BP plc · LSE:BP.

BP — Investor Day (2018)

58 slides from BP's investor day presentation, 2018

  1. Slide 1: Base and transformation

    Track record Base and transformation Gordon Birrell Upstream COO Production, Transformation and Carbon Leigh-Ann Russell Head of Upstream Procurement and Supply Chain Management Ian Cavanagh Head of Upstream Transformation BP UPSTREAM INVESTOR DAY AND FIELDTRIP 1

  2. Slide 2: Maximising the value of the base

    Track record Maximising the value of the base Alaska Russia Canada North Sea  Optimising base decline BPX Energy L48 AGT  Rigorously North Africa India managing cash costs Trinidad GoM  Enabled by our Asia Pacific transformation agenda Middle East Angola Latin America Cumulative production Remain

  3. Slide 3: Optimising base decline

    Track record Optimising base decline Managed base decline1 % 5  Managed base decline performance achieved through: Guidance 3 – 5%  Improving operating efficiency  Strong reservoir management  System modelling and optimisation  Improving wedge delivery  Base decline guidance now 3-5% excluding

  4. Slide 4: Optimising base decline – improving operating efficiency

    Track record Optimising base decline – improving operating efficiency Operating efficiency TARs1 – days and deferrals Improving trend in mature region and plant reliability North Sea performance % Annual % Plant reliability Operating efficiency TAR deferrals mboed TAR days Plant reliability Operatin

  5. Slide 5: Rigorously managing cash costs

    Track record Rigorously managing cash costs Production costs1 2017 cash costs summary $/boe BP (excl Rosneft) Competitor range Other BP costs (including labour, BPX Energy L48, gas trading) Third-party spend Operated by others (OBO) 2013 '14 '15 '16 '17 2018 est (1) Includes fuel gas; Competitor Ran

  6. Slide 6: Management of cash costs

    Track record Management of cash costs Alaska Gulf of Mexico Trinidad  Field wide  Aggregation of  Supplier collaboration standardisation of regional demand for on new technology and instrumentation data acquisition. new commercial models systems with a new Collaboration with for project commercia

  7. Slide 7: Rapid scale up of transformation in 2018

    Track record Rapid scale up of transformation in 2018 ~1,000 Over 1,300 continuous transformation projects Alaska improvement projects Plant Operations Advisor deployed in Gulf of Mexico and Angola Agility Mindset Digital  Nearly 3,000 people  Over 2,000 senior  7.5 petabytes now in trained leade

  8. Slide 8: Base and transformation – what's next?

    Track record Base and transformation – what’s next? Transformation Safety Mindset and agility Automation Transforming how we work Production Costs and toolkit efficiency Optimisation Digitisation and collaboration BP BPUPSTREAM UPSTREAMINVESTOR INVESTORDAY DAYAND ANDFIELD TRIP 8 FIELDTRIP

  9. Slide 9: Capital discipline and productivity

    Capital discipline and productivity James Dupree Upstream COO, Developments and Technology David O’Connor Upstream Head of Global Projects Organisation BP UPSTREAM INVESTOR DAY AND FIELDTRIP 1

  10. Slide 10: Disciplined capital investment – staying the course

    Disciplined capital investment – staying the course Upstream organic capital Upstream organic capital to 2021 $bn $bn 20 Exploration 15 LTO1 / Integrity $13-14bn 10 $13-14bn Major projects per annum BPX Energy 5 0 Drilling 2013 '14 '15 '16 '17 '18 '19-21 (1) License to operate BP UPSTREAM INVESTOR D

  11. Slide 11: Disciplined capital investment – right choices and strong execution

    Disciplined capital investment – right choices and strong execution Choices Control Execution  Rigorous planning  Chief Operating Officer  Global wells Exploration forum Appraisal forum  Global projects  Technology leadership Disciplined  Global subsurface choices  Global concepts Area develo

  12. Slide 12: Execution – competitive drilling and completion performance

    Execution – competitive drilling and completion performance Drilling efficiency Completions Improved performance % top quartile offshore wells1 % non-productive time2 Atlantis  Targeting ~35% cost 80 35 reduction (2016-2019)  Line of sight to 30 additional ~15% cost reduction by 2021 60 Manuel 25

  13. Slide 13: Delivering major projects

    Delivering major projects 19 projects ~500 mboed net Gross capital ~$100bn Major project start-ups: 2016 2017 2018 delivered online to date Net capital ~$30bn Alaska  Point UK Thomson  Quad 204 Russia  Clair Ridge  Taas Expansion US Gulf of Mexico Algeria Azerbaijan  Thunder Horse  Shah Deniz

  14. Slide 14: Execution - competitive projects performance

    Execution - competitive projects performance Project costs Project schedule IPA1 ratio IPA1 ratio 1.5 1.5 1.2 1.2 2017 industry average 2017 industry average 0.9 0.9 0.6 0.6 0.3 0.3 0 0 2013 ‘14 ‘15 ‘16 ‘17 ’18 2013 ‘14 ‘15 ‘16 ‘17 ’18 YTD YTD (1) Independent Project Analysis, a lower ratio indicate

  15. Slide 15: Project delivery – what's next?

    Project delivery – what’s next? Transformation Next Mindset generation and concepts agility Remote operations  Cypre, Trinidad Fast-paced tie-backs  Gulf of Mexico and North Sea Supplier Digital Industry ecosystems standardisation Collaborative contracting Digital twin  Tortue, Mauritania and Sen

  16. Slide 16: Major projects – on track

    Major projects – on track BP net production from major projects 19 delivered, 16 to go operating construction appraise/design 2016 2017 2018 1,000 mboed  In Salah Southern Fields  West Nile Delta~  Atoll Phase 1 – Taurus/Libra  Thunder Horse Water  Taas Expansion Injection  Trinidad Onshore 

  17. Slide 17: Advantaged oil portfolio and growth

    Track record Advantaged oil portfolio and growth Murray Auchincloss CFO, Upstream Starlee Sykes Regional President, Gulf of Mexico and Canada BP UPSTREAM INVESTOR DAY AND FIELDTRIP

  18. Slide 18: Oil growth underpinned

    Oil growth underpinned Gulf of Mexico North Sea Thunder Horse Mad Dog Atlantis Na Kika Operated by others Shetland Central North Sea Aker BP Operated by others E&A options E&A options 500 mboed 300 mboed 0 0 2010 2015 2020 2025 2010 2015 2020 2025 Angola Azerbaijan oil Block 18 Block 31 Operated by

  19. Slide 19: Gulf of Mexico – safely growing a high margin business

    Gulf of Mexico – safely growing a high margin business ▪ Safety and environment – core value ▪ Top producer in the Gulf of Mexico Houston ▪ High quality assets with room to grow Mars Na Kika Thunder Horse Olympus Ursa ▪ Track record of cost and capital Constitution Atlantis Tigris efficient delivery

  20. Slide 20: Gulf of Mexico - building a competitive business

    Gulf of Mexico - building a competitive business Production Plant reliability1 Unit production costs Capital efficiency example mboed % $/boe $m 400 100 10% 20 120 >60% >60% >40% 0 0 0 0 2013 2018 2013 2018 2013 2018 2014 Thunder 2018 Thunder est est est Horse well Horse well (1) BP-operated plant r

  21. Slide 21: Mad Dog – developing a Miocene giant

    Mad Dog – developing a Miocene giant Production 2.7bn boe Net estimated HCIIP1 125mboed >3x 4% Recovered2 0 2013 2017 2021 2025 Future options ▪ North West Water Injection ▪ New hub: Mad Dog 2 - Argos ▪ Strong capital efficiency ▪ South West Expansion ▪ up to 140 mboed oil ▪ Technology driven growth

  22. Slide 22: Atlantis – field within a field

    Atlantis – field within a field Production 1.7bn boe Net estimated HCIIP1 ILX 25% 75mboed 11% Recovered2 0 2013 2017 2021 2025 Future options ▪ Phase 3 (new field) ▪ Infrastructure Led Exploration ▪ Technology driven growth – 4D Ocean (ILX) opportunities ▪ Phase 4 & 5 (new horizon) Bottom Nodes (OBN

  23. Slide 23: Thunder Horse – maintaining cash engine at full capacity

    Thunder Horse – maintaining cash engine at full capacity Production 2.9bn boe Net estimated HCIIP1 ILX 125mboed 10% Recovered2 0 2013 2017 2021 2025 Future options ▪ South drill-out ▪ South Shallow (new field) ▪ Sustain production through system optimisation and innovative well ▪ Water Injection Exp

  24. Slide 24: Na Kika – renewing a high profitability hub

    Na Kika – renewing a high profitability hub Production 0.7bn boe Net estimated HCIIP1 ILX 29% Recovered2 75mboed >2x 0 2013 2017 2021 2025 Future options ▪ Isabela & Ariel Infill ▪ Additional ILX opportunities ▪ Agile working techniques, ILX and new well ▪ Manuel Development design unlocking value ▪

  25. Slide 25: Angola – decline but increasing potential

    Angola – decline but increasing potential Production Offshore plant reliability1 Unit production costs mboed % $/boe 100 15 DR CONGO Block 31 Block 15 Block 17 Block 18 ANGOLA Block 20 0 0 2013 2018 2013 2018 est est (1) BP-operated plant reliability BP UPSTREAM INVESTOR DAY AND FIELDTRIP 9

  26. Slide 26: Azerbaijan – sustaining a material business with significant exploration opportunity

    Azerbaijan – sustaining a material business with significant exploration opportunity Production Offshore plant reliability1 Unit production costs mboed % $/boe Base New projects 100 10 Exploration options 100 D230 >30% AZERBAIJAN ACG SWAP Gobustan Shah Deniz Shafaq Asiman 0 0 0 2018 2025 2013 2018 2

  27. Slide 27: North Sea – back to growth

    North Sea – back to growth Production Offshore plant reliability1 Unit production costs mboed % $/boe Base New projects 100 30 Aker BP Exploration options 300 >10% ~50% Clair Ridge ~50% Foinaven Clair Schiehallion Andrew ETAP Culzean Shearwater UK Operated Non-operated 0 0 0 2018 2025 2013 2018 2013

  28. Slide 28: Intentionally blank

    Intentionally blank BP UPSTREAM INVESTOR DAY AND FIELDTRIP 12

  29. Slide 29: Advantaged gas portfolio and growth

    Track record Advantaged gas portfolio and growth William Lin Alan Haywood COO, Regions CEO, Integrated Supply and Trading Emma Delaney Regional President, Mauritania & Senegal BP UPSTREAM INVESTOR DAY AND FIELDTRIP

  30. Slide 30: Advantaged gas

    Advantaged gas  Belief in gas Alaska  Balanced portfolio Russia  Strong growth and quality UK Azerbaijan  Broad and integrated capability throughout gas North America UAE Algeria value chains Egypt India Mauritania Oman & Senegal Trinidad Angola Mozambique Indonesia Brazil Australia Domestic Hub

  31. Slide 31: Balanced gas portfolio

    Balanced gas portfolio Domestic pricing1 Hub pricing1 International LNG1 Oman, Egypt gas, Russia, India Algeria, Azerbaijan (Shah Deniz gas), Australia, Indonesia, Mauritania & Senegal, BPX Energy gas Trinidad Base Major projects E&A options Base Major projects Base Major projects E&A options 700 mb

  32. Slide 32: Strong growth and quality

    Strong growth and quality Gas production1 LNG volumes Managed base Major projects E&A options Equity base Equity opportunity Merchant base Merchant opportunity 12 bcfd 35 mtpa 25mtpa goal Merchant Equity 0 0 2010 2018 2025 2018 2025 (1) Total production for gas producing regions BP UPSTREAM INVESTOR

  33. Slide 33: Underpinning growth and basin leadership

    Underpinning growth and basin leadership Alaska  Alaska LNG Russia (2030)  Kharampur (Turonian) Azerbaijan BPX Energy  Shah Deniz 2 ramp-up  Lower 48  Shah Deniz Compression Mauritania & Senegal  Tortue Phases 1-3 Oman  Yakaar Teranga  Khazzan Ph2  BirAllah Indonesia  Tangguh Expansion UAE

  34. Slide 34: Broad capability – gas value chain optimisation

    Broad capability – gas value chain optimisation Global LNG Gas and Power  Diversified supply of  Trading equity and merchant LNG  Operations  Geographic and price  Origination exposure balance  Analytics  Building markets: Brazil,  Integrated marketing India, China, other Asia natural gas sp

  35. Slide 35: Broad capability – delivering complex projects

    Broad capability – delivering complex projects Tangguh LNG Southern Gas Corridor  Located at a remote site in Bintuni Bay, West Papua,  Shah Deniz – world class reservoir in the Caspian, Indonesia with 2 LNG trains producing 7.6mtpa Azerbaijan with up to 40tcf of gas initially in place  Operator

  36. Slide 36: Broad capability – creating innovative solutions

    Broad capability – creating innovative solutions Mauritania & Senegal Material position Block in a world class C18 Greater BirAllah hydrocarbon basin Block  12-60tcf GIIP1  ~50,000km2 of acreage  2019 appraisal C6 across 7 blocks programme Block  50-100tcf estimated C12 Nouakchott gas in place T

  37. Slide 37: BPX Energy

    Track record BPX Energy Dave Lawler CEO, BPX Energy Brian Pugh COO, BPX Energy BP UPSTREAM INVESTOR DAY AND FIELDTRIP

  38. Slide 38: BPX Energy core values, mission, and strategy

    BPX Energy core values, mission, and strategy Core values Mission Strategy  Safety and the  Build a premier  Develop newly acquired environment independent onshore and legacy shale plays business focused on through efficient capital delivering free cash investment and flow growth advanced technol

  39. Slide 39: Mission delivery

    Track record Mission delivery Proven Proven Material free assets track record cash flow growth Proven top-tier assets Proven track Material free cash flow located in the core of the record of execution growth achieved through Permian, Eagle Ford and synergies, capital efficiency, Haynesville shale p

  40. Slide 40: BHP acquisition – base case + upside

    Track record BHP acquisition – base case + upside1 increasing confidence that value creation can exceed model $65 WTI $3.25 HH Further upside potential Base case $55 WTI $2.75 HH $45 WTI Midstream $2.25 HH $10.5bn Upstream Purchase price BHP assets Synergies Capital efficiency Additional Environment

  41. Slide 41: Proven Permian, Eagle Ford, and Haynesville acreage

    Track record Proven Permian, Eagle Ford, and Haynesville acreage Permian Eagle Ford Haynesville  128 active rigs in Reeves, Culberson  44 active rigs across 5 counties  51 active rigs in Haynesville and Loving counties  >1,800 wells in Eagle Ford since  >275 wells since 2018, with average  >1,

  42. Slide 42: Stellar economics across a range of prices

    Track record Stellar economics across a range of prices Breakeven WTI1  4.6bn boe resource base from BHP US onshore Resources Locations asset acquisition bn boe 0.3 0.3 500  Highly economic across a variety of price ranges 2,700  Short-cycle position, largely held by production 2,700 2.0 2.0  Ad

  43. Slide 43: Synergies – >$350m annually from three categories

    Track record Synergies – >$350m annually from three categories On track to deliver synergies ahead of plan General & administrative Production cost Financial $200-220m $100-120m $50-60m  Scaled engineering  Intelligent Operations  Trading and development teams  Supply chain optimisation  Fiscal

  44. Slide 44: Capital efficiency – primary development

    Track record Capital efficiency – primary development high-density, multi-zone, long-lateral development strategy Permian subsurface Haynesville subsurface (including legacy) Up to 6 wells Avalon 3 wells Bossier Up to 8 wells 2nd Bone Spring Wolfcamp XY Wolfcamp A 3 wells Haynesville Up to 24 wells

  45. Slide 45: Additional resource potential

    Track record Additional resource potential under-developed zones prevalent across three plays Permian subsurface Haynesville subsurface (including legacy) Up to 6 wells Avalon 3 wells Bossier Up to 8 wells 2nd Bone Spring Wolfcamp XY Wolfcamp A 3 wells Haynesville Up to 24 wells Wolfcamp B 1-2 mile

  46. Slide 46: Permian integrated development plan

    Track record Permian integrated development plan installation of midstream assets to improve capital efficiency and decrease operating costs Completing wells Centralised processing  Controlling midstream assets aligns the entire value chain for more efficient Gas development On demand Compression w

  47. Slide 47: Proven track record

    Track record Proven track record established top tier performance in legacy Southern Haynesville play Average single well cumulative production BPX gross production in Haynesville cumulative gross gas volume, mmboe gross production, mboed, number of wells 1.6 100 50 80 40 1.2 number of wells 60 30 m

  48. Slide 48: Proven track record

    Track record Proven track record material cost reduction achieved through proprietary intelligent operations model  Traditional operating model: disparate Company operated unit Headcount systems and data silo information require production costs ‘000s labor intensive processes to manage $/bbl outco

  49. Slide 49: Intelligent operations example

    Track record Intelligent operations example algorithm based work management system Proprietary system more efficiently manages workforce & activity 43% fewer workers doing 10% more work, with higher value  Directly translates to acquired assets  Creates value through cost savings and revenue maxim

  50. Slide 50: Near term development – Permian, Eagle Ford & Haynesville

    Track record Near term development – Permian, Eagle Ford & Haynesville 2019 Plan Planned Divestments 2019-2021 Plan ~$2bn Capital ~$2-2.5bn Wamsutter 2019 capital p.a. Rig 16 San Juan Rig 15-25 count operated count operated rigs rigs Anadarko Arkoma  5-10 in Permian 2019 wells to be drilled >250 

  51. Slide 51: Transforming the portfolio

    Track record Transforming the portfolio simplifying the business and increasing liquids production BP Lower 48 BPX Energy before acquisition (2018) post-integration (2021) Operated wells 9,400 3,500 Basins 6 3 Capital budget ~$950m ~$2-2.5bn Production1 315mboed ~500mboed Oil % of production mix ~5%

  52. Slide 52: BHP acquisition – base case + upside

    Track record BHP acquisition – base case + upside1 increasing confidence that value creation can exceed model $65 WTI $3.25 HH Further upside potential Base case $55 WTI $2.75 HH $45 WTI Midstream $2.25 HH $10.5bn Upstream Purchase price BHP assets Synergies Capital efficiency Additional Environment

  53. Slide 53: Oman

    Track record Upstream Investor Day & Fieldtrip Oman 2018 Oman Michael Townshend Regional President, Middle East BP UPSTREAM INVESTOR DAY AND FIELDTRIP 1

  54. Slide 54: BP in Oman – history

    BP in Oman – history 2018 Ghazeer (Khazzan Ph2) FID 1937 PDO Khazzan 2013 2017 BP 23.75% interest in Petroleum Khazzan Khazzan discovery Development Oman and Dhofar Ph1 FID first gas 1920 1930 1980 1990 2000 2010 1927 2007 2016 BP, AMOCO & ARCO Exploration blocks D’Arcy Block 61 Block 61 2 year lice

  55. Slide 55: Largest tight gas development in Middle East

    Largest tight gas development in Middle East Block 61 interest Khazzan and Ghazeer fields combined 2,550km2 BP 60% OOCEP1 30% PETRONAS2 10% Phase 1 Phase 1 1bcfd, 25mboed Khazzan Khazzan OMAN condensate Phase 2 First gas 2021 Phase 2 Ghazeer 0.5bcfd gas Ghazeer plan 30mboed condensate  13,500 const

  56. Slide 56: Khazzan project progress and plan

    Khazzan project progress and plan Expected recoverable gas Development capital 2018 highlights: gross tcf gross $bn Khazzan Ghazeer Khazzan Ghazeer  ADIPEC Awards – Digital transformation project of the year 10.5 ~16 ~16  Eleven rigs to four 7.0  Top quartile vertical well cost  ∼ 30% higher rat

  57. Slide 57: Project progress – Khazzan Phase 2 (Ghazeer)

    Project progress – Khazzan Phase 2 (Ghazeer)  3rd gas train and 2nd condensate train  New gas export pipeline  ~7% ahead of plan  First gas expected in 2021 First structural concrete pour for utility area foundations in the brownfield (live plant) Ongoing installation of pipe rack construction o

  58. Slide 58: Beyond 2020 – future growth

    Beyond 2020 – future growth Block 61  Increase recovery beyond 10.5tcf  Get close to 2bcfd with a 1.5bcfd plant  Maximise condensate production Downstream  Gas market development options including acetic acid Exploration  Discussions with government ongoing BP UPSTREAM INVESTOR DAY AND FIELDTRI

BP — Investor Day (2018) on 6ix