BP plc · LSE:BP.
BP — Corporate Update (September 2006)
7 slides from BP's corporate update, September 2006
Slide 1: Commercial Structure & Financial Performance
Commercial Structure & Financial Performance Phil Home Commercial Director
Slide 2: PSC terms – General principles
PSC terms – General principles Duration Accounting & Fiscal • Exploration phase normally three years • Accounting is in US Dollars with 2-3 well commitment • Azerbaijan profits tax rate is fixed for • 25 year development phase with a five duration of PSCs year negotiable extension • No customs duty
Slide 3: Example: ACG PSC mechanism
Example: ACG PSC mechanism Profit Oil Shares Total Production X Net Back Government Contractor Contractor's RROR Price Share (%) Share (%) RROR < 16.75 % 30 70 16.75 % ≤ RROR < 22.75 % 55 45 RROR ≥ 22.75 % 80 20 OPEX Recovery 100% Profit Oil Capex Recovery (up to 50%) @ LIBOR+4% Profit Oil Sharing M
Slide 4: Indicative price sensitivity: ACG
Indicative price sensitivity: ACG Gross production @ $25/bbl Gross production @ $60/bbl FOC Profit Oil Share FOC Profit Oil Share 1400 80% 1400 80% 70% 70% 1200 1200 60% 60% 1000 1000 50% 50% 800 800 mbd mbd 40% 40% Az Govt Az Govt 600 Profit Oil 600 Profit Oil 30% 30% 400 FOC Profit Oil 400 20% 20%
Slide 5: ACG PSC: Impact of higher oil prices
ACG PSC: Impact of higher oil prices Lower production and reserve entitlement but much higher returns and NPV BP net ACG reserves and BP net ACG NPV and IRR entitlement factor 1400 90 1200 80 Entitlement Factor (%) 1000 70 NPV (indexed) Reserves (mmbbl) IRR 800 60 600 50 400 40 200 30 0 20 $25/bbl $
Slide 6: BP Azerbaijan net production
BP Azerbaijan net production BP net production 500 400 300 mboed 200 100 0 2005 2006 2007 2008 2009 2010 @ $40/bbl @ $60/bbl Production profiles include sanctioned developments only: Chirag, Central Azeri, West Azeri, East Azeri, Deep-Water Gunashli (DWG) and DWG East manifold in ACG, and Shah Deniz
Slide 7: BP Azerbaijan high margin barrels
BP Azerbaijan high margin barrels 2006 Barrel @ $70/bbl dated Brent (BP net basis) Average Realisation $65.9/boe Net income $35.1 Cash costs Tax $13.7 Lifting costs $1.0 Non-cash costs M&T costs $9.5 $4.9 Cash costs Other cash $7.6 $1.7 costs