Bp Plc · LSE:BP.
Bp — Q2 2023 Earnings Presentation
36 slides from Bp's earnings presentation, Aug 1, 2023
Slide 1: 2Q 2023 financial results
1Q 2023 2Q 2023 financial results financial results 1Q 2023 financial results
Slide 2: SVP investor relations introduction
SVP investor relations Good morning everyone and welcome to bp’s second quarter 2023 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 cautionary statement. 2
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 presentation
Slide 4: Chief executive officer
Chief executive officer Thanks Craig. Good morning everyone, thanks for joining us either physically in the room here or online. 4
Slide 5: Performing while transforming
Our strategy in Performing while transforming • Resilient operational and financial performance 2Q23 underlying 2Q23 operating earnings cash flow* • Progressing our strategy at pace increase in dividend per ordinary share buyback • Executing against our disciplined share to 7.270 for 2Q23 announced
Slide 6: Investing with discipline across five transition growth engines
We are investing with discipline across our five transition growth engines to help accelerate the energy transition. This continued progress underpins our confidence in delivering our 2025 targets. Third, we are growing distributions for our shareholders. Today we have announced a 10% increase in th
Slide 7: Strong operational and strategic momentum in resilient hydrocarbons
Our strategy in Major bpx bp-operated upstream Upstream projects* production plant reliability* unit production cost Added from Mad Dog 1H23 vs 1H22 in 1H23 Lower unit production cost Phase 2 and KG D6-MJ YoY – on track with major projects by 2025 2025 target of ~$6/boe 2023 YTD strong operational a
Slide 8: Building growth optionality in global gas portfolio
We continued building growth optionality in our global gas portfolio, including agreeing to acquire a further 27% interest in the Browse project. In LNG – we are growing supply. Our third-party offtakes have made good progress with 15 cargoes loaded from Coral, and from Freeport which is now back to
Slide 9: Investing in today's oil and gas system – Tangguh expansion
Our strategy in Investing in today’s oil and gas system – Adds third LNG train – Start-up * 200mboed high-margin production 25mtpa LNG supply in 2025 from new major projects by 2025 2Q 2023 financial results 7 They say a picture is worth a thousand words and this one certainly does that. This is our
Slide 10: Significant progress in five transition growth engines
Our strategy in Acquisition of Strategic Convenience EV charge Biofuel production TravelCenters of America convenience sites1 gross margin*2 points* volumes Strategic 1H23 vs 1H22 1H23 vs 1H22 1H23 vs 1H22 1H23 vs 1H22 convenience sites* (1) Including TravelCenters (2) At constant forex Energy sales
Slide 11: Integrating Archaea Energy; growing hydrogen and renewables pipeline
safely integrating Archaea Energy into bp. We continue to grow our pipeline of hydrogen projects. Underpinned by new projects in the US and Oman, the pipeline has increased by 60% since the end of 2022 to reach 2.8 million tonnes per annum – well on the way to delivering our target of doubling our p
Slide 12: Creating an integrated value chain in Germany
Our strategy in Creating an integrated value chain in Germany – to develop 2 projects ― 4GW capacity renewable power own demand delivery approach1 disciplined enhanced returns investment from integration (1) Refers to our expectation to bring in a partner through farm down at the point of future inv
Slide 13: Enhancing returns through value chain integration
we will enhance these returns further through integrating across the energy value chain, leveraging our Trading & Shipping business to optimise value. And we believe our bid benchmarked positively compared to other lease auctions, acknowledging the timing of payments and other factors like the deliv
Slide 14: Chief financial officer
Chief financial officer Thanks Bernard and good morning everyone. 10
Slide 15: Underlying results
Underlying results $bn 2Q22 1Q23 2Q23 2Q 2023 vs 1Q 2023 Brent ($/bbl) 113.9 81.2 78.1 Henry Hub ($/mmbtu) 7.2 3.4 2.1 ▪ Significantly lower realised refining NBP (p/therm) 130.1 130.8 83.2 margins; significantly higher RMM ($/bbl) 45.5 28.1 24.7 turnaround and maintenance activity; Underlying RCPBI
Slide 16: Cash flow and balance sheet
Cash flow and balance sheet 1H23 surplus cash flow* $bn 16 $bn 2Q22 1Q23 2Q23 Disposal proceeds* Surplus cash flow IFRS operating cash flow* 10.9 7.6 6.3 12 Cash dividends Working capital (build)/release *1 (1.9) (1.4) 0.1 Lease payments* Capital expenditure* (2.8) (3.6) (4.3) 8 Divestment and other
Slide 17: 2023 financial frame
2023 financial frame Resilient Strong investment Disciplined Share dividend grade credit rating investment allocation buybacks Increase in dividend per 2023 surplus cash flow* 2023 capital expenditure* 2023 surplus cash flow1,2 ordinary share to 7.270 cents for 2Q23 Resilient $40/bbl Target further
Slide 18: Outlook for buybacks, capex and dividend growth
Looking forward, and based on bp’s current forecasts, at around $60 per barrel Brent and subject to the board’s discretion each quarter, bp continues to expect to be able to deliver share buybacks of around $4 billion per annum, at the lower end of its $14-18 billion capital expenditure range, and h
Slide 19: Transition growth engines – enhancing disclosure
Transition growth engines – enhancing disclosure Capex* EBITDA* $bn 1H23 2023-30 cumulative 1H23 2025 target 2030 aim Bioenergy 0.3 ~15 0.4 ~2 >4 Convenience 1.01 0.3 ~15 >1.5 >4 EV charging 0.2 (0.1) Hydrogen 0.1 (0.1) ~30 — 2-3 Renewables & power 0.5 0.2 Total transition growth* engines 2.1 55-65
Slide 20: EV charging and convenience EBITDA outlook
reaching around 3,000 by 2025 from around 2,750 today. And in EV charging we expect to be EBITDA positive by 2025 as we accelerate the roll-out of rapid and ultra-fast EV charge points and drive a material increase in energy sold. This disclosure is an important part of our commitment to reinventing
Slide 21: Chief executive officer
Bernard Looney Chief executive officer 15
Slide 22: Our investor proposition
Our investor proposition Growing value and returns >12% adjusted EBIDA*1 per share CAGR* Growing ROACE* to >18%2 long-term shareholder value Compelling cash distributions Resilient dividend3, ~4% p.a. growth Investing in transition growth* engines; driving down emissions ≥60% surplus cash flow* as s
Slide 23: Q&A
Q&A 2Q 2023 financial results 17
Slide 24: Appendix
Appendix 2Q 2023 financial results 18
Slide 25: Guidance
Guidance Full year 2023 3Q23 vs 2Q23 Capital expenditure* $16-18bn bp expects third-quarter 2023 reported upstream production to be broadly flat compared to second quarter 2023. Within this, bp expects production from oil DD&A Slightly above 2022 production & operations to be lower and gas & low c
Slide 26: Momentum in our strategic delivery
Momentum in our strategic delivery 2019 2022 2025 target 2030 aim Resilient Oil and gas production ~200mboed major Deep resource base hydrocarbons (mmboed) 2.6 2.3 project* production ~2.3 provides optionality ~2.0 ~3.8 incl. Russia production Biofuels production (mbd) 23 27 Scale co-processing ~50
Slide 27: Strategic progress – last months
Strategic progress – last 12 months Denotes transition growth* engine Resilient hydrocarbons Convenience and mobility Low carbon energy Acquisition of Archaea Energy bp pulse & Uber Global agreement Renewables pipeline* growth Accelerating growth and realising distinctive value in biogas Building on
Slide 28: Gas and low carbon energy
Gas and low carbon energy 2Q22 1Q23 2Q23 Underlying RCPBIT* $bn Production volume 7.0 6.2 Liquids (mbd) 112 114 103 6.0 Natural gas (mmcfd) 4,709 4,962 4,641 5.0 Total hydrocarbons (mboed) 924 969 903 4.0 3.5 3.1 3.1 Average realisations* 3.0 2.2 Liquids ($/bbl)1 105.50 79.44 73.57 2.0 Natural gas (
Slide 29: Oil production and operations
Oil production and operations 2Q22 1Q23 2Q23 Underlying RCPBIT* $bn Production volume 7.0 5.9 Liquids (mbd) 935 1,005 1,000 6.0 5.2 Natural gas (mmcfd) 1,964 2,060 2,140 5.0 4.4 Total hydrocarbons (mboed) 1,274 1,360 1,369 4.0 3.3 Average realisations* 2.8 3.0 Liquids ($/bbl) 100.34 71.63 69.19 2.0
Slide 30: Customers and products
Customers and products 2Q22 1Q23 2Q23 Underlying RCPBIT* $bn Customers – convenience & mobility Customers - convenience & mobility Products - refining & trading Total Customers – convenience & mobility 1.0 0.7 1.1 adjusted EBITDA* 5.0 4.0 Castrol1 adjusted EBITDA* 0.3 0.2 0.2 4.0 Capital expenditure
Slide 31: Glossary - abbreviations
Glossary - abbreviations Barrel (bbl) 159 litres, 42 US gallons. MW Megawatts CCS Carbon, capture and storage. RC Replacement cost. DD&A Depreciation, depletion and amortisation. SAF Sustainable aviation fuel. EV Electric vehicle. SPA Sale and purchase agreement FID Final investment decision. SVP Se
Slide 32: Glossary
Glossary Adjusting items Include gains and losses on the sale of businesses and fixed assets, Convenience It is calculated as RC profit before interest and tax for the customers & impairments, environmental and other provisions, restructuring, integration gross margin products segment, excluding RC
Slide 33: Glossary
Glossary Fair value Difference between the way bp manages the economic exposure and Realisations Result of dividing revenue generated from hydrocarbon sales, excluding accounting internally measures performance of certain activities and the way those revenue generated from purchases made for resale
Slide 34: Glossary
Glossary Retail sites Include sites operated by dealers, jobbers, franchisees or brand licensees or Transition growth Activities, represented by a set of transition growth engines, that transition joint venture (JV) partners, under the bp brand. These may move to and from bp toward its objective to
Slide 35: Glossary
Glossary Working capital Movements in inventories and other current and non-current assets and liabilities as reported in the condensed group cash flow statement. Change in working capital adjusted for inventory holding gains/losses, fair value accounting effects relating to subsidiaries and other a
Slide 36: Resources
Resources bp's website includes information Useful links Investor events about our financial performance, reports and information on investing Why invest in bp 10-11 October 2023 Oil & gas capital markets event Denver in bp, dividend payments, AGM and strategy events. Modelling guidance 31 October 2