First quarter 2024 results

Highlights

1Q24 underlying replacement cost (RC) profit* $2.7 billion

• Underlying RC profit for the quarter was $2.7 billion, compared with $3.0 billion for the previous quarter. Compared with the fourth quarter 2023, the result reflects lower oil and gas realizations, the impacts of the Whiting refinery outage and significantly weaker fuels margin, partially offset by significantly lower level of turnaround activity, a strong oil trading result and higher realized refining margins. The underlying effective tax rate (ETR)* in the quarter was 43%.
• Reported profit for the quarter was $2.3 billion, compared with $0.4 billion for the fourth quarter 2023. The reported result for the first quarter is adjusted for inventory holding gains* of $0.7 billion (net of tax) and a net adverse impact of adjusting items* of $1.1 billion (net of tax) to derive the underlying RC profit. Adjusting items pre-tax include net impairment charges of $0.6 billion, largely as a result of regulatory and portfolio changes, and adverse fair value accounting effects* of $0.2 billion.
  

Segment results

• Gas & low carbon energy: The RC profit before interest and tax for the first quarter 2024 was $1.0 billion, compared with $2.2 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.6 billion, the underlying RC profit before interest and tax* for the first quarter was $1.7 billion, compared with $1.8 billion in the fourth quarter 2023. The first quarter underlying result reflects lower realizations and foreign exchange losses on Egyptian pound balances, partially offset by lower exploration write-offs. Gas marketing and trading was strong following a strong result in the fourth quarter.
• Oil production & operations: The RC profit before interest and tax for the first quarter 2024 was $3.1 billion, compared with $1.9 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.1 billion, the underlying RC profit before interest and tax for the first quarter was $3.1 billion, compared with $3.5 billion in the fourth quarter 2023. The first quarter underlying result reflects lower realizations, partially offset by higher production.
  
• Customers & products: The RC profit before interest and tax for the first quarter 2024 was $1.0 billion, compared with a loss of $0.6 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.3 billion, the underlying RC profit before interest and tax for the first quarter was $1.3 billion, compared with $0.8 billion in the fourth quarter 2023. The customers first quarter underlying result was lower by $0.5 billion, reflecting significantly weaker fuels margin, seasonally lower volumes, and the absence of one-off positive effects that benefited the prior quarter, partly offset by lower costs. The products first quarter underlying result was higher by $1.0 billion, reflecting higher realized refining margins, a significantly lower level of turnaround activity and higher commercial optimization, partially offset by the impacts of the Whiting refinery outage. The oil trading contribution was strong following a weak result in the fourth quarter.
  

Operating cash flow* $5.0 billion

• Operating cash flow in the quarter of $5.0 billion includes a working capital* build (after adjusting for inventory holding gains, fair value accounting effects and other adjusting items) of $2.4 billion, reflecting seasonal inventory effects, timing of various payments and the price environment. (see page 27).

Delivering the next wave of efficiencies - at least $2 billion cash cost* savings

• bp has a target to deliver at least $2 billion of cash cost savings by the end of 2026 relative to 2023. The reduction is expected to result from cost-saving measures across bp’s business underpinned by high-grading the portfolio, digital transformation, supply chain efficiencies and global capability hubs. Some of these cost savings may have associated restructuring charges.

Further $1.75 billion share buyback announced for 1Q24; $3.5 billion for first half 2024 unchanged

• The $1.75 billion share buyback programme announced with the fourth quarter results was completed on 3 May 2024.
• A resilient dividend is bp’s first priority within its disciplined financial frame, underpinned by a cash balance point* of around $40 per barrel Brent, $11 per barrel RMM and $3 per mmBtu Henry Hub (all 2021 real). For the first quarter, bp has announced a dividend per ordinary share of 7.270 cents.
• bp is committed to maintaining a strong investment grade credit rating. Through the cycle, we are targeting to further improve our credit metrics within an 'A' grade credit range.
  
• bp continues to invest with discipline and a returns focused approach in our transition growth* engines and in our oil, gas and refining businesses. For 2024 and 2025 we expect capital expenditure of around $16 billion per annum.
• In setting the dividend per ordinary share and buyback each quarter, the board will continue to take into account factors including the cumulative level of and outlook for surplus cash flow*, the cash balance point and maintaining a strong investment grade credit rating.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36.

(a) Divestment proceeds are disposal proceeds as per the condensed group cash flow statement. There were no other proceeds for all periods stated.
(b) See Note 9 for more information.

RC profit, underlying RC profit, net debt, adjusted EBITDA, underlying RC profit per ordinary share and underlying RC profit per ADS are non-IFRS measures. Inventory holding (gains) losses and adjusting items are non-IFRS adjustments.

* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 30.

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: plans, expectations and assumptions regarding oil and gas demand, supply, prices or volatility; expectations regarding reserves; expectations regarding production and volumes; expectations regarding bp’s customers & products business; expectations regarding margins, including sensitivity of fuels margin to costs of supply; expectations regarding the simplification of bp’s organizational structure and related cash cost savings; expectations regarding underlying effective tax rate; expectations regarding turnaround and maintenance activity; expectations regarding financial performance, results of operations and cash flows; expectations regarding future project start-ups; expectations regarding bp’s customers & products businesses, including TravelCenters of America, Castrol and bp pulse; bp’s plans regarding transforming to an IEC; price assumptions used in accounting estimates; bp’s plans and expectations regarding the amount and timing of share buybacks and dividends; plans and expectations regarding bp’s credit rating, including in respect of maintaining a strong investment grade credit rating and targeting further improvements in credit metrics; plans and expectations regarding the allocation of surplus cash flow to share buybacks and strengthening the balance sheet; plans and expectations regarding LNG sales; plans and expectations the sale of its investments, including those relating to the sale of its Türkiye ground fuels business; plans and expectations regarding investments, collaborations and partnerships in electric vehicle (EV) charging infrastructure; plans and expectations related to bp’s transition growth engines, including expected capital expenditures; plans and expectations regarding the amount or timing of payments related to divestment and other proceeds, and the timing, quantum and nature of certain acquisitions and divestments; expectations regarding the timing and amount of future payments relating to the Gulf of Mexico oil spill; plans and expectations regarding bp’s guidance for 2024 and the second quarter of 2024, including expected growth, margins, other businesses & corporate underlying annual charge, depreciation, depletion and amortization; plans and expectations regarding capital expenditure for 2024 and 2025; expectations regarding greenhouse gas emissions; and plans and expectations regarding bpoperated projects and ventures, including plans for the Gelsenkirchen refinery site, and its projects, joint ventures, partnerships and agreements with commercial entities and other third party partners.
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, 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 forwardlooking 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 bp’s ability to sell its interests in Rosneft, or the price for which bp 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 those factors discussed under “Risk factors” in bp’s Annual Report and Form 20-F for fiscal year 2023 as filed with the US Securities and Exchange Commission.