6 FEBRUARY 2018 BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE STRONGER FUTURE IN A CHANGING WORLD 1 1 BP 4Q 2017 RESULTS BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE 1
BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE Bob Dudley Group Chief Executive 2 2 BP 4Q 2017 RESULTS BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE Hello everyone and welcome to BP’s fourth-quarter and full-year 2017 results and an update on BP’s strategy. I would like to thank everyone for joining us – here in the room in London, as well as those of you online around the globe. I know it’s very early in the morning or late in the evening for some of you, so a particular thanks to you. 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’), 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 – 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 future oil prices and supply and demand; expectations related to global energy supply and demand including with respect to natural gas and renewables; expectations regarding industry refining margins, turnaround activity and discounts for North American heavy crude oil in the first quarter of 2018; expectations regarding Upstream underlying production in 2018 and Upstream reported production in the first quarter of 2018; expectations regarding the timing and amount of future payments relating to the Gulf of Mexico oil spill; plans and expectations regarding the strategic partnership with Lightsource; plans and expectations with respect to Upstream projects, production, investments and activities in the Africa Transform Margin, the Atlantic Margin, Argentina, Azerbaijan, Brazil, Egypt, the Gulf of Mexico, India, Indonesia, the Lower 48, the North Sea, Norway, Nova Scotia, Oman, and Trinidad; plans and expectations regarding joint ventures with Rosneft; plans and expectations regarding major projects production including with respect to margins and production of 900 thousand barrels per day by 2021; expectations regarding organic capital expenditure, organic free cash flow, the organic breakeven point, inorganic cash flow, average operating cash flow, the DD&A charge, the Other Businesses and Corporate average underlying quarterly charge and the 2018 adjusted effective tax rate; plans and expectations regarding sustainable free cash flow and distributions to shareholders over the long term; expectations that ROACE will exceed 10% by 2021; plans and expectations regarding Downstream underlying earnings growth, free cash flow and pre-tax returns by 2021; plans and expectations regarding retail markets in Mexico, India, Indonesia and China; expectations with respect to base decline, margins per barrel and development costs per barrel; plans to set operational emissions reduction targets and expectations regarding operational emissions; plans and expectations regarding spending on and development of renewables including through new technologies, new business models, venturing and research, OGCI collaboration and the $1 billion investment fund; plans and expectations regarding the BP-Beyond Limits partnership; plans to maintain focus on safety and discipline; plans and expectations to offset scrip dilution and balance disciplined investment and regarding deleveraging of the balance sheet and distributions growth; expectations regarding the amount and timing of divestment proceeds; plans and expectations to target gearing within a 20-30% band; [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 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; the actions of contractors; 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 “Principal risks and uncertainties” in the results announcement for the period ended 30 June 2017 and “Risk factors” in BP Annual Report and Form 20-F 2016 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 Re Reconciliati tions to to GAAP AP - 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. Febru ruary ry 2018 2018 3 3 BP 4Q 2017 RESULTS BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE Before we begin, I need to draw your attention to the cautionary statement. It is long and detailed, but necessary. Please have a read when you have a moment. 3
Agenda 1 2 3 Group 4Q results Advancing strategic & financial the energy review frame transition Bob Dudley Brian Gilvary Lamar McKay Group chief f executi tive ve Chief f finan anci cial al offi ficer Deputy ty group chief f executi tive 4 5 6 Upstream Downstream Summary & Q&A Bernard Looney Tufan Erginbilgic Chief f executi tive ve, Upstre tream am Chief f executi tive ve, Downstre stream am 4 4 BP 4Q 2017 RESULTS BP 4Q & FULL YEAR 2017 RESULTS & STRATEGY UPDATE Here’s the agenda for today, and you’ll hear from me first with an overview of our progress against the strategy we laid out a year ago. Brian will then take you through our financial results for the fourth quarter and, also update you on our financial framework and guidance for 2018. We will then move on to update you on the strategy, looking out to 2021 and beyond. Lamar will focus specifically on our approach to the energy transition, and what BP is doing across the business to adapt and position itself for a lower carbon future. That will provide you with some wider context for the updates from Bernard and Tufan on how our Upstream and Downstream plans and portfolio are evolving over the medium term, as well as what we are doing to create and deliver longer-term growth prospects. We’ll then take a short break, and when we return I’ll provide a summary before moving to Q&A. 4
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