Hello and welcome everyone. This is BPs second-quarter 2013 Results webcast and conference call. Im Jessica Mitchell, BPs Head of Investor Relations and Im here with our Group Chief Executive Bob Dudley, and our Chief Financial Officer…
Thank you Jess. And good afternoon or good morning everyone, depending where you are. Thank you for joining us. 4
In todays presentation we will of course take you through our second-quarter results but we will also update you on our key areas of activity. Our 2Q results reflect a variety of factors some positive, some negative, which Brian will…
Before handing over to Brian heres a brief look at what weve done in the year to date, focusing on the strategic progress to achieve our 10-point plan to 2014 that we laid out in 2011, and that will deliver shareholder value into the…
Weve started up a major crude distillation unit at the Whiting refinery, the first major unit in the modernisation programme that is now over 96% complete and on track for full operation this year, and we have received approval for a new…
Thank you Bob. 7
Starting with an overview of the second-quarter financial results. Underlying replacement cost profit in the second quarter was 2.7 billion, down 24% on the same period a year ago and 36% lower than the first quarter of 2013. Compared…
For the Upstream, the underlying second-quarter replacement cost profit before interest and tax was 4.3 billion compared with 4.4 billion a year ago and 5.7 billion in the first quarter. The result versus a year ago reflects: Lower…
Looking ahead we expect third-quarter 2013 reported production to be somewhat lower than the second quarter, similar to the reduction we saw between the first and second quarters of this year. This is the result of the continuing impact…
This slide shows our share of earnings from Rosneft, and historically from TNK-BP. This is the first full quarter that reflects our 19.75% shareholding in Rosneft. BPs share of Rosneft underlying net income was 218 million in the second…
In the Downstream, the second quarter underlying replacement cost profit was 1.2 billion compared with 1.1 billion a year ago and 1.6 billion in the first quarter. The fuels business delivered an underlying replacement cost profit of 850…
The petrochemicals business reported an underlying replacement cost loss of 24 million compared with a profit of around 30 million in the same period last year due to the continued difficult environment for BPs mix of products impacting…
In Other Businesses and Corporate, we reported a pre-tax underlying replacement cost charge of 440 million for the second quarter, which is broadly in line with the guidance we gave in February. The underlying effective tax rate for the…
Turning to the Gulf of Mexico provision, the charge increased by 200 million in the second quarter reflecting an increase in the provision for litigation relating to the Gulf of Mexico oil spill. The total cumulative net charge for the…
Moving now to cash flow, this slide compares our sources and uses of cash in the first half of 2013 to the same period a year ago. Operating cash flow in the first half was 9.4 billion, of which 5.4 billion was generated in the second…
Net debt at the end of the second quarter was 18.2 billion with gearing of 12.3% compared to 21.7% a year ago. Our intention remains to keep gearing in a target band of 10 to 20% whilst uncertainties remain. 15
Turning now to our guidance for the full year. We continue to expect full-year underlying production to be higher than 2012, mainly driven by the ramp-up of major projects in higher-margin areas and reduced maintenance outages. Full-year…
Before I hand over to Bob Id like to return to a slide I showed you last quarter which outlines our financial framework for 2014 and beyond. We continue to expect operating cash flow of 30-31 billion in 2014, representing more than 50%…
Thanks Brian and I hope you heard our message of operating cash generation and capital discipline as fundamental to our strategy for the decade. And well take any specific questions on the numbers shortly. But before that let me say a…
Let me turn to an update on the status of legal proceedings in the United States. The first phase of the MDL 2179 trial commenced on the 25th of February in New Orleans, focusing on the causes of the accident and allocation of fault…
in the payment of claims for fictitious or inflated losses, contrary to the express terms of the agreement reached last year. We have appealed to the US Court of Appeals for the Fifth Circuit, which heard oral argument on the 8th of July…
In regard to progress in Rosneft, I am pleased to have been elected to the Rosneft Board of Directors at the companys recent Annual General Meeting in St. Petersburg and am also now a member of the Boards Strategic Planning Committee. As…
Rosneft also announced at the Russian Economic Summit in St Petersburg long-term crude oil supply agreements to Europe and Asia, including a 25-year, 270 billion contract with the China National Petroleum Company, which when finalised…
Moving on, let me update you on progress and milestones in our Upstream. 21
Our primary focus continues to be the safe and reliable execution of activity within our operations and executing with discipline what we said we would do to grow operating cash flow for the long term. In exploration we plan to complete…
We continue to build our exploration portfolio and are ramping up exploration activity accordingly. We have been awarded eight new deepwater blocks through Brazils 11th licensing round in deepwater Brazil and have also farmed-in to five…
I want to spend a few minutes on India. As we have frequent questions about our progress there and this quarter we have seen some great developments. It has been two years since we formed our strategic alliance with Reliance. This…
Our major projects are moving forward. Our key 2012 start-ups continue to ramp-up as planned and we expect to start-up four major projects in 2013. Atlantis North Expansion joins this list having started up in April and Angola LNG loaded…
We continue to make progress in our four key regions to underpin operating cash flow growth for the long term. In the Gulf of Mexico we have spudded the Gila exploration well, our first operated exploration well post Macondo. Seven rigs…
Our Global Operations Organisation is seeing results from investments in turnarounds, reliability programmes and the systematic elimination of defects. Unplanned outages are coming down reflecting the benefits of these programmes and our…
Turning to the Downstream, here you see a picture of the new 250 thousand barrel per day crude unit at Whiting which came onstream at the end of June. 28
We have now completed the previously announced divestments of the Texas City and Carson refineries, including associated marketing assets. We reached a major milestone at Whiting, with the commissioning of the new crude distillation unit…
Focusing for a moment on Whiting, where the refinery modernisation project is approaching completion. The new crude distillation unit, which has enabled the refinery to return to full operational and processing capacity, is currently…
And so to summarise. 31
Our objective is very clear - to deliver value to our owners from this more streamlined company by being a focused oil and gas company that grows long-term sustainable free cash flow for our shareholders. We will do this through safe and…
We will deal with litigation off to the side. And we are doing this with a strong and flexible financial base from which we intend to grow distributions over time - in line with the improving circumstances of the firm - and to maintain a…
That concludes my remarks, and now we would be very happy to take your questions. 33
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