1Q Q 2012 R Results P Presenta ation: 1 May 20 012 Jes ssica - - PDF document

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mat Plea for m Tha 1Q12 Resu ing today’s estimates, terially due ase refer to more detail nk you, and lts Presenta presentatio plans and e to factors t

• ur Annua
• s. These do

d now over ation

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BP

Bria

Tha 1Q12 Resu

an Gilvary

nk you Jess lts Presenta

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Financial

• me to all o

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ng us today on the call. 3

BP I’d l        The qua Turn 1Q12 Resu ike to start Our first qu $4.8 billion, fourth quar First quarte Gulf of Mex 1Q operatin effect of hi Group unde by $540 mi inventory; As a remind related to o Accounting equity crud In this quar

• f crude oil

the previou e effective ta rter of 2011 ning to the lts Presenta with an ove uarter under , down 13% rter of 2011 er operating xico oil spill ng cash flow gher oil pric erlying repla illion in resp der, this ref

• ur upstream

g rules requ de is held in rter the com l held in inv us quarter. ax rate for t 1. highlights a ation erview of fi rlying replac % on the sa ; g cash flow expenses; w was impa ces and inve acement co pect of the c flects unrea m equity ba ire this to b

• ur refinery

mbined effe entory has the first qua at a segmen rst quarter f cement cos me period a was $3.4 b acted by hig entory build

• st profit for

consolidatio alized profit arrels which be eliminate y inventorie cts of highe significantly arter was 33 nt level. financial pe st profit afte a year ago a billion, includ gher workin ds; r the quarte

• n adjustme

in our dow h will be rea ed from Gro es; er crude oil y increased 3% compar rformance. er interest a and 4% low ding $1.2 bi g capital inc er was adve ent for unre nstream inv lized in futu up earnings prices and the charge red to 37% and tax was wer than the illion of pos cluding the ersely impac ealized profi ventories ure quarters s while this a higher lev e compared in the first 4 s e t-tax cted t in s; vel to

BP In U tax four The thre    Com env Liqu real by s Rep day, the

• ffs

Und enti yea Loo cost

• n h

We 201 1Q12 Resu Upstream, th was $6.3 b rth quarter. e result vers ee factors: Firstly, high inflation an Secondly, l Thirdly, low mpared to th ironment, a uids realizat izations imp stronger gas ported produ , 6% lower Gulf of Me set by resto derlying volu tlement eff r.

• king ahead

ts to be hig high-margin continue to 1, excludin lts Presenta he underlyin illion compa sus a year a her costs – w d higher de

• ss of reve

wer product he fourth qu a higher con tions increa proved sligh s realization uction exclu than 1Q 20 xico reflect ration of pr umes - excl fects in our , we expect gher, as a re n production

• expect ful

g TNK-BP. ation ng first qua ared with $ go reflects which inclu epreciation, nues assoc ion in some uarter of las ntribution fro sed 15% ye htly over the ns in other r uding TNK-B 011 mainly d ing lower d

• duction at

uding TNK- production t second-qu esult of norm n in the Gulf ll year unde rter replace 6.7 billion a a stronger ude the imp depletion a ciated with d e higher-ma st year the

• m gas ma

ear-on-year e same per regions. BP was 2.4 due to dive drilling activi t Greater Plu

• BP and afte

sharing ag uarter repor mal seasona f of Mexico erlying prod ement cost a year ago a environmen act of incre and amortiza disposals a rgin areas. result impro rketing and in line with riod, with lo 5 million ba stments an ity in 2010 a utonio in An er adjusting reements - rted produc al turnaroun

• at Atlantis,

uction in 20 profit befor nd $5.9 bill nt, more tha ased activit ation; nd;

• ved, due to

trading, an h marker gra wer US gas arrels of oil e nd productio and 2011. T ngola. for divestm increased s tion to be lo nd activity c , Mad Dog, 012 to be br re interest a ion in the an offset by ty levels, se

• the bette

nd lower cos ades, while s prices offs equivalent p

• n decline in

This was pa ments and slightly yea

• wer, and

concentrate and Holste roadly flat w 5 and y ector r sts. gas set per n artly r on d ein. with

BP 1Q12 Results Presentation 6 Reported production in 2012 is expected to be lower than 2011 due to divestments which we currently estimate at 120,000 barrels of oil equivalent per day. The actual outcome will depend on the exact timing of divestments, OPEC quotas and the impact of the oil price on production sharing agreements. Turning to TNK-BP.

BP Our whi Our equ And Now 1Q12 Resu r share of TN ch was up 3 r share of TN ivalent per d we receive w, turning to lts Presenta NK-BP unde 3% versus NK-BP prod day was 4% ed a cash d

• Downstre

ation erlying net i a year ago. duction in th % higher th ividend of $ eam. income was he first quar an the sam $690 million s $1.2 billio rter at 1.02 me period las n in the first n in the firs million barr st year. t quarter. st quarter, rels of oil 7

BP For prof and deliv In o repl sam We Mid

• ffs

qua mar has Loo imp exp com In lu robu high In p the sign yea Des qua petr 1Q12 Resu the first qu fit before in $750 millio vered a hig

• ur fuels bus

acement co me period la continued dwest throu set by weak rter of 2011 rketing envi been unde

• king ahead

prove in line ect that the mpleted bot ubricants, u ust perform h base oil pr petrochemic quarter, so nificantly we r. spite this, vo rter as a res rochemicals lts Presenta arter, the d terest and t

• n in the fou

her underly siness, we

• st profit of

st year, in a to capture t gh good ref k performan 1, unfavoura ronment du er repair follo to the seco with seaso e Cherry Po h repairs an nderlying re mance despi rices. cals, underly me $400 m eaker marg

• lumes hav

sult of stron s margin en ation

• wnstream

tax of $900 urth quarter ying replace have had a f around $50 a broadly sim the benefit fining availa nce in suppl able local cr ue to weake

• wing the i
• nd quarter
• nal trends

int refinery nd the sche eplacement te weak de ying replace million below in environm ve improved nger deman nvironment m segment r 0 million, co r of 2011. A ment cost p challenging 00 million c milar refinin

• f accessin
• ability. This

y and tradin rude differe er demand. ncident in F r, we expec and fuels v will resume duled seco t cost profit emand in so ement cost w the same ment than th d compared nd and high to remain c reported un mpared wit All three do profit than i g quarter de compared w ng environm ng WTI-linke s benefit wa ng compare entials in Eu In addition February. t refining m

• lumes to r

e full opera nd quarter t was aroun

• me OECD

profit was period last he record le d with the lo er availabilit challenging. nderlying rep th $2.2 billio wnstream b n the fourth elivering und with $1.3 bil ment. ed crudes in as however ed to the str urope, and a , our Cherry margins to co remain subd tions during turnaround. d $300 mill markets an around $10 year reflect vels seen in

• w levels in
• ty. We expe

placement

• n a year ag

businesses h quarter. derlying lion in the n the US more than rong first a difficult fu y Point refin

• ntinue to
• dued. We

g May havin . ion, reflecti nd continued 00 million fo ting a n the previo the fourth ect the 8 cost go els nery ng ing d

• r
• us

BP In O cost

• f $

and was Guid qua The qua $70 Guid 1Q12 Resu Other Busin t charge be $(140) millio functional s sold in the dance for 2 rterly charg e effective ta rter of 2011 00 million ar dance for th lts Presenta esses and C efore interes

• n versus th

costs, and t e third quart 012 remain ges volatile a ax rate for t 1 which wa ising from c he full year ation Corporate, w st and tax o he charge a the loss of ter of 2011. ns unchange and averagi the first qua s impacted changes to effective ta we reported

• f $(440) mi

year ago, p income fro . ed from tha ing around arter was 33 by a one-o the UK taxa ax rate rema d a pre-tax llion for the primarily ref m the alum at given in F $(500) millio 3%, compa ff deferred ation of Nor ains in the r underlying first quarte lecting high inium busin ebruary, wi

• n each qua

ared to 37% tax adjustm rth Sea prod range of 34 replacemen er, an increa her corporat ness which ith underlyi arter. % in the first ment of som duction. to 36%. 9 nt ase te ng t me

BP Nex asso In th the the Und in Ja Pre- was As w neg 1Q12 Resu xt I would lik

• ciated with

he first qua Gulf Coast incident to der a settlem anuary whic

• tax BP cas

s $1.7 billion we indicate gligent and w lts Presenta ke to provid h the Gulf o rter an adju Restoration date remai ment agree ch was sub h out flow r n. ed in previou we have tak ation de you with

• f Mexico o

stment to p n Organizat ns at $37.2 ment finaliz bsequently p relating to o us quarters, ken the cha an update

• il spill.

provisions o tion, so the 2 billion. zed in late 2 paid into the

• il spill cost

, we contin arge against

• n the cost
• ffset the u

total cumul 2011, Came e $20 billion s and the T ue to believ t income on ts and provi sual quarter lative net ch eron paid BP n Trust Fund rust Fund fo ve that BP w n that basis. isions rly expense harge taken P $250 milli d.

• r the quart

was not gro . 10 es of n for ion ter

• ssly

BP Turn In th and In 2 $38 Ann com som Nat Prog and thes We inclu Hoo 1Q12 Resu ning to our he first qua announced 012 we wil 8 billion expe nounced div mprises com me further $ ural Gas Liq gress is bei associated se deals by are also ma uding our in

• ver fields.

lts Presenta divestment rter we com d an agreem l continue t ected betw vestments n mpleted dive $2.0 billion o quids busine ng made w d marketing the end of arketing for nterests in t ation t programm mpleted the ment to sell to focus our ween 2010 a now stand a estments to

• f sales at t

ess in Cana with the dive assets in th this year. r sale certai the Marlin, me. e sale of our

• ur southe

r portfolio t and the end at around $2

• talling $20

he end of t ada which c estments of he US, and n non-strate Horn Moun r Kansas ga ern North Se hrough dive

• f next yea

23 billion si .8 billion an he quarter,

• mpleted o

f our previo we are aim egic assets ntain, Holste s assets fo ea gas inter estments, w ar. nce the sta d agreeme including th

• n 1st April.

usly announ ming to anno in the Gulf ein, Ram Po

• r $1.2 billio

rests. with a total o rt of 2010. nts in place he sale of o . nced refinin

• unce both

f of Mexico,

• well and D

11 n

• f

This e for

• ur

ng

• f

, Diana

BP Mov cash Ope billio $(1. We Our exp Tota Firs inclu 1Q12 Resu ving now to h in the firs erating cash

• n a year ag

2) billion un received $ r organic ca ect full yea al cash held t quarter op uding the e lts Presenta

• cash flow

t quarter of h flow was $

• go. After ex

nderlying op 1.3 billion o pital expend r spend to b d on deposit perating cas ffect of hig ation movement f 2011 and 2 $3.4 billion xcluding Gu perating cas

• f divestme

diture in the be around $ t at the end sh flow refle her oil price ts, this slide 2012. in the first lf of Mexico sh flow in th nt proceeds e first quart $22 billion. d of the qua ects around es and inven e compares quarter of 2

• oil spill re

he quarter w s during the er was $5.6 rter was $1 d $3.0 billion ntory builds

• ur source

2012 compa lated expen was $4.6 bil e first quarte 6 billion. We 4.1 billion. n net workin s. es and uses ared to $2.4 nditures of llion. er. e continue t ng capital b 12

• f

4 to build,

BP At t 20.7 As n bott We the proj 1Q12 Resu he end of t 7%. noted in Fe tom half of remain con year and in ects comin lts Presenta he first qua bruary, whi the 10 to 2 nfident that to 2013 as g onstream ation rter net deb lst uncertai 0% range o net debt an we see cas m, and the e bt was $31 nties remai

• ver time.

nd gearing w sh inflows f end of paym .2 billion res in, we are t will fall thro from divestm ments into th sulting in a argeting ge

• ugh the sec

ments, new he Trust. gearing of earing in the cond half o w higher-ma 13 e f argin

BP I’d n     On doc sub from The set the claim BP e billio incr the A ne MD 1Q12 Resu now like to Active shor the Gulf Co We are pro Gulf under Assessmen The first eig the finalizat By the end individual a been paid i 18th April t umented ag stantial maj m the Deep e settlement in place wit framework ms process estimates t

• n Trust, w

ease to the end of the ew schedul DL2179. lts Presenta update you reline patro

• ast;
• gressing pr
• ur initial $

nt; ght of these tion of the P

• f the first

nd busines nto the Tru his year, BP greements jority of elig water Horiz t agreemen thin 30 days k agreed as s is in opera that the cos

• uld be app

e $37.2 billio first quarte le is expect ation u on progres lling and ma rojects for e 1 billion com e projects w Phase 1 Ear quarter, we s claims an st Fund at t P announce with the Pl gible private zon incident nts allow for s of prelimi part of the tion. st of the set proximately

• n charge ta

r. ted to be se ss in the US aintenance early restora mmitment f will soon be rly Restorat e had paid a d governm the end of t ed that it ha aintiffs’ Ste e economic t. r a new cou nary Court settlement ttlement, ex y $7.8 billion aken in resp et by the Co S. continues a ation of the for Natural egin along th tion Plan by a total of $8 ent paymen the 1st quar d reached d eering Comm loss and m urt-supervis approval, w . In the me xpected to b

• n. This is no

pect of the

• urt for rem

across the a natural hab Resources he Gulf Coa the Truste 8.3 billion to

• nts. Over $1

rter. definitive an mittee to re medical claim ed claims p which will op antime a tra be paid from t expected Gulf of Mex aining proc affected are bitats along Damages ast, followin es;

• meet

16.6 billion nd fully esolve the ms stemmin process to b perate unde ansitional m the $20 to result in xico oil spill ceedings un 14 ea of the ng has ng be er any l to der

BP Befo we exp      We incr reta 1Q12 Resu

• re closing

laid out our ect and five As a brief r strengths, a promised to In terms of manageme We said yo three years average by And you ca

• perating c

Gulf of Mex We plan to purposes in by a strong remain com eases cont ain financial lts Presenta I’d like to s r roadmap f e things you eminder we and be stro

• create mo

f measures,

• ent. We aim
• u can expe

s with opera 2014 – and an expect us cash flow by xico Trust F use around ncluding sha g balance sh mmitted to ingent upon flexibility, a ation say a few w

• r growing

u can meas e said we w nger, more

• re visibility

we said yo m to divest $ ct to see 15 ating cash m d that’s at $ s to generat y 2014 com Fund payme d half that e areholder d heet; a progressi n improved and our con words about value - a cl ure. would focus e focused, s y and transp

• u will see c

$38 billion o 5 new proje margins aro $100 per ba te an increa mpared to 20 ents and aro extra cash fo distributions ive dividend cash flow d ntinuing obli

• ur strateg

ear 10-poin s relentlessl simpler and parency to v continuing a

• f assets by

ects coming und double rrel and exc ase of aroun 011 - approx

• und half fro
• r re-invest
• s. And all of

d policy goin delivery, ba gations to t gic progress t plan; five y on safety more stand value; active portf the end of g onstream the 2011 u cluding TNK nd 50% in a ximately ha

• m operatio

ment and h this will be ng forward lanced by t the Trust Fu

• s. In Octobe

things you y, play to ou

• dardized. W
• lio

2013;

• ver the ne

upstream K-BP; additional alf from end

• ns;

half for othe e underpinne with future he need to und. 15 er can r We ext ing er ed

BP So l Con inte the    We $23

• f 2

earl In F prog Wit Trus In th befo activ wor Wo this dee You sep 1Q12 Resu et me upda nsistent wit erests in pro announcem Farm-ins to Deepening blocks in of BP also gai the Utica s continue to 3 billion of d

• 2013. I have

ier we cont February we gress. h over $16 st to end in he Gulf of M

• re the end

vity; two on rk. rk continue

• year. In the

epwater Ang u will also ha arate report lts Presenta ate you on p h our increa

• mising Sou

ment of:

• four explo
• f our inte

ffshore Uru ned access hale format

• actively m

ivestments e mentioned tinue to pro e said 2012 billion alrea the fourth Mexico, five d of the year n appraisal a s on our ma e second qu gola; and Ga ave seen th ting of TNK ation progress in ased focus uth Atlantic ration conc rests in offs guay; s to the prom tions in Ohio manage our to date aga d the divest gress our p would be a ady paid into quarter this e rigs are op

• r. Of those

activity; and ajor projects uarter we e alapagos in he increased K-BP in the S the first qu

• n explorat

equatorial m essions wit shore Nami mising pote

• .
• portfolio. A

ainst the $3 tments anno plans to dive a year of mi

• the Trust

s year. perational an five rigs, tw d one is com s and we ar expect to se the Gulf of d visibility o Stock Excha uarter: tion, BP has margin play th Petrobras bia, and be entially liquid As I noted ea 38 billion we

• unced this

est the two lestones an Fund, we e nd we expe wo are now mpleting plu re on track ee the start- f Mexico.

• f our Down

ange Annou s added sign ys during the s in Brazil; ing awarde ds-rich shal arlier we ha e aim to div s quarter an US refineri nd we are se expect paym ect to have undertakin ugging and a to start-up s

• up of Cloch

nstream bus uncement w nificantly to e quarter, w d three new e acreage i ave announc vest by the nd as I said ies. eeing ments into t eight opera g productio abandonme six of them has-Mavaco siness and we released 16

• its

with w n ced end the ating

• n

ent m

• la in

the d

BP 1Q12 Results Presentation 17 this morning. A separate Rule of Thumb for the Upstream and TNK-BP is now available on our website. Of course one quarter provides only a very narrow window to gauge progress. As we look towards the second half and into 2013 we expect to see this increasing momentum reflected in operating cash flow from:  The start-up of new upstream projects with on average higher operating cash margins;  The strong year to date oil price environment continuing to feed operating cash flow into the second half of the year without the associated step-up in working capital;  And as we make the final payment into the Trust Fund in the fourth quarter. Our intention remains to generate sufficient cash to both invest to build our portfolio, and grow distributions over time as the circumstances of the firm improve.

BP Tha 1Q12 Resu t concludes lts Presenta s my remark ation

• ks. Jess and

d I will now w be happy t to take you r questions 18 .