BP plc · LSE:BP.
BP — Bernstein Strategic Decisions Conference 2007
22 slides from BP's conference presentation, September 2007
Slide 1: The role of an International Oil Company in the 21st Century
The role of an International Oil Company in the 21st Century Andy Inglis Chief Executive, Exploration & Production
Slide 2: Cautionary Statement
Cautionary Statement Forward Looking Statements Cautionary Statement This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding capital expenditure, capital investments, global hydrocarbon supply and demand growth, oil and gas reserves
Slide 3: Growth in energy demand expected to continue
Growth in energy demand expected to continue Global Energy Demand Growth by Region (1971-2030) 140 120 Energy Demand (Bnboe) OECD 100 80 Transition Economies 60 Developing Countries 40 20 0 1971 2002 2030 Source: IEA WEO 2004 2
Slide 4: Energy mix expected to remain dominated by hydrocarbons
Energy mix expected to remain dominated by hydrocarbons Primary energy supply by fuel 18,000 16,000 Other Renewables 14,000 Biomass & waste 12,000 Hydro 10,000 (mtoe) Nuclear 8,000 Gas 6,000 4,000 Oil 2,000 Coal 0 1990 2004 2015 2030 Source: IEA, WEO 2006 3
Slide 5: Global resources remain substantial
Global resources remain substantial 6,000 Reserves & Resources (bnboe) 5,000 4,000 Unconventional Unconventional 3,000 2,000 Yet to Find Yet to Find 1,000 R/P Ratio R/P Ratio Proven Proven 41 yrs 67 yrs 0 Oil Gas Source: World Energy Assessment 2001, HIS, WoodMackenzie, BP Statistical Review of Worl
Slide 6: Supply dislocated from demand
Supply dislocated from demand 22% 39% 3 Largest Energy Markets (N. America + Europe + Asia Pacific) 90% 85% Rest of World 78% 61% 10% 15% Consumption Reserves Consumption Reserves OIL GAS Source: BP Statistical Review 2006 5
Slide 7: Growth constrained by capability, not capital
Growth constrained by capability, not capital US petroleum engineering (PE) workforce 10 PE Workforce in place as at 2000 8 1,000 employees Cumulative new PE graduates 6 Projected PE workforce 4 2 0 00 02 04 06 08 10 12 14 16 18 20 Source: PetroStrategies Inc. 6
Slide 8: BP's five competitive advantages
BP’s five competitive advantages • Managing risk • Portfolio diversity and scale • Capability and ‘know-how’ • Relationships of mutual advantage • Global integration 7
Slide 9: Managing risk: The Arctic frontier
Managing risk The Arctic frontier Prudhoe Bay Recovery Factor Improved recovery factor through time, (%) with enhanced recovery techniques 60 55 Techniques 50 for enhanced recovery 45 Base 40 82 86 90 94 98 02 06 8
Slide 10: Managing risk: Russia
Managing risk Russia West Siberia Moscow Ukraine Rospan Ryazan Nyagan Samotlor Verknechonsk Saratov Orenburg Uvat Kovykta Volga Urals East Siberia Refineries Core production areas Project areas 9
Slide 11: Managing risk: Deepwater Gulf of Mexico
Managing risk Deepwater Gulf of Mexico Up to 1985 Up to 1985 • Industry had made a small number of deepwater discoveries totalling less than 150 million barrels 2007 2007 • Today more than nearly 19 billion deepwater barrels have been Tubular Bells discovered – more than a Bonsa i tenfold increase P
Slide 12: Portfolio diversity and scale: High quality resources in the world's major basins
BP’s Portfolio diversity and scale: High quality resources in the world’s major basins Non-Proved Proved Conventional Oil Deepwater Oil Water Flood Viscous 41 bn boe 18 bn boe and Heavy Oil Conventional Gas LNG Gas Tight Gas Coal Bed Methane Totals in billion boe Proved UK SORP, non-proved BP data 1
Slide 13: Portfolio diversity and scale: Growing investment
BP’s Portfolio diversity and scale Growing investment $bn 2005 2006 2007e Capital expenditure 13.9 15.9* ~18 Exploration & Production 10.1 12.1* ~13 Refining & Marketing 2.8 3.1 ~4 Gas, Power, Renewables & Other 1.0 0.7 ~1 Organic capex only *Excludes $1bn investment in Rosneft IPO BP estimates for
Slide 14: Portfolio diversity and scale: Prize of improved recovery
BP’s Portfolio diversity and scale Prize of improved recovery 200 bn boe oil bn boe and gas initially Produced 38 in place Proved Non-Proved 18 Currently unrecoverable hydrocarbon 41 A 1% increase in recovery = 2 bn boe Does not include exploration potential 13
Slide 15: Capability and know-how: Real-time reservoir management
BP’s Capability and ‘know-how’ Real-time reservoir management CARSP: Phase 1 Gas Cap Depletion simulation for Central Azeri Oil Deep Water Water Gas Gunashli Water Oil Chirag Azeri 14
Slide 16: Capability and know-how: Unlocking tight gas
BP’s Capability and ‘know-how’ Unlocking tight gas Wamsutter Field, Wyoming 10% The prize developed • 15 TCF (net to BP) tight gas resources in North America 40% • Development challenging due to low developed connectivity 50 miles Role of technology • Innovative horizontal drilling technology Innova
Slide 17: Relationships of mutual advantage
Relationships of mutual advantage Workforce capability Local content Capacity building 16
Slide 18: Global integration
Global integration • Standardisation of engineering: design one, build many • Development of local talent • Implementation of company-wide standards: Operating Management System • Transfer of knowledge and expertise across regions 17
Slide 19: Strategy: Focussed and enduring
Strategy Focussed and enduring E&P • Focus on the most prolific hydrocarbon basins and the biggest fields • Build leadership positions in these areas • Manage decline of existing producing assets and divest when appropriate Gas • Access to premium gas markets R&M • Integrated chains of supply based
Slide 20: Major projects: 2007 key start ups
Major projects 2007 key start ups Angola • Greater Plutonio • Rosa • Kizomba A Phase 2 Gulf of Mexico • Atlantis • King Subsea Trinidad • Red Mango North America Gas • San Juan Coal Bed Methane expansion 19
Slide 21: Production guidance
Production guidance Guidance based on current portfolio at $60/barrel: 2007 3.8 - 3.9 mmboed Effectively flat vs 2006 after allowing for divestment impact By 2009 More than 4.0 mmboed By 2012 More than 4.3 mmboed Reserve base strong : portfolio lengthening : sustainable growth BP estimates for 2007,
Slide 22: Conclusion: BP's role as an International Oil Company in the 21st Century
Conclusion: BP’s role as an International Oil Company in the 21st Century • Managing risk − Establishing significant positions in the world’s largest basins • Portfolio diversity and scale − 59 billion barrels of resource: conventional, deepwater and tight gas • Capability and ‘know-how’ − Integrati