FOR IMMEDIATE RELEASE
|
|
London 9 April 2024
|
|
BP
p.l.c. Trading Statement
|
First quarter 2024 trading statement
The following Trading Statement
provides a summary of BP p.l.c.'s (bp) current estimates and
expectations for the first quarter of 2024, including data on the
economic environment as well as group performance during the
period.
The information presented is not
comprehensive of all factors which may impact bp's group results
for the first quarter 2024 and is not an estimate of those results.
Also refer to bp's fourth quarter and full year 2023 group results
announcement on 6 February 2024 for guidance items which continue
to apply unless explicitly stated. A summary of that guidance is
also provided in the Appendix to this Trading Statement. All
information provided is subject to the finalization of bp's
financial reporting processes and actual results may
vary.
bp's group results for the first
quarter 2024 are expected to be published on 7 May 2024.
Updated 1Q24
guidancea
•
Upstream productionb in the first
quarter is expected to be higher compared to the prior quarter,
with production higher in oil production & operations and
slightly higher in gas & low carbon energy.
•
In the gas & low carbon energy segment,
realizationsc compared to the prior quarter are expected
to have an adverse impact in the range of $0.2-0.4 billion,
including declines in non-Henry Hub natural gas marker prices.
There is also expected to be an adverse impact of around $0.2
billion as a result of the devaluation of the Egyptian
Pound. In addition, the gas marketing and
trading result is expected to be strong following a strong result
in the fourth quarter 2023.
•
In the oil production & operations segment,
realizationsc compared to the prior quarter are expected
to have an adverse impact in the range of $0.3-0.6 billion,
including price lags on bp's production in the Gulf of Mexico and
the UAE and also declines in non-Henry Hub natural gas marker
prices.
•
The customers and products segment, compared to
the prior quarter, is expected to be impacted by the following
factors: in products, improving realized refining margins, expected
to result in a benefit in the range of $0.1-0.2 billion; a
significantly lower level of turnaround activity than the prior
quarter, offset by the impacts of the 1 February plant-wide power
outage at the Whiting refinery which, after a phased start-up,
resumed normal operations on 15 March; the oil trading result is
expected to be strong following a weak result in the fourth quarter
2023; and in customers, significantly weaker fuel margins,
seasonally lower volumes, and the absence of one-off positive
effects that impacted the prior quarter.
•
Other items: Net debt is expected to increase in
the first quarter mainly reflecting a working capital build plus
phasing of capex and divestment and other proceeds as previously
guided.
a
All impacts influence bp's underlying RC profit
before interest and tax, unless stated otherwise.
b
Includes bp's share of production of
equity-accounted entities.
c
Realizations are based on sales by consolidated
subsidiaries only - this excludes equity-accounted
entities.
Trading conditions
Brent averaged $83.16/bbl in the
first quarter 2024 compared to $84.34/bbl in the fourth quarter
2023.
US gas Henry Hub first of
month index averaged $2.25/mmBtu in the
first quarter compared to $2.88/mmBtu in the fourth quarter
2023.
The bp average refining
marker margin averaged $20.6/bbl in the first
quarter compared to $18.5/bbl in the fourth quarter
2023.
Further information on prices and
bp's current rules of thumb can be found at
the following link:
bp.com Rules of Thumb
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 announcement contains
certain forecasts, projections and forward-looking statements -
that is, statements related to future, not past events and
circumstances - with respect to the financial condition, results of
operations and businesses of bp and certain of the plans and
objectives of bp with respect to these items. 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 or outcomes, may differ materially from those expressed in
such statements, depending on a variety of factors, including
(without limitation): price fluctuations in crude oil and natural
gas; changes in demand for bp's products; currency fluctuations;
drilling and production results; reserves estimates; sales volume
and sales mix numbers; supply and demand imbalances including as a
result of direct or indirect restrictions on production; regional
pricing differentials and refining margins; seasonal impacts on
product demand and operating expenses; resolution of trading and
derivative positions for the quarter; 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; 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 as well as
those factors discussed under "Risk factors" in bp's Annual Report
and Form-20F 2023 as filed with the US Securities and Exchange
Commission. Furthermore, additional factors may exist that will be
relevant to bp's group results for the first quarter of 2024 that
are not currently known or fully understood. Neither BP plc nor any
of its subsidiaries assumes any obligation to update, revise or
supplement any forward-looking statement contained in this
announcement to reflect future circumstances, events or
information.
The contents of websites referred to
in this announcement do not form part of this
announcement.
FOR IMMEDIATE RELEASE
|
|
London 9 April 2024
|
|
BP
p.l.c. Trading Statement
|
Appendix: Guidance issued in 4Q23 Stock Exchange
Announcementa
Guidance Area
|
Full Year 2024
|
1Q24 vs 4Q23
|
Reported and underlying* upstream
production
|
Slightly higher than 2023, of which
Oil production & operations higher and Gas & low carbon
energy lower
|
• expected to be
higher
|
Customers
|
Growth from convenience, including
TravelCenters of America; stronger Castrol, bp pulse margin growth;
fuels margins to remain sensitive to movements in cost of
supply
|
• expect seasonally lower
volumes across most businesses
• absence of fourth
quarter one-off positive effects
• fuels margins to remain
sensitive to movements in cost of supply
|
Products
|
Lower level of industry refining
margins, with realized margins impacted by narrower North American
heavy crude oil differentials; turnaround activity broadly in line
with 2023 but heavily weighted towards the second half
|
• significantly lower
levels of refinery turnaround activity
• lower industry refining
margins with a larger reduction in realized margins due to narrower
North American heavy crude oil differentials
|
OB&C
|
Around $1.0bn charge; quarterly
charges may vary
|
|
DD&A
|
Slightly higher than 2023
|
|
Underlying effective tax
rate*b
|
Expected to be around 40%
|
|
Capital expenditure*
|
Around $16bn, weighted to the first
half
|
|
Divestment and other
proceeds
|
$2-3bn, weighted to the second
half
|
|
Gulf of Mexico oil spill
payments
|
~$1.2bn pre-tax, of which $1.1bn
2Q
|
|
a
Refer to bp's fourth quarter and full year 2023
group results announcement and bp.com for full text.
b
Underlying effective tax rate is sensitive to the
impact that volatility in the current price environment may have on
the geographical mix of the group's profits and losses.
* See
Glossary.
Contacts
|
London
|
Houston
|
|
|
|
Press Office
|
David Nicholas
|
Paul Takahashi
|
|
+44 (0) 7831 095541
|
+1 713 903 9729
|
|
|
|
Investor Relations
|
Craig Marshall
|
Graham Collins
|
bp.com/investors
|
+44 (0) 203 401 5592
|
+1 832 753 5116
|
Glossary
Underlying production - 2024
underlying production, when compared with 2023, is production after
adjusting for acquisitions and divestments, curtailments, and
entitlement impacts in our production-sharing agreements/contracts
and technical service contract*.
Underlying RC profit or loss before interest and
tax for the operating segments or
customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating
segments and excluding net adjusting items for the respective
operating segment or business.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR is calculated by
dividing taxation on an underlying replacement cost (RC) basis by
underlying RC profit or loss before tax. Taxation on an underlying
RC basis for the group is calculated as taxation as stated on the
group income statement adjusted for taxation on inventory holding
gains and losses and total taxation on adjusting items. Information
on underlying RC profit or loss is provided below. Taxation on an
underlying RC basis presented for the operating segments is
calculated through an allocation of taxation on an underlying RC
basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to
understand and evaluate, in the same manner as management, the
underlying trends in bp's operational performance on a comparable
basis, period on period. Taxation on an underlying RC basis and
underlying ETR are non-IFRS measures. The nearest equivalent
measure on an IFRS basis is the ETR on profit or loss for the
period.
Capital expenditure is total
cash capital expenditure as stated in the condensed group cash flow
statement. Capital expenditure for the operating segments, gas
& low carbon energy businesses and customers & products
businesses is presented on the same basis.
Technical service contract (TSC) - Technical service contract is an arrangement through which an
oil and gas company bears the risks and costs of exploration,
development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin
which reflects incremental production added to the
oilfield.
BP p.l.c.'s LEI Code
213800LH1BZH3D16G760