DGAP-News: BP p.l.c. / Key word(s): Annual Results 
BP p.l.c. Group results - Fourth quarter and full year 2020 
2021-02-02 / 11:15 
The issuer is solely responsible for the content of this announcement. 
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FOR IMMEDIATE RELEASE 
London 2 February 2021 
BP p.l.c. Group results 
Fourth quarter and full year 2020

For a printer friendly copy of this announcement, please click on the link below to open a PDF version. 


Highlights    Resilient operations and strategic progress in a challenging environment 
Bernard Looney - chief executive officer: 
2020 will forever be remembered for the pain and sadness caused by COVID-19. Lives were lost - livelihoods destroyed. 
Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins. It was also a 
pivotal year for the company. We launched a net zero ambition, set a new strategy to become an integrated energy 
company and created an offshore wind business in the US. We began reinventing bp - with nearly 10 thousand people 
leaving the company. We strengthened our finances - taking out costs and closing major divestments. And through all of 
this, the underlying operations of the company remained safe - one of our safest years - and reliable, and major new 
projects were brought on line. I appreciate our team's commitment to deliver the energy the world needed and am 
grateful for the support we received from investors and the communities where we work. We expect much better days ahead 
for all of us in 2021.

Financial results and progress

- Underlying replacement cost profit for the quarter was USD0.1 billion, similar to the previous quarter. Performance was significantly impacted by lower marketing performance in the Downstream, with volumes remaining under pressure due to COVID-19 and continuing pressure on refining margins and utilization. In addition, the result was impacted by a significantly weaker result in gas marketing and trading and higher exploration write-offs, partially offset by a higher Rosneft contribution and a lower underlying tax charge. The full-year result was a loss of USD5.7 billion compared to USD10 billion profit in 2019, driven by lower oil and gas prices, significant exploration write-offs and refining margins and depressed demand.

- Reported profit for the quarter was USD1.4 billion, compared with USD0.5 billion loss in the previous quarter. The result included USD2.3 billion gain on disposal from the sale of BP's petrochemicals business. For the full year, the reported loss was USD20.3 billion, including significant impairments and exploration write-offs taken in the second quarter, compared with a profit of USD4.0 billion in 2019.

- Operating cash flow for the quarter, excluding Gulf of Mexico oil spill payments of USD0.1 billion, was USD2.4 billion. Compared to the third quarter, this reflected the significant impact of lower marketing volumes in the Downstream and a significantly weaker contribution from gas marketing and trading. There was also the absence of the working capital release and other working capital effects, absence of the Rosneft dividend, and severance payments for reinvent bp, partly offset by lower tax payments.

- Proceeds from divestments and other disposals in the quarter were USD4.2 billion, including USD3.5 billion on completion of the petrochemicals divestment. In February 2021, BP agreed to sell a 20% interest in Oman's Block 61 for USD2.6 billion subject to final adjustments. BP has now completed or agreed transactions for over half of its target of USD25 billion in proceeds by 2025. BP expects proceeds from divestments and other disposals of USD4-6 billion in 2021, weighted toward the second half.

- At year end net debt was USD39 billion, down USD1.4 billion over the quarter and USD6.5 billion over the full year. Net debt is expected to increase in the first half of 2021, driven by severance payments, the annual Gulf of Mexico oil spill payment and payment following completion of the offshore wind joint venture with Equinor. It is expected to then fall in the second half with growing operating cash flow and the receipt of divestment proceeds. BP continues to expect to reach our USD35 billion net debt target around fourth quarter 2021 and first quarter 2022. This assumes oil prices in the range of USD45-50 a barrel and BP planning assumptions for RMM and gas prices.

- A dividend of 5.25 cents per share was announced for the quarter.

Performing while transforming

- Operations were strong in 2020, with full-year BP-operated refining availability of 96% and Upstream plant reliability of 94%. Safety performance was also strong with both tier1/tier2 process safety events and reported recordable injury frequency significantly lower than in 2019. Upstream unit production costs for the year were 6.5% lower than 2019. Full-year Upstream production was 9.9% lower than 2019 primarily due to divestments.

- BP continues to make strong progress in reinventing its organization. The new organization was in place at the start of 2021 and over half of the approximately 10,000 people expected to leave BP as a result of the reinvent programme had left by year-end. Around USD1.4 billion in people-related costs are expected associated with the reinvent programme, with the majority of the cash outflow incurred in the first half of 2021.

- Four new Upstream major projects began production in the year, including three in the fourth quarter - Ghazeer in Oman, Vorlich in the UK and KG D6 R-cluster in India. In the quarter, the Trans Adriatic Pipeline began gas deliveries, completing the Southern Gas Corridor pipeline system.

- Demonstrating the resilience of BP's convenience offer, while retail fuel volumes were 14% lower for the full year, BP's convenience gross margin grew by 6%. Through the year, around 300 strategic convenience sites were added to the network.

- BP had developed 3.3GW net renewable generating capacity to FID by end-2020, 0.7GW more than a year earlier. In January 2021 BP completed formation of its strategic US offshore wind partnership with Equinor, including the purchase of 50% in the Empire Wind and Beacon Wind projects. The projects were also selected to supply 2.5GW of power to the State of New York, adding to an existing commitment to supply 0.8GW.

- Working in partnership with other companies, BP has announced: plans to develop a 'green' hydrogen project at its Lingen refinery in Germany with Ørsted; a BP-operated multi-company partnership to develop offshore infrastructure to support planned UK carbon capture, use and storage projects; and agreements to provide additional supplies of renewable energy to Amazon. 


Financial summary                                                         Fourth    Third   Fourth 
                                                                         quarter  quarter  quarter         Year    Year 
USD million                                                                   2020     2020     2019         2020    2019 
Profit (loss) for the period attributable to BP shareholders             1,358    (450)       19     (20,305)   4,026 
Inventory holding (gains) losses, net of tax                             (533)    (194)     (23)        2,201   (511) 
RC profit (loss)                                                           825    (644)      (4)     (18,104)   3,515 
Net (favourable) adverse impact of non-operating items and fair value 
accounting effects, net of tax                                           (710)      730    2,571       12,414   6,475 
Underlying RC profit (loss)                                                115       86    2,567      (5,690)   9,990 
RC profit (loss) per ordinary share (cents)                               4.08   (3.18)   (0.02)      (89.53)   17.32 
RC profit (loss) per ADS (dollars)                                        0.24   (0.19)     0.00       (5.37)    1.04 
Underlying RC profit (loss) per ordinary share (cents)                    0.57     0.42    12.67      (28.14)   49.24 
Underlying RC profit (loss) per ADS (dollars)                             0.03     0.03     0.76       (1.69)    2.95

RC profit (loss), underlying RC profit, operating cash flow excluding Gulf of Mexico oil spill payments, working capital, organic capital expenditure and net debt are non-GAAP measures. These measures and inventory holding gains and losses, non-operating items, fair value accounting effects, divestment proceeds, RMM, major project, convenience gross margin, Upstream plant reliability, refining availability and divestment proceeds are defined in the Glossary on page 32.

Top of page 2 BP p.l.c. Group results Fourth quarter and full year 2020 


 
Murray Auchincloss - chief financial officer: 
These results reflect a truly tough quarter, with a challenging price environment and COVID-19 related demand impacts. 
Nonetheless, we made strong progress in reducing net debt again, to USD39 billion in the quarter. We remain on track to 
meet our target of USD35 billion between the fourth quarter of 2021 and first quarter of 2022, which will trigger the 
start of share buybacks, subject to maintaining a strong investment grade credit rating. COVID-19 Update Strengthening finances:

- BP's future financial performance, including cash flows and net debt, will be impacted by the extent and duration of the current market conditions and the effectiveness of the actions that it and others take, including its financial interventions. It is difficult to predict when current supply and demand imbalances will be resolved and what the ultimate impact of COVID-19 will be.

- BP has continued to progress its divestment programme towards delivery of USD25 billion of proceeds by 2025. The petrochemicals and Alaska midstream disposals both completed in the fourth quarter. Divestment proceeds for the full year were USD5.5 billion.

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February 02, 2021 05:18 ET (10:18 GMT)