Investments in joint ventures (Notes)

12 Months Ended

Dec. 31, 2023

Separate Financial Statements [Abstract]

The following table provides aggregated summarized financial information for the group's joint ventures as it relates to the amounts recognized in the group income statement and on the group balance sheet.


					$ million
		Income statement			Balance sheet
		Earnings from joint ventures - after interest and tax			Investments in joint ventures
	2023	2022	2021	2023	2022
Azule Energy	700	540	—	5,066	5,264
Pan American Energy Group	—	538	(217)	—	2,000
Other joint venturesa	(633)	50	760	7,369	5,136
	67	1,128	543	12,435	12,400

a 2023 includes Pan American Energy Group as no longer considered material to the group post 2022 impairment.

The joint venture that is material to the group at 31 December 2023 is Azule Energy, which was formed during 2022 and in which bp owns a 50% stake.

bp classifies its investment in Azule Energy Holdings Limited as a joint venture because, per the terms of the shareholders' agreements, bp has joint control over Azule Energy. Azule Energy Holdings Limited is based in Angola and its functional currency is USD.

Following the 2022 impairment of bp's investment in PAEG, this is no longer considered material to the group for 2023 and is now included with Other joint ventures.

The following table provides summarized financial information relating to Azule Energy for 2023 and 2022 and Pan American Energy Group for 2022 and 2021. This information is presented on a 100% basis and reflects adjustments made by bp to Azule Energy and Pan American Energy Group’s own results in applying the equity method of accounting. bp adjusts Azule Energy Holdings Limited and Pan American Energy Group’s results for the accounting required under IFRS relating to bp’s purchase of its interests in Azule Energy Holdings Limited and Pan American Energy Group S.L..

The operational and financial information is based on preliminary operational and financial results of Azule Energy Holdings Limited for 2023 and 2022 and Pan American Energy Group S.L. for 2022 and 2021. Actual results may differ from these amounts - immaterial adjustments to the 2022 numbers for Azule Energy Holdings Limited have been included in the 2023 numbers and adjustments to the 2021 numbers for Pan America Energy Group S.L. have been included in the 2022 numbers.

16. Investments in joint ventures – continued


				$ million
				Gross amount
	2023		2022	2021
	Azule Energy	Azule Energy	PAEG	PAEG
Sales and other operating revenues	5,164	2,274	6,408	4,394
Profit (loss) before interest and taxation	2,146	1,460	1,560	806
Finance costs	400	218	376	262
Profit (loss) before taxationa	1,746	1,242	1,184	544
Taxationb	346	162	108	978
Profit (loss) for the year	1,400	1,080	1,076	(434)
Other comprehensive income	—	—	—	—
Total comprehensive income	1,400	1,080	1,076	(434)
Non-current assets	18,788	22,218	14,598
Current assetsc	3,928	4,132	3,054
Total assets	22,716	26,350	17,652
Current liabilitiesd	2,510	2,594	1,996
Non-current liabilitiese	10,074	13,228	5,856
Total liabilities	12,584	15,822	7,852
Net assets	10,132	10,528	9,800
Less: non-controlling interests	—	—	—
	10,132	10,528	9,800

aAzule Energy includes depreciation and amortisation of $2,768 million (2022 $1,145 million), interest income of $nil (2022 $11 million) and interest expense of $407 million (2022 $218 million). For 2022 and 2021 PAEG includes depreciation and amortisation of $1,039 million and $930 million respectively, interest income of $29 million and $19 million respectively and interest expense of $375 million and $262 million respectively.

bPAEG 2021 net income expense includes a deferred tax charge of $415 million related to a change in the income tax rate.

cAzule Energy includes cash and cash equivalents of $603 million (2022 $1,031 million). PAEG includes cash and cash equivalents of $1,012 million for 2022.

dAzule Energy includes current financial liabilities of $2,409 million (2022 $2,077 million). PAEG includes current financial liabilities of $751 million for 2022.

eAzule Energy includes non-current financial liabilities of $4,735 million (2022 $4,700 million). PAEG includes non-current financial liabilities of $2,151 million for 2022.

The group received dividends of $708 million from Azule Energy Holdings Limited in 2023 (2022 $500 million).

The group received dividends of $35 million and $nil from Pan American Energy Group S.L in 2022 and 2021 respectively.

The following table provides aggregated summarized financial information relating to the group’s share of joint ventures.


										$ million
										bp share
			2023				2022			2021
	Azule Energy	Other	Total	Azule Energy	PAEG	Other	Total	PAEG	Other	Total
Sales and other operating revenues	2,582	13,705	16,287	1,137	3,204	9,770	14,111	2,197	9,048	11,245
Profit (loss) before interest and taxation	1,073	8	1,081	730	780	255	1,765	403	927	1,330
Finance costs	200	421	621	109	188	137	434	131	58	189
Profit (loss) before taxation	873	(413)	460	621	592	118	1,331	272	869	1,141
Taxation	173	219	392	81	54	67	202	489	107	596
Non-controlling interest	—	1	1	—	—	1	1	—	2	2
Profit (loss) for the year	700	(633)	67	540	538	50	1,128	(217)	760	543
Other comprehensive income	—	45	45	—	—	50	50	—	5	5
Total comprehensive income	700	(588)	112	540	538	100	1,178	(217)	765	548
Non-current assets	9,394	16,505	25,899	11,109	7,299	7,775	26,183
Current assets	1,964	4,387	6,351	2,066	1,527	2,778	6,371
Total assets	11,358	20,892	32,250	13,175	8,826	10,553	32,554
Current liabilities	1,255	2,992	4,247	1,297	998	1,713	4,008
Non-current liabilities	5,037	7,505	12,542	6,614	2,928	3,687	13,229
Total liabilities	6,292	10,497	16,789	7,911	3,926	5,400	17,237
Net assets	5,066	10,395	15,461	5,264	4,900	5,153	15,317
Less: non-controlling interests	—	(15)	(15)	—	—	(13)	(13)
	5,066	10,380	15,446	5,264	4,900	5,140	15,304

Group investment in joint ventures
Group share of net assets (as above)	5,066	10,380	15,446	5,264	4,900	5,140	15,304
Cumulative impairment charge	—	(3,007)	(3,007)	—	(2,900)	—	(2,900)
Loans made by group companies to joint ventures	—	(4)	(4)	—	—	(4)	(4)
	5,066	7,369	12,435	5,264	2,000	5,136	12,400

16. Investments in joint ventures – continued

Transactions between the group and its joint ventures are summarized below.


						$ million
Sales to joint ventures		2023		2022		2021
Product	Sales	Amount receivable at 31 December	Sales	Amount receivable at 31 December	Sales	Amount receivable at 31 December
LNG, crude oil and oil products, natural gas	3,585	501	4,212	316	3,923	292


Purchases from joint ventures		2023		2022		2021
Product	Purchases	Amount payable at 31 December	Purchases	Amount payable at 31 December	Purchases	Amount payable at 31 December
LNG, crude oil and oil products, natural gas, refinery operating costs, plant processing fees	3,328	427	1,893	574	716	93

In the normal course of business, bp enters into various arm’s length transactions with joint ventures including fixed price commitments to sell and to purchase commodities, forward sale and purchase contracts and agency agreements.

The terms of the outstanding balances receivable from joint ventures are typically 30 to 45 days. The balances are unsecured and will be settled in cash. There are no significant provisions for doubtful debts relating to these balances and no significant expense recognized in the income statement in respect of bad or doubtful debts. Dividends receivable are not included in the table above.

The majority of sales to joint ventures in 2023 relate to heating oil, gasoline, diesel and lubricant product transactions with Mobene and Ocwen Energy. The majority of purchases from joint ventures in 2023 relate to crude oil and oil products transactions with Azule Energy.

The bp investment in Pan American Energy Group S.L. joint venture had an impairment charge in 2022 of $2,900 million as a result of expected portfolio changes.

bp's share of net impairment charges recognized by joint ventures in 2023 was $1,285 million (2022 $256 million charge and 2021 reversals of $214 million) of which $1,152 million charge (2022 $276 million and 2021 $nil) was in the gas and low carbon energy segment and $133 million charge (2022 $20 million reversals and 2021 reversals of $214 million) was in the oil production & operations segment. The 2023 charges in the gas and low carbon energy segment principally relate to the group's US offshore wind investments. The project assets were measured at fair value less costs of disposal following the rejection in October 2023 of requests to renegotiate the power purchase agreements associated with three wind farms off the coast of New York (Empire Wind 1 and 2, Beacon Wind 1) and the announcement in January 2024 that bp and Equinor will restructure those investments. Subject to approvals, bp will assume full ownership of the Beacon projects and Equinor the Empire projects.