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2006 FULL YEAR RESULTS – BP Plc

BP Plc · Feb 6, 2007 · 71 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2006 FULL YEAR RESULTS – BP Plc – slide 1
    BP Full Year 2006 Results and Strategy Update 6 February 2007
  2. 2006 FULL YEAR RESULTS – BP Plc – slide 2
    John Browne Group Chief Executive
  3. 2006 FULL YEAR RESULTS – BP Plc – slide 3
    John Browne Group Chief Executive
  4. 2006 FULL YEAR RESULTS – BP Plc – slide 4
    Agenda Review of 2006 Strategy and performance in context Trading environment 2007 priorities - Business updates Financial framework 2007 guidance Q&A
  5. 2006 FULL YEAR RESULTS – BP Plc – slide 5
    2006: Financial results Replacement cost profit - 22.3bn, up 15% - Per share 111.1, up 22% Post tax operating cash flow 28.2bn, up 5% Quarterly dividend per share 10.325 - Up 5% vs. last quarter - Up 10% vs. last year Distributed…
  6. 2006 FULL YEAR RESULTS – BP Plc – slide 6
    2006: Incidents and responses Texas City - Implementing Baker Panels process safety recommendations Prudhoe Bay and Thunder Horse - Embedding learning across the company Propane trading
  7. 2006 FULL YEAR RESULTS – BP Plc – slide 7
    2006: Milestones 2006 reserve replacement 113% 10 new discoveries including Kaskida, Titania, Urano and in Uvat area New upstream access: Pakistan, India and Oman Start-up of 9 new upstream projects Re-commissioning of Texas…
  8. 2006 FULL YEAR RESULTS – BP Plc – slide 8
    Byron Grote Chief Financial Officer
  9. 2006 FULL YEAR RESULTS – BP Plc – slide 9
    Trading environment /bbl Oil realization /mcf Gas realization 70 12 60 10 50 8 40 6 30 20 4 10 2 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005 2006 2005 2006 /bbl Refining indicator margin 14 Change vs. 2005 12…
  10. 2006 FULL YEAR RESULTS – BP Plc – slide 10
    Financial results Change vs. 4Q 2005 Results for the fourth quarter bn % % per share Replacement cost profit 3.9 (12)% (6)% Profit including inventory gains/losses 2.9 (22)% (16)% Net cash provided by operating activities 5.0 17%…
  11. 2006 FULL YEAR RESULTS – BP Plc – slide 11
    Exploration & Production Pre-tax bn 8 Lower gas realizations 7 Lower volumes 6 Sector specific inflation 5 Greater integrity spend 4 3 Higher non-cash costs 2 TNK-BP 1 - Absence of disposal gain 0 - Lagged tax reference 4Q…
  12. 2006 FULL YEAR RESULTS – BP Plc – slide 12
    Refining & Marketing Pre-tax bn 0.4 Higher Texas City volumes 0.3 0.2 Absence of rationalization charges 0.1 0.0 Smaller fair value charge (0.1) Higher turnaround costs (0.2) and integrity spend (0.3) 4Q 05 NOI Underlying…
  13. 2006 FULL YEAR RESULTS – BP Plc – slide 13
    Gas, Power & Renewables Pre-tax bn 0.7 0.6 0.5 Lower NGL and marketing 0.4 & trading contribution 0.3 Smaller fair value gain 0.2 Non-Operating Item (NOI) 0.1 - Disposals 0.0 4Q 05 NOI Underlying 4Q 06 m m 436…
  14. 2006 FULL YEAR RESULTS – BP Plc – slide 14
    Other business & corporate Pre-tax bn 0.0 (0.1) (0.2) 2006 underlying charge (0.3) consistent with prior guidance (0.4) (0.5) 4Q 05 NOI Underlying 4Q 06 m m (345) Underlying result (88) (64) Non-operating items (188)…
  15. 2006 FULL YEAR RESULTS – BP Plc – slide 15
    Guidance on 2007 items OB&C: annual charge of 900m200m Full year effective tax rate: 37% Rules of thumb: Full year (pre-tax) m Oil price Brent 1/bbl 500 Gas price Henry Hub 0.1/mmbtu 90 Refining margin GIM 1/bbl 950 Note: Rules…
  16. 2006 FULL YEAR RESULTS – BP Plc – slide 16
    Sources and uses of cash Post tax 2005 2006 bn 40 35 Disposals Disposals 30 Buybacks 25 Buybacks 20 Dividends Operations Dividends Operations Acquisitions* 15 26.7 28.2 10 Organic Organic 5 capex capex 0 Sources Uses…
  17. 2006 FULL YEAR RESULTS – BP Plc – slide 17
    Net debt ratio % 40 35 30 25 20 15 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005 2006 Net debt ratio = net debt / (net debt + equity)
  18. 2006 FULL YEAR RESULTS – BP Plc – slide 18
    Shareholder distributions bn 24 Buybacks Dividends Share issues 21 18 15 12 9 6 3 0 (3) 2002 2003 2004 2005 2006
  19. 2006 FULL YEAR RESULTS – BP Plc – slide 19
    John Browne Group Chief Executive
  20. 2006 FULL YEAR RESULTS – BP Plc – slide 20
    Strategy E&P Focus on the most prolific hydrocarbon basins and the biggest fields Build leadership positions in these areas Manage decline of existing producing assets and divest when appropriate Gas Access to premium gas markets…
  21. 2006 FULL YEAR RESULTS – BP Plc – slide 21
    Strategic indicators 1995 2006 Ratio Production (mboed) 1428 3926 2.7 Production/share (boe/ADR/yr) 0.28 0.43 1.5 Reserves (bn boe) 8.4 17.7 2.1 Reserves/share (boe/ADR) 4.5 5.3 1.2 Share of gas in total production (%) 15 37 2.5 Number…
  22. 2006 FULL YEAR RESULTS – BP Plc – slide 22
    Crude oil prices since 1995 Dated Brent per bbl 80 70 60 50 40 12-year average 30 29.34 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Daily prices Source: Platts quotes
  23. 2006 FULL YEAR RESULTS – BP Plc – slide 23
    Oil demand and economic growth % 5 4 3 2 1 0 00 01 02 03 04 05 06 Oil demand GDP Source: oil demand, BP estimate; GDP, 00 -06 Oxford Economic Forecasting
  24. 2006 FULL YEAR RESULTS – BP Plc – slide 24
    Oil supply growth and surplus capacity Non-OPEC output growth OPEC surplus capacity Million Million b/d b/d 6 6 4 4 2 2 0 0 00 01 02 03 04 05 06 00 01 02 03 04 05 06 End year; Year-on-year change; Source: 00 03…
  25. 2006 FULL YEAR RESULTS – BP Plc – slide 25
    Crude oil prices 2000 to 2007 Dated Brent per bbl 80 2006 Avg 70 65.14 2005 Avg 60 +19% 54.52 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 Daily prices Source: Platts quotes
  26. 2006 FULL YEAR RESULTS – BP Plc – slide 26
    US gas prices 2000 to 2007 US Henry Hub per mmbtu 20 18 16 14 12 2005 Avg 10 8.64 8 -16% 6 2006 Avg 4 7.24 2 0 2000 2001 2002 2003 2004 2005 2006 Chart uses daily common Henry Hub prices; annual averages are based on the…
  27. 2006 FULL YEAR RESULTS – BP Plc – slide 27
    Refining margins 2000 to 2007 per bbl 30 25 20 15 2005 Avg 10 8.50 -1% 5 2006 Avg 8.39 0 2000 2001 2002 2003 2004 2005 2006 Daily margins BP Global Indicator Margin (GIM); 2006 portfolio basis
  28. 2006 FULL YEAR RESULTS – BP Plc – slide 28
    2007 priorities Safety - Personal safety - Process safety - Environment Performance
  29. 2006 FULL YEAR RESULTS – BP Plc – slide 29
    Safety in operations 1999 to 2006 Workforce fatalities Oil spills greater 1 bbl 35 Non-road related Road related 1200 30 1000 25 800 20 600 15 10 400 5 200 0 0 99 00 01 02 03 04 05 06 99 00 01 02 03 04 05 06 Recordable injury…
  30. 2006 FULL YEAR RESULTS – BP Plc – slide 30
    Focus on process safety Actions under way to improve integrity of plant and operations - Implementing new standards - Implementing new Operations Management System Baker Panel recommendations accepted provides further learning…
  31. 2006 FULL YEAR RESULTS – BP Plc – slide 31
    2007 priorities Safety Performance - Deliver upstream projects - Atlantis by end 2007 - Thunder Horse by end 2008 - Texas City - Expected to be processing 400,000 bpd by end of 2007
  32. 2006 FULL YEAR RESULTS – BP Plc – slide 32
    Tony Hayward Group Chief Executive Designate
  33. 2006 FULL YEAR RESULTS – BP Plc – slide 33
    Exploration & Access Exploration Deepwater Gulf of Mexico Kaskida Angola Titania and Urano TNK-BP Uvat area Access Oman Pakistan India Gulf of Mexico lease sale
  34. 2006 FULL YEAR RESULTS – BP Plc – slide 34
    Reserves replacement % 160 5 year moving average 140 120 100 80 60 40 20 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 Reserves replacement for subsidiaries + associates, excludes the effects of…
  35. 2006 FULL YEAR RESULTS – BP Plc – slide 35
    Major projects 2006 key start ups Azerbaijan BTC Pipeline / East Azeri Algeria In Amenas Trinidad Cannonball Egypt Temsah Redevelopment Angola Dalia
  36. 2006 FULL YEAR RESULTS – BP Plc – slide 36
    Major projects 2007 key start ups Angola Greater Plutonio Rosa Kizomba A Phase 2 Gulf of Mexico Atlantis King Subsea Trinidad Red Mango North America Gas San Juan Coal Bed Methane expansion
  37. 2006 FULL YEAR RESULTS – BP Plc – slide 37
    Existing Profit Centres Alaska, North Sea, North America Gas, Latin America, Egypt, Middle East Production lower than forecast in Alaska and North Sea Increased levels of downtime Reduced operational efficiency Infill drilling…
  38. 2006 FULL YEAR RESULTS – BP Plc – slide 38
    Bob Dudley President and CEO TNK-BP
  39. 2006 FULL YEAR RESULTS – BP Plc – slide 39
    TNKBP West Siberia Moscow Ukraine Rospan Ryazan Nyagan Samotlor Verknechonsk Saratov Orenburg Uvat Kovykta Volga Urals East Siberia Refineries Core production areas Project areas
  40. 2006 FULL YEAR RESULTS – BP Plc – slide 40
    Strategy and performance highlights The strategy remains unchanged Resources to Reserves to Production Production growth of 30% since 2003 Licence extensions New Resource Access of 5 Bn boe risked, 60% Exploration Success rate Margin…
  41. 2006 FULL YEAR RESULTS – BP Plc – slide 41
    TNKBP production and capex 2003 2007 Capex mmboed bn 2.5 5 Capex 2.0 4 1.5 Disposals 3 1.0 2 0.5 1 0.0 0 2003 2004 2005 2006 2007e TNK-BP projection for 2007
  42. 2006 FULL YEAR RESULTS – BP Plc – slide 42
    Major projects and new access West Siberia Bolshekhetsky Rospan Verknechonsk Orenburg Uvat Kovykta Volga Urals East Siberia
  43. 2006 FULL YEAR RESULTS – BP Plc – slide 43
    Underpinning the future The four promises made in February 2003: Production Growth Technology Transfer Corporate Governance Good Corporate Citizen of Russia Organisational Capability building a world-class company
  44. 2006 FULL YEAR RESULTS – BP Plc – slide 44
    Tony Hayward Group Chief Executive Designate
  45. 2006 FULL YEAR RESULTS – BP Plc – slide 45
    E&P investment: 2004 2007 Organic Capex bn 16 BP TNK-BP Pan American Energy 14 12 10 8 6 4 2 0 2004 2005 2006 2007e 2006 Capex excludes Rosneft BP projection for 2007 TNK-BP and PAE are self-funding
  46. 2006 FULL YEAR RESULTS – BP Plc – slide 46
    Margin pressures Inflationary pressure on operating costs partly mitigated by Supply chain management Focussing activity on the most material opportunities Government take increasing Rising depreciation per barrel
  47. 2006 FULL YEAR RESULTS – BP Plc – slide 47
    Portfolio evolution mmboed 4.5 4.0 3.5 1 TNK-BP 2 Disposals 3.0 2.5 2.0 EPC 2 1.5 1.0 0.5 NPC 2 0 2001 2002 2003 2004 2005 2006 1 Reported production associated with assets divested between 2001 and 2006 inclusive 2…
  48. 2006 FULL YEAR RESULTS – BP Plc – slide 48
    Production outlook Guidance impacted by: Focus on safety and operational efficiency PSC entitlements -40/bbl to 60/bbl price assumption 2006 divestments Gulf of Mexico project delays TNK-BP project phasing Conservatism Greater…
  49. 2006 FULL YEAR RESULTS – BP Plc – slide 49
    Production guidance Guidance based on current portfolio at 60/barrel: 2007 3.8 -3.9 mmboed Effectively flat vs 2006 after allowing for divestment impact By 2009 More than 4.0 mmboed By 2012 More than 4.3 mmboed Reserve base…
  50. 2006 FULL YEAR RESULTS – BP Plc – slide 50
    Resource growth & progression 2002 2006 New Further discoveries appraisal, revisions 7.2 8.3 Start 02 End 06 Purchased Sold resources resources 26.2 12.1 Non-proved 4.5 41.3 8.0 16.3 2.4 Proved 2.0 17.7 42.5 59.0 7.0…
  51. 2006 FULL YEAR RESULTS – BP Plc – slide 51
    The ultimate prize: improving recovery Recovery to date: 19% Proved reserves: 28% 12 years of current production Todays non-proved recovery limit: 49% Additional 29 years of current production The future: 1% improvement = 2…
  52. 2006 FULL YEAR RESULTS – BP Plc – slide 52
    E&P a sustainable future Focussed and successful exploration and access strategy 13 year track record of 100%+ reserves replacement continues* Sustainable growth More than 4.3 mmboed by 2012 Strong and growing resource base…
  53. 2006 FULL YEAR RESULTS – BP Plc – slide 53
    John Manzoni Chief Executive, Refining & Marketing
  54. 2006 FULL YEAR RESULTS – BP Plc – slide 54
    R&M: Key messages Focus on safety and integrity Improvement from 2006 Disciplined execution of strategy
  55. 2006 FULL YEAR RESULTS – BP Plc – slide 55
    Baker Panel Implement panel recommendations Recommendations in line with actions already underway; more to do BP committed to becoming an industry leader in process safety Integrity spend in US refineries increased from…
  56. 2006 FULL YEAR RESULTS – BP Plc – slide 56
    Refining: Texas City Throughput kbpd % 500 100 400 80 300 60 200 40 100 20 0 0 2005 2006 2007e 2008e Sweet Sour High value products BP estimates for 2007-2008
  57. 2006 FULL YEAR RESULTS – BP Plc – slide 57
    Refining: Availability Availability % 100 90 80 70 60 50 2004 2005 2006 2007e 2008e BP estimates for 2007-2008
  58. 2006 FULL YEAR RESULTS – BP Plc – slide 58
    Refining: Portfolio Average Size kbpd 240 220 BP CVX XOM 200 180 160 Total 140 COP RDS 120 7.0 8.0 9.0 10.0 11.0 Complexity index 2 mmbbl/d Circle area proportional to Source: Oil & Gas Journal 2006 nameplate…
  59. 2006 FULL YEAR RESULTS – BP Plc – slide 59
    Marketing: Strategy unchanged Differentiated branded offers and disciplined execution to grow gross margin Focused investment in markets where we can be number 1 or 2 Cost management to ensure efficiency improves over time
  60. 2006 FULL YEAR RESULTS – BP Plc – slide 60
    Marketing: Cost efficiency Headcount reduction 3000 On track to deliver 0.5bn cost benefits in 2008 2000 from efficiency projects 1000 0 2005 2006 2007e Further productivity improvements to come Gross Margin / Distribution and…
  61. 2006 FULL YEAR RESULTS – BP Plc – slide 61
    R&M: Investment patterns Organic capex bn 5 Marketing 4 Infrastructure 3 Refining 2 1 Biofuels 0 Aromatics & Acetyls (1) Disposals Disposals (2) 2004 2006 2007e average BP estimates for 2007
  62. 2006 FULL YEAR RESULTS – BP Plc – slide 62
    R&M: Key messages Focus on safety and integrity Improvement from 2006 Disciplined execution of strategy
  63. 2006 FULL YEAR RESULTS – BP Plc – slide 63
    John Browne Group Chief Executive
  64. 2006 FULL YEAR RESULTS – BP Plc – slide 64
    Gas, Power & Renewables Gas remains an important part of the portfolio Growing LNG marketing and trading business Second largest gas producers among IOCs Worlds largest marketer and trader among IOCs Wind capacity 450 MW by end…
  65. 2006 FULL YEAR RESULTS – BP Plc – slide 65
    Investment bn 2005 2006 2007e Capital expenditure 13.9 15.9* 18 Exploration & Production 10.1 12.1* 13 Refining & Marketing 2.8 3.1 4 Gas, Power, Renewables & Other 1.0 0.7 1 Organic capex only *Excludes 1bn investment in…
  66. 2006 FULL YEAR RESULTS – BP Plc – slide 66
    Historical dividend 2001-2006 1987-2006 Average Average CAGR CAGR 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% Dollar Inflation Sterling Inflation Dollar Inflation Sterling Inflation DPS DPS DPS DPS Dividends as…
  67. 2006 FULL YEAR RESULTS – BP Plc – slide 67
    Impact of share buyback programme 2006 vs. 2001 Absolute growth Per-share growth (%) (%) Replacement cost 163 195 profit Cash from 61 80 operations Dividend 59 79 Production 15 29
  68. 2006 FULL YEAR RESULTS – BP Plc – slide 68
    2007 guidance Production - 3.8 3.9 mmboed assuming 60/bbl oil price and current portfolio Organic capex - Around 18bn Total Group costs - Expected to grow in line with sector inflation Distribution policy unchanged -…
  69. 2006 FULL YEAR RESULTS – BP Plc – slide 69
    Summary Priorities: safety and performance High-quality asset base Acting on lessons learned from 2005-06 Robust and unchanged financial framework
  70. 2006 FULL YEAR RESULTS – BP Plc – slide 70
    Questions & answers London New York John Browne Bob Malone Group Chief Executive Chairman & President, BP America Inc. Byron Grote David Allen Chief Financial Officer Group Managing Director & Chief of Staff Tony Hayward Iain Conn…
  71. 2006 FULL YEAR RESULTS – BP Plc – slide 71

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