BP plc · LSE:BP.
BP — Investor Day (2014)
45 slides from BP's investor day presentation, 2014
Slide 1: Resource progression
Resource progression James Dupree and Richard Herbert Andrew, North Sea1
Slide 2: Resource progression - agenda
Resource progression - agenda James Dupree, Chief Operating Officer for Reservoir Development & Technology Richard Herbert, Chief Operating Officer for Exploration • Resource progression conveyor belt • Reserves / production competitive position • Giant young fields and area development plans • Expl
Slide 3: BP's resource progression conveyor belt
Progressing resources BP’s resource progression conveyor belt Proved Proved Prospects Non-proved resources undeveloped developed Major projects Major projects Resource appraise construction / execute Explore appraise / construction 6.0bn boe 2.6bn boe 5.0bn boe Annual Start Producing production Up 6
Slide 4: BP reserves & production position versus competitors
Progressing resources BP reserves & production position versus competitors Proved reserves bn boe(1) Production mmboed(1) BP share of Rosneft BP share of Rosneft Reserves to production ratio years(1) BP reserves to production ratio years(2) Proved R/P (years) PD (years) BP share of Rosneft 15 Total
Slide 5: Thunder Horse resource potential
Growth in deepwater fields Thunder Horse resource potential GoM GoMResources resources ThunderHorse Thunder Horse Resources resources Cumulative production • Early field-life operation in deepwater Proved reserves Non-proved resource Remaining hydrocarbons • Near term focus on infill drilling and we
Slide 6: PSVM resource potential - keeping our vessels full
Growth in deepwater fields PSVM resource potential - keeping our vessels full Angola Region region Block Block31 31PSVM PSVM • 6% recovery to date, early field life resources Resources Fieldresources Resources Cumulative production • Strong production performance Proved reserves Non-proved resource
Slide 7: Value investment decisions
Value investment decisions Current portfolio, produced and remaining Alaska • Quality through choice North Sea of activity aligned to a Canada Azerbaijan regional strategy Lower 48 N Africa • Ensures executable India (integrated) activity Gulf of Mexico Trinidad through cross- Middle Angola East fun
Slide 8: Exploration access and appraise
Exploration access and appraise Proved Proved Prospects Non-proved resources undeveloped developed Major projects Major projects Explore Resource appraise Appraise / construction construction / execute Annual Start-up Producing Production Access Reservoir development Rig programmes 8
Slide 9: Exploration & resource appraisal current portfolio
Exploration & resource appraisal Current portfolio North Sea1 Canada Azerbaijan North Africa2 Trinidad Gulf of Mexico Brazil Oman India Angola Asia Pacific3 Unconventional Deepwater oil 2014 discovery (1) Includes North Sea, Norwegian Barents and Greenland Arctic Conventional oil (2) Includes Algeri
Slide 10: Exploration & resource appraisal: deepwater oil & conventional gas
Exploration & resource appraisal Deepwater oil & conventional gas Gulf of Mexico Keathley Canyon Paleogene Egypt Nile Delta • Built strong • Proved deep Oligocene Paleogene play play through material position discoveries • New development • Large upside through hub potential play extension both thro
Slide 11: Future exploration activity 2014 - 2018
Future exploration activity 2014 - 2018 Near-field Core Frontier Test of Exploration Exploration Exploration Concept Angola Australia • Balanced portfolio with Brazil diversity of future drill-out Deepwater Oil Canada options Gulf of Mexico Morocco • Drill 15 to 20 wildcat wells Conventional Oil Nor
Slide 12: Summary
Summary • Reloaded exploration pipeline • Successful 2013/2014 exploration programme • 4% growth in our resource base despite divestments • Existing portfolio underpins long-term underlying production growth • Balanced portfolio of opportunities 12
Slide 13: Execution in the base
Execution in the base Bernard Looney Na Kika, Gulf of Mexico
Slide 14: Execution in the base
Execution in the base Safely, profitably manage decline • Safety is our first priority • Reservoir management • Drilling efficiency • Operations efficiency • Operating expenditure efficiency ~350 oil and gas fields ~$9bn production cost per annum ~2mmboed production ~20,000 people today 2
Slide 15: Reservoir management: reservoir sweep
Reservoir management Reservoir sweep 2014 water injection rates Key area BP operated water injection rates Alaska North 1500 Water injection (mbwd) Sea Azerbaijan Canada 1000 N Africa Iraq Gulf of Mexico 500 (excludes OBO) Angola 0 S Cone 2011 2012 2013 2014 • 78% of 2014 oil production supported by
Slide 16: Reservoir management: system optimisation
Reservoir management System optimisation Production from system optimisation 2% % Total production 1% 0% 2011 2012 2013 2014 • Systematic identification of opportunities • System modelling and optimisation has • Targeted deployment of capability and delivered 1-2% of production each year technology
Slide 17: Drilling efficiency
Drilling Efficiency New well delivery and wellwork production Total Total OBO production Production operated production BP Operated Production 200 150 mboed 100 50 0 2009 2010 2011 2012 2013 2014 • 42 operated rigs by end 2014 • Highest new well delivery since 2009 • 126 BP operated wells drilled •
Slide 18: Drilling: Blow Out Preventer reliability
Drilling Blow Out Preventer reliability BOP reliability team Subsea BOP reliability 19.9m Non-productive time (days) • Dedicated team of experts 700 600 • 4 focus areas 500 - Troubleshooting and risk assessment 400 - Maintenance 300 - Defect elimination 200 - Contractor engagement 100 3.5m 0 2012 20
Slide 19: Operations efficiency
Operations Efficiency Global operations organisation process safety • Global operations priorities Upstream operated Tier 1 events plant reliability 1. Embed the functional organisation 25 95% 2. Drive improvement in reliability and 20 maintenance 90% 15 3. Manage process safety and plant integrity
Slide 20: Operations key regions: plant reliability
Operations Key regions Plant reliability Plant reliability (%) 100 Azerbaijan • Drive root cause failure analysis Angola GoM 90 • Eliminate defects • Eliminate vulnerabilities 80 North Sea • Build capability 70 60 2011 2012 2013 2014 (1) Source: BP internal data; 2014 based on 3Q YTD 8
Slide 21: Operating expenditure efficiency
Operating Expenditure Efficiency In action Forward plan • ~1,000 staff reduction due to 1. Safety remains our top priority divestments and restructuring by 2. Activity: amount and pace year end 2014 3. Efficiency: right sized overheads and • ~1,200 reduction in agency staff by simplified processes y
Slide 22: Summary
Summary • Safety continues to improve – remains our number 1 priority • Safely, profitably manage production decline to compound annual 3-5% − Continue focus on reservoir health − Competitive drilling in every basin − Improve North Sea plant reliability • Continue to drive operating expenditure effi
Slide 23: Gas
Gas Andy Hopwood and Paul Reed Tangguh LNG Plant, Indonesia
Slide 24: Gas
Gas Andy Hopwood, COO Strategy and Regions Paul Reed, CEO Integrated Supply and Trading Agenda • Strategy • Portfolio • Business model • Potential outcomes 2
Slide 25: Demand for gas continues to grow
Demand for gas continues to grow Demand by region bcfd • Global gas demand grows at 500 around 2% pa ~ double that of oil China 400 • Global LNG demand grows at Other non-OECD around 4% pa 300 • Demand driven by non-OECD Middle East 200 countries Other OECD 100 • North American unconventional North
Slide 26: Our strategy for gas is focused on value
Our strategy for gas is focused on value • Access the lowest cost resources in the basin − From incumbency in oil and exploration • Be prepared to take on projects at scale and complexity − Deep water, pipelines, LNG, unconventionals, technology • Maintain a deliberate balance with a view to the lon
Slide 27: Material portfolio of gas value chains
Material portfolio of gas value chains Unconventional Shah Deniz KG D6 Prudhoe Bay 5 key basins Tangguh NEC 25 Point Thomson VICO Alaska (2030) Lower 48 Azerbaijan North Africa Oman Trinidad India Indonesia Bubble size = 2024 operating cash flow Australia (Alaska 2030) Khazzan Columbus basin Nile De
Slide 28: Significant future investment potential
Significant future investment potential 2014 BP BP upstream BP net Potential Value chain production production equity plateau lifespan Optionality (bcfd) (%) (bcfd) (yrs) Potential to extend contracts and sustain production from infill, Trinidad 2.3 BPTT (70% BP) 2.2 - 2.5 15-20 tie backs and furthe
Slide 29: Balanced production growth
Balanced production growth bcfd 10 Gas production 2024 production Australia Future Indonesia LNG LNG optionality Trinidad New major projects Conventional sustaining or adding value chains Azerbaijan India Pipeline & domestic North Africa & Egypt Unconventional Today’s producing value chains Oman Low
Slide 30: Supported by Integrated Supply & Trading assets
Supported by Integrated Supply & Trading assets Largest US gas wholesaler Southern corridor Pan European marketer and trader Reliance JV Guangdong LNG Key customer relationships Alaska (2030) LNG LNG Future LNG supply Lower 48 LNG Azerbaijan LNG (Alaska, Freeport) LNG LNG North Africa LNG LNG Oman T
Slide 31: A world class marketing and trading capability
A world class marketing and trading capability Experienced global team of professionals − Deep knowledge of market supply and demand − Relationships with key global gas players and regional partners Global scale and flexibility − Largest wholesale gas trader in North America − Pan-European presence
Slide 32: Enables growth in our LNG portfolio
Enables growth in our LNG portfolio 2014 year-to-date LNG cargo flows Potential BP portfolio LNG liquefaction capacity (mtpa) 124 124 40 Trinidad & Tobago Europe Merchant Asia BP goal ~25mtpa S. America Spot & Caribbean Equity N. America Middle East 0 Supply Sales 2014 2016 2018 2020 2022 2024 2026
Slide 33: Flexibility key as premium markets shift over time
Flexibility key as premium markets shift over time Trinidad & Tobago Europe (2006 – 2010) USA (2000 – 2006) 2 Asia (2010 – 2014) 1 3 Trinidad S. America (2010 – 2014) 4 Historic global gas prices 25 (1) USA Premium (2) European Premium (3 & 4) Asia / S.America Premium Asian contract 20 proxy $/MMBtu
Slide 34: A business competitively positioned for value
A business competitively positioned for value Gas resources (tcf) 2013 production (bcfd) 250 12 Russia Russia Total excluding Russia Total excluding Russia 0 0 25 2014 Liquefaction capacity (mtpa) 25 US wholesale volumes (bcfd) 0 0 Source: BP internal, Wood Mackenzie, FERC 552 returns, company infor
Slide 35: Summary
Summary Upstream operating cash flow % of total(1) Material gas resources 100 − 133 tcf of BP entitlement resources gas Significant growth potential oil − Gas growth greater than oil 0 2014 2024 Material cash conversion BP major gas projects production profile length − Investment of ~$100bn by 2024
Slide 36: Projects
Projects Neil Shaw Quad 204, North Sea Under construction in Korea
Slide 37: Track record of project delivery
Track record of project delivery 2012 – 2014 Major projects start-ups PSVM 2012 2013 2014 2014 plant efficiency = 98% Clochas-Mavacola ALNG Chirag Oil Galapagos Atlantis North Mars B Devenick Expansion 1 Na Kika 3 PSVM North Rankin 2 Atlantis North Expansion 2 Skarv CLOV Ki
Slide 38: Major projects growth to 2020
Major projects growth to 2020 2014 2015 mboed BP net production from Chirag Oil Kizomba Satellites 2 new major projects Mars B In Salah Southern Fields Na Kika 3 Atlantis North Expansion 2 Western Flank A CLOV Greater Plutonio 3 Kinnoull Sunrise 1 2016 2017 Thunder Horse Water Injection Juniper ALNG
Slide 39: On track to deliver projects 2015 – 2017
On track to deliver 15 projects 2015 – 2017 In Salah Southern Fields (2015) 60% 100% Progress to start-up Start-up Kizomba Satellites 2 2H 2015 In Salah Southern Fields 2H 2015 Greater Plutonio 3 2H 2015 Construction 78% complete Western Flank A 2H 2015 Quad 204 (2016) Thunder Horse Water Injection
Slide 40: Improving project execution
Improving project execution • Global execution model BP relative performance Input metrics (Quartile) (Ongoing projects) - Organisation, systems and processes 2010 2014 - Centres of expertise Reservoir FEL 1st 1st Facilities FEL 1st 1st - Economies of scale Wells FEL 2nd 1st • Concept development re
Slide 41: Standardisation
Standardisation • Organised to standardise Subsea control module costs and delivery times - Global subsea and facilities hardware teams 100% - Global concept development team - Multi-year programme to drive standardisation at scale across projects portfolio PMT & Engineering • Circa 15% cost and sch
Slide 42: Mad Dog 2
Mad Dog 2 mboed(1) (gross) $22bn 200 Total $14bn project capital 0 Pre-recycle Latest view 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 MD Phase 1 MD Phase 2 MD Phase 3 • Material high-value project, total field is 4 bn boe in place, only 12% recoverable oil produced to date • Focus on value, ~
Slide 43: Shah Deniz 2
Shah Deniz 2 mboed(1) (gross) 600 • Material high-value project, BP’s largest ever gas discovery – 40 tcf gas and 2 bn barrels oil in place • Alignment across the value chain, countries, partners and contractors working together with BP actively influencing TANAP and TAP execution 0 2007 2012 2017 2
Slide 44: Oman Khazzan
Oman Khazzan mboed(1) (gross) • Material high-value project, 250 develops 7 tcf resources with peak production of ~1 bcfd • Technology, leverages BP capability in tight gas development to optimise recovery - • Project execution on track, overall 2017 2022 2027 2032 2037 2042 12% complete with all ma
Slide 45: Summary
Summary High-quality and material project portfolio to underpin growth to 2020 and beyond – Over 900 mboed of expected new net production by 2020 - 50% under construction - next 15 projects on track for start-up in 2015 - 2017 – 2015 - 2020 project margins over 35% greater than 2014 segment averag