SRI annual meeting 13 November 2015
Cautionary statement Forward-looking statements - cautionary statement The presentations and the associated slides and discussion contain certain forecasts, projections and forward-looking statements – that is, statements related to future, not past events – with respect to the financial condition, results of operation and businesses of BP and certain of the plans and objectives of BP with respect to these items. In particular, among other statements, certain statements regarding future focus on safety and efficiency in operations; 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 future global energy trends and oil price, expectations regarding the settlement of certain claims in the Gulf of Mexico litigation; BP’s plans and expectations regarding the 'BP Proposition', active portfolio management, future po rtfolio resilience and the effects of future and current technologies on BP’s portfolio; expectations regarding BP’s plans to rebalance the financial framework and the future growth of organic free cash flow; plans and expectations regarding the Upstream major project pipeline and an increasing bias to gas; expectations regarding divestments and the prospects for, expected timing, locations, composition and future production of major projects and growth; plans and expectations regarding BP’s ability to sustain its dividend, growth of shareholder distributions over the long -term and expe cted gearing levels; BP’s expectations in respect of future global demographic and economic trends, expectations regarding future trends in global energy demand and expectations regarding future contributions to global supply from different energy sources; levels of emissions and temperature, as well as improvements in engine efficiency, and the effect of a carbon price, are all forward looking in nature. 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 timing of 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 problems; economic and financial market conditions generally or in various countries and regions; political stability in relevant areas of the world; changes in laws and governmental regulations; changes in sanctions and other trade restrictions; 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; the impact on our reputation following the Gulf of Mexico oil spill; the actions of the Claims Administrator appointed under the Economic and Property Damages Settlement; the actions of all parties to the Gulf of Mexico oil spill-related litigation at various phases of the litigation; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners, creditors, rating agencies and others; decisions by Rosneft’s management and board of directors in respect of strategy, operations or otherwise; 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 BP’s Stoc k Exchange Announcement for the period ended 30 June 2015 and under “Risk factors” in our Annual Report and Form 20 -F 2014 as filed with the US Securities and Exchange Commission (SEC). Cautionary note to US investors – This presentation 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. Tables and projections in this presentation are BP projections unless otherwise stated. Stock Exchange Announcement : For further information on BP’s results, please see our Stock Exchange Announcement for the period ended 30 September 2015. November 2015
Carl-Henric Svanberg Chairman Board context
Dev Sanyal Executive vice president, strategy and regions Industry context and our priorities
Agenda • Context for the sector and BP • Managing operational risk • Shareholder resolution 25 - our response • Operating performance 5
Current context Brent (1) Henry Hub (1) Refining Marker Margin (2) 120 8 35 7 30 100 6 25 $/mmbtu 80 5 $/bbl $/bbl 20 4 60 15 3 40 10 2 20 1 5 2013 2014 2015 2013 2014 2015 2013 2014 2015 (1) Source: Thomson Reuters Datastream (2) Refining Marker Margin based on BP’s portfolio 6
The longer term view $/bbl Money of the day 7
GDP and energy demand growth GDP Energy consumption by region Shares of primary energy Trillion, $2011 PPP Billion toe 18 50% 240 Thousands Oil 15 40% Other 180 Other 12 Coal 30% 9 120 Non-OECD Non- Gas Asia OECD 20% Asia 6 60 10% Hydro 3 OECD OECD Nuclear Renewables* 0% 0 0 1965 2000 2035 1965 2000 2035 1965 2000 2035 *Includes biofuels 8
Our strategic principles • Safe and efficient • A focused technology • Resilience, focused on operations programme value over volume • Capital and cost • Relationships of • Competitive growth discipline mutual advantage 9
Our proposition 1. Capex of $17-19bn per annum over 2015-17 2. Cash costs reduced by over $6bn by 2017 versus 2014 3. Balance organic sources and uses of cash (1) at ~$60/bbl by 2017; organic free cash flow growth thereafter 4. Divestments of $9-10bn 2014-15; $3-5bn 2016; $2-3bn 2017+ 5. Gearing managed with flexibility around 20% 6. Commitment to sustaining the dividend (1) Excludes Deepwater Horizon (DWH) payments, includes 100% of dividend. Organic free cashflow = Operating cash flow excluding DWH payments less organic capex. 10
GDP, energy and emissions GDP , energy and emissions Emissions growth 2013 to 2035 Index: 1990 = 100 Billion tonnes CO 2 500 35 30 400 GDP 25 Energy intensity 20 300 15 Energy Fuel mix 10 200 CO 2 5 100 0 GDP growth Projected 1990 2005 2020 2035 growth effect Source: BP Energy Outlook 2035 11
Partnership 12
Bob Fryar Executive vice president, safety and operational risk Managing operational risk
A safer, stronger BP BP’s agenda is a multi -year programme with activities risk-prioritized and paced to achieve enduring and sustainable change. Three principles underpin our efforts: Our operating We test our conduct of To promote deep management system operating through self capability and a safe (OMS) is the way BP verification, independent operating culture operates assurance and audit. Our goals on safety remains the same: no accidents, no harm to people and no damage to the environment 14
Risk mitigation Possible 1 Material protection Possible causes Prevention barriers Mitigation barriers consequences Maintain mechanical Maintain mechanical 2 2 Operating outside an integrity integrity operating envelope Fire or explosion 3 Corrosion prevention Corrosion 1 2 2 3 Hydrocarbons Toxic release Erosion Fatigue LOPC from Environmental onshore process 1 2 3 release facility Mechanical failure Reputation Breaking impact containment Plant shut down 1 Start-up / shut- down operations Financial loss Leak containment 2 External impact Spill response 3 15 LOPC – Loss of primary containment
Risk mitigation Prevention barriers Maintain mechanical integrity 2 2 Visual inspection walk-downs Inspection pipeline pigging 1 2 2 3 Maintenance pipeline pigging Subsea ROV inspection Advanced non intrusive inspection Internal vessel inspection External hull inspection (FPSO) Cathodic protection surveys Vibration and fatigue assessments of pipework Routine maintenance on process equipment (e.g. Rotating Machinery) FPSO – Floating production, storage and offloading 16 ROV – Remotely operated vehicle
Safety and environmental performance Number of Tier 1 & Tier 2 process safety events (T1 &T2 PSE) Number of losses of primary containment (LOPC) Number of oil spills ≥ 1 Barrel Recordable injury frequency (RIF) 17
In summary • Year on year performance • Underpinned by our three principles • 25 Bly recommendations complete • Safety is good business 18
SRI annual meeting 13 November 2015 Qs and As
SRI annual meeting 13 November 2015
Dev Sanyal Executive vice president, strategy and regions Shareholder resolution 21
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