| Resilient performance, committed distributions |
| Financial summary | First | Fourth | First | |
| quarter | quarter | quarter | ||
| $ million | 2024 | 2023 | 2023 | |
| Profit for the period attributable to bp shareholders | 2,263 | 371 | 8,218 | |
| Inventory holding (gains) losses*, net of tax | (657) | 1,155 | 452 | |
| Replacement cost (RC) profit* | 1,606 | 1,526 | 8,670 | |
| Net (favourable) adverse impact of adjusting items*, net of tax | 1,117 | 1,465 | (3,707) | |
| Underlying RC profit* | 2,723 | 2,991 | 4,963 | |
| Operating cash flow* | 5,009 | 9,377 | 7,622 | |
| Capital expenditure* | (4,278) | (4,711) | (3,625) | |
| Divestment and other proceeds(a) | 413 | 300 | 800 | |
| Net issue (repurchase) of shares | (1,750) | (1,350) | (2,448) | |
| Net debt*(b) | 24,015 | 20,912 | 21,232 | |
| Adjusted EBITDA* | 10,306 | 10,568 | 13,066 | |
| Announced dividend per ordinary share (cents per share) | 7.270 | 7.270 | 6.610 | |
| Underlying RC profit per ordinary share* (cents) | 16.24 | 17.77 | 27.74 | |
| Underlying RC profit per ADS* (dollars) | 0.97 | 1.07 | 1.66 |
Highlights
• Resilient financial and operational performance: Adjusted EBITDA $10.3 billion; underlying RC profit $2.7 billion; upstream* production grew +2.1% vs 1Q23; start up of new Azeri Central East (ACE) platform in Caspian Sea
• Growing shareholder distributions: 1Q24 $1.75 billion share buyback announced as part of our $3.5 billion commitment for the first half of 2024; Dividend per ordinary share of 7.270 cents
• Focus on delivering our six priorities: announcement to simplify organizational structure; target to deliver at least $2 billion of cash cost* savings by the end of 2026
| We’ve delivered another resilient quarter financially and continued to make progress on our strategy. Oil production was up and our ACE platform in the Caspian is now producing. We are simplifying and reducing complexity across bp and plan to deliver at least $2 billion of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs. |
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| Murray AuchinclossChief executive officer |
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(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.
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| bp reported solid financial performance in the first quarter with adjusted EBITDA* of $10.3 billion and underlying replacement cost profit of $2.7 billion. Our financial frame is unchanged, and we are delivering competitive shareholder distributions, announcing a $1.75 billion share buyback for the first quarter as part of our commitment of $3.5 billion for the first half of 2024. |
| Kate Thomson Chief financial officer |
 |
| 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. |
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Financial results
In addition to the highlights on page 2:
• Profit attributable to bp shareholders in the first quarter was $2.3 billion, compared with a profit of $8.2 billion in the same period of 2023.
– After adjusting profit attributable to bp shareholders for inventory holding gains* and net impact of adjusting items*, underlying replacement cost (RC) profit* for the first quarter was $2.7 billion, compared with $5.0 billion for the same period of 2023. This reduction in underlying RC profit for the first quarter mainly reflects lower realizations, lower industry refining margins, a strong gas marketing and trading result compared with an exceptional result in the first quarter in 2023 and the impacts of the Whiting refinery outage.
– Adjusting items in the first quarter had a net adverse pre-tax impact of $1.2 billion, compared with a net favourable pre-tax impact of $3.9 billion in the same period of 2023.
– Adjusting items for the first quarter of 2024 include an adverse impact of pre-tax fair value accounting effects*, relative to management’s internal measure of performance, of $0.2 billion, compared with a favourable pre-tax impact of $4.3 billion in the same period of 2023. This difference is primarily due to a small decline in the forward price of LNG over the quarter compared to a large decline in this price during the first quarter of 2023.
• The effective tax rate (ETR) on RC profit or loss* for the first quarter was 54%, compared with 29% for the same period in 2023. Excluding adjusting items, the underlying ETR* for the first quarter was 43%, compared with 39% for the same period a year ago. The higher underlying ETR for the first quarter reflects foreign exchange impacts which are not tax deductible. ETR on RC profit or loss and underlying ETR are non-IFRS measures.
• Operating cash flow* for the first quarter was $5.0 billion, compared with $7.6 billion for the same period in 2023, reflecting the difference in the underlying RC profit for the respective periods.
• Capital expenditure* in the first quarter was $4.3 billion, compared with $3.6 billion in the same period of 2023.
• Total divestment and other proceeds for the first quarter were $0.4 billion, compared with $0.8 billion for the same period in 2023. There were no other proceeds for both periods.
• At the end of the first quarter, net debt* was $24.0 billion, compared with $20.9 billion at the end of the fourth quarter 2023 and $21.2 billion at the end of the first quarter 2023. The increase in the net debt is mainly attributable to a working capital* build.
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Analysis of RC profit (loss) before interest and tax and reconciliation to profit (loss) for the period
| First | Fourth | First | ||
| quarter | quarter | quarter | ||
| $ million | 2024 | 2023 | 2023 | |
| RC profit (loss) before interest and tax | ||||
| gas & low carbon energy | 1,036 | 2,169 | 7,347 | |
| oil production & operations | 3,060 | 1,879 | 3,317 | |
| customers & products | 988 | (554) | 2,680 | |
| other businesses & corporate | (300) | (16) | (90) | |
| Consolidation adjustment – UPII* | 32 | 95 | (22) | |
| RC profit before interest and tax | 4,816 | 3,573 | 13,232 | |
| Finance costs and net finance expense relating to pensions and other post-retirement benefits | (1,034) | (977) | (785) | |
| Taxation on a RC basis | (2,030) | (1,005) | (3,573) | |
| Non-controlling interests | (146) | (65) | (204) | |
| RC profit attributable to bp shareholders* | 1,606 | 1,526 | 8,670 | |
| Inventory holding gains (losses)* | 851 | (1,497) | (600) | |
| Taxation (charge) credit on inventory holding gains and losses | (194) | 342 | 148 | |
| Profit for the period attributable to bp shareholders | 2,263 | 371 | 8,218 |
Analysis of underlying RC profit (loss) before interest and tax
| First | Fourth | First | ||
| quarter | quarter | quarter | ||
| $ million | 2024 | 2023 | 2023 | |
| Underlying RC profit (loss) before interest and tax | ||||
| gas & low carbon energy | 1,658 | 1,777 | 3,456 | |
| oil production & operations | 3,125 | 3,549 | 3,319 | |
| customers & products | 1,289 | 803 | 2,759 | |
| other businesses & corporate | (154) | (97) | (296) | |
| Consolidation adjustment – UPII | 32 | 95 | (22) | |
| Underlying RC profit before interest and tax | 5,950 | 6,127 | 9,216 | |
| Finance costs and net finance expense relating to pensions and other post-retirement benefits | (942) | (891) | (681) | |
| Taxation on an underlying RC basis | (2,139) | (2,180) | (3,368) | |
| Non-controlling interests | (146) | (65) | (204) | |
| Underlying RC profit attributable to bp shareholders* | 2,723 | 2,991 | 4,963 |
Reconciliations of underlying RC profit attributable to bp shareholders to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 6-14 for the segments.
Operating Metrics
| Operating metrics | First quarter 2024 | vs First quarter 2023 | ||
| Tier 1 and tier 2 process safety events* | 14 | +5 | ||
| Reported recordable injury frequency* | 0.218 | +8.9% | ||
| upstream* production(a) (mboe/d) | 2,378 | +2.1% | ||
| upstream unit production costs*(b) ($/boe) | 6.00 | +4.7% | ||
| bp-operated upstream plant reliability* | 94.9% | -0.6 | ||
| bp-operated refining availability*(a) | 90.4% | -5.7 |
(a) See Operational updates on pages 6, 9 and 11. Because of rounding, upstream production may not agree exactly with the sum of gas & low carbon energy and oil production & operations.
(b) Mainly reflecting portfolio mix.
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Outlook & Guidance
2Q 2024 guidance
• Looking ahead, bp expects second quarter 2024 reported upstream* production to be slightly lower compared with first-quarter 2024.
• In its customers business, bp expects seasonally higher volumes and fuels margin to remain sensitive to movements in the cost of supply.
• In products, bp expects realized margins to be impacted by narrower North American heavy crude oil differentials, and to remain sensitive to relative movements in product cracks. In addition, bp expects the absence of the first quarter plant-wide power outage at the Whiting refinery to be partly offset by a higher level of turnaround activity.
2024 guidance
In addition to the guidance on page 2:
• bp continues to expect both reported and underlying upstream production* to be slightly higher compared with 2023. Within this, bp continues to expect underlying production from oil production & operations to be higher and production from gas & low carbon energy to be lower.
• In its customers business, bp continues to expect growth from convenience, including a full year contribution from TravelCenters of America; a stronger contribution from Castrol underpinned by volume growth in focus markets; and continued margin growth from bp pulse driven by higher energy sold. In addition, bp continues to expect fuels margin to remain sensitive to the cost of supply.
• In products, bp continues to expect a lower level of industry refining margins, with realized margins impacted by narrower North American heavy crude oil differentials. bp continues to expect refinery turnaround activity to have a similar impact on both throughput and financial performance compared to 2023, with phasing of activity in 2024 heavily weighted towards the second half.
• bp continues to expect the other businesses & corporate underlying annual charge to be around $1.0 billion for 2024. The charge may vary from quarter to quarter.
• bp continues to expect the depreciation, depletion and amortization to be slightly higher than 2023.
• bp continues to expect the underlying ETR* for 2024 to be around 40% but it is sensitive to the impact that volatility in the current price environment may have on the geographical mix of the group’s profits and losses.
• bp continues to expect capital expenditure* for 2024 to be around $16 billion, but now expects the phasing to be split broadly evenly between the first half and the second half.
• bp continues to expect divestment and other proceeds of $2-3 billion in 2024, weighted towards the second half. Having realized $18.2 billion of divestment and other proceeds since the second quarter of 2020, bp continues to expect to reach $25 billion of divestment and other proceeds between the second half of 2020 and 2025.
• bp continues to expect Gulf of Mexico oil spill payments for the year to be around $1.2 billion pre-tax including $1.1 billion pre-tax paid during the second quarter.
| The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 36. |