Hello and welcome. This is BPs full-year 2014 results webcast and conference call. Im Jess Mitchell, BPs Head of Investor Relations and Im here with our Group Chief Executive Bob Dudley, Chief Financial Officer Brian Gilvary, Upstream…
During todays presentation, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors that we note on this slide and in our UK and SEC…
Thanks Jess and welcome everyone to todays call 4
Today is an important day for BP, particularly as it marks the fulfilment of our ten-point plan and the start of a new phase. Were here to look back on a turbulent last quarter, a strong 2014 and a three-year period in which we did what…
So the first thing to say is that with 2014 now complete, we can confirm that we have delivered the 10-point plan we laid out back in 2011. As part of that plan we set a series of goals that we would accomplish over a three year period.…
Its been a similar story in the Downstream where we have invested in the major upgrade of our Whiting refinery and at the same time divested two large US refineries and some related marketing assets, leaving a portfolio of more advantaged…
The recent sharp fall in the oil price is of course the big story in the industry today. A lot has been said and written about this so Im going to concentrate today on how BP is positioned in this environment. How well we navigate the…
At this moment we benefit from being an organisation that is already very focused on cost discipline. We began to streamline activity and increase efficiency some 18 months ago in response to becoming a smaller, more focused company. This…
So let me now spend a moment on how we intend to deepen our focus on costs in the different parts of our business. The background to this, as you know, is that BP invested significantly in certain areas of functional capability following…
1.6 billion per year of efficiency savings by 2018 versus 2014 as Tufan will explain. This all works together to right-size our total cash cost base. In 2014 we saw a reduction in total group cash costs of over 1 billion relative to…
Turning to our portfolio. Todays environment is a good reminder of the logic of being an integrated business with a focused portfolio of high-quality assets. The repositioning of our portfolio following our divestments has made us less…
With respect to Russia, the current geo-political context remains challenging. Nonetheless, Russia remains today the worlds largest oil and gas producer and we remain committed to our strategic investment in Rosneft, a position with…
Turning to our overall proposition to investors, this is a slide we showed you in March last year. Of course a lot has changed since then but the fundamental principles of that proposition remain unchanged over the long term. We are…
Looking ahead to what we expect to happen over the next few years. We see this year, and probably the next several years, as an industry reset phase a period of intense change, the outcomes of which will be defined by oil and gas prices,…
We expect this reset base to be underpinned by the next wave of Upstream major projects and longer-term opportunities for resource progression. In the Downstream we see us moving to the next level of competitiveness and efficiency as we…
Now let me now turn specifically to our full-year 2014 results. Our underlying replacement cost profit was 12.1 billion. As you would expect, in the Upstream this was significantly affected by the weaker environment, particularly in the…
So now I want to walk you through the important area of our safety performance in 2014. These charts show an encouraging overall trend since 2010 which I believe reflects the disciplined approach we are taking to our operations around…
Lastly, let me briefly touch on the ongoing Gulf of Mexico litigation processes in the United States. The penalty phase of the MDL 2179 trial is now underway. This is the third of three steps in the process of determining the amount of…
Thanks Bob 15
Ill start by touching briefly on the price environment in what continues to be a very weak market. In the fourth quarter, Brent fell to an average of just under 77 per barrel, the lowest quarterly average since the third quarter of 2010,…
Turning to the results. BPs fourth-quarter underlying replacement cost profit was 2.2 billion, down 20% on the same period a year ago, and 26% lower than the third quarter. Compared to the fourth quarter of 2013, the result reflects:…
In Upstream, the underlying fourth-quarter replacement cost profit before interest and tax of 2.2 billion compares with 3.9 billion a year ago and 3.9 billion in the third quarter. Compared to the fourth quarter of 2013 the result…
Partly offset by: Significantly stronger gas marketing and trading; Higher production; and Lower costs. Looking ahead, we expect first-quarter 2015 reported production to be higher than the fourth quarter, reflecting higher…
For the fourth quarter of 2014 we have recognised 470 million as our estimate of BPs share of Rosnefts underlying net income, compared to 1.1 billion a year ago and 110 million in the third quarter. BPs share of Rosnefts production for…
In the Downstream, the fourth-quarter underlying replacement cost profit before interest and tax was 1.2 billion compared with 70 million a year ago and 1.5 billion in the third quarter. The fuels business reported an improved underlying…
the Asian aromatics sector and unplanned operational events. Looking to 2015, we anticipate weaker refining margins due to narrowing crude differentials in the low crude price environment. We expect the financial impact of refinery…
In Other Businesses and Corporate, the pre-tax underlying replacement cost charge was 120 million for the fourth quarter, a reduction of 490 million on the same period a year ago, mainly due to improved results in our other businesses,…
The charge for the Gulf of Mexico oil spill was 480 million for the fourth quarter, primarily reflecting increased costs related to business economic loss claims, litigation and the ongoing costs of the Gulf Coast Restoration…
Now turning to progress on divestments and our objective to divest 10 billion of assets by the end of 2015. Agreed deals to date have reached 4.7 billion. These include: The sale of a package of assets on the Alaskan North Slope; The…
Now looking at our full-year cash flow movements, this slide compares our sources and uses of cash in 2013 and 2014. Operating cash flow for 2014 was 32.8 billion, marking delivery of the ten-point plan operating cash flow target. This…
Turning to our forward-looking guidance for 2015. We expect full-year underlying production in 2015 to be broadly flat compared with 2014, with base decline offset by new major project volumes. The actual reported outcome will depend on…
charge against the 1 billion charge we expect to see before the end of this year. Clearly, as Bob outlined, this is a year of transition, as we adjust to the reality of current and expected lower oil prices. As we re-balance the companies…
Turning to our financial outlook. Our 2014 operating cash delivery of 32.8 billion reflects the reliable operating performance in our business and a release of working capital that is less than half of the build we saw in 2013. This…
cash for discretionary re-investment and distributions on an ongoing basis, with a bias to distributions. We will continue to keep you updated as our plans evolve through the year. Now let me hand over to Lamar to talk about the…
Thanks Brian. In December I shared with you some significant detail about our strategy and plans for the Upstream, so I do not intend to go into a lot of detail today. Ill start with a look back at 2014, followed by a reminder of the…
We achieved a number of key milestones in 2014. Eighteen exploration wells were drilled in the year. We made five new discoveries at Orca in Angola, Notus in Egypt, Xerelete in Brazil, Vorlich in the North Sea and Guadalupe in the Gulf…
wells and had the highest production from new wells and wellwork since 2009. 28
As I described in December, our core business activities are designed to drive value growth and competitive returns. In our base operations we are focused on driving systematic delivery of safe and increasingly reliable operations, with…
Now Ill look more specifically at the four major projects we expect to start-up in 2015, which are progressing on time and within budgets. In Angola, the Kizomba Satellites Phase 2 project is progressing well. Subsea installation is…
I will now focus a little more on our portfolio and recent developments in the United States where we have 3 main Upstream businesses: The Lower 48; Alaska; and The Gulf of Mexico. We have initiated change to actively pursue more…
drive incremental value. Finally in the Gulf of Mexico, we focus our efforts on four operated hubs and three non-operated positions which have the potential to deliver production growth. At the same time we will also consider how we can…
So, to close, I would like to revisit the key take-aways from our Upstream Day in December: We are building a track record of delivery; We are improving safety and making our operations more reliable; We are focused on value over…
Thanks Lamar. In the next few slides I will provide a brief update on our progress in 2014 and will set out the opportunity I see for further performance improvement across the Downstream and the strategy we will be following to capture…
In terms of progress in 2014. We have seen continued improvement in our process safety performance, particularly on loss of primary containment where we have achieved around 20 percent reduction in incidents year-on-year during 2014,…
Our strategy focuses on improving returns, growing operating and free cash flow, and building a quality Downstream business which leads the industry, as measured by net income per refining barrel. Our strategy to deliver this performance…
We have improved our refining portfolio quality in terms of both feedstock advantage and scale, and sustained competitive complexity through portfolio rationalisation and selective investment. We have divested or closed 14 refineries…
And outside of the US and Europe where we have refineries in Africa and Australia, these are industry leading in their region in terms of scale and have top quartile profit capability. Across all regions we expect to operate our…
Our Petrochemicals portfolio is focused in large on two main end products Purified Terephthalic Acid (PTA) and Acetic Acid We are taking steps to significantly improve the cash breakeven performance of the business. This will improve our…
The bottom right chart illustrates the cost advantage enjoyed from our latest technologies. Deployment of these leading technologies, plus portfolio actions should deliver performance uplift, improve earnings potential of the business and…
Fuels marketing and Lubricants are both key to our profitable growth strategy. In left-hand chart, the bubble size illustrates total 2014 business profit generation, plotted against business returns and the percentage of profit generated…
We have a good track record of generating cost efficiencies as shown in the top right chart. Going forward, to improve our performance and competitiveness, simplification and efficiency programs will form key elements of our Downstream…
Now, let me summarise the key elements of our strategy to capture further performance improvement: Within Refining and Petrochemicals, we will focus on building an advantaged manufacturing portfolio, improving the earnings potential of…
Thanks Tufan 41
Now to summarise the key points we want to leave you with today. We leave 2014 behind having delivered some significant milestones over the last three years including everything we said you should expect and be able to measure as part of…
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