4Q06 Part 1 of 2
BP PLC
06 February 2007
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2006
Unaudited
London 6 February 2007
FOR IMMEDIATE RELEASE
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005 %
=========================== ============================
3,685 6,231 2,880 Profit for the period* 22,000 22,341
747 744 1,015 Inventory holding (gains) losses 253 (3,027)
--------------------------- ----------------------------
4,432 6,975 3,895 Replacement cost profit 22,253 19,314 15
=========================== ============================
12.15 18.76 10.37 - per ordinary share (pence) 60.38 50.23
21.34 35.08 20.08 - per ordinary share (cents) 111.10 91.41 22
1.28 2.10 1.21 - per ADS (dollars) 6.67 5.48
=========================== ============================
• BP's fourth quarter replacement cost profit was $3,895 million,
compared with $4,432 million a year ago, a decrease of 12%. For the year,
replacement cost profit was $22,253 million compared with $19,314 million,
up 15%.
• The fourth quarter result included a net non-operating charge of $152
million compared with a net non-operating charge of $553 million in the
fourth quarter of 2005. For the year, the net non-operating gain was
$1,062 million compared with a net non-operating charge of $1,754 million
for 2005.
• Compared with a year ago, the fourth quarter trading environment
reflected higher oil realizations, lower refining and retail marketing
margins and lower gas realizations.
• Net cash provided by operating activities for the quarter and year was
$5.0 billion and $28.2 billion, respectively, compared with $4.2 billion and
$26.7 billion a year ago.
• The ratio of net debt to net debt plus equity was 20%.
• The quarterly dividend, to be paid in March, is 10.325 cents per share
($0.6195 per ADS) compared with 9.375 cents per share a year ago. For the
year, the dividend showed an increase of 10%. In sterling terms, the
quarterly dividend is 5.258 pence per share, compared with 5.288 pence per
share a year ago; for the year the increase was 6%. During the year, the
company repurchased 1,334 million of its own shares, representing 6.5% of
the end 2005 outstanding shares net of treasury shares, at a cost of $15.5
billion.
BP Group Chief Executive, Lord Browne, said:
'The fourth quarter result reflects the recent declines in the overall price and
margin environment, as well as operational factors and increased safety and
integrity investments. Our record full year replacement cost profit and
operating cash flow supported the group's capital programme and increased
dividends and share buybacks. We remain committed to addressing the recent
operational issues while executing our strategy with discipline and focus.'
* Profit attributable to BP shareholders.
Summary Quarterly Results
-------------------------
Exploration and Production's fourth quarter result was impacted by significantly
lower gas prices and realizations and lower reported volumes, partly offset by
higher liquids realizations. In addition, it included higher costs, reflecting
the impacts of sector specific inflation and increased integrity and revenue
investment. Furthermore, BP's share of income from equity-accounted entities was
negatively affected by lower net income from TNK-BP, reflecting the adverse
effect of lagged tax reference prices and the absence of the gain on sale of
assets that occurred in the fourth quarter of 2005.
The Refining and Marketing result reflects a number of improvements on a year
ago. These result from the progressive recommissioning of the Texas City
refinery following the storm-related shutdown, together with the absence of
storm-related disruptions to our pipelines and marketing businesses, the absence
of rationalization costs and a lower adverse impact from IFRS fair value
accounting. Additionally, the result reflects lower refining margins partially
offset by stronger supply optimization benefits, and lower overall marketing
margins.
In Gas, Power and Renewables the higher result reflects non-operating gains
compared with a net non-operating charge in the same period last year, partly
offset by lower contributions from the gas marketing and trading and NGL
businesses and a lower benefit related to IFRS fair value accounting.
Finance costs and Other finance expense was $149 million for the quarter.
The consolidation adjustment, which removes the margin on sales between segments
in respect of inventory at the period end, was a charge of $103 million.
The effective tax rate on replacement cost profit of continuing operations was
25% versus 32% a year earlier reflecting the impact of a number of favorable
items in the fourth quarter and the effect of year end prices on inventory
holding gains and losses.
Capital expenditure and acquisitions was $5.4 billion for the quarter. Disposal
proceeds were $0.8 billion.
Net debt at the end of the quarter was $21.4 billion. The ratio of net debt to
net debt plus equity was 20%.
During the fourth quarter, the company repurchased 310 million of its own shares
for cancellation, at a cost of $3.5 billion.
The commentaries above and following are based on replacement cost profit.
The financial information for 2005 has been restated to reflect the following,
all with effect from 1 January 2006: (a) the transfer of three equity-accounted
entities from Other businesses and corporate to Refining and Marketing following
the sale of Innovene; (b) the transfer of certain mid-stream assets and
activities from Refining and Marketing and Exploration and Production to Gas,
Power and Renewables; (c) the transfer of Hydrogen for Transport activities from
Gas, Power and Renewables to Refining and Marketing; and (d) the change in the
basis of accounting for over-the-counter forward sale and purchase contracts for
oil, natural gas, NGLs and power. See Note 2 for further details.
Non-operating Items
-------------------
Fourth
$ million Quarter
2006
=========
Exploration and Production (177)
Refining and Marketing (53)
Gas, Power and Renewables 215
Other businesses and corporate (188)
----------
(203)
Taxation 51
----------
Continuing Operations (152)
Innovene Operations -
Taxation - -
-------- ---------
Total for all operations (152)
=========
Reconciliation of Replacement Cost Profit to Profit for the Period
------------------------------------------------------------------
Fourth Third Fouth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================= =================
6,566 9,935 5,063 Exploration and Production 29,647 25,485
(165) 1,503 312 Refining and Marketing 5,283 4,394
129 152 470 Gas, Power and Renewables 1,376 1,077
(409) (261) (276) Other businesses and corporate (947) (1,237)
Consolidation adjustments
234 440 (103) Unrealized profit in inventory 52 (208)
Net profit on transactions between continuing
128 - - and Innovene operations (a) - 527
--------------------------------- -----------------
6,483 11,769 5,466 RC profit before interest and tax 35,411 30,038
--------------------------------- -----------------
(215) (117) (149) Finance costs and other finance expense (516) (761)
(2,029) (4,614) (1,347) Taxation (12,331) (9,473)
(93) (63) (75) Minority interest (286) (291)
--------------------------------- -----------------
RC profit from continuing operations
4,146 6,975 3,895 attributable to BP shareholders (b) 22,278 19,513
================================= =================
Inventory holding gains (losses) for
(903) (744) (1,015) continuing operations (253) 2,644
--------------------------------- -----------------
Profit for the period from continuing
3,243 6,231 2,880 operations attributable to BP shareholders 22,025 22,157
Profit (loss) for the period from Innovene
442 - - Operations (c) (25) 184
--------------------------------- -----------------
Profit for the period attributable to
3,685 6,231 2,880 BP shareholders 22,000 22,341
================================= =================
RC profit from continuing operations
attributable
4,146 6,975 3,895 to BP shareholders 22,278 19,513
286 - - RC profit (loss) from Innovene operations (25) (199)
--------------------------------- -----------------
4,432 6,975 3,895 Replacement cost profit 22,253 19,314
================================= =================
(a) In the circumstances of discontinued operations, Accounting Standards
require that the profits earned by the discontinued operations, in this case the
Innovene operations, on sales to the continuing operations be eliminated on
consolidation from the discontinued operations, and attributed to the continuing
operations and vice versa. This adjustment has two offsetting elements: the net
margin on crude refined by Innovene as substantially all crude for their
refineries was supplied by BP and most of the refined products manufactured were
taken by BP; and the margin on sales of feedstock from BP's US refineries to
Innovene's manufacturing plants. The profits attributable to individual
segments were not affected by this adjustment. Neither does this representation
indicate the profits earned by continuing or Innovene operations, as if they
were stand-alone entities, for past periods or likely to be earned in future
periods.
(b) Replacement cost profit reflects the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from profit
inventory holding gains and losses. BP uses this measure to assist investors to
assess BP's performance from period to period. Replacement cost profit is not a
recognized GAAP measure. Operating cash flow is calculated from the starting
point of profit before taxation which includes inventory holding gains and
losses. Operating cash flow also reflects working capital movements including
inventories, trade and other receivables and trade and other payables. The
carrying value of these working capital items will change for various reasons,
including movements in oil, gas and products prices.
(c) See further detail in Note 3.
Per Share Amounts
-----------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
===================================== ======================
Results for the period ($m)
3,685 6,231 2,880 Profit (a) 22,000 22,341
4,432 6,975 3,895 Replacement cost profit 22,253 19,314
------------------------------------- ------------------------
Shares in issue at period end
20,657,045 19,815,830 19,510,496 (thousand) (b) 19,510,496 20,657,045
3,442,841 3,302,638 3,251,749 - ADS equivalent (thousand) (b) 3,251,749 3,442,841
Average number of shares outstanding
20,792,896 19,818,106 19,610,871 (thousand) (b) 20,027,527 21,125,902
3,465,483 3,303,018 3,268,479 - ADS equivalent (thousand) (b) 3,337,921 3,520,984
Per ordinary share (cents)
17.90 31.46 15.04 Profit for the period 109.84 105.74
21.34 35.08 20.08 RC profit for the period 111.10 91.41
Per ADS (cents)
107.40 188.76 90.24 Profit for the period 659.04 634.44
128.04 210.48 120.48 RC profit for the period 666.60 548.46
------------------------------------- ------------------------
(a) Profit attributable to BP shareholders.
(b) Excludes treasury shares.
Exploration and Production
--------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================ ===================
6,574 9,929 5,057 Profit before interest and tax (a) 29,629 25,502
(8) 6 6 Inventory holding (gains) losses 18 (17)
-------------------------------- -------------------
Replacement cost profit before interest
6,566 9,935 5,063 and tax 29,647 25,485
================================ ===================
Results include:
Impairment and gain (loss) on sale of
62 1,962 16 businesses and fixed assets 2,317 893
- (17) - Environmental and other provisions (17) -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
(801) 521 240 derivatives 515 (1,688)
(240) - (433) Other (433) (203)
-------------------------------- -------------------
(979) 2,466 (177) Total non-operating items 2,382 (998)
================================ ===================
208 351 408 Exploration expense 1,045 684
Of which:
81 232 265 Exploration expenditure written off 624 305
================================ ===================
Production (Net of royalties) (b)
2,400 2,250 2,249 Crude oil (mb/d) 2,303 2,389
164 172 167 Natural gas liquids (mb/d) 172 173
2,564 2,422 2,416 Total liquids (mb/d) (c) 2,475 2,562
8,458 8,086 8,256 Natural gas (mmcf/d) 8,417 8,424
4,022 3,816 3,840 Total hydrocarbons (mboe/d) (d) 3,926 4,014
================================ ===================
Average realizations(e)
53.92 67.22 56.38 Crude oil ($/bbl) 61.91 50.27
39.29 40.08 35.21 Natural gas liquids ($/bbl) 37.17 33.23
52.44 64.15 54.13 Total liquids ($/bbl) 59.23 48.51
6.24 4.49 4.38 Natural gas ($/mcf) 4.72 4.90
44.56 45.47 40.13 Total hydrocarbons ($/boe) 43.60 38.86
================================ ===================
Average oil marker prices ($/bbl)
56.87 69.60 59.60 Brent 65.14 54.48
60.01 70.44 59.90 West Texas Intermediate 66.02 56.58
57.89 69.02 55.47 Alaska North Slope US West Coast 63.57 53.55
================================ ===================
Average natural gas marker prices
13.00 6.58 6.56 Henry Hub gas price ($/mmbtu) (f) 7.24 8.65
65.30 33.72 29.92 UK Gas - National Balancing Point (p/therm) 42.19 40.71
================================ ===================
(a) Profit from continuing operations and includes profit after interest and
tax of equity-accounted entities.
(b) Includes BP's share of production of equity-accounted entities.
(c) Crude oil and natural gas liquids.
(d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1
million barrels.
(e) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(f) Henry Hub First of the Month Index.
Exploration and Production
--------------------------
The replacement cost profit before interest and tax for the fourth quarter was
$5,063 million, a decrease of 23% over the fourth quarter of 2005. This result
was impacted by significantly lower gas prices and realizations and lower
reported volumes, partly offset by higher liquids realizations. In addition, it
included higher costs, reflecting the impacts of sector specific inflation and
increased integrity and revenue investment. Furthermore, BP's share of income
from equity-accounted entities was negatively affected by lower net income from
TNK-BP, reflecting the adverse effect of lagged tax reference prices and the
absence of the gain on sale of assets that occurred in the fourth quarter of
2005. Net non-operating charges for the fourth quarter were $177 million, with
the most significant items being fair value gains on embedded derivatives
relating to North Sea gas contracts, the reversal of impairments, increases in
decommissioning estimates associated with the hurricane damaged fields in the
Gulf of Mexico which we divested during the year and other one off adjustments,
primarily legal provisions. The corresponding quarter in 2005 contained a net
non-operating charge of $979 million.
The replacement cost profit before interest and tax of $29,647 million for the
full year represented a record and is an increase of 16% on the previous year.
This result benefited from higher oil realizations partially offset by lower
reported volumes and lower gas realizations, higher production taxes and higher
costs reflecting the impacts of sector specific inflation and increased
integrity spend and revenue investments. The full year result included a net
non-operating gain of $2,382 million compared with a net non-operating charge of
$998 million in 2005.
After adjusting for the impact of divestments and the impact of lower
entitlement in our production sharing agreements, production was flat compared
with the fourth quarter of 2005. Actual production was down 182 mboe/d.
Production for the full year, on this adjusted basis, was also flat compared
with the prior year. Underlying production growth from major projects in the
new profit centres offset decline in existing profit centres. Actual production
was down 88 mboe/d from 2005.
During the quarter, in Azerbaijan, the East Azeri oil platform commenced
production. Additionally, in Angola, the Dalia field, which is our second hub
in block 17, started production.
Also during the quarter, we had further exploration success in Angola with the
Terra oil discovery in ultra-deepwater Block 31, bringing the number of
successful discoveries that BP has drilled in the Block to twelve.
We have decided to move solely to the SEC basis for reserve reporting to
simplify disclosures and allow for easier comparison to competitors. BP's proved
reserves replacement ratio, using reserves calculated in accordance with SEC
guidance, was 113% on a combined basis of subsidiaries and equity-accounted
entities, excluding acquisitions and disposals.
Since the end of the year, we have signed a production sharing agreement to
appraise and develop the Khazzan/Makarem fields in Oman.
Refining and Marketing
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================ ===================
(1,073) 717 (706) Profit (loss) before interest and tax (a) 5,041 6,926
908 786 1,018 Inventory holding (gains) losses 242 (2,532)
-------------------------------- -------------------
Replacement cost profit (loss) before
(165) 1,503 312 interest and tax 5,283 4,394
================================ ===================
Results include:
Impairment and gain (loss) on sale of
50 2 51 businesses and fixed assets 729 84
- (33) - Environmental and other provisions (33) (140)
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
- - - derivatives - -
- (400) (104) Other (1,080) (733)
-------------------------------- -------------------
50 (431) (53) Total non-operating items (384) (789)
================================ ===================
Refinery throughputs (mb/d)
144 200 188 UK 165 180
664 622 660 Rest of Europe 648 667
942 1,213 1,052 USA 1,110 1,255
288 252 294 Rest of World 275 297
-------------------------------- -------------------
2,038 2,287 2,194 Total throughput 2,198 2,399
================================ ==================
90.9 82.2 81.6 Refining availability (%)(b) 82.5 92.9
================================ ===================
Oil sales volumes (mb/d)
Refined products
358 370 354 UK 356 355
1,343 1,367 1,368 Rest of Europe 1,340 1,354
1,559 1,609 1,541 USA 1,595 1,634
573 578 601 Rest of World 581 599
-------------------------------- -------------------
3,833 3,924 3,864 Total marketing sales 3,872 3,942
1,448 1,911 1,920 Trading/supply sales 1,929 1,946
-------------------------------- -------------------
5,281 5,835 5,784 Total refined product sales 5,801 5,888
2,434 1,913 1,959 Crude oil 2,110 2,464
-------------------------------- -------------------
7,715 7,748 7,743 Total oil sales 7,911 8,352
================================ ===================
Global Indicator Refining Margin ($/bbl) (c)
5.51 4.54 2.49 NWE 3.92 5.47
11.64 11.47 7.92 USGC 12.00 11.40
7.91 11.50 5.42 Midwest 9.14 8.19
8.90 12.30 14.59 USWC 14.84 13.49
4.42 3.58 2.95 Singapore 4.22 5.56
7.60 8.40 6.30 BP Average 8.39 8.60
================================ ===================
Chemicals production (kte)
281 230 159 UK 990 1,199
811 776 797 Rest of Europe 3,156 3,123
676 883 976 USA 3,464 3,891
1,638 1,682 1,357 Rest of World 6,454 5,863
-------------------------------- -------------------
3,406 3,571 3,289 Total production 14,064 14,076
================================ ===================
(a) Profit from continuing operations and includes profit after interest and
tax of equity-accounted entities.
(b) Refining availability is defined as the ratio of units which are available
for processing, regardless of whether they are actually being used, to
total capacity. Where there is planned maintenance, such capacity is not
regarded as being available. During the year 2006, there was planned
maintenance of a substantial part of the Texas City refinery.
(c) The Global Indicator Refining Margin (GIM) is the average of regional
indicator margins weighted for BP's crude refining capacity in each
region. Each regional indicator margin is based on a single representative
crude with product yields characteristic of the typical level of upgrading
complexity. The regional indicator margins may not be representative of
the margins achieved by BP in any period because of BP's particular
refinery configurations and crude and product slate.
Refining and Marketing
----------------------
The replacement cost profit before interest and tax for the fourth quarter and
full year was $312 million and $5,283 million, respectively. This compares with
a replacement cost loss before interest and tax of $165 million for the fourth
quarter of 2005 and a replacement cost profit before interest and tax of $4,394
million for the full year 2005.
The fourth quarter's result included a net non-operating charge of $53 million,
reflecting a net gain of $51 million in respect of impairment and disposals and
a charge of $104 million for other items. This compares with a net
non-operating gain of $50 million in the fourth quarter of 2005. The full year's
result included a charge of $384 million for non-operating items compared with a
charge of $789 million in 2005. Included in the 2006 charge is $925 million in
respect of fatality and personal injury claims associated with the Texas City
incident in March 2005, partially offset by net gains on disposals.
The fourth quarter's result reflects a number of improvements on a year ago.
Firstly, the progressive recommissioning of the Texas City refinery following
the storm-related shutdown, together with the absence of storm-related
disruptions to our pipelines and marketing businesses, relative to the fourth
quarter of 2005, resulted in an improvement in replacement cost profit before
interest and tax of around $250 million. For the full year, the Texas City
refinery recorded a loss of $1.1 billion (excluding non-operating items).
Secondly, the result reflects the absence of rationalization costs of $467
million that were incurred in the fourth quarter of 2005. Thirdly, the adverse
impact relating to IFRS fair value accounting was lower compared with the fourth
quarter of 2005. The last two factors also contributed to the improvement in the
full year 2006 result compared with 2005.
The average refining Global Indicator Margin (GIM) for the fourth quarter was
lower than that in the fourth quarter of 2005. BP's actual refining margin also
fell but was partially offset by stronger supply optimization benefits during
the quarter. For the full year, the GIM was lower with supply optimization
benefits more than offsetting the decline in refining margins.
Retail marketing margins for the fourth quarter were materially lower than those
for the same period last year, partially offset by an improvement in the margins
from the other marketing businesses. For the full year, retail margins improved
versus 2005, partially negated by deterioration in other marketing margins.
Refining throughputs were 2,194 mb/d for the quarter, some 156 mb/d higher than
the fourth quarter of 2005. For the full year, throughputs were 2,198 mb/d, 201
mb/d lower than 2005. Refining availability for the quarter and full year,
excluding the Texas City refinery, was 94.8% and 95.7% respectively, broadly
consistent with 2005. Marketing volumes were 3,864 mb/d, slightly higher than
the same quarter last year.
The efficiency programmes delivered lower operating costs in the marketing
businesses, both in the fourth quarter and full year compared with 2005, offset
by the costs of higher planned refinery turnaround activities and investments in
integrity management.
On 1 February 2007, BP announced that it has agreed to sell its Coryton Refinery
in Essex, UK, to Petroplus Holdings AG, subject to required regulatory
approvals. The sale includes the adjacent bulk terminal and BP's UK bitumen
business which is closely integrated with the refinery. Completion of the sale
is expected mid 2007.
Gas, Power and Renewables
-------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
============================= ==================
126 152 468 Profit before interest and tax (a) 1,321 1,172
3 - 2 Inventory holding (gains) losses 55 (95)
----------------------------- ------------------
Replacement cost profit before
129 152 470 interest and tax 1,376 1,077
============================= ==================
Results include:
Impairment and gain (loss) on sale of
(26) (65) 159 businesses and fixed assets 93 55
- - - Environmental and other provisions - 6
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
(546) (20) 56 derivatives 88 (346)
265 - - Other - 265
----------------------------- ------------------
(307) (85) 215 Total non-operating items 181 (20)
============================= ==================
(a) Profit from continuing operations and includes profit after interest and
tax of equity-accounted entities.
The replacement cost profit before interest and tax for the fourth quarter and
full year was $470 million and $1,376 million respectively, compared with $129
million and $1,077 million a year ago. Non-operating items for the fourth
quarter included fair value gains on embedded derivatives of $56 million, a
charge of $30 million for the impairment of a North American NGL asset and a
$189 million net gain on disposal. The corresponding quarter of 2005 included a
net charge for non-operating items of $307 million, largely comprising fair
value losses of $546 million on embedded derivatives and $265 million
compensation received on cancellation of an intra-group gas supply contract.
The fourth quarter result was significantly higher than the same period in 2005
primarily due to the change in non-operating items described above, partly
offset by lower contributions from the gas marketing and trading and NGL
businesses and a lower benefit related to IFRS fair value accounting. The full
year result was higher than in 2005 reflecting a net gain from non-operating
items compared with a charge last year and higher contributions from the
operating businesses, partly offset by higher IFRS fair value accounting
charges.
In December 2006, BP acquired Orion Energy LLC, a leading US wind energy
developer which has a portfolio of projects under development with potential
power generation capacity of more than 6 gigawatts.
Other Businesses and Corporate
------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
=========================== =================
(409) (213) (265) Profit (loss) before interest and tax (a) (885) (1,237)
- (48) (11) Inventory holding (gains) losses (62) -
--------------------------- -----------------
Replacement cost profit (loss) before
(409) (261) (276) interest and tax (947) (1,237)
=========================== =================
Results include:
Impairment and gain (loss) on sale of
- (10) 14 businesses and fixed assets 26 38
(4) 96 (2) Environmental and other provisions 94 (278)
Restructuring, integration and
(57) - - rationalization costs - (134)
Fair value gain (loss) on embedded
(3) (8) - derivatives 5 (13)
- - (200) Other (200) 3
--------------------------- -----------------
(64) 78 (188) Total non-operating items (75) (384)
=========================== =================
(a) Profit from continuing operations and includes profit after interest and
tax of equity-accounted entities.
Other businesses and corporate comprises Finance, the group's aluminium asset,
interest income and costs relating to corporate activities. The fourth
quarter's result included a net charge of $188 million in respect of
non-operating items, primarily relating to a reassessment of certain provisions.
Dividends Payable
-----------------
March December March June, September
2006 2006 2007 December and March
2006/07 2005/06
=================================== =====================
Dividends per ordinary share
9.375 9.825 10.325 Cents 39.35 35.725
5.288 5.241 5.258 Pence 21.074 19.918
56.25 58.95 61.95 Dividends per ADS (cents) 236.10 214.35
----------------------------------- ---------------------
BP today announced a dividend of 10.325 cents per ordinary share to be paid in
March. Holders of ordinary shares will receive 5.258 pence per share and
holders of American Depository Receipts (ADRs) $0.6195 per ADS share. The
dividend is payable on 12 March to shareholders on the register on 23 February.
Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP facility in
the US Direct Access Plan will receive the dividend in the form of shares, also
on 12 March.
Outlook
---------
BP Group Chief Executive, Lord Browne, concluded:
'World economic growth has been sustained. US economic growth appears to have
been resilient in the fourth quarter, and growth in Europe and Asia has been
sustained. The near-term global outlook is for continued growth at close to
current rates.
'Crude oil prices averaged $59.60 per barrel (Dated Brent) in the fourth quarter
of 2006, $10 per barrel below the third quarter level but slightly above the
same period last year. For the year, Dated Brent averaged $65.14 per barrel, a
record in money-of-the-day terms and more than $10 per barrel above the 2005
average. Prices in the fourth quarter drifted higher after OPEC announced
production cuts in late October, but retreated in late December in face of
demand weakness and rising non-OPEC supply. Prices have declined further this
year. Further OPEC production cuts have been announced.
'US natural gas prices averaged $6.56/mmbtu (Henry Hub first of month index) in
the fourth quarter, nearly identical to the third quarter average but half the
very high levels seen in the fourth quarter of 2005. Gas continued to trade
near parity with residual fuel oil heading into the peak winter demand months.
Gas in storage at year-end was 14% above the five year average in face of
unusually warm weather. Prices may find temporary support for the remainder of
the winter but high inventories are expected to continue to weigh on prices.
'UK gas prices (NBP day-ahead) in the fourth quarter averaged 29.92 pence per
therm, 11% below the third quarter and less than half the level of a year ago.
New infrastructure projects, high inventories and above-average temperatures
contributed to the decline. These factors have eased concerns over winter
supply availability, although the risk of temporary price spikes due to
late-winter cold spells persists.
'The global average indicator refining margin fell to $6.30/bbl in the fourth
quarter, down just over $2/bbl versus the third quarter and more than $1/bbl
below the fourth quarter last year. Margins recovered well from mid-September
lows despite a light US hurricane season and an extremely warm start to winter.
So far in the first quarter, margins have averaged around $6/bbl, with the
near-term outlook dependant on the weather and a relatively heavy US refinery
turnaround programme.
'Retail Margins fell in October and November due to the increasing cost of
product, before stabilising in December. Average retail margins therefore
deteriorated in the fourth quarter relative to the third. The outlook for retail
margins is expected to remain uncertain.
'Our strategy is unchanged. We continue to execute it with discipline and focus.
Capital expenditure excluding acquisitions for the year was about $16.9 billion,
in line with the guidance given with our third quarter results, including $1
billion in respect of our investment in Rosneft, and is expected to be around
$18 billion in 2007. Production in 2007 is expected to be in the range of 3.8 to
3.9 mmboe/d.
'On the basis of a price assumption of $60 per barrel and our current portfolio,
we expect production of more than 4.0 million barrels of oil equivalent per day
by 2009, and more than 4.3 million barrels of oil equivalent per day by 2012.'
Cautionary Statement: The foregoing discussion, in particular the statements
under 'Outlook', contains forward looking statements particularly those
regarding world economic growth; oil and gas prices; refining margins; marketing
margins; production; capital expenditure; and divestment proceeds. By their
nature, forward looking statements involve risks and uncertainties and actual
results may differ from those expressed in such statements depending on a
variety of factors including the following: the timing of bringing new fields on
stream; industry product supply; OPEC policy decisions; demand and pricing;
currency exchange rates; operational problems; general economic conditions
including inflationary pressures; political stability; economic growth and
outlook in relevant areas of the world; changes in governmental regulations;
exchange rate fluctuations; development and use of new technology; the actions
of competitors; natural disasters and other changes in business conditions;
prolonged adverse weather conditions; wars and acts of terrorism or sabotage;
and other factors discussed in this Announcement. For more information you
should refer to our Annual Report and Accounts 2005 and our 2005 Annual Report
on Form 20-F/A filed with the US Securities and Exchange Commission.
This information is provided by RNS
The company news service from the London Stock Exchange
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