BP 1Q 2019 Results 30 April 2019 keep advancing BP 1Q 2019 RESULTS 1
Craig Marshall Head of Investor Relations BP 1Q 2019 Results keep advancing BP 1Q 2019 RESULTS 2
Cautionary statement Forward-looking statements - 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. This presentation and the associated slides and discussion contain forward-looking statements – that is, statements related to future, not past events and circumstances – with respect to the financial condition, results of operations and business of BP and certain of the expectations, intentions, plans and objectives of BP with respect to these items, in particular statements regarding expectations related to the world economy, future oil and gas prices and global energy supply and demand including with respect to oil and natural gas; plans to invest up to $100 million over the next three years in the Upstream Carbon Fund to support projects to deliver new greenhouse gas emissions in the Upstream; plans and expectations regarding progress against near-term emissions reduction targets; plans to produce 900,000 boed from new major projects by 2021; plans and expectations regarding the Azeri Central East project, including to achieve first production in 2023 and produce up to 300 million barrels over its lifetime; plans and expectations regarding the integration of the assets acquired from BHP in BPX Energy, including delivery of synergies and further upside potential; plans to add 1,000 new BP branded retail station sites in China over the next five years; plans and expectations to expand the production capacity at BP’s joint venture petrochemicals facility in South Korea; plans and expectations regarding share buybacks, including to offset the impact of dilution from the scrip program; expectations regarding refining margins, discounts for North American heavy crude oil and refining turnarounds; expectations regarding Upstream reported production in the second quarter of 2019, seasonal turnaround and maintenance activity; expectations regarding continuing growth in the Downstream; plans and expectations with respect to Upstream projects; expectations regarding BP’s strategic plan and financial frame including organic capital expenditure, organic free cash flow and operating cash flow, the DD&A charge, Gulf of Mexico oil spill payments, cost and capital discipline, the Other Businesses and Corporate average underlying quarterly charge, and the 2019 underlying effective tax rate; plans and expectations to deliver returns exceeding 10% by 2021 at a $55 per barrel real price assumption; plans and expectations regarding sustainable free cash flow and growing distributions to shareholders; expectations regarding the amount, timing and uses of divestment proceeds; plans and expectations to target gearing within a range of 20-30%; and plans and expectations with respect to dividends. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of BP. Actual results may differ materially from those expressed in such statements, depending on a variety of factors, including: the specific factors identified in the discussions accompanying such forward-looking statements; the receipt of relevant third party and/or regulatory approvals; the timing and level of maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new fields onstream; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing, including supply growth in North America; OPEC quota restrictions; PSA effects; operational and safety problems; potential lapses in product quality; economic and financial market conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought or imposed; the actions of prosecutors, regulatory authorities and courts; delays in the processes for resolving claims; amounts ultimately payable and timing of payments relating to the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; our access to future credit resources; business disruption and crisis management; the impact on our reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; decisions by Rosneft’s management and board of directors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other factors discussed under “Risk factors” in BP Annual Report and Form 20-F 2018 as filed with the US Securities and Exchange Commission. This document contains references to non-proved resources and production outlooks based on non-proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov. Reconciliations to GAAP - This presentation also contains financial information which is not presented in accordance with generally accepted accounting principles (GAAP). A quantitative reconciliation of this information to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found on our website at www.bp.com. Tables and projections in this presentation are BP projections unless otherwise stated. April il 2019 2019 keep advancing BP 1Q 2019 RESULTS 3
Brian Gilvary Chief Financial Officer BP 1Q 2019 Results keep advancing BP 1Q 2019 RESULTS 4
1Q 2019 highlights Resilient earnings Solid operational Advancing the and cash flow performance energy transition 3.8 mmboed $ 2.4 billion Continued focus on emissions reductions underlying replacement group production 2 cost profit Upstream Carbon Fund Upstream major project $ 5.9 billion announced delivery Downstream marketing underlying operating cash flow 1 growth (1) Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments (2) Group reported oil and gas production including Rosneft keep advancing BP 1Q 2019 RESULTS 5
Environment Brent oil price 1 Henry Hub gas price 1 Refining Marker Margin 2 $/bbl $/mmbtu $/bbl 80 18 6.0 75 16 5.0 70 14 65 4.0 12 60 10 55 3.0 8 50 45 2.0 6 Jan Feb Mar Apr Jan Feb Mar Apr Jan Feb Mar Apr (1) Source: Platts All data 1 January 2019 to 26 April 2019 (2) Refining Marker Margin (RMM) based on BP’s portfolio keep advancing BP 1Q 2019 RESULTS 6
1Q 2019 results summary $bn $bn 1Q18 4 4Q18 4 1Q19 4 1Q 2 2019 19 vs 4 4Q 2018 Underlying replacement cost profit 2.6 3.5 2.4 Underlying operating cash flow 1 5.4 7.1 5.9 Lower price environment ▪ Underlying RCPBIT 2 Upstream turnaround and ▪ Upstream 3.2 3.9 2.9 divestment impacts Downstream 1.8 2.2 1.7 Rosneft 3 0.2 0.4 0.6 Strong supply and trading ▪ Other businesses and corporate (0.4) (0.3) (0.4) Underlying earnings per share (cents) 13.0 17.4 11.7 Dividend paid per share (cents) 10.00 10.25 10.25 Dividend declared per share (cents) 10.00 10.25 10.25 (1) Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments (2) Replacement cost profit before interest and tax (RCPBIT), adjusted for non-operating items and fair value accounting effects (3) BP estimate of Rosneft earnings after interest, tax and minority interest (4) 1Q18 and 4Q18 have not been restated following the adoption of IFRS 16. 1Q19 impacts are disclosed in the appendix keep advancing BP 1Q 2019 RESULTS 7
Sources and uses of cash 1Q 2018 organic cash inflows/outflows 1 $bn 1Q 2019 organic cash inflows/outflows $bn 7 7 6 6 Share buybacks Share buybacks 5 5 Dividends 3 Dividends 3 4 4 Lease payments 4 Underlying Underlying 3 3 cash flow 2 cash flow 2 2 2 Organic capex Organic capex 1 1 0 0 Other inflows/outflows 1 $bn Other inflows/outflows $bn 3 3 2 2 Inorganic capex Inorganic capex 1 1 Disposals 5 Gulf of Mexico oil spill Disposals 5 Gulf of Mexico oil spill 0 0 (1) 1Q 2018 has not been restated following the adoption of IFRS 16 (2) Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments (3) Cash dividends paid (4) Lease liability payments (5) Divestments and other proceeds keep advancing BP 1Q 2019 RESULTS 8
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