First quarter 2022 results

Highlights

Reported loss of $20.4 billion, underlying replacement cost profit of $6.2 billion

• Reported loss for the quarter was $20.4 billion, compared with a profit of $2.3 billion for the fourth quarter 2021. The reported result includes adjusting items* before tax of $30.8 billion.
• Adjusting items include pre-tax charges of $24.0 billion and $1.5 billion as a result of the loss of significant influence and bp's decision to exit its 19.75% shareholding in Rosneft and its other businesses with Rosneft in Russia respectively.
  As a result, in the first quarter the post-tax charge is $24.4 billion and the total reduction in equity is $14.7 billion.
  Adjusting items also include fair value accounting effects of $5.8 billion. See page 3 for further details.
• Underlying replacement cost profit* was $6.2 billion, compared with $4.1 billion for the previous quarter. This was driven by exceptional oil and gas trading, higher oil realizations and a stronger refining result, partly offset by the absence of Rosneft from the first quarter underlying result.
• For the first quarter bp has announced a dividend of 5.46 cents per ordinary share payable in June 2022.

Net debt* reduced to $27.5 billion; further $2.5 billion share buyback announced

• Operating cash flow* of $8.2 billion includes a working capital* build of $4.1 billion (after adjusting for inventory holding gains* and fair value accounting effects*). 
• Capital expenditure* in the quarter was $2.9 billion. bp continues to expect capital expenditure of $14-15 billion in 2022. 
• bp received divestment and other proceeds of $1.2 billion in the first quarter and continues to expect to receive total proceeds of $2-3 billion during 2022. 
• Net debt fell to $27.5 billion at the end of the first quarter. 
• During the first quarter bp executed share buybacks of $1.6 billion - $0.5 billion during January to offset the expected full-year dilution of the 2022 vesting of awards under employee share schemes and a further $1.1 billion representing progress against the $1.5 billion programme announced with the fourth quarter 2021 results on 8 February. This programme was completed on 27 April. 
• During the first quarter bp generated surplus cash flow* of $4.1 billion and intends to execute a $2.5 billion share buyback prior to announcing its second quarter results.
  

Progressing transformation to an Integrated Energy Company

• In resilient hydrocarbons since the start of 2022 bp announced the start-up of the Herschel Expansion major project* in the Gulf of Mexico; signed a final agreement with Eni to create Azule Energy a new independent joint venture in Angola; and advanced its strategy in biofuels producing sustainable aviation fuel at bp's Lingen refinery and entering into a long-term strategic offtake and market development agreement for low-carbon biofuels feedstock with Nuseed. 
• In convenience and mobility since the start of 2022 bp has continued to progress its EV charging strategy - launching a strategic partnership with Volkswagen Group and announcing plans to invest £1 billion in the UK over the next decade; signed a global strategic convenience partnership with Uber, aiming to make more than 3,000 retail locations available on Uber Eats by 2025; and signed a strategic collaboration agreement with DHL Express to supply sustainable aviation fuel. 
• In low carbon energy since the start of 2022 bp has increased its position in offshore wind with the ScotWind lease option award of 1.45GW net; agreed to form an offshore wind partnership with Marubeni; and advanced its hydrogen strategy, announcing plans to develop H2-Fifty, a 250MW gross green hydrogen plant in Rotterdam and signing an agreement to form a joint venture with Aberdeen City Council to develop a hydrogen hub.

^(a) Divestment proceeds are disposal proceeds as per the condensed group cash flow statement. See page 3 for more information on divestment and other proceeds

^(b) See Note 10 for more information.

RC profit (loss), underlying RC profit (loss), surplus cash flow and net debt are non-GAAP measures. Inventory holding (gains) losses and adjusting items are non-GAAP adjustments.

* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 33

Further information

Contacts

bp press office, London: +44 (0)20 7496 4076, bppress@bp.com

Cautionary statement

In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement:

The discussion in this results announcement contains certain forecasts, projections and forward-looking statements - that is, statements related to future, not past events and circumstances - with respect to the financial condition, results of operations and businesses of bp and certain of the plans and objectives of bp with respect to these items. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions.

In particular, the following, among other statements, are all forward looking in nature: expectations regarding the COVID-19 pandemic and the conflict in Ukraine, including the impacts and consequences on economic growth, demand, and bp’s operations and financial performance; plans, expectations and assumptions regarding oil and gas demand, supply or prices, the timing of production of reserves, storage levels and decision making by OPEC+; expectations regarding reported and underlying production and related major project ramp-up, capital investments, divestment and maintenance activity; expectations regarding refining margins, refinery utilization rates and product demand; expectations regarding bp’s future financial performance and cash flows; expectations regarding future hydrocarbon production and project ramp-up; expectations with regards to bp’s transformation to an IEC; expectations regarding price assumptions used in accounting estimates; bp’s plans and expectations regarding the amount and timing of share buybacks and quarterly dividends; expectations regarding the amount of full-year dilution from the vesting of awards under employee share schemes in 2022; plans and expectations regarding bp’s credit rating, including in respect of maintaining a strong investment grade credit rating; plans and expectations regarding the allocation of surplus cash flow to share buybacks and strengthening the balance sheet; plans and expectations regarding bp’s exit of its shareholding in Rosneft and other investments in Russia;plans and expectations with respect to the total depreciation, depletion and amortization and business and corporate underlying annual charge for 2022; plans and expectations regarding investments in the UK, including in charging infrastructure and public charge points; plans and expectations regarding debt, net debt, and bp’s intentions to strengthen the balance sheet; plans and expectations regarding the divestment programme, including the amount and timing of proceeds; plans and expectations regarding bp’s renewable energy and alternative energy businesses; expectations regarding the underlying effective tax rate for 2022; expectations regarding the timing and amount of future payments relating to the Gulf of Mexico oil spill; plans and expectations regarding capital expenditure, including that capital expenditure will be within a range of $14-15 billion in 2022; expectations regarding adjusted EBITDA for resilient hydrocarbons and the group; and plans and expectations regarding projects joint ventures and other partnerships and agreements, including partnerships and other collaborations with Eni, Nuseed, Uber, Korea Gas Corporation, EnBW, Marubeni, Aberdeen City Council, HyCC, DHL Express, BYD, Tesco, Shell and AENA, as well as plans and expectations regarding the Herschel Expansion project in the Gulf of Mexico, production of sustainable aviation fuel at the Lingen refinery, the Gas Natural Acu power plant in Brazil the sale of bp’s retail assets in Switzerland to Oel Pool AG, bp’s stake in Green Biofuels Ltd., the completion of the acquisition of the oil and gas business of Lundin Energy, the development of EV charge points and the completion of the establishment of bp’s Basra Energy Company joint venture with PetroChina.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of bp.

Actual results or outcomes, may differ materially from those expressed in such statements, depending on a variety of factors, including: the extent and duration of the impact of current market conditions including the volatility of oil prices, the effects of bp’s plan to exit its shareholding in Rosneft and other investments in Russia, the impact of COVID-19, overall global economic and business conditions impacting bp’s business and demand for bp’s products as well as the specific factors identified in the discussions accompanying such forward-looking statements; changes in consumer preferences and societal expectations; the pace of development and adoption of alternative energy solutions; developments in policy, law, regulation, technology and markets, including societal and investor sentiment related to the issue of climate change; the receipt of relevant third party and/or regulatory approvals; the timing and level of maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new fields onstream; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing, including supply growth in North America and continued base oil and additive supply shortages; OPEC+ quota restrictions; PSA and TSC effects; operational and safety problems; potential lapses in product quality; economic and financial market conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations and policies, including related to climate change; changes in social attitudes and customer preferences; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought or imposed; the actions of prosecutors, regulatory authorities and courts; delays in the processes for resolving claims; amounts ultimately payable and timing of payments relating to the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; bp’s access to future credit resources; business disruption and crisis management; the impact on bp’s reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; the possibility that international sanctions or other steps taken by governmental authorities or any other relevant persons may impact Rosneft’s business or outlook, bp’s ability to sell its interests in Rosneft, or the price for which bp could sell such interests; the possibility that actions of any competent authorities or any other relevant persons may limit bp’s ability to sell its interests in Rosneft, or the price for which it could sell such interests;; the actions of contractors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other factors discussed elsewhere in this report, as well those factors discussed under “Risk factors” in bp’s Annual Report and Form 20-F 2021 as filed with the US Securities and Exchange Commission.