BP plc · LSE:BP.
BP — FY2016 Earnings Presentation
27 slides from BP's earnings presentation, Feb 7, 2017
Slide 1: 4Q & Full Year 2016 Results Presentation
4Q & Full Year 2016 Results Presentation 7 February 2017 Thunder Horse South Expansion, Gulf of Mexico
Slide 2: Jess Mitchell, Head of Group Investor Relations
Jess Mitchell Head of Group Investor Relations Whiting, Indiana
Slide 3: Cautionary statement
Cautionary statement Forward-looking statements - cautionary statement In order to utilize the ‘safe harbour’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), BP is providing the following cautionary statement. This presentation and the associated slide
Slide 4: Bob Dudley, Group Chief Executive
Bob Dudley Group Chief Executive Glen Lyon, North Sea
Slide 5: Agenda
Agenda Environment Full-year 2016 highlights Safety performance 4Q 2016 results Financial frame Business update Q&A 5
Slide 6: Oil market moving back into balance
Oil market moving back into balance Brent oil price(1) OECD commercial inventories(2) 120 3,400 2010-2014 monthly average range 100 3,200 2015-2016 inventories Spot Futures 80 3,000 mbbls $/bbl 60 2,800 40 2,600 20 2,400 2014 2015 2016 2017 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 (1) Source: Platts (2) S
Slide 7: Group full-year 2016 results
Group full-year 2016 results • Underlying replacement cost profit of $2.6bn(1) • Underlying operating cash flow of $17.8bn(2) • Organic capital expenditure of $16.0bn(3) • Divestment proceeds of $3.2bn(4) • Gearing at 27%, within target range of 20% to 30% • Dividend paid of $4.6bn • Reserves replac
Slide 8: 2016 highlights: a year in perspective
2016 highlights: a year in perspective • Strong progress towards rebalancing the financial frame • Deepwater Horizon commitments clarified - now fully focused on the future • Six Upstream major project start-ups • Our biggest Downstream fuels launch in a decade • Resource progression and creative po
Slide 9: Further shaping the future
Further shaping the future Aker BP ACG extension Fulcrum Bioenergy venture 10% of Zohr 10% of ADCO Mad Dog 2 FID concession Woolworths retail Khazzan acquisition Phase 2 Mauritania and Senegal access 9
Slide 10: Safety performance
Safety performance Loss of Primary Containment (LOPC) Recordable injury frequency(1) and Process Safety Events (PSE) 300 0.6 0.5 Number of instances 200 0.4 0.3 100 0.2 0.1 0 0.0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 LOPC excl. US L48 PSE Tier 1 BP Group American Petroleum Institute US b
Slide 11: Brian Gilvary, Chief Financial Officer
Brian Gilvary Chief Financial Officer Juniper, Trinidad
Slide 12: Environment
Environment Brent oil price(1) Henry Hub gas price(1) Refining Marker Margin(2) 58 3.8 16 3.6 15 56 3.4 54 14 3.2 52 13 $/mmbtu 3.0 $/bbl $/bbl 50 12 2.8 48 11 2.6 46 10 2.4 44 2.2 9 42 2.0 8 Oct 16 Nov 16 Dec 16 Jan17 Oct 16 Nov 16 Dec 16 Jan17 Oct 16 Nov 16 Dec 16 Jan17 (1) Source: Thomson Reuters
Slide 13: 4Q 2016 Summary
4Q 2016 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 4Q15 3Q16 4Q16 % Y-o-Y % Q-o-Q (1) Replacement cost profit before Upstream (0.7) (0.2) 0.4 interest and tax (RCPBIT) (2
Slide 14: Upstream
Upstream Realisations(1) Volume Underlying RCPBIT(2) $/bbl $/mcf mboe/d $bn 70 18 3,000 1.0 16 60 2,750 14 50 0.5 0.4 12 2,500 40 10 0.0 2,250 0.0 30 8 6 2,000 (0.2) 20 4 (0.5) 1,750 (0.7) 10 2 (0.7) 0 0 1,500 (1.0) 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 Liquids $
Slide 15: Downstream
Downstream Refining environment Refining availability Underlying RCPBIT(2) $/bbl % $bn 24 98 2.0 1.8 1.8 20 96 1.6 1.5 1.4 1.4 16 94 1.2 1.2 12 92 1.0 0.9 0.8 8 90 0.6 0.4 4 88 0.2 0 86 0.0 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 RMM WTI CMA - WCS spread (1) Fuels
Slide 16: Rosneft
Rosneft BP share of underlying net BP’s share of Rosneft Average Urals price income(1) annual dividend(2) $/bbl $bn $bn 70 0.3 0.5 60 0.4 50 0.2 0.3 40 30 0.2 0.1 20 0.1 10 0 0.0 0.0 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 (1) On a replacement cost basis and adjust
Slide 17: Other items
Other items OB&C underlying RCPBIT(1) Adjusted effective tax rate(2) $bn % 4Q15 1Q16 2Q16 3Q16 4Q16 0.0 40 30 (0.1) 20 (0.2) 10 (0.3) 0 (0.4) (10) (20) (0.5) 4Q15 1Q16 2Q16 3Q16 4Q16 (1) Other businesses and corporate replacement cost profit before interest and tax (RCPBIT), adjusted for non-operati
Slide 18: Gulf of Mexico oil spill costs and provisions
Gulf of Mexico oil spill costs and provisions pre-tax(1) To end Cumulative $bn FY 2016 2015 to date Income statement Charge for the period 55.5 7.1 62.6 Balance sheet (2) Brought forward 18.8 Charge to income statement 55.5 7.1 62.6 Payments into Trust Fund (20.0) - (20.0) Cash settlements received
Slide 19: Sources and uses of cash
Sources and uses of cash 2015 organic cash inflows/outflows 2016 organic cash inflows/outflows $bn $bn 30 30 25 25 Dividends(2) 20 20 Dividends (2) 15 15 Underlying Organic Underlying 10 cash flow (1) capex 10 Organic cash flow (1) capex 5 5 0 0 $bn Other inflows/outflows $bn Other inflows/outflows
Slide 20: Financial framework for 2017
Financial framework for 2017 • Underlying operating cash flow to reflect – A stronger outlook for the environment – Growth and continuous underlying performance improvement – Reduced cash impact from restructuring 2016 2017 2018 + Organic capital expenditure $16.0bn(1) $16-17bn Strong capital discip
Slide 21: Repositioned for free cash flow growth
Repositioned for free cash flow growth Organic free cash flow • Re-establishing balance in our financial frame at per share(2) around $60/bbl by the end of 2017(1) • Strong business momentum 100% current • Gearing within a 20-30% band Current DPS(3) cash DPS(3) • Sustaining the dividend and growing
Slide 22: 2017 Guidance
2017 Guidance Full year 2016 actual Full year 2017 guidance higher than 2016 Production (excluding Rosneft)(1) 2,208 mboed (underlying) Organic capital expenditure $16.0bn (2) $16-17bn (3) DD&A $14.5bn higher than 2016 Other businesses and corporate $310m ~$350m average underlying quarterly charge E
Slide 23: Bob Dudley, Group Chief Executive
Bob Dudley Group Chief Executive Tangguh, Indonesia
Slide 24: Upstream growing value: now and in the future
Upstream growing value: now and in the future • Continued strong operational and drilling performance • Six major projects started up – Thunder Horse South Expansion 11 months early • Five FIDs and major projects progress – Mad Dog Phase 2 – Juniper jacket and topsides installed • Enhanced portfolio
Slide 25: Downstream performance improvement and growth
Downstream performance improvement and growth Pre-tax Pre-tax earnings(1) • $3bn underlying performance improvement $bn ($bn) earnings since 2014 6 6 • Strong refining operations $3bn 4 4 underlying • Material and growing marketing businesses improvement 2 2 • New technology-led product offers • Cas
Slide 26: Our future
Our future A clear set of enduring principles A medium-term financial frame • Relentless focus on safety and • Capex: $16-17bn for 2017, continued focus on reliability capital efficiency • A balanced portfolio with distinctive • $7bn cash cost reduction target reached; capabilities ongoing disciplin
Slide 27: Q&A
Q&A Bob Dudley Brian Gilvary Group Chief Executive Chief Financial Officer Jess Mitchell Head of Group Investor Relations 27