Bp Plc · LSE:BP.
Bp — Q2 2024 Earnings Presentation
37 slides from Bp's earnings presentation, Jul 30, 2024
Slide 1: 2Q 2024 financial results
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Slide 2: Craig Marshall, SVP investor relations
Craig Marshall SVP investor relations Hello everyone and thank you for your interest in bp’s second quarter 2024 results. Today’s video presentation features Murray Auchincloss, chief executive officer and Kate Thomson, chief financial officer. Before we begin today, let me draw your attention to ou
Slide 3: Cautionary statement
Cautionary statement In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement: The discussion in this results announcement
Slide 4: Murray Auchincloss
Murray Auchincloss Chief executive officer 4
Slide 5: Strong cash generation, growing distributions
Strong cash generation, growing distributions 2Q24 financial highlights Shareholder distributions Operational highlights –I $8.1bn –I +10% –I +3.4% operating cash flow* increase in dividend per upstream production1 ordinary share to 8 cents –I $9.6bn for 2Q24 –I 96.1% EBITDA* upstream plant reliabil
Slide 6: Six priorities
Six priorities 1 2 3 Improve safety & Drive focus into Deliver next wave reduce emissions the business of efficiency 4 5 6 Deliver growth Optimise ROACE* Grow shareholder projects returns Growing the value of bp 2Q 2024 financial results 6 Looking ahead, our destination remains unchanged. Our strate
Slide 7: Six priorities – improving safety
Six priorities – improving safety Process Safety Events (PSE) Safety goals 80 Tier 1* Tier 2* • Maintain a consistent safety culture 60 65% • Eliminate life changing injuries 40 Tier 1: 2019-2023 20 • Eliminate Tier 1 PSEs 0 2019 2020 2021 2022 2023 2024 1H 2024 2Q 2024 financial results 7 Our first
Slide 8: Six priorities – delivering growth projects
Six priorities – delivering growth projects Kaskida FID taken 6th operated platform in the Gulf of Mexico Industry led solution – proven technology, cost efficient design Na Kika Gulf of Mexico Olympus Mars Ursa 80mbd <$5bn Discovered Thunder Horse nameplate capacity development cost resource Conste
Slide 9: Kaskida is a world-class resource base
Kaskida is a world-class resource base, in a prime location, with a supportive fiscal regime and access to market. It is an asset we own 100%, and together with the expected FID of Tiber in 2025, is expected to support the growth of our oil portfolio - delivering high- margin, advantaged barrels thi
Slide 10: Six priorities – driving focus
Six priorities – driving focus Acquiring full ownership in a High-grading biofuel portfolio business we know well • Returns(1) • Acquisition multiple(2) • Two bio-refinery projects paused > 15% < 4x • Continuing to assess three potential projects • Integration in action — for progression trading, mi
Slide 11: Driving focus into the business in bioenergy
into existing supply infrastructure. Together, these decisions in bioenergy demonstrate how we are driving focus into the business and acting to optimise returns. 9
Slide 12: Six priorities - in action across bp
Six priorities - in action across bp LNG portfolio 4 5 bp Trinidad 4 5 • 10% interest in Ruwais LNG development1 • Cypre and Mento – 2025 major projects* • FID at Coconut • Cross-border licence at Manakin-Cocuina Underpinned by Atlantic LNG restructuring Hydrogen 2 • High-grading from 30 opportuniti
Slide 13: Progress on hydrogen and cost savings
progress this decade. And that progress is happening now. At Castellon, together with our joint venture partner, we are taking our first FID to develop and produce industrial scale green hydrogen at our Castellon refinery. At Lingen in Germany, the award of European IPCEI funding has paved the way f
Slide 14: Kate Thomson
Kate Thomson Chief financial officer 11
Slide 15: 2Q24 Underlying earnings
2Q24 Underlying earnings $bn 2Q23 1Q24 2Q24 2Q 2024 vs 1Q 2024 Brent ($/bbl) 78.1 83.2 85.0 Henry Hub ($/mmbtu) 2.1 2.3 1.9 ▪ Underlying RCP higher NBP (p/therm) 83.2 68.7 76.6 RMM ($/bbl) 24.7 20.6 20.6 ▪ Underlying RCPBIT lower reflecting: Underlying RCPBIT * 5.6 6.0 5.4 Gas & low carbon energy 2.
Slide 16: Products underlying profit and tax rate
− In products, the underlying profit was $360 million, around $560 million lower compared to the previous quarter. The result reflects significantly lower realised refining margins, mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, as well
Slide 17: 2Q24 Cash flow and balance sheet
2Q24 Cash flow and balance sheet $bn 2Q23 1Q24 2Q24 ▪ 2Q24 working capital release includes $1.1bn pre-tax Gulf of IFRS operating cash flow* 6.3 5.0 8.1 Mexico scheduled payments Working capital (build)/release *1 0.1 (2.4) 0.5 ▪ FY2024 capex guidance ~$16bn unchanged Capital expenditure* (4.3) (4.3
Slide 18: Our financial frame
Our financial frame Resilient Strong investment Disciplined investment Share dividend grade credit rating allocation buybacks +10% ‘A’ range ~$16bn $3.5bn Increase in dividend per credit metrics through cycle 2024-25 p.a. capital expenditure* 2H242 ordinary share to 8 cents for 2Q24 $14bn at Resilie
Slide 19: Commitment to grow shareholder returns
Together this represents our commitment to grow shareholders returns. 14
Slide 20: Guidance
Guidance Full year 20241 3Q 2024 vs 2Q 20241 Reported and underlying* Slightly higher than 2023, of which OPO higher and Reported upstream production: upstream production GLCE lower ▪ expect to be lower, including in higher margin regions Customers Growth from convenience, including TravelCenters of
Slide 21: Murray Auchincloss
Murray Auchincloss Chief executive officer 16
Slide 22: Growing the value of bp
Growing the value of bp Safety first Performance Drive to 2025 ...delivering $46-49bn EBITDA 1 (1) Brent $70/bbl 2021 real, at bp planning assumptions 2Q 2024 financial results Thanks Kate Our direction is unchanged, and we are in action on focusing, simplifying and growing the value of bp – all und
Slide 23: EBITDA growth 3-4% p.a. over 2024 and 2025
3-4% p.a. over 2024 and 2025. This growth comes from: Oil and gas – where we expect the start-up of a further five new major oil and gas projects, and strong production growth in bpx. And in LNG, we continue to make progress on our target to deliver 25 mtpa by 2025, up from 23 mtpa in 2023 and 30 mt
Slide 24: Appendix
Appendix 2Q 2024 financial results 18
Slide 25: Gas and low carbon energy
Gas and low carbon energy 2Q23 1Q24 2Q24 Underlying RCPBIT* $bn Production volume 3.0 Liquids (mbd) 103 102 98 Natural gas (mmcfd) 4,641 4,708 4,648 2.2 Total hydrocarbons (mboed) 903 914 899 2.0 1.8 1.7 Average realisations* 1.4 1.3 Liquids ($/bbl) 73.57 76.92 79.92 1.0 Natural gas ($/mcf) 5.53 5.4
Slide 26: Oil production and operations
Oil production and operations 2Q23 1Q24 2Q24 Underlying RCPBIT* $bn Production volume 4.0 3.5 Liquids (mbd) 1,000 1,056 1,085 3.1 3.1 3.1 Natural gas (mmcfd) 2,140 2,364 2,292 3.0 2.8 Total hydrocarbons (mboed) 1,369 1,463 1,481 Average realisations* 2.0 Liquids ($/bbl) 69.19 70.53 73.01 Natural gas
Slide 27: Customers and products
Customers and products 2Q23 1Q24 2Q24 Underlying RCPBIT* $bn Customers – convenience & mobility Customers - convenience & mobility Products - refining & trading Total Customers – convenience & mobility 1.1 0.9 1.3 adjusted EBITDA*($bn) 3.5 Castrol1 adjusted EBITDA ($bn) 0.2 0.2 0.3 2.5 2.1 Capital e
Slide 28: Drive to 2025
Drive to 2025 2025 Group EBITDA Factors driving growth to 2025 $46-49bn ~$44bn Other Transition growth* engines Oil, gas & refining Oil and gas • Biogas: >30 new • Non-TGE growth in Environment scenario - biogas plants online Customers including based on impact of • Start up five more by 2025 Castro
Slide 29: Transition growth engines
Transition growth engines Capex* EBITDA* $bn FY23 1H24 FY23 1H24 2025 target Bioenergy 0.7 0.5 0.51 0.31 ~2 Convenience 1.32 0.2 0.8 0.5 >1.5 EV charging 0.5 0.3 (0.3) (0.1) Hydrogen 0.2 0.1 (0.3) (0.2) — Renewables & power 1.1 0.7 0.4 0.1 Total transition growth* engines 3.8 1.8 1.0 0.5 3-4 3 (1) C
Slide 30: Strategic progress – last 12 months
Strategic progress – last 12 months Resilient hydrocarbons Convenience and mobility4 Low carbon energy Scaling-up our bioenergy business Strategic convenience partnership Renewables pipeline* • Archaea – 5 AMD plants online - capacity of >5m mmbtu of RNG p.a. • Extended convenience partnerships with
Slide 31: Glossary
Glossary 2Q 2024 financial results 25
Slide 32: Glossary – abbreviations
Glossary – abbreviations ACE Azeri Central East. mmbtu Million British thermal units. AMD Archaea Modular Design. mmcfd Million cubic feet per day. Barrel (bbl) 159 litres, 42 US gallons. mtpa Million tonnes per annum. boe Barrels of oil equivalent. OB&C Other businesses and corporate. CCS Carbon, c
Slide 33: Glossary
Glossary Adjusting items Includes gains and losses on the sale of businesses and fixed assets, EBITDA / Replacement cost (RC) profit before interest and tax, excluding net adjusting impairments, environmental and other provisions and charges, adjusted EBITDA items* before interest and tax, and addin
Slide 34: Glossary
Glossary Net debt Calculated as finance debt, as shown in the balance sheet, plus the fair Renewables Renewable projects satisfying the following criteria until the point they can value of associated derivative financial instruments that are used to hedge pipeline be considered developed to FID: Sit
Slide 35: Glossary
Glossary Surplus cash flow Refers to the net surplus of sources of cash over uses of cash, after Transition growth Activities, represented by a set of transition growth engines, that transition reaching the $35 billion net debt target. Sources of cash include net cash bp toward its objective to be a
Slide 36: Glossary
Glossary Upstream unit Calculated as production cost divided by units of production. Production production costs cost does not include ad valorem and severance taxes. Units of production are barrels for liquids and thousands of cubic feet for gas. Amounts disclosed are for bp subsidiaries only and d
Slide 37: Resources
Resources bp's website includes information Useful links Investor events about our financial performance, reports and information on investing Why invest in bp 29 October 2024 Third quarter results in bp, dividend payments, AGM and strategy events. Modelling guidance Databook Find out more on bp.com