BP plc · LSE:BP.
BP — Q2 2009 Earnings Presentation
23 slides from BP's earnings presentation, Jul 28, 2009
Slide 1: BP 2Q 2009 Results
BP 2Q 2009 Results 28th July 2009
Slide 2: Fergus MacLeod, Head of Investor Relations
Fergus MacLeod Head of Investor Relations
Slide 3: Cautionary Statement
Cautionary Statement Forward Looking Statements - Cautionary Statement This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding global economic recovery; GDP growth; effective tax rate; improved efficiency and effectiveness across th
Slide 4: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 5: The economy and oil supply/demand
The economy and oil supply/demand y-o-y growth, mmbbl/d y-o-y growth (%) 2 1.5 1 GDP growth (rhs) 0.0 0 (1.5) (1) (3.0) (2) (4.5) (3) (4) (6.0) 2Q08 3Q08 4Q08 1Q09 2Q09 OPEC production Non-OPEC production Global Consumption Source: IEA for oil demand, JP Morgan for GDP growth 5
Slide 6: The US gas market
The US gas market US manufacturing and gas consumption US gas production y-o-y change, Bcf/d y-o-y change (%) y-o-y change, Bcf/d 4 0 4 Manufacturing 3 growth (rhs) (2) 3 (4) 2 2 (6) 1 1 (8) 0 0 (10) (1) (1) (12) (2) (14) (2) (3) (16) (3) 2Q08 3Q08 4Q08 1Q09 2Q09 2Q08 3Q08 4Q08 1Q09 2Q09 Industry ga
Slide 7: 1H 2009: Financial results
1H 2009: Financial results • Replacement cost profit $5.5bn • Post-tax operating cash flow $12.3bn • Organic capex* of $9.4bn • Divestments of $1bn • Dividend − 28 cents per share − $5.2bn * Organic capital expenditure, excluding acquisitions and asset exchanges 7
Slide 8: Operational momentum
Operational momentum Safe and reliable operations • 50 entities now on our Operating Management System (OMS) • Continuous improvement Building capability • Right people, right place, right skills • Deepening expertise • Reward for performance Upstream growth • Volumes up by more than 3% in 1H09 Down
Slide 9: Strategic delivery: Upstream growth
Strategic delivery Upstream growth • New access for future growth − Iraq: Rumaila − Egypt: new acreage awarded − Indonesia: coal bed methane JV − Azerbaijan – memorandum of understanding signed with SOCAR • Continued exploration and appraisal success − Angola – 17th/18th discoveries − Gulf of Mexico
Slide 10: Strategic delivery: Downstream turnaround
Strategic delivery Downstream turnaround • Safe operations and OMS • Behaviours and core processes − Refocused R&M head office − Iberia back office go-live • Restoring missing revenues − Refining availability at highest level since 1Q05 − Texas City is running at full economic capability • Business
Slide 11: Strategic delivery: Corporate efficiency
Strategic delivery Corporate efficiency • Alternative Energy − Focused and disciplined • Restructuring and delayering − More than 5,000 reduction in headcount • Organization − Deepening expertise − Embedded functional model • Cash costs down by more than $2bn in 1H09 11
Slide 12: Byron Grote, Chief Financial Officer
Byron Grote Chief Financial Officer
Slide 13: Trading environment
Trading environment $/bbl Liquids realization $/mcf Gas realization 120 20 100 16 80 12 60 8 40 20 4 0 0 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2008 2009 2008 2009 $/bbl Refining indicator margin 12 Change vs 2008 Average realizations 2Q YTD 9 Liquids $/bbl (52)% (53)% 6 Natural gas $/mcf (57)% (48)% 3
Slide 14: Financial highlights
Financial highlights All earnings figures are adjusted for non-operating items and fair value accounting effects ($bn) 2Q’08 2Q’09 Replacement cost profit before interest and tax 2Q09 vs 2Q08 ($bn) Exploration & Production 13.1 4.4 14 Refining & Marketing 0.8 1.0 Other businesses & corporate (0.2) (
Slide 15: Exploration & Production
Exploration & Production Pre-tax replacement cost profit Production growth YoY Adjusted for non-operating items and fair value accounting effects (4 quarter rolling average) Average hydrocarbon ($bn) realizations ($/bbl) 14 80 3% 12 70 10 60 2% 8 50 6 40 1% 4 30 2 20 0% 0 10 (2) (1)% 2Q08 3Q08 4Q08
Slide 16: Refining & Marketing
Refining & Marketing Pre-tax replacement cost profit Refining availability Adjusted for non-operating items and fair value accounting effects Solomon availability (%) Refining indicator ($bn) margin ($/bbl) 2.0 9.0 94 8.0 1.5 7.0 92 1.0 6.0 5.0 90 0.5 4.0 88 0 3.0 (0.5) 86 (1.0) 84 2Q08 3Q08 4Q08 1Q
Slide 17: Other Businesses & Corporate
Other Businesses & Corporate Pre-tax replacement cost profit Adjusted for non-operating items and fair value accounting effects ($bn) 0.2 • Foreign exchange effects 0 • Weaker environment (0.2) • Lower corporate costs • 2009 underlying quarterly charges (0.4) expected to average $400-$500m (0.6) (0.
Slide 18: Sources & uses of cash
Sources & uses of cash $bn post tax 1H 08 1H 09 20 18 Disposals 16 Buybacks Inorganic 14 capex Disposals 12 Organic Organic 10 Operations capex capex 17.6 8 Operations 6 12.3 4 Dividends Dividends 2 0 Sources Uses Sources Uses 18
Slide 19: Net debt ratio
Net debt ratio % 40 35 30 25 20 15 10 2001 2002 2003 2004 2005 2006 2007 2008 2009 Net debt ratio = net debt / (net debt + equity) Net debt includes the fair value of associated derivative financial instruments used to hedge finance debt 19
Slide 20: 2009 Outlook
2009 Outlook 2009 guidance 1H 09 Production* Growth More than 3% Refining availability* Higher More than 4% Cash cost reduction* More than $3bn More than $2bn Capex** Below $20bn $9.4bn Divestments Around $2-3bn $1.0bn * Change versus 2008 ** Organic capital expenditure, excluding acquisitions and a
Slide 21: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 22: BP strategy
BP strategy • Upstream profit growth, cost and capital efficiency • Downstream turnaround, cost efficiency • Alternative Energy; focused and disciplined • Corporate efficiency 22
Slide 23: Q&A
Q&A Tony Hayward Byron Grote Group Chief Executive Chief Financial Officer Andy Inglis Iain Conn Chief Executive Chief Executive Exploration & Production Refining & Marketing Fergus MacLeod Head of Investor Relations 23