Blueprint
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 February, 2017
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|
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press
release
7
February 2017
BP full year and 4Q 2016 results
BP focused on growth
strategic portfolio additions, new projects coming onstream, costs
& spending reduced ahead of schedule
●
4Q
2016 underlying replacement cost profit $400 million, full year
2016 $2.6 billion
●
Full
year underlying operating cash flow $17.8 billion
●
Full
year 2016 reported headline profit $115 million vs 2015 loss of
$6.5 billion:
− headline
profit excluding Gulf of Mexico legacy charges $4.1 billion
●
Continued
discipline on cost and spending:
− cash
costs $7 billion lower than 2014, delivered a year ahead of
schedule
− organic
capital spending $16 billion vs $17-19 billion initial
guidance
●
Major strategic portfolio additions
agreed, providing
disciplined expansion in gas, long-term low-cost oil and retail
marketing
●
2017 guidance, including the impact of new portfolio
additions:
−
balancing organic sources & uses of cash by year end at around
$60/bbl
−
$16-17 billion capex
−
$4.5-5.5 billion divestments
●
Dividend unchanged at 10c/share
Bob
Dudley, BP group chief executive, commented:
"2016
was the year we made significant strides in creating a stronger
platform for growth. We launched six major project start-ups - from
Algeria to the Gulf of Mexico - and made final investment decisions
on a further five major projects. And we see exciting opportunities
ahead.
"We
have delivered solid results in tough conditions - and are well
prepared for any volatility in oil pricing. We have adapted by
cutting our controllable cash costs by $7 billion from 2014 - a
full year earlier than planned. Continued tight discipline on costs
remains essential. Everything we have done during the year has made
us a more resilient and competitive company.
"With
our Deepwater Horizon financial liabilities now substantially
behind us, BP is fully focused on the future. You have seen that
focus in the string of strategic portfolio additions during the
last two months of the year. From increasing gas interests and
renewing long-term low-cost oil to expanding our retail operations
- these investments will generate significant long term value for
our shareholders. We start this year with considerable momentum -
and a sense of disciplined ambition. We have laid the foundations
for BP to be back to growth."
--------------------------------------------------
4Q
and full year 2016 results
Underlying
replacement cost profit1 for fourth quarter
of 2016 was $400 million2, compared with $196
million for the same period in 2015 and $933 million for the third
quarter of 2016. Compared to a year earlier, the quarter's result
benefited from higher oil prices and significantly lower costs,
offset by weaker refining margins and higher turnarounds in the
Downstream.
The
full year 2016 price environment was challenging: the average Brent
oil price of $44 per barrel was the lowest for 12 years; Henry Hub
gas marker prices averaged $2.46 per million British thermal units;
and the refining marker margin was the lowest since
2010.
The
headline reported result for the full year was a profit of $115
million, compared with the headline loss of $6.5 billion reported
for 2015. The 2016 headline result included a total of $4 billion
non-operating charges taken through the year associated with
resolution of the remaining legacy of the 2010 oil spill. The
headline profit excluding these legacy charges was $4.1 billion for
2016, compared with $2.0 billion for 20153.
Underlying
operating cash flow4, excluding pre-tax
Gulf of Mexico payments, was $17.8 billion for 2016, with $4.5
billion in the fourth quarter, compared with $20.3 billion in
2015.
BP's
full year controllable cash costs5 were $7 billion
lower than in 2014 - a target reached a year earlier than
previously expected. Organic capital expenditure for the year
totalled $16 billion6 in 2016, compared
with the range of $17-19 billion anticipated at the beginning of
last year.
In
total $7.1 billion in pre-tax payments related to the Gulf of
Mexico oil spill were made through 2016, as processing of
outstanding claims accelerated. Total divestment revenues were $3.2
billion in the year7.
BP
reported a reserves
replacement ratio for 2016 of 109%8.
At year
end, BP's gearing level was 26.8%, within the target range of
20-30%.
BP also
today announced an unchanged dividend for the quarter of 10c per
ordinary share, expected to be paid in March 2017.
Strategic
progress
During
the fourth quarter BP announced a series of important agreements,
including:
-
increasing
long-term low-cost oil interests through renewal of BP's 10%
interest in the ADCO onshore oil concession in Abu Dhabi, which has
a life of 40 years;
-
taking a material
stake in emerging world-class, low-cost gas basins offshore
Mauritania and Senegal through a farm-in agreement with Kosmos
Energy;
-
extending BP's
existing major gas positions: in Egypt, by acquiring a 10% interest
in the world-class Zohr gas field in the Mediterranean; in Oman,
finalising agreements to extend the Khazzan gas project by 50%; and
in Indonesia by acquiring an additional 3% in the Tangguh LNG
project;
-
building from
significant incumbent oil positions: in Azerbaijan, BP and partners
agreeing principles to extend the ACG oil concession by 25 years to
2050; and in the US Gulf of Mexico, BP sanctioning the development
of the Mad Dog 2 project, at costs 60% lower than originally
estimated, expected to begin production in 2021; and
-
building on BP's
leading retail and convenience expertise, agreeing a strategic fuel
and convenience partnership in Australia with the leading
supermarket chain Woolworths, including the acquisition of their
network of more than 500 retail sites9.
Bob
Dudley commented: "These agreements are firmly aligned with BP's
strategy and our view of the evolving energy landscape. They will
make an important contribution to BP's growth and create
significant long term value for our shareholders."
Two new
major Upstream projects began production during the fourth quarter:
the In Amenas compression project in Algeria, and the Thunder Horse
South Expansion project in the US Gulf of Mexico, which came
onstream 11 months earlier than planned and $150 million under
budget. BP also won interests in exploration acreage in the Mexican
Gulf of Mexico.
2017
guidance
The
recently-announced portfolio additions will be accretive to cash
flow over the longer term but will require additional cash outflow
in the early years. Together with the mostly second half start-up
of the new Upstream projects expected to come onstream in 2017,
these significant and strategic additions mean that BP now
anticipates balancing its organic sources and uses of cash by the
end of 2017 in a Brent oil price environment of around $60 a
barrel.
"Looking beyond
this year, we expect organic free cash flow to grow into the medium
term, supported strongly by the ramp-up of production from new
Upstream projects, strong marketing growth and the positive impact
of these portfolio additions," said Brian Gilvary, BP chief
financial officer.
Including estimated
additional organic capital spending associated with the portfolio
additions, organic capital expenditure is now expected to be $16-17
billion in 2017.
Divestment proceeds
for 2017 are expected to be $4.5-5.5 billion, reverting to $2-3
billion a year thereafter.
Gulf
of Mexico legacy
BP is
moving towards completion of the process for resolving Business
Economic Loss (BEL) claims arising from the 2010 oil spill and
amounts to resolve remaining claims are expected to be
substantially paid in 2017.
In 2017
cash payments related to the spill are expected to be lower than in
2016, around $4.5-5.5 billion, before falling sharply to around $2
billion in 2018 and to a little over $1 billion a year from
2019.
A
pre-tax charge of $625 million was taken in the quarter to reflect
the latest estimate for claims, including BEL claims, and
associated costs. Together with the non-cash impact of the ongoing
unwind of discounting effects on the provision and other costs, a
total pre-tax charge of $800 million was taken in the fourth
quarter. The total cumulative charge for the incident is now $62.6
billion on a pre-tax basis, $44.1 billion after tax.
Further information:
BP
press office, London: +44 (0)20 7496 4076, bppress@bp.com
Notes
1.
Underlying replacement cost profit is adjusted for non-operating
items and fair value accounting effects.
2.
Includes estimates for operational and financial information
for the Rosneft segment for the fourth quarter of 2016, based on
preliminary operational and financial results of Rosneft for the
three months ended 31 December 2016. Actual results may differ from
these amounts.
3.
Based on the post-tax charges for 2016 and 2015 in relation
to the Gulf of Mexico oil spill.
4.
Underlying operating cash flow is net cash provided by operating
activities excluding pre-tax amounts related to the Gulf of Mexico
oil spill.
5.
Controllable cash costs are the principal operating and overhead
costs that management considers to be the most directly under their
control; see www.bp.com
for
further information.
6.
Organic capital expenditure for 2016 excludes amounts associated
with the renewal of BP's interest in the Abu Dhabi onshore oil
concession.
7.
Including the partial sale of the Group's interest in Castrol
India.
8.
On a combined basis of subsidiaries and equity-accounted entities
including the impact of the Abu Dhabi renewal and estimated
reserves data for Rosneft. The reserves replacement ratio will be
finalized and reported in BP Annual Report and Form 20-F
2016.
9.
Subject to regulatory approval.
Full BP
p.l.c. Group results for the fourth quarter and full year of 2016
can be seen at www.bp.com/results
Cautionary statement
In
order to utilize the 'safe harbor' provisions of the United States
Private Securities Litigation Reform Act of 1995 (the 'PSLRA'), BP
is providing the following cautionary statement: This press release
contains certain forecasts, projections and forward-looking
statements - that is, statements related to future, not past events
- with respect to the financial conditions, results of operations
and businesses of BP and certain of the plans and objectives of BP
with respect to these items. These statements generally, but not
always, are identified by the use of words such as "will",
"expected to", "is intended to", "projected" or similar
expressions. In particular, among other statements, certain
statements regarding the timing of the payment of the quarterly
dividend; expectations regarding 2017 organic capital expenditure,
divestment proceeds, and the growth of organic free cash flow;
expectations with respect to balancing organic sources and uses of
cash; expectations regarding the production start at Mad Dog; the
statement that BP's strategic agreements will contribute to BP's
growth and create long-term value for shareholders and expectations
regarding the effect of portfolio additions on BP's cash flow;
expectations with respect to the timing and amount of future
payments relating to the Gulf of Mexico oil spill; and statements
that Business Economic Loss claims are expected to be substantially
paid in 2017; are all forward-looking in nature. Actual results may
differ materially from those expressed in such statements,
depending on a variety of factors, including: the specific factors
identified in the discussions accompanying such forward-looking
statements; the receipt of relevant third party and/or regulatory
approvals; the timing and level of maintenance and/or turnaround
activity; the timing and volume of refinery additions and outages;
the timing of bringing new fields onstream; the timing, quantum and
nature of certain divestments; future levels of industry product
supply, demand and pricing, including supply growth in North
America; OPEC quota restrictions; PSA effects; operational and
safety problems; potential lapses in product quality; economic and
financial market conditions generally or in various countries and
regions; political stability and economic growth in relevant areas
of the world; changes in laws and governmental regulations;
regulatory or legal actions including the types of enforcement
action pursued and the nature of remedies sought or imposed; the
actions of prosecutors, regulatory authorities and courts; delays
in the processes for resolving claims; exchange rate fluctuations;
development and use of new technology; recruitment and retention of
a skilled workforce; the success or otherwise of partnering; the
actions of competitors, trading partners, contractors,
subcontractors, creditors, rating agencies and others; our access
to future credit resources; business disruption and crisis
management; the impact on our reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major
uninsured losses; decisions by Rosneft's management and board of
directors; the actions of contractors; natural disasters and
adverse weather conditions; changes in public expectations and
other changes to business conditions; wars and acts of terrorism;
cyber-attacks or sabotage; and other factors discussed elsewhere in
this press release and under "Principal risks and uncertainties" in
the results announcement for the period ended 30 June 2016 and
"Risk factors" in BP Annual Report and Form 20-F 2015 as filed with
the US Securities and Exchange Commission.
Non-GAAP financial
measures - This press release contains financial measures which are
not presented in accordance with IFRS. Quantitative reconciliations
of these measures to the most comparable financial measures
calculated in accordance with IFRS can be found on our website at
www.bp.com.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BP
p.l.c.
(Registrant)
Dated: 07
February 2017
/s/
J. BERTELSEN
..............................
J.
BERTELSEN
Deputy
Company Secretary