Bp Plc · LSE:BP.
Bp — Q2 2022 Earnings Presentation
37 slides from Bp's earnings presentation, Aug 2, 2022
Slide 1: bp second quarter 2022 financial results
bp second quarter 2022 financial results 2 August 2022
Slide 2: Welcome and introductions
svp investor relations 1Q 2022 financial results Good morning everyone and welcome to bp’s second quarter 2022 results presentation. I am here today with Bernard Looney, chief executive officer and Murray Auchincloss, chief financial officer. Before we begin today, let me draw your attention to our
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: CEO introduction: the energy trilemma
Chief executive officer 1Q 2022 financial results Thanks Craig. Good morning everyone. Welcome to our second quarter results. It is great to have you join us on the call and see those of you here in person. You are going to hear about – what I hope you will agree – is some good progress from us toda
Slide 5: Focused on delivering our strategy as an Integrated Energy Company
We see this. And it’s why we are absolutely focused on delivering our strategy to transform to an Integrated Energy Company. A company which can help solve that energy trilemma. We do that by: a) Working hard to keep the energy flowing today. And – not or - b) At the same time investing to accelerat
Slide 6: Performing while transforming: results context
2Q 2022 financial results 5 That is the context against which we present today’s results. A set of results that show us performing while transforming. During the quarter we generated operating cash flow of $10.9 billion. We reduced net debt for the ninth consecutive quarter to reach $22.8 billion. A
Slide 7: Chief financial officer
Chief financial officer 1Q 2022 financial results Thanks Bernard and good morning everyone. 6
Slide 8: Macro environment
Macro environment Oil price1 $/bbl Natural gas price1 $/mmbtu Refining marker margin* 1 $/bbl Source: Platts - all data 1 July 2021 to 27 July 2022 (1) Spot price 2Q 2022 financial results 7 Let’s begin with macro environment. Starting with the oil price. During the second quarter, Brent averaged $1
Slide 9: Underlying results
Underlying results $bn 2Q21 1Q22 2Q22 2Q 2022 vs 1Q 2022 Underlying RCPBIT * 4.7 10.2 12.8 Gas & low carbon energy 1.2 3.6 3.1 ▪ Strong realised refining margins Oil production & operations 2.2 4.7 5.9 Customers & products 0.8 2.2 4.0 Other businesses and corporate 1 0.4 (0.3) (0.2) ▪ Higher liquids
Slide 10: Cash flow and balance sheet
Cash flow and balance sheet 2Q22 highlights 1H22 cash inflows/outflows $bn ▪ $10.9bn operating cash flow* including: ▪ $2.9bn working capital*1 build – includes $1.2bn Gulf of Mexico oil spill payment ▪ $6.6bn surplus cash flow* ▪ $2.3bn share buyback executed ▪ $2.5bn programme announced with 1Q22
Slide 11: Maintaining our disciplined financial frame
Maintaining our disciplined financial frame (1) Subject to maintaining a strong investment grade credit rating (2) In addition, executed $500m buyback programme during 1Q22 to offset expected dilution from vesting of awards under employee share schemes during 2022 2Q 2022 financial results 10 Moving
Slide 12: Chief executive officer
Chief executive officer 1Q 2022 financial results Thanks Murray. 11
Slide 13: Advancing our strategy at pace – growing EBITDA to 2030
Advancing our strategy at pace – growing EBITDA to 2030 All numbers represent 2030 EBITDA* aims, at $60/bbl Brent (2020, real) and bp planning assumptions 2Q 2022 financial results 12 Turning then to our strategic momentum in transforming to an IEC. First, I am going to provide an update on the prog
Slide 14: Turning first to our oil and gas business
2Q 2022 financial results 13 Turning first to our oil and gas business. 13
Slide 15: Oil and gas – a high-graded portfolio
Oil and gas – a high-graded portfolio Remaining highly price leveraged Focused on growth from six Driving >20% margin expansion as production declines material regions in unit EBITDA Oil & gas EBITDA*1,2,3 $bn Oil & gas EBITDA*1,3 $bn Production1,3 % Price upside >$45/boe Other resilient hydrocarbon
Slide 16: Unit margins expected to grow by over 20% by 2030
at our strategy update in February. It demonstrates how unit margins are expected to grow by over 20% by 2030 relative to 2021 as we: − Focus our investment in higher margin regions; − Execute our plans to drive cost efficiency; and − High-grade through divestments in lower margin regions. This high
Slide 17: Oil and gas – progress in high-grading our portfolio
Oil and gas – progress in high-grading our portfolio High-grading Access in Egypt position in Canada Awarded 100% working • Agreed to divest 50% interest in offshore interest in Sunrise exploration block oil sands asset Azule Energy begins Growing investment and • Agreed to acquire 35% operations Di
Slide 18: Portfolio optimisation
Finally, portfolio optimisation. This year we have: − Agreed to divest our Canadian Sunrise and Pike oil sands assets; − Created a new Angola focused company – Azule Energy – in a joint venture between Eni and ourselves; and − Restructured our business in Iraq with PetroChina. 15
Slide 19: Transition growth engines: EV charging
Integration 2Q 2022 financial results 16 Now let me turn to two of our transition growth engines, starting with EV charging. 16
Slide 20: EV charging – aim to deliver ~$2bn EBITDA by 2030
EV charging – aim to deliver ~$2bn EBITDA by 2030 Leveraging our Charge points*: >50% growth to 2025 already announced global scale 000’s Global network and infrastructure Convenience and loyalty offers Established global strategic relationships Trading and shipping (1) Reported to the nearest 50 2Q
Slide 21: Focus on fast-charging and growing electron sales
US. Importantly, we have a distinctive focus on fast-charging. − Around 50% of our charge points are now rapid or ultra-fast – that’s at least 50kW for rapid, more than 150kW for ultra-fast; − We recently became the leading provider of ultra-fast charging in Germany, building on our leading position
Slide 22: Turning then to hydrogen
2Q 2022 financial results 18 Turning then to hydrogen. 18
Slide 23: Hydrogen – building global leadership in low carbon hydrogen
Hydrogen – building global leadership in low carbon hydrogen Our progress Asian Renewable Energy Hub (AREH) Global scale, cost advantaged solar, wind & hydrogen Decarbonising Refineries own demand >1mtpa Building global hydrogen hopper scale (risked) Capturing customer >2.5mtpa demand identified Glo
Slide 24: Asian Renewable Energy Hub
Teesside in the UK. And we are accelerating our aim to create cost-advantaged global production hubs. We have agreed to lead and operate the Asian Renewable Energy Hub – AREH – in Australia where bp will hold 40.5% stake. AREH has the potential to be one of the world’s largest renewables and green h
Slide 25: Summary: bp is focused on delivery
2Q 2022 financial results 20 To summarise. I hope you agree that today’s results show that bp is focused on delivery. We are performing while transforming – doing exactly what we said we would do. − The company is running well and continues to strengthen. − We have real strategic momentum in our tra
Slide 26: 2Q 2022 financial results
2Q 2022 financial results 21
Slide 27: 2Q 2022 financial results
2Q 2022 financial results 22
Slide 28: Guidance
Guidance Full year 2022 3Q22 vs 2Q22 Capital expenditure* $14-15bn ▪ Looking ahead, we expect third-quarter 2022 upstream production on a DD&A Similar level to 2021 reported basis to be broadly flat compared with the second-quarter 2022, with improved base performance offset by planned maintenance a
Slide 29: Gas and low carbon energy
Gas and low carbon energy 2Q21 1Q22 2Q22 Underlying RCPBIT* $bn Production volume Liquids (mbd) 109 121 112 Natural gas (mmcfd) 4,440 4,897 4,709 Total hydrocarbons (mboed) 875 966 924 Average realisations* Liquids ($/bbl) 61.69 86.09 105.50 Natural gas ($/mcf) 4.14 7.88 8.42 Total hydrocarbons ($/b
Slide 30: Gas and low carbon energy: renewables pipeline
Gas and low carbon energy Developed renewables to FID* and Renewables pipeline* Renewables hopper* renewables pipeline* bp net, GW by technology bp net bp net ▪ Developed and pipeline 0.9GW higher than 1Q22, driven by increase in Lightsource bp pipeline ▪ 53 projects developed to FID* by Lightsource
Slide 31: Oil production and operations
Oil production and operations 2Q21 1Q22 2Q22 Underlying RCPBIT* $bn Production volume1 Liquids (mbd) 938 948 935 Natural gas (mmcfd) 1,786 1,964 1,964 Total hydrocarbons (mboed) 1,245 1,286 1,274 Average realisations* Liquids ($/bbl) 60.55 83.47 100.34 Natural gas ($/mcf) 3.90 9.40 7.97 Total hydroc
Slide 32: Customers and products
Customers and products 2Q21 1Q22 2Q22 Underlying RCPBIT* $bn Customers – convenience & mobility Customers – convenience & mobility 1.3 0.8 1.0 adjusted EBITDA* Castrol1 adjusted EBITDA* 0.3 0.3 0.3 Capital expenditure* 0.3 0.3 0.3 bp retail sites* – total2 20,300 20,550 20,600 bp retail sites in gro
Slide 33: 2Q 2022 financial results
2Q 2022 financial results 28
Slide 34: Glossary – definitions
Glossary – definitions Adjusting items Include gains and losses on the sale of businesses and fixed assets, EBITDA / RC profit before interest and tax, excluding net adjusting items*, adding back impairments, environmental and other provisions, restructuring, integration adjusted EBITDA depreciation
Slide 35: Glossary – definitions
Glossary – definitions Net debt Calculated as finance debt, as shown in the balance sheet, plus the fair value Renewables Renewable projects satisfying the following criteria until the point they can of associated derivative financial instruments that are used to hedge foreign pipeline be considered
Slide 36: Glossary – definitions
Glossary – definitions Surplus cash flow Refers to the net surplus of sources of cash over uses of cash, after reaching Underlying Underlying RC profit or loss before interest and tax for the operating the $35 billion net debt target. Sources of cash include net cash provided by replacement cost seg
Slide 37: Glossary - abbreviations
Glossary - abbreviations Barrel (bbl) 159 litres, 42 US gallons. boe Barrels of oil equivalent. GW Gigawatt. mbd Thousand barrels per day. mboed Thousand barrels of oil equivalent per day. mmbtu Million British thermal units. mtpa Million tonnes per annum. RC Replacement cost. SAF Sustainable aviati