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MARCH 2009 INVESTOR PRESENTATION – BP Plc

BP Plc · Mar 3, 2009 · 62 slides

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Slides

  1. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 1
    BP Strategy Presentation London 3 March 2009
  2. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 2
    Tony Hayward Group Chief Executive
  3. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 3
    Agenda Introduction Tony Hayward 2008 in perspective Business environment Technology TNK-BP Refining & Marketing Iain Conn Exploration & Production Andy Inglis Conclusions Tony Hayward Alternative Energy Financial framework…
  4. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 4
    2008 in perspective Safety : People : Performance Safe, compliant and reliable operations: our No. 1 priority Operational and financial momentum Strategy in progress Upstream growth Downstream turnaround Alternative Energy:…
  5. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 5
    Safe, compliant and reliable operations 2.5 Recordable Injury Frequency 80 Integrity Management Incidents 2.0 60 1.5 Industry range(1) 40 1.0 20 0.5 0.0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008(2)…
  6. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 6
    Operational momentum in 2008 Upstream growth Growth in line with guidance 5% underlying, excluding PSC entitlement effects Major project start-up volumes ahead of plan Cost increases below sector inflation Strong reported reserve…
  7. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 7
    Financial momentum in 2008 Underlying(1) Net Income (bn) 26.2 43.7 28.4 22.8 20.5 Year on Year % 39% 10% 12% 30% 22% Cash from operations (bn) 38.1 59.7 43.9 29.6 27.5 Year on Year % 54% 15% 27% 19% 13% Reported volumes (mboed)…
  8. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 8
    Oil prices Brent /bbl 140 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Platts 9
  9. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 9
    US gas prices, production and rig count /mmbtu bcf/d US gas rig count 14 60 1,800 1,600 1,400 11 55 US gas 1,200 production 1,000 8 50 800 600 Henry 5 45 Hub 400 200 2 40 0 2004 2005 2006 2007 2008 2009 Source:…
  10. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 10
    Refining margins and utilization Global Indicator Global Margin /bbl(1) Utilization(2) 12 88% 9.92 87% 10 8.56 8.49 86% 8 85% 6.38 6.50 6 84% 4.50 4.50 4.11 83% 4 2.30 82% 2 81% 0 80% 2000 2001 2002 2003 2004 2005 2006…
  11. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 11
    Deep technology focus BPs approach to Research and Technology: Sustained increase in technology investment Building leadership positions Implementation at scale Long-term commitment to research and development Collaborative and…
  12. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 12
    BPs major technology programmes Resource business Conversion Low-carbon extensions technologies technologies Unconventional Gas Fuels Solar Unconventional Oil Lubricants Biofuels Gulf of Mexico Paleogene PTA Carbon Management…
  13. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 13
    TNK-BP: updated governance Revised shareholder agreement retains 50/50 ownership structure Three new independent directors on TNK-BP Board Significant TNK-BP group subsidiaries now have both BP and AAR directors Potential…
  14. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 14
    TNK-BP: operating performance Production growth of 30% since inception Five-year average reserve replacement around 200% Proved reserves increased from 1.8bn boe to 3.6bn boe since 2003 Total resources increased from 11.6bn boe…
  15. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 15
    TNK-BP: financial performance Since the formation of TNK-BP: More than 25bn of net income generated More than 20bn distributed as dividends Around 14bn of capex invested More than 90bn in taxes and excise duties paid…
  16. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 16
    TNK-BP: expected future performance 2009 investment 3bn Production broadly flat Lower costs Fiscal regime changes Cash and earnings breakeven in 2009 at 3540/bbl 2009 BP projections 17
  17. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 17
    Iain Conn Chief Executive, Refining & Marketing
  18. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 18
    The Downstream turnaround Restored missing revenues 2008 Business simplified Safe operations and OMS(1) Behaviours and core processes 2009 Repositioning cost efficiency (1) OMS Operating Management System 19
  19. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 19
    Performance gap at 7.50/bbl refining margin(1) Pre-tax replacement cost profit 2007 gap of 3.5bn4bn Portfolio / mix Performance gap closed in 2008 Remaining performance gap 50% of gap closed in 2008 (1) BP Global…
  20. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 20
    Our portfolio 2008 2008 Av. pre-tax Pre-tax operating underlying RC capital empl. profit Fuels Value (bn) (bn) Chains Convenience Fuels Marketing 16 2.0 and Supply Refining 19 (0.7) International Lubricants Businesses…
  21. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 21
    Performance momentum Pre-tax underlying RC profit (bn) (3.3) 2.7 3.9 3.3 2007 Environment Performance 2008 Improvement 22
  22. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 22
    Competitive performance Underlying ROACE(1) % (post tax) 30 25 20 Competitor average(2) 15 BP R&M Competitor range(2) 10 5 0 2003 2004 2005 2006 2007 2008 (1) BP and competitor return on average capital employed data…
  23. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 23
    Regional refining margins and BPs relative exposure Refining regional indicator margins (US/bbl) Regional refining capacities US/bbl 30 BP 25 20 15 Average of competitors 10 5 0 1Q07 3Q07 3Q08 1Q09 3Q06…
  24. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 24
    Closing the performance gap in a challenging environment Repositioning cost efficiency 9 Business services and overheads programme scoped and underway 15% reduction in Senior Management on track Flat cash costs at constant forex in…
  25. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 25
    Restoring missing revenues Refining availability Solomon availability Lost opportunity (historical and expected) ( 7.50/bbl refining margin)(1) 100 3 Pre-tax Replacement Cost Profit (bn) 90 2 80 % 70 1 60 50 0 2004…
  26. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 26
    Business simplification Pre-programme Programme launch End 2008 target Integrated Fuels Value Chains Designed Implemented Competitive US Company owned Sites 805 512 0 Countries with direct Lubricants 60 50(1) 40(1) presence…
  27. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 27
    Headcount R&M Headcount (exc. Retail site staff) R&M Senior Management 40 190 180 39 170 Headcount (000s) 2000 reduction 160 15% reduction 38 target target 150 140 37 130 36 120 110 35 100 Mid 2007 End 2008 End…
  28. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 28
    Repositioning our cost efficiency 140 130 BP R&M cash cost index 120 110 100 90 80 70 60 50 2004 2005 2006 2007 2008 Cash cost index Cash cost index at constant forex and energy 29
  29. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 29
    Portfolio strengths Advantaged Fuels US West Coast, Rhine, Southern Africa and Australasia Value Chains Petrochemicals Concentrated focus in fast growing Asian markets Lubricants Castrol brand and marketing capability Global Fuels…
  30. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 30
    Portfolio improvement US / Europe based Petrochemicals Sale of Innovene in 2005 9 Exposure to Asian growth Continued growth of Petrochemicals 9 in China Exposure to European gasoline Sale of Coryton and purchase of 9 remaining…
  31. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 31
    Whiting modernisation project Location advantage as more extra Canadian Oil Sands heavy crude flows from Canada to the Gulf Whiting Toledo Repositions Whiting to process Crude (Husky JV) advantaged feedstocks at scale…
  32. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 32
    Investment Bias to manufacturing Organic capital expenditure (bn) 5.0 4.5 4.0 3.5 Other 3.0 Lubricants and Global Fuels 2.5 Fuels Marketing and Supply 2.0 Petrochemicals 1.5 Refining 1.0 0.5 0.0 2004 2008 2009 2009 BP…
  33. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 33
    Summary and what to expect Achievements so far: 2bn of performance gap closure in 2008: Restoration of revenues complete Fuels Value Chains established Lubricants, Aviation and Convenience Retail footprint reduced Cost efficiency…
  34. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 34
    Andy Inglis Chief Executive, Exploration & Production
  35. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 35
    2008: resources and reserves Excluding TNK-BP(1) TNK-BP Proved: 14.6 bn boe Proved: 3.6 bn boe Conventional oil 13 years 10 years Deepwater oil Water flood viscous and heavy oil Conventional gas 45 years LNG gas 26 years…
  36. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 36
    Access in 2008 CANADIAN ARCTIC Beaufort Sea 6,000km2 in three blocks CANADIAN OIL SANDS Sunrise SAGD project LIBYA Offshore 30,000km2 Onshore 23,000km2 INDIA US GULF OF MEXICO East Coast 125 leases from OCS One block in…
  37. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 37
    Libya access Offshore Sirt Tripoli Deepwater Benghazi Hassi Messaoud Ghadames Palozoic gas In Salah Gas In Amenas Gas 200km Algeria Libya BP acreage 38
  38. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 38
    Exploration success in 2008 UK Kinnoull BP (77%) and operator Oil discovery EGYPT Satis GULF OF MEXICO Nile Delta Freedom BP (50%) and operator BP (25%) and operator First HP/HT Oligocene discovery 550 feet net pay Kodiak BP…
  39. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 39
    Gulf of Mexico Largest remaining resources (mmboe)(1) Largest current lease acreage(2) 2,000 BP Oil Gas Anadarko 1,500 Chevron 1,000 Shell XOM 500 Hess Statoil 0 BHP Devon Petrobras Statoil Devon Hess Anadarko…
  40. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 40
    Technology flagships Each has potential to deliver 1billion+ boe increase in reserves Inherently Reliable Facilities Monitor, predict and manage Field of the Future TM corrosion to increase operating Deliver 100mboed through real…
  41. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 41
    Pushing Reservoir Limits: Step change in oil recovery technology Bright WaterTM The results Injected thermally activated particle pops 1500 Milne Pt incremental oil open and blocks better swept zones Oil rate (bopd) 0.1 to 1 1 to…
  42. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 42
    Production outlook 20082013 mboed 5,000 TNK-BP 4,000 Asia Pacific Angola 3,000 Gulf of Mexico South America 2,000 N. Africa, Middle East and Caspian Trinidad 1,000 North Sea N. America onshore 2008 2009 2010 2011…
  43. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 43
    Super Major production since 2002 120 115 110 BP 105 100 Total 95 Chevron 90 Exxon Mobil 85 Shell 80 2002 2003 2004 2005 2006 2007 2008 Barrels of oil equivalent as reported in company disclosures, indexed to 2002 44
  44. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 44
    Improving drilling performance North America Gas days per 10k E&P days per 10k drilling performance drilling performance 20% days per 10k 15% days per 10k 2007 2008 Trinidad days per 10k drilling performance 25%…
  45. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 45
    Cost focus Production costs (/boe) 12 Shell 10 Chevron 8 Exxon Mobil BP 6 Total 4 2 0 2004 2005 2006 2007 2008 Production costs and production per FAS69 disclosure in 10-K / 20-F. Consolidated subsidiaries only. Totals 2008…
  46. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 46
    Major Projects contributing to 2013 growth Angola North Africa, Middle East Kizomba C Phase 1 9 and Caspian Kizomba C Phase 2 9 ACG Phase 3 9 Angola LNG Egypt Gas Phase 1 9 Pazflor Saqqara 9 PSVM North America onshore Gulf of…
  47. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 47
    LNG growth BP equity gas into LNG plant(1) 2008 equity gas into LNG plant(2) mmscfd mmscfd 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2007 2008 2009 2010 2011 2012 2013…
  48. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 48
    Investing for growth Organic capital expenditure (bn) 20 18 16 14 Pan American Energy 12 10 TNK-BP 8 6 BP 4 2 0 2004 2005 2006 2007 2008 2009 Organic Capital Expenditure above excludes: 2004 Slavneft; 2006 Rosneft, 2007 asset…
  49. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 49
    Potential for continued production growth to 2020 DEVELOPMENT DEVELOPMENT GROSS CAPACITY PROJECT STAGE LOCATION BP OP. TYPE /MBOED WI (%) Liberty Post FID Alaska 9 Oil 40 100 In Salah Gas Compression Post FID Algeria Gas 40 33…
  50. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 50
    Delivering upstream growth Ongoing success in growing the resource base Resource base continues to grow: 61.6 billion boe at end 2008 15 year track record of reporting 100%+ reserves replacement(1) Growing production to 2013…
  51. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 51
    Tony Hayward Conclusions
  52. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 52
    Alternative Energy: 2008 performance Solar 2008 sales up 41% Manufacturing footprint optimized Wind Strategic decision to focus on US 3rd largest US portfolio Biofuels First JV production of Brazilian cane-to-ethanol…
  53. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 53
    Alternative Energy: disciplined growth Solar Further optimization of manufacturing base Wind Continued build out of portfolio Pace to finance and partner constraints Biofuels Grow Brazilian bioethanol Demonstrate biobutanol…
  54. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 54
    A challenging environment Our response Immediate priorities Safe and reliable operations Dividend Rapid cost reduction: drive deflation into our business Strengths Cost momentum: every dollar counts, every seat counts Operational…
  55. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 55
    Oil price and costs BP cash Brent oil price cost index (/bbl) 170 100 160 150 80 140 60 130 120 40 110 100 20 90 80 0 2004 2005 2006 2007 2008 2009 2009 BP projections 56
  56. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 56
    Investment guidance bn 2007 2008 2009 Exploration & Production 13.7 15.6 1516 Refining & Marketing 4.4 4.7 4 Other (including Alternative Energy) 0.9 1.4 1 Organic capital expenditure 19.0 21.7 2021 Divestments 4.6 0.9…
  57. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 57
    Financial framework: 20012008 bn 27 20012008 total shareholder distribution of 105bn 21 Dividend per share has grown average 15%/year 20012008 15 50bn share buybacks, majority funded by divestments 9 Gearing range 2030% 3…
  58. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 58
    Net debt ratio % 40 35 30 25 20 15 10 2001 2002 2003 2004 2005 2006 2007 2008 Net debt ratio = net debt / ( net debt + equity ) Net debt includes the fair value of associated derivative financial instruments used to…
  59. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 59
    Debt book 2008 Continued access to bond and commercial paper markets Issued 7.5bn of new bonds in 2008 (2007: 7.4bn) 4.6bn of new bonds in 4Q 2009 Bond maturities of 56bn Continued capital markets access Funding rates Commercial…
  60. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 60
    Sources and uses of cash bn (post tax) 50 45 40 Sources 35 Disposals 30 Operations 25 Uses 20 Buybacks Dividends 15 Inorganic capex 10 Organic capex 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2001 and 2002 operating…
  61. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 61
    An enduring and consistent strategy Upstream growth Downstream turnaround Alternative Energy: focused, disciplined Corporate simplification 62
  62. MARCH 2009 INVESTOR PRESENTATION – BP Plc – slide 62
    Q&A Tony Hayward Byron Grote Group Chief Executive Chief Financial Officer Andy Inglis Iain Conn Chief Executive Chief Executive Exploration & Production Refining & Marketing Vivienne Cox Chief Executive Alternative…

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