6-K 1 a30062018bp6kq2.htm 6-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

for the period ended 30 June 2018
Commission File Number 1-06262

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 of Form 20-F or Form 40-F:
 
 
 
 
Form 20-F x  Form 40-F ¨  
 
 
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NOS. 333-208478 AND 333-208478-01) OF BP CAPITAL MARKETS p.l.c. AND BP p.l.c.; THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-132619) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-173136) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207188) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207189) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210316) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210318) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.


1


BP p.l.c. and subsidiaries
Form 6-K for the period ended 30 June 2018(a) 

(a)
In this Form 6-K, references to the half year 2018 and half year 2017 refer to six-month periods ended 30 June 2018 and 30 June 2017 respectively. References to the second quarter 2018 and second quarter 2017 refer to the three-month periods ended 30 June 2018 and 30 June 2017 respectively.
(b)
This discussion should be read in conjunction with the consolidated financial statements and related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, in BP’s Annual Report on Form 20-F for the year ended 31 December 2017.


2


Group results second quarter and half year 2018

Highlights
Strong earnings, strategic momentum, increased dividend
Profit for the second quarter of 2018 was $2.8 billion, compared with $0.1 billion for the same period in 2017. Underlying replacement cost profit* for the second quarter of 2018 was $2.8 billion – four times that reported for the same period in 2017 – including significantly higher earnings from the Upstream and Rosneft.
Operating cash flow* was $6.3 billion in the second quarter and $10.0 billion in the first half including the impact of Gulf of Mexico oil spill payments of $0.7 billion and $2.4 billion respectively(a).
    Dividend was increased 2.5% to 10.25 cents a share, the first rise since the third quarter of 2014.
Upstream reported the strongest quarter since the third quarter of 2014 on both a replacement cost and underlying basis.
Oil and gas production: reported production in the quarter was 3.6 million barrels of oil equivalent a day. Upstream production, excluding Rosneft, was 1.4% higher than a year earlier and up 9.6% when adjusted for portfolio changes and pricing effects, driven by rising output from new major projects* and strong plant reliability*.
Major projects: with start-ups in Azerbaijan, Russia and Egypt, three of the six new projects expected to start in 2018 are now online.
Strategic portfolio management: agreed to buy world-class US onshore oil and gas assets from BHP, a $10.5 billion acquisition that will transform BP’s US Lower 48 business. BP also agreed to increase its stake in the Clair oilfield in the UK while exiting the Greater Kuparuk Area in Alaska.
Downstream reported strong first half refining performance, with record levels of crude processed at Whiting refinery in US; further expansion in fuels marketing, with more than 1,200 convenience partnership sites now across our retail network.
Advancing the energy transition: acquisition of UK's largest electric vehicle charging company Chargemaster and investment in innovative battery technology firm StoreDot move forward BP’s approach to advanced mobility.
    Gulf of Mexico oil spill payments in the quarter were $0.7 billion on a post-tax basis.
    Gross debt reduced in the quarter by $1.8 billion to $60.4 billion. Net debt* reduced in the quarter by $0.7 billion to $39.3 billion.
    BP's share buyback programme continued with 29 million ordinary shares bought back in the first half at a cost of $200 million.

(a)  
Operating cash flow excluding Gulf of Mexico oil spill payments is a measure used by management and BP believes it is useful as it allows for meaningful comparisons between reporting periods. It is not however disclosed in this SEC filing because SEC regulations do not permit the inclusion of this non-GAAP metric.
Financial summary
 
Second

Second

 
First

First

 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Sales and other operating revenues
 
75,439

56,511

 
143,611

112,374

Profit for the period(a)
 
2,799

144

 
5,268

1,593

Inventory holding (gains) losses*, before tax
 
(1,310
)
586

 
(1,402
)
520

Taxation charge (credit) on inventory holding gains and losses
 
300

(177
)
 
312

(148
)
RC profit (loss)*
 
1,789

553

 
4,178

1,965

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*, before tax
 
1,275

237

 
1,670

504

Taxation charge (credit) on non-operating items and fair value accounting effects
 
(242
)
(106
)
 
(440
)
(275
)
Underlying RC profit
 
2,822

684

 
5,408

2,194

Profit per ordinary share (cents)
 
14.03

0.73

 
26.42

8.12

Profit per ADS (dollars)
 
0.84

0.04

 
1.59

0.49

RC profit (loss) per ordinary share (cents)*
 
8.96

2.80

 
20.96

10.02

RC profit (loss) per ADS (dollars)
 
0.54

0.17

 
1.26

0.60

Underlying RC profit per ordinary share (cents)*
 
14.14

3.47

 
27.13

11.19

Underlying RC profit per ADS (dollars)
 
0.85

0.21

 
1.63

0.67

(a)
Profit attributable to BP shareholders.

* See definitions in the Glossary on page 40. RC profit (loss), underlying RC profit, net debt and organic capital expenditure are non-GAAP measures.
The commentary above and following should be read in conjunction with the cautionary statement on page 43.

3


Group headlines
Results
BP’s profit for the second quarter and half year was $2,799 million and $5,268 million respectively, compared with $144 million and $1,593 million for the same periods in 2017.
For the half year, replacement cost (RC) profit* was $4,178 million, compared with $1,965 million in 2017. Underlying RC profit* was $5,408 million, compared with $2,194 million in 2017. Underlying RC profit is after adjusting RC profit for a net charge for non-operating items* of $970 million and net adverse fair value accounting effects* of $260 million (both on a post-tax basis).
For the second quarter, RC profit was $1,789 million, compared with a profit of $553 million in 2017. Underlying RC profit was $2,822 million compared with $684 million for the same period in 2017. Underlying RC profit is after adjusting RC profit for a net charge for non-operating items of $723 million and net adverse fair value accounting effects of $310 million (both on a post-tax basis).
See further information on pages 5, 34 and 35.
Non-operating items
Non-operating items amounted to a post-tax charge of $723 million for the quarter and $970 million for the half year. The charge for the quarter includes post-tax amounts relating to the Gulf of Mexico oil spill of $193 million for business economic loss claims and $126 million for other claims and litigation relating to the spill, as well as finance costs in respect of the unwinding of discounting effects relating to oil spill payables. See further information on page 34.
Effective tax rate
The effective tax rate (ETR) on the profit for the second quarter and half year was 42% and 39% respectively, compared with 83% and 46% for the same periods in 2017. The ETR on RC profit or loss* for the second quarter and half year was 49% and 42% respectively, compared with 63% and 43% for the same periods in 2017. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the second quarter and half year was 42% and 40% respectively, compared with 60% and 45% for the same periods in 2017. The lower underlying ETR for the second quarter and half year mainly reflected lower exploration write-offs partly offset by deferred tax charges due to foreign exchange impacts. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
Dividend
On 26 July 2018 BP announced a quarterly dividend of 10.25 cents per ordinary share ($0.615 per ADS), which is expected to be paid on 21 September 2018. The corresponding amount in sterling will be announced on 11 September 2018. See page 26 for further information.
Share buybacks
BP repurchased 11 million ordinary shares at a cost of $80 million, including fees and stamp duty, during the second quarter of 2018. For the half year, BP repurchased 29 million ordinary shares at a cost of $200 million, including fees and stamp duty.
 

Operating cash flow*
Operating cash flow was $6.3 billion in the second quarter and $10.0 billion in the first half including the impact of Gulf of Mexico oil spill payments of $0.7 billion and $2.4 billion respectively. These compare with $4.9 billion for the second quarter of 2017 and $7.0 billion for the first half of 2017.
Capital expenditure*
Total capital expenditure for the second quarter and half year was $3.8 billion and $7.8 billion respectively, compared with $4.5 billion and $8.6 billion for the same periods in 2017.
Organic capital expenditure* for the second quarter and half year was $3.5 billion and $7.0 billion respectively, compared with $4.3 billion and $7.9 billion for the same periods in 2017.
Inorganic capital expenditure* for the second quarter and half year was $0.4 billion and $0.8 billion respectively, compared with $0.1 billion and $0.7 billion for the same periods in 2017.
See page 33 for further information.
Divestment and other proceeds
Divestment proceeds* were $0.2 billion for the second quarter and $0.3 billion for the half year, compared with $0.5 billion and $0.7 billion for the same periods in 2017.
Debt
Gross debt at 30 June 2018 was $60.4 billion compared with $63.0 billion a year ago. Gross debt ratio* at 30 June 2018 was 37.2%, compared with 39.0% a year ago.
Net debt* at 30 June 2018 was $39.3 billion, compared with $39.8 billion a year ago. Gearing* or net debt ratio* at 30 June 2018 was 27.8%, compared with 28.8% a year ago.
We expect gearing to remain within the target band, of 20-30%, during the second half of 2018.
Net debt, net debt ratio and gearing are non-GAAP measures. See page 26 for more information.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

4


Analysis of underlying RC profit* before interest and tax
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Underlying RC profit before interest and tax
 
 
 
 
 
 
Upstream
 
3,508

710

 
6,665

2,080

Downstream
 
1,455

1,413

 
3,281

3,155

Rosneft
 
766

279

 
1,013

378

Other businesses and corporate
 
(477
)
(366
)
 
(869
)
(806
)
Consolidation adjustment – UPII*
 
151

135

 
(9
)
67

Underlying RC profit before interest and tax
 
5,403

2,171

 
10,081

4,874

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(448
)
(420
)
 
(912
)
(807
)
Taxation on an underlying RC basis
 
(2,059
)
(1,055
)
 
(3,625
)
(1,818
)
Non-controlling interests
 
(74
)
(12
)
 
(136
)
(55
)
Underlying RC profit attributable to BP shareholders
 
2,822

684

 
5,408

2,194

Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 3 for the group and on pages 8-13 for the segments.
 
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

RC profit (loss) before interest and tax
 
 
 
 
 
 
Upstream
 
3,514

795

 
6,688

2,051

Downstream
 
840

1,567

 
2,553

3,273

Rosneft
 
766

279

 
1,013

378

Other businesses and corporate(a)
 
(1,025
)
(721
)
 
(1,596
)
(1,152
)
Consolidation adjustment – UPII
 
151

135

 
(9
)
67

RC profit (loss) before interest and tax
 
4,246

2,055

 
8,649

4,617

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(566
)
(541
)
 
(1,150
)
(1,054
)
Taxation on a RC basis
 
(1,817
)
(949
)
 
(3,185
)
(1,543
)
Non-controlling interests
 
(74
)
(12
)
 
(136
)
(55
)
RC profit (loss) attributable to BP shareholders
 
1,789

553

 
4,178

1,965

Inventory holding gains (losses)*
 
1,310

(586
)
 
1,402

(520
)
Taxation (charge) credit on inventory holding gains and losses
 
(300
)
177

 
(312
)
148

Profit (loss) for the period attributable to BP shareholders
 
2,799

144

 
5,268

1,593

(a)
Includes costs related to the Gulf of Mexico oil spill. See page 13 and also Note 2 from page 21 for further information on the accounting for the Gulf of Mexico oil spill.




5


Strategic progress
Upstream
Upstream production, excluding Rosneft, for the second quarter was 2,465mboe/d, 1.4% higher than a year earlier. Underlying production* – adjusted for PSA* impacts and portfolio changes, including termination of BP’s interest in the offshore concession in Abu Dhabi – was 9.6% higher than a year ago due to production from the ramp-up of major projects* and continued strong plant reliability*. Unit production costs* for the second quarter improved by 3% compared with the same period in 2017.
Three Upstream major projects have now started up in 2018: the Shah Deniz 2 gas project in Azerbaijan and the Taas-Yuryakh oil expansion in Russia in the second quarter, following the Atoll project in Egypt in the first quarter. These projects were started up under budget and on or ahead of schedule. Another three major projects are expected to begin production during 2018. In addition, during the first half of the year, final investment decisions have been made on five projects in Oman, India, the North Sea and Angola.
BP has accessed new acreage in the Campos basin, offshore Brazil, as a result of the fourth Pre-Salt Production Sharing Contract Bid Round.
BP has agreed to buy a portfolio of US unconventional oil and gas assets from BHP. This major acquisition will upgrade and materially reposition BP’s US onshore oil and gas business. BP also agreed to increase its interest in the UK's Clair field, an advantaged oil asset with growth potential, while divesting its non-operating interest in the Greater Kuparuk Area in Alaska.
Downstream
In marketing, BP’s convenience partnership model is now rolled out to more than 1,200 sites across our network, more than 300 BP-branded retail sites are now open in Mexico and lubricants continues to deliver premium brand growth.
In manufacturing, BP’s Whiting refinery processed record levels of crude and our petrochemicals business announced two new PTA licensing agreements, demonstrating the strength of BP’s industry-leading technology.
 

Advancing the energy transition
BP has continued to progress its lower-carbon strategy as detailed in the Advancing the energy transition report published in April.
Two Upstream major projects that have started operation in 2018 so far – Shah Deniz 2 and Atoll – produce natural gas.
BP also significantly progressed its advanced mobility strategy with the purchase of Chargemaster, the UK’s largest electric vehicle charging network operator. Together with investments in StoreDot, a developer of ultra-fast charging battery technology, and mobile-charging company FreeWire, this supports BP’s aim to become the leading fuel provider for electric as well as conventional vehicles.
Financial framework
Operating cash flow* was $6.3 billion in the quarter and $10.0 billion in the first half, including Gulf of Mexico oil spill payments of $0.7 billion in the quarter and $2.4 billion in the first half. These compare with $4.9 billion for the second quarter of 2017 and $7.0 billion for the first half of 2017.
Organic capital expenditure* of $3.5 billion in the quarter brought the total for the first half of 2018 to $7.0 billion. BP expects 2018 organic capital expenditure to be around $15 billion.

Divestments and other proceeds totalled $0.3 billion for the half year. 2018 total proceeds are expected to be over $3 billion including proceeds from the sale of BP’s interests in the Greater Kuparuk Area in Alaska.
Gulf of Mexico oil spill payments on a post-tax basis totalled $2.4 billion in the first half of 2018. Payments for the full year are expected to be just over $3 billion on a post-tax basis.

Gearing* at the end of the quarter was 27.8%, within BP’s target band of 20-30%. We expect gearing to remain within the target band during the second half of 2018.


Operating metrics
 
First half 2018
 
Financial metrics
 
First half 2018
 
(vs. First half 2017)
 
 
(vs. First half 2017)
Tier 1 process safety events*
 
8
 
Underlying RC profit*i
 
$5.4bn
 
(-3)
 
 
(+$3.2bn)
Reported recordable injury frequency*
 
0.22
 
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
 
(b) 
 
(—)
 
 
 
Group production
 
3,662mboe/d
 
Organic capital expenditureii
 
$7.0bn
 
(+3.3%)
 
 
(-$0.9bn)
Upstream production (excludes Rosneft segment)
 
2,535mboe/d
 
Gulf of Mexico oil spill payments (post-tax)(c)
 
$2.4bn
 
(+5.2%)
 
 
(-$1.9bn)
Upstream unit production costs
 
$7.32/boe
 
Divestment proceeds*
 
$0.3bn
 
(+1.6%)
 
 
(-$0.4bn)
BP-operated Upstream plant reliability(a)
 
95.8%
 
Net debt ratio* (gearing)iii
 
27.8%
 
(+0.7)
 
 
(-1.0)
Refining availability*
 
94.1%
 
Dividend per ordinary share(d)
 
10.25 cents
 
(-0.7)
 
 
(+2.5%)
(a)
BP-operated Upstream operating efficiency* has been replaced with Upstream plant reliability as a group operating metric in the first quarter 2018. It is more comparable with the equivalent metric disclosed for the Downstream, which is ‘Refining availability’.
(b)
SEC regulations do not permit inclusion of this non-GAAP metric in this SEC filing. Operating cash flow excluding Gulf of Mexico oil spill payments is calculated by excluding post-tax payments relating to the Gulf of Mexico oil spill from net cash provided by operating activities, as reported in the condensed group cash flow statement. For the half year, net cash provided by operating activities was $10.0 billion and post-tax Gulf of Mexico oil spill payments were $2.4 billion.

6


(c)
Amounts shown are post-tax, first quarter 2018 amounts disclosed were pre-tax. Post-tax amounts are consistent with operating cash flow excluding Gulf of Mexico oil spill payments in the table above and the financial framework. The equivalent amount on a pre-tax basis was $2.7 billion, a reduction of $1.6 billion on the prior year.
(d)
Represents dividend announced in the quarter (vs. prior year quarter).



 
Nearest GAAP equivalent measures
i
Profit for the period:
$5.3bn
ii
Capital expenditure*:
$7.8bn
iii
Gross debt ratio*:
37.2%


The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

7


Upstream
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Sales and other operating revenues(a)
 
12,698

10,493

 
26,568

21,820

Profit before interest and tax
 
3,518

796

 
6,693

2,046

Inventory holding (gains) losses*
 
(4
)
(1
)
 
(5
)
5

RC profit before interest and tax
 
3,514

795

 
6,688

2,051

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
(6
)
(85
)
 
(23
)
29

Underlying RC profit (loss) before interest and tax*(b)
 
3,508

710

 
6,665

2,080

(a)
Includes sales to other segments.
(b)
See page 9 for a reconciliation to segment RC profit before interest and tax by region.

Financial results
Sales and other operating revenues for the second quarter and half year were $13 billion and $27 billion respectively, compared with $10 billion and $22 billion for the corresponding periods in 2017. For the second quarter and half year, revenues were higher due to higher realizations, higher sales volumes, and higher gas marketing and trading revenues.
The replacement cost profit before interest and tax for the second quarter and half year was $3,514 million and $6,688 million respectively, compared with $795 million and $2,051 million for the same periods in 2017. The second quarter and half year included a net non-operating gain of $27 million and a charge of $77 million respectively, compared with a net charge of $21 million and $381 million for the same periods in 2017. Fair value accounting effects in the second quarter and half year had an adverse impact of $21 million and a favourable impact of $100 million respectively, compared with a favourable impact of $106 million and $352 million in the same periods of 2017.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the second quarter and half year was $3,508 million and $6,665 million respectively, compared with $710 million and $2,080 million for the same periods in 2017. The result for the second quarter and half year mainly reflected higher liquids and gas realizations, lower exploration write-offs, and higher production from the ramp-up of major projects*.
Production
Production for the quarter was 2,465mboe/d, 1.4% higher than the second quarter of 2017. Underlying production* for the quarter increased by 9.6%, due to the ramp-up of major projects.
For the half year, production was 2,535mboe/d, 5.2% higher than 2017. Underlying production for the half year was 11.7% higher than 2017 due to the ramp-up of major projects.
Key events
In the second quarter, the Rosneft-operated Taas-Yuryakh expansion project (BP 20%) completed commissioning of the main project facilities for the Srednebotuobinskoye oil and gas condensate field in Eastern Siberia, Russia. This is the second of six major projects expected to come onstream for BP this year. The project was delivered under budget and on schedule.
On 7 June, BP won the licence for the Dois Irmãos block located in the Campos basin, offshore Brazil, as a result of the fourth Pre-Salt Production Sharing Contract Bid Round (Petrobras operator 45%, BP 30%, and Equinor 25%).
On 2 July, BP and its partners in the Shah Deniz consortium (BP operator 28.8%) announced the start-up of the Shah Deniz 2 gas project in Azerbaijan, including its first commercial gas delivery to Turkey. Shah Deniz 2 is the starting point for the Southern Gas Corridor series of pipelines that will deliver gas from the Caspian Sea direct to European markets and the third of six major projects expected to come onstream for BP this year. The project started up under budget and on schedule.
On 3 July, BP announced that it has entered into an agreement to purchase from ConocoPhillips a 16.5% interest in the BP-operated Clair field, west of Shetland in the UK. As a result, BP’s interest in Clair will increase to 45.1%. Simultaneously BP has entered into agreements to sell to ConocoPhillips BP’s entire 39.2% interest in the Greater Kuparuk Area on the North Slope of Alaska as well as BP’s holding in the Kuparuk Transportation Company. The two transactions together are expected to be cash neutral. The transactions remain subject to regulatory approvals.
On 26 July, BP announced that BP America Production Company will acquire from BHP Billiton Petroleum (North America) Inc. 100% of the issued share capital of Petrohawk Energy Corporation for a total consideration of $10.5 billion subject to customary adjustments. These unconventional oil and gas assets comprise 470,000 net acres of licences, including a new position for BP in the liquids-rich Permian-Delaware basin, and two premium positions in the Eagle Ford and Haynesville basins. The assets have combined current production of 190,000 barrels of oil equivalent per day, about 45% of which is liquid hydrocarbons, as well as undeveloped resources. The transaction is anticipated to complete by the end of October subject to regulatory approvals.
This builds on the progress announced in our first-quarter results, which comprised the following: BP announced the start of gas production from the Atoll Phase One project in Egypt; BP confirmed that the governments of Mauritania and Senegal signed an Inter-Government Cooperation Agreement (ICA) which will enable the development of the BP-operated Tortue/Ahmeyim gas project; BP took final investment decisions on the two new North Sea developments, Alligin and Vorlich satellite fields; BP’s equity interest (14.67%) in the ADNOC Offshore concession in Abu Dhabi expired; BP announced that, together with its partner, the Oman Oil Company Exploration & Production, it has approved the development of Ghazeer, the second phase of the Khazzan gas field in Oman; BP and state-owned Brazilian oil company Petrobras announced the signing of a memorandum of understanding to form a strategic alliance to jointly explore potential business opportunities both in Brazil and beyond; BP together with its partner Reliance Industries Limited, announced the sanction of the Satellite Cluster project off the east coast of India; BP and the State Oil Company

8


Upstream (continued)
of the Azerbaijan Republic (SOCAR) signed a new production-sharing agreement* for the joint exploration and development of Block D230 in the North Absheron basin in the Azerbaijan sector of the Caspian Sea.
Outlook
Looking ahead, we expect third-quarter reported production to be broadly flat with the second quarter with continued seasonal turnaround and maintenance activities.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Underlying RC profit before interest and tax
 
 
 
 
 
 
US
 
742

179

 
1,268

345

Non-US
 
2,766

531

 
5,397

1,735

 
 
3,508

710

 
6,665

2,080

Non-operating items
 
 
 
 
 
 
US
 
(29
)
(34
)
 
(174
)
(46
)
Non-US(a)
 
56

13

 
97

(335
)
 
 
27

(21
)
 
(77
)
(381
)
Fair value accounting effects
 
 
 
 
 
 
US
 
(143
)
92

 
(152
)
284

Non-US
 
122

14

 
252

68

 
 
(21
)
106

 
100

352

RC profit before interest and tax
 
 
 
 
 
 
US
 
570

237

 
942

583

Non-US
 
2,944

558

 
5,746

1,468

 
 
3,514

795

 
6,688

2,051

Exploration expense
 
 
 
 
 
 
US
 
77

25

 
386

65

Non-US(b)
 
87

825

 
292

1,197

 
 
164

850

 
678

1,262

Of which: Exploration expenditure written off(b)
 
81

753

 
507

1,014

Production (net of royalties)(c)
 
 
 
 
 
 
Liquids* (mb/d)
 
 
 
 
 
 
US
 
411

418

 
429

433

Europe
 
147

122

 
143

118

Rest of World
 
659

812

 
695

819

 
 
1,217

1,352

 
1,267

1,371

Of which equity-accounted entities
 
112

202

 
144

208

Natural gas (mmcf/d)
 
 
 
 
 
 
US
 
1,744

1,576

 
1,767

1,585

Europe
 
202

274

 
209

269

Rest of World
 
5,297

4,410

 
5,376

4,173

 
 
7,242

6,260

 
7,352

6,026

Of which equity-accounted entities
 
493

558

 
485

544

Total hydrocarbons* (mboe/d)
 
 
 
 
 
 
US
 
711

689

 
734

706

Europe
 
182

169

 
180

165

Rest of World
 
1,572

1,572

 
1,622

1,539

 
 
2,465

2,431

 
2,535

2,410

Of which equity-accounted entities
 
197

298

 
227

301

Average realizations*(d)
 
 
 
 
 
 
Total liquids(e) ($/bbl)
 
67.24

46.27

 
64.21

48.09

Natural gas ($/mcf)
 
3.65

3.19

 
3.72

3.34

Total hydrocarbons ($/boe)
 
43.37

33.59

 
42.36

35.37

(a)
First half 2017 relates primarily to an impairment charge related to the sale of the Forties Pipeline System business to INEOS.
(b)
Second quarter and first half 2017 predominantly relates to the write-off of exploration well and lease costs in Angola. First half 2017 also includes write-off of exploration wells in Egypt.
(c)
Includes BP’s share of production of equity-accounted entities in the Upstream segment.
(d)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
(e)
Includes condensate, natural gas liquids and bitumen.

Because of rounding, some totals may not agree exactly with the sum of their component parts.

9


Downstream
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Sales and other operating revenues(a)
 
69,174

52,195

 
130,580

102,275

Profit before interest and tax
 
2,036

988

 
3,818

2,792

Inventory holding (gains) losses*
 
(1,196
)
579

 
(1,265
)
481

RC profit before interest and tax
 
840

1,567

 
2,553

3,273

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
615

(154
)
 
728

(118
)
Underlying RC profit before interest and tax*(b)
 
1,455

1,413

 
3,281

3,155

(a)
Includes sales to other segments.
(b)
See page 11 for a reconciliation to segment RC profit before interest and tax by region and by business.

Financial results
Sales and other operating revenues for the second quarter and half year were $69 billion and $131 billion respectively, compared with $52 billion and $102 billion for the corresponding periods in 2017. The increase in the second quarter and half year was mainly due to higher oil prices.
The replacement cost profit before interest and tax for the second quarter and half year was $840 million and $2,553 million respectively, compared with $1,567 million and $3,273 million for the same periods in 2017.
The second quarter and half year include a net non-operating charge of $225 million and $278 million respectively, compared with a gain of $138 million and $62 million for the same periods in 2017. Fair value accounting effects had an adverse impact of $390 million in the second quarter and $450 million for the half year, compared with a favourable impact of $16 million and $56 million for the same periods in 2017.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the second quarter and half year was $1,455 million and $3,281 million respectively, compared with $1,413 million and $3,155 million for the same periods in 2017.
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 11.
Fuels
The fuels business reported an underlying replacement cost profit before interest and tax of $1,054 million for the second quarter and $2,452 million for the half year, compared with $908 million and $2,108 million for the same periods in 2017. The result for the quarter and half year reflects a higher refining performance but a weak supply and trading contribution with a small loss in the second quarter. The result also reflects continued strong fuels marketing performance despite the adverse lag impact of increasing crude oil prices.
The refining performance for the quarter and half year reflects the benefits from increased commercial optimization with record levels of crude processed at our Whiting refinery, stronger industry refining margins and higher North American heavy crude oil discounts which was partly offset by pipeline capacity apportionment impacts.
In fuels marketing our convenience partnership model is now in more than 1,200 sites across our network and in Mexico we now have more than 300 BP-branded retail sites operational.
This quarter, we continued to progress our advanced mobility agenda. In May, we invested $20 million in StoreDot, a leading developer of ultra-fast charging battery technology and in July, we completed the acquisition of Chargemaster, the operator of the UK’s largest electric vehicle charging network, for £130 million.
In the quarter we signed a memorandum of understanding with state-owned Brazilian oil company Petrobras to explore potential joint commercial agreements in Brazil. We also announced that we will not be continuing with the proposed acquisition of Woolworths’ retail fuel and convenience business in Australia.
Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $326 million for the second quarter and $657 million for the half year, compared with $355 million and $748 million for the same periods in 2017. The result for the quarter and half year reflects continued premium brand growth, more than offset by the adverse lag impact of increasing base oil prices.
During the first quarter we significantly strengthened our relationship with Renault through the continuation of our Renault Formula 1 sponsorship with Renault Sport Racing, and we are exploring new opportunities to work globally with the Renault-Nissan-Mitsubishi Alliance.
Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $75 million for the second quarter and $172 million for the half year, compared with $150 million and $299 million for the same periods in 2017. The result for the quarter and half year reflects an improved margin environment, increased margin optimization and lower costs. This was more than offset by a significantly higher level of turnaround activity and the impact from the divestment of our interest in the SECCO joint venture, which completed in the fourth quarter of last year.
Outlook
Looking to the third quarter, we expect lower industry refining margins. We also expect significantly higher levels of turnaround activity in the second half of the year, particularly at our Whiting refinery in the US.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

10


Downstream (continued)
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Underlying RC profit before interest and tax - by region
 
 
 
 
 
 
US
 
399

283

 
988

837

Non-US
 
1,056

1,130

 
2,293

2,318

 
 
1,455

1,413

 
3,281

3,155

Non-operating items
 
 
 
 
 
 
US
 
(155
)
28

 
(172
)
16

Non-US
 
(70
)
110

 
(106
)
46

 
 
(225
)
138

 
(278
)
62

Fair value accounting effects(a)
 
 
 
 
 
 
US
 
(299
)
10

 
(420
)
(52
)
Non-US
 
(91
)
6

 
(30
)
108

 
 
(390
)
16

 
(450
)
56

RC profit before interest and tax
 
 
 
 
 
 
US
 
(55
)
321

 
396

801

Non-US
 
895

1,246

 
2,157

2,472

 
 
840

1,567

 
2,553

3,273

Underlying RC profit before interest and tax - by business(b)(c)
 
 
 
 
 
 
Fuels
 
1,054

908

 
2,452

2,108

Lubricants
 
326

355

 
657

748

Petrochemicals
 
75

150

 
172

299

 
 
1,455

1,413

 
3,281

3,155

Non-operating items and fair value accounting effects(a)
 
 
 
 
 
 
Fuels
 
(584
)
159

 
(694
)
163

Lubricants
 
(26
)
(2
)
 
(29
)
(5
)
Petrochemicals
 
(5
)
(3
)
 
(5
)
(40
)
 
 
(615
)
154

 
(728
)
118

RC profit before interest and tax(b)(c)
 
 
 
 
 
 
Fuels
 
470

1,067

 
1,758

2,271

Lubricants
 
300

353

 
628

743

Petrochemicals
 
70

147

 
167

259

 
 
840

1,567

 
2,553

3,273

 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
14.9

13.8

 
13.3

12.8

 
 
 
 
 
 
 
Refinery throughputs (mb/d)
 
 
 
 
 
 
US
 
666

708

 
690

702

Europe
 
786

782

 
792

791

Rest of World
 
228

198

 
238

189

 
 
1,680

1,688

 
1,720

1,682

Refining availability* (%)
 
93.3

94.5

 
94.1

94.8

 
 
 
 
 
 
 
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
US
 
1,161

1,177

 
1,129

1,146

Europe
 
1,135

1,153

 
1,090

1,111

Rest of World
 
477

497

 
479

505

 
 
2,773

2,827

 
2,698

2,762

Trading/supply sales of refined products
 
3,247

2,996

 
3,215

2,978

Total sales volumes of refined products
 
6,020

5,823

 
5,913

5,740

 
 
 
 
 
 
 
Petrochemicals production (kte)
 
 
 
 
 
 
US
 
404

672

 
903

1,170

Europe
 
1,094

1,365

 
2,222

2,618

Rest of World
 
1,358

2,001

 
2,749

4,074

 
 
2,856

4,038

 
5,874

7,862

(a)
For Downstream, fair value accounting effects arise solely in the fuels business. See page 35 for further information.
(b)
Segment-level overhead expenses are included in the fuels business result.
(c)
Results from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany are reported in the fuels business.


11


Rosneft
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018(a)

2017

 
2018(a)

2017

Profit before interest and tax(b)
 
876

271

 
1,145

344

Inventory holding (gains) losses*
 
(110
)
8

 
(132
)
34

RC profit before interest and tax
 
766

279

 
1,013

378

Net charge (credit) for non-operating items*
 


 


Underlying RC profit before interest and tax*
 
766

279

 
1,013

378

Financial results
Replacement cost (RC) profit before interest and tax and underlying RC profit before interest and tax for the second quarter and half year was $766 million and $1,013 million respectively, compared with $279 million and $378 million for the same periods in 2017. There were no non-operating items in the second quarter and half year of either year.
Compared with the same periods in 2017, the results for the second quarter and half year were primarily affected by higher oil prices, favourable foreign exchange and duty lag effects, and certain one-off items.
BP’s two nominees, Bob Dudley and Guillermo Quintero, were re-elected to Rosneft’s board at the annual general meeting (AGM) on 21 June. At the AGM, shareholders also approved a resolution to pay a dividend of 6.65 roubles per ordinary share, which brings the total dividend for 2017 to 10.48 roubles per ordinary share, constituting 50% of the company’s IFRS net profit. BP expects to receive a dividend of 12.5 billion roubles, after the deduction of withholding tax, on 31 July 2018.

Key events
In December 2017 Rosneft and BP announced an agreement to develop subsoil resources within the Kharampurskoe and Festivalnoye licence areas in Yamalo-Nenets Autonomous Okrug in northern Russia. In the second quarter of 2018 BP acquired a 49% stake in LLC Kharampurneftegaz and it is expected that Rosneft will transfer the relevant subsoil use licences to LLC Kharampurneftegaz, subject to regulatory approvals, later in 2018. BP's interest is reported through the Upstream segment.

 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

 
 
2018(a)

2017

 
2018(a)

2017

Production (net of royalties) (BP share)
 
 
 
 
 
 
Liquids* (mb/d)
 
909

902

 
906

907

Natural gas (mmcf/d)
 
1,262

1,302

 
1,285

1,318

Total hydrocarbons* (mboe/d)
 
1,127

1,126

 
1,127

1,134

(a)
The operational and financial information of the Rosneft segment for the second quarter and half year is based on preliminary operational and financial results of Rosneft for the half year ended 30 June 2018. Actual results may differ from these amounts.
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP’s 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BP’s purchase of its interest in Rosneft and the amortization of the deferred gain relating to the divestment of BP’s interest in TNK-BP. These adjustments increase the reported profit before interest and tax, as shown in the table above, compared with the equivalent amount in Russian roubles in Rosneft’s IFRS financial statements. BP’s share of Rosneft’s profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BP's share of Rosneft’s earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation.


12


Other businesses and corporate
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Sales and other operating revenues(a)
 
376

326

 
719

611

Profit (loss) before interest and tax
 
 
 
 
 
 
Gulf of Mexico oil spill - business economic loss claims
 
(249
)
(260
)
 
(249
)
(260
)
Gulf of Mexico oil spill - other
 
(184
)
(87
)
 
(270
)
(122
)
Other
 
(592
)
(374
)
 
(1,077
)
(770
)
Profit (loss) before interest and tax
 
(1,025
)
(721
)
 
(1,596
)
(1,152
)
Inventory holding (gains) losses*
 


 


RC profit (loss) before interest and tax
 
(1,025
)
(721
)
 
(1,596
)
(1,152
)
Net charge (credit) for non-operating items*
 
 
 
 
 
 
Gulf of Mexico oil spill - business economic loss claims
 
249

260

 
249

260

Gulf of Mexico oil spill - other
 
184

87

 
270

122

Other
 
115

8

 
208

(36
)
Net charge (credit) for non-operating items
 
548

355

 
727

346

Underlying RC profit (loss) before interest and tax*
 
(477
)
(366
)
 
(869
)
(806
)
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(123
)
(104
)
 
(270
)
(301
)
Non-US
 
(354
)
(262
)
 
(599
)
(505
)
 
 
(477
)
(366
)
 
(869
)
(806
)
Non-operating items
 
 
 
 
 
 
US
 
(498
)
(350
)
 
(646
)
(388
)
Non-US
 
(50
)
(5
)
 
(81
)
42

 
 
(548
)
(355
)
 
(727
)
(346
)
RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(621
)
(454
)
 
(916
)
(689
)
Non-US
 
(404
)
(267
)
 
(680
)
(463
)
 
 
(1,025
)
(721
)
 
(1,596
)
(1,152
)
(a)
Includes sales to other segments.

Other businesses and corporate comprises our alternative energy business, shipping, treasury, corporate activities including centralized functions, and the costs of the Gulf of Mexico oil spill.
Financial results
The replacement cost loss before interest and tax for the second quarter and half year was $1,025 million and $1,596 million respectively, compared with $721 million and $1,152 million for the same periods in 2017.
The results included a net non-operating charge of $548 million for the second quarter and $727 million for the half year, compared with a charge of $355 million and $346 million for the same periods in 2017. See Note 2 on page 21 for more information on the Gulf of Mexico oil spill.
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the second quarter and half year was $477 million and $869 million respectively, compared with $366 million and $806 million for the same periods in 2017. The underlying charge for the second quarter was impacted by adverse foreign exchange effects.
Alternative Energy
The net ethanol-equivalent production (which includes ethanol and sugar) for the second quarter and half year was 259 million litres and 267 million litres respectively, compared with 227 million litres for the same periods in 2017 (there was no production for the first quarter in 2017 due to the inter-harvest period).
Net wind generation capacity* was 1,432MW at 30 June 2018, compared with 1,432MW at 30 June 2017. BP’s net share of wind generation for the second quarter and half year was 984GWh and 2,201GWh respectively, compared with 1,053GWh and 2,212GWh for the same periods in 2017.

Lightsource BP, the solar development company 43% owned by BP, made progress on a number of solar development projects during the quarter, including completing a 60MW solar farm in India, being awarded mandates for projects in mid-Kansas in the US, and also completing the acquisition of a portfolio of development projects in Pennsylvania and Maryland, in the US. Lightsource BP, in partnership with Everstone Capital, was also awarded the mandate to manage the Global Growth Energy Fund in India, established and partly funded by the UK and Indian governments.





13


Financial statements
Group income statement
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

 
 
 
 
 
 
 
Sales and other operating revenues (Note 6)
 
75,439

56,511

 
143,611

112,374

Earnings from joint ventures – after interest and tax
 
220

160

 
513

365

Earnings from associates – after interest and tax
 
1,027

371

 
1,441

522

Interest and other income
 
165

127

 
324

249

Gains on sale of businesses and fixed assets
 
56

197

 
161

242

Total revenues and other income
 
76,907

57,366

 
146,050

113,752

Purchases
 
58,424

42,555

 
109,936

83,530

Production and manufacturing expenses(a)
 
5,515

5,761

 
10,953

11,016

Production and similar taxes (Note 8)
 
531

347

 
899

815

Depreciation, depletion and amortization (Note 7)
 
3,811

3,793

 
7,742

7,635

Impairment and losses on sale of businesses and fixed assets
 
(23
)
51

 
68

504

Exploration expense
 
164

850

 
678

1,262

Distribution and administration expenses
 
2,929

2,540

 
5,723

4,893

Profit (loss) before interest and taxation
 
5,556

1,469

 
10,051

4,097

Finance costs(a)
 
535

487

 
1,088

947

Net finance expense relating to pensions and other post-retirement benefits
 
31

54

 
62

107

Profit (loss) before taxation
 
4,990

928

 
8,901

3,043

Taxation(a)
 
2,117

772

 
3,497

1,395

Profit (loss) for the period
 
2,873

156

 
5,404

1,648

Attributable to
 
 
 
 
 
 
BP shareholders
 
2,799

144

 
5,268

1,593

Non-controlling interests
 
74

12

 
136

55

 
 
2,873

156

 
5,404

1,648

 
 
 
 
 
 
 
Earnings per share (Note 9)
 
 
 
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
 
 
 
 
Per ordinary share (cents)
 
 
 
 
 
 
Basic
 
14.03

0.73

 
26.42

8.12

Diluted
 
13.96

0.72

 
26.27

8.08

Per ADS (dollars)
 
 
 
 
 
 
Basic
 
0.84

0.04

 
1.59

0.49

Diluted
 
0.84

0.04

 
1.58

0.48

(a)
See Note 2 for information on the impact of the Gulf of Mexico oil spill on these income statement line items.


14


Condensed group statement of comprehensive income
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

 
 
 
 
 
 
 
Profit (loss) for the period
 
2,873

156

 
5,404

1,648

Other comprehensive income
 
 
 
 
 
 
Items that may be reclassified subsequently to profit or loss
 
 
 
 
 
 
Currency translation differences
 
(2,612
)
(103
)
 
(2,081
)
1,111

Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
 

4

 

5

Available-for-sale investments
 

1

 

3

Cash flow hedges and costs of hedging
 
(107
)
148

 
(189
)
277

Share of items relating to equity-accounted entities, net of tax
 
(33
)
72

 
122

303

Income tax relating to items that may be reclassified
 
52

4

 
(38
)
(121
)
 
 
(2,700
)
126

 
(2,186
)
1,578

Items that will not be reclassified to profit or loss
 
 
 
 
 
 
Remeasurements of the net pension and other post-retirement benefit liability or asset
 
1,714

318

 
2,579

1,045

Cash flow hedges that will subsequently be transferred to the balance sheet
 
(35
)

 
(22
)

Income tax relating to items that will not be reclassified
 
(557
)
(102
)
 
(822
)
(348
)
 
 
1,122

216

 
1,735

697

Other comprehensive income
 
(1,578
)
342

 
(451
)
2,275

Total comprehensive income
 
1,295

498

 
4,953

3,923

Attributable to
 
 
 
 
 
 
BP shareholders
 
1,268

472

 
4,848

3,835

Non-controlling interests
 
27

26

 
105

88

 
 
1,295

498

 
4,953

3,923


15


Condensed group statement of changes in equity
 
 
BP shareholders’

Non-controlling

Total

$ million
 
equity

interests

equity

At 31 December 2017
 
98,491

1,913

100,404

Adjustment on adoption of IFRS 9, net of tax(a)
 
(180
)

(180
)
At 1 January 2018
 
98,311

1,913

100,224

 
 
 
 
 
Total comprehensive income
 
4,848

105

4,953

Dividends
 
(3,556
)
(70
)
(3,626
)
Cash flow hedges transferred to the balance sheet, net of tax
 
5


5

Repurchase of ordinary share capital
 
(200
)

(200
)
Share-based payments, net of tax
 
414


414

Transactions involving non-controlling interests, net of tax
 
(1
)
1


At 30 June 2018
 
99,821

1,949

101,770

 
 
 
 
 
 
 
BP shareholders’

Non-controlling

Total

$ million
 
equity

interests

equity

 
 
 
 
 
At 1 January 2017
 
95,286

1,557

96,843

 
 
 
 
 
Total comprehensive income
 
3,835

88

3,923

Dividends
 
(2,850
)
(77
)
(2,927
)
Share-based payments, net of tax
 
334


334

Share of equity-accounted entities' changes in equity, net of tax
 
198


198

Transactions involving non-controlling interests, net of tax
 

90

90

At 30 June 2017
 
96,803

1,658

98,461

(a)
See Note 1 for further information.


16


Group balance sheet
 
 
30 June

31 December

$ million
 
2018

2017

Non-current assets
 
 
 
Property, plant and equipment
 
124,390

129,471

Goodwill
 
11,319

11,551

Intangible assets
 
17,808

18,355

Investments in joint ventures
 
8,293

7,994

Investments in associates
 
17,835

16,991

Other investments
 
1,284

1,245

Fixed assets
 
180,929

185,607

Loans
 
505

646

Trade and other receivables
 
1,472

1,434

Derivative financial instruments
 
4,633

4,110

Prepayments
 
1,134

1,112

Deferred tax assets
 
3,908

4,469

Defined benefit pension plan surpluses
 
6,354

4,169

 
 
198,935

201,547

Current assets
 
 
 
Loans
 
298

190

Inventories
 
21,004

19,011

Trade and other receivables
 
25,130

24,849

Derivative financial instruments
 
3,614

3,032

Prepayments
 
1,277

1,414

Current tax receivable
 
783

761

Other investments
 
106

125

Cash and cash equivalents
 
22,185

25,586

 
 
74,397

74,968

Assets classified as held for sale (Note 3)
 
2,294


 
 
76,691

74,968

Total assets
 
275,626

276,515

Current liabilities
 
 
 
Trade and other payables
 
46,635

44,209

Derivative financial instruments
 
3,643

2,808

Accruals
 
3,741

4,960

Finance debt
 
10,625

7,739

Current tax payable
 
2,283

1,686

Provisions
 
2,313

3,324

 
 
69,240

64,726

Liabilities directly associated with assets classified as held for sale (Note 3)
 
291


 
 
69,531

64,726

Non-current liabilities
 
 
 
Other payables
 
13,696

13,889

Derivative financial instruments
 
5,126

3,761

Accruals
 
599

505

Finance debt
 
49,733

55,491

Deferred tax liabilities
 
8,828

7,982

Provisions
 
17,783

20,620

Defined benefit pension plan and other post-retirement benefit plan deficits
 
8,560

9,137

 
 
104,325

111,385

Total liabilities
 
173,856

176,111

Net assets
 
101,770

100,404

Equity
 
 
 
BP shareholders’ equity
 
99,821

98,491

Non-controlling interests
 
1,949

1,913

Total equity
 
101,770

100,404



17


Condensed group cash flow statement
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2018

2017

 
2018

2017

Operating activities
 
 
 
 
 
 
Profit (loss) before taxation
 
4,990

928

 
8,901

3,043

Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
 
 
 
 
 
 
Depreciation, depletion and amortization and exploration expenditure written off
 
3,892

4,546

 
8,249

8,649

Impairment and (gain) loss on sale of businesses and fixed assets
 
(79
)
(146
)
 
(93
)
262

Earnings from equity-accounted entities, less dividends received
 
(988
)
(103
)
 
(1,524
)
(323
)
Net charge for interest and other finance expense, less net interest paid
 
191

84

 
271

336

Share-based payments
 
167

156

 
404

318

Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans
 
(62
)
54

 
(264
)
(19
)
Net charge for provisions, less payments
 
80

183

 
224

6

Movements in inventories and other current and non-current assets and liabilities
 
(570
)
3

 
(3,968
)
(3,597
)
Income taxes paid
 
(1,315
)
(815
)
 
(2,248
)
(1,671
)
Net cash provided by operating activities
 
6,306

4,890

 
9,952

7,004

Investing activities
 
 
 
 
 
 
Expenditure on property, plant and equipment, intangible and other assets
 
(3,484
)
(4,181
)
 
(7,070
)
(8,004
)
Acquisitions, net of cash acquired
 
(1