bp second quarter 2022
financial results
2 August 2022

svp investor relations
1Q 2022 financial results

Good morning everyone and welcome to bp’s second quarter 2022 resultspresentation.
I am here today with Bernard Looney, chief executive officer and Murray
Auchincloss, chief financial officer.

Before we begin today, let me draw your attention to our cautionary statement.

2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’, ‘focus on’ or similar
expressions.
In particular, the following, among other statements, are all forward looking in nature: expectations regarding the conflict in Ukraine, including the impacts and consequences on energy supplies; plans, expectations and assumptions regarding oil and gas demand, supply, andprices; expectations regarding capacity and inventory levels; plans and expectations regarding bp’s performance, earnings, balance sheet and capital expenditure, including with respect to bp’s resilient hydrocarbons, convenience and mobility and low carbon energy
businesses; plans and expectations related to earnings growth, including the aim that resilient hydrocarbons will reach $28-33 billion of EBITDA by 2030, that EBITDA from convenience and mobility will reach around $9-10 billion by 2030, that EBITDA for bp’s low carbon
businesses will reach around $2-3 billion of EBITDA by 2030, that EBITDA from transition growth businesses will reach around $9-10 billion by 2030, and that EBITDA from EV charging will reach around $2 billion by 2030; plans to high-grade bp’s oil and gas portfolio, including
expectations regarding future production; expectations regarding the oil and gas business’s contribution to the aim of sustaining EBITDA from resilient hydrocarbons to 2030; plans and expectations regarding allocating investments to material regions of the world, andexpectations regarding EBITDA growth from these regions; plans and expectations regarding cost efficiency, divestment and growing unit margins; plans and expectations for oil and gas EBITDA to remain highly leveraged to price over the decade; plans and expectations
regarding the start-up of new high-margin, major projects by end 2024; plans and expectations regarding increased investment in bpx energy from 2021 to 2022 and growing production in bpx energy; plans and expectations regarding the growth in EV charge points andcharge capacity, including expectations related to the benefits of bp’s integrated organisation and expectations related to growth in regions including the US; plans and expectations regarding bp’s ‘on-the-go’ chargers; plans and expectations regarding bp’s five transition
growth engines of EV charging, convenience, bioenergy, renewables and hydrogen; plans and expectations regarding bp’s convenience and mobility business; plans and expectations regarding resilient hydrocarbons; expectations regarding refining margins and productdemand; expectations regarding bp’s future financial performance and cash flows; expectations regarding supply issues; expectations with regards to bp’s transformation to an IEC; expectations regarding the energy trilemma and bp’s capabilities and scale to help the world
address it; plans and expectations regarding bp’s financial frame; bp’s plans and expectations regarding the allocation of surplus cash flow; plans regarding future quarterly dividends and the amount and timing of share buybacks; plans and expectations regarding bp’s credit
rating, including in respect of maintaining a strong investment grade credit rating; expectations regarding bp’s development of hydrogen projects and bp’s hydrogen production, low carbon energy hubs and wind projects; plans and expectations regarding start-ups during 2022;
expectations of disposal proceeds of $2-3 billion in 2022; plans and expectations of around $14-15 billion capital expenditure in 2022; plans and expectations regarding the acquisition of a 35% interest in the Bay du Nord discovery in offshore Canada, the divestment of bp’s
Sunrise oil sands asset, the delivery of low carbon hydrogen to bp’s Rotterdam, Lingen, Gelsenkirchen and Castellon refineries, the award of a 100% working interest in an offshore exploration block in Egypt, the appraisal of the Brazil discovery at Cabo Frio, the Basra Energy
Company joint venture, the Indonesia discovery at Timpan-1 and bp’s acquisition of a stake in the Asian Renewable Energy Hub project; and plans and expectations regarding joint ventures, partnerships and other collaborations with Uber Eats, Didi, Daimler Trucks, Eni,
PetroChina, Volkswagen Group, Iberdrola and Thyssenkrupp Steel.
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 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 theissue 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 andnature 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; delaysin 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 ofpartnering; 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 noncompliance 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 interestsin 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 as 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.
Reconciliations to GAAP - This presentation also contains financial information which is not presented in accordance with generally accepted accounting principles (GAAP). A quantitative reconciliation of this information to the most directly comparable financial measurecalculated and presented in accordance with GAAP can be found on our website at www.bp.com.
This presentation contains references to non-proved resources and production outlooks based on non-proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F,
SEC File No. 1-06262.
Tables and projections in this presentation are bp projections unless otherwise stated.

August 2022

* For items marked with an asterisk throughout this document, definitions are provided in the glossary

2Q 2022 financial results

3

During today’s presentation, we will make forward-looking statements including
those that refer to our estimates, plans and expectations. Actual results andoutcomes could differ materially due to factors we note on this slide and in our
UK and SEC filings. Please refer to our Annual Report, Stock Exchangeannouncement and SEC filings for more details. These documents are available
on our website.
I will now handover to Bernard.

3

Chief executive officer
1Q 2022 financial results

Thanks Craig.
Good morning everyone.
Welcome to our second quarter results. It is great to have you join us on the calland see those of you here in person.
You are going to hear about – what I hope you will agree – is some good
progress from us today.
But before we do that – let me take a moment to put what follows into context.
Russia’s military action is continuing in Ukraine, devastating people’s lives anddisrupting energy supplies.
The cost of living is spiralling upwards – with energy costs a big contributor.
And since the start of the Ukraine conflict, power generation from coal in Europe
has significantly increased.
These are stark examples of the energy trilemma.
−

Energy security under threat;−

Energy affordability an acute problem for many; and−A pressing need for lower carbon energy.

4

We see this.
And it’s why we are absolutely focused on delivering our strategy totransform to an Integrated Energy Company. A company which canhelp solve that energy trilemma. We do that by:a)Working hard to keep the energy flowing today. And – not or -b)

At the same time investing to accelerate the energy transition.

That’s the role of an IEC and its purpose has never been clearer.
And we do all of that while remaining acutely focused on delivering
long-term value for our owners.

4

2Q 2022 financial results

5

That is the context against which we present today’s results.
A set of results that show us performing while transforming.
During the quarter we generated operating cash flow of $10.9 billion.
We reduced net debt for the ninth consecutive quarter to reach $22.8 billion.
And we are growing distributions to shareholders – our owners - by announcing:−

A 10% increase in the quarterly dividend per ordinary share;−

And a further $3.5 billion share buyback.

Crucially we are doing this within a financial frame which is unchanged andmaintaining a resilient $40 per barrel cash balance point. With all the uncertainty
in the world – now is not the time to lose discipline.
We also have real momentum in our transformation. In a moment I will update
you on how we are:−Driving improvement in our oil and gas portfolio; and−Making good progress in our transition growth engines.

But for now, I will hand over to Murray to take us through the second quarter
results.
Murray.

5Chief financial officer
1Q 2022 financial results

Thanks Bernard and good morning everyone.

6Macro environment
Oil price1 $/bbl

Natural gas price1 $/mmbtu

Refining marker margin* 1 $/bbl

Source: Platts - all data 1 July 2021 to 27 July 2022
(1)

Spot price2Q 2022 financial results

7

Let’s begin with macro environment.
Starting with the oil price. During the second quarter, Brent averaged $114 perbarrel, up from $102 per barrel in the first quarter. This was driven by reduced
spare global capacity and inventory levels significantly below the 5-year average.
Looking ahead, we expect these factors to keep oil prices elevated during thethird quarter.
Turning to gas prices. During the second quarter, average European prices
declined as high LNG imports supported a recovery in inventories. However, inthe latter stages of the quarter prices moved sharply higher driven by reduced
Russian supply and the outage at Freeport. In the US, Henry Hub rose by anaverage 60% from the first quarter. This was supported by limited gas
production growth and strong gas-to-power demand.
The outlook for global gas prices is heavily dependent on Russian pipeline flows.
We expect prices to remain elevated and volatile during the third quarter due to alack of supply to Europe.

Moving to refining. Margins more than doubled to average $45.50 per barrel inthe second quarter. This reflects resilient demand, lower stocks and sanctioningof Russian crude and product. In the third quarter we expect refining margins toremain elevated due to ongoing supply disruptions.

7Underlying results
$bn

2Q21

1Q22

2Q22

4.7

10.2

12.8

Gas & low carbon energy

1.2

3.6

3.1

Oil production & operations

2.2

4.7

5.9

Customers & products

0.8

2.2

4.0

Other businesses and corporate 1

0.4

(0.3)

Other businesses and corporate excluding Rosneft *(0.3)

Rosneft*

0.7

Underlying RCPBIT *2Q 2022 vs 1Q 2022▪

Strong realised refining margins

(0.2)

▪

Higher liquids and gas realisations*

(0.3)

(0.2)

▪

Average gas marketing and trading

-

-

(0.0)

0.0

(0.0)

Underlying replacement cost profit*

2.8

6.2

8.5

Operating cash flow*

5.4

8.2

10.9

*

(2.5)

(2.9)

(2.8)

0.2

1.2

0.7

Of which:

Consolidation adjustment - UPII

Capital expenditure*

Divestment and other proceeds(1)Surplus cash flow*

0.7

4.1

6.6

Net issue (repurchase) of shares

(0.5)

(1.6)

(2.3)

Net debt*

32.7

27.5

22.8

Announced dividend per ordinary share (cents per share)

5.460

5.460

6.006

From first quarter 2022 the results of Rosneft, previously reported as a separate segment, are also included in other businesses & corporate.
Comparative information for 2021 has been restated to reflect the changes in reportable segments.

result after exceptional 1Q22▪

Higher refinery turnaround andmaintenance activity

2Q 2022 financial results

8

Moving to results.
In the second quarter we reported an underlying replacement cost profit of $8.5
billion compared to $6.2 billion last quarter.
Compared to the first quarter:−

In gas and low carbon energy the result benefited from higher realisations.
This was offset by an average gas marketing and trading result following theexceptional performance in the first quarter. The result includes our best
estimate of the impact of the recent outage at Freeport LNG leading to asignificant reduction in the number of cargoes expected to be received.

−

In oil production and operations, the result reflects higher realisations.

−

In customers and products, the products result benefited from a significant
increase in refining margins partially offset by higher turnaround andmaintenance activity. The contribution from oil trading remained
exceptionally strong.
Strength in products more than offset the impact of weaker fuel retailmargins and higher inflation in a challenging environment in our customers
businesses. Despite these factors, the convenience contribution remained
strong.

8Cash flow and balance sheet
2Q22 highlights▪

1H22 cash inflows/outflows $bn$10.9bn operating cash flow* including:▪

$2.9bn working capital*1 build – includes $1.2bn Gulf
of Mexico oil spill payment▪

$6.6bn surplus cash flow*▪

$2.3bn share buyback executed▪

$2.5bn programme announced with 1Q22 resultscompleted on 22 July▪

Net debt* reduced to $22.8bn(1)Adjusted for inventory holding gains and fair value accounting effects

2Q 2022 financial results

9

Turning to cash flow.
Operating cash flow was $10.9 billion in the second quarter. This included $1.2
billion of Gulf of Mexico oil spill payments within a working capital build of $2.9
billion.
Capital expenditure was $2.8 billion with our guidance for 2022 remaining in arange of $14 to 15 billion.
And disposal proceeds were $700 million in the quarter, bringing the first half
total to $1.9 billion. Guidance of $2 to 3 billion in 2022 is unchanged.
During the quarter we repurchased $2.3 billion of shares. The $2.5 billion
programme announced with first quarter 2022 results was completed on 22 July.
Reflecting underlying cash flow delivery, net debt fell for the ninth consecutive
quarter to reach $22.8 billion.
With second quarter surplus cash flow of $6.6 billion, we intend to execute ashare buyback of $3.5 billion prior to reporting third quarter results.

9

Maintaining our disciplined financial frame

(1)
(2)

Subject to maintaining a strong investment grade credit rating
In addition, executed $500m buyback programme during 1Q22 to offset expected dilution from vesting of awards under employee share schemes during 2022

2Q 2022 financial results

10

Moving to our disciplined financial frame which has five priorities and remains
unchanged.

Our first priority remains a resilient dividend.
As Bernard has outlined, we have announced a 10% increase in the quarterly
dividend.
Crucially, this is funded within an unchanged 2021 to 2025 average cash balance
point of around $40 per barrel Brent, $3 Henry Hub and $11 per barrel RMM – all2020 real.
This increase reflects the underlying performance and cash generation of thebusiness, which has enabled strong progress in delivering share buybacks andnet debt reduction.
Our second priority is to maintain a strong investment grade credit rating. We
intend to continue to allocate 40% of 2022 surplus cash flow to further
strengthen the balance sheet.
Our third and fourth priorities are the disciplined allocation of investment to ourlow carbon and convenience and mobility businesses and to resilienthydrocarbons.
And our fifth priority is share buybacks. We are committed to returning 60% of
2022 surplus cash flow through share buybacks subject to maintaining a strong
investment grade credit rating. And we have now announced share buybacks
from 2021 and first half 2022 surplus cash flow of over $10 billion. This isequivalent to 60% of the cumulative surplus.
I’ll now hand back to Bernard.

10Chief executive officer
1Q 2022 financial results

Thanks Murray.

11

Advancing our strategy at pace – growing EBITDA to 2030

All numbers represent 2030 EBITDA* aims, at $60/bbl Brent (2020, real) and bp planning assumptions

2Q 2022 financial results

12

Turning then to our strategic momentum in transforming to an IEC.
First, I am going to provide an update on the progress that we are making in ouroil and gas business.
Second, I want to highlight some examples which give us growing confidence in
our transition growth engines and how this is underpinned by incumbency. By
our assets, our capabilities, our relationships and our brand. I will focus today on
two of the engines – EV charging and hydrogen – where we are excited by the
progress made in recent months.

12

2Q 2022 financial results

13

Turning first to our oil and gas business.

13

Oil and gas – a high-graded portfolio
Remaining highly price leveraged
as production declines

Focused on growth from six
material regions

Oil & gas EBITDA*1,2,3 $bn

Oil & gas EBITDA*1,3 $bn

Price upside

Driving >20% margin expansionin unit EBITDA
Production1,3 %>$45/boe
Other resilienthydrocarbons$30-45/boe

Other
Other oil& gasregionsregions

2021 actual($71/bbl)$15-30/boe

6 material
6 materialoil &
regionsgas regions<$15/boe
2021
(1)
(2)
(3)

2030 aims

2021

2030 aims

Oil and gas EBITDA excludes Rosneft, bioenergy, refining and trading. Reflects planned divestments
2021 and 2030 price upside adjusted for average oil and natural gas marker prices 1H 2022 (nominal)
2030 at $60/bbl Brent (2020, real) and $3/mmbtu Henry Hub (2020, real)

2021

2030 aims

2Q 2022 financial results

14

Our strategy in oil and gas is to maximise returns and cash flow; creating
resilience through lower costs, higher margins and lower operational emissions.
Focusing on the best barrels. And high grading through divestment at the righttime and for the right value.
Let me say three things about our oil and gas portfolio.
Firstly. Leverage to price.
Today’s results show our portfolio doing what is it supposed to do – capturing
the upside from higher prices.
And as the first chart shows, over the decade, we expect our oil and gas EBITDA
to remain highly leveraged to price as we high-grade our portfolio and reduce
production.
This is enabled by EBITDA growth coming from just six material regions.
Secondly. Focus. The middle chart.

Underpinned by a deep resource base, we are focusing our investment andleveraging incumbency. Through 2030 we plan to allocate around 80% of oil andgas investment to these six material regions. We expect EBITDA to grow fromthem and represent around 90% of the 2030 total from oil and gas.
Thirdly. Higher unit margins.
The third chart illustrates our evolving margin mix. It’s the same chart we shared14

at our strategy update in February.
It demonstrates how unit margins are expected to grow by over 20%
by 2030 relative to 2021 as we:−

Focus our investment in higher margin regions;−Execute our plans to drive cost efficiency; and−High-grade through divestments in lower margin regions.

This high-graded oil and gas portfolio, together with our growth plansin refining and bioenergy, gives us confidence in sustaining EBITDA
from resilient hydrocarbons at around 2021 levels through 2025,
aiming to hold around this level to 2030.

14

Oil and gas – progress in high-grading our portfolio
High-grading
position in Canada• Agreed to divest 50%
interest in Sunrise
oil sands asset
Growing investment andproduction in bpx energy
3,500 drillable locations >30% IRR at $55/bbl WTI
and $3/mmbtu Henry Hub• Agreed to acquire 35%
interest in Bay du Nord
discovery

Access in Egypt
Awarded 100% working
interest in offshore
exploration block
Azule Energy begins
operations
Angola’s largest
independent oil & gas
producer

1H 2022 efficiency

Appraisal ongoingBrazil discovery at
Cabo Frio• Plant reliability* >95%

New oil hub potential,
appraisal ongoing• ~11% lower production
cost YoY
Major project start-ups
Targeting seven new
high-margin1 major
projects* by end 2024
(1)

Discovery inIndonesia at Timpan-1

Average major project margins above portfolio average

Basra Energy
Company formed
Joint venture to restructurebusiness in Iraq
2Q 2022 financial results

15

And we are making real progress – in four areas.
First, investment.
By the end of 2024 we expect to start-up a further seven high-margin major
projects.
And to maximise value we will be flexible in our capital allocation. For instance,
within our disciplined capital frame we plan to increase investment in bpx energy
from $1 billion in 2021 to around $1.7 billion in 2022. Here we are leveraging ahopper of around 3,500 drilling locations capable of delivering IRRs of over 30%
at $55 WTI and $3 Henry Hub.
Second, reliability and efficiency.
In the first half of 2022 plant reliability increased to over 95% and unit production
costs fell by almost 11% compared to the same period last year.
Third, exploration and renewal.

We continue to selectively explore, aiming to further enhance our portfolio. So
far this year we have:−

Announced an oil discovery offshore Brazil with the potential to become a
new hub;−

Participated in a gas discovery offshore Indonesia;−

And strengthened our position offshore Canada, agreeing to acquire a 35%
interest in the Bay du Nord discovery.
15

Finally, portfolio optimisation. This year we have:−

Agreed to divest our Canadian Sunrise and Pike oil sands assets;−

Created a new Angola focused company – Azule Energy – in a joint
venture between Eni and ourselves; and−Restructured our business in Iraq with PetroChina.

15

Integration
2Q 2022 financial results

16

Now let me turn to two of our transition growth engines, starting with EV
charging.

16

EV charging – aim to deliver ~$2bn EBITDA by 2030
Leveraging ourglobal scale(1)

Charge points*: >50% growth to 2025 already announced
000’s

Global network and infrastructure

Convenience and loyalty offers

Established global strategic relationships

Trading and shipping

Reported to the nearest 50

2Q 2022 financial results

17Here, we aim to deliver around $2 billion of EBITDA by 2030, focusing on fleet
and fast charging to ‘on-the-go’ customers.
Clear sources of competitive advantage underpin this:−Our global network of 20,600 retail sites;−

Integrated convenience offers at our 2,200 strategic sites;−

Our customer base with around 16 million loyalty customers and around
170,000 fleet accounts;−

Our trading and shipping organisation which provides optimised and reliable
electron sourcing. Over time, one of the benefits of integration is expected
to be the sourcing of electrons from our own renewables business. And
here, we have already secured offshore wind licenses with over 5 gigawattsof capacity net bp;−

And strategic relationships with partners like VW, Uber, Didi, and Daimler
Trucks.

We are accelerating our roll-out plans.
−

We now have around 16,000 charge points – up almost 50% since the same
point last year;−

We have announced partnerships with VW and Iberdrola that have thepotential to help achieve half of our target growth to 2025;−

And we are excited about potential opportunities in other regions, like the17

US.
Importantly, we have a distinctive focus on fast-charging.
−Around 50% of our charge points are now rapid or ultra-fast –that’s at least 50kW for rapid, more than 150kW for ultra-fast;−

We recently became the leading provider of ultra-fast charging inGermany, building on our leading position in the UK;−

And by 2030, we expect around 90% of our 100,000 ‘on-the-go’
chargers to be rapid or ultra-fast, resulting in around 10 gigawattsof installed capacity. This is equivalent to around 30 billion EV
miles driven per annum assuming just a 10% utilisation of our
network – 15 times more than a network of the same scale withpredominately 7kW charge points.

And we are rapidly growing electron sales. Supported by increasing
utilisation rates, the amount of electricity we sold through EV charging
rose more than two-fold in the first half of 2022 compared to the prior
year.

17

2Q 2022 financial results

18

Turning then to hydrogen.

18

Hydrogen – building global leadership in low carbon hydrogen
Our progress

Asian Renewable Energy Hub (AREH)
Global scale, cost advantaged solar, wind & hydrogen

Decarbonising
own demand

Refineries

Building global
scale>1mtpahydrogen hopper(risked)Capturing customer
demand

>2.5mtpa
identified

Global scale major project execution

Trading and shipping

Integrating energy value chains

Leveraging partnerships and global customers
2Q 2022 financial results

19

We see a huge opportunity given the anticipated strong growth in global demand
for low carbon hydrogen.
Our strategy is to leverage existing demand pools – often our own - and develop
advantaged production hubs – manufacturing green and blue hydrogen at scale
to create competitive supply for global markets.
It is underpinned by our distinctive sources of competitive advantage:−

Delivering and operating complex global scale major projects;−

Our global trading capability and experience in building integrated value
chains; and−Our track record in building and maintaining partnerships – establishing longterm customer relationships.

We are actively progressing our business development and now have a global
scale, risked project hopper of over one million tonnes per annum hydrogenproduction capacity. And we have identified more than 2.5 million tonnes perannum of potential customer demand. This includes our recently announced
strategic collaboration with Thyssenkrupp Steel to advance decarbonisation ofsteel production.
Initially we are progressing projects that help decarbonise hydrogen feedstock
supply to deliver low carbon hydrogen to our Rotterdam, Lingen, Gelsenkirchen
and Castellon refineries.
We are also helping to decarbonise industrial clusters, including in Texas, and at19

Teesside in the UK.
And we are accelerating our aim to create cost-advantaged global
production hubs. We have agreed to lead and operate the Asian
Renewable Energy Hub – AREH – in Australia where bp will hold40.5% stake.
AREH has the potential to be one of the world’s largest renewables
and green hydrogen hubs that will help decarbonise the Australianmarket, as well as supplying competitive green hydrogen and ammonia
to major international users.
This project has plans to reach up to 26 gigawatts of renewableenergy. To put this in context, it’s around a third of all electricity
generated in Australia in 2020. And it will target production of 1.6
million tonnes of green hydrogen or nine million tonnes of green
ammonia per annum. Hydrogen at scale.

19

2Q 2022 financial results

20

To summarise.
I hope you agree that today’s results show that bp is focused on delivery.
We are performing while transforming – doing exactly what we said we woulddo.
−

The company is running well and continues to strengthen.

−We have real strategic momentum in our transformation to an IEC.

−

Our financial frame has clarity and discipline. It is unchanged – and doing
what it is intended to do.

−

And we are growing distributions – remaining acutely focused on delivering
long-term value for our owners.

We believe more than ever that bp has the capabilities and scale to help theworld address the energy trilemma.

Thank you for listening. We should stop now and take any questions you might
have.

20

2Q 2022 financial results21

2Q 2022 financial results

22Guidance
Full year 2022

3Q22 vs 2Q22

Capital expenditure*$14-15bn

DD&A

Similar level to 2021

Divestment and otherproceeds$2-3bn~$1.4bn pre-tax

OB&C* underlying annual
charge$1.2-1.4bn full year, quarterly charges may vary

Underlying effective tax
rate*1

Expected to be around 352%

(1)

(2)

Looking ahead, we expect third-quarter 2022 upstream production on areported basis to be broadly flat compared with the second-quarter 2022, withimproved base performance offset by planned maintenance activity in highmargin regions.

▪

Gulf of Mexico oil spill
payments

Reported and underlying*
upstream production(ex. Rosneft)▪

In our customers & products business, there remains an elevated level of
uncertainty due to the ongoing impacts of the conflict in Ukraine and consumer
demand changes driven by inflationary pressures. We expect high base oil
prices to persist in Castrol. In refining, we expect margins to remain high, thebenefits of which will be partially offset by a continued high level of turnaround
activity and elevated energy prices.

For full year 2022 we continue to expect reported
upstream production to be broadly flat compared with
2021 despite the absence of production from ourRussia incorporated joint ventures. On an underlying
basis, we expect upstream production to be slightly
higher.

Underlying effective tax rate* 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
Guidance updated with bp’s 2Q22 stock exchange announcement – The reduction from prior guidance of around
40% reflects changes in the geographical mix of the group's profits and losses and additional recognition of deferred
tax assets, partly offset by the impact of the new levy on UK oil and gas profits

2Q 2022 financial results

23Gas and low carbon energy
2Q21

1Q22

2Q22

Liquids (mbd)

109

121

112

Natural gas (mmcfd)

4,440

4,897

4,709

Total hydrocarbons (mboed)

875

966

924

Liquids ($/bbl)

61.69

86.09

105.50Natural gas ($/mcf)

4.14

7.88

8.42

Total hydrocarbons ($/boe)

28.97

50.91

55.79

Adjusted EBITDA*

2.4

4.8

4.3

Capital expenditure* – gas

0.7

0.6

0.7

Capital expenditure* – low carbon

0.0

0.2

0.1

Underlying RCPBIT* $bn

Production volume

Average realisations*

Selected financial metrics ($bn)

Operational metrics (GW, bp net)
Installed renewables capacity*

1.6

1.9

2.0

Developed renewables to FID*

3.7

4.4

4.4

Renewables pipeline*

21.2

24.9

25.8

2Q 2022 vs 1Q 2022▪

Average gas marketing and trading result including our best estimate of the
impact of the recent outage at Freeport LNG▪

Higher realisations*▪

Lower production due to base decline

2Q 2022 financial results

24Gas and low carbon energy
Developed renewables to FID* andrenewables pipeline* bp net, GW▪
▪

Renewables pipeline*
by technology bp net

Renewables hopper*
bp netDeveloped and pipeline 0.9GW higher than 1Q22, driven byincrease in Lightsource bp pipeline
53 projects developed to FID* by Lightsource bp withweighted average expected IRR of 8 – 10%
2Q 2022 financial results

25Oil production and operations
2Q21

1Q22

2Q22

Liquids (mbd)

938

948

935

Natural gas (mmcfd)

1,786

1,964

1,964

Total hydrocarbons (mboed)

1,245

1,286

1,274

Liquids ($/bbl)

60.55

83.47

100.34Natural gas ($/mcf)

3.90

9.40

7.97

Total hydrocarbons ($/boe)

52.47

76.64

87.46

Exploration write-offs

0.0

0.1

0.1

Adjusted EBITDA*

3.8

6.2

7.4

Capital expenditure*

1.1

1.3

1.2

Underlying RCPBIT* $bn

Production volume1

Average realisations*

Selected financial metrics ($bn)▪

Combined upstream
Oil and gas production1 (mboed)

2,120

2,252

2,198

bp average realisation* ($/boe)

41.84

64.70

73.24

Unit production costs* 1,2 ($/boe)

7.33

6.52

6.53

bp-operated plant reliability* 2 (%)

93.7

96.1

95.3

(1)
(2)

Excluding Rosneft
On a year-to-date basis

2Q 2022 vs 1Q 2022
Higher liquids and gas realisations*

2Q 2022 financial results

26

Customers and products
2Q21

1Q22

2Q22

Customers – convenience & mobility
adjusted EBITDA*

1.3

0.8

1.0

Castrol1 adjusted EBITDA*

0.3

0.3

0.3

Capital expenditure*

0.3

0.3

0.3

bp retail sites* – total2

20,30020,55020,600bp retail sites in growth markets* 2

2,700

2,650

2,650

Strategic convenience sites* 2

2,000

2,150

2,200

Marketing sales of refined products (mbd)

2,853

2,819

3,003

Adjusted EBITDA*

0.3

2.0

3.7

Capital expenditure*

0.3

0.4

0.3

RMM* 3 ($/bbl)

13.7

18.9

45.5

Refining throughput (mbd)

1,507

1,650

1,480

Refining availability* (%)

93.5

95.0

93.9

Underlying RCPBIT* $bn

Customers – convenience & mobility

Products – refining & trading

Refining environment

(1)
(2)
(3)

Castrol is included in customers – convenience & mobility
Reported to the nearest 50
The RMM* in the quarter is calculated based on bp’s current refinery portfolio. On a comparative basis, the firstquarter 2022 and the second quarter 2021 RMM* would be $19.3/bbl $14.2/bbl respectively

2Q 2022 vs 1Q 2022
Customers▪
Convenience & mobility – higher volumes and robust convenience
performance partially offset by lower fuels retail margins and higher inflation▪
Castrol – broadly flat; base oil prices continued to increase and Covid
lockdowns in China
Products▪
Refining – significant increase in refining margins, partly offset by higher
turnaround and maintenance activity▪
Trading – exceptional performance
2Q 2022 financial results27

2Q 2022 financial results

28

Glossary – definitions
Adjusting items

Include gains and losses on the sale of businesses and fixed assets,
impairments, environmental and other provisions, restructuring, integration
and rationalisation costs, fair value accounting effects, financial impacts
relating to Rosneft for the 2022 financial reporting period and costs relating to
the Gulf of Mexico oil spill and other items. Adjusting items within equityaccounted earnings are reported net of incremental income tax reported by
the equity-accounted entity. Adjusting items are used as a reconcilingadjustment to derive underlying RC profit or loss and related underlying
measures which are non-GAAP measures.

EBITDA /adjusted EBITDA

RC profit before interest and tax, excluding net adjusting items*, adding backdepreciation, depletion and amortisation and exploration write-offs (net ofadjusting items).

Electric vehicle
Number of connectors on a charging device, operated by either bp or a bp
charge points/ EV joint venture.
charge points

Fair value
accounting
bp-operated plant Calculated taking 100% less the ratio of total unplanned plant deferrals effects
reliability
divided by installed production capacity, excluding non-operated assets andbpx energy. Unplanned plant deferrals are associated with the topside plant Hopper
and where applicable the subsea equipment (excluding wells and reservoir).
Unplanned plant deferrals include breakdowns, which does not include Gulf
of Mexico weather related downtime.
Hydrogen / low
Capital
Total cash capital expenditure as stated in the condensed group cash flow carbon hydrogen
expenditurestatement. Capital expenditure for the operating segments and customers &products businesses is presented on the same basis.
Installed
renewables
Consolidation
Unrealised profit in inventory arising on inter-segment transactions.
capacity
adjustment – UPII
Developed
renewables to
final investment
decision (FID)

Total generating capacity for assets developed to FID by all entities where bp Lease payments
has an equity share (proportionate to equity share). If asset is subsequently
Major projects
sold bp will continue to record capacity as developed to FID. If bp equity
share increases developed capacity to FID will increase proportionately toshare increase for any assets where bp held equity at the point of FID.

Disposalproceeds

Divestments and other proceeds.

Reflect the difference between the way bp manages the economic exposure
and internally measures performance of certain activities and the way those
activities are measured under IFRS.
Renewables hopper comprises of project opportunities from the point ofinitial evaluation until they are either stopped or become part of therenewable pipeline.
Hydrogen fuel with reduced carbon attributes, including renewable (green)hydrogen made from solar, wind and hydro-electricity, and (blue) made fromnatural gas in combination with carbon capture and storage.
bp's share of capacity for operating assets owned by entities where bp has
an equity share.
Lease liability payments.

Have a bp net investment of at least $250 million, or are considered to be ofstrategic importance to bp or of a high degree of complexity.

2Q 2022 financial results

29Glossary – definitions
Net debt

OB&C
Operating cash
flow
Realisations

Refining
availability

Refining marker
margin (RMM)

Calculated as finance debt, as shown in the balance sheet, plus the fair value Renewables
Renewable projects satisfying the following criteria until the point they canof associated derivative financial instruments that are used to hedge foreign pipeline
be considered developed to final investment decision (FID): Site based
currency exchange and interest rate risks relating to finance debt, for which
projects that have obtained land exclusivity rights, or for PPA based projects
hedge accounting is applied, less cash and cash equivalents. Net debt does
an offer has been made to the counterparty, or for auction projects prenot include accrued interest, which is reported within other receivables andqualification criteria has been met, or for acquisition projects post a binding
other payables on the balance sheet and for which the associated cash flows
offer being accepted.
are presented as operating cash flows in the group cash flow statement.
Replacement cost Reflects the replacement cost of inventories sold in the period and is
Other businesses and corporate.
(RC) profit or loss calculated as profit or loss attributable to bp shareholders, adjusting for
inventory holding gains and losses (net of tax).
Net cash provided by (used in) operating activities as stated in the condensed
group cash flow statement.
Retail sites
Include sites operated by dealers, jobbers, franchisees or brand licensees orjoint venture (JV) partners, under the bp brand. These may move to and from
Result of dividing revenue generated from hydrocarbon sales, excluding
the bp brand as their fuel supply agreement or brand licence agreement
revenue generated from purchases made for resale and royalty volumes, by
expires and are renegotiated in the normal course of business. Retail sites
revenue generating hydrocarbon production volumes. Revenue generating
are primarily branded bp, ARCO, Amoco, Aral and Thorntons, and alsohydrocarbon production reflects the bp share of production as adjusted forincludes sites in India through our Jio-bp JV.
any production which does not generate revenue. Adjustments may include
losses due to shrinkage, amounts consumed during processing, and Retail sites in
Retail sites that are either bp branded or co-branded with our partners incontractual or regulatory host committed volumes such as royalties. For the growth markets
China, Mexico and Indonesia and also include sites in India through our Jiogas & low carbon energy and oil production & operations segments,
bp JV.
realizations include transfers between businesses.
Rosneftbp’s adjusted share of Rosneft’s earnings after Rosneft's own finance costs,
Represents Solomon Associates’ operational availability for bp-operated underlying
taxation and non-controlling interests is included in the bp group income
refineries, which is defined as the percentage of the year that a unit is RCPBIT
statement within profit before interest and taxation. For each year-to-dateavailable for processing after subtracting the annualized time lost due toperiod it is calculated by translating the amounts reported in Russian roubles
turnaround activity and all planned mechanical, process and regulatory
into US dollars using the average exchange rate for the year to date.
downtime.
Strategic
Retail sites, within the bp portfolio, which sell bp-branded vehicle energy and
Average of regional indicator margins weighted for bp’s crude refining convenience sites carry one of the strategic convenience brands (e.g. M&S, Thorntons, Rewecapacity in each region. Each regional marker margin is based on productto Go). To be considered a strategic convenience brand the convenience
yields and a marker crude oil deemed appropriate for the region. The regional
offer should have a demonstrable level of differentiation in the market inindicator margins may not be representative of the margins achieved by bp inwhich it operates. Strategic convenience site count includes sites under aany period because of bp’s particular refinery configurations and crude andpilot phase, but exclude sites in growth markets.
product slate.

2Q 2022 financial results

30

Glossary – definitions
Surplus cash flow Refers to the net surplus of sources of cash over uses of cash, after reaching
the $35 billion net debt target. Sources of cash include net cash provided byoperating activities, cash provided from investing activities and cash receipts
relating to transactions involving non-controlling interests. Uses of cash
include lease liability payments, payments on perpetual hybrid bond,dividends paid, cash capital expenditure, the cash cost of share buybacks tooffset the dilution from vesting of awards under employee share schemes,
cash payments relating to transactions involving non-controlling interests andcurrency translation differences relating to cash and cash equivalents aspresented on the condensed group cash flow statement.
Technical service
contract (TSC)

Underlying
replacement costprofit or loss
before interestand tax (RCPBIT)

Underlying RC profit or loss before interest and tax for the operating
segments or customers & products businesses is calculated as RC profit orloss (as defined above) including profit or loss attributable to non-controllinginterests before interest and tax for the operating segments and excluding
net adjusting items for the respective operating segment or business.

Unit production
costs

Calculated as production cost divided by units of production. Production costdoes not include ad valorem and severance taxes. Units of production are
barrels for liquids and thousands of cubic feet for gas. Amounts disclosed
are for bp subsidiaries only and do not include bp’s share of equityaccounted entities.

Technical service contract is an arrangement through which an oil and gas
company bears the risks and costs of exploration, development and Working capital
production. In return, the oil and gas company receives entitlement to variablephysical volumes of hydrocarbons, representing recovery of the costs
incurred and a profit margin which reflects incremental production added tothe oilfield

Underlying
effective
tax rate (ETR)

Calculated by dividing taxation on an underlying replacement cost (RC) basis
by underlying RC profit or loss before tax. Taxation on an underlying RC basis
for the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and losses andtotal taxation on adjusting items.

Underlying
production

2022 underlying production, when compared with 2021, is production after
adjusting for acquisitions and divestments, curtailments, and entitlement
impacts in our production-sharing agreements/contracts and technical service
contract*.

Underlying
Replacement cost profit or loss* after excluding net adjusting items andreplacement cost related taxation.
profitMovements in inventories and other current and non-current assets andliabilities as reported in the condensed group cash flow statement.
Change in working capital adjusted for inventory holding gains/losses and fairvalue accounting effects relating to subsidiaries is a non-GAAP measure. It is
calculated by adjusting for inventory holding gains/losses reported in the
period and from the second quarter 2021 onwards, it is also adjusted for fairvalue accounting effects relating to subsidiaries reported within adjusting
items for the period. This represents what would have been reported as
movements in inventories and other current and non-current assets andliabilities, if the starting point in determining net cash provided by operating
activities had been underlying replacement cost profit rather than profit forthe period. The nearest equivalent measure on an IFRS basis for this is
movements in inventories and other current and non-current assets andliabilities. In the context of describing working capital after adjusting for Gulf
of Mexico oil spill outflows, change in working capital also excludes
movements in inventories and other current and non-current assets andliabilities relating to the Gulf of Mexico oil spill.
bp utilises various arrangements in order to manage its working capital
including discounting of receivables and, in the supply and trading business,
the active management of supplier payment terms, inventory and collateral.

2Q 2022 financial results

31Glossary - abbreviations
Barrel (bbl)

159 litres, 42 US gallons.

boe

Barrels of oil equivalent.

GW

Gigawatt.

mbd

Thousand barrels per day.

mboed

Thousand barrels of oil equivalent per day.

mmbtu

Million British thermal units.

mtpa

Million tonnes per annum.

RC

Replacement cost.

SAF

Sustainable aviation fuel.

SVP

Senior vice president.

2Q 2022 financial results

32