Loading...
Docoh

BP (BP)

Filed: 3 May 22, 7:27am
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 6-K
 
 
Report of Foreign Issuer
 
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
for the period ended 3 May, 2022
 
 
BP p.l.c.
(Translation of registrant's name into English)
 
 
 
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
 
 
 
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
 
 
Form 20-F |X| Form 40-F
--------------- ----------------
 
 
 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
 
 
 
Yes No |X|
--------------- --------------
 
 
 
 
 
 
 
 
 
 
 
Top of page 1
 
 
FOR IMMEDIATE RELEASE
 
 
London 3 May 2022
 
 
BP p.l.c. Group results
 
First quarter 2022
 
 
 
“For a printer friendly version of this announcement please click on the link below to open a PDF version of the announcement”
 
http://www.rns-pdf.londonstockexchange.com/rns/9845J_1-2022-5-2.pdf
 
 
 
 
Performing while transforming
 
Financial summary
 
 FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) for the period attributable to bp shareholders
 
 
(20,384)
 
2,326
 
4,667
 
Inventory holding (gains) losses*, net of tax
 
 
(2,664)
 
(358)
 
(1,342)
 
Replacement cost (RC) profit (loss)*
 
 
(23,048)
 
1,968
 
3,325
 
Net (favourable) adverse impact of adjusting items*, net of tax
 
 
29,293
 
2,097
 
(695)
 
Underlying RC profit*
 
 
6,245
 
4,065
 
2,630
 
Operating cash flow*
 
 
8,210
 
6,116
 
6,109
 
Capital expenditure*
 
 
(2,929)
 
(3,633)
 
(3,798)
 
Divestment and other proceeds(a)
 
 
1,181
 
2,265
 
4,839
 
Surplus cash flow*
 
 
4,089
 
2,993
 
1,687
 
Net issue (repurchase) of shares
 
 
(1,592)
 
(1,725)
 
 
Net debt*(b)
 
 
27,457
 
30,613
 
33,313
 
Announced dividend per ordinary share (cents per share)
 
 
5.46
 
5.46
 
5.25
 
Underlying RC profit per ordinary share* (cents)
 
 
32.00
 
20.53
 
12.95
 
Underlying RC profit per ADS* (dollars)
 
 
1.92
 
1.23
 
0.78
 
 
● Reported loss primarily due to decision to exit Rosneft shareholding
 
 
● Net debt reduced to $27.5bn; further share buyback announced
 
 
● Delivering resilient hydrocarbons: major project start-up in the Gulf of Mexico; deal to create Azule Energy in Angola
 
 
● Continued progress in transformation to an IEC - momentum in each of the five transition growth engines
 
 
In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, bp's focus has been on supplying the reliable energy our customers need. Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today. But it has not changed our strategy, our financial frame, or our expectations for shareholder distributions. Importantly bp continues to perform and step-by-step we are making progress executing our IEC strategy - producing resilient hydrocarbons to provide energy security while investing with discipline in the energy transition.
 
Bernard Looney
Chief executive officer
 
 
(a)
Divestment proceeds are disposal proceeds as per the condensed group cash flow statement. See page 3 for more information on divestment and other proceeds.
(b)
See Note 10 for more information.
 
 
RC profit (loss), underlying RC profit (loss), surplus cash flow and net debt are non-GAAP measures. Inventory holding (gains) losses and adjusting items are non-GAAP adjustments.
* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 33.
 
 
 
 
 
 
Top of page 2
 
 
 
 
Highlights
 
 
 
Reported loss of $20.4 billion, underlying replacement cost profit of $6.2 billion
 
 
 
       ●     Reported loss for the quarter was $20.4 billion, compared with a profit of $2.3 billion for the fourth quarter 2021. The reported result includes adjusting items* before tax of $30.8 billion.
 Adjusting items include pre-tax charges of $24.0 billion and $1.5 billion as a result of the loss of significant influence and bp's decision to exit its 19.75% shareholding in Rosneft and its other businesses with Rosneft in Russia respectively. As a result, in the first quarter the post-tax charge is $24.4 billion and the total reduction in
       equity is $14.7 billion. Adjusting items also include fair value accounting effects of $5.8 billion. See page 3 for further details.
 Underlying replacement cost profit* was $6.2 billion, compared with $4.1 billion for the previous quarter. This was driven by exceptional oil and gas trading, higher oil realizations and a stronger refining result, partly offset by the absence of Rosneft from the first quarter underlying result.
 For the first quarter bp has announced a dividend of 5.46 cents per ordinary share payable in June 2022.
 
 
 
 Net debt* reduced to $27.5 billion; further $2.5 billion share buyback announced 
 
 
 Operating cash flow* of $8.2 billion includes a working capital* build of $4.1 billion (after adjusting for inventory holding gains* and fair value accounting effects*).
 Capital expenditure* in the quarter was $2.9 billion. bp continues to expect capital expenditure of $14-15 billion in 2022.
 bp received divestment and other proceeds of $1.2 billion in the first quarter and continues to expect to receive total proceeds of $2-3 billion during 2022.
 Net debt fell to $27.5 billion at the end of the first quarter.
 During the first quarter bp executed share buybacks of $1.6 billion - $0.5 billion during January to offset the expected full-year dilution of the 2022 vesting of awards under employee share schemes and a further $1.1 billion representing progress against the $1.5 billion programme announced with the fourth quarter 2021 results on 8
       February. This programme was completed on 27 April.
 During the first quarter bp generated surplus cash flow* of $4.1 billion and intends to execute a $2.5 billion share buyback prior to announcing its second quarter results.
 
 
 
 Progressing transformation to an Integrated Energy Company 
 
 
 In resilient hydrocarbons since the start of 2022 bp announced the start-up of the Herschel Expansion major project* in the Gulf of Mexico; signed a final agreement with Eni to create Azule Energy a new independent joint venture in Angola; and advanced its strategy in biofuels producing sustainable aviation fuel at bp's Lingen
        refinery and entering into a long-term strategic offtake and market development agreement for low-carbon biofuels feedstock with Nuseed.
 In convenience and mobility since the start of 2022 bp has continued to progress its EV charging strategy - launching a strategic partnership with Volkswagen Group and announcing plans to invest £1 billion in the UK over the next decade; signed a global strategic convenience partnership with Uber, aiming to make more than 3,000
        retail locations available on Uber Eats by 2025; and signed a strategic collaboration agreement with DHL Express to supply sustainable aviation fuel.
 In low carbon energy since the start of 2022 bp has increased its position in offshore wind with the ScotWind lease option award of 1.45GW net; agreed to form an offshore wind partnership with Marubeni; and advanced its hydrogen strategy, announcing plans to develop H2-Fifty, a 250MW gross green hydrogen plant in Rotterdam
        and signing an agreement to form a joint venture with Aberdeen City Council to develop a hydrogen hub.
 
 
 
 
bp continues to build a track-record of delivery against its disciplined financial frame. Net debt fell for the eighth consecutive quarter; we are investing with discipline to advance our strategy - making significant progress year-to-date; and we are delivering on our commitment to shareholder distributions.
 
 
Murray Auchincloss
Chief financial officer
 
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
 
 

 
 
Top of page 3
 
 
Financial results
 
At 31 December 2021, the group's reportable segments were gas & low carbon energy, oil production & operations, customers & products and Rosneft. For the period from 1 January 2022 to 27 February 2022, any net income from Rosneft is classified as an adjusting item. The group has ceased to report Rosneft as a separate segment in the group’s financial reporting for 2022. From the first quarter of 2022, the group's reportable segments are gas & low carbon energy, oil production & operations and customers & products. For more information see note 2 - Investment in Rosneft.
 
In addition to the highlights on page 2:
Loss attributable to bp shareholders in the first quarter was $20.4 billion compared with a profit of $4.7 billion in the first quarter of 2021.
 
Adjusting items* in the first quarter were an adverse pre-tax impact of $30.8 billion compared with a favourable pre-tax impact of $0.7 billion in the same period of 2021.
 
As a result of bp's two nominated directors stepping-down from the Rosneft board on 27 February, bp determined that it no longer meets the criteria set out under IFRS for having "significant influence" over Rosneft. bp therefore no longer equity accounts for its interest in Rosneft from that date, treating it prospectively as a financial asset measured at fair value. Combined with bp's decision to exit its shareholding in Rosneft and the market impact on Russian assets, an impairment assessment was undertaken. Within the first quarter results, the loss of significant influence and the impairment assessment led to a net pre-tax charge of $24.0 billion classified as an adjusting item, reducing equity by $14.4 billion. The adjusting item is made up of(a):
 
o
A $13.5 billion pre-tax impairment charge, representing the full carrying value of the Rosneft investment at 27 February 2022 as, due to sanctions and geopolitical challenges the level of uncertainty as to the value of our shareholding means that, under IFRS, it is not currently possible to estimate any value other than zero.
 
o
A $11.1 billion pre-tax charge, principally arising from foreign exchange losses accumulated from the date of the initial investment in 2013 to 27 February 2022, that under IFRS, to that date, were recorded directly in equity rather than in the income statement. Of this $1.4 billion has an incremental impact on equity with $9.7 billion recorded as at 31 December 2021.
 
o
These charges are partly offset by $0.5 billion representing bp's estimated share of Rosneft's post-tax income in the first quarter until 27 February 2022.
 
Following bp's decision to exit its other businesses with Rosneft in Russia, adjusting items within the first quarter 2022 results also include a $1.5 billion pre tax charge. This comprises a $1.0 billion pre-tax charge representing the impairment of the entire carrying value of these businesses and a further $0.5 billion of foreign exchange losses which were recorded directly in equity since the date of initial investment has also been moved to the income statement. These charges reduced equity in the first quarter by $1.2 billion.
 
Adjusting items for the first quarter 2022 also include the reversal of a $1.1 billion deferred tax liability relating to Russian withholding tax on bp's share of Rosneft's undistributed profit. A further $0.2 billion deferred tax charge has been reversed through equity. No further tax impacts are expected as a result of the above pre-tax charges.
 
Adjusting items for the first quarter 2022 also include adverse fair value accounting effects* of $5.8 billion, primarily due to further increases in forward gas prices compared to the end of the fourth quarter 2021.
 
Pre-tax inventory holding gains of $3.5 billion for the first quarter 2022 arose due to significant increases in most crude and product prices during the quarter.
 
The effective tax rate (ETR) on RC profit or loss* for the first quarter was -8%, compared with 26% for the same period in 2021. Excluding adjusting items, the underlying ETR* for the first quarter was 33%, compared with 30% for the same period a year ago. The higher underlying ETR for the first quarter reflects the absence of equity-accounted earnings from Rosneft. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
 
Operating cash flow* for the first quarter 2022 was $8.2 billion compared with $6.1 billion for the same period last year. The increase is driven by the increased underlying replacement cost profit, offset by working capital movements.
 
Capital expenditure in the first quarter 2022 was $2.9 billion, compared with $3.8 billion in the first quarter of 2021 which included a $0.7 billion payment in respect of the strategic partnership with Equinor.
 
Total divestment and other proceeds for the first quarter were $1.2 billion, compared with $4.8 billion for the same period in 2021. This includes divestment proceeds from the disposal of bp's Swiss retail assets, the disposal of bp's interest in the Pike oil sands assets and receipt of deferred consideration related to the 2020 divestment of bp's Alaska business to Hilcorp. Other proceeds for the first quarter consists of $0.2 billion of proceeds from the disposal of a loan note related to the Alaska divestment. See page 31 for further information.
 
At the end of the first quarter, net debt* was $27.5 billion, compared with $30.6 billion at the end of the fourth quarter 2021 and $33.3 billion at the end of the first quarter 2021.
 
 
(a)
Because of rounding, the total does not agree exactly with the sum of its component parts.
 
 
 
 
Top of page 4
 
 
Analysis of RC profit (loss) before interest and tax and reconciliation to profit (loss) for the period
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
RC profit (loss) before interest and tax
 
    
gas & low carbon energy
 
 
(1,524)
 
1,911
 
3,430
 
oil production & operations
 
 
3,831
 
3,212
 
1,479
 
customers & products
 
 
1,981
 
(426)
 
934
 
other businesses & corporate(a)
 
 
(24,719)
 
(369)
 
(315)
 
Of which:
 
    
other businesses & corporate excluding Rosneft
 
 
(686)
 
(924)
 
(678)
 
Rosneft
 
 
(24,033)
 
555
 
363
 
Consolidation adjustment – UPII*
 
 
34
 
(7)
 
13
 
RC profit (loss) before interest and tax
 
 
(20,397)
 
4,321
 
5,541
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(644)
 
(751)
 
(729)
 
Taxation on a RC basis
 
 
(1,693)
 
(1,350)
 
(1,254)
 
Non-controlling interests
 
 
(314)
 
(252)
 
(233)
 
RC profit (loss) attributable to bp shareholders*
 
 
(23,048)
 
1,968
 
3,325
 
Inventory holding gains (losses)*
 
 
3,501
 
472
 
1,730
 
Taxation (charge) credit on inventory holding gains and losses
 
 
(837)
 
(114)
 
(388)
 
Profit (loss) for the period attributable to bp shareholders
 
 
(20,384)
 
2,326
 
4,667
 
 
 
Analysis of underlying RC profit (loss) before interest and tax
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Underlying RC profit (loss) before interest and tax
 
    
gas & low carbon energy
 
 
3,595
 
2,211
 
2,270
 
oil production & operations
 
 
4,683
 
4,024
 
1,565
 
customers & products
 
 
2,156
 
611
 
656
 
other businesses & corporate(a)
 
 
(259)
 
210
 
193
 
Of which:
 
    
other businesses & corporate excluding Rosneft
 
 
(259)
 
(535)
 
(170)
 
Rosneft
 
 
 
745
 
363
 
Consolidation adjustment – UPII
 
 
34
 
(7)
 
13
 
Underlying RC profit before interest and tax
 
 
10,209
 
7,049
 
4,697
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(486)
 
(494)
 
(581)
 
Taxation on an underlying RC basis
 
 
(3,164)
 
(2,238)
 
(1,253)
 
Non-controlling interests
 
 
(314)
 
(252)
 
(233)
 
Underlying RC profit attributable to bp shareholders*
 
 
6,245
 
4,065
 
2,630
 
Reconciliations of underlying RC profit attributable to bp shareholders to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 6-15 for the segments.
 
(a)
From first quarter 2022 the results of Rosneft, previously reported as a separate segment, are also included in other businesses & corporate. Comparative information for 2021 has been restated to reflect the changes in reportable segments. For more information see Note 2 Investment in Rosneft.
 
 
Operating Metrics
 
Operating metrics
 
 
First quarter
2022
 
vs First quarter
2021
Tier 1 and tier 2 process safety events*
 
 12 
-11
 
Reported recordable injury frequency*
 
 0.148 
-5.7%
 
upstream* production(a) (mboe/d)
 
 2,252 
+1.5%
 
upstream unit production costs*(b) ($/boe)
 
 6.52 
-11.4%
 
bp-operated hydrocarbon plant reliability*
 
 96.1% 
+3.1
 
bp-operated refining availability*(a)
 
 95.0% 
+0.2
 
(a)
See Operational updates on pages 6, 9 and 11.
(b)
Reflecting higher volumes and lower costs including phasing impacts.
 
 
 
 
 
 
 
 
Top of page 5
 
 
Outlook & Guidance
 
Macro outlook
bp expects an ongoing elevated risk of oil price volatility. This reflects uncertainties around the level of disruption to Russian supply, the capacity for increased OPEC+ supply, the ongoing impact of COVID-19 on demand and the impact of the conflict in Ukraine on economic growth.
 
bp expects the short-term outlook for gas prices to remain heavily dependent on Russian pipeline flows to Europe.
 
In the second quarter of 2022, bp expects industry refining margins to remain elevated due to ongoing supply disruptions, particularly in Russia and Europe.
 
2Q22 guidance
 
Looking ahead, we expect second-quarter 2022 underlying upstream* production to be lower than first-quarter 2022, primarily in gas & low carbon energy, reflecting base decline and seasonal maintenance. On a reported basis, second-quarter production will reflect additional impacts from the absence of production from our Russia incorporated joint ventures.
 
In our customers & products business, there is an elevated level of uncertainty due to the developing impacts from the conflict in Ukraine and ongoing COVID-19 restrictions. In addition, in Castrol, additive supplies are expected to remain under pressure. In refining, we expect higher industry refining margins, although the increase in realized margins may differ due to market dislocations. In addition, energy prices are expected to remain elevated and turnaround costs to be higher.
 
2022 Guidance
In addition to the guidance on page 2:
For full year 2022 we continue to expect reported upstream production to be broadly flat compared with 2021 despite the absence of production from our Russia incorporated joint ventures. On an underlying basis, we expect production from oil production & operations to be slightly higher and production from gas & low carbon energy to be broadly flat.
 
bp continues to expect the other businesses & corporate underlying annual charge to be in a range of $1.2-1.4 billion for 2022. The charge may vary from quarter to quarter.
 
bp continues to expect the depreciation, depletion and amortization to be at a similar level to 2021.
 
As updated in bp Annual Report and Form 20-F 2021, the underlying ETR* for 2022 is expected to be around 40% but 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. The increase from prior guidance of around 35% reflects the exclusion of Rosneft from bp's underlying result effective 1 January 2022.
 
bp continues to expect divestment and other proceeds for the year of $2-3 billion. Against a target of $25 billion of divestment and other proceeds between the second half of 2020 and 2025 bp has now received almost $14.0 billion of proceeds.
 
bp continues to expect Gulf of Mexico oil spill payments for the year to be around $1.4 billion pre-tax and during the second quarter expects to make a pre-tax cash payment of $1.2 billion.
 
For 2022, and subject to maintaining a strong investment grade credit rating, bp remains committed to using 60% of surplus cash flow* for share buybacks and intends to allocate the remaining 40% to further strengthen the balance sheet.
 
On average, based on bp’s current forecasts, at around $60 per barrel Brent and subject to the board’s discretion each quarter, bp continues to expect to be able to deliver share buybacks of around $4.0 billion per annum and have capacity for an annual increase in the dividend per ordinary share of around 4% through 2025.
 
In setting the dividend per ordinary share and the buyback each quarter, the board will take into account factors including the cumulative level of and outlook for surplus cash flow, the cash balance point* and the maintenance of a strong investment grade credit rating.
 
 
Adjusted EBITDA* targets and aims(a)
 
As a result of the decision to exit its shareholding in Rosneft and excluding Rosneft from base year and future periods, on 27 February bp outlined an expectation that 2025 adjusted EBITDA from resilient hydrocarbons and group will be around $2 billion lower than bp's previous targets, at around $31 billion and $38 billion respectively. In addition, bp has now revised its 2030 adjusted EBITDA aims for resilient hydrocarbons and group by lowering both by around $2 billion, to a range of $28-33 billion and $39-46 billion respectively.
 
(a)
At $60/bbl Brent (2020 $ real) and $3/mmBtu Henry Hub (2020 $ real) and RMM $12/bbl (2020 $ real).
 
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
 
 
 
 
Top of page 6
 
 
gas & low carbon energy
 
Financial results
The replacement cost loss before interest and tax for the first quarter was $1,524 million, compared with a profit of $3,430 million for the same period in 2021. The first quarter includes an adverse impact of net adjusting items* of $5,119 million, compared with a favourable impact of net adjusting items of $1,160 million for the same period in 2021.
 
After excluding adjusting items, the underlying replacement cost profit before interest and tax* for the first quarter was $3,595 million, compared with $2,270 million for the same period in 2021. Adjusting items include adverse fair value accounting effects* of $5,015 million, primarily arising from the increase in forward gas prices during the quarter. Under IFRS, reported earnings include the mark-to-market value of the hedges used to risk-manage forward LNG contracts, but not of the LNG contracts themselves. The fair value accounting effect reduces this mismatch.
 
The underlying replacement cost profit for the first quarter, compared with the same period in 2021, reflects higher realizations, offset by a higher depreciation, depletion and amortization charge, and an exceptional gas marketing and trading result, albeit lower than in 2021.
 
Operational update
Reported production for the quarter was 966mboe/d, 6.2% higher than the same period in 2021, mainly due to major project* start-ups during 2021, partially offset by base decline and the partial divestment in Oman at the end of the first quarter 2021.
 
Underlying production* was also higher, by 10.9% for the quarter, mainly due to major project start-ups during 2021, partially offset by base decline.
 
Renewables pipeline* at the end of the quarter was 24.9GW (bp net). The renewables pipeline increased by 1.8GW during the quarter, primarily as a result of bp and its partner EnBW being awarded a lease option off the east coast of Scotland to develop an offshore wind project with a total generating capacity of around 2.9GW (1.45GW bp net).
 
Strategic progress
gas
On 18 March bp announced it had been successful in a bid for operatorship of deepwater offshore exploration blocks Agung I and II offshore Indonesia. Agung I covers an area of 6,656 square kilometres off the coast of Bali and East Java, while Agung II spans 7,970 square kilometres offshore South Sulawesi, West Nusa Tenggara and East Java.
 
In February 2022 bp increased its shareholding in the Shah Deniz gas project in the Caspian Sea, offshore Azerbaijan, by 1.16% to 29.99%.
 
On 1 February construction started on the Gas Natural Acu (GNA) 2 power plant at the Port of Acu, Rio de Janeiro state, Brazil. GNA 2 is expected to have an installed capacity of 1.7GW. GNA is a joint venture among bp, Prumo, Siemens and SPIC Brasil. bp is the exclusive LNG supplier for GNA 1 and GNA 2 which, together, are expected to achieve 3GW of installed capacity.
 
In April bp and the Korea Gas Corporation (KOGAS) signed a long-term agreement to supply 1.58 million tonnes of liquified natural gas (LNG) per year from 2025 to KOGAS through a new 18-year contract.
 
low carbon energy
On 23 March bp announced it is partnering with Marubeni to explore a selected offshore wind development opportunity in Japan. We have agreed to form a strategic partnership for offshore wind and potentially other decarbonization projects. In the first phase of the agreement bp will acquire a 49% interest in a project to jointly bid in the Ishikari licence round.
 
On 11 March bp announced that it signed an agreement to form a joint venture with the Aberdeen City Council that aims to deliver a scalable green hydrogen production, storage and distribution facility in the city powered by renewable energy.
 
On 1 February bp and partner HyCC announced plans to develop H2-Fifty, a 250MW green hydrogen production plant in the port area of Rotterdam. The facility could supply bp’s refinery in the city and has the potential to reduce CO₂ emissions up to 350,000 tonnes per year.
 
On 25 January bp submitted bids for our H2Teesside hydrogen project and Net Zero Teesside Power project as part of the UK government’s Phase 2 of cluster sequencing for carbon capture, usage and storage (CCUS) deployment.
 
 
Top of page 7
 
gas & low carbon energy (continued)
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) before interest and tax
 
 
(1,499)
 
1,903
 
3,452
 
Inventory holding (gains) losses*
 
 
(25)
 
8
 
(22)
 
RC profit (loss) before interest and tax
 
 
(1,524)
 
1,911
 
3,430
 
Net (favourable) adverse impact of adjusting items
 
 
5,119
 
300
 
(1,160)
 
Underlying RC profit before interest and tax
 
 
3,595
 
2,211
 
2,270
 
Taxation on an underlying RC basis
 
 
(1,009)
 
(509)
 
(535)
 
Underlying RC profit before interest
 
 
2,586
 
1,702
 
1,735
 
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Depreciation, depletion and amortization
 
    
Total depreciation, depletion and amortization
 
 
1,255
 
1,265
 
854
 
     
Exploration write-offs
 
    
Exploration write-offs
 
 
(2)
 
2
 
6
 
     
Adjusted EBITDA*
 
    
Total adjusted EBITDA
 
 
4,848
 
3,478
 
3,130
 
     
Capital expenditure*
 
    
gas
 
 
642
 
928
 
811
 
low carbon energy(a)
 
 
219
 
109
 
1,074
 
Total capital expenditure
 
 
861
 
1,037
 
1,885
 
 
(a)
First quarter 2021 includes $712 million in respect of the remaining payment to Equinor for our investment in our strategic US offshore wind partnership and $326 million as a lease option fee deposit paid to The Crown Estate in connection with our participation in the UK Round 4 Offshore Wind Leasing together with our partner EnBW.
 
  FirstFourthFirst
  quarterquarterquarter
  202220212021
Production (net of royalties)(b)
 
    
Liquids* (mb/d)
 
 
121
 
122
 
112
 
Natural gas (mmcf/d)
 
 
4,897
 
4,941
 
4,623
 
Total hydrocarbons* (mboe/d)
 
 
966
 
974
 
909
 
     
Average realizations*(c)
 
    
Liquids ($/bbl)
 
 
86.09
 
71.63
 
55.38
 
Natural gas ($/mcf)
 
 
7.88
 
6.94
 
3.94
 
Total hydrocarbons* ($/boe)
 
 
50.91
 
43.68
 
26.84
 
 
 
(b)
Includes bp’s share of production of equity-accounted entities in the gas & low carbon energy segment.
(c)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
 
 
 
 
 
 
Top of page 8
 
 
gas & low carbon energy (continued)
 
  
31 March
2022
31 December
2021
31 March
2021
  
low carbon energy(a)
 
 
     
Renewables (bp net, GW)
 
    
Installed renewables capacity*
 
 
1.9
 
1.9
 
1.6
 
     
Developed renewables to FID*
 
 
4.4
 
4.4
 
3.3
 
Renewables pipeline
 
 
24.9
 
23.1
 
13.8
 
of which by geographical area:
 
    
Renewables pipeline – Americas
 
 
16.3
 
16.2
 
7.3
 
Renewables pipeline – Asia Pacific
 
 
1.4
 
1.4
 
1.4
 
Renewables pipeline – Europe
 
 
7.0
 
5.3
 
5.1
 
Renewables pipeline – Other
 
 
0.2
 
0.2
 
 
of which by technology:
 
    
Renewables pipeline – offshore wind
 
 
5.2
 
3.7
 
3.7
 
Renewables pipeline – solar
 
 
19.7
 
19.4
 
10.1
 
Total Developed renewables to FID and Renewables pipeline
 
 
29.2
 
27.5
 
17.1
 
(a)
Because of rounding, some totals may not agree exactly with the sum of their component parts.
 
 
 
 
 
 
Top of page 9
 
 
oil production & operations
 
Financial results
The replacement cost profit before interest and tax for the first quarter was $3,831 million, compared with $1,479 million for the same period in 2021. The first quarter includes an adverse impact of net adjusting items* of $852 million, which includes an adverse impact of $1,487 million related to the planned exit from our incorporated joint ventures in Russia, compared with an adverse impact of net adjusting items of $86 million for the same period in 2021.
 
After excluding adjusting items, the underlying replacement cost profit before interest and tax* for the first quarter was $4,683 million, compared with $1,565 million for the same period in 2021.
 
The higher underlying replacement cost profit for the first quarter, compared with the same period in 2021, primarily reflects higher liquids and gas realizations.
 
Operational update
Reported production for the quarter was 1,286mboe/d, 1.7% lower than the first quarter of 2021. Underlying production* for the quarter was flat compared with the first quarter of 2021.
 
Strategic progress
On 22 February bp announced the start-up of the Herschel Expansion major project* in the deepwater Gulf of Mexico. Phase 1 of the project comprises development of a new subsea production system and the first of up to three wells tied to the Na Kika platform (bp 50% operator, Shell 50%).
 
On 11 March bp and Eni signed an agreement to form a new 50:50 independent company, Azule Energy, a bp and Eni company, through the combination of the two companies’ Angolan businesses. The agreement follows the memorandum of understanding between the companies agreed in May 2021. The creation of Azule Energy is subject to customary governmental approvals, and the transaction is expected to complete in the second half of 2022.
 
On 1 April, our partner Petrobras announced the discovery of a new oil accumulation in the southern portion of the Campos Basin, offshore Brazil. Evaluation is ongoing (bp 50%, Petrobras operator 50%).
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit before interest and tax
 
 
3,832
 
3,212
 
1,494
 
Inventory holding (gains) losses*
 
 
(1)
 
 
(15)
 
RC profit before interest and tax
 
 
3,831
 
3,212
 
1,479
 
Net (favourable) adverse impact of adjusting items
 
 
852
 
812
 
86
 
Underlying RC profit before interest and tax
 
 
4,683
 
4,024
 
1,565
 
Taxation on an underlying RC basis
 
 
(1,912)
 
(1,235)
 
(729)
 
Underlying RC profit before interest
 
 
2,771
 
2,789
 
836
 
 
 
 
 
 
Top of page 10
 
 
oil production & operations (continued)
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Depreciation, depletion and amortization
 
    
Total depreciation, depletion and amortization
 
 
1,429
 
1,628
 
1,574
 
     
Exploration write-offs
 
    
Exploration write-offs
 
 
51
 
45
 
56
 
     
Adjusted EBITDA*
 
    
Total adjusted EBITDA
 
 
6,163
 
5,697
 
3,195
 
     
Capital expenditure*
 
    
Total capital expenditure
 
 
1,254
 
1,272
 
1,319
 
 
 
 
 
  FirstFourthFirst
  quarterquarterquarter
  202220212021
Production (net of royalties)(a)
 
    
Liquids* (mb/d)
 
 
948
 
1,004
 
997
 
Natural gas (mmcf/d)
 
 
1,964
 
2,053
 
1,810
 
Total hydrocarbons* (mboe/d)
 
 
1,286
 
1,358
 
1,309
 
     
Average realizations*(b)
 
    
Liquids ($/bbl)
 
 
83.47
 
71.07
 
52.92
 
Natural gas ($/mcf)
 
 
9.40
 
9.27
 
4.11
 
Total hydrocarbons* ($/boe)
 
 
76.64
 
66.94
 
46.81
 
 
 
(a)
Includes bp’s share of production of equity-accounted entities in the oil production & operations segment.
(b)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
 
 
 
 
 
Top of page 11
 
 
customers & products
Financial results
The replacement cost profit before interest and tax for the first quarter was $1,981 million, compared with $934 million for the same period in 2021. The first quarter included an adverse impact of net adjusting items* of $175 million, compared with a favourable impact of net adjusting items of $278 million for the same period in 2021.
 
After excluding adjusting items, the underlying replacement cost profit before interest and tax* for the first quarter was $2,156 million, compared with $656 million for the same period in 2021.
 
The customers & products result for the first quarter reflects a significantly stronger performance compared with the same period in 2021, with higher results in both refining and oil trading.
 
customers – convenience and mobility result, excluding Castrol, for the quarter was marginally lower than the same period in 2021. The benefits of both a strong convenience performance and higher volumes were more than offset with the impact of a volatile environment, with increasing commodity costs and adverse foreign exchange impacts.
Castrol result in the quarter was lower than the same period in 2021 due to ongoing additive supply shortages and higher input costs.
 
products – the products result for the quarter was higher compared with the same period in 2021, with refining returning to a profit and an exceptional oil trading result. In refining, the result included the benefit of higher realized refining margins and utilization. This was partially offset by increased energy costs.
 
Operational update
Utilization for the quarter was around 6 percentage points higher than the same period in 2021 mainly due to lower COVID related demand impacts. bp-operated refining availability* for the first quarter was 95.0%, broadly in line with 94.8% for the same period in 2021.
 
Strategic progress
In support of our leading convenience offers, we signed a global convenience partnership with Uber, aiming to make more than 3,000 retail locations available on Uber Eats by 2025. Additionally, to bring a more seamless store experience to our customers, we announced the pilot of Mashgin's checkout-free technology at our US convenience sites.
 
bp completed the sale of its retail assets in Switzerland to Oel Pool AG, who will continue to operate the retail sites under the bp brand.
 
In support of accelerating our EV charging ambition:
 
in April, bp and Volkswagen Group launched their strategic partnership to roll-out an EV fast charging network in Europe and UK, with the potential for up to 8,000 new charge points by end 2024. bp's growing charging network will be integrated into Volkswagen, Skoda and Seat in-car dashboards, helping drivers seamlessly find their nearest charger;
 
bp announced plans to invest £1 billion over the next 10 years to support the roll-out of fast, convenient charging infrastructure across the UK and to nearly triple our number of UK public charge points.
 
In biofuels, we entered into a 10-year strategic agreement with Nuseed with plans to accelerate market adoption of Nuseed Carinata as a sustainable low-carbon biofuel feedstock for use in our refineries, as well as onward marketing.
 
bp’s Lingen refinery in Germany became the country’s first production facility to use co-processing on an industrial scale to produce sustainable aviation fuel (SAF), using biomass derived from used cooking oil.
 
bp acquired a 30% stake in Green Biofuels Ltd, the UK’s largest provider of low emission hydrogenated vegetable oil fuels. This investment will expand bp's global biofuels portfolio and its lower carbon solutions for UK customers.
 
Air bp signed a strategic collaboration agreement with DHL Express to supply SAF until 2026, and also signed a SAF supply contract with Rolls-Royce in the UK and Germany.
 
Castrol and BYD, a leading new energy vehicle brand in China, signed a strategic cooperation agreement for the supply of the Castrol ON range of EV fluids. Additionally, Castrol signed a new commercial agreement with Tesco, the UK’s largest supermarket chain, to stock a range of Castrol products.
 
On 5 April 2022, bp completed the previously announced acquisition of the public units of BP Midstream Partners LP (BPMP) which has resulted in BPMP becoming a wholly-owned subsidiary of bp.
 
SAPREF shareholders (bp and Shell) announced that refinery operations in South Africa will be paused for an indefinite period from the end of March 2022. Additionally, in April, the New Zealand Whangarei refinery, in which bp holds a share, converted to an import-only terminal.
 
 
 
 
 
 
 
Top of page 12
 
 
customers & products (continued)
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) before interest and tax
 
 
5,456
 
(14)
 
2,539
 
Inventory holding (gains) losses*
 
 
(3,475)
 
(412)
 
(1,605)
 
RC profit (loss) before interest and tax
 
 
1,981
 
(426)
 
934
 
Net (favourable) adverse impact of adjusting items
 
 
175
 
1,037
 
(278)
 
Underlying RC profit before interest and tax
 
 
2,156
 
611
 
656
 
Of which:(a)
 
    
customers – convenience & mobility
 
 
522
 
637
 
658
 
Castrol – included in customers
 
 
256
 
207
 
334
 
products – refining & trading
 
 
1,634
 
(26)
 
(2)
 
Taxation on an underlying RC basis
 
 
(400)
 
(640)
 
(133)
 
Underlying RC profit before interest
 
 
1,756
 
(29)
 
523
 
(a)
A reconciliation to RC profit before interest and tax by business is provided on page 31.
 
 
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Adjusted EBITDA*(b)
 
    
customers – convenience & mobility
 
 
848
 
966
 
982
 
Castrol – included in customers
 
 
295
 
243
 
373
 
products – refining & trading
 
 
2,025
 
399
 
419
 
  
2,873
 
1,365
 
1,401
 
     
Depreciation, depletion and amortization
 
    
Total depreciation, depletion and amortization
 
 
717
 
754
 
745
 
     
Capital expenditure*
 
    
customers – convenience & mobility
 
 
347
 
692
 
316
 
Castrol – included in customers
 
 
52
 
53
 
41
 
products – refining & trading
 
 
368
 
532
 
216
 
Total capital expenditure
 
 
715
 
1,224
 
532
 
(b)
A reconciliation to RC profit before interest and tax by business is provided on page 31.
 
 
 
Retail(c)
 FirstFourthFirst
  quarterquarterquarter
  202220212021
bp retail sites* – total (#)
 
 
20,550
 
20,500
 
20,300
 
bp retail sites in growth markets*
 
 
2,650
 
2,700
 
2,650
 
Strategic convenience sites*
 
 
2,150
 
2,150
 
1,950
 
(c)
Reported to the nearest 50.
 
 
Marketing sales of refined products (mb/d) FirstFourthFirst
  quarterquarterquarter
  202220212021
US
 
 
1,113
 
1,151
 
1,016
 
Europe
 
 
883
 
936
 
706
 
Rest of World
 
 
471
 
496
 
440
 
  
2,467
 
2,583
 
2,162
 
Trading/supply sales of refined products(d)
 
 
352
 
395
 
336
 
Total sales volume of refined products
 
 
2,819
 
2,978
 
2,498
 
(d)
An amendment of 22mb/d has been made to amounts presented for the first quarter 2021.
 
 
 
 
Top of page 13
 
 
customers & products (continued)
 
Refining marker margin*
 
 FirstFourthFirst
  quarterquarterquarter
  202220212021
bp average refining marker margin (RMM) ($/bbl)
 
 
18.9
 
15.1
 
8.7
 
 
 
Refinery throughputs (mb/d)
 
 FirstFourthFirst
  quarterquarterquarter
  202220212021
US
 
 
758
 
720
 
725
 
Europe
 
 
807
 
833
 
747
 
Rest of World
 
 
85
 
91
 
129
 
Total refinery throughputs
 
 
1,650
 
1,644
 
1,601
 
bp-operated refining availability* (%)
 
 
95.0
 
95.4
 
94.8
 
 
 
 
 
 
 
 
Top of page 14
 
 
other businesses & corporate
 
Other businesses & corporate comprises innovation & engineering, bp ventures, Launchpad, regions, cities & solutions, our corporate activities & functions and any residual costs of the Gulf of Mexico oil spill. From first quarter 2022 the results of Rosneft, previously reported as a separate segment, are also included in other businesses & corporate. Comparative information for 2021 has been restated to reflect the changes in reportable segments. For more information see Note 2 Investment in Rosneft.
 
Financial results
The replacement cost loss before interest and tax for the first quarter was $24,719 million, compared with a loss of $315 million for the same period in 2021. The first quarter included an adverse impact of net adjusting items* of $24,460 million, compared with an adverse impact of net adjusting items of $508 million for the same period in 2021. The adjusting items for the first quarter of 2022 mainly relate to Rosneft:
 
o
A $13.5 billion pre-tax impairment charge, representing the full carrying value of the Rosneft investment at 27 February 2022 as, due to sanctions and geopolitical challenges the level of uncertainty as to the value of our shareholding means that, under IFRS, it is not currently possible to estimate any value other than zero.
 
o
A $11.1 billion pre-tax charge, principally arising from foreign exchange losses accumulated from the date of the initial investment in 2013 to 27 February 2022, that under IFRS, to that date, were recorded directly in equity rather than in the income statement. Of this $1.4 billion has an incremental impact on equity with $9.7 billion recorded as at 31 December 2021.
 
o
These charges are partly offset by $0.5 billion representing bp's estimated share of Rosneft's post-tax income in the first quarter until 27 February 2022.
 
Fair value accounting effects* for the first quarter had an adverse impact of $425 million, compared with an adverse impact of $447 million for the same period in 2021.
 
After excluding adjusting items, the underlying replacement cost loss before interest and tax* for the first quarter was $259 million, compared with a profit of $193 million for the same period in 2021.
 
For other businesses & corporate excluding Rosneft, after excluding adjusting items, the underlying replacement cost loss before interest and tax for the first quarter was $259 million, compared with a loss of $170 million for the same period in 2021, reflecting lower valuation gains from bp ventures.
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) before interest and tax
 
 
(24,719)
 
(301)
 
(227)
 
Inventory holding (gains) losses*
 
 
 
(68)
 
(88)
 
RC profit (loss) before interest and tax
 
 
(24,719)
 
(369)
 
(315)
 
Net (favourable) adverse impact of adjusting items(a)
 
 
24,460
 
579
 
508
 
Underlying RC profit (loss) before interest and tax
 
 
(259)
 
210
 
193
 
Taxation on an underlying RC basis
 
 
23
 
55
 
19
 
Underlying RC profit (loss) before interest
 
 
(236)
 
265
 
212
 
 
(a)
Includes fair value accounting effects relating to the hybrid bonds that were issued on 17 June 2020. See page 34 for more information.
 
 
 
 
other businesses & corporate (excluding Rosneft)
 
Strategic progress
 
On 8 April bp and AENA signed an agreement to work on the decarbonization of the energy and mobility system of the airports operated by AENA, starting with Valencia airport.
 
On 19 April 2022 the Australian Federal Government announced that bp’s Kwinana Integrated Clean Energy Hub project in Perth, Western Australia had been awarded up to A$70 million (US$52 million) of grant funding.
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) before interest and tax
 
 
(686)
 
(924)
 
(678)
 
Inventory holding (gains) losses*
 
 
 
 
 
RC profit (loss) before interest and tax
 
 
(686)
 
(924)
 
(678)
 
Net (favourable) adverse impact of adjusting items
 
 
427
 
389
 
508
 
Underlying RC profit (loss) before interest and tax
 
 
(259)
 
(535)
 
(170)
 
Taxation on an underlying RC basis
 
 
23
 
128
 
54
 
Underlying RC profit (loss) before interest
 
 
(236)
 
(407)
 
(116)
 
 
 
 
Top of page 15
 
 
other businesses & corporate (Rosneft)
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Profit (loss) before interest and tax
 
 
(24,033)
 
623
 
451
 
Inventory holding (gains) losses*
 
 
 
(68)
 
(88)
 
RC profit (loss) before interest and tax
 
 
(24,033)
 
555
 
363
 
Net (favourable) adverse impact of adjusting items
 
 
24,033
 
190
 
 
Underlying RC profit (loss) before interest and tax
 
 
 
745
 
363
 
Taxation on an underlying RC basis
 
 
 
(73)
 
(35)
 
Underlying RC profit (loss) before interest
 
 
 
672
 
328
 
 
 
  FirstFourthFirst
  quarterquarterquarter
  
2022(a)
20212021
Production: Hydrocarbons (net of royalties, bp share)
 
    
Liquids* (mb/d)
 
 
584
 
879
 
827
 
Natural gas (mmcf/d)
 
 
963
 
1,433
 
1,294
 
Total hydrocarbons* (mboe/d)
 
 
750
 
1,126
 
1,050
 
(a)
First quarter 2022 reflects bp's estimated share of Rosneft production for the period 1 January to 27 February, averaged over the quarter (see Note 2).
 
 
 
 
 
 
Top of page 16
 
 
Financial statements
 
Group income statement
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
     
Sales and other operating revenues (Note 6)
 
 
49,258
 
50,554
 
34,544
 
Earnings from joint ventures – after interest and tax
 
 
379
 
243
 
160
 
Earnings from associates – after interest and tax
 
 
871
 
896
 
601
 
Interest and other income
 
 
194
 
259
 
82
 
Gains on sale of businesses and fixed assets
 
 
518
 
286
 
1,105
 
Total revenues and other income
 
 
51,220
 
52,238
 
36,492
 
Purchases
 
 
27,808
 
32,089
 
15,656
 
Production and manufacturing expenses
 
 
6,975
 
6,397
 
6,858
 
Production and similar taxes
 
 
505
 
406
 
253
 
Depreciation, depletion and amortization (Note 7)
 
 
3,625
 
3,863
 
3,367
 
Net impairment and losses on sale of businesses and fixed assets (Note 4)
 
 
26,031
 
1,223
 
373
 
Exploration expense
 
 
92
 
102
 
99
 
Distribution and administration expenses
 
 
3,080
 
3,365
 
2,615
 
Profit (loss) before interest and taxation
 
 
(16,896)
 
4,793
 
7,271
 
Finance costs
 
 
664
 
759
 
723
 
Net finance (income) expense relating to pensions and other post-retirement benefits
 
 
(20)
 
(8)
 
6
 
Profit (loss) before taxation
 
 
(17,540)
 
4,042
 
6,542
 
Taxation
 
 
2,530
 
1,464
 
1,642
 
Profit (loss) for the period
 
 
(20,070)
 
2,578
 
4,900
 
Attributable to
 
    
BP shareholders
 
 
(20,384)
 
2,326
 
4,667
 
Non-controlling interests
 
 
314
 
252
 
233
 
  
(20,070)
 
2,578
 
4,900
 
     
Earnings per share (Note 8)
 
    
Profit (loss) for the period attributable to BP shareholders
 
    
Per ordinary share (cents)
 
    
Basic
 
 
(104.46)
 
11.75
 
22.99
 
Diluted
 
 
(104.46)
 
11.66
 
22.89
 
Per ADS (dollars)
 
    
Basic
 
 
(6.27)
 
0.70
 
1.38
 
Diluted
 
 
(6.27)
 
0.70
 
1.37
 
 
 
 
 
Top of page 17
 
 
Condensed group statement of comprehensive income
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
     
Profit (loss) for the period
 
 
(20,070)
 
2,578
 
4,900
 
Other comprehensive income
 
    
Items that may be reclassified subsequently to profit or loss
 
    
Currency translation differences(a)
 
 
(1,749)
 
(619)
 
(605)
 
Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets(b)
 
 
10,791
 
36
 
 
Cash flow hedges and costs of hedging
 
 
222
 
408
 
(62)
 
Share of items relating to equity-accounted entities, net of tax
 
 
85
 
104
 
11
 
Income tax relating to items that may be reclassified
 
 
(102)
 
(24)
 
1
 
  
9,247
 
(95)
 
(655)
 
Items that will not be reclassified to profit or loss
 
    
Remeasurements of the net pension and other post-retirement benefit liability or asset(c)
 
 
2,128
 
1,306
 
2,026
 
Cash flow hedges that will subsequently be transferred to the balance sheet
 
 
(1)
 
 
2
 
Income tax relating to items that will not be reclassified
 
 
(668)
 
(434)
 
(588)
 
  
1,459
 
872
 
1,440
 
Other comprehensive income
 
 
10,706
 
777
 
785
 
Total comprehensive income
 
 
(9,364)
 
3,355
 
5,685
 
Attributable to
 
    
BP shareholders
 
 
(9,678)
 
3,095
 
5,460
 
Non-controlling interests
 
 
314
 
260
 
225
 
  
(9,364)
 
3,355
 
5,685
 
 
 
 
(a)
First quarter 2022 principally affected by movements in the Russian rouble against the US dollar.
(b)
See Note 2 - Investment in Rosneft.
(c)
See Note 1 - Basis of preparation - Pensions and other post-retirement benefits for further information.
 
 
 
 
 
 
Top of page 18
 
 
Condensed group statement of changes in equity
 
  
bp shareholders’
 
Non-controlling interests
 
Total
 
$ million 
equity(a)
Hybrid bondsOther interestequity
At 1 January 2022
 
 
75,463
 
13,041
 
1,935
 
90,439
 
      
Total comprehensive income
 
 
(9,678)
 
127
 
187
 
(9,364)
 
Dividends
 
 
(1,069)
 
 
(65)
 
(1,134)
 
Cash flow hedges transferred to the balance sheet, net of tax
 
 
(1)
 
 
 
(1)
 
Repurchase of ordinary share capital
 
 
(1,592)
 
 
 
(1,592)
 
Share-based payments, net of tax
 
 
175
 
 
 
175
 
Share of equity-accounted entities’ changes in equity, net of tax
 
 
 
 
 
 
Issue of perpetual hybrid bonds
 
 
(1)
 
67
 
 
66
 
Payments on perpetual hybrid bonds
 
 
 
(72)
 
 
(72)
 
Transactions involving non-controlling interests, net of tax
 
 
2
 
 
 
2
 
At 31 March 2022
 
 
63,299
 
13,163
 
2,057
 
78,519
 
      
  
bp shareholders’
 
Non-controlling interests
 
Total
 
$ million equityHybrid bondsOther interestequity
At 1 January 2021
 
 
71,250
 
12,076
 
2,242
 
85,568
 
      
Total comprehensive income
 
 
5,460
 
124
 
101
 
5,685
 
Dividends
 
 
(1,068)
 
 
(51)
 
(1,119)
 
Cash flow hedges transferred to the balance sheet, net of tax
 
 
(4)
 
 
 
(4)
 
Share-based payments, net of tax
 
 
(45)
 
 
 
(45)
 
Payments on perpetual hybrid bonds
 
 
 
(55)
 
 
(55)
 
Transactions involving non-controlling interests, net of tax
 
 
366
 
 
190
 
556
 
At 31 March 2021
 
 
75,959
 
12,145
 
2,482
 
90,586
 
 
 
(a)
In 2022 $9.2 billion of the opening foreign currency translation reserve has been moved to profit and loss account reserve as a result of bp's decision to exit its shareholding in Rosneft and its other businesses with Rosneft in Russia. For more information see Note 2.
 
 
 
 
 
 
Top of page 19
 
 
Group balance sheet
 
  31 March31 December
$ million 20222021
Non-current assets
 
   
Property, plant and equipment
 
 
109,884
 
112,902
 
Goodwill
 
 
11,883
 
12,373
 
Intangible assets
 
 
6,352
 
6,451
 
Investments in joint ventures
 
 
9,512
 
9,982
 
Investments in associates(a)
 
 
5,476
 
21,001
 
Other investments
 
 
2,669
 
2,544
 
Fixed assets
 
 
145,776
 
165,253
 
Loans
 
 
912
 
922
 
Trade and other receivables
 
 
1,631
 
2,693
 
Derivative financial instruments
 
 
7,809
 
7,006
 
Prepayments
 
 
575
 
479
 
Deferred tax assets
 
 
5,516
 
6,410
 
Defined benefit pension plan surpluses
 
 
13,162
 
11,919
 
  
175,381
 
194,682
 
Current assets
 
   
Loans
 
 
353
 
355
 
Inventories
 
 
30,109
 
23,711
 
Trade and other receivables
 
 
35,610
 
27,139
 
Derivative financial instruments
 
 
9,390
 
5,744
 
Prepayments
 
 
2,625
 
2,486
 
Current tax receivable
 
 
255
 
542
 
Other investments
 
 
103
 
280
 
Cash and cash equivalents
 
 
34,414
 
30,681
 
  
112,859
 
90,938
 
Assets classified as held for sale (Note 3)
 
 
7,272
 
1,652
 
  
120,131
 
92,590
 
Total assets
 
 
295,512
 
287,272
 
Current liabilities
 
   
Trade and other payables
 
 
61,195
 
52,611
 
Derivative financial instruments
 
 
17,357
 
7,565
 
Accruals
 
 
4,389
 
5,638
 
Lease liabilities
 
 
1,737
 
1,747
 
Finance debt
 
 
5,212
 
5,557
 
Current tax payable
 
 
2,917
 
1,554
 
Provisions
 
 
5,811
 
5,256
 
  
98,618
 
79,928
 
Liabilities directly associated with assets classified as held for sale (Note 3)
 
 
2,567
 
359
 
  
101,185
 
80,287
 
Non-current liabilities
 
   
Other payables
 
 
10,385
 
10,567
 
Derivative financial instruments
 
 
9,065
 
6,356
 
Accruals
 
 
930
 
968
 
Lease liabilities
 
 
6,729
 
6,864
 
Finance debt
 
 
55,394
 
55,619
 
Deferred tax liabilities
 
 
8,498
 
8,780
 
Provisions
 
 
17,830
 
19,572
 
Defined benefit pension plan and other post-retirement benefit plan deficits
 
 
6,977
 
7,820
 
  
115,808
 
116,546
 
Total liabilities
 
 
216,993
 
196,833
 
Net assets
 
 
78,519
 
90,439
 
Equity
 
   
BP shareholders’ equity 
 
 
63,299
 
75,463
 
Non-controlling interests
 
 
15,220
 
14,976
 
Total equity
 
 
78,519
 
90,439
 
 
(a)
See Note 2 - Investment in Rosneft.
 
 
 
 
Top of page 20
 
 
Condensed group cash flow statement
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Operating activities
 
    
Profit (loss) before taxation
 
 
(17,540)
 
4,042
 
6,542
 
Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
 
    
Depreciation, depletion and amortization and exploration expenditure written off
 
 
3,674
 
3,909
 
3,428
 
Net impairment and (gain) loss on sale of businesses and fixed assets
 
 
25,513
 
937
 
(732)
 
Earnings from equity-accounted entities, less dividends received
 
 
(1,093)
 
(201)
 
(633)
 
Net charge for interest and other finance expense, less net interest paid
 
 
184
 
74
 
29
 
Share-based payments
 
 
170
 
226
 
(46)
 
Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans
 
 
(146)
 
(184)
 
(20)
 
Net charge for provisions, less payments
 
 
484
 
194
 
902
 
Movements in inventories and other current and non-current assets and liabilities
 
 
(1,771)
 
(1,709)
 
(2,793)
 
Income taxes paid
 
 
(1,265)
 
(1,172)
 
(568)
 
Net cash provided by operating activities
 
 
8,210
 
6,116
 
6,109
 
Investing activities
 
    
Expenditure on property, plant and equipment, intangible and other assets
 
 
(2,602)
 
(2,772)
 
(3,033)
 
Acquisitions, net of cash acquired
 
 
(8)
 
(132)
 
(1)
 
Investment in joint ventures
 
 
(294)
 
(581)
 
(742)
 
Investment in associates
 
 
(25)
 
(148)
 
(22)
 
Total cash capital expenditure
 
 
(2,929)
 
(3,633)
 
(3,798)
 
Proceeds from disposal of fixed assets
 
 
468
 
520
 
551
 
Proceeds from disposal of businesses, net of cash disposed
 
 
549
 
1,745
 
3,613
 
Proceeds from loan repayments
 
 
29
 
36
 
61
 
Cash provided from investing activities
 
 
1,046
 
2,301
 
4,225
 
Net cash used in investing activities
 
 
(1,883)
 
(1,332)
 
427
 
Financing activities
 
    
Net issue (repurchase) of shares (Note 8)
 
 
(1,592)
 
(1,725)
 
 
Lease liability payments
 
 
(498)
 
(502)
 
(560)
 
Proceeds from long-term financing
 
 
2,002
 
648
 
1,956
 
Repayments of long-term financing
 
 
(892)
 
(2,963)
 
(7,029)
 
Net increase (decrease) in short-term debt
 
 
(276)
 
969
 
222
 
Issue of perpetual hybrid bonds
 
 
66
 
65
 
 
Payments relating to perpetual hybrid bonds
 
 
(148)
 
(100)
 
(55)
 
Payments relating to transactions involving non-controlling interests (Other interest)
 
 
(5)
 
 
 
Receipts relating to transactions involving non-controlling interests (Other interest)
 
 
7
 
12
 
668
 
Dividends paid - BP shareholders
 
 
(1,068)
 
(1,077)
 
(1,064)
 
 - non-controlling interests
 
 
(65)
 
(66)
 
(51)
 
Net cash provided by (used in) financing activities
 
 
(2,469)
 
(4,739)
 
(5,913)
 
Currency translation differences relating to cash and cash equivalents 
(125)
 
(58)
 
(58)
 
Increase (decrease) in cash and cash equivalents
 
 
3,733
 
(13)
 
565
 
Cash and cash equivalents at beginning of period 
30,681
 
30,694
 
31,111
 
Cash and cash equivalents at end of period 
34,414
 
30,681
 
31,676
 
 
 
 
 
 
 
Top of page 21
 
 
Notes
 
Note 1. Basis of preparation
 
The interim financial information included in this report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.
 
The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2021 included in BP Annual Report and Form 20-F 2021.
 
bp prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted by the UK, and European Union (EU), and in accordance with the provisions of the UK Companies Act 2006 as applicable to companies reporting under international accounting standards. IFRS as adopted by the UK does not differ from IFRS as adopted by the EU. IFRS as adopted by the UK and EU differ in certain respects from IFRS as issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the periods presented.
 
The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing BP Annual Report and Form 20-F 2022 which are the same as those used in preparing BP Annual Report and Form 20-F 2021. There are no new or amended standards or interpretations adopted from 1 January 2022 onwards that have a significant impact on the financial information.
 
Significant accounting judgements and estimates
bp's significant accounting judgements and estimates were disclosed in BP Annual Report and Form 20-F 2021. These have been subsequently considered at the end of this quarter to determine if any changes were required to those judgements and estimates.
 
Investment in Rosneft
 
Following bp's announcement on 27 February 2022, the significant judgement on significant influence over Rosneft has been reassessed and a new significant estimate has been identified for the fair value of bp's equity investment in Rosneft. bp's segmental reporting has also changed and comparatives have been restated to reflect the segmental changes. See Note 2 for further information.
 
Pensions and other post-retirement benefits
The group's defined benefit plans are reviewed quarterly to determine any changes to the fair value of the plan assets or present value of the defined benefit obligations. As a result of the review during the first quarter of 2022, the group's total net defined benefit plan surplus as at 31 March 2022 is $6.2 billion, compared to a surplus of $4.1 billion at 31 December 2021. The movement for the quarter principally reflects net actuarial gains reported in other comprehensive income arising from increases in the UK, US and Eurozone discount rates, partly offset by negative asset performance and increases in inflation rates.
 
Other accounting judgements and estimates
All other significant accounting judgements and estimates disclosed in BP Annual Report and Form 20-F 2021 remain applicable and no other new significant accounting judgements or estimates have been identified.
 
 
 
 
Top of page 22
 
 
Note 2. Investment in Rosneft
 
On 27 February 2022, following the military action in Ukraine, bp announced that it will exit its 19.75% shareholding in Rosneft Oil Company (Rosneft), a Russian oil and gas company. As of 27 February 2022, bp chief executive officer Bernard Looney also stepped down from the board of Rosneft with immediate effect and has submitted a letter of resignation as did the other Rosneft director nominated by bp, former bp group chief executive Bob Dudley.
 
As a result of bp’s nominated directors stepping down from the Rosneft board, bp has determined that as of 27 February 2022, the group no longer has significant influence over Rosneft taking into account the criteria set out in IAS 28 'Investments in Associates and Joint Ventures'. bp therefore no longer equity accounts for its interest in Rosneft as of that date, treating it prospectively as a financial asset measured at fair value within ‘Other investments’. In response to sanctions imposed on Russia by a number of countries, Russia has implemented a number of counter-sanctions including restrictions on the divestment from Russian assets by foreign investors and a reported temporary prohibition on registrars and depositories from making payments on Russian securities in favour of foreign investors. Further details including application of these counter-sanctions are not yet fully known. In addition, bp is not able to sell its Rosneft shares on the Moscow Stock Exchange and is unable to ascribe probabilities to possible outcomes of any exit process. As a result, it is considered that any measure of fair value, other than nil, would be subject to such high measurement uncertainty that no estimate would provide useful information even if it were accompanied by a description of the estimate made in producing it and an explanation of the uncertainties that affect the estimate. Accordingly, it is not currently possible to estimate any carrying value other than zero when determining both the measurement of the impairment charge and remeasurement as at 31 March 2022.
 
The loss of significant influence over Rosneft combined with the market impacts on Russian assets has led to an impairment charge of $13,479 million including $528 million which relates to estimated earnings in the quarter prior to the loss of significant influence. In addition, accumulated exchange losses of $10,372 million, a cash flow hedge reserve of $651 million relating to the original acquisition of Rosneft shares and bp's cumulative share of Rosneft's other comprehensive income of $59 million which were previously charged to equity were reclassified to the income statement in the quarter in the aggregate amount of $11,082 million. The change in accounting treatment also means that bp no longer recognizes a share in Rosneft’s net income, production and reserves from 27 February 2022.
 
As a result of bp's decision to exit its shareholding in Rosneft, the group has ceased to report Rosneft as a separate segment in the its financial reporting for 2022. Rosneft results up to 27 February 2022 are included within other businesses & corporate (OB&C), and 2021 comparatives have been restated to include the Rosneft segment as per the table below.
 
 
  
OB&C
(as previously reported)
 
Rosneft
(as previously reported)
 
OB&C restated
 
OB&C
(as previously reported)
 
Rosneft
(as previously reported)
 
OB&C restated
 
  FourthFourthFourthFirstFirstFirst

 quarter
quarter
 
quarterquarterquarterquarter
$ million 202120212021202120212021
    
Profit (loss) before interest and tax
 
 
(924)
 
623
 
(301)
 
(678)
 
451
 
(227)
 
Inventory holding (gains) losses*
 
 
 
(68)
 
(68)
 
 
(88)
 
(88)
 
RC profit (loss) before interest and tax
 
 
(924)
 
555
 
(369)
 
(678)
 
363
 
(315)
 
Net (favourable) adverse impact of adjusting items(a)
 
 
389
 
190
 
579
 
508
 
 
508
 
Underlying RC profit (loss) before interest and tax
 
 
(535)
 
745
 
210
 
(170)
 
363
 
193
 
Taxation on an underlying RC basis
 
 
128
 
(73)
 
55
 
54
 
(35)
 
19
 
Underlying RC profit (loss) before interest
 
 
(407)
 
672
 
265
 
(116)
 
328
 
212
 
 
 
Also, as of 27 February 2022, bp decided to exit its other businesses with Rosneft within Russia, which are included in the oil production & operations segment. These businesses are also determined to have a fair value of nil. This decision resulted in an impairment charge of $1,043 million, including $35 million which relates to estimated earnings in the quarter, and accumulated exchange losses of $479 million previously charged to equity and taken to the income statement. As with Rosneft, bp no longer recognizes a share in these businesses' net income, production and reserves.
 
The total pre-tax charge in the first quarter of 2022 relating to bp's investment in Rosneft and other businesses with Rosneft in Russia is $25,520 million.
 
 
 
 
 
 
 
 
Top of page 23
 
 
Note 3. Non-current assets held for sale
 
The carrying amount of assets classified as held for sale at 31 March 2022 is $7,272 million, with associated liabilities of $2,567 million.
 
On 11 March 2022, bp and Eni signed an agreement to form Azule Energy, an independent incorporated 50:50 joint venture, through the combination of the two companies’ Angolan businesses. Subject to all customary governmental and other approvals, the transaction is expected to complete during the second half of 2022. Assets of $5,514 million and associated liabilities of $2,202 million have been classified as held for sale in the group balance sheet at 31 March 2022.
 
As announced in August 2021, bp and PetroChina have agreed to establish Basra Energy Company, an incorporated joint venture, intended to own and manage the companies’ interests in the Rumaila field in Iraq. Subject to regulatory and other approvals, the transaction is expected to complete during the second quarter of 2022. Assets of $1,162 million and associated liabilities of $366 million are classified as held for sale in the group balance sheet at 31 March 2022.
 
On 21 December 2021, Aker BP, an associate of bp, announced the proposed acquisition of Lundin Energy for consideration in cash and new Aker BP shares. Subject to regulatory and other approvals, the transaction is expected to complete mid-year 2022. bp currently holds a 27.9% interest in Aker BP. Following the transaction this is expected to become a 15.9% interest in the combined company. $595 million of bp’s investment in Aker BP is classified as held for sale in the group balance sheet at 31 March 2022.
 

 
Note 4. Impairment and losses on sale of businesses and fixed assets(a)
 
Net impairment charges net of losses on sale of businesses and fixed assets for the first quarter 2022 were $26,031 million (charges of $373 million for the comparative period in 2021) and include net impairment charges for the first quarter of 2022 of $14,386 million (charges of $220 million for the comparative period in 2021). 
 
gas & low carbon energy segment
 
In the gas & low carbon energy segment there was a net impairment charge of $252 million for the first quarter 2022 (charges of $122 million for the comparative period in 2021).
 
oil production & operations segment
 
In the oil production & operations segment there was a net impairment charge of $624 million for the first quarter 2022 (charges of $99 million for the comparative period in 2021).
 
Impairment charges for the first quarter 2022 principally related to the decision to exit other businesses with Rosneft within Russia. They were offset by impairment reversals related to producing assets due to reserves additions.
 
other businesses and corporate
 
In the other businesses and corporate segment there was a net impairment charge of $13,479 million for the first quarter 2022 (reversal of $3 million for the comparative period in 2021) and a loss on sale of businesses and fixed assets of $11,082 million.
 
The impairment charge and the loss on sale of businesses and fixed assets for the first quarter mainly relates to bp's investment in Rosneft - see Note 2.
 
 
(a)
All disclosures are pre-tax.
 
 
 
 
 
 
Top of page 24
 
 
Note 5. Analysis of replacement cost profit (loss) before interest and tax and reconciliation to profit (loss) before taxation
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
gas & low carbon energy
 
 
(1,524)
 
1,911
 
3,430
 
oil production & operations
 
 
3,831
 
3,212
 
1,479
 
customers & products
 
 
1,981
 
(426)
 
934
 
other businesses & corporate(a)
 
 
(24,719)
 
(369)
 
(315)
 
  
(20,431)
 
4,328
 
5,528
 
Consolidation adjustment – UPII*
 
 
34
 
(7)
 
13
 
RC profit (loss) before interest and tax
 
 
(20,397)
 
4,321
 
5,541
 
Inventory holding gains (losses)*
 
    
gas & low carbon energy
 
 
25
 
(8)
 
22
 
oil production & operations
 
 
1
 
 
15
 
customers & products
 
 
3,475
 
412
 
1,605
 
other businesses & corporate(a)
 
 
 
68
 
88
 
Profit (loss) before interest and tax
 
 
(16,896)
 
4,793
 
7,271
 
Finance costs
 
 
664
 
759
 
723
 
Net finance expense/(income) relating to pensions and other post-retirement benefits
 
 
(20)
 
(8)
 
6
 
Profit (loss) before taxation
 
 
(17,540)
 
4,042
 
6,542
 
     
RC profit (loss) before interest and tax*
 
    
US
 
 
2,277
 
959
 
1,907
 
Non-US
 
 
(22,674)
 
3,362
 
3,634
 
  
(20,397)
 
4,321
 
5,541
 
(a)From first quarter 2022 the results of Rosneft, previously reported as a separate segment, are also included in other businesses & corporate. Comparative information for 2021 has been restated to reflect the changes in reportable segments. For more information see Note 2 Investment in Rosneft.
 
 
 
 
 
 
Top of page 25
 
 
Note 6. Sales and other operating revenues
 
  FirstFourthFirst
  quarterquarterquarter
$ million
 
 202220212021
By segment
 
    
gas & low carbon energy
 
 
8,166
 
14,545
 
8,002
 
oil production & operations
 
 
8,158
 
7,482
 
5,155
 
customers & products
 
 
42,163
 
37,446
 
27,107
 
other businesses & corporate
 
 
452
 
484
 
436
 
  
58,939
 
59,957
 
40,700
 
     
Less: sales and other operating revenues between segments
 
    
gas & low carbon energy
 
 
1,948
 
1,199
 
1,032
 
oil production & operations
 
 
7,036
 
7,202
 
4,855
 
customers & products
 
 
692
 
650
 
110
 
other businesses & corporate
 
 
5
 
352
 
159
 
  
9,681
 
9,403
 
6,156
 
     
External sales and other operating revenues
 
    
gas & low carbon energy
 
 
6,218
 
13,346
 
6,970
 
oil production & operations
 
 
1,122
 
280
 
300
 
customers & products
 
 
41,471
 
36,796
 
26,997
 
other businesses & corporate
 
 
447
 
132
 
277
 
Total sales and other operating revenues
 
 
49,258
 
50,554
 
34,544
 
     
By geographical area
 
    
US
 
 
19,152
 
17,927
 
14,491
 
Non-US
 
 
42,797
 
43,423
 
26,883
 
  
61,949
 
61,350
 
41,374
 
Less: sales and other operating revenues between areas
 
 
12,691
 
10,796
 
6,830
 
  
49,258
 
50,554
 
34,544
 
     
Revenues from contracts with customers
 
    
Sales and other operating revenues include the following in relation to revenues from contracts with customers:
 
    
Crude oil
 
 
2,144
 
1,583
 
1,334
 
Oil products
 
 
31,751
 
29,790
 
19,278
 
Natural gas, LNG and NGLs
 
 
10,680
 
10,449
 
4,181
 
Non-oil products and other revenues from contracts with customers
 
 
2,345
 
806
 
1,398
 
Revenue from contracts with customers
 
 
46,920
 
42,628
 
26,191
 
Other operating revenues(a)
 
 
2,338
 
7,926
 
8,353
 
Total sales and other operating revenues
 
 
49,258
 
50,554
 
34,544
 
 
 
(a)
Principally relates to commodity derivative transactions.
 
 
 
 
 
 
 
Top of page 26
 
 
Note 7. Depreciation, depletion and amortization
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Total depreciation, depletion and amortization by segment
 
    
gas & low carbon energy
 
 
1,255
 
1,265
 
854
 
oil production & operations
 
 
1,429
 
1,628
 
1,574
 
customers & products
 
 
717
 
754
 
745
 
other businesses & corporate
 
 
224
 
216
 
194
 
  
3,625
 
3,863
 
3,367
 
Total depreciation, depletion and amortization by geographical area
 
    
US
 
 
1,083
 
1,209
 
1,121
 
Non-US
 
 
2,542
 
2,654
 
2,246
 
  
3,625
 
3,863
 
3,367
 
 
 
 
 
Note 8. Earnings per share and shares in issue
 
 
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit (loss) for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. During the first quarter 2022 300 million of ordinary shares were repurchased for cancellation for a total cost of $1,592 million, including transaction costs of $9 million, as part of the share buyback programme announced on 27 April 2021. Of these $500 million offset the expected full year dilution from the vesting of awards under employee share schemes in 2022 and $1,092 million represent progress against the $1,500 million programme announced with the fourth quarter results on 8 February 2022. This programme was completed by a repurchase of a further 80 million of shares in April 2022 at a total cost of $409 million. The number of shares in issue is reduced when shares are repurchased. 165 million of new ordinary shares were issued in April 2022 as non-cash consideration for the acquisition of the public units of BP Midstream Partners LP.
 
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.
 
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Results for the period
 
    
Profit (loss) for the period attributable to bp shareholders
 
 
(20,384)
 
2,326
 
4,667
 
Less: preference dividend
 
 
 
 
1
 
Profit (loss) attributable to bp ordinary shareholders
 
 
(20,384)
 
2,326
 
4,666
 
     
Number of shares (thousand)(a)(b)
 
    
Basic weighted average number of shares outstanding
 
 
19,514,477
 
19,800,620
 
20,297,585
 
ADS equivalent(c)
 
 
3,252,412
 
3,300,103
 
3,382,930
 
     
Weighted average number of shares outstanding used to calculate diluted earnings per share
 
 
19,514,477
 
19,947,023
 
20,388,628
 
ADS equivalent(c)
 
 
3,252,412
 
3,324,503
 
3,398,104
 
     
Shares in issue at period-end
 
 
19,409,157
 
19,642,221
 
20,331,023
 
ADS equivalent(c)
 
 
3,234,859
 
3,273,703
 
3,388,503
 
 
(a)
Excludes treasury shares and includes certain shares that will be issued in the future under employee share-based payment plans.
 
(b)
If the inclusion of potentially issuable shares would decrease loss per share, the potentially issuable shares are excluded from the weighted average number of shares outstanding used to calculate diluted earnings per share. The numbers of potentially issuable shares that have been excluded from the calculation for the first quarter 2022 are 179,226 thousand (ADS equivalent 29,871 thousand).
 
(c)
One ADS is equivalent to six ordinary shares.
 
 
 
 
 
Top of page 27
 
 
 
Note 9. Dividends
 
Dividends payable
BP today announced an interim dividend of 5.46 cents per ordinary share which is expected to be paid on 24 June 2022 to ordinary shareholders and American Depositary Share (ADS) holders on the register on 13 May 2022. The ex-dividend date will be 12 May 2022. The corresponding amount in sterling is due to be announced on 10 June 2022, calculated based on the average of the market exchange rates over three dealing days between 6 June 2022 and 8 June 2022. Holders of ADSs are expected to receive $0.3276 per ADS (less applicable fees). The board has decided not to offer a scrip dividend alternative in respect of the first quarter 2022 dividend. Ordinary shareholders and ADS holders (subject to certain exceptions) will be able to participate in a dividend reinvestment programme. Details of the first quarter dividend and timetable are available at bp.com/dividends and further details of the dividend reinvestment programmes are available at bp.com/drip.
 
  FirstFourthFirst
  quarterquarterquarter
  202220212021
Dividends paid per ordinary share
 
    
cents
 
 
5.460
 
5.460
 
5.250
 
pence
 
 
4.160
 
4.105
 
3.768
 
Dividends paid per ADS (cents)
 
 
32.76
 
32.76
 
31.50
 
 
 
 
 
Note 10. Net debt
 
Net debt*
 
 FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Finance debt(a)
 
 
60,606
 
61,176
 
66,123
 
Fair value (asset) liability of hedges related to finance debt(b)
 
 
1,265
 
118
 
(1,134)
 
  
61,871
 
61,294
 
64,989
 
Less: cash and cash equivalents
 
 
34,414
 
30,681
 
31,676
 
Net debt(c)
 
 
27,457
 
30,613
 
33,313
 
Total equity
 
 
78,519
 
90,439
 
90,586
 
Gearing*
 
 25.9%25.3%26.9%
(a)
The fair value of finance debt at 31 March 2022 was $59,601 million (31 December 2021 $62,946 million, 31 March 2021 $67,775 million).
 
(b)
Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $173 million at 31 March 2022 (fourth quarter 2021 liability of $166 million and first quarter 2021 liability of $346 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments.
 
(c)
Net debt does not include accrued interest, which is reported within other receivables and other payables on the balance sheet and for which the associated cash flows are presented as operating cash flows in the group cash flow statement.
 
 
 
 
 
 
Note 11. Statutory accounts
 
The financial information shown in this publication, which was approved by the Board of Directors on 2 May 2022, is unaudited and does not constitute statutory financial statements. Audited financial information will be published in BP Annual Report and Form 20-F 2022. BP Annual Report and Form 20-F 2021 has been filed with the Registrar of Companies in England and Wales. The report of the auditor on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under section 498(2) or section 498(3) of the UK Companies Act 2006.
 
 
 
 
 
 
Top of page 28
 
 
Additional information
 
Capital expenditure*
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Capital expenditure
 
    
Organic capital expenditure*
 
 
2,573
 
3,512
 
2,906
 
Inorganic capital expenditure*(a)
 
 
356
 
121
 
892
 
  
2,929
 
3,633
 
3,798
 
 
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Capital expenditure by segment
 
    
gas & low carbon energy(a)
 
 
861
 
1,037
 
1,885
 
oil production & operations
 
 
1,254
 
1,272
 
1,319
 
customers & products
 
 
715
 
1,224
 
532
 
other businesses & corporate
 
 
99
 
100
 
62
 
  
2,929
 
3,633
 
3,798
 
Capital expenditure by geographical area
 
    
US
 
 
1,097
 
1,305
 
1,487
 
Non-US
 
 
1,832
 
2,328
 
2,311
 
  
2,929
 
3,633
 
3,798
 
 
(a)
First quarter 2021 includes the final payment of $712 million in respect of the strategic partnership with Equinor.
 
 
 
 
 
 
 
 
Top of page 29
 
 
Adjusting items*
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
gas & low carbon energy
 
    
Gains on sale of businesses and fixed assets(a)
 
 
9
 
 
1,034
 
Net impairment and losses on sale of businesses and fixed assets(b)
 
 
(252)
 
553
 
(123)
 
Environmental and other provisions
 
 
 
 
 
Restructuring, integration and rationalization costs
 
 
4
 
(4)
 
(8)
 
Fair value accounting effects(c)(d)
 
 
(5,015)
 
(790)
 
247
 
Other
 
 
135
 
(59)
 
10
 
  
(5,119)
 
(300)
 
1,160
 
oil production & operations
 
    
Gains on sale of businesses and fixed assets
 
 
249
 
224
 
168
 
Net impairment and losses on sale of businesses and fixed assets(b)
 
 
(1,204)
 
(799)
 
(209)
 
Environmental and other provisions
 
 
58
 
(235)
 
(65)
 
Restructuring, integration and rationalization costs
 
 
(10)
 
(2)
 
(4)
 
Fair value accounting effects
 
 
 
 
 
Other
 
 
55
 
 
24
 
  
(852)
 
(812)
 
(86)
 
customers & products
 
    
Gains on sale of businesses and fixed assets
 
 
261
 
62
 
(97)
 
Impairment and losses on sale of businesses and fixed assets(b)
 
 
(13)
 
(961)
 
(43)
 
Environmental and other provisions
 
 
 
(102)
 
 
Restructuring, integration and rationalization costs
 
 
1
 
24
 
(41)
 
Fair value accounting effects(d)
 
 
(377)
 
146
 
459
 
Other(e)
 
 
(47)
 
(206)
 
 
  
(175)
 
(1,037)
 
278
 
other businesses & corporate(f)
 
    
Gains on sale of businesses and fixed assets
 
 
(1)
 
 
 
Net impairment and losses on sale of businesses and fixed assets
 
 
(1)
 
(9)
 
(1)
 
Environmental and other provisions
 
 
(3)
 
(144)
 
 
Restructuring, integration and rationalization costs
 
 
13
 
(2)
 
(25)
 
Fair value accounting effects(d)
 
 
(425)
 
(212)
 
(447)
 
Rosneft(f)
 
 
(24,033)
 
(190)
 
 
Gulf of Mexico oil spill
 
 
(19)
 
(24)
 
(11)
 
Other
 
 
9
 
2
 
(24)
 
  
(24,460)
 
(579)
 
(508)
 
Total before interest and taxation
 
 
(30,606)
 
(2,728)
 
844
 
Finance costs(g)
 
 
(158)
 
(257)
 
(148)
 
Total before taxation
 
 
(30,764)
 
(2,985)
 
696
 
Total taxation(h)
 
 
1,471
 
888
 
(1)
 
Total after taxation for period
 
 
(29,293)
 
(2,097)
 
695
 
 
(a)
First quarter 2021 relates to a gain from the divestment of a 20% stake in Oman Block 61.
(b)
See Note 4 for further information.
(c)
Under IFRS bp marks-to-market the derivative financial instruments used to risk-manage LNG contracts, but does not mark-to-market the physical LNG contracts themselves, resulting in a mismatch in accounting treatment. The fair value accounting effect reduces this mismatch, and the underlying result reflects how bp risk-manages its LNG contracts.
(d)
For further information, including the nature of fair value accounting effects reported in each segment, see page 34.
(e)
Fourth quarter 2021 includes amounts arising in relation to the amendment of the timing of recognition of certain customer incentives in our customers business.
(f)
From first quarter 2022 the results of Rosneft, previously reported as a separate segment, are also included in other businesses & corporate. Comparative information for 2021 has been restated to reflect the changes in reportable segments. For more information see Note 2 Investment in Rosneft.
(g)
Includes the unwinding of discounting effects relating to Gulf of Mexico oil spill payables, the income statement impact associated with the buyback of finance debt and temporary valuation differences associated with the group’s interest rate and foreign currency exchange risk management of finance debt.
(h)
Includes certain foreign exchange effects on tax as adjusting items. These amounts represent the impact of: (i) foreign exchange on deferred tax balances arising from the conversion of local currency tax base amounts into functional currency, and (ii) taxable gains and losses from the retranslation of US dollar-denominated intra-group loans to local currency.
 
 
 
Top of page 30
 
 
Net debt including leases
 
Net debt including leases*
 
 FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Net debt
 
 
27,457
 
30,613
 
33,313
 
Lease liabilities
 
 
8,466
 
8,611
 
9,030
 
Net partner (receivable) payable for leases entered into on behalf of joint operations
 
 
206
 
187
 
37
 
Net debt including leases
 
 
36,129
 
39,411
 
42,380
 
Total equity
 
 
78,519
 
90,439
 
90,586
 
Gearing including leases* 31.5%30.4%31.9%
 
 
 
 
 
 
 
 
 
 
Gulf of Mexico oil spill
 
  31 March31 December
$ million 20222021
Gulf of Mexico oil spill payables and provisions
 
 
(10,496)
 
(10,433)
 
Of which - current
 
 
(1,254)
 
(1,279)
 
    
Deferred tax asset
 
 
3,438
 
3,959
 
 
Payables and provisions presented in the table above reflect the latest estimate for the remaining costs associated with the Gulf of Mexico oil spill. Where amounts have been provided on an estimated basis, the amounts ultimately payable may differ from the amounts provided and the timing of payments is uncertain. Further information relating to the Gulf of Mexico oil spill, including information on the nature and expected timing of payments relating to provisions and other payables, is provided in BP Annual Report and Form 20-F 2021 - Financial statements - Notes 6, 8, 19, 21, 22, 28, and 32.
 
 
 
 
 
 
Working capital* reconciliation(a)
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Movements in inventories and other current and non-current assets and liabilities as per condensed group cash flow statement(b)
 
 
(1,771)
 
(1,709)
 
(2,793)
 
Adjusted for inventory holding gains (losses)* (Note 5 excluding Rosneft)
 
 
3,501
 
472
 
1,730
 
Adjusted for fair value accounting effects
 
 
(5,817)
 
(856)
 
259
 
Working capital release (build) after adjusting for net inventory gains (losses) and fair value accounting effects
 
 
(4,087)
 
(2,093)
 
(804)
 
 
(a)
Commencing with second quarter 2021 results fair value accounting effects have been included in the working capital reconciliation. For further information see page 34.
 
(b)
The movement in working capital includes outflows relating to the Gulf of Mexico oil spill on a pre-tax basis of $47 million in the first quarter 2022, $7 million in the fourth quarter 2021 and $135 million in the first quarter 2021.
 
 
 
 
 
Top of page 31
 
 
Surplus cash flow* reconciliation
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
Sources:    
Net cash provided by operating activities 8,2106,1166,109
Cash provided from investing activities 1,0462,3014,225
Other proceeds(a)
 164
Receipts relating to transactions involving non-controlling interests 712668
Cash inflow 9,4278,42911,002
     
Uses:    
Lease liability payments (498)(502)(560)
Payments on perpetual hybrid bonds (148)(100)(55)
Dividends paid – BP shareholders (1,068)(1,077)(1,064)
– non-controlling interests (65)(66)(51)
Total capital expenditure* (2,929)(3,633)(3,798)
Net repurchase of shares relating to employee share schemes (500)
Payments relating to transactions involving non-controlling interests (5)
Currency translation differences relating to cash and cash equivalents (125)(58)(58)
Cash outflow (5,338)(5,436)(5,586)
     
Cash used to meet net debt target 3,729
     
Surplus cash flow 4,0892,9931,687
 
(a)
Other proceeds for the first quarter 2022 include $164 million of proceeds from the disposal of a loan note related to the Alaska divestment. The cash was received in the fourth quarter 2021, was reported as a financing cash flow and was not included in other proceeds at the time due to potential recourse from the counterparty. The proceeds are being recognised as the potential recourse reduces.
 
 
 
 
 
 
 
 
Reconciliation of customers & products RC profit before interest and tax to underlying RC profit before interest and tax* to adjusted EBITDA* by business
 
  FirstFourthFirst
  quarterquarterquarter
$ million 202220212021
RC profit before interest and tax for customers & products
 
 
1,981
 
(426)
 
934
 
Less: Adjusting items* gains (charges)
 
 
(175)
 
(1,037)
 
278
 
Underlying RC profit before interest and tax for customers & products
 
 
2,156
 
611
 
656
 
By business:
 
    
customers – convenience & mobility
 
 
522
 
637
 
658
 
Castrol – included in customers
 
 
256
 
207
 
334
 
products – refining & trading
 
 
1,634
 
(26)
 
(2)
 
     
Add back: Depreciation, depletion and amortization
 
 
717
 
754
 
745
 
By business:
 
    
customers – convenience & mobility
 
 
326
 
329
 
324
 
Castrol – included in customers
 
 
39
 
36
 
39
 
products – refining & trading
 
 
391
 
425
 
421
 
     
Adjusted EBITDA for customers & products
 
 
2,873
 
1,365
 
1,401
 
By business:
 
    
customers – convenience & mobility
 
 
848
 
966
 
982
 
Castrol – included in customers
 
 
295
 
243
 
373
 
products – refining & trading
 
 
2,025
 
399
 
419
 
 
 
 
 
 
 
 
Top of page 32
 
 
Realizations* and marker prices
 
  FirstFourthFirst
  quarterquarterquarter
  202220212021
Average realizations(a)
 
    
Liquids* ($/bbl)
 
    
US
 
 
70.34
 
65.25
 
45.21
 
Europe
 
 
104.41
 
80.49
 
61.72
 
Rest of World
 
 
88.84
 
74.19
 
57.48
 
BP Average
 
 
83.80
 
71.12
 
53.20
 
Natural gas ($/mcf)
 
    
US
 
 
3.90
 
4.59
 
3.45
 
Europe
 
 
33.77
 
32.45
 
6.89
 
Rest of World
 
 
7.88
 
6.94
 
3.94
 
BP Average
 
 
8.24
 
7.51
 
3.98
 
Total hydrocarbons* ($/boe)
 
    
US
 
 
52.17
 
51.09
 
36.91
 
Europe
 
 
134.62
 
118.97
 
55.34
 
Rest of World
 
 
62.38
 
52.93
 
36.06
 
BP Average
 
 
64.70
 
56.46
 
37.75
 
Average oil marker prices ($/bbl)
 
    
Brent
 
 
102.23
 
79.76
 
61.12
 
West Texas Intermediate
 
 
95.22
 
77.32
 
58.13
 
Western Canadian Select
 
 
79.90
 
59.71
 
46.12
 
Alaska North Slope
 
 
96.13
 
79.74
 
61.07
 
Mars
 
 
93.43
 
75.21
 
58.65
 
Urals (NWE – cif)
 
 
87.26
 
77.66
 
59.36
 
Average natural gas marker prices
 
    
Henry Hub gas price(b) ($/mmBtu)
 
 
4.96
 
5.84
 
2.71
 
UK Gas – National Balancing Point (p/therm)
 
 
232.84
 
226.24
 
49.82
 
 
(a)
Based on sales of consolidated subsidiaries only this excludes equity-accounted entities.
 
(b)
Henry Hub First of Month Index.
 
 
 
 
 
 
 
 
Exchange rates
 
  FirstFourthFirst
  quarterquarterquarter
  202220212021
$/£ average rate for the period 1.341.351.38
$/£ period-end rate
 
 
1.32
 
1.35
 
1.37
 
     
$/€ average rate for the period
 
 
1.12
 
1.14
 
1.21
 
$/€ period-end rate
 
 
1.12
 
1.13
 
1.17
 
     
$/AUD average rate for the period
 
 
0.72
 
0.73
 
0.77
 
$/AUD period-end rate
 
 
0.75
 
0.73
 
0.76
 
     
Rouble/$ average rate for the period
 
 
88.48
 
72.72
 
74.41
 
Rouble/$ period-end rate
 
 
82.59
 
74.66
 
76.09
 
 
 
 
 
 
 
Top of page 33
 
 
Legal proceedings
 
For a full discussion of the group’s material legal proceedings, see pages 248-249 of bp Annual Report and Form 20-F 2021.
 
 
 
 
Glossary
 
Non-GAAP measures are provided for investors because they are closely tracked by management to evaluate bp’s operating performance and to make financial, strategic and operating decisions. Non-GAAP measures are sometimes referred to as alternative performance measures.
 
 
Adjusted EBITDA is a non-GAAP measure presented for bp's operating segments and is defined as replacement cost (RC) profit before interest and tax, excluding net adjusting items*, adding back depreciation, depletion and amortization and exploration write-offs (net of adjusting items). Adjusted EBITDA by business is a further analysis of adjusted EBITDA for the customers & products businesses. bp believes it is helpful to disclose adjusted EBITDA by operating segment and by business because it reflects how the segments measure underlying business delivery. The nearest equivalent measure on an IFRS basis for the segment is RC profit or loss before interest and tax, which is bp's measure of profit or loss that is required to be disclosed for each operating segment under IFRS.
 
Adjusted EBITDA for the group is defined as profit or loss for the period before finance costs and net finance expense relating to pensions and other post-retirement benefits, adjusting for inventory holding gains or losses before tax, adjusting items before interest and tax, and adding back depreciation, depletion and amortization (pre-tax) and exploration expenditure written-off (net of adjusting items, pre-tax). The nearest equivalent measure on an IFRS basis for the group is profit or loss for the period.
 
We are unable to present reconciliations of forward-looking information for adjusted EBITDA for the group, strategic themes or transition growth businesses, because without unreasonable efforts, we are unable to forecast accurately certain adjusting items required to calculate a meaningful comparable GAAP forward-looking financial measure. These items include inventory holding gains or losses, adjusting items and exploration expenditure written off that are difficult to predict in advance in order to include in a GAAP estimate.
 
Adjusting items are items that bp discloses separately because it considers such disclosures to be meaningful and relevant to investors. They are items that management considers to be important to period-on-period analysis of the group's results and are disclosed in order to enable investors to better understand and evaluate the group’s reported financial performance. Adjusting items include gains and losses on the sale of businesses and fixed assets, impairments, environmental and other provisions, restructuring, integration and rationalization costs, fair value accounting effects, financial impacts relating to Rosneft for the 2022 financial reporting period and costs relating to the Gulf of Mexico oil spill and other items. Adjusting items within equity-accounted earnings are reported net of incremental income tax reported by the equity-accounted entity. Adjusting items are used as a reconciling adjustment to derive underlying RC profit or loss and related underlying measures which are non-GAAP measures. An analysis of adjusting items by segment and type is shown on page 29.
 
Bio-refinery is a facility that is dedicated to processing biological materials (including waste oil and crop waste) to produce biofuels such as bio-diesel and sustainable aviation fuel, which may be blended to customer specifications with other components such as hydrocarbons at co-located or adjacent terminals and tanks.
 
 
Capital expenditure is total cash capital expenditure as stated in the condensed group cash flow statement. Capital expenditure for the operating segments and customers & products businesses is presented on the same basis.
 
 
Cash balance point is defined as the implied Brent oil price for the quarter that would cause the sum of operating cash flow excluding Gulf of Mexico oil spill payments (assuming actual refining marker margins and Henry Hub gas prices for the quarter) and proceeds from loan repayments to equate to the sum of total cash capital expenditure, lease liability payments, dividend paid, and payments on perpetual hybrid bonds.
 
 
Consolidation adjustment – UPII is unrealized profit in inventory arising on inter-segment transactions.
 
Developed renewables to final investment decision (FID) – Total generating capacity for assets developed to FID by all entities where bp has an equity share (proportionate to equity share). If asset is subsequently sold bp will continue to record capacity as developed to FID. If bp equity share increases developed capacity to FID will increase proportionately to share increase for any assets where bp held equity at the point of FID.
 
 
Divestment proceeds are disposal proceeds as per the condensed group cash flow statement.
 
 
Effective tax rate (ETR) on replacement cost (RC) profit or loss is a non-GAAP measure. The ETR on RC profit or loss is calculated by dividing taxation on a RC basis by RC profit or loss before tax. Taxation on a 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. Information on RC profit or loss is provided below. bp believes it is helpful to disclose the ETR on RC profit or loss because this measure excludes the impact of price changes on the replacement of inventories and allows for more meaningful comparisons between reporting periods. Taxation on a RC basis and ETR on RC profit or loss are non-GAAP measures. The nearest equivalent measure on an IFRS basis is the ETR on profit or loss for the period.
 
 
Electric vehicle charge points / EV charge points are defined as the number of connectors on a charging device, operated by either bp or a bp joint venture.
 
 
Top of page 34
 
 
Glossary (continued)
 
 
Fair value accounting effects are non-GAAP adjustments to our IFRS profit (loss). They reflect the difference between the way bp manages the economic exposure and internally measures performance of certain activities and the way those activities are measured under IFRS. Fair value accounting effects are included within adjusting items. They relate to certain of the group's commodity, interest rate and currency risk exposures as detailed below. Other than as noted below, the fair value accounting effects described are reported in both the gas & low carbon energy and customer & products segments.
 
bp uses derivative instruments to manage the economic exposure relating to inventories above normal operating requirements of crude oil, natural gas and petroleum products. Under IFRS, these inventories are recorded at historical cost. The related derivative instruments, however, are required to be recorded at fair value with gains and losses recognized in the income statement. This is because hedge accounting is either not permitted or not followed, principally due to the impracticality of effectiveness-testing requirements. Therefore, measurement differences in relation to recognition of gains and losses occur. Gains and losses on these inventories, other than net realizable value provisions, are not recognized until the commodity is sold in a subsequent accounting period. Gains and losses on the related derivative commodity contracts are recognized in the income statement, from the time the derivative commodity contract is entered into, on a fair value basis using forward prices consistent with the contract maturity.
 
bp enters into physical commodity contracts to meet certain business requirements, such as the purchase of crude for a refinery or the sale of bp’s gas production. Under IFRS these physical contracts are treated as derivatives and are required to be fair valued when they are managed as part of a larger portfolio of similar transactions. Gains and losses arising are recognized in the income statement from the time the derivative commodity contract is entered into.
 
IFRS require that inventory held for trading is recorded at its fair value using period-end spot prices, whereas any related derivative commodity instruments are required to be recorded at values based on forward prices consistent with the contract maturity. Depending on market conditions, these forward prices can be either higher or lower than spot prices, resulting in measurement differences.
 
bp enters into contracts for pipelines and other transportation, storage capacity, oil and gas processing, liquefied natural gas (LNG) and certain gas and power contracts that, under IFRS, are recorded on an accruals basis. These contracts are risk-managed using a variety of derivative instruments that are fair valued under IFRS. This results in measurement differences in relation to recognition of gains and losses.
 
The way that bp manages the economic exposures described above, and measures performance internally, differs from the way these activities are measured under IFRS. bp calculates this difference for consolidated entities by comparing the IFRS result with management’s internal measure of performance. Under management’s internal measure of performance the inventory, transportation and capacity contracts in question are valued based on fair value using relevant forward prices prevailing at the end of the period. The fair values of derivative instruments used to risk manage certain oil, gas, power and other contracts, are deferred to match with the underlying exposure and the commodity contracts for business requirements are accounted for on an accruals basis. We believe that disclosing management’s estimate of this difference provides useful information for investors because it enables investors to see the economic effect of these activities as a whole.
 
Fair value accounting effects also include changes in the fair value of the near-term portions of LNG contracts that fall within bp’s risk management framework. LNG contracts are not considered derivatives, because there is insufficient market liquidity, and they are therefore accrual accounted under IFRS. However, oil and natural gas derivative financial instruments (used to risk manage the near-term portions of the LNG contracts) are fair valued under IFRS. The fair value accounting effect, which is reported in the gas and low carbon energy segment, reduces the measurement differences between that of the derivative financial instruments used to risk manage the LNG contracts and the measurement of the LNG contracts themselves, which therefore gives a better representation of performance in each period.
 
In addition, fair value accounting effects include changes in the fair value of derivatives entered into by the group to manage currency exposure and interest rate risks relating to hybrid bonds to their respective first call periods. The hybrid bonds which were issued on 17 June 2020 are classified as equity instruments and were recorded in the balance sheet at that date at their USD equivalent issued value. Under IFRS these equity instruments are not remeasured from period to period, and do not qualify for application of hedge accounting. The derivative instruments relating to the hybrid bonds, however, are required to be recorded at fair value with mark to market gains and losses recognized in the income statement. Therefore, measurement differences in relation to the recognition of gains and losses occur. The fair value accounting effect, which is reported in the other businesses & corporate segment, eliminates the fair value gains and losses of these derivative financial instruments that are recognized in the income statement. We believe that this gives a better representation of performance, by more appropriately reflecting the economic effect of these risk management activities, in each period.
 
 
 
 
 
Top of page 35
 
 
Glossary (continued)
 
 
Gearing and net debt are non-GAAP measures. Net debt is calculated as finance debt, as shown in the balance sheet, plus the fair value of associated derivative financial instruments that are used to hedge foreign currency exchange and interest rate risks relating to finance debt, for which hedge accounting is applied, less cash and cash equivalents. Net debt does not include accrued interest, which is reported within other receivables and other payables on the balance sheet and for which the associated cash flows are presented as operating cash flows in the group cash flow statement. Gearing is defined as the ratio of net debt to the total of net debt plus total equity. bp believes these measures provide useful information to investors. Net debt enables investors to see the economic effect of finance debt, related hedges and cash and cash equivalents in total. Gearing enables investors to see how significant net debt is relative to total equity. The derivatives are reported on the balance sheet within the headings ‘Derivative financial instruments’. The nearest equivalent GAAP measures on an IFRS basis are finance debt and finance debt ratio. A reconciliation of finance debt to net debt is provided on page 27.
 
We are unable to present reconciliations of forward-looking information for net debt or gearing to finance debt and total equity, because without unreasonable efforts, we are unable to forecast accurately certain adjusting items required to present a meaningful comparable GAAP forward-looking financial measure. These items include fair value asset (liability) of hedges related to finance debt and cash and cash equivalents, that are difficult to predict in advance in order to include in a GAAP estimate.
 
 
Gearing including leases and net debt including leases are non-GAAP measures. Net debt including leases is calculated as net debt plus lease liabilities, less the net amount of partner receivables and payables relating to leases entered into on behalf of joint operations. Gearing including leases is defined as the ratio of net debt including leases to the total of net debt including leases plus total equity. bp believes these measures provide useful information to investors as they enable investors to understand the impact of the group’s lease portfolio on net debt and gearing. The nearest equivalent GAAP measures on an IFRS basis are finance debt and finance debt ratio. A reconciliation of finance debt to net debt including leases is provided on page 30.
 
 
Green hydrogen – Hydrogen produced by electrolysis of water using renewable power.
 
 
Hydrocarbons – Liquids and natural gas. Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels.
 
Inorganic capital expenditure is a subset of capital expenditure on a cash basis and a non-GAAP measure. Inorganic capital expenditure comprises consideration in business combinations and certain other significant investments made by the group. It is reported on a cash basis. bp believes that this measure provides useful information as it allows investors to understand how bp’s management invests funds in projects which expand the group’s activities through acquisition. The nearest equivalent measure on an IFRS basis is capital expenditure on a cash basis. Further information and a reconciliation to GAAP information is provided on page 28.
 
Installed renewables capacity is bp's share of capacity for operating assets owned by entities where bp has an equity share.
 
 
Inventory holding gains and losses are non-GAAP adjustments to our IFRS profit (loss) and represent:
 
a.
the difference between the cost of sales calculated using the replacement cost of inventory and the cost of sales calculated on the first-in first-out (FIFO) method after adjusting for any changes in provisions where the net realizable value of the inventory is lower than its cost. Under the FIFO method, which we use for IFRS reporting of inventories other than for trading inventories, the cost of inventory charged to the income statement is based on its historical cost of purchase or manufacture, rather than its replacement cost. In volatile energy markets, this can have a significant distorting effect on reported income. The amounts disclosed as inventory holding gains and losses represent the difference between the charge to the income statement for inventory on a FIFO basis (after adjusting for any related movements in net realizable value provisions) and the charge that would have arisen based on the replacement cost of inventory. For this purpose, the replacement cost of inventory is calculated using data from each operation’s production and manufacturing system, either on a monthly basis, or separately for each transaction where the system allows this approach; and
 
b.
an adjustment relating to certain trading inventories that are not price risk managed which relate to a minimum inventory volume that is required to be held to maintain underlying business activities. This adjustment represents the movement in fair value of the inventories due to prices, on a grade by grade basis, during the period. This is calculated from each operation’s inventory management system on a monthly basis using the discrete monthly movement in market prices for these inventories.
 
The amounts disclosed are not separately reflected in the financial statements as a gain or loss. No adjustment is made in respect of the cost of inventories held as part of a trading position and certain other temporary inventory positions that are price risk-managed. See Replacement cost (RC) profit or loss definition below.
 
 
Liquids – Liquids comprises crude oil, condensate and natural gas liquids. For the oil production & operations segment, it also includes bitumen.
 
 
Major projects have a bp net investment of at least $250 million, or are considered to be of strategic importance to bp or of a high degree of complexity.
 
 
Operating cash flow is net cash provided by (used in) operating activities as stated in the condensed group cash flow statement.
 
 
 
 
Gulf of Mexico oil spill
 
 
Top of page 36
 
 
Glossary (continued)
 
 
Organic capital expenditure is a non-GAAP measure. Organic capital expenditure comprises capital expenditure on a cash basis less inorganic capital expenditure. bp believes that this measure provides useful information as it allows investors to understand how bp’s management invests funds in developing and maintaining the group’s assets. The nearest equivalent measure on an IFRS basis is capital expenditure on a cash basis and a reconciliation to GAAP information is provided on page 28.
 
We are unable to present reconciliations of forward-looking information for organic capital expenditure to total cash capital expenditure, because without unreasonable efforts, we are unable to forecast accurately the adjusting item, inorganic capital expenditure, that is difficult to predict in advance in order to derive the nearest GAAP estimate.
 
 
Production-sharing agreement/contract (PSA/PSC) is an arrangement through which an oil and gas company bears the risks and costs of exploration, development and production. In return, if exploration is successful, the oil company receives entitlement to variable physical volumes of hydrocarbons, representing recovery of the costs incurred and a stipulated share of the production remaining after such cost recovery.
 
Realizations are the result of dividing revenue generated from hydrocarbon sales, excluding revenue generated from purchases made for resale and royalty volumes, by revenue generating hydrocarbon production volumes. Revenue generating hydrocarbon production reflects the bp share of production as adjusted for any production which does not generate revenue. Adjustments may include losses due to shrinkage, amounts consumed during processing, and contractual or regulatory host committed volumes such as royalties. For the gas & low carbon energy and oil production & operations segments, realizations include transfers between businesses.
 
Refining availability represents Solomon Associates’ operational availability for bp-operated refineries, which is defined as the percentage of the year that a unit is available for processing after subtracting the annualized time lost due to turnaround activity and all planned mechanical, process and regulatory downtime.
 
The Refining marker margin (RMM) is the average of regional indicator margins weighted for bp’s crude refining capacity in each region. Each regional marker margin is based on product yields and a marker crude oil deemed appropriate for the region. The regional indicator margins may not be representative of the margins achieved by bp in any period because of bp’s particular refinery configurations and crude and product slate.
 
Renewables pipeline – Renewable projects satisfying the following criteria until the point they can be considered developed to final investment decision (FID): Site based projects that have obtained land exclusivity rights, or for PPA based projects an offer has been made to the counterparty, or for auction projects pre-qualification criteria has been met, or for acquisition projects post a binding offer being accepted.
 
Replacement cost (RC) profit or loss / RC profit or loss attributable to bp shareholders reflects the replacement cost of inventories sold in the period and is calculated as profit or loss attributable to bp shareholders, adjusting for inventory holding gains and losses (net of tax). RC profit or loss for the group is not a recognized GAAP measure. bp believes this measure is useful to illustrate to investors the fact that crude oil and product prices can vary significantly from period to period and that the impact on our reported result under IFRS can be significant. Inventory holding gains and losses vary from period to period due to changes in prices as well as changes in underlying inventory levels. In order for investors to understand the operating performance of the group excluding the impact of price changes on the replacement of inventories, and to make comparisons of operating performance between reporting periods, bp’s management believes it is helpful to disclose this measure. The nearest equivalent measure on an IFRS basis is profit or loss attributable to bp shareholders. A reconciliation to GAAP information is provided on page 1. RC profit or loss before interest and tax is bp's measure of profit or loss that is required to be disclosed for each operating segment under IFRS.
 
 
Reported recordable injury frequency measures the number of reported work-related employee and contractor incidents that result in a fatality or injury per 200,000 hours worked. This represents reported incidents occurring within bp’s operational HSSE reporting boundary. That boundary includes bp’s own operated facilities and certain other locations or situations. Reported incidents are investigated throughout the year and as a result there may be changes in previously reported incidents. Therefore comparative movements are calculated against internal data reflecting the final outcomes of such investigations, rather than the previously reported comparative period, as this this represents a more up to date reflection of the safety environment.
 
 
Retail sites include sites operated by dealers, jobbers, franchisees or brand licensees or joint venture (JV) partners, under the bp brand. These may move to and from the bp brand as their fuel supply agreement or brand licence agreement expires and are renegotiated in the normal course of business. Retail sites are primarily branded bp, ARCO, Amoco, Aral and Thorntons, and also includes sites in India through our Jio-bp JV.
 
 
Retail sites in growth markets are retail sites that are either bp branded or co-branded with our partners in China, Mexico and Indonesia and also include sites in India through our Jio-bp JV.
 
 
Solomon availability – See Refining availability definition.
 
 
Strategic convenience sites are retail sites, within the bp portfolio, which sell bp-branded vehicle energy and carry one of the strategic convenience brands (e.g. M&S, Thorntons, Rewe to Go). To be considered a strategic convenience brand the convenience offer should have a demonstrable level of differentiation in the market in which it operates. Strategic convenience site count includes sites under a pilot phase, but exclude sites in growth markets.
 
 
 
 
Top of page 37
 
 
Glossary (continued)
 
Surplus cash flow is a non-GAAP measure and refers to the net surplus of sources of cash over uses of cash, after reaching the $35 billion net debt target. Sources of cash include net cash provided by operating activities, cash provided from investing activities and cash receipts relating to transactions involving non-controlling interests. Uses of cash include lease liability payments, payments on perpetual hybrid bond, dividends paid, cash capital expenditure, the cash cost of share buybacks to offset the dilution from vesting of awards under employee share schemes, cash payments relating to transactions involving non-controlling interests and currency translation differences relating to cash and cash equivalents as presented on the condensed group cash flow statement.
For the first quarter of 2021, the sources of cash includes other proceeds related to the proceeds from the disposal of a loan note related to the Alaska divestment. The cash was received in the fourth quarter 2021, was reported as a financing cash flow and was not included in other proceeds at the time due to potential recourse from the counterparty. The proceeds are being recognised as the potential recourse reduces. See page 31 for the components of our sources of cash and uses of cash.
 
 
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.
 
 
Tier 1 and tier 2 process safety events – Tier 1 events are losses of primary containment from a process of greatest consequence – causing harm to a member of the workforce, damage to equipment from a fire or explosion, a community impact or exceeding defined quantities. Tier 2 events are those of lesser consequence. These represent reported incidents occurring within bp’s operational HSSE reporting boundary. That boundary includes bp’s own operated facilities and certain other locations or situations. Reported process safety events are investigated throughout the year and as a result there may be changes in previously reported events. Therefore comparative movements are calculated against internal data reflecting the final outcomes of such investigations, rather than the previously reported comparative period, as this this represents a more up to date reflection of the safety environment.
 
 
Underlying effective tax rate (ETR) is a non-GAAP 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-GAAP measures. The nearest equivalent measure on an IFRS basis is the ETR on profit or loss for the period.
 
We are unable to present reconciliations of forward-looking information for underlying ETR to ETR on profit or loss for the period, because without unreasonable efforts, we are unable to forecast accurately certain adjusting items required to present a meaningful comparable GAAP forward-looking financial measure. These items include the taxation on inventory holding gains and losses and adjusting items, that are difficult to predict in advance in order to include in a GAAP estimate.
 
 
Underlying production – 2022 underlying production, when compared with 2021, 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 / underlying RC profit or loss attributable to bp shareholders is a non-GAAP measure and is RC profit or loss* (as defined on page 36) after excluding net adjusting items and related taxation. See page 29 for additional information on the adjusting items that are used to arrive at underlying RC profit or loss in order to enable a full understanding of the items and their financial impact.
 
 
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.
 
bp believes that underlying RC profit or loss is a useful measure for investors because it is a measure closely tracked by management to evaluate bp’s operating performance and to make financial, strategic and operating decisions and because it 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, by adjusting for the effects of these adjusting items. The nearest equivalent measure on an IFRS basis for the group is profit or loss attributable to bp shareholders. The nearest equivalent measure on an IFRS basis for segments and businesses is RC profit or loss before interest and taxation. A reconciliation to GAAP information is provided on page 1 for the group and pages 6-15 for the segments.
 
 
Underlying RC profit or loss per share is a non-GAAP measure. Earnings per share is defined in Note 7. Underlying RC profit or loss per ordinary share is calculated using the same denominator as earnings per share as defined in the consolidated financial statements. The numerator used is underlying RC profit or loss attributable to bp shareholders rather than profit or loss attributable to bp shareholders. Underlying RC profit or loss per ADS is calculated as outlined above for underlying RC profit or loss per share except the denominator is adjusted to reflect one ADS equivalent to six ordinary shares. bp believes it is helpful to disclose the underlying RC profit or loss per ordinary share and per ADS because these measures 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. The nearest equivalent measure on an IFRS basis is basic earnings per share based on profit or loss for the period attributable to bp shareholders.
 
 
 
 
 
Top of page 38
 
 
Glossary (continued)
 
 
upstream includes oil and natural gas field development and production within the gas & low carbon energy and oil production & operations segments.
 
 
upstream/hydrocarbon plant reliability (bp-operated) is calculated taking 100% less the ratio of total unplanned plant deferrals divided by installed production capacity, excluding non-operated assets and bpx energy. Unplanned plant deferrals are associated with the topside plant and where applicable the subsea equipment (excluding wells and reservoir). Unplanned plant deferrals include breakdowns, which does not include Gulf of Mexico weather related downtime.
 
 
upstream unit production cost is calculated as production cost divided by units of production. Production cost does not include ad valorem and severance taxes. Units of production are barrels for liquids and thousands of cubic feet for gas. Amounts disclosed are for bp subsidiaries only and do not include bp’s share of equity-accounted entities.
 
 
Working capital is movements in inventories and other current and non-current assets and liabilities as reported in the condensed group cash flow statement.
 
Change in working capital adjusted for inventory holding gains/losses and fair value accounting effects is a non-GAAP measure. It is calculated by adjusting for inventory holding gains/losses reported in the period and from the second quarter onwards, it is also adjusted for fair value accounting effects reported within adjusting items for the period. This represents what would have been reported as movements in inventories and other current and non-current assets and liabilities, if the starting point in determining net cash provided by operating activities had been underlying replacement cost profit rather than profit for the period. The nearest equivalent measure on an IFRS basis for this is movements in inventories and other current and non-current assets and liabilities. In the context of describing working capital after adjusting for Gulf of Mexico oil spill outflows, change in working capital also excludes movements in inventories and other current and non-current assets and liabilities relating to the Gulf of Mexico oil spill.
 
bp utilizes various arrangements in order to manage its working capital including discounting of receivables and, in the supply and trading business, the active management of supplier payment terms, inventory and collateral.
 
 
Trade marks
Trade marks of the bp group appear throughout this announcement. They include:
 
bp, Amoco, Aral, Castrol ON and Thorntons
 
 
 
 
 
 
Top of page 39
 
 
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 results 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. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions.
In particular, the following, among other statements, are all forward looking in nature: expectations regarding the COVID-19 pandemic and the conflict in Ukraine, including the impacts and consequences on economic growth, demand, and bp’s operations and financial performance; plans, expectations and assumptions regarding oil and gas demand, supply or prices, the timing of production of reserves, storage levels and decision making by OPEC+; expectations regarding reported and underlying production and related major project ramp-up, capital investments, divestment and maintenance activity; expectations regarding refining margins, refinery utilization rates and product demand; expectations regarding bp’s future financial performance and cash flows; expectations regarding future hydrocarbon production and project ramp-up; expectations with regards to bp’s transformation to an IEC; expectations regarding price assumptions used in accounting estimates; bp’s plans and expectations regarding the amount and timing of share buybacks and quarterly dividends; expectations regarding the amount of full-year dilution from the vesting of awards under employee share schemes in 2022; plans and expectations regarding bp’s credit rating, including in respect of maintaining a strong investment grade credit rating; plans and expectations regarding the allocation of surplus cash flow to share buybacks and strengthening the balance sheet; plans and expectations regarding bp’s exit of its shareholding in Rosneft and other investments in Russia;plans and expectations with respect to the total depreciation, depletion and amortization and business and corporate underlying annual charge for 2022; plans and expectations regarding investments in the UK, including in charging infrastructure and public charge points; plans and expectations regarding debt, net debt, and bp’s intentions to strengthen the balance sheet; plans and expectations regarding the divestment programme, including the amount and timing of proceeds; plans and expectations regarding bp’s renewable energy and alternative energy businesses; expectations regarding the underlying effective tax rate for 2022; expectations regarding the timing and amount of future payments relating to the Gulf of Mexico oil spill; plans and expectations regarding capital expenditure, including that capital expenditure will be within a range of $14-15 billion in 2022; expectations regarding adjusted EBITDA for resilient hydrocarbons and the group; and plans and expectations regarding projects joint ventures and other partnerships and agreements, including partnerships and other collaborations with Eni, Nuseed, Uber, Korea Gas Corporation, EnBW, Marubeni, Aberdeen City Council, HyCC, DHL Express, BYD, Tesco, Shell and AENA, as well as plans and expectations regarding the Herschel Expansion project in the Gulf of Mexico, production of sustainable aviation fuel at the Lingen refinery, the Gas Natural Acu power plant in Brazil, the sale of bp’s retail assets in Switzerland to Oel Pool AG, bp’s stake in Green Biofuels Ltd., the completion of the acquisition of the oil and gas business of Lundin Energy, the development of EV charge points and the completion of the establishment of bp’s Basra Energy Company joint venture with PetroChina.
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: the extent and duration of the impact of current market conditions including the volatility of oil prices, the effects of bp’s plan to exit its shareholding in Rosneft and other investments in Russia, the impact of COVID-19, overall global economic and business conditions impacting bp’s business and demand for bp’s products as well as the specific factors identified in the discussions accompanying such forward-looking statements; changes in consumer preferences and societal expectations; the pace of development and adoption of alternative energy solutions; developments in policy, law, regulation, technology and markets, including societal and investor sentiment related to the issue of climate change; 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 and continued base oil and additive supply shortages; OPEC+ quota restrictions; PSA and TSC 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 and policies, including related to climate change; changes in social attitudes and customer preferences; 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; bp’s access to future credit resources; business disruption and crisis management; the impact on bp’s reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; the possibility that international sanctions or other steps taken by governmental authorities or any other relevant persons may impact Rosneft’s business or outlook, bp’s ability to sell its interests in Rosneft, or the price for which bp could sell such interests; the possibility that actions of any competent authorities or any other relevant persons may limit bp’s ability to sell its interests in Rosneft, or the price for which it could sell such interests;; 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 elsewhere in this report, as well those factors discussed under “Risk factors” in bp’s Annual Report and Form 20-F 2021 as filed with the US Securities and Exchange Commission.
 
 
 
 
 
 
 
Top of page 40
 
 
 
Contacts
 
 LondonHouston
   
Press OfficeDavid NicholasMegan Baldino
 +44 (0) 7831 095541 +1 907 529 9029
   
Investor RelationsCraig MarshallGraham Collins
bp.com/investors
 
+44 (0) 203 401 5592
 
+1 832 753 5116
 
 
 
 
 
BP p.l.c.’s LEI Code 213800LH1BZH3D16G760
 
 
 
 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 BP p.l.c.
 (Registrant)
  
Dated: 3 May 2022 
 /s/ Ben J. S. Mathews
 ------------------------
 Ben J. S. Mathews
 Company Secretary