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2011 RESULTS AND STRATEGY PRESENTATION – BP Plc

BP Plc · Feb 7, 2012 · 67 slides

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Slides

  1. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 1
    SECRET 2011 Results and Strategy Presentation 2011 Results and 7 February 2012 Strategy Presentation 7 February 2012 1
  2. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 2
    Bob Dudley Group Chief Executive Playing to our strengths 3
  3. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 3
    Moving BP forward Playing to our strengths Bob Dudley 4Q 2011 results Brian Gilvary Progress in the US Bob Dudley Upstream TNK-BP Alternative Energy Refining and Marketing Iain Conn Summary Bob Dudley Break-outs Upstream -…
  4. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 4
    2011: A year of consolidation Safety Trust Value Growth Safety Safety and Operational Risk organisation in action Upstream re-organized to strengthen consistency and capability Trust Meeting our commitments in the Gulf of Mexico…
  5. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 5
    Key global energy trends to 2030 Continued strong growth in demand Energy contributions to global growth Concentrated in non-OECD 2.5 Oil, gas and coal expected to deliver 80% of needs by 2030 and to have similar shares of global…
  6. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 6
    Environment Brent oil /bbl(1) Natural gas /mmbtu(1) Refining Marker Margin /bbl(2) 160 28 30 Henry Hub 140 24 Japan/Korea marker 25 120 20 20 100 16 80 15 12 60 10 8 40 4 5 20 0 0 0 2005 2006 2007 2008 2009 2010 2011…
  7. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 7
    Moving BP Forward 10 - point plan What you can expect What you can measure 1. Relentless focus on safety and managing 6. Active portfolio management to continue risk 7. New upstream projects onstream with unit 2. Play to our…
  8. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 8
    Playing to our strengths Leading explorer Distinctive upstream portfolio focussed in three growth engines Deepwater Gas value chains Giant fields World class downstream Technology development Strong relationships 9
  9. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 9
    Growing value Building momentum 2012: Year of milestones 2013 / 2014: Financial momentum 12 exploration wells 15-25 exploration wells per annum Start-up of 6 upstream major projects Start-up of 9 upstream major projects 8 rigs…
  10. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 10
    Growing value 2013-14: financial momentum Around 50% growth in operating cash flow by 2014 at 100/bbl(1) Key enablers: Restoration of high value production Growth from new projects Whiting refinery upgrade coming onstream Completion…
  11. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 11
    Safety performance record 700 Loss of Primary Containment Incidents 600 500 400 14% reduction in number of Losses of 300 Primary Containment Incidents from 2010 200 to 2011 100 0 2008 2009 2010 2011 2.0 Recordable Injury Frequency 1.8…
  12. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 12
    Safety and operational risk strategic priorities Leadership & culture Operating culture supports safe, compliant and reliable operations Organization, competence & contractors Growing deep capability and managing contractor…
  13. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 13
    Technology Ensuring safe, reliable operations is our top priority Focused at the point of competition Leveraged investment through partnerships 16 major technology programmes Resource extraction Conversion Consumption Alternatives…
  14. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 14
    People and organization New organizational structures Building technical and leadership capability Over 3,000 new technical staff recruited Strengthened common BP values Restated values and expected behaviours Stronger linkage…
  15. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 15
    Brian Gilvary Chief Financial Officer 16
  16. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 16
    4Q 2011 Summary Earnings figures are adjusted for the costs associated with the Gulf of Mexico oil spill, other non-operating items and fair value accounting effects bn 4Q10 3Q11 4Q11 % yoy Exploration & Production 6.7 7.2 6.9…
  17. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 17
    Exploration & Production Underlying replacement cost Realizations(1) Volume profit before interest and tax(2) 120 20 1,600 10 1,400 100 7.8 16 8 7.4 7.2 1,200 6.7 6.9 80 12 1,000 6 mboed /mcf /bbl bn 60 800 8 600 4…
  18. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 18
    TNK-BP Average oil marker prices BP share of net income BP share of dividend 120 1.4 1.8 1.6 100 1.2 1.4 1.0 80 1.2 0.8 1.0 /bbl bn 60 bn 0.6 0.8 40 0.6 0.4 0.4 20 0.2 0.2 0 0.0 0.0 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10…
  19. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 19
    Refining & Marketing BP average Underlying replacement cost Refining Marker Margin Refining availability profit before interest and tax(1) 20 97 2.5 2.2 18 96 2.0 16 1.7 95 14 1.4 94 1.5 12 % /bbl 93 10 1.0 0.8 0.7 92…
  20. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 20
    Other items OB&C underlying RCPBIT(1) Effective tax rate(2) 4Q10 1Q11 2Q11 3Q11 4Q11 0.0 45 (0.1) 40 (0.2) 35 (0.3) (0.3) % bn (0.3) (0.4) 30 (0.4) (0.5) (0.5) 25 2011 full year effective tax (0.6) rate is 33%…
  21. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 21
    Gulf of Mexico oil spill costs and provisions (pre-tax(1)) bn FY10 FY11 Total Income statement Charge / (credit) for the period 40.9 (3.7) 37.2 Balance sheet(2) Brought forward 23.3 Charge / (credit) to income statement 40.9 (3.7)…
  22. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 22
    Divestments US Wytch Farm Natural Gas Midstream Liquids Canada(3) Aluminium Egypt Western Western Desert Canada Gas Permian Assets LukArco Cumulative divestments proceeds(1) 50% Devon 25 ACG(2) interest 20 Wattenberg gas…
  23. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 23
    Sources and uses of cash 2010 2011 35 35 30 30 Inorganic Disposals capex 25 25 Inorganic 20 capex 20 Disposals bn bn 15 15 Organic Organic Operating capex 10 capex 10 cash flow(1) Operating 5 cash flow(1) 5…
  24. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 24
    Net debt ratio 35 30 25 20 to 30% 20 % 15 10 to 20% 10 to 20% 10 5 0 2008 2009 2010 2011 2012 2013 Net debt ratio = net debt / (net debt + equity) Net debt includes the fair value of associated derivative financial…
  25. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 25
    2012 Guidance bn 2011 2012 guidance Organic capital expenditure 19.1 22 DD&A(1) 11.1 1.0 higher Production excluding TNK-BP 2,460mboed flat, underlying(2) Other businesses and corporate: 400m 500m average underlying quarterly…
  26. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 26
    Financial framework Increased investment to grow the firm Intention to grow distributions over time in line with improving circumstances of the firm Dividend: progressive growth Driven by: momentum in underlying businesses…
  27. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 27
    Bob Dudley Group Chief Executive Progress in the US 28
  28. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 28
    Progress in the US Response completion: focus on restoration Shoreline clean up essentially complete Patrolling and maintenance continues Environmental restoration Natural Resource Damages Assessment progressing 1bn committed to…
  29. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 29
    Legal proceedings: Limitation and Liability Trial (MDL 2179) Civil liability trial will begin 27 February 2012 and is likely to last into 2013 (with breaks between the three phases) Trial will address allocation and proportion of fault…
  30. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 30
    Legal proceedings: MDL 2179 timeline(1) 2010 2011 2012 2013 2014+ MDL 2179 formed and master complaints Discovery and motions Start of Limitation and Liability trial phase 1 Trial Phase 2 and Phase 3; judgment (no monetary…
  31. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 31
    Upstream 32
  32. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 32
    Upstream: focus on value Our new operating model Driving risk reduction and strengthening execution capability Active portfolio management Leading to a reshaping and rescaling of our portfolio Underpinning 2014 operating cash growth…
  33. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 33
    New operating model now in place Relentless focus on safety and managing risk Organization in place and aligned with delivery Exploration: Access, Exploration and Appraisal Production: Subsurface, Operations Developments: Global…
  34. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 34
    Active portfolio management to continue Divestments (bn) Acquisitions (bn) New Access 30 US: Gulf of Mexico Angola: Kwanza and Benguela basins Australia: Ceduna basin Namibia: Orange Delta 16 16 China: South China Sea(1) Vietnam…
  35. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 35
    Potential for stronger growth, diverse resource mix and new market exposure Resources, bn boe (excluding TNK-BP) Prospect Non-proved Inventory Conventional Viscous / LNG gas Heavy oil gas Deepwater oil Unconventional…
  36. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 36
    Upstream scale: focus on value not volume Large enough to take part in world scale Production, mmboed (excluding TNK-BP) projects 3.0 Greater leverage to exploration success 2.5 Balancing short and longer term 2.3 2.0…
  37. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 37
    Operating cash to grow faster than production Upstream operating cash (excluding TNK-BP) 2011 operating Growth driven by Divested 2014 operating cash at oil price of Angola, operations and cash estimate 111/bbl Gulf of Mexico,…
  38. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 38
    Major projects underpin operating cash growth Deepwater Gas Giant Fields Start- Gross Gross Gross Project WI%(2) Project WI% Capacity Project WI% up Capacity Capacity 2012 Block 31 27 150 mboed Angola LNG 14 1,100 mmscfd Skarv(1)…
  39. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 39
    Gulf of Mexico has returned to work Exploration and Appraisal Rigs on BP operated fields Moccasin discovery 2011 2012 2013 Kaskida appraisal Development Driller II Mad Dog resource extension now estimated to be 4bn bbl Original Oil…
  40. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 40
    Growing upstream value in 2012 Excluding TNK-BP Operating cash Expected to grow based on operating cash margin improvement Production Underlying production broadly flat(1) 2012 vs 2011 divestment impact 120 mboed(2) Investment…
  41. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 41
    Longer term investments play to our strengths Exploration with a focus on Deepwater Material positions created / added to via new access deals Plans to double investment underpinned Gas value chains Strengthening in diverse and high…
  42. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 42
    Robust pipeline for the longer term Exploration Pre-FID Post-FID Australia GoM(1): Kaskida, Thunder Angola: Block 18 West, Angola: Kizomba Angola: LNG, Block 31 Asia Horse Water Injection, Tiber, Block 31 South-East, Satellites Phase…
  43. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 43
    Growing upstream investment Increasing investment in Upstream 2012-2014 investment, bn Exploration Doubling exploration investment Future Deepwater projects Investing near term for cash generation and longer term for value Gas…
  44. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 44
    45
  45. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 45
    Upstream summary Operating model is reducing risk and strengthening execution capability Portfolio being focused potential for stronger growth with diversified resource mix and market exposure 2014 operating cash delivery is…
  46. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 46
    TNK-BP 47
  47. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 47
    TNK-BP Unique position in Russia, continued strong performance World class integrated oil and gas company Russias number two oil producer(1) 4.8bn boe of proved reserves(2), 23bn boe resources BP net Russias third largest refiner…
  48. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 48
    TNK-BP: potential for growth Drivers of growth Mature fields: application of technology Major projects: Yamal, Uvat and Verkhnechonskoye Refining: yield and quality improvements; marketing expansion Advantaged international…
  49. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 49
    Alternative Energy 50
  50. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 50
    Alternative Energy: a focused renewable footprint Strategic intent Wind Biofuels 13 operating farms 1 pilot plant Position for growth of renewables 2 under construction 1 commercial plant as an increasing proportion of fuel under…
  51. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 51
    Iain Conn Chief Executive Refining & Marketing Refining & Marketing 52
  52. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 52
    World class downstream business The highest quality downstream business Hydrocarbon value chains delivering leading returns and cash flow growth Incorporating three business models: Fuels (including optimization and trading)…
  53. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 53
    World class downstream business Safe and reliable operations Becoming a leader in process safety Industry leading reliability and availability Excellent execution Compliance, rigour, discipline, efficient use of resources Effective…
  54. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 54
    Underlying performance improvement 10 2bn performance /bbl/bbl . 9 improvement(1) vs 2009 profit 8 profit cost 7 ent cost replacement 2011 6 1.3bn performance improvement 2005 delivered 2009-2011 underlying…
  55. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 55
    Competitive position Underlying ROACE % (post tax)(1) Underlying Net Income /bbl(3) 30 6 25 5 20 4 15 3 10 2 5 1 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 Competitor…
  56. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 56
    Portfolio performance Pre-tax underlying replacement Business Environment cost profit by business (Indexed 2004 = 100) Refining & Petchems margin environment 7 200 350 6 180 Lubricants 300 base oil Lubricants base oil…
  57. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 57
    Earnings and operating cash flow momentum Sources of earnings growth Operating cash flow growth (in a 2009 refining environment) Earnings On track for +2bn performance Performance improvement - bn Whiting Refinery 14…
  58. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 58
    Refining & Marketing summary World class downstream Safety, excellent execution, portfolio quality, exposure to growth 2011 is a record year of Refining & Marketing earnings On track for delivery of 2bn per annum of pre-tax…
  59. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 59
    Bob Dudley Moving BP forward 60
  60. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 60
    Moving BP Forward (1 ) 15 major upstream projects lo w onstream 2012-2014(2) hf cas Whiting onstream 2H 2013 in g rat Payments to US Trust Fund end in 2012 ope h in Reducing uncertainties on Gulf of Mexico liabilities t ow gr…
  61. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 61
    Moving BP Forward 10 - point plan What you can expect What you can measure 1. Relentless focus on safety and managing 6. Active portfolio management to continue risk 7. New upstream projects onstream with unit 2. Play to our…
  62. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 62
    Moving BP Forward Year of consolidation now behind us Safety is our continuing priority 2012 a year of milestones: 2013/14 brings financial momentum Around 50% improvement in operating cash flow by 2014 versus 2011(1) Increasing…
  63. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 63
    Break-out sessions Upstream 1st Floor Longer term investments play to our strengths Mike Daly: Executive Vice President, Exploration Andy Hopwood: Executive Vice President, Strategy and Integration Upstream 3rd Floor Operating model:…
  64. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 64
    SECRET 2011 Results and Strategy Presentation 2011 Results and 7 February 2012 Strategy Presentation 7 February 2012 65
  65. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 65
    Q&A Iain Conn Bob Dudley Chief Executive, Group Chief Executive Refining & Marketing Andy Hopwood Brian Gilvary Executive Vice President, Chief Financial Officer Strategy & Integration Bob Fryar Mike Daly Executive Vice…
  66. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 66
    Q&A Iain Conn Bob Dudley Chief Executive, Group Chief Executive Refining & Marketing Andy Hopwood Brian Gilvary Executive Vice President, Chief Financial Officer Strategy & Integration Bob Fryar Mike Daly Executive Vice…
  67. 2011 RESULTS AND STRATEGY PRESENTATION – BP Plc – slide 67
    SECRET 2011 Results and Strategy Presentation 7 February 2012 Moving BP forward 69

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