BP plc · LSE:BP.
BP — Investor Day (2004)
25 slides from BP's investor day presentation, Aug 8, 2004
Slide 1: Tony Hayward: Exploration and Production
TONY HAYWARD Exploration and Production Tony Hayward exploration and production Thank you John. Ladies and gentlemen, good afternoon. It’s a great pleasure to be here to report on our strategic implementation and provide more detail on the E&P segment to underpin the summary that you heard from John
Slide 2: Exploration and Production - Agenda
Exploration and Production - Agenda exploration and production exploration and reserve base managing decline in our existing profit centres progress in developing our new profit centres TNK-BP 2008 and beyond I plan to cover: - Exploration and our reserve base - How we are managing decline in our ex
Slide 3: Reserves Replacement
Reserves Replacement reserves replacement replacement ratio: extensions and discoveries average 98-02 reserves replacement ratio 1.4 200% BP 1.2 Total 150% 1.0 0.8 100% XOM 0.6 CVX 0.4 50% Shell 0.2 0 0% 0 1 2 3 4 94 95 96 97 98 99 00 01 02 03 F cost ($/boe) source: company reports Let me begin with
Slide 4: Proved Reserves
replacement over the past 10 years was 146%, over the last 5 years was 153% and in 2003, it was 122%. Our successful exploration track record continued in 2003: - in Angola we had 8 discoveries from 8 wells in Blocks 15, 18 and 31; - we also made 2 significant new discoveries in the Gulf of Mexico –
Slide 5: Finding and Development Costs
construction. The remainder is spread fairly evenly between our operations in North America, UK/Europe and ROW. Second is the significance of natural gas as we go forward. Natural gas represents 44% of our total reserve base. Finding and Development Costs finding & development costs 5 yr moving aver
Slide 6: Existing Profit Centres: Managed Decline
existing profit centres: managed decline mboed $m divestments 2500 02-03 5000 other 2000 4000 Middle East Egypt 1500 3000 Latin America incl. associates 1000 2000 North Sea North America 500 1000 Gas Alaska 0 0 capex 02 03 04 05 06 07 08 04-08 BP estimates Let me now turn to our Existing Profit Cent
Slide 7: Existing Profit Centres: Managed Decline
- In the North Sea decline is also mitigated as a number of new projects come on stream, and - In South America production is expected to grow as we continue the development of the Cerro Dragon oil field in Argentina. Overall gas represents around 40% of our Existing Profit Centre production in 2004
Slide 8: Planned increase in operating efficiency
The second skin is a planned increase in operating efficiency from 87% to 89% over the next four years building on the improvement from 86% to 87% achieved over the last 3 years. A good example is the Bruce field in the North Sea where we recently implemented an innovative work practice with Rolls R
Slide 9: Existing Profit Centres: Decline Management
Existing Profit Centres : Decline Management existing profit centres: decline management mboed 300 2003 production added 280mboed for 250 $2.1bn in 2003 from the following activities: 200 reservoir management 150 wellwork new development wells 100 facility upgrades 50 0 reservoir well work new wells
Slide 10: Drilling Performance
Drilling Performance drilling performance ratio: current performance to best possible performance drilling rate % days/10k ft 70 30 60 25 50 20 40 15 30 10 20 10 5 0 0 BP other companies 01 02 03 Internal benchmarking from public databases, 2002 BP data (normalised for ’01 portfolio) We have been wo
Slide 11: Additions from Reservoir Management
Additions from Reservoir Management additions from reservoir management BP cumulative reserve adds – improved recovery and revisions mmboe 4000 3000 2000 1000 0 94 95 96 97 98 99 00 01 02 03 The third area I want to cover is reservoir management. Improved recovery through the application of technolo
Slide 12: Reserves added over the past 10 years
As you can see on the chart, over the past 10 years we have added 3.5bn boe of additional reserves, just over 100 million boe through revisions and 3.4bn boe through improved recovery, from the careful and rigorous stewardship of our reservoirs. In summary, proved reserves replacement in our existin
Slide 13: Existing Profit Centres: Cash Costs
Existing Profit Centres : Cash Costs existing profit centres: cash costs $m $/boe 5000 12 total cash costs total cash costs/boe 10 4000 8 3000 6 2000 4 1000 2 0 0 02 03 04 05 06 07 08 04-08 BP estimates Turning now to costs. We continue to make good progress managing the cash cost base down in our e
Slide 14: Existing Profit Centres: Production and Capex
On a unit basis, this means cash costs remain stable at around $5/boe. Existing Profit Centres : Production and Capex existing profit centres: managed decline mboed $m divestments 2500 02-03 5000 other 2000 4000 Middle East Egypt 1500 3000 Latin America incl. associates 1000 2000 North Sea North Ame
Slide 15: New Profit Centres: Production and Capex
New Profit Centres : Production and Capex new profit centres: production and capex mboed $m 2500 7000 RoW 6000 2000 Asia Pacific 5000 Azerbaijan 1500 4000 Angola 3000 1000 Trinidad 2000 500 GoM Deep 1000 Water capex 0 0 02 03 04 05 06 07 08 04-08 BP estimates I’d now like to discuss our New Profit C
Slide 16: New Profit Centres: Project Start-ups
around half that of the existing profit centres – a consequence of the scale and quality of the new developments. Over this time, the balance of assets-in-construction, that is capital which is not yet in service, in the new profit centres should decline from more than $10bn in 2004 to around $5.5bn
Slide 17: Project start-ups in 2004 and beyond
- In Trinidad, Atlas Methanol is nearing completion and is expected to start-up in the second quarter of 2004. - In Algeria, commissioning of In Salah is under way in support of expected mid-2004 first gas sales, ahead of the original schedule. - In Australia, NWS Train 4 is on track for first gas i
Slide 18: New Profit Centres: Production and Capex
- Fourthly, in Trinidad, construction of Train 4 LNG is over 50% complete with first gas scheduled for end 2005 / early 2006. New Profit Centres: Production and Capex new profit centres: production and capex mboed $m 2500 7000 RoW 6000 2000 Asia Pacific 5000 Azerbaijan 1500 4000 Angola 3000 1000 Tri
Slide 19: Tony Hayward: Exploration and Production
TONY HAYWARD Exploration and Production Tony Hayward exploration and production Thanks Bob. 19
Slide 20: 2008 and Beyond
2008 and Beyond 2008 and beyond existing PCs new PCs discoveries Russia • base efficiency • projects • Gulf of Mexico • Kovytka Gas – Angola: Block 15 – Tubular Bells • exploration • tie backs Kizomba C – Puma – Sakhalin – Egypt: Saqqara – Angola: Block 17 – Cascade • Projects Rosa – Shenzi – Pt. Th
Slide 21: Non-proven resource and exploration potential
Tangguh which we expect to sanction at the end of 2004 with start up in 2008. It should continue to grow through the end of the decade. North West Shelf Train 5 and Egyptian LNG now underpinned by our recent Raven gas discovery. The total non-proven resource across our entire portfolio excluding TNK
Slide 22: New Profit Centres: Resource Base
New Profit Centres: Resource Base new profit centres: resource base Azerbaijan TNK-BP Sakhalin Black Sea GoM DW Trinidad Brazil Angola DW New basin tests New PCs remaining resources proved non proved BP projection yet to find (BP share) Our exploration programme today is focused primarily on the Dee
Slide 23: E&P Segment: Production and Capex
E&P Segment : Production and Capex e&p segment: production and capex million boed TNK-BP $m 6 new profit centres production 12000 existing profit centres production segment capex 5 10000 4 3 8000 2 6000 1 0 4000 02 03 04 05 06 07 08 04-08 BP estimates Finally, this chart shows the projection for cap
Slide 24: E&P Segment Summary
to the TNK-BP estimate. Including TNK-BP, production is expected to grow at around 7% pa between 2003 and 2008. As John discussed, production growth beyond the end of this decade is difficult to forecast. However, it is reasonable to expect production growth in aggregate of around 5% to the end of t
Slide 25: Closing summary
In our new profit centres, all projects are on track. We expect strong production growth as projects start-up – and as capital comes into service, cash returns increase with time. Operating performance in TNK-BP continues to improve and our confidence in the resource potential is growing. Within our