6-K 1 a6363n.htm 4Q20 PART 1 OF 1 a6363n
 
 
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 02 February, 2021
 
 
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|
 
 
 
 
 
 
 
London 2 February 2021
 
 
BP p.l.c. Group results
 
Fourth quarter and full year 2020
 
 
 
 
 
For a printer friendly copy of this announcement, please click on the link below to open a PDF version.
http://www.rns-pdf.londonstockexchange.com/rns/6348N_1-2021-2-1.pdf
 
 
 
 
 
Highlights
Resilient operations and strategic progress in a challenging environment
 
 
Bernard Looney  chief executive officer:
2020 will forever be remembered for the pain and sadness caused by COVID-19. Lives were lost – livelihoods destroyed. Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins. It was also a pivotal year for the company. We launched a net zero ambition, set a new strategy to become an integrated energy company and created an offshore wind business in the US. We began reinventing bp – with nearly 10 thousand people leaving the company. We strengthened our finances – taking out costs and closing major divestments. And through all of this, the underlying operations of the company remained safe – one of our safest years – and reliable, and major new projects were brought on line. I appreciate our team’s commitment to deliver the energy the world needed and am grateful for the support we received from investors and the communities where we work. We expect much better days ahead for all of us in 2021.
 
Financial results and progress
-
Underlying replacement cost profit for the quarter was $0.1 billion, similar to the previous quarter. Performance was significantly impacted by lower marketing performance in the Downstream, with volumes remaining under pressure due to COVID-19 and continuing pressure on refining margins and utilization. In addition, the result was impacted by a significantly weaker result in gas marketing and trading and higher exploration write-offs, partially offset by a higher Rosneft contribution and a lower underlying tax charge. The full-year result was a loss of $5.7 billion compared to $10 billion profit in 2019, driven by lower oil and gas prices, significant exploration write-offs and refining margins and depressed demand.
-
Reported profit for the quarter was $1.4 billion, compared with $0.5 billion loss in the previous quarter. The result included $2.3 billion gain on disposal from the sale of BP’s petrochemicals business. For the full year, the reported loss was $20.3 billion, including significant impairments and exploration write-offs taken in the second quarter, compared with a profit of $4.0 billion in 2019.
-
Operating cash flow for the quarter, excluding Gulf of Mexico oil spill payments of $0.1 billion, was $2.4 billion. Compared to the third quarter, this reflected the significant impact of lower marketing volumes in the Downstream and a significantly weaker contribution from gas marketing and trading. There was also the absence of the working capital release and other working capital effects, absence of the Rosneft dividend, and severance payments for reinvent bp, partly offset by lower tax payments.
-
Proceeds from divestments and other disposals in the quarter were $4.2 billion, including $3.5 billion on completion of the petrochemicals divestment. In February 2021, BP agreed to sell a 20% interest in Oman's Block 61 for $2.6 billion subject to final adjustments. BP has now completed or agreed transactions for over half of its target of $25 billion in proceeds by 2025. BP expects proceeds from divestments and other disposals of $4-6 billion in 2021, weighted toward the second half.
-
At year end net debt was $39 billion, down $1.4 billion over the quarter and $6.5 billion over the full year. Net debt is expected to increase in the first half of 2021, driven by severance payments, the annual Gulf of Mexico oil spill payment and payment following completion of the offshore wind joint venture with Equinor. It is expected to then fall in the second half with growing operating cash flow and the receipt of divestment proceeds. BP continues to expect to reach our $35 billion net debt target around fourth quarter 2021 and first quarter 2022. This assumes oil prices in the range of $45-50 a barrel and BP planning assumptions for RMM and gas prices.
-
A dividend of 5.25 cents per share was announced for the quarter.
 
Performing while transforming
-
Operations were strong in 2020, with full-year BP-operated refining availability of 96% and Upstream plant reliability of 94%. Safety performance was also strong with both tier1/tier2 process safety events and reported recordable injury frequency significantly lower than in 2019. Upstream unit production costs for the year were 6.5% lower than 2019. Full-year Upstream production was 9.9% lower than 2019 primarily due to divestments.
-
BP continues to make strong progress in reinventing its organization. The new organization was in place at the start of 2021 and over half of the approximately 10,000 people expected to leave BP as a result of the reinvent programme had left by year-end. Around $1.4 billion in people-related costs are expected associated with the reinvent programme, with the majority of the cash outflow incurred in the first half of 2021.
-
Four new Upstream major projects began production in the year, including three in the fourth quarter – Ghazeer in Oman, Vorlich in the UK and KG D6 R-cluster in India. In the quarter, the Trans Adriatic Pipeline began gas deliveries, completing the Southern Gas Corridor pipeline system.
-
Demonstrating the resilience of BP's convenience offer, while retail fuel volumes were 14% lower for the full year, BP's convenience gross margin grew by 6%. Through the year, around 300 strategic convenience sites were added to the network.
-
BP had developed 3.3GW net renewable generating capacity to FID by end-2020, 0.7GW more than a year earlier. In January 2021 BP completed formation of its strategic US offshore wind partnership with Equinor, including the purchase of 50% in the Empire Wind and Beacon Wind projects. The projects were also selected to supply 2.5GW of power to the State of New York, adding to an existing commitment to supply 0.8GW.
-
Working in partnership with other companies, BP has announced: plans to develop a ‘green’ hydrogen project at its Lingen refinery in Germany with Ørsted; a BP-operated multi-company partnership to develop offshore infrastructure to support planned UK carbon capture, use and storage projects; and agreements to provide additional supplies of renewable energy to Amazon.
 
Financial summary
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) for the period attributable to BP shareholders
 
 
1,358 
 
 
(450)
 
 
19 
 
 
 
(20,305)
 
 
4,026 
 
 
Inventory holding (gains) losses, net of tax
 
 
(533)
 
 
(194)
 
 
(23)
 
 
 
2,201 
 
 
(511)
 
 
RC profit (loss)
 
 
825 
 
 
(644)
 
 
(4)
 
 
 
(18,104)
 
 
3,515 
 
 
Net (favourable) adverse impact of non-operating items and fair value accounting effects, net of tax
 
 
(710)
 
 
730 
 
 
2,571 
 
 
 
12,414 
 
 
6,475 
 
 
Underlying RC profit (loss)
 
 
115 
 
 
86 
 
 
2,567 
 
 
 
(5,690)
 
 
9,990 
 
 
RC profit (loss) per ordinary share (cents)
 
 
4.08 
 
 
(3.18)
 
 
(0.02)
 
 
 
(89.53)
 
 
17.32 
 
 
RC profit (loss) per ADS (dollars)
 
 
0.24 
 
 
(0.19)
 
 
0.00 
 
 
 
(5.37)
 
 
1.04 
 
 
Underlying RC profit (loss) per ordinary share (cents)
 
 
0.57 
 
 
0.42 
 
 
12.67 
 
 
 
(28.14)
 
 
49.24 
 
 
Underlying RC profit (loss) per ADS (dollars)
 
 
0.03 
 
 
0.03 
 
 
0.76 
 
 
 
(1.69)
 
 
2.95 
 
 
 
 
RC profit (loss), underlying RC profit, operating cash flow excluding Gulf of Mexico oil spill payments, working capital, organic capital expenditure and net debt are non-GAAP measures. These measures and inventory holding gains and losses, non-operating items, fair value accounting effects, divestment proceeds, RMM, major project, convenience gross margin, Upstream plant reliability, refining availability and divestment proceeds are defined in the Glossary on page 32.
 
 
 
 
Top of page 2
BP p.l.c. Group results
Fourth quarter and full year 2020
 
 
 
 
 
Murray Auchincloss   chief financial officer:
 
These results reflect a truly tough quarter, with a challenging price environment and COVID-19 related demand impacts. Nonetheless, we made strong progress in reducing net debt again, to $39 billion in the quarter. We remain on track to meet our target of $35 billion between the fourth quarter of 2021 and first quarter of 2022, which will trigger the start of share buybacks, subject to maintaining a strong investment grade credit rating.
 
 
 
COVID-19 Update
Strengthening finances:
-
BP's future financial performance, including cash flows and net debt, will be impacted by the extent and duration of the current market conditions and the effectiveness of the actions that it and others take, including its financial interventions. It is difficult to predict when current supply and demand imbalances will be resolved and what the ultimate impact of COVID-19 will be.
-
BP has continued to progress its divestment programme towards delivery of $25 billion of proceeds by 2025. The petrochemicals and Alaska midstream disposals both completed in the fourth quarter. Divestment proceeds for the full year were $5.5 billion.
-
Organic capital expenditure in 2020 was $12.0 billion, in line with the guidance given in April and compared with $15.2 billion in 2019.
-
Costs that are directly attributable to COVID-19 were around $0.1 billion for the quarter (full year 2020 around $0.4 billion).
-
At year end net debt was $39 billion, and BP continues to actively manage the profile of its debt portfolio. During the third quarter and January 2021, the group bought back an aggregate of $6 billion of debt. At year-end BP had around $44 billion of liquidity, including cash and undrawn revolving credit facilities.
-
Net debt is expected to increase in the first half of 2021 before reducing in the second half of the year supported by growing operating cash flow and the receipt of divestment proceeds. BP continues to expect to reach our $35 billion net debt target around fourth quarter 2021 and first quarter 2022. This assumes oil prices in the range of $45-50 a barrel and BP planning assumptions for RMM and gas prices.
 
Protecting our people and operations:
-
BP continues to take steps to protect and support its staff through the pandemic. The great majority of BP staff who are able to work from home continue to do so. Precautions in operations and offices include: reduced manning levels, changing working patterns, deploying appropriate personal protective equipment (PPE) and enhanced cleaning and social distancing measures at plants and retail sites. Decisions on working practices are being taken with caution and in compliance with local and national guidelines and regulations.
-
BP is providing enhanced support and guidance to staff on safety, health and hygiene, homeworking and mental health.
-
While the pandemic did not result in significant outages in our ongoing operations, it resulted in delays to in-year major projects in the North Sea and India and has impacted development of the Mad Dog 2, Tangguh Expansion, Trinidad Cassia Compression and Greater Tortue Ahmeyin Phase 1 major projects. However production from four major projects commenced during the year.
-
Refinery utilization for the full year was around 6% lower than 2019 due to the impact of COVID-19 on demand, with refining margins remaining extremely weak. Year on year, demand for retail fuels was lower by 14% and for aviation by 50%. Despite this, convenience gross margin grew by 6% at BP retail sites for the full year.
-
Despite the challenges of the environment, BP's operations have performed safely and reliably over the course of the year. BP-operated Upstream plant reliability was 94% and BP-operated refining availability was 96% for the year.
 
Outlook:
-
From the oil supply side, limited growth from non-OPEC+ countries coupled with active market management from OPEC+ means that for 2021 we anticipate a normalization of the currently high inventory levels.
-
Oil demand is anticipated to recover in 2021. The speed and degree of the rebound depends on governments’ policies and individuals’ self-imposed actions as vaccine distribution proceeds.
-
Oil prices have risen since the end of October, supported by vaccine rollout programmes and continued active supply management by OPEC+ countries. Prices are expected to remain subject to the decisions of OPEC+, confidence in efforts to manage the rollout of vaccination and further virus control measures.
-
We expect the US gas market to tighten in 2021 as supply declines and demand for LNG exports recovers. The current tightness on global LNG markets and higher US gas prices will lift other regional gas prices.
-
US gas markets are likely to benefit from lower production and a recovery in international LNG demand driven by demand in Asia.
-
In the first quarter of 2021 we expect material impacts in Downstream as a result of the pandemic, with increased COVID-19 restrictions resulting in lower product demand. We expect industry refining margins and utilization to remain under pressure. In our marketing businesses we expect renewed COVID-19 restrictions to have a greater impact on product demand, with January retail volumes down by around 20% year on year, compared with a decline of 11% in the fourth quarter.
-
BP will continue to review all actions and respond to any further changes in prevailing market conditions.
 
 
The commentary above and following should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
Top of page 3
 
Group headlines
Results
For the full year, underlying replacement cost (RC) loss* was $5,690 million, compared with a profit of $9,990 million in 2019. Underlying RC loss is after adjusting RC loss* for a net charge for non-operating items* of $12,191 million and net adverse fair value accounting effects* of $223 million (both on a post-tax basis).
RC loss was $18,104 million for the full year, compared with a profit of $3,515 million in 2019.
For the fourth quarter, underlying RC profit was $115 million, compared with $2,567 million in 2019. Underlying RC profit is after adjusting RC profit for a net gain for non-operating items of $1,166 million and net adverse fair value accounting effects of $456 million (both on a post-tax basis).
RC profit was $825 million for the fourth quarter, compared with a loss of $4 million in 2019.
Profit or loss for the fourth quarter and full year attributable to BP shareholders was a profit of $1,358 million and a loss of $20,305 million respectively, compared with a profit of $19 million and $4,026 million for the same periods in 2019.
See further information on pages 4, 27 and 28.
Depreciation, depletion and amortization
The charge for depreciation, depletion and amortization was $3.4 billion in the quarter and $14.9 billion in the full year, compared with $4.4 billion and $17.8 billion for the same periods in 2019. In 2021, we expect the full-year charge to be similar to the 2020 level.
Effective tax rate
The effective tax rate (ETR) on RC profit or loss* for the fourth quarter and full year was -141% and 16% respectively, compared with 102% and 51% for the same periods in 2019. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the fourth quarter and full year was 40% and -14% respectively, compared with 27% and 36% for the same periods a year ago. The higher underlying ETR for the fourth quarter reflects changes in the mix of profits and losses. The lower underlying ETR for the full year mainly reflects the exploration write-offs with a limited deferred tax benefit and the reassessment of deferred tax asset recognition in the second quarter. The underlying ETR for 2021 is expected to be higher than 40% but is sensitive to the impact that volatility in the current environment may have on the geographical mix of the group’s profits and losses. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
Dividend
BP today announced a quarterly dividend of 5.25 cents per ordinary share ($0.315 per ADS), which is expected to be paid on 26 March 2021. The corresponding amount in sterling is due to be announced on 15 March 2021, calculated based on the average of the market exchange rates for the four dealing days commencing on 9 March 2021. See page 24 for more information.
Share buybacks
BP repurchased 120 million ordinary shares at a cost of $776 million (including fees and stamp duty) in the full year 2020, all of which was completed in the first quarter of 2020. In January 2020, the share dilution buyback programme had fully offset the impact of scrip dilution since the third quarter 2017.
 
 
 
Operating cash flow*
Operating cash flow excluding Gulf of Mexico oil spill payments* was $2.4 billion for the fourth quarter and $13.8 billion for the full year. These amounts include a working capital* build of $4.0 million in the fourth quarter and $1.3 billion in the full year, after adjusting for net inventory holding gains or losses* and working capital effects of the Gulf of Mexico oil spill. The comparable amount for the same periods in 2019 was $7.6 billion and $28.2 billion.
Operating cash flow as reported in the group cash flow statement was $2.3 billion for the fourth quarter and $12.2 billion for the full year, including a working capital build of $0.7 billion and $0.1 billion respectively, compared with $7.6 billion and $25.8 billion for the same periods in 2019.
See page 30 and Glossary for further information on Gulf of Mexico oil spill cash flows and on working capital.
Capital expenditure*
Organic capital expenditure* for the fourth quarter and full year was $2.9 billion and $12.0 billion respectively, compared with $4.0 billion and $15.2 billion for the same periods in 2019.
Inorganic capital expenditure* for the fourth quarter and full year was $0.5 billion and $2.0 billion respectively, compared with $0.2 billion and $4.2 billion for the same periods in 2019.
Organic capital expenditure and inorganic capital expenditure are non-GAAP measures. See page 26 for further information.
Divestment and other proceeds
Divestment proceeds* for the fourth quarter and full year were $4.0 billion and $5.5 billion respectively, including $3.5 billion and $3.9 billion of proceeds from the petrochemicals divestment respectively. For the same periods in 2019 divestment proceeds were $0.8 billion and $2.2 billion respectively.
In addition, $0.2 billion was received in the fourth quarter in relation to the sale of an interest in BP's New Zealand retail property portfolio. For the full year, $1.1 billion in other proceeds were received including from the TANAP pipeline refinancing and the sale of an interest in BP's UK retail property portfolio. Other proceeds for the fourth quarter and full year in 2019 were $0.6 billion.
Total divestment and other proceeds for the quarter and full year in 2020 were $4.2 billion and $6.6 billion respectively. Total divestment and other proceeds for the fourth quarter and full year in 2019 were $1.4 billion and $2.8 billion respectively.
Net debt* and gearing*
Net debt at 31 December 2020 was $38.9 billion, compared with $45.4 billion a year ago. Gearing at 31 December 2020 was 31.3%, compared with 31.1% a year ago. Gearing including leases* at 31 December 2020 was 36.0%, compared with 35.3% a year ago. Net debt, gearing and gearing including leases are non-GAAP measures. See pages 25 and 29 for more information.
Reserves replacement ratio*
The organic reserves replacement ratio on a combined basis of subsidiaries and equity-accounted entities was 78% for the year. Including acquisitions and divestments, the total reserves replacement ratio was -5%.
 
 
 
 
* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 32.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
 
Top of page 4
 
Analysis of underlying RC profit (loss)* before interest and tax
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
Upstream
 
 
697 
 
 
878 
 
 
2,678 
 
 
 
(5,041)
 
 
11,158 
 
 
Downstream
 
 
126 
 
 
636 
 
 
1,438 
 
 
 
3,088 
 
 
6,419 
 
 
Rosneft
 
 
311 
 
 
(177)
 
 
412 
 
 
 
56 
 
 
2,419 
 
 
Other businesses and corporate
 
 
(89)
 
 
(130)
 
 
(250)
 
 
 
(1,040)
 
 
(1,280)
 
 
Consolidation adjustment – UPII*
 
 
(77)
 
 
34 
 
 
24 
 
 
 
89 
 
 
75 
 
 
Underlying RC profit (loss) before interest and tax
 
 
968 
 
 
1,241 
 
 
4,302 
 
 
 
(2,848)
 
 
18,791 
 
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(568)
 
 
(610)
 
 
(781)
 
 
 
(2,523)
 
 
(3,041)
 
 
Taxation on an underlying RC basis
 
 
(158)
 
 
(402)
 
 
(955)
 
 
 
(743)
 
 
(5,596)
 
 
Non-controlling interests
 
 
(127)
 
 
(143)
 
 
 
 
 
424 
 
 
(164)
 
 
Underlying RC profit (loss) attributable to BP shareholders
 
 
115 
 
 
86 
 
 
2,567 
 
 
 
(5,690)
 
 
9,990 
 
 
 
 
Reconciliations of underlying RC profit or loss attributable to BP shareholders to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 6-11 for the segments.
 
 
 
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
Upstream
 
 
(592)
 
 
30 
 
 
614 
 
 
 
(21,547)
 
 
4,917 
 
 
Downstream
 
 
1,245 
 
 
915 
 
 
1,433 
 
 
 
3,418 
 
 
6,502 
 
 
Rosneft
 
 
270 
 
 
(278)
 
 
503 
 
 
 
(149)
 
 
2,316 
 
 
Other businesses and corporate
 
 
308 
 
 
24 
 
 
(1,432)
 
 
 
(683)
 
 
(2,771)
 
 
Consolidation adjustment – UPII
 
 
(77)
 
 
34 
 
 
24 
 
 
 
89 
 
 
75 
 
 
RC profit (loss) before interest and tax
 
 
1,154 
 
 
725 
 
 
1,142 
 
 
 
(18,872)
 
 
11,039 
 
 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
 
(759)
 
 
(808)
 
 
(903)
 
 
 
(3,148)
 
 
(3,552)
 
 
Taxation on a RC basis
 
 
557 
 
 
(418)
 
 
(244)
 
 
 
3,492 
 
 
(3,808)
 
 
Non-controlling interests
 
 
(127)
 
 
(143)
 
 
 
 
 
424 
 
 
(164)
 
 
RC profit (loss) attributable to BP shareholders
 
 
825 
 
 
(644)
 
 
(4)
 
 
 
(18,104)
 
 
3,515 
 
 
Inventory holding gains (losses)*
 
 
695 
 
 
233 
 
 
10 
 
 
 
(2,868)
 
 
667 
 
 
Taxation (charge) credit on inventory holding gains and losses
 
 
(162)
 
 
(39)
 
 
13 
 
 
 
667 
 
 
(156)
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
1,358 
 
 
(450)
 
 
19 
 
 
 
(20,305)
 
 
4,026 
 
 
 
 
 
 
 
 
 
 
Top of page 5
 
Operational updates
Upstream
Upstream production, which excludes Rosneft, for the full year averaged 2,375mboe/d, 9.9% lower than for 2019, driven primarily by divestments in BPX Energy and Alaska. Underlying production* for the full year was 3.5% lower than 2019.
For the full year of 2020, BP-operated Upstream plant reliability* was 94.0% and Upstream unit production costs* of $6.39/boe were 6.5% lower than in 2019.
Production from three Upstream major projects started in the quarter – the Ghazeer project in Oman, Vorlich in the UK North Sea and the KG D6 R Cluster project offshore India. This follows the Gulf of Mexico Atlantis Phase 3 project in the previous quarter. The Raven project in Egypt is currently undergoing commissioning. The Trans Adriatic Pipeline began gas deliveries, completing the Southern Gas Corridor pipeline system.
BP reached agreement to sell its interests in the Wamsutter asset in Wyoming to Williams Field Services LLC. In February 2021 BP also agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited.
Downstream
BP-operated refining availability for the full year was 96.0%. In the quarter BP announced plans to cease production at the Kwinana refinery and convert it to an import terminal, helping to secure ongoing fuel supply for Western Australia.
BP continued to make progress in fuels marketing in 2020, expanding its retail network by more than 1,400 to over 20,300 sites worldwide. This includes more than 1,900 strategic convenience sites, around 300 more than a year earlier.
The $5-billion sale of BP's petrochemicals business to INEOS completed on 31 December and BP received the second payment of $3.6 billion, less $0.1 billion of third-party indebtedness. Final payments totalling $1 billion are expected in the first half of 2021.
Through 2020, the number of BP and joint venture operated electric vehicle charging points increased to more than 10,000 worldwide, with growth in the UK, Germany and through the DiDi joint venture in China.
 
 
Strategic progress
At the end of 2020, BP had developed 3.3GW net renewable generating capacity to FID, compared with 2.6GW a year earlier.
The formation of BP's strategic partnership with Equinor for offshore wind opportunities in the US was completed in January 2021, including BP's purchase of a 50% interest in the Empire Wind and Beacon Wind projects. Empire Wind 2 and Beacon Wind 1 were selected to provide New York state with additional offshore wind power which, subject to negotiation of a purchase and sale agreement, will bring the total secured by the projects to 3.3GW, 75% of the maximum potential installed capacity across the projects.
In the quarter BP also acquired a majority stake in Finite Carbon, the biggest developer of forest carbon offsets in the US. BP's investment is expected to support the accelerated growth of the business, including international expansion.
Financial framework
Operating cash flow excluding Gulf of Mexico oil spill payments* was $13.8 billion for the full year of 2020, compared with $28.2 billion for the same period in 2019.
Organic capital expenditure* for the full year of 2020 was $12.0 billion. BP expects total capital expenditure, including inorganic capital expenditure, to be around $13 billion in 2021.
Divestment and other proceeds were $6.6 billion for the full year of 2020. BP has now completed or agreed transactions for over half of its target of $25 billion in proceeds by 2025. BP expects proceeds from divestments and other disposals of $4-6 billion in 2021, weighted toward the second half.
Gulf of Mexico oil spill payments on a post-tax basis were $1.6 billion in the full year of 2020. Payments for 2021 are expected to be around $1 billion on a post-tax basis.
Gearing* at 31 December 2020 was 31.3%, in part reflecting the hybrid bond issue in the second quarter of 2020. See page 25 for more information.
 
 
Operating metrics
 
 
 Year 2020
 
 
Financial metrics
 
 
 Year 2020
 
 
(vs. Year 2019)
 
 
 
(vs. Year 2019)
 
Tier 1 and tier 2 process safety events
 
 
70
 
 
Underlying RC profit (loss)*
 
 
$(5.7)bn
 
 
(-28)
 
 
 
(-$15.7bn)
 
Reported recordable injury frequency*
 
 
0.132
 
 
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
 
 
$13.8bn
 
 
(-20.7%)
 
 
 
(-$14.4bn)
 
Group production
 
 
3,473mboe/d
 
 
Organic capital expenditure
 
 
$12.0bn
 
 
(-8.1%)
 
 
 
(-$3.2bn)
 
Upstream production (excludes Rosneft segment)
 
 
2,375mboe/d
 
 
Gulf of Mexico oil spill payments (post-tax)
 
 
$1.6bn
 
 
(-9.9%)
 
 
 
(-$0.8bn)
 
Upstream unit production costs(a)
 
 
$6.39
6.39/boe
 
 
Divestment proceeds*
 
 
$5.5bn
 
 
(-6.5%)
 
 
 
(+$3.3bn)
 
BP-operated Upstream plant reliability
 
 
94.0%
 
 
Gearing
 
 
31.3%
 
 
(-0.4)
 
 
 
(+0.2)
 
BP-operated refining availability*
 
 
96.0%
 
 
Dividend per ordinary share(b)
 
 
5.25 cents
 
 
(+1.1)
 
 
 
(-50.0%)
 
 
 
 
 
Return on average capital employed*
 
 
(3.8)%
 
 
 
 
 
(-12.7)
 
 
(a)
Reflecting lower costs and divestment impacts.
 
(b)
Represents dividend announced in the quarter (vs. prior year quarter).
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
 
Top of page 6
 
Upstream
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) before interest and tax
 
 
(572)
 
 
38 
 
 
614 
 
 
 
(21,530)
 
 
4,909 
 
 
Inventory holding (gains) losses*
 
 
(20)
 
 
(8)
 
 
— 
 
 
 
(17)
 
 
 
 
RC profit (loss) before interest and tax
 
 
(592)
 
 
30 
 
 
614 
 
 
 
(21,547)
 
 
4,917 
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
1,289 
 
 
848 
 
 
2,064 
 
 
 
16,506 
 
 
6,241 
 
 
Underlying RC profit (loss) before interest and tax*(a)
 
 
697 
 
 
878 
 
 
2,678 
 
 
 
(5,041)
 
 
11,158 
 
 
 
(a)
See page 7 for a reconciliation to segment RC profit before interest and tax by region.
 
 
Financial results
The replacement cost loss before interest and tax for the fourth quarter and full year was $592 million and $21,547 million respectively, compared with a profit of $614 million and $4,917 million for the same periods in 2019. The fourth quarter and full year included a net non-operating charge of $612 million and $15,768 million respectively, compared with a net charge of $2,723 million and $6,947 million for the same periods in 2019. The net non-operating charge for the quarter primarily reflects a net impairment charge and a provision for restructuring costs partly offset by disposal gains. The charge for the full year is principally related to impairments associated with revisions to long-term price assumptions. Fair value accounting effects in the fourth quarter and full year had an adverse impact of $677 million and $738 million respectively, compared with a favourable impact of $659 million and $706 million in the same periods of 2019.
 
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost result before interest and tax for the fourth quarter and full year was a profit of $697 million and a loss of $5,041 million respectively, compared with a profit of $2,678 million and $11,158 million for the same periods in 2019. The result for the fourth quarter mainly reflects lower liquids and gas realizations, lower production including the impact of divestments, and a significantly weaker gas marketing and trading contribution, partly offset by lower depreciation, depletion and amortization. The result for the full year mainly reflects lower liquids and gas realizations and the impact of writing down certain exploration intangible carrying values.
 
Production
Production for the quarter was 2,155mboe/d, 20.1% lower than the fourth quarter of 2019. This includes the impact of divestments mainly in BPX Energy and Alaska. Underlying production* for the quarter decreased by 11.1% mainly due to impacts from reduced capital investment levels and decline, significant weather impacts from hurricanes in the higher-margin US Gulf of Mexico and maintenance activity.
 
For the full year, production was 2,375mboe/d, 9.9% lower than the full year of 2019 mainly due to the impact of divestments in BPX Energy and Alaska. Underlying production for the full year decreased by 3.5% mainly due to impacts from reduced capital investment levels and decline, and significant weather impacts from hurricanes in the US Gulf of Mexico.
 
 
Key events
On 26 October, BP announced the start of production from the Qattameya field in the North Damietta concession, located offshore Egypt (BP operator 100%).
 
On 29 October, BP confirmed oil discoveries at the Cappahayden and Cambriol prospects in the Flemish Pass basin, offshore Newfoundland, Canada (Equinor operator 60%, BP 40%).
 
On 15 November, the Trans Adriatic Pipeline (TAP), an 878-km gas transportation system crossing Greece, Albania, the Adriatic Sea and Italy, became operational (BP 20%, SOCAR 20%, Snam 20%, Fluxys 19%, Enagás 16% and Axpo 5%), with first gas exports from Azerbaijan to Europe commencing in December.
 
On 26 November, BP announced the start of production from the Vorlich field in the UK North Sea (BP 66%, Ithaca Energy operator 34%).
 
On 15 December, BP signed an agreement to sell its interest in the Wamsutter asset, located in the Greater Green River Basin, Wyoming, US, to Williams Field Services LLC. Subject to approvals, the transaction is expected to complete in first quarter 2021.
 
On 18 December, BP and Reliance Industries Limited (RIL) announced the start of production from the R Cluster ultra-deep-water gas field in block KG D6 off the east coast of India. (RIL operator 66.67%, BP 33.33%).
 
On 1 February 2021, BP announced it has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited (PTTEP). Subject to approvals, the transaction is expected to complete in 2021 and following which the participating interests in Block 61 will be: BP operator 40%, OQ 30%, PTTEP 20%, and PETRONAS 10%.
 
 
Outlook
We expect full-year 2021 underlying production to be slightly higher than 2020 due to the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets. We expect reported production to be lower due to the impact of the ongoing divestment programme.
 
We expect first-quarter 2021 reported production to be slightly higher than fourth-quarter 2020.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
Top of page 7
 
Upstream (continued)
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(100)
 
 
125 
 
 
645 
 
 
 
(2,396)
 
 
2,670 
 
 
Non-US
 
 
797 
 
 
753 
 
 
2,033 
 
 
 
(2,645)
 
 
8,488 
 
 
 
 
697 
 
 
878 
 
 
2,678 
 
 
 
(5,041)
 
 
11,158 
 
 
Non-operating items(a)(b)
 
 
 
 
 
 
 
 
US
 
 
(101)
 
 
(114)
 
 
(2,451)
 
 
 
(2,969)
 
 
(6,265)
 
 
Non-US
 
 
(511)
 
 
(517)
 
 
(272)
 
 
 
(12,799)
 
 
(682)
 
 
 
 
(612)
 
 
(631)
 
 
(2,723)
 
 
 
(15,768)
 
 
(6,947)
 
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
104 
 
 
57 
 
 
120 
 
 
 
198 
 
 
(179)
 
 
Non-US
 
 
(781)
 
 
(274)
 
 
539 
 
 
 
(936)
 
 
885 
 
 
 
 
(677)
 
 
(217)
 
 
659 
 
 
 
(738)
 
 
706 
 
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(97)
 
 
68 
 
 
(1,686)
 
 
 
(5,167)
 
 
(3,774)
 
 
Non-US
 
 
(495)
 
 
(38)
 
 
2,300 
 
 
 
(16,380)
 
 
8,691 
 
 
 
 
(592)
 
 
30 
 
 
614 
 
 
 
(21,547)
 
 
4,917 
 
 
Exploration expense
 
 
 
 
 
 
 
 
US
 
 
104 
 
 
40 
 
 
86 
 
 
 
2,724 
 
 
233 
 
 
Non-US
 
 
110 
 
 
150 
 
 
180 
 
 
 
7,556 
 
 
731 
 
 
 
 
214 
 
 
190 
 
 
266 
 
 
 
10,280 
 
 
964 
 
 
Of which: Exploration expenditure written off(b)
 
 
154 
 
 
50 
 
 
155 
 
 
 
9,920 
 
 
631 
 
 
Production (net of royalties)(c)(d)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
 
 
 
 
 
 
US
 
 
359 
 
 
363 
 
 
517 
 
 
 
424 
 
 
482 
 
 
Europe
 
 
160 
 
 
143 
 
 
149 
 
 
 
154 
 
 
141 
 
 
Rest of World
 
 
600 
 
 
623 
 
 
662 
 
 
 
651 
 
 
666 
 
 
 
 
1,119 
 
 
1,129 
 
 
1,328 
 
 
 
1,229 
 
 
1,288 
 
 
Natural gas (mmcf/d)
 
 
 
 
 
 
 
 
US
 
 
1,232 
 
 
1,419 
 
 
2,317 
 
 
 
1,561 
 
 
2,358 
 
 
Europe
 
 
320 
 
 
265 
 
 
275 
 
 
 
282 
 
 
185 
 
 
Rest of World
 
 
4,459 
 
 
4,774 
 
 
5,354 
 
 
 
4,800 
 
 
5,279 
 
 
 
 
6,011 
 
 
6,457 
 
 
7,945 
 
 
 
6,643 
 
 
7,823 
 
 
Total hydrocarbons* (mboe/d)
 
 
 
 
 
 
 
 
US
 
 
571 
 
 
608 
 
 
916 
 
 
 
694 
 
 
888 
 
 
Europe
 
 
215 
 
 
188 
 
 
196 
 
 
 
202 
 
 
173 
 
 
Rest of World
 
 
1,369 
 
 
1,446 
 
 
1,585 
 
 
 
1,479 
 
 
1,576 
 
 
 
 
2,155 
 
 
2,243 
 
 
2,698 
 
 
 
2,375 
 
 
2,637 
 
 
Average realizations*(e)
 
 
 
 
 
 
 
 
Total liquids(f) ($/bbl)
 
 
38.42 
 
 
38.17 
 
 
55.90 
 
 
 
36.16 
 
 
57.73 
 
 
Natural gas ($/mcf)
 
 
3.10 
 
 
2.56 
 
 
3.12 
 
 
 
2.75 
 
 
3.39 
 
 
Total hydrocarbons ($/boe)
 
 
28.48 
 
 
26.42 
 
 
36.42 
 
 
 
26.31 
 
 
38.00 
 
 
 
(a)
Full year 2020 principally relates to impairments in a number of our businesses resulting from the revisions to BP’s long-term price assumptions. Full year 2020 also includes impairment charges related to the disposal of our Alaska business. Fourth quarter and full year 2019 include impairment charges related to the disposal of heritage BPX Energy assets, Alaska and GUPCO divestment. See Note 3 for further information.
 
(b)
Full year 2020 includes the write-off of $1,974 million relating to value ascribed to certain licences as part of the accounting for the acquisition of upstream assets in Brazil, India and the Gulf of Mexico and the impairment of certain intangible assets in Mauritania and Senegal. This has been classified within the ‘other’ category of non-operating items. See Note 4 for further information.
 
(c)
Includes BP’s share of production of equity-accounted entities in the Upstream segment.
 
(d)
Because of rounding, some totals may not agree exactly with the sum of their component parts.
 
(e)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
 
(f)
Includes condensate, natural gas liquids and bitumen.
 
 
 
 
 
 
 
Top of page 8
 
Downstream
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit before interest and tax
 
 
1,895 
 
 
1,106 
 
 
1,412 
 
 
 
622 
 
 
7,187 
 
 
Inventory holding (gains) losses*
 
 
(650)
 
 
(191)
 
 
21 
 
 
 
2,796 
 
 
(685)
 
 
RC profit before interest and tax
 
 
1,245 
 
 
915 
 
 
1,433 
 
 
 
3,418 
 
 
6,502 
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
(1,119)
 
 
(279)
 
 
 
 
 
(330)
 
 
(83)
 
 
Underlying RC profit before interest and tax*(a)
 
 
126 
 
 
636 
 
 
1,438 
 
 
 
3,088 
 
 
6,419 
 
 
 
(a)
See page 9 for a reconciliation to segment RC profit before interest and tax by region and by business.
 
 
Financial results
 
The replacement cost profit before interest and tax for the fourth quarter and full year was $1,245 million and $3,418 million respectively, compared with $1,433 million and $6,502 million for the same periods in 2019.
 
The fourth quarter and full year include a net non-operating gain of $1,403 million and $479 million respectively, compared with a charge of $28 million and $77 million for the same periods in 2019. The gain for the quarter and full year reflects a profit of $2.3 billion on the sale of our petrochemicals business, which is partially offset by restructuring costs and impairments. Fair value accounting effects in the fourth quarter and full year had an adverse impact of $284 million and $149 million respectively, compared with a favourable impact of $23 million and $160 million in the same periods in 2019.
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the fourth quarter and full year was $126 million and $3,088 million respectively, compared with $1,438 million and $6,419 million for the same periods in 2019.
 
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 9.
 
Fuels
 
The fuels business reported an underlying replacement cost loss before interest and tax of $169 million for the fourth quarter and a profit of $2,037 million for the full year, compared with a profit of $1,068 million and $4,759 million for the same periods in 2019.
 
The result for the quarter and full year reflected an exceptionally weak refining environment, with COVID-19 restrictions impacting refining utilization and fuel volumes. The result for the full year also reflected a higher contribution from supply and trading.
 
Fuels marketing demonstrated continued resilience, delivering significant profit for the quarter and full year, despite COVID-19 which adversely impacted retail fuel and aviation volumes by 14% and 50% respectively for the full year.
 
The refining loss for the quarter and full year reflects the continued impact of historically low industry margins. For the full year, although availability was strong at 96%, utilization was around 6% lower than 2019 due to the impact of COVID-19 on demand. These factors were partially offset by a lower level of turnaround activity and lower costs. The result for the quarter was also impacted by narrower heavy crude oil discounts compared with the same period in 2019.
 
In the quarter we announced our plans to cease production at our Kwinana refinery and convert it to an import terminal, helping to secure ongoing fuel supply for Western Australia.
During the year we continued to progress our agenda to redefine convenience, delivering a 6% growth in convenience gross margin* for the full year, and we expanded our retail network by over 1,400 sites, to a total of 20,300, which now includes more than 1,900 strategic convenience sites.
We also progressed our electrification agenda, growing our network to more than 10,000 BP and joint venture operated EV charging points. This included rolling out ultra-fast chargers at retail sites in the UK and Germany, and the continued expansion of our electrification joint venture with DiDi in China.
 
Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $262 million for the fourth quarter and $818 million for the full year, compared with $333 million and $1,258 million for the same periods in 2019. The result for the quarter and full year reflects significant demand impacts, with volumes lower than the prior quarter and 15% lower for the full year. In the second half of the year we have seen volumes in growth markets recover to 2019 levels as COVID-19 restrictions eased during that period.
 
In 2020 we continued to expand our service offer, growing the number of Castrol branded independent workshops by more than 4,000 to over 28,000 globally. We also continued to establish strong partnerships with OEMs, with BMW selecting Castrol to be its exclusive supplier of lubricants to all BMW and MINI authorized dealers across the US, Canada and Mexico.
 
Petrochemicals
 
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $33 million for the fourth quarter and $233 million for the full year, compared with $37 million and $402 million for the same periods in 2019. The result for the full year reflects the impact of COVID-19 on demand, and a significantly weaker margin environment.
 
In December we completed the divestment of BP’s petrochemicals business to INEOS for a total consideration of $5 billion. Final payments, totalling $1 billion are expected to be received in the first half of 2021.
 
Outlook
Looking to the first quarter of 2021, we expect industry refining margins and utilization to remain under pressure. In our marketing businesses we expect renewed COVID-19 restrictions to have a greater impact on product demand, with January retail volumes down by around 20% year on year, compared with a decline of 11% in the fourth quarter.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
Top of page 9
 
Downstream (continued)
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Underlying RC profit before interest and tax - by region
 
 
 
 
 
 
 
 
US
 
 
(231)
 
 
96 
 
 
556 
 
 
 
1,141 
 
 
2,190 
 
 
Non-US
 
 
357 
 
 
540 
 
 
882 
 
 
 
1,947 
 
 
4,229 
 
 
 
 
126 
 
 
636 
 
 
1,438 
 
 
 
3,088 
 
 
6,419 
 
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
890 
 
 
(27)
 
 
(40)
 
 
 
800 
 
 
(42)
 
 
Non-US
 
 
513 
 
 
(119)
 
 
12 
 
 
 
(321)
 
 
(35)
 
 
 
 
1,403 
 
 
(146)
 
 
(28)
 
 
 
479 
 
 
(77)
 
 
Fair value accounting effects(a)
 
 
 
 
 
 
 
 
US
 
 
(125)
 
 
78 
 
 
(37)
 
 
 
27 
 
 
148 
 
 
Non-US
 
 
(159)
 
 
347 
 
 
60 
 
 
 
(176)
 
 
12 
 
 
 
 
(284)
 
 
425 
 
 
23 
 
 
 
(149)
 
 
160 
 
 
RC profit before interest and tax
 
 
 
 
 
 
 
 
US
 
 
534 
 
 
147 
 
 
479 
 
 
 
1,968 
 
 
2,296 
 
 
Non-US
 
 
711 
 
 
768 
 
 
954 
 
 
 
1,450 
 
 
4,206 
 
 
 
 
1,245 
 
 
915 
 
 
1,433 
 
 
 
3,418 
 
 
6,502 
 
 
Underlying RC profit before interest and tax - by business(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
(169)
 
 
222 
 
 
1,068 
 
 
 
2,037 
 
 
4,759 
 
 
Lubricants
 
 
262 
 
 
326 
 
 
333 
 
 
 
818 
 
 
1,258 
 
 
Petrochemicals
 
 
33 
 
 
88 
 
 
37 
 
 
 
233 
 
 
402 
 
 
 
 
126 
 
 
636 
 
 
1,438 
 
 
 
3,088 
 
 
6,419 
 
 
Non-operating items and fair value accounting effects(a)
 
 
 
 
 
 
 
 
Fuels
 
 
(1,037)
 
 
288 
 
 
(41)
 
 
 
(1,754)
 
 
32 
 
 
Lubricants
 
 
(121)
 
 
(7)
 
 
39 
 
 
 
(179)
 
 
57 
 
 
Petrochemicals
 
 
2,277 
 
 
(2)
 
 
(3)
 
 
 
2,263 
 
 
(6)
 
 
 
 
1,119 
 
 
279 
 
 
(5)
 
 
 
330 
 
 
83 
 
 
RC profit before interest and tax(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
(1,206)
 
 
510 
 
 
1,027 
 
 
 
283 
 
 
4,791 
 
 
Lubricants
 
 
141 
 
 
319 
 
 
372 
 
 
 
639 
 
 
1,315 
 
 
Petrochemicals
 
 
2,310 
 
 
86 
 
 
34 
 
 
 
2,496 
 
 
396 
 
 
 
 
1,245 
 
 
915 
 
 
1,433 
 
 
 
3,418 
 
 
6,502 
 
 
 
 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
 
5.9 
 
 
6.2 
 
 
12.4 
 
 
 
6.7 
 
 
13.2 
 
 
 
 
 
 
 
 
 
 
Refinery throughputs (mb/d)
 
 
 
 
 
 
 
 
US
 
 
708 
 
 
701 
 
 
761 
 
 
 
693 
 
 
737 
 
 
Europe
 
 
720 
 
 
699 
 
 
848 
 
 
 
742 
 
 
787 
 
 
Rest of World
 
 
200 
 
 
187 
 
 
238 
 
 
 
192 
 
 
225 
 
 
 
 
1,628 
 
 
1,587 
 
 
1,847 
 
 
 
1,627 
 
 
1,749 
 
 
BP-operated refining availability* (%)
 
 
96.1 
 
96.2 
 
95.7 
 
 
96.0 
 
94.9 
 
 
 
 
 
 
 
 
 
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
 
 
US
 
 
1,055 
 
 
1,083 
 
 
1,156 
 
 
 
1,011 
 
 
1,145 
 
 
Europe
 
 
801 
 
 
849 
 
 
1,051 
 
 
 
823 
 
 
1,073 
 
 
Rest of World
 
 
457 
 
 
422 
 
 
537 
 
 
 
441 
 
 
509 
 
 
 
 
2,313 
 
 
2,354 
 
 
2,744 
 
 
 
2,275 
 
 
2,727 
 
 
Trading/supply sales of refined products
 
 
2,942 
 
 
2,618 
 
 
3,519 
 
 
 
3,026 
 
 
3,268 
 
 
Total sales volumes of refined products
 
 
5,255 
 
 
4,972 
 
 
6,263 
 
 
 
5,301 
 
 
5,995 
 
 
 
 
 
 
 
 
 
 
Petrochemicals production (kte)
 
 
 
 
 
 
 
 
US
 
 
640 
 
 
541 
 
 
518 
 
 
 
2,201 
 
 
2,267 
 
 
Europe
 
 
1,241 
 
 
1,325 
 
 
1,141 
 
 
 
5,183 
 
 
4,714 
 
 
Rest of World
 
 
1,261 
 
 
1,211 
 
 
1,353 
 
 
 
4,896 
 
 
5,133 
 
 
 
 
3,142 
 
 
3,077 
 
 
3,012 
 
 
 
12,280 
 
 
12,114 
 
 
 
(a)
For Downstream, fair value accounting effects arise solely in the fuels business. See page 28 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.
 
 
 
 
 
 
 
Top of page 10
 
Rosneft
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020(a)
 
2020
 
2019
 
 
2020(a)
 
2019
 
Profit (loss) before interest and tax(b)(c)
 
 
295 
 
 
(244)
 
 
534 
 
 
 
(238)
 
 
2,306 
 
 
Inventory holding (gains) losses*
 
 
(25)
 
 
(34)
 
 
(31)
 
 
 
89 
 
 
10 
 
 
RC profit (loss) before interest and tax
 
 
270 
 
 
(278)
 
 
503 
 
 
 
(149)
 
 
2,316 
 
 
Net charge (credit) for non-operating items*
 
 
41 
 
 
101 
 
 
(91)
 
 
 
205 
 
 
103 
 
 
Underlying RC profit (loss) before interest and tax*
 
 
311 
 
 
(177)
 
 
412 
 
 
 
56 
 
 
2,419 
 
 
 
 
Financial results
Replacement cost (RC) profit before interest and tax for the fourth quarter was $270 million and RC loss for the full year was $149 million, compared with a profit of $503 million and $2,316 million for the same periods in 2019.
 
After adjusting for non-operating items, the underlying RC profit before interest and tax for the fourth quarter and full year was $311 million and $56 million respectively, compared with a profit of $412 million and $2,419 million for the same periods in 2019.
 
Compared with the same period in 2019, the result for the fourth quarter primarily reflects lower oil prices partially offset by favourable foreign exchange effects. Compared with the same period in 2019, the result for the full year primarily reflects lower oil prices, unfavourable foreign exchange and adverse duty lag effects.
 
Key events
On 28 December, Rosneft announced completion of the acquisition of 100% stakes in JSC Taimyrneftegaz and LLC Taimyrburservis, and the sale of a 10% interest in LLC Vostok Oil.
 
 
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
 
 
2020(a)
 
2020
 
2019
 
 
2020(a)
 
2019
 
Production (net of royalties) (BP share)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
876 
 
 
858 
 
 
923 
 
 
 
877 
 
 
923 
 
 
Natural gas (mmcf/d)
 
 
1,360 
 
 
1,260 
 
 
1,306 
 
 
 
1,286 
 
 
1,279 
 
 
Total hydrocarbons* (mboe/d)
 
 
1,111 
 
 
1,075 
 
 
1,148 
 
 
 
1,098 
 
 
1,144 
 
 
 
(a)
The operational and financial information of the Rosneft segment for the fourth quarter and full year is based on preliminary operational and financial results of Rosneft for the three months and full year ended 31 December 2020. Actual results may differ from these amounts. Amounts reported for the fourth quarter are based on BP’s 22.01% average economic interest for the quarter (third quarter 2020 21.96% and fourth quarter 2019 19.75%). A preliminary assessment of the fair values of the assets and liabilities acquired and the consideration transferred in respect of the acquisitions announced by Rosneft on 28 December is being undertaken and the impact, if any, on BP’s accounting for its equity-accounted investment in Rosneft will be updated once this has been completed.
 
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP’s economic interest in Rosneft as adjusted for 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.
 
(c)
BP’s adjusted share of Rosneft’s earnings after Rosneft's own finance costs, taxation and non-controlling interests is included in the BP group income statement within profit before interest and taxation. For each year-to-date period it is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date.
 
 
 
 
 
 
 
Top of page 11
 
Other businesses and corporate
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
Profit (loss) before interest and tax
 
 
308 
 
 
24 
 
 
(1,432)
 
 
 
(683)
 
 
(2,771)
 
 
Inventory holding (gains) losses*
 
 
— 
 
 
— 
 
 
— 
 
 
 
— 
 
 
— 
 
 
RC profit (loss) before interest and tax
 
 
308 
 
 
24 
 
 
(1,432)
 
 
 
(683)
 
 
(2,771)
 
 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
 
(397)
 
 
(154)
 
 
1,182 
 
 
 
(357)
 
 
1,491 
 
 
Underlying RC profit (loss) before interest and tax*
 
 
(89)
 
 
(130)
 
 
(250)
 
 
 
(1,040)
 
 
(1,280)
 
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(135)
 
 
(65)
 
 
(85)
 
 
 
(453)
 
 
(713)
 
 
Non-US
 
 
46 
 
 
(65)
 
 
(165)
 
 
 
(587)
 
 
(567)
 
 
 
 
(89)
 
 
(130)
 
 
(250)
 
 
 
(1,040)
 
 
(1,280)
 
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
(303)
 
 
(62)
 
 
(268)
 
 
 
(475)
 
 
(559)
 
 
Non-US
 
 
250 
 
 
(50)
 
 
(914)
 
 
 
157 
 
 
(932)
 
 
 
 
(53)
 
 
(112)
 
 
(1,182)
 
 
 
(318)
 
 
(1,491)
 
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
— 
 
 
— 
 
 
— 
 
 
 
— 
 
 
— 
 
 
Non-US
 
 
450 
 
 
266 
 
 
— 
 
 
 
675 
 
 
— 
 
 
 
 
450 
 
 
266 
 
 
— 
 
 
 
675 
 
 
— 
 
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(438)
 
 
(127)
 
 
(353)
 
 
 
(928)
 
 
(1,272)
 
 
Non-US
 
 
746 
 
 
151 
 
 
(1,079)
 
 
 
245 
 
 
(1,499)
 
 
 
 
308 
 
 
24 
 
 
(1,432)
 
 
 
(683)
 
 
(2,771)
 
 
 
Other businesses and corporate comprises our alternative energy business, shipping, treasury, BP ventures and corporate activities including centralized functions, and any residual costs of the Gulf of Mexico oil spill.
 
Financial results
The replacement cost result before interest and tax for the fourth quarter and full year was a profit of $308 million and a loss of $683 million respectively, compared with a loss of $1,432 million and $2,771 million for the same periods in 2019.
 
The results include a net non-operating charge of $53 million for the fourth quarter and $318 million for the full year, compared with a charge of $1,182 million and $1,491 million for the same periods in 2019. Fair value accounting effects in the fourth quarter and full year had a favourable impact of $450 million and $675 million respectively. See page 28 for further information.
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost loss before interest and tax for the fourth quarter and full year was $89 million and $1,040 million respectively, compared with $250 million and $1,280 million for the same periods in 2019. The results include an uplift in valuation of a venture investment of $229 million for the fourth quarter and $284 million for the full year.
 
Alternative Energy
BP's net ethanol-equivalent production* for the fourth quarter and full year averaged 14.9kb/d and 20.3kb/d respectively, compared with 11.6kb/d and 13.7kb/d for the 100% BP-owned business for the same periods in 2019.
Net wind generation capacity* was 1,071MW at 31 December 2020, compared with 926MW at 31 December 2019. BP’s net share of wind generation for the fourth quarter and full year was 902GWh and 2,806GWh respectively, compared with 785GWh and 2,752GWh for the same periods in 2019.
In December Lightsource BP developed to FID the 163MW Elm Branch and 153MW Briar Creek projects in the US, 50MW South Lowfield and 21MW Thornham projects in the UK, taking their overall total capacity developed to FID to 1,403MW for the full year.
In January 2021 BP and Equinor formed a strategic partnership to initially develop four projects in two existing leases located offshore New York and Massachusetts which together are expected to have a total generating capacity of 4.4GW. Early in January Empire Wind 2 and Beacon Wind 1 projects were selected to provide New York State with an additional 2.5GW of power and subject to negotiation of a purchase and sale agreement will take total secured power offtake agreements on the projects to 3.3GW which represents a material de-risking of the overall project. Beyond these initial projects, the strategic partnership expects to participate in future offshore wind developments in the US.
In December, BP finalized its investment in India’s Green Growth Equity Fund (GGEF) with an initial investment of $30 million and a total commitment of $70 million to the fund. The fund itself was established in 2018 and is focused on identifying, investing in and supporting growth in clean energy projects in India and is managed by Lightsource BP and Everstone Capital.
We continue to progress our aim to build material renewable energy businesses by having developed 20GW of net renewable generating capacity to FID by 2025. Overall we have developed a total of 3.3GW of net renewable generating capacity to FID by 31 December 2020 across our businesses and are progressing a development pipeline with projects across nine countries totalling 11GW net BP. In addition our development teams are further evaluating potential options totalling over 20GW.
 
Outlook
Other businesses and corporate charges for 2021, excluding non-operating items, fair value accounting effects and foreign exchange volatility impact, are expected to be $1.2-1.4 billion although the quarterly charge may vary quarter to quarter.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.
 
 
 
 
 
 
Top of page 12
 
Financial statements
 
Group income statement
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
Sales and other operating revenues (Note 6)
 
 
44,789 
 
 
44,251 
 
 
71,109 
 
 
 
180,366 
 
 
278,397 
 
 
Earnings from joint ventures – after interest and tax
 
 
214 
 
 
73 
 
 
163 
 
 
 
(302)
 
 
576 
 
 
Earnings from associates – after interest and tax
 
 
575 
 
 
(332)
 
 
640 
 
 
 
(101)
 
 
2,681 
 
 
Interest and other income
 
 
233 
 
 
183 
 
 
210 
 
 
 
663 
 
 
769 
 
 
Gains on sale of businesses and fixed assets
 
 
2,757 
 
 
27 
 
 
48 
 
 
 
2,874 
 
 
193 
 
 
Total revenues and other income
 
 
48,568 
 
 
44,202 
 
 
72,170 
 
 
 
183,500 
 
 
282,616 
 
 
Purchases
 
 
32,803 
 
 
31,645 
 
 
53,444 
 
 
 
132,104 
 
 
209,672 
 
 
Production and manufacturing expenses
 
 
6,111 
 
 
5,073 
 
 
5,809 
 
 
 
22,494 
 
 
21,815 
 
 
Production and similar taxes (Note 8)
 
 
228 
 
 
140 
 
 
412 
 
 
 
695 
 
 
1,547 
 
 
Depreciation, depletion and amortization (Note 7)
 
 
3,426 
 
 
3,467 
 
 
4,434 
 
 
 
14,889 
 
 
17,780 
 
 
Impairment and losses on sale of businesses and fixed assets (Note 3)
 
 
1,168 
 
 
294 
 
 
3,657 
 
 
 
14,381 
 
 
8,075 
 
 
Exploration expense (Note 4)
 
 
214 
 
 
190 
 
 
266 
 
 
 
10,280 
 
 
964 
 
 
Distribution and administration expenses
 
 
2,769 
 
 
2,435 
 
 
2,996 
 
 
 
10,397 
 
 
11,057 
 
 
Profit (loss) before interest and taxation
 
 
1,849 
 
 
958 
 
 
1,152 
 
 
 
(21,740)
 
 
11,706 
 
 
Finance costs
 
 
749 
 
 
800 
 
 
886 
 
 
 
3,115 
 
 
3,489 
 
 
Net finance expense relating to pensions and other post-retirement benefits
 
 
10 
 
 
 
 
17 
 
 
 
33 
 
 
63 
 
 
Profit (loss) before taxation
 
 
1,090 
 
 
150 
 
 
249 
 
 
 
(24,888)
 
 
8,154 
 
 
Taxation
 
 
(395)
 
 
457 
 
 
231 
 
 
 
(4,159)
 
 
3,964 
 
 
Profit (loss) for the period
 
 
1,485 
 
 
(307)
 
 
18 
 
 
 
(20,729)
 
 
4,190 
 
 
Attributable to
 
 
 
 
 
 
 
 
BP shareholders
 
 
1,358 
 
 
(450)
 
 
19 
 
 
 
(20,305)
 
 
4,026 
 
 
Non-controlling interests
 
 
127 
 
 
143 
 
 
(1)
 
 
 
(424)
 
 
164 
 
 
 
 
1,485 
 
 
(307)
 
 
18 
 
 
 
(20,729)
 
 
4,190 
 
 
 
 
 
 
 
 
 
 
Earnings per share (Note 9)
 
 
 
 
 
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
 
 
 
 
 
 
Per ordinary share (cents)
 
 
 
 
 
 
 
 
Basic
 
 
6.71 
 
 
(2.22)
 
 
0.09 
 
 
 
(100.42)
 
 
19.84 
 
 
Diluted
 
 
6.68 
 
 
(2.22)
 
 
0.09 
 
 
 
(100.42)
 
 
19.73 
 
 
Per ADS (dollars)
 
 
 
 
 
 
 
 
Basic
 
 
0.40 
 
 
(0.13)
 
 
0.01 
 
 
 
(6.03)
 
 
1.19 
 
 
Diluted
 
 
0.40 
 
 
(0.13)
 
 
0.01 
 
 
 
(6.03)
 
 
1.18 
 
 
 
 
 
 
 
 
 
Top of page 13
 
Condensed group statement of comprehensive income
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2020
 
2020
 
2019
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
 
1,485 
 
 
(307)
 
 
18 
 
 
 
(20,729)
 
 
4,190 
 
 
Other comprehensive income
 
 
 
 
 
 
 
 
Items that may be reclassified subsequently to profit or loss
 
 
 
 
 
 
 
 
Currency translation differences
 
 
1,594 
 
 
(166)
 
 
1,404 
 
 
 
(1,843)
 
 
1,538 
 
 
Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
 
 
(357)
 
 
— 
 
 
880 
 
 
 
(353)
 
 
880 
 
 
Cash flow hedges and costs of hedging
 
 
42 
 
 
(90)
 
 
(76)
 
 
 
105 
 
 
59 
 
 
Share of items relating to equity-accounted entities, net of tax
 
 
(105)
 
 
308 
 
 
43 
 
 
 
312 
 
 
82 
 
 
Income tax relating to items that may be reclassified
 
 
 
 
(16)
 
 
(39)
 
 
 
66 
 
 
(70)
 
 
 
 
1,176 
 
 
36 
 
 
2,212 
 
 
 
(1,713)
 
 
2,489 
 
 
Items that will not be reclassified to profit or loss
 
 
 
 
 
 
 
 
Remeasurements of the net pension and other post-retirement benefit liability or asset(a)
 
 
333 
 
 
78 
 
 
1,480 
 
 
 
170 
 
 
328 
 
 
Cash flow hedges that will subsequently be transferred to the balance sheet
 
 
 
 
 
 
 
 
 
 
 
(3)
 
 
Income tax relating to items that will not be reclassified
 
 
(89)
 
 
(16)
 
 
(459)
 
 
 
(105)
 
 
(157)
 
 
 
 
253 
 
 
70 
 
 
1,027 
 
 
 
72 
 
 
168 
 
 
Other comprehensive income
 
 
1,429 
 
 
106 
 
 
3,239 
 
 
 
(1,641)
 
 
2,657 
 
 
Total comprehensive income
 
 
2,914 
 
 
(201)
 
 
3,257 
 
 
 
(22,370)
 
 
6,847 
 
 
Attributable to
 
 
 
 
 
 
 
 
BP shareholders
 
 
2,740 
 
 
(364)
 
 
3,240 
 
 
 
(21,983)
 
 
6,674 
 
 
Non-controlling interests
 
 
174 
 
 
163 
 
 
17 
 
 
 
(387)
 
 
173 
 
 
 
 
2,914 
 
 
(201)
 
 
3,257 
 
 
 
(22,370)
 
 
6,847 
 
 
 
(a)
See Note 1 - Pensions and other post retirement benefits for further information.
 
 
 
 
Top of page 14
Condensed group statement of changes in equity
 
 
 
BP shareholders’
 
Non-controlling interests
 
Total
 
$ million
 
 
equity
 
Hybrid bonds
 
Other interest
 
equity
 
At 1 January 2020
 
 
98,412 
 
 
— 
 
 
2,296 
 
 
100,708 
 
 
 
 
 
 
 
 
Total comprehensive income
 
 
(21,983)
 
 
256 
 
 
(643)
 
 
(22,370)
 
 
Dividends
 
 
(6,367)
 
 
— 
 
 
(238)
 
 
(6,605)
 
 
Cash flow hedges transferred to the balance sheet, net of tax
 
 
 
 
— 
 
 
— 
 
 
 
 
Repurchase of ordinary share capital
 
 
(776)
 
 
— 
 
 
— 
 
 
(776)
 
 
Share-based payments, net of tax
 
 
726 
 
 
— 
 
 
— 
 
 
726 
 
 
Share of equity-accounted entities’ changes in equity, net of tax(a)
 
 
1,341 
 
 
— 
 
 
— 
 
 
1,341 
 
 
Issue of perpetual hybrid bonds
 
 
(48)
 
 
11,909 
 
 
— 
 
 
11,861 
 
 
Payments on perpetual hybrid bonds
 
 
— 
 
 
(89)
 
 
— 
 
 
(89)
 
 
Tax on issue of perpetual hybrid bonds
 
 
 
 
— 
 
 
— 
 
 
 
 
Transactions involving non-controlling interests, net of tax
 
 
(64)
 
 
— 
 
 
827 
 
 
763 
 
 
At 31 December 2020
 
 
71,250 
 
 
12,076 
 
 
2,242 
 
 
85,568 
 
 
 
 
 
 
 
 
 
 
BP shareholders’
 
Non-controlling interests
 
Total
 
$ million
 
 
equity
 
Hybrid bonds
 
Other interest
 
equity
 
At 31 December 2018
 
 
99,444 
 
 
— 
 
 
2,104 
 
 
101,548 
 
 
Adjustment on adoption of IFRS 16, net of tax(b)
 
 
(329)
 
 
— 
 
 
(1)
 
 
(330)
 
 
At 1 January 2019
 
 
99,115 
 
 
— 
 
 
2,103 
 
 
101,218 
 
 
 
 
 
 
 
 
Total comprehensive income
 
 
6,674 
 
 
— 
 
 
173 
 
 
6,847 
 
 
Dividends
 
 
(6,929)
 
 
— 
 
 
(213)
 
 
(7,142)
 
 
Cash flow hedges transferred to the balance sheet, net of tax
 
 
23 
 
 
— 
 
 
— 
 
 
23 
 
 
Repurchase of ordinary share capital
 
 
(1,511)
 
 
— 
 
 
— 
 
 
(1,511)
 
 
Share-based payments, net of tax
 
 
719 
 
 
— 
 
 
— 
 
 
719 
 
 
Share of equity-accounted entities’ changes in equity, net of tax
 
 
 
 
— 
 
 
— 
 
 
 
 
Transactions involving non-controlling interests, net of tax
 
 
316 
 
 
 
233 
 
 
549 
 
 
At 31 December 2019
 
 
98,412 
 
 
— 
 
 
2,296 
 
 
100,708 
 
 
 
 
(a) Principally relates to a non-controlling interest transaction entered into by Rosneft.
(b)