 12 2,500 60 mboe/d 10 $/mcf $/bbl $bn 2,250 1 0.8 8 0.6 40 0.5 6 2,000 0 20 4 1,750 2 -0.7 0 0 1,500 -1 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 Liquids $/bbl
Slide 16: Downstream
Downstream Refining environment Refining availability Underlying RCPBIT(1) 24 98 2.5 2.3 2.2 20 96 2.0 1.9 16 94 1.5 1.2 1.2 $/bbl $bn 12 % 92 1.0 8 90 0.5 4 88 0.0 0 86 -0.5 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 RMM WTI - WCS spread Fuels Lubricants Petrochemica
Slide 17: Rosneft
Rosneft Average Urals price BP share of underlying net BP’s share of Rosneft income(1) annual dividend(2) 100 0.6 0.8 0.7 0.5 80 0.6 0.4 0.5 60 $/bbl $bn $bn 0.3 0.4 40 0.3 0.2 0.2 20 0.1 0.1 0 0.0 0.0 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 2013 2014 2015 (1) On a replacement cost basis a
Slide 18: Other items
Other items OB&C underlying RCPBIT(1) Underlying effective tax rate(2) 4Q14 1Q15 2Q15 3Q15 4Q15 40 0.0 30 (0.1) 20 (0.1) (0.2) 10 $bn % (0.2) 0 (0.3) (0.3) (0.3) -10 (0.4) -20 (0.4) -30 (0.5) 4Q14 1Q15 2Q15 3Q15 4Q15 (1) Other businesses and corporate replacement cost profit before interest and tax
Slide 19: Gulf of Mexico oil spill costs and provisions
Gulf of Mexico oil spill costs and provisions pre-tax(1) $bn To end Full year Cumulative 2014 2015 to date Income statement Charge for the period 43.5 12.0 55.5 Balance sheet(2) Brought forward 8.0 Charge to income statement 43.5 12.0 55.5 Payments into Trust Fund (20.0) - (20.0) Cash settlements re
Slide 20: Sources and uses of cash
Sources and uses of cash 2014 2015 40 40 Disposals 35 Gulf of Mexico oil spill 35 Share buybacks 30 30 Gulf of Mexico oil spill Dividends 25 25 Inorganic capex Dividends Disposals $bn $bn 20 Underlying 20 Inorganic capex cash flow(1) 15 15 Organic Underlying capex Organic 10 10 cash flow(1) capex 5
Slide 21: 2016 Guidance
2016 Guidance Full year 2015 actual Full year 2016 guidance Production (excluding Rosneft) 2,258mboed broadly flat, underlying(1) Organic capital expenditure $18.7bn lower end of $17-19bn range (2) DD&A $15.2bn broadly flat Other businesses and corporate: $300m ~$300m average underlying quarterly ch
Slide 22: Our medium term financial frame
Our medium term financial frame US cents Organic free cash flow • Capital expenditure of $17-19bn in 2016-17; per share per share(1) towards the lower end of the range in 2016 70 60 • Cash cost reduction of close to $7bn by 2017 versus 2014 50 Current DPS(3) 40 • Balance organic sources and uses of
Slide 23: Bob Dudley, Group Chief Executive
Bob Dudley Group Chief Executive Mad Dog, Gulf of Mexico
Slide 24: 2015 – Upstream milestones and progress
2015 – Upstream milestones and progress • Exploration and access – Significant discovery in Egypt – New access in Gulf of Mexico, Egypt & Mexico • Major projects – 3 major project start-ups – Final investment decision on West Nile Delta projects • Operations and wells – 15 turnarounds completed in 2
Slide 25: Upstream simplification and efficiency
Upstream simplification and efficiency ‘000 Upstream Headcount(1) 30 • Right-size the organisation Agency 20 Employees • Reduce third party spend 10 0 – Deflation across contracts 2013 2014 2015 2016 $/boe Production cost per barrel(2) – Efficiency of scope and delivery 18 CVX 15 RDS XOM • Influence
Slide 26: Resilient base performance
Resilient base performance Improving safety and reliability(1) Managing field decline(2) BP operated Tier 1 events plant reliability % Managed decline 25 95 trend(2) ~2% 20 90 15 10 85 5 0 80 2010 2011 2012 2013 2014 2015 2014 2015 2016 2015/16 Base Project PSA(3) start-ups impacts (1) Data represen
Slide 27: Our robust growth option hopper
Our robust growth option hopper Net production from new major projects by stage mboed 900 600 Construction 300 Operating 0 2015 2016 2017 2018 2019 2020 27
Slide 28: Growth beyond 2020
Growth beyond 2020 Alaska • Drill out 3 hubs North Sea • Alaska LNG • Drill out 10 Hubs Russia Canada • Greater Clair • Taas JV (Srednebotuobinskoye) • Sunrise later phases • Exploration drill out • Yenisey-Khatanga development • Pike, multiple phases and exploration • Terre de Grace • West Siberian
Slide 29: 2015 – Downstream milestones and progress
2015 – Downstream milestones and progress Pre-tax earnings $bn 8 • Process safety performance improvement Environment(1) 6 $1.9bn underlying improvement • Record Downstream earnings and returns 4 2 • $1.9 billion underlying performance improvement 0 2014 2015 Pre-tax returns • Strong refining availa
Slide 30: Downstream strategy and performance improvement
Downstream strategy and performance improvement % Pre-tax returns • Safe and reliable operations 20 (1) 10 • Advantaged manufacturing – Top quartile refining 0 Medium term 2013 2014 2015 target(1) – Higher earning potential in petrochemicals $bn Operating cash flow (pre-tax) • Profitable marketing g
Slide 31: Downstream simplification and efficiency
Downstream simplification and efficiency Cash costs evolution • ~$2.5bn of cost efficiencies per annum versus 2014(1) >15% – Right-sizing the organisation Cash costs – Manufacturing efficiency – Reduction in third party spend 2013 2014 2015 Headcount evolution • Material progress in 2015 ‘000 >5,000
Slide 32: Our future
Our future A clear set of enduring principles A medium-term financial frame • Capex of $17-19bn per annum over 2016-17; • Relentless focus on safety and towards the lower end of range in 2016 reliability • Cash costs reduced by close to $7bn by 2017 • A balanced portfolio with distinctive versus 201
Slide 33: Q&A
Q&A Bob Dudley Brian Gilvary Group Chief Executive Chief Financial Officer Lamar McKay Tufan Erginbilgic Chief Executive, Chief Executive, Upstream Downstream Jess Mitchell Head of Group Investor Relations 33