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 06 February 2018
 
 
 
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|
 
      ---------------           ----------------
 
 
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
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/9787D_-2018-2-5.pdf
 
Top of page 1
 
 
 
 
 
Full year
Highlights
 
Strong delivery and growth across BP
– Underlying profit up 139%
– Organic cash flows back in balance
– Downstream underlying profit up 24%
– Upstream production up 12%
– Reserves replacement ratio 143% for BP group
– Share buybacks, offsetting scrip dilution, restarted
 
 
 Underlying replacement cost profit* was $6.2 billion for full year 2017 and $2.1 billion for the fourth quarter, compared with $2.6 billion and $400 million for full year and fourth quarter 2016 respectively.
 Operating cash flow for 2017, excluding Gulf of Mexico oil spill payments*, was $24.1 billion, compared with $17.6 billion in 2016. Gulf of Mexico oil spill payments in 2017 were $5.2 billion, compared with $6.9 billion in 2016.
 Downstream earnings were very strong with underlying replacement cost profit of $7.0 billion, 24% higher than 2016.
 Operational reliability was high, with refining availability* and Upstream BP-operated plant reliability* both 95%.
 Seven new major projects* delivered, boosting oil and gas production. Upstream production, excluding BP’s share of Rosneft production, was 12% higher than 2016, the highest since 2010. Including Rosneft, production was 3.6 million barrels of oil equivalent a day, 10% higher than 2016. Oil and gas realizations were 25% higher.
 Exploration delivered the most successful year for BP since 2004, with around 1 billion boe resources discovered.
 Dividend unchanged at 10 cents per share. 
 BP began share buybacks in the fourth quarter, spending $343 million, fully offsetting the dilution from scrip dividends issued in the third quarter.
 Non-operating items in the fourth quarter, which are excluded from underlying profit, included a $0.9 billion charge for US tax changes and a $1.7 billion post-tax charge relating to a further provision for claims associated with the oil spill.
 
 
 
 
Year on year
 
 
 
See chart on PDF
 
 
 
Bob Dudley – Group chief executive:
“2017 was one of the strongest years in BP’s recent history. We delivered operationally and financially, with very strong earnings in the Downstream, Upstream production up 12%, and our finances rebalanced. And we did all this while maintaining safe and reliable operations.
“We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond.
 “At the same time, we are embracing the energy transition, seeking new opportunities in a changing, lower-carbon world.”
 
 
 
Financial summary
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Profit for the period(a)
 
 
27
 
1,769
 
497
 
 
3,389
 
115
 
Inventory holding (gains) losses*, net of tax
 
 
(610)
 
(390)
 
(425)
 
 
(628)
 
(1,114)
 
RC profit (loss)*
 
 
(583)
 
1,379
 
72
 
 
2,761
 
(999)
 
Net (favourable) adverse impact of non-operating
 
 
 
 
 
 
 
 
  items* and fair value accounting effects*,
 
 
 
 
 
 
 
 
  net of tax
 
 
2,690
 
486
 
328
 
 
3,405
 
3,584
 
Underlying RC profit
 
 
2,107
 
1,865
 
400
 
 
6,166
 
2,585
 
RC profit (loss) per ordinary share (cents)*
 
 
(2.94)
 
6.98
 
0.38
 
 
14.02
 
(5.33)
 
RC profit (loss) per ADS (dollars)
 
 
(0.18)
 
0.42
 
0.02
 
 
0.84
 
(0.32)
 
Underlying RC profit per ordinary share (cents)*
 
 
10.64
 
9.44
 
2.11
 
 
31.31
 
13.79
 
Underlying RC profit per ADS (dollars)
 
 
0.64
 
0.57
 
0.13
 
 
1.88
 
0.83
 
 
(a)
 
Profit attributable to BP shareholders.
 
 
 
* See definitions in the Glossary on page 30. RC profit (loss), underlying RC profit, operating cash flow excluding Gulf of Mexico oil spill payments and organic capital expenditure are non-GAAP measures.
 
 
The commentary above and following should be read in conjunction with the cautionary statement on page 34.
 
 
 
Top of page 2
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
Group headlines
 
Earnings
For the full year, underlying replacement cost (RC) profit was $6,166 million, compared with $2,585 million in 2016. Underlying RC profit is after adjusting for a net charge for non-operating items of $3,309 million and net adverse fair value accounting effects of $96 million (both on a post-tax basis). RC profit was $2,761 million for the full year, compared with a loss of $999 million a year ago.
 
For the fourth quarter, underlying RC profit was $2,107 million compared with $400 million for the same period in 2016. Underlying RC profit is after adjusting for a net charge for non-operating items of $2,515 million and net adverse fair value accounting effects of $175 million (both on a post-tax basis). RC loss was $583 million for the fourth quarter, compared with a profit of $72 million for the same period in 2016.
 
BP’s profit for the fourth quarter and full year was $27 million and $3,389 million respectively, compared with $497 million and $115 million for the same periods in 2016.
 
See further information on page 4.
 
Depreciation, depletion and amortization
The charge for depreciation, depletion and amortization was $15.6 billion in 2017, compared with $14.5 billion in 2016. In 2018, we expect the charge to be higher than 2017.
 
Non-operating items
Non-operating items amounted to a charge of $2,325 million pre-tax and $2,515 million post-tax for the quarter and a charge of $3,622 million pre-tax and $3,309 million post-tax for the full year. The post-tax non-operating charge for the fourth quarter includes a charge of $1.7 billion relating to business economic loss and other claims associated with the Gulf of Mexico oil spill (see Note 2 on page 17) and a $0.9 billion deferred tax charge following the change in the US tax rate. See further information on page 25.
 
Effective tax rate
The effective tax rate (ETR) on RC profit or loss* for the fourth quarter and full year was significantly impacted by the effect of non-operating items and therefore it is not a meaningful measure.
 
The adjusted ETR* is calculated by eliminating the impact of non-operating items, which for the fourth quarter includes a one-off deferred tax charge in respect of the revaluation of deferred tax assets and liabilities following the reduction in the US federal corporate income tax rate from 35% to 21% enacted in December 2017; fair value accounting effects; and the impact of a reduction in the UK supplementary tax charge in the third quarter of 2016.
 
The adjusted ETR for the fourth quarter and full year was 27% and 38% respectively, compared with 10% and 23% for the same periods in 2016. The adjusted ETR for the fourth quarter 2017 reflects a benefit from the reassessment of the recognition of deferred tax assets. The adjusted ETR for the fourth quarter 2016 was impacted by a high proportion of equity-accounted income (which is reported net of tax in the income statement) within RC profit, and reflected a benefit from the reassessment of the recognition of deferred tax assets and other items, partly offset by charges for foreign exchange impacts.
 
 
 
 
The adjusted ETR for the full year is higher than last year predominantly due to changes in the geographical mix of profits notably the impact of the renewal of our interest in the Abu Dhabi onshore oil concession. In the current environment, and assuming no further reassessment of the recognition of deferred tax assets, the adjusted ETR in 2018 is expected to be above 40%. ETR on RC profit or loss and adjusted ETR are non-GAAP measures.
 
Dividend
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 29 March 2018. The corresponding amount in sterling will be announced on 19 March 2018. See page 22 for further information.
 
Share buybacks
BP recommenced a share buyback programme in the fourth quarter to offset the dilution of the scrip issue and repurchased 51 million ordinary shares at a cost of $343 million, including fees and stamp duty, during the fourth quarter of 2017.
 
Operating cash flow*
Excluding post-tax amounts related to the Gulf of Mexico oil spill, operating cash flow* for the fourth quarter and full year was $6.2 billion and $24.1 billion respectively, compared with $4.5 billion and $17.6 billion for the same periods in 2016. Including amounts relating to the Gulf of Mexico oil spill, operating cash flow for the fourth quarter and full year was $5.9 billion and $18.9 billion respectively, compared with $2.4 billion and $10.7 billion for the same periods in 2016.
 
Capital expenditure*
Organic capital expenditure* for the fourth quarter and full year was $4.6 billion and $16.5 billion respectively, compared with $4.5 billion and $16.7 billion for the same periods in 2016. In 2018, we expect organic capital expenditure to be in the range of $15-16 billion.
 
Inorganic capital expenditure* for the fourth quarter and full year was $0.2 billion and $1.3 billion respectively, compared with $0.4 billion, and $0.8 billion for the same periods in 2016.
 
See page 24 for further information.
 
Divestment and other proceeds
Total divestment and other proceeds for the year were $4.3 billion including proceeds of $0.8 billion received in relation to the initial public offering of BP Midstream Partners LP’s common units. Divestment proceeds* were $2.5 billion for the fourth quarter and $3.4 billion for the full year, compared with $0.5 billion and $2.6 billion for the same periods in 2016. In 2018, divestments are expected to be in the range of $2-3 billion.
 
Net debt*
Net debt at 31 December 2017 was $37.8 billion, compared with $35.5 billion a year ago. The net debt ratio* at 31 December 2017 was 27.4%, compared with 26.8% a year ago. We continue to target a net debt ratio in the range of 20-30%. Net debt and the net debt ratio are non-GAAP measures. See page 23 for more information.
 
 
Top of page 3
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
Reserves replacement ratio*
The reserves replacement ratio on a combined basis of subsidiaries and equity-accounted entities was estimated at 143%(a) for the year.
 
(a) Includes estimated reserves data for Rosneft. The reserves replacement ratio will be finalized and reported in BP Annual Report and Form 20-F 2017.
 
 
 
 
Brian Gilvary – Chief financial officer: 
“We had strong delivery and growth across BP in 2017. The full-year underlying result was more than double a year earlier, our organic cash flows are back in balance and our financial frame remains resilient. Our share buyback programme in the fourth quarter offset the dilution from scrip dividends issued in September and our intent remains to offset any ongoing scrip dilution through further buybacks over time.”
 
 
The commentary above should be read in conjunction with the cautionary statement on page 34.
 
 
Top of page 4
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Analysis of underlying RC profit before interest and tax
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Underlying RC profit before interest and tax*
 
 
 
 
 
 
 
 
    Upstream
 
 
2,223
 
1,562
 
400
 
 
5,865
 
(542)
 
    Downstream
 
 
1,474
 
2,338
 
877
 
 
6,967
 
5,634
 
    Rosneft
 
 
321
 
137
 
135
 
 
836
 
567
 
    Other businesses and corporate
 
 
(394)
 
(398)
 
(424)
 
 
(1,598)
 
(1,238)
 
    Consolidation adjustment – UPII*
 
 
(149)
 
(130)
 
(132)
 
 
(212)
 
(196)
 
Underlying RC profit before interest and tax
 
 
3,475
 
3,509
 
856
 
 
11,858
 
4,225
 
Finance costs and net finance expense relating
 
 
 
 
 
 
 
 
  to pensions and other post-retirement benefits
 
 
(550)
 
(444)
 
(359)
 
 
(1,801)
 
(1,371)
 
Taxation on an underlying RC basis
 
 
(782)
 
(1,212)
 
(51)
 
 
(3,812)
 
(212)
 
Non-controlling interests
 
 
(36)
 
12
 
(46)
 
 
(79)
 
(57)
 
Underlying RC profit attributable to BP
 
 
 
 
 
 
 
 
  shareholders
 
 
2,107
 
1,865
 
400
 
 
6,166
 
2,585
 
 
Reconciliations of underlying RC profit or loss 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
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
RC profit (loss) before interest and tax*
 
 
 
 
 
 
 
 
  Upstream
 
 
1,928
 
1,242
 
692
 
 
5,221
 
574
 
  Downstream
 
 
1,773
 
2,175
 
899
 
 
7,221
 
5,162
 
  Rosneft
 
 
321
 
137
 
158
 
 
836
 
590
 
  Other businesses and corporate(a)
 
 
(2,833)
 
(460)
 
(1,117)
 
 
(4,445)
 
(8,157)
 
  Consolidation adjustment – UPII
 
 
(149)
 
(130)
 
(132)
 
 
(212)
 
(196)
 
RC profit (loss) before interest and tax
 
 
1,040
 
2,964
 
500
 
 
8,621
 
(2,027)
 
Finance costs and net finance expense relating
 
 
 
 
 
 
 
 
  to pensions and other post-retirement benefits
 
 
(674)
 
(566)
 
(484)
 
 
(2,294)
 
(1,865)
 
Taxation on a RC basis
 
 
(913)
 
(1,031)
 
102
 
 
(3,487)
 
2,950
 
Non-controlling interests
 
 
(36)
 
12
 
(46)
 
 
(79)
 
(57)
 
RC profit (loss) attributable to BP shareholders
 
 
(583)
 
1,379
 
72
 
 
2,761
 
(999)
 
Inventory holding gains (losses)
 
 
816
 
557
 
601
 
 
853
 
1,597
 
Taxation (charge) credit on inventory holding
 
 
 
 
 
 
 
 
  gains and losses
 
 
(206)
 
(167)
 
(176)
 
 
(225)
 
(483)
 
Profit for the period attributable to
 
 
 
 
 
 
 
 
  BP shareholders
 
 
27
 
1,769
 
497
 
 
3,389
 
115
 
 
 
(a)
 
Includes costs related to the Gulf of Mexico oil spill. See page 11 and also Note 2 from page 17 for further information on the accounting for the Gulf of Mexico oil spill.
 
 
Top of page 5
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Strategic progress
 
Financial framework
 
Upstream 
2017 oil and gas production, excluding Rosneft, was 12% higher than in 2016, the highest since 2010. Upstream unit production costs* were 16% lower, benefiting from production growth and continued cost discipline.
 
Zohr in Egypt completed BP’s programme of seven major project* start-ups in 2017. Together with 2016 start-ups, the projects contribute more than 500mboe/d new net production capacity and are expected to deliver operating cash margins* around 35% greater than Upstream’s assets in 2015.
 
In the quarter BP accessed significant new exploration acreage in the Santos basin of Brazil and in Côte d’Ivoire with Kosmos Energy. BP announced six exploration discoveries in 2017 – the cumulative discovery of around 1 billion boe of resources was BP’s largest since 2004.
 
Downstream 
Fuels marketing earnings increased by more than 10% in 2017. Premium fuel volumes grew by 6% and BP’s convenience partnership model increased to 1,100 sites worldwide. More than 120 BP retail sites in Mexico were operational at year end. In lubricants, BP delivered premium brand growth and increased earnings from growth markets.
 
In manufacturing, both refining and petrochemicals grew earnings with record levels of advantaged feedstock processed in refining.
 
Advancing the energy transition
BP acquired a 43% interest in Lightsource, Europe’s largest solar development company, supporting its rapid expansion worldwide. Other progress included BP enhancing its biofuels business in Brazil through an ethanol storage joint venture, forming a partnership with Aria Energy to expand its renewable gas portfolio in the US and, in January, BP Ventures investing in the electric vehicle fast-charging company Freewire.
 
Operating cash flow, excluding Gulf of Mexico payments*, was $24.1 billion for full year 2017. This compares with $17.6 billion for full year 2016.
 
Organic capital expenditure* for 2017 was $16.5 billion, in the range of $15-17 billion previously indicated. BP expects 2018 organic capital expenditure to be in the range of $15-16 billion.
 
Operating cash flow excluding Gulf of Mexico payments in 2017 exceeded organic capital expenditure, cash dividend payments to BP shareholders and share buybacks by $1.1 billion.
 
Total divestment and other proceeds for the year were $4.3 billion including proceeds of $0.8 billion received in relation to the initial public offering of BP Midstream Partners LP’s common units. Divestment proceeds* were $3.4 billion for the full year, including the proceeds received in the fourth quarter for the sale of BP’s interest in the SECCO joint venture in China. In 2018, divestments are expected to be in the range of $2-3 billion.
 
Gulf of Mexico oil spill payments were $0.3 billion in the fourth quarter, bringing the total for 2017 to $5.2 billion. Cash outflows in 2018 are expected to be approximately $3 billion, weighted to the first half of the year.
 
Gearing* was 27.4% at the end of 2017. BP continues to target a gearing range of 20-30%.
 
Safety 
The 3-year average for both Tier 1 process safety events* and reported recordable injury frequency* remains on an improving trend. Safety remains a core value and our number one priority. We are committed to continuous improvement to drive enhanced performance.
 
 
Operating metrics
 
 
Year 2017 (vs. Year 2016)
 
 
Financial metrics
 
 
Year 2017 (vs. Year 2016)
 
Tier 1 process safety events
 
 
18
(+2)
 
 
Underlying RC profit
 
 
$6.2bn
(+$3.6bn)
 
Reported recordable injury frequency
 
 
0.22
(+3%)
 
 
Operating cash flow excluding Gulf of Mexico oil spill payments
 
 
$24.1bn 
(+$6.5bn)
 
Group production
 
 
3,595mboe/d
(+10%)
 
 
Organic capital expenditure
 
 
$16.5bn
(-$0.2bn)
 
Upstream production (excludes Rosneft segment)
 
 
2,466mboe/d
(+12%)
 
 
Gulf of Mexico oil spill payments
 
 
$5.2bn 
(-$1.7bn)
 
Upstream unit production costs
 
 
$7.11/boe
(-16%)
 
 
Divestment proceeds
 
 
$3.4bn
(+$0.8bn)
 
BP-operated Upstream operating efficiency*
 
 
80.5%
 
 
Net debt ratio (gearing)
 
 
27.4%
(+0.6)
 
BP-operated Upstream plant reliability*(a)
 
 
94.7%
(-0.6)
 
 
Dividend per ordinary share(b)
 
 
10.00 cents
(–)
 
Refining availability*
 
 
95.3%
(–)
 
 
Return on average capital employed*(c)
 
 
5.8%
(+3.0)
 
 
(a)
 
BP-operated Upstream plant reliability has been included as an operating metric this quarter. It is more comparable with the equivalent metric disclosed for the Downstream, which is ‘Refining availability’. BP-operated Upstream plant reliability was 94.9% for the first quarter 2017, 95.2% for the six months ended 30 June 2017 and 94.5% for the nine months ended 30 September 2017.
 
(b)
 
Represents dividend announced in the quarter (vs. prior year quarter).
 
(c)
 
Return on average capital employed is included as this is a full year report.
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 34.
 
 
Top of page 6
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Upstream
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Profit before interest and tax
 
 
1,928
 
1,255
 
711
 
 
5,229
 
634
 
Inventory holding (gains) losses*
 
 
 
(13)
 
(19)
 
 
(8)
 
(60)
 
RC profit before interest and tax
 
 
1,928
 
1,242
 
692
 
 
5,221
 
574
 
Net (favourable) adverse impact of
 
 
 
 
 
 
 
 
  non-operating items* and fair value
 
 
 
 
 
 
 
 
  accounting effects*
 
 
295
 
320
 
(292)
 
 
644
 
(1,116)
 
Underlying RC profit (loss) before interest
 
 
 
 
 
 
 
 
  and tax*(a)
 
 
2,223
 
1,562
 
400
 
 
5,865
 
(542)
 
 
(a)
 
See page 7 for a reconciliation to segment RC profit before interest and tax by region.
 
 
Financial results
The replacement cost profit before interest and tax for the fourth quarter and full year was $1,928 million and $5,221 million respectively, compared with $692 million and $574 million for the same periods in 2016. The fourth quarter and full year included a net non-operating charge of $144 million and $671 million respectively, compared with a net non-operating gain of $636 million and $1,753 million for the same periods in 2016. Fair value accounting effects in the fourth quarter and full year had an adverse impact of $151 million and a favourable impact of $27 million respectively, compared with an adverse impact of $344 million and $637 million in the same periods of 2016.
 
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 $2,223 million and $5,865 million respectively, compared with a profit of $400 million and a loss of $542 million for the same periods in 2016. The result for the fourth quarter mainly reflected higher liquids realizations and higher production including the impact of the Abu Dhabi onshore concession renewal and major project* start-ups. The result for the full year reflected higher liquids realizations, and higher production including the impact of the Abu Dhabi onshore concession renewal and major project start-ups, partly offset by higher depreciation, depletion and amortization, and higher exploration write-offs.
 
Production
Production for the quarter was 2,581mboe/d, 18.1% higher than the fourth quarter of 2016. Fourth quarter production reflects the fifth consecutive quarter of growth as well as the highest production since first quarter 2011. Underlying production* for the quarter increased by 11.1%, due to the ramp-up of major projects. For the full year, production was 2,466mboe/d, 11.7% higher than 2016. Underlying production for the full year was 7.9% higher than 2016 due to major project start-ups. The seven major project start-ups for 2017, together with the 2016 start-ups, contribute more than 500mboe/d of new net production capacity.
 
Key events
On 21 November, BP agreed to sell a package of its interests in the Bruce assets in the North Sea to Serica Energy plc, subject to regulatory approvals. The Bruce assets comprise the Bruce, Keith and Rhum fields, platforms and associated subsea infrastructure.
 
On 18 December, BP completed the formation of Pan American Energy Group (PAEG) (BP 50%, Bridas Corporation 50%), which is a combination of Pan American Energy and Axion Energy.
 
On 20 December, BP confirmed that production started from the Zohr gas field, offshore Egypt (ENI operator 60%, Rosneft 30%, BP 10%), BP’s seventh major project to start in 2017.
 
Also on 20 December, BP and Statoil signed an extension agreement for the In Amenas production-sharing contract* with Algerian state-owned energy company Sonatrach, which has been submitted to the Algerian authorities for ratification.
 
On 21 December, BP and Kosmos Energy (KE) were awarded five blocks offshore Côte d’Ivoire, under agreements with the government of Côte d’Ivoire and state oil company Société Nationale d'Operations Pétrolières de la Côte d'Ivoire (PETROCI) (BP 45%, KE 45%, PETROCI 10%).
 
In December Rosneft announced an agreement to develop resources within the Kharampurskoe and Festivalnoye licence areas in Yamalo-Nenets Autonomous Okrug in northern Russia jointly with BP. Rosneft will hold a majority stake of 51% and BP will hold a 49% stake. Completion of the deal is subject to regulatory approvals.
 
On 31 January, BP announced the oil discovery Capercaillie (BP 100%) and the oil discovery Achmelvich (BP 52.6%, Shell 28%, and Chevron 19.4%) in the UK North Sea, both operated by BP. These two discoveries bring the total exploration discoveries in 2017 to six, and our most successful exploration campaign in the UK North Sea since 2008.
 
Outlook
We expect full-year 2018 underlying production to be higher than 2017 due to the ramp-up of major projects. The actual reported outcome will depend on the exact timing of project start-ups, acquisition and divestment activities, OPEC quotas and entitlement impacts in our production-sharing agreements*. We expect first-quarter 2018 reported production to be broadly flat with the fourth quarter 2017, reflecting continued growth from the 2017 major project start-ups, offset by the expiration of the Abu Dhabi offshore concession and divestment impacts.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 34.
 
 
Top of page 7
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Upstream (continued)
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
629
 
264
 
(147)
 
 
1,238
 
(1,270)
 
Non-US
 
 
1,594
 
1,298
 
547
 
 
4,627
 
728
 
 
 
2,223
 
1,562
 
400
 
 
5,865
 
(542)
 
Non-operating items
 
 
 
 
 
 
 
 
US(a)
 
 
(187)
 
(97)
 
21
 
 
(330)
 
127
 
Non-US(b)(c)
 
 
43
 
(49)
 
615
 
 
(341)
 
1,626
 
 
 
(144)
 
(146)
 
636
 
 
(671)
 
1,753
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
8
 
(100)
 
(274)
 
 
192
 
(379)
 
Non-US
 
 
(159)
 
(74)
 
(70)
 
 
(165)
 
(258)
 
 
 
(151)
 
(174)
 
(344)
 
 
27
 
(637)
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
450
 
67
 
(400)
 
 
1,100
 
(1,522)
 
Non-US
 
 
1,478
 
1,175
 
1,092
 
 
4,121
 
2,096
 
 
 
1,928
 
1,242
 
692
 
 
5,221
 
574
 
Exploration expense
 
 
 
 
 
 
 
 
US
 
 
27
 
190
 
511
 
 
282
 
693
 
Non-US(c)(d)
 
 
494
 
107
 
(197)
 
 
1,798
 
1,028
 
 
 
521
 
297
 
314
 
 
2,080
 
1,721
 
Of which: Exploration expenditure written off(c)(d)
 
 
372
 
217
 
166
 
 
1,603
 
1,274
 
Production (net of royalties)(e)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
 
 
 
 
 
 
US
 
 
430
 
408
 
406
 
 
426
 
391
 
Europe
 
 
117
 
123
 
122
 
 
119
 
120
 
Rest of World
 
 
796
 
809
 
650
 
 
811
 
698
 
 
 
1,344
 
1,341
 
1,178
 
 
1,356
 
1,208
 
Natural gas (mmcf/d)
 
 
 
 
 
 
 
 
US
 
 
1,759
 
1,703
 
1,675
 
 
1,659
 
1,656
 
Europe
 
 
186
 
217
 
268
 
 
235
 
264
 
Rest of World
 
 
5,231
 
4,581
 
3,903
 
 
4,543
 
3,876
 
 
 
7,176
 
6,502
 
5,846
 
 
6,436
 
5,796
 
Total hydrocarbons* (mboe/d)
 
 
 
 
 
 
 
 
US
 
 
734
 
702
 
694
 
 
712
 
676
 
Europe
 
 
150
 
161
 
168
 
 
160
 
165
 
Rest of World
 
 
1,698
 
1,599
 
1,323
 
 
1,594
 
1,366
 
 
 
2,581
 
2,462
 
2,186
 
 
2,466
 
2,208
 
Average realizations*(f)
 
 
 
 
 
 
 
 
Total liquids(g) ($/bbl)
 
 
56.16
 
47.45
 
43.89
 
 
49.92
 
38.27
 
Natural gas ($/mcf)
 
 
3.23
 
2.89
 
3.08
 
 
3.19
 
2.84
 
Total hydrocarbons ($/boe)
 
 
37.48
 
33.23
 
31.40
 
 
35.38
 
28.24
 
 
(a)
 
Fourth quarter and full year 2017 include an impairment charge relating to the US Lower 48 business, partially offset by gains associated with asset divestments.
 
(b)
 
Fourth quarter and full year 2017 include BP’s share of an impairment reversal recognized by the Angola LNG equity-accounted entity, partially offset by other items. In addition, full year 2017 includes an impairment charge arising following the announcement of the agreement to sell the Forties Pipeline System business to INEOS. Fourth quarter and full year 2016 principally relate to impairment reversals in India, Angola and the North Sea.
 
(c)
 
See page 25 for more information on non-operating items.
 
(d)
 
Full year 2017 includes the write-off of exploration well and lease costs in Angola and the write-off of exploration wells in Egypt.
 
(e)
 
Includes BP’s share of production of equity-accounted entities in the Upstream segment.
 
(f)
 
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
 
(g)
 
Includes condensate, natural gas liquids and bitumen.
 

Because of rounding, some totals may not agree exactly with the sum of their component parts.
 
 
Top of page 8
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
 
Downstream
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Profit before interest and tax
 
 
2,492
 
2,695
 
1,457
 
 
7,979
 
6,646
 
Inventory holding (gains) losses*
 
 
(719)
 
(520)
 
(558)
 
 
(758)
 
(1,484)
 
RC profit before interest and tax
 
 
1,773
 
2,175
 
899
 
 
7,221
 
5,162
 
Net (favourable) adverse impact of
 
 
 
 
 
 
 
 
  non-operating items* and fair value
 
 
 
 
 
 
 
 
  accounting effects*
 
 
(299)
 
163
 
(22)
 
 
(254)
 
472
 
Underlying RC profit before interest and tax*(a)
 
 
1,474
 
2,338
 
877
 
 
6,967
 
5,634
 
 
(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 $1,773 million and $7,221 million respectively, compared with $899 million and $5,162 million for the same periods in 2016.
 
The fourth quarter and full year include a net non-operating gain of $382 million and $389 million respectively, compared with a net non-operating charge of $77 million and $24 million for the same periods in 2016. Fair value accounting effects had an adverse impact of $83 million in the fourth quarter and $135 million for the full year, compared with a favourable impact of $99 million and an adverse impact of $448 million for the same periods in 2016.
 
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 $1,474 million and $6,967 million respectively, compared with $877 million and $5,634 million for the same periods in 2016.
 
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 profit before interest and tax of $976 million for the fourth quarter and $4,872 million for the full year, compared with $417 million and $3,727 million for the same periods in 2016. The result for the quarter and full year reflects stronger refining performance. In addition, the full-year improvement reflects growth in fuels marketing, partly offset by a weaker contribution from supply and trading.
 
The refining result for the quarter and full year reflects continued strong operational performance, capturing higher industry refining margins, efficiency benefits as well as increased commercial optimization including the benefits of higher levels of advantaged feedstock. The full year result was, however, impacted by a higher level of planned turnaround activity.
 
The fuels marketing result for the full year reflects continued profit growth supported by higher premium fuel volumes which grew by 6% and the continued rollout of our convenience partnership model to more than 220 sites, bringing the total number of convenience partnership sites to 1,100 across our retail network.
 
We continue to grow in Mexico, where, by the end of 2017 we had more than 120 operational sites after becoming the first international oil company to enter the deregulated fuel retail market earlier in the year.
 
In December, the Australian Competition and Consumer Commission announced that it intends to oppose our proposed acquisition of Woolworths’ fuel and convenience sites in Australia. We are currently considering our next steps.
 
On 1 February 2018, we entered into joint ventures with Shandong Dongming Petrochemical Group to develop a leading branded retail fuels and convenience business in Shandong, Henan and Hebei provinces in China.
 
Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $375 million for the fourth quarter and $1,479 million for the full year, compared with $357 million and $1,523 million for the same periods in 2016. The result for the quarter and full year reflects growth in premium brands and growth markets, offset by the adverse lag impact of increasing base oil prices.
 
Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $123 million for the fourth quarter and $616 million for the full year, compared with $103 million and $384 million for the same periods in 2016. The result for the quarter and full year reflects an improved margin environment, stronger margin optimization, the benefits from our efficiency programmes and a lower level of turnaround activity. The result was, however, impacted by the divestment of our interest in the SECCO joint venture, which completed in the fourth quarter and was classified as held for sale in the group balance sheet at 30 September 2017.
 
Outlook
Looking to the first quarter of 2018, we expect higher discounts for North American heavy crude oil but lower industry refining margins. In addition, we expect our turnaround activity to be lower in refining but significantly higher in petrochemicals.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 34.
 
 
Top of page 9
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Downstream (continued)
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Underlying RC profit before interest and tax -
 
 
 
 
 
 
 
 
  by region
 
 
 
 
 
 
 
 
US
 
 
501
 
640
 
(371)
 
 
1,978
 
853
 
Non-US
 
 
973
 
1,698
 
1,248
 
 
4,989
 
4,781
 
 
 
1,474
 
2,338
 
877
 
 
6,967
 
5,634
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
(25)
 
(39)
 
(122)
 
 
(48)
 
(48)
 
Non-US(a)
 
 
407
 
(16)
 
45
 
 
437
 
24
 
 
 
382
 
(55)
 
(77)
 
 
389
 
(24)
 
Fair value accounting effects
 
 
 
 
 
 
 
 
US
 
 
3
 
20
 
22
 
 
(29)
 
(321)
 
Non-US
 
 
(86)
 
(128)
 
77
 
 
(106)
 
(127)
 
 
 
(83)
 
(108)
 
99
 
 
(135)
 
(448)
 
RC profit before interest and tax
 
 
 
 
 
 
 
 
US
 
 
479
 
621
 
(471)
 
 
1,901
 
484
 
Non-US
 
 
1,294
 
1,554
 
1,370
 
 
5,320
 
4,678
 
 
 
1,773
 
2,175
 
899
 
 
7,221
 
5,162
 
Underlying RC profit before interest and tax - 
 
 
 
 
 
 
 
 
  by business(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
976
 
1,788
 
417
 
 
4,872
 
3,727
 
Lubricants
 
 
375
 
356
 
357
 
 
1,479
 
1,523
 
Petrochemicals
 
 
123
 
194
 
103
 
 
616
 
384
 
 
 
1,474
 
2,338
 
877
 
 
6,967
 
5,634
 
Non-operating items and fair value
 
 
 
 
 
 
 
 
  accounting effects(d)
 
 
 
 
 
 
 
 
Fuels
 
 
(202)
 
(154)
 
103
 
 
(193)
 
(390)
 
Lubricants
 
 
(14)
 
(3)
 
(81)
 
 
(22)
 
(84)
 
Petrochemicals(a)
 
 
515
 
(6)
 
 
 
469
 
2
 
 
 
299
 
(163)
 
22
 
 
254
 
(472)
 
RC profit before interest and tax(b)(c)
 
 
 
 
 
 
 
 
Fuels
 
 
774
 
1,634
 
520
 
 
4,679
 
3,337
 
Lubricants
 
 
361
 
353
 
276
 
 
1,457
 
1,439
 
Petrochemicals
 
 
638
 
188
 
103
 
 
1,085
 
386
 
 
 
1,773
 
2,175
 
899
 
 
7,221
 
5,162
 
 
 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
 
14.4
 
16.3
 
11.4
 
 
14.1
 
11.8
 
Refinery throughputs (mb/d)
 
 
 
 
 
 
 
 
US
 
 
714
 
737
 
604
 
 
713
 
646
 
Europe
 
 
741
 
768
 
806
 
 
773
 
803
 
Rest of World
 
 
243
 
240
 
234
 
 
216
 
236
 
 
 
1,698
 
1,745
 
1,644
 
 
1,702
 
1,685
 
Refining availability* (%)
 
 
96.1
 
95.3
 
94.9
 
 
95.3
 
95.3
 
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
 
 
US
 
 
1,127
 
1,186
 
1,146
 
 
1,151
 
1,134
 
Europe
 
 
1,132
 
1,204
 
1,166
 
 
1,140
 
1,179
 
Rest of World
 
 
542
 
480
 
540
 
 
508
 
512
 
 
 
2,801
 
2,870
 
2,852
 
 
2,799
 
2,825
 
Trading/supply sales of refined products
 
 
3,549
 
3,088
 
2,836
 
 
3,149
 
2,775
 
Total sales volumes of refined products
 
 
6,350
 
5,958
 
5,688
 
 
5,948
 
5,600
 
Petrochemicals production (kte)
 
 
 
 
 
 
 
 
US
 
 
641
 
617
 
546
 
 
2,428
 
2,564
 
Europe
 
 
1,559
 
1,285
 
930
 
 
5,462
 
3,729
 
Rest of World
 
 
1,306
 
2,025
 
2,071
 
 
7,405
 
7,934
 
 
 
3,506
 
3,927
 
3,547
 
 
15,295
 
14,227
 
 
 
(a)
 
Fourth quarter and full year 2017 gain primarily reflects the disposal of our shareholding in the SECCO joint venture.
 
(b)
 
Segment-level overhead expenses are included in the fuels business result.
 
(c)
 
Results from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany is reported in the fuels business.
 
(d)
 
For Downstream, fair value accounting effects arise solely in the fuels business.
 
 
 
Top of page 10
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Rosneft
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017(a)
 
2017
 
2016
 
 
2017(a)
 
2016
 
Profit before interest and tax(b)
 
 
418
 
161
 
182
 
 
923
 
643
 
Inventory holding (gains) losses*
 
 
(97)
 
(24)
 
(24)
 
 
(87)
 
(53)
 
RC profit before interest and tax
 
 
321
 
137
 
158
 
 
836
 
590
 
Net charge (credit) for non-operating items*
 
 
 
 
(23)
 
 
 
(23)
 
Underlying RC profit before interest and tax*
 
 
321
 
137
 
135
 
 
836
 
567
 
 
Financial results
Replacement cost profit before interest and tax for the fourth quarter and full year was $321 million and $836 million respectively, compared with $158 million and $590 million for the same periods in 2016.
 
There were no non-operating items in the fourth quarter and full year of 2017, compared with a non-operating gain of $23 million in the same periods of 2016.
 
After adjusting for non-operating items, the underlying replacement cost profit before interest and tax for the fourth quarter and full year was $321 million and $836 million respectively, compared with $135 million and $567 million for the same periods in 2016.
 
Compared with the same periods in 2016, the results primarily reflected higher oil prices. The results for the fourth quarter and the full year also benefited from a $163-million gain representing the BP share of a voluntary out-of-court settlement between Sistema, Sistema-Invest and the Rosneft subsidiary, Bashneft. These positive effects were partially offset by adverse foreign exchange effects.
 
In September 2017 the extraordinary general meeting adopted a resolution to pay interim dividends for the first half of 2017 of 3.83 Russian roubles per ordinary share. In October BP received a dividend of $124 million after the deduction of withholding tax.
 
Key events
In October Rosneft completed the acquisition of a 30% stake for $1.1 billion in a concession agreement to develop the Zohr field in Egypt from the Italian company Eni. Eni retains a 60% stake and BP holds the remaining 10%.
 
In December Rosneft announced an agreement to develop subsoil resources within the Kharampurskoe and Festivalnoye licence areas in Yamalo-Nenets Autonomous Okrug in northern Russia jointly with BP. Rosneft will hold a majority stake of 51% and BP will hold a 49% stake. Completion of the deal is subject to regulatory approvals.
 
 
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
 
 
2017(a)
 
2017
 
2016
 
 
2017(a)
 
2016
 
Production (net of royalties) (BP share)
 
 
 
 
 
 
 
 
Liquids* (mb/d)
 
 
899
 
903
 
919
 
 
904
 
840
 
Natural gas (mmcf/d)
 
 
1,333
 
1,263
 
1,347
 
 
1,308
 
1,279
 
Total hydrocarbons* (mboe/d)
 
 
1,129
 
1,120
 
1,152
 
 
1,129
 
1,060
 
 
(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 full year ended 31 December 2017. Actual results may differ from these amounts.
 
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP’s 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BP’s purchase of its interest in Rosneft and the amortization of the deferred gain relating to the divestment of BP’s interest in TNK-BP. These adjustments have increased the reported profit before interest and tax for the fourth quarter and full year 2017, as shown in the table above, compared with the equivalent amount in Russian roubles that we expect Rosneft to report in its own financial statements under IFRS. BP’s share of Rosneft’s profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BP's share of Rosneft’s earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation.
 
 
Top of page 11
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Other businesses and corporate
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Profit (loss) before interest and tax
 
 
 
 
 
 
 
 
Gulf of Mexico oil spill
 
 
(2,221)
 
(84)
 
(674)
 
 
(2,687)
 
(6,640)
 
Other
 
 
(612)
 
(376)
 
(443)
 
 
(1,758)
 
(1,517)
 
Profit (loss) before interest and tax
 
 
(2,833)
 
(460)
 
(1,117)
 
 
(4,445)
 
(8,157)
 
Inventory holding (gains) losses*
 
 
 
 
 
 
 
 
RC profit (loss) before interest and tax
 
 
(2,833)
 
(460)
 
(1,117)
 
 
(4,445)
 
(8,157)
 
Net charge (credit) for non-operating items*
 
 
 
 
 
 
 
 
Gulf of Mexico oil spill
 
 
2,221
 
84
 
674
 
 
2,687
 
6,640
 
Other
 
 
218
 
(22)
 
19
 
 
160
 
279
 
Net charge (credit) for non-operating items
 
 
2,439
 
62
 
693
 
 
2,847
 
6,919
 
Underlying RC profit (loss) before interest and tax*
 
 
(394)
 
(398)
 
(424)
 
 
(1,598)
 
(1,238)
 
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(29)
 
(145)
 
50
 
 
(475)
 
(276)
 
Non-US
 
 
(365)
 
(253)
 
(474)
 
 
(1,123)
 
(962)
 
 
 
(394)
 
(398)
 
(424)
 
 
(1,598)
 
(1,238)
 
Non-operating items
 
 
 
 
 
 
 
 
US
 
 
(2,381)
 
(92)
 
(672)
 
 
(2,861)
 
(6,824)
 
Non-US
 
 
(58)
 
30
 
(21)
 
 
14
 
(95)
 
 
 
(2,439)
 
(62)
 
(693)
 
 
(2,847)
 
(6,919)
 
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
 
US
 
 
(2,410)
 
(237)
 
(622)
 
 
(3,336)
 
(7,100)
 
Non-US
 
 
(423)
 
(223)
 
(495)
 
 
(1,109)
 
(1,057)
 
 
 
(2,833)
 
(460)
 
(1,117)
 
 
(4,445)
 
(8,157)
 
 
Other businesses and corporate comprises our alternative energy business, shipping, treasury, corporate activities including centralized functions, and the costs of the Gulf of Mexico oil spill.
 
Financial results
The replacement cost loss before interest and tax for the fourth quarter and full year was $2,833 million and $4,445 million respectively, compared with $1,117 million and $8,157 million for the same periods in 2016.
 
The results included a net non-operating charge of $2,439 million for the fourth quarter and $2,847 million for the full year, mainly relating to the Gulf of Mexico oil spill, compared with a net non-operating charge of $693 million and $6,919 million for the same periods in 2016. See Note 2 on page 17 for more information on the Gulf of Mexico oil spill.
 
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the fourth quarter and full year was $394 million and $1,598 million respectively, compared with $424 million and $1,238 million for the same periods in 2016. The underlying charge for the full year was impacted by weaker business results, higher corporate costs and adverse foreign exchange effects which had a favourable effect in 2016.
 
Alternative energy
The net ethanol-equivalent production (which includes ethanol and sugar) for the fourth quarter and full year was 188 million litres and 776 million litres respectively, compared with 98 million litres and 733 million litres for the same periods in 2016.
 
Net wind generation capacity*(a) was 1,432MW at 31 December 2017 compared with 1,474MW at 31 December 2016. BP’s net share of wind generation for the fourth quarter and full year was 1,148GWh and 4,004GWh respectively, compared with 1,154GWh and 4,389GWh for the same periods in 2016.
 
(a)
Capacity figures for 2016 include 23MW in the Netherlands managed by our Downstream segment.
 
BP formed a strategic partnership with Lightsource, Europe’s largest developer of large-scale solar projects, with the aim of driving further growth of solar power development worldwide. Under the terms of the deal, which completed on 31 January 2018, BP acquired a 43% equity share in Lightsource for a total consideration of $200 million, payable over three years. The move will combine BP’s global scale, technology and trading capabilities with Lightsource’s expertise in solar development. The company will rebrand as Lightsource BP.
 
Outlook
In 2018, Other businesses and corporate average quarterly charges, excluding non-operating items, are expected to be around $350 million although this will fluctuate from quarter to quarter.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 34.
 
 
Top of page 12
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Financial statements
Group income statement
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Sales and other operating revenues (Note 4)
 
 
67,816
 
60,018
 
51,007
 
 
240,208
 
183,008
 
Earnings from joint ventures – after interest
 
 
 
 
 
 
 
 
  and tax
 
 
581
 
231
 
489
 
 
1,177
 
966
 
Earnings from associates – after interest and tax
 
 
526
 
282
 
263
 
 
1,330
 
994
 
Interest and other income
 
 
223
 
185
 
114
 
 
657
 
506
 
Gains on sale of businesses and fixed assets
 
 
876
 
92
 
248
 
 
1,210
 
1,132
 
Total revenues and other income
 
 
70,022
 
60,808
 
52,121
 
 
244,582
 
186,606
 
Purchases(a)
 
 
51,745
 
44,441
 
37,883
 
 
179,716
 
132,219
 
Production and manufacturing expenses(b)
 
 
7,759
 
5,454
 
6,595
 
 
24,229
 
29,077
 
Production and similar taxes (Note 5)(a)
 
 
511
 
449
 
199
 
 
1,775
 
683
 
Depreciation, depletion and amortization (Note 4)
 
 
4,045
 
3,904
 
3,642
 
 
15,584
 
14,505
 
Impairment and losses on sale of businesses
 
 
 
 
 
 
 
 
  and fixed assets
 
 
604
 
108
 
(305)
 
 
1,216
 
(1,664)
 
Exploration expense
 
 
521
 
297
 
314
 
 
2,080
 
1,721
 
Distribution and administration expenses
 
 
2,981
 
2,634
 
2,692
 
 
10,508
 
10,495
 
Profit (loss) before interest and taxation
 
 
1,856
 
3,521
 
1,101
 
 
9,474
 
(430)
 
Finance costs(b)
 
 
616
 
511
 
434
 
 
2,074
 
1,675
 
Net finance expense relating to pensions and
 
 
 
 
 
 
 
 
  other post-retirement benefits
 
 
58
 
55
 
50
 
 
220
 
190
 
Profit (loss) before taxation
 
 
1,182
 
2,955
 
617
 
 
7,180
 
(2,295)
 
Taxation(b)
 
 
1,119
 
1,198
 
74
 
 
3,712
 
(2,467)
 
Profit (loss) for the period
 
 
63
 
1,757
 
543
 
 
3,468
 
172
 
Attributable to
 
 
 
 
 
 
 
 
  BP shareholders
 
 
27
 
1,769
 
497
 
 
3,389
 
115
 
  Non-controlling interests
 
 
36
 
(12)
 
46
 
 
79
 
57
 
 
 
63
 
1,757
 
543
 
 
3,468
 
172
 
 
 
 
 
 
 
 
 
Earnings per share (Note 6)
 
 
 
 
 
 
 
 
Profit (loss) for the period attributable to
 
 
 
 
 
 
 
 
  BP shareholders
 
 
 
 
 
 
 
 
  Per ordinary share (cents)
 
 
 
 
 
 
 
 
    Basic
 
 
0.14
 
8.95
 
2.62
 
 
17.20
 
0.61
 
    Diluted
 
 
0.14
 
8.90
 
2.60
 
 
17.10
 
0.60
 
  Per ADS (dollars)
 
 
 
 
 
 
 
 
    Basic
 
 
0.01
 
0.54
 
0.16
 
 
1.03
 
0.04
 
    Diluted
 
 
0.01
 
0.53
 
0.16
 
 
1.03
 
0.04
 
 
(a)
 
Amounts reported in prior quarters of 2017 for Purchases and Production and similar taxes have been amended, with no effect on profit for the period. See Note 5 for further information.
 
(b)
 
See Note 2 for information on the impact of the Gulf of Mexico oil spill on these income statement line items.
 
 
 
Top of page 13
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Group statement of comprehensive income
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
 
63
 
1,757
 
543
 
 
3,468
 
172
 
Other comprehensive income
 
 
 
 
 
 
 
 
Items that may be reclassified subsequently to
 
 
 
 
 
 
 
 
  profit or loss
 
 
 
 
 
 
 
 
  Currency translation differences
 
 
264
 
611
 
(777)
 
 
1,986
 
254
 
  Exchange (gains) losses on translation of
 
 
 
 
 
 
 
 
    foreign operations reclassified to gain or loss
 
 
 
 
 
 
 
 
    on sale of businesses and fixed assets
 
 
(138)
 
13
 
24
 
 
(120)
 
30
 
  Available-for-sale investments
 
 
11
 
 
 
 
14
 
1
 
  Cash flow hedges marked to market
 
 
19
 
49
 
(204)
 
 
197
 
(639)
 
  Cash flow hedges reclassified to the income
 
 
 
 
 
 
 
 
    statement
 
 
23
 
20
 
86
 
 
116
 
196
 
  Cash flow hedges reclassified to the
 
 
 
 
 
 
 
 
    balance sheet
 
 
8
 
29
 
32
 
 
112
 
81
 
  Share of items relating to equity-accounted
 
 
 
 
 
 
 
 
    entities, net of tax
 
 
133
 
128
 
172
 
 
564
 
833
 
  Income tax relating to items that may
 
 
 
 
 
 
 
 
    be reclassified
 
 
(81)
 
(59)
 
97
 
 
(261)
 
13
 
 
 
239
 
791
 
(570)
 
 
2,608
 
769
 
Items that will not be reclassified to profit or loss
 
 
 
 
 
 
 
 
  Remeasurements of the net pension and other
 
 
 
 
 
 
 
 
    post-retirement benefit liability or asset
 
 
1,599
 
1,002
 
3,484
 
 
3,646
 
(2,496)
 
  Income tax relating to items that will not be
 
 
 
 
 
 
 
 
    reclassified
 
 
(539)
 
(351)
 
(765)
 
 
(1,238)
 
739
 
 
 
1,060
 
651
 
2,719
 
 
2,408
 
(1,757)
 
Other comprehensive income
 
 
1,299
 
1,442
 
2,149
 
 
5,016
 
(988)
 
Total comprehensive income
 
 
1,362
 
3,199
 
2,692
 
 
8,484
 
(816)
 
Attributable to
 
 
 
 
 
 
 
 
  BP shareholders
 
 
1,312
 
3,206
 
2,667
 
 
8,353
 
(846)
 
  Non-controlling interests
 
 
50
 
(7)
 
25
 
 
131
 
30
 
 
 
1,362
 
3,199
 
2,692
 
 
8,484
 
(816)
 
 
 
Top of page 14
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Group statement of changes in equity
 
 
BP
 
 
 
 
 
shareholders’
 
Non-controlling
 
Total
 
$ million
 
 
equity
 
interests
 
equity
 
 
 
 
 
 
At 1 January 2017
 
 
95,286
 
1,557
 
96,843
 
 
 
 
 
 
Total comprehensive income
 
 
8,353
 
131
 
8,484
 
Dividends
 
 
(6,153)
 
(141)
 
(6,294)
 
Repurchase of ordinary share capital
 
 
(343)
 
 
(343)
 
Share-based payments, net of tax
 
 
687
 
 
687
 
Share of equity-accounted entities’ change in equity, net of tax
 
 
215
 
 
215
 
Transactions involving non-controlling interests, net of tax
 
 
446
 
366
 
812
 
At 31 December 2017
 
 
98,491
 
1,913
 
100,404
 
 
 
 
 
 
 
 
BP
 
 
 
 
 
shareholders’
 
Non-controlling
 
Total
 
$ million
 
 
equity
 
interests
 
equity
 
 
 
 
 
 
At 1 January 2016
 
 
97,216
 
1,171
 
98,387
 
 
 
 
 
 
Total comprehensive income
 
 
(846)
 
30
 
(816)
 
Dividends
 
 
(4,611)
 
(107)
 
(4,718)
 
Share-based payments, net of tax
 
 
2,991
 
 
2,991
 
Share of equity-accounted entities’ change in equity, net of tax
 
 
106
 
 
106
 
Transactions involving non-controlling interests, net of tax
 
 
430
 
463
 
893
 
At 31 December 2016
 
 
95,286
 
1,557
 
96,843
 
 
 
Top of page 15
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Group balance sheet
 
 
31 December
 
31 December
 
$ million
 
 
2017
 
2016
 
Non-current assets
 
 
 
 
Property, plant and equipment
 
 
129,471
 
129,757
 
Goodwill
 
 
11,551
 
11,194
 
Intangible assets
 
 
18,355
 
18,183
 
Investments in joint ventures
 
 
7,994
 
8,609
 
Investments in associates
 
 
16,991
 
14,092
 
Other investments
 
 
1,245
 
1,033
 
Fixed assets
 
 
185,607
 
182,868
 
Loans
 
 
646
 
532
 
Trade and other receivables
 
 
1,434
 
1,474
 
Derivative financial instruments
 
 
4,110
 
4,359
 
Prepayments
 
 
1,112
 
945
 
Deferred tax assets
 
 
4,469
 
4,741
 
Defined benefit pension plan surpluses
 
 
4,169
 
584
 
 
 
201,547
 
195,503
 
Current assets
 
 
 
 
Loans
 
 
190
 
259
 
Inventories
 
 
19,011
 
17,655
 
Trade and other receivables
 
 
24,849
 
20,675
 
Derivative financial instruments
 
 
3,032
 
3,016
 
Prepayments
 
 
1,414
 
1,486
 
Current tax receivable
 
 
761
 
1,194
 
Other investments
 
 
125
 
44
 
Cash and cash equivalents
 
 
25,586
 
23,484
 
 
 
74,968
 
67,813
 
Total assets
 
 
276,515
 
263,316
 
Current liabilities
 
 
 
 
Trade and other payables
 
 
44,209
 
37,915
 
Derivative financial instruments
 
 
2,808
 
2,991
 
Accruals
 
 
4,960
 
5,136
 
Finance debt
 
 
7,739
 
6,634
 
Current tax payable
 
 
1,686
 
1,666
 
Provisions
 
 
3,324
 
4,012
 
 
 
64,726
 
58,354
 
Non-current liabilities
 
 
 
 
Other payables
 
 
13,889
 
13,946
 
Derivative financial instruments
 
 
3,761
 
5,513
 
Accruals
 
 
505
 
469
 
Finance debt
 
 
55,491
 
51,666
 
Deferred tax liabilities
 
 
7,982
 
7,238
 
Provisions
 
 
20,620
 
20,412
 
Defined benefit pension plan and other post-retirement benefit plan deficits
 
 
9,137
 
8,875
 
 
 
111,385
 
108,119
 
Total liabilities
 
 
176,111
 
166,473
 
Net assets
 
 
100,404
 
96,843
 
Equity
 
 
 
 
BP shareholders’ equity
 
 
98,491
 
95,286
 
Non-controlling interests
 
 
1,913
 
1,557
 
Total equity
 
 
100,404
 
96,843
 
 
 
Top of page 16
 
BP p.l.c. Group results
Fourth quarter and full year 2017
 
 
 
Condensed group cash flow statement
 
 
Fourth
 
Third
 
Fourth
 
 
 
 
 
 
quarter
 
quarter
 
quarter
 
 
Year
 
Year
 
$ million
 
 
2017
 
2017
 
2016
 
 
2017
 
2016
 
Operating activities
 
 
 
 
 
 
 
 
Profit (loss) before taxation
 
 
1,182
 
2,955
 
617
 
 
7,180
 
(2,295)
 
Adjustments to reconcile profit (loss) before taxation
 
 
 
 
 
 
 
 
  taxation to net cash provided by operating
 
 
 
 
 
 
 
 
  activities
 
 
 
 
 
 
 
 
  Depreciation, depletion and amortization and
 
 
 
 
 
 
 
 
    exploration expenditure written off
 
 
4,417
 
4,121
 
3,808
 
 
17,187
 
15,779
 
  Impairment and (gain) loss on sale of
 
 
 
 
 
 
 
 
    businesses and fixed assets
 
 
(272)
 
16
 
(553)
 
 
6
 
(2,796)
 
  Earnings from equity-accounted entities,
 
 
 
 
 
 
 
 
    less dividends received
 
 
(820)
 
(111)
 
(605)
 
 
(1,254)
 
(855)
 
  Net charge for interest and other finance
 
 
 
 
 
 
 
 
    expense, less net interest paid
 
 
294
 
163
 
310
 
 
793
 
795
 
  Share-based payments
 
 
166
 
177
 
150
 
 
661
 
779
 
  Net operating charge for pensions and other
 
 
 
 
 
 
 
 
    post-retirement benefits, less contributions
 
 
 
 
 
 
 
 
    and benefit payments for unfunded plans
 
 
(215)
 
(160)
 
(347)
 
 
(394)
 
(467)