UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

for the period ended 31 March 2020
Commission File Number 1-06262

BP p.l.c.
(Translation of registrant’s name into English)

1 ST JAMES’S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
 
 
 
 
Form 20-F  Form 40-F ¨
 
 
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NOS. 333-226485, 333-226485-01 AND 333-226485-02) OF BP p.l.c., BP CAPITAL MARKETS p.l.c. AND BP CAPITAL MARKETS AMERICA INC.; THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-132619) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-173136) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207188) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207189) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210316) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210318) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.


1

Table of contents

BP p.l.c. and subsidiaries
Form 6-K for the period ended 31 March 2020(a) 

 
 
 
Page
1.
 
3-13, 26-32, 32-34
 
 
 
 
2.
 
14-25
 
 
 
 
3.
 
32
 
 
 
 
4.
 
35
 
 
 
 
5.
 
36
 
 
 
 
6.
 
37
(a)
In this Form 6-K, references to the first quarter 2020 and first quarter 2019 refer to the three-month periods ended 31 March 2020 and 31 March 2019 respectively.
(b)
This discussion should be read in conjunction with the consolidated financial statements and related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, in BP’s Annual Report on Form 20-F for the year ended 31 December 2019.


2

Table of contents

Group results first quarter 2020
Performance with purpose:
protecting our people, supporting our communities, strengthening our finances
Bernard Looney  Chief executive officer:
This extraordinary time for the world demands extraordinary responses. And thankfully we are seeing that just about everywhere we look around the world. Our industry has been hit by supply and demand shocks on a scale never seen before, but that is no excuse to turn inward. BP, like many other companies, is stepping up and extending a helping hand to those in need. We do it not because it is expected of us – but because we want to. That is consistent with our purpose.
We are focusing our efforts on protecting our people, supporting our communities and strengthening our finances. I am incredibly proud of the work that our people are doing in all three areas, particularly our colleagues in operations – from rigs to retail and everywhere in between – who are continuing to deliver energy and provide goods in the most difficult of circumstances.
At the same time, we are taking decisive actions to strengthen our finances – reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower.
We are determined to perform with purpose and remain committed to delivering our net zero ambition.

First quarter 2020 results
Inventory holding losses of $3.7 billion, as a result of the dramatic drop in oil prices at the quarter end, were the main driver of the reported loss attributable to BP shareholders of $4.4 billion for the first quarter, compared with a profit of $2.9 billion for the same period a year earlier.
Replacement cost loss for the first quarter was $0.6 billion, compared with a profit of $2.1 billion for the same period a year earlier, including a $1.4 billion net adverse impact of non-operating items and fair value accounting effects.
Underlying replacement cost profit for the first quarter was $0.8 billion, compared with $2.4 billion for the same period a year earlier. The result reflected lower prices, demand destruction in the Downstream particularly in March, a lower estimated result from Rosneft and a lower contribution from oil trading. It was also impacted by $0.2 billion non-cash underlying foreign exchange (FX) effects in other businesses and corporate, including FX translation impacts of finance debt in the BP Bunge Bioenergia joint venture.
Operating cash flow for the quarter was $1.0 billion including the impact of Gulf of Mexico oil spill payments(a). Gulf of Mexico oil spill payments in the quarter were $0.3 billion on a post-tax basis.
Receipts from divestments and other proceeds were $0.7 billion in the first quarter.
Finance debt and finance debt ratio at 31 March 2020 was $69.1 billion and 43.3% respectively. Net debt at the end of the quarter was $51.4 billion, $6.0 billion higher than a quarter earlier. Also reflecting lower equity including FX impacts, gearing at quarter end was 36.2%.
At the end of the quarter BP had around $32 billion of liquidity available.
A dividend of 10.5 cents per share was announced for the quarter.

(a)  
Operating cash flow excluding Gulf of Mexico oil spill payments is a measure used by management and BP believes it is useful as it allows for meaningful comparisons between reporting periods. It is not however disclosed in this SEC filing because SEC regulations do not permit the inclusion of this non-GAAP metric.

Financial summary
 
First

First

 
quarter

quarter

$ million
 
2020

2019

Profit (loss) for the period attributable to BP shareholders
 
(4,365
)
2,934

Inventory holding (gains) losses, before tax
 
4,884

(1,088
)
Taxation charge (credit) on inventory holding gains and losses
 
(1,147
)
249

RC profit (loss)
 
(628
)
2,095

Net (favourable) adverse impact of non-operating items and fair value accounting effects, before tax
 
1,364

349

Taxation charge (credit) on non-operating items and fair value accounting effects
 
55

(86
)
Underlying RC profit
 
791

2,358

Profit (loss) per ordinary share (cents)
 
(21.63
)
14.54

Profit (loss) per ADS (dollars)
 
(1.30
)
0.87

RC profit (loss) per ordinary share (cents)
 
(3.11
)
10.38

RC profit (loss) per ADS (dollars)
 
(0.19
)
0.62

Underlying RC profit per ordinary share (cents)
 
3.92

11.69

Underlying RC profit per ADS (dollars)
 
0.24

0.70


RC profit (loss), underlying RC profit, organic capital expenditure, net debt and gearing are non-GAAP measures. These measures and finance debt ratio, inventory holding gains and losses, non-operating items, fair value accounting effects, underlying production, Upstream plant reliability and refining availability are defined in the Glossary on page 32.
The commentary above and following should be read in conjunction with the cautionary statement on page 35.



3

Table of contents

Outlook
The economic impact of the COVID-19 pandemic coupled with pre-existing supply and demand factors have resulted in an exceptionally challenged commodity environment. Product demand has sharply reduced, notably for mobility, contributing sharp falls in refining margins and utilization. The resulting reduction in demand for crude oil has begun to put severe pressure on storage and logistics, with a substantial effect on prices and has promoted volatility. In April, OPEC and its partners agreed to significant supply cuts that are expected to help reduce the imbalance but are unlikely to prevent material supply shut ins by oil producers in the near-term, some of which may be difficult to reverse. Challenges in gas markets, following significant growth in supply over recent years, have been compounded by the pandemic, lowering LNG demand.
In March, Brent crude marker prices and BP’s refining marker margin touched levels not seen for well over a decade, while Henry Hub gas price hit multi-year lows and prices and margins have continued to remain depressed.
Looking forward, there remains an exceptional level of uncertainty regarding the near-term outlook for prices and product demand, particularly while many economies remain under lockdown. There is the risk of more sustained consequences depending on the efforts of governments and the public and private sectors to manage the health, economic and financial stability effects of the pandemic.
Upstream second-quarter reported production is expected to be lower compared to the first quarter. There are significant uncertainties with regard to the implementation of OPEC+ restrictions, price impacts on entitlement volumes, divestments, market restrictions given lack of demand for oil and COVID-19 operational impacts.
In Downstream, material impacts from COVID-19 are expected in the second quarter. Product demand in fuels marketing is expected to be significantly lower in BP’s key European and North America businesses. In refining, reduced utilization is expected due to the overall product demand declines, as well as significantly lower refining margins. In addition, a lower level of North American heavy crude discounts is expected.
During the second quarter BP also expects to make the annual payment of around $1.2 billion relating to the Gulf of Mexico spill settlement.
Gearing is expected to remain above the 20 to 30% target range into 2021. It is expected to trend down over time reflecting receipt of divestment proceeds and reversal of first quarter working capital impacts, and as BP’s financial interventions take effect.
BP's future financial performance, including cash flows, net debt and gearing, 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.

Taking decisive action
BP is taking a series of interventions to strengthen its finances.
BP has strengthened its balance sheet, with around $32 billion of liquidity at quarter end, including a new $10 billion revolving credit facility. In April BP has issued around $7 billion of new bonds.
2020 organic capital spending is expected to be around $12 billion, a reduction of around 25% on full-year guidance given in February. In the Upstream, most of the interventions are being made in areas not expected to have a significant impact on 2020 cash generation at lower prices. These include delaying exploration and appraisal activities and curtailing development activities in lower margin areas, as well as rephasing or minimizing spend on projects in the early phases of development. These interventions are expected to reduce 2020 underlying production by around 70mboe/d compared with 2019. In Downstream, the capital expenditure reduction contribution is expected to be around $1 billion in 2020. Interventions are primarily related to growth projects and are also not expected to have a significant impact on operating cash in the short term. BP expects to continue to invest around $500 million in low-carbon activities in 2020.
BP plans to reduce cash costs by $2.5 billion by the end of 2021 relative to 2019. The reduction is expected to result both from cost-saving measures across BP’s business as well as an important contribution from actions including increased digitisation, further integration and removing duplication, and new ways of working. Some of these cost savings may have associated restructuring charges.
The programme to deliver $15 billion of announced transactions by mid-2021 remains on track, although the current market environment remains challenging. BP has delivered $10.1 billion of announced transactions since the start of 2019. The phasing of receipt of $10 billion of divestment proceeds by the end of 2020 will be revised as transactions complete. BP has reconfirmed its commitment to completing the sale of its Alaska business to Hilcorp in 2020, subject to regulatory approvals. The total consideration of $5.6 billion is unchanged but the structure of the consideration and phasing of payments have been revised to respond to the current environment.
BP will continue to review these actions, and any further actions that may be appropriate, in response to changes in prevailing market conditions.

Maintaining safe operations
BP continues to monitor the impact of COVID-19 on our global operations and to date there has been no significant operational impact. This could change through the rest of the second quarter.
Despite significant challenges of the environment, BP’s operations continued to perform safely and reliably in the quarter. BP-operated Upstream plant reliability was 93.0% and refining availability was strong at 96.1%.
BP is taking significant steps to protect and support its staff through the pandemic. These include reducing manning levels where possible and changing working patterns to support social distancing; introducing testing to reduce spread of virus in offshore installations; requesting all staff who are able to do so to work from home since mid-March; and deploying personal protective equipment (PPE), enhanced cleaning and social distancing measures in retail sites.
BP is also providing enhanced support and guidance on safety, health and hygiene, homeworking and mental health to all staff. In March BP informed staff that for three months no BP employees would lose their jobs as a result of virus-related cost reductions.

Supporting communities
BP is offering support across the world to the communities in which it works in their response to the pandemic.
These actions include: providing free fuel and discounts to emergency services vehicles and workers in a number of countries; donating PPE to health services; donating access to our supercomputer in Houston to aid researchers investigating the pandemic; donating ethanol from our biofuels production for sanitizers; donating to MIND, the mental health charity, and the World Health Organization’s response fund; supporting all staff in volunteering efforts and matching employee donations to charities.

4

Table of contents

Group headlines
Results
Loss for the first quarter attributable to BP shareholders was $4,365 million, compared with a profit of $2,934 million for the same period in 2019.
For the first quarter, RC loss was $628 million, compared with a profit of $2,095 million in 2019. Underlying RC profit was $791 million, compared with $2,358 million in 2019. Underlying RC profit is after adjusting RC loss for a net charge for non-operating items of $1,391 million and net adverse fair value accounting effects of $28 million (both on a post-tax basis).
See further information on pages 6, 27 and 28.
Effective tax rate
The effective tax rate (ETR) on the profit for the first quarter was 3%, compared with 37% for the same period in 2019.
The ETR on RC profit or loss* for the first quarter was 280%, compared with 42% for the same period in 2019. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the first quarter was 55%, compared with 40% for the same period a year ago. The higher underlying ETR for the first quarter reflects charges for the reassessment of the recognition of deferred tax assets. The underlying effective tax rate for the full year is sensitive to the volatility in the current environment and updates will be provided throughout the year. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
Dividend
BP today announced a quarterly dividend of 10.5 cents per ordinary share ($0.63 per ADS), which is expected to be paid on 19 June 2020. The corresponding amount in sterling will be announced on 8 June 2020. See page 24 for more information.
Share buybacks
BP repurchased 120 million ordinary shares at a cost of $776 million (including fees and stamp duty) in the first quarter. In
 
January 2020, the share dilution buyback programme had fully offset the impact of scrip dilution since the third quarter 2017.
Operating cash flow*
Operating cash flow was $1.0 billion for the first quarter, including the impact of Gulf of Mexico oil spill payments of $281 million, compared with $5.3 billion for the same period in 2019.
Capital expenditure*
Total capital expenditure for the first quarter was $3.9 billion, compared with $5.6 billion for the same period in 2019.
Organic capital expenditure* for the first quarter was $3.5 billion, compared with $3.6 billion for the same period in 2019.
Inorganic capital expenditure* for the first quarter was $0.3 billion, compared with $2.0 billion for the same period in 2019.
Organic capital expenditure and inorganic capital expenditure are non-GAAP measures. See page 26 for further information.
Divestment and other proceeds
Divestment proceeds* were $0.7 billion for the first quarter, compared with $0.6 billion for the same period in 2019.
Debt
Finance debt at 31 March 2020 was $69.1 billion, compared with $66.0 billion a year ago. Finance debt ratio* at 31 March 2020 was 43.3%, compared with 39.0% a year ago. Net debt* at 31 March 2020 was $51.4 billion, compared with $45.1 billion a year ago. Gearing* at 31 March 2020 was 36.2%, compared with 30.4% a year ago.
Net debt and gearing are non-GAAP measures. See page 24 for more information.





Brian Gilvary  Chief financial officer:
“We are dealing with an exceptionally challenging environment and the unprecedented effects of demand destruction and price impacts that can be seen in these results are expected to continue through the second quarter. Despite this our underlying businesses performed well in the first quarter, although our headline results were impacted by foreign exchange as well as price effects at the quarter end. We have developed a clear plan and are confident in increasing resilience in our financial framework through a set of interventions focused on building liquidity, strengthening our balance sheet and reducing expenditure to drive our cash balance point below $35 per barrel in 2021.”

* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 32.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35.

5

Table of contents

Analysis of underlying RC profit* before interest and tax
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Underlying RC profit before interest and tax
 
 
 
Upstream
 
1,871

2,928

Downstream
 
921

1,733

Rosneft
 
(17
)
567

Other businesses and corporate
 
(561
)
(418
)
Consolidation adjustment – UPII*
 
178

(13
)
Underlying RC profit before interest and tax
 
2,392

4,797

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(668
)
(754
)
Taxation on an underlying RC basis
 
(953
)
(1,620
)
Non-controlling interests
 
20

(65
)
Underlying RC profit attributable to BP shareholders
 
791

2,358

Reconciliations of underlying RC profit or loss attributable to BP shareholders to the nearest equivalent IFRS measure are provided on page 3 for the group and on pages 8-13 for the segments.
 
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

RC profit before interest and tax
 
 
 
Upstream
 
1,023

2,884

Downstream
 
664

1,765

Rosneft
 
(17
)
486

Other businesses and corporate
 
(698
)
(546
)
Consolidation adjustment – UPII
 
178

(13
)
RC profit before interest and tax
 
1,150

4,576

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(790
)
(882
)
Taxation on a RC basis
 
(1,008
)
(1,534
)
Non-controlling interests
 
20

(65
)
RC profit (loss) attributable to BP shareholders
 
(628
)
2,095

Inventory holding gains (losses)*
 
(4,884
)
1,088

Taxation (charge) credit on inventory holding gains and losses
 
1,147

(249
)
Profit (loss) for the period attributable to BP shareholders
 
(4,365
)
2,934






6

Table of contents

Strategic progress
Upstream
Upstream production for the first quarter, which excludes Rosneft, was 2,579mboe/d, 2.9% lower than a year earlier. Underlying production*, adjusted for portfolio changes and entitlement impacts, was 0.7% higher than a year earlier, mainly due to reduced turnaround activities.
Upstream is making progress in the divestment programme including the completion of the sale of the San Juan, Arkoma and Anadarko fields in the US onshore and the recent announcement confirming that BP expects to complete the sale of its Alaska business in 2020.
BP continues to progress its major projects*. The COVID-19 pandemic is slowing progress on some projects and impacts are currently being assessed. Of the 900mboe/d major project growth targeted for 2021, 700mboe/d is currently online.

Downstream
Refining operations in the quarter were strong with Solomon availability of 96.1%. However, reduction in utilization was seen towards quarter-end due to reducing fuel demand.
During the quarter BP announced plans to extend its convenience partnership with Albert Heijn to more than 100 sites across the Netherlands.

Advancing the energy transition
The BP joint venture with Didi in China, BP Xiaoju, went live in the quarter. It is now operational and active in building public fast-charging hubs in China, the world’s largest and fastest developing electric vehicle market.
 
BP confirmed an agreement to invest in Santos’ Moomba carbon capture and storage project in South Australia to capture and permanently store in geological formations 1.7 million tonnes of carbon dioxide a year.
BP signed a memorandum of understanding with a number of partners to develop Germany’s first publicly accessible hydrogen network from Lingen to Gelsenkirchen. The planned network would link the production of green hydrogen with industrial customers in Lower Saxony and North Rhine-Westphalia.
In the quarter Lightsource BP, in which BP has a 50% stake, completed financing for a planned 260MW project in Texas. Output from the project – expected to start commercial operation in late 2020 – will be traded through a long-term arrangement with BP.
Financial framework
Operating cash flow* was $1.0 billion for the first quarter of 2020, including Gulf of Mexico oil spill payments of $0.3 billion, compared with $5.3 billion for the same period in 2019.
Organic capital expenditure* for the first quarter of 2020 was $3.5 billion. BP now expects 2020 organic capital expenditure to be around $12 billion. 
Divestment and other proceeds were $0.7 billion for the first quarter of 2020.
Gulf of Mexico oil spill payments on a post-tax basis was $281 million in the first quarter of 2020. Payments for 2020 are expected to be less than $1 billion on a post-tax basis.
Gearing* at 31 March 2020 was 36.2%. See page 24 for more information.

Operating metrics
 
First quarter 2020
 
Financial metrics
 
First quarter 2020
 
(vs. First quarter 2019)
 
 
(vs. First quarter 2019)
Tier 1 and tier 2 process safety events
 
21
 
Underlying RC profit*i
 
$0.8bn
 
(-7)
 
 
(-$1.6bn)
Reported recordable injury frequency*
 
0.152
 
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
 
(a) 
 
(-4.1%)
 
 
 
Group production
 
3,715mboe/d
 
Organic capital expenditureii
 
$3.5bn
 
(-2.8%)
 
 
(-$0.1bn)
Upstream production (excludes Rosneft segment)
 
2,579mboe/d
 
Gulf of Mexico oil spill payments (post-tax)
 
$0.3bn
 
(-2.9%)
 
 
(-$0.4bn)
Upstream unit production costs*
 
$7.07/boe
 
Divestment proceeds*
 
$0.7bn
 
(-4.4%)
 
 
(+$0.1bn)
BP-operated Upstream plant reliability*
 
93.0%
 
Gearingiii
 
36.2%
 
(-3.2)
 
 
(+5.8)
BP-operated refining availability*
 
96.1%
 
Dividend per ordinary share(b)
 
10.50 cents
 
(+1.8)
 
 
(2.4%)
(a)
SEC regulations do not permit inclusion of this non-GAAP metric in this SEC filing. Operating cash flow excluding Gulf of Mexico oil spill payments is calculated by excluding post-tax payments relating to the Gulf of Mexico oil spill from net cash provided by operating activities, as reported in the condensed group cash flow statement. For the first quarter, net cash provided by operating activities was $1.0 billion and post-tax Gulf of Mexico oil spill payments were $0.3 billion.
(b)
Represents dividend announced in the quarter (vs. prior year quarter).
Nearest GAAP equivalent measures
i
(Loss) for the period att. to BP shareholders:
$(4.4)bn
ii
Capital expenditure*:
$3.9bn
iii
Finance debt ratio*:
43.3%
 


The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35.

7

Table of contents

Upstream
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Profit before interest and tax
 
955

2,886

Inventory holding (gains) losses*
 
68

(2
)
RC profit before interest and tax
 
1,023

2,884

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
848

44

Underlying RC profit before interest and tax*(a)
 
1,871

2,928

(a)
See page 9 for a reconciliation to segment RC profit before interest and tax by region.

Financial results
The replacement cost profit before interest and tax for the first quarter was $1,023 million, compared with $2,884 million for the same period in 2019. The first quarter included a net non-operating charge of $1,071 million, which principally relate to impairments, compared with a net charge of $4 million for the same period in 2019. Fair value accounting effects in the first quarter had a favourable impact of $223 million, compared with an adverse impact of $40 million in the same period of 2019.

After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the first quarter was $1,871 million, compared with $2,928 million for the same period in 2019. The result for the quarter mainly reflected lower liquids and gas realizations, partly offset by lower depreciation, depletion and amortization, lower exploration write-offs, and very strong gas marketing and trading.

Production
Production for the quarter was 2,579mboe/d, 2.9% lower than the first quarter of 2019. Underlying production* for the quarter increased 0.7%, mainly due to reduced turnaround activities.

Key events
During the first quarter, BP executed a gas sale and purchase agreement with partners in the Greater Tortue Ahmeyim (GTA) project. GTA operations are severely affected by COVID-19 and the 2020 weather window for installation works can no longer be met resulting in a delay of around one year. BP is working with stakeholders to agree a revised work plan. A force majeure (FM) notice was issued under the lease and operate agreement with Golar LNG over the provision of a floating liquified natural gas vessel, where due to the FM event the lessee is not able to meet the connection date (BP operator 56%, Kosmos 27%, Petrosen 10%, SMHPM 7%).
In February, BP confirmed notification from the Brazilian National Petroleum Agency (ANP) of its approvals to postpone the deadline for declaring commerciality of the Wahoo (BP operator 35.7%, IBV Brasil Petróleo 35.7% Total 20%, Anadarko 8.6%) and Itaipu (BP operator 60%, Total 26.7%, Anadarko 13.3%) pre-salt discoveries offshore Brazil in the Campos basin, until June 2022.
On 29 March, BP confirmed completion of the restructuring of contractual arrangements for the Petrojari Foinaven floating production, storage and offloading vessel on the Foinaven field to the west of the Shetlands (BP operator 72%, RockRose Energy 28%).
In late March, BP started to relocate personnel from the remote Tangguh expansion project in Indonesia, as part of a COVID-19 response plan. BP continues progressing the major project* and anticipates a delay to start-up (BP operator 40.22%, MI Berau B.V. 16.30%, CNOOC Muturi Ltd. 13.90%, Nippon Oil Exploration (Berau) Ltd. 12.23%, KG Berau Petroleum Ltd 8.60%, Indonesia Natural Gas Resources Muturi Inc 7.35%, KG Wiriagar Overseas Ltd 1.40%).

Outlook
Looking ahead, we expect second-quarter reported production to be lower compared to the first quarter, and will be subject to significant uncertainties with regard to the implementation of OPEC+ restrictions, price impacts on PSA* and TSC* entitlement volumes, divestments, market restrictions given lack of demand for oil and COVID-19 operational impacts.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35.


8

Table of contents

Upstream (continued)
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Underlying RC profit before interest and tax
 
 
 
US
 
539

612

Non-US
 
1,332

2,316

 
 
1,871

2,928

Non-operating items(a)
 
 
 
US
 
(632
)
(30
)
Non-US
 
(439
)
26

 
 
(1,071
)
(4
)
Fair value accounting effects
 
 
 
US
 
(2
)
(93
)
Non-US
 
225

53

 
 
223

(40
)
RC profit (loss) before interest and tax
 
 
 
US
 
(95
)
489

Non-US
 
1,118

2,395

 
 
1,023

2,884

Exploration expense
 
 
 
US
 
20

25

Non-US
 
182

342

 
 
202

367

Of which: Exploration expenditure written off
 
98

284

Production (net of royalties)(b)(c)
 
 
 
Liquids* (mb/d)
 
 
 
US
 
505

455

Europe
 
147

159

Rest of World
 
655

685

 
 
1,306

1,299

Of which equity-accounted entities
 
146

137

Natural gas (mmcf/d)
 
 
 
US
 
2,050

2,310

Europe
 
244

145

Rest of World
 
5,093

5,417

 
 
7,387

7,872

Of which equity-accounted entities
 
489

459

Total hydrocarbons* (mboe/d)
 
 
 
US
 
858

853

Europe
 
189

184

Rest of World
 
1,533

1,619

 
 
2,579

2,656

Of which equity-accounted entities
 
230

216

Average realizations*(d)
 
 
 
Total liquids(e) ($/bbl)
 
47.47

56.47

Natural gas ($/mcf)
 
2.83

4.02

Total hydrocarbons ($/boe)
 
31.80

39.37

(a)
First quarter 2020 includes impairment charges and loss principally related to the disposal of our Alaska business, BPX Energy assets and oil price impacts in the UK North Sea. See Note 3 for further information.
(b)
Includes BP’s share of production of equity-accounted entities in the Upstream segment.
(c)
Because of rounding, some totals may not agree exactly with the sum of their component parts.
(d)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
(e)
Includes condensate, natural gas liquids and bitumen.



9

Table of contents

Downstream
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Profit (loss) before interest and tax
 
(3,951
)
2,811

Inventory holding (gains) losses*
 
4,615

(1,046
)
RC profit before interest and tax
 
664

1,765

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
257

(32
)
Underlying RC profit before interest and tax*(a)
 
921

1,733

(a)
See page 11 for a reconciliation to segment RC profit before interest and tax by region and by business.

Financial results
The replacement cost profit before interest and tax for the first quarter was $664 million, compared with $1,765 million for the same period in 2019.
The first quarter includes a net non-operating gain of $2 million, compared with a charge of $4 million for the same period in 2019. Fair value accounting effects in the first quarter had an adverse impact of $259 million, compared with a favourable impact of $36 million in the same period in 2019.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the first quarter was $921 million, compared with $1,733 million for the same period in 2019.
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 11.
Fuels
The fuels business reported an underlying replacement cost profit before interest and tax of $689 million for the first quarter, compared with $1,292 million for the same period in 2019.
The result for the quarter reflects strong refining operational performance and a lower level of turnaround activity, more than offset by a significantly weaker contribution from supply and trading, and adverse COVID-19 related impacts.
The refining result for the quarter reflects wider North American heavy crude oil discounts and lower turnaround activity, more than offset by lower refining margins. Operational performance across our refining portfolio was strong, with Solomon availability* of 96.1%, albeit with some reduction in utilization towards quarter-end due to reducing fuel demand.
The fuels marketing result for the quarter reflects the impact of fuels demand destruction, initially in China, and more recently across our US and European businesses. In recent weeks we have seen our retail fuel volumes in North America and Europe fall by around 50%, and demand for aviation fuel in our key markets fall by around 80%.
Despite these fuel volume declines our store sales have remained resilient, demonstrating the strength of our convenience retail offer which we continue to expand, with the recently announced plans to grow our convenience partnership with Albert Heijn in the Netherlands.

Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $167 million for the first quarter, compared with $272 million for the same period in 2019. The result reflects significantly weaker demand, primarily driven by the impact of COVID-19 which has been particularly evident in China where we saw demand fall by more than 50% for the quarter. In recent weeks demand has begun to recover in China but has continued to fall in Europe, the US and India where volumes are currently down 50-90% compared to the same period last year.

Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $65 million for the first quarter, compared with $169 million for the same period in 2019. The result primarily reflects a weaker margin environment across both aromatics and acetyls.

Outlook
Looking to the second quarter of 2020, we expect material impacts from COVID-19. In our marketing businesses we expect product demand to be significantly lower due to the actions taken by countries to limit the spread of COVID-19, and in refining we expect reduced utilization due to the lower demand, as well as significantly lower industry refining margins. In addition we expect a lower level of North American heavy crude oil discounts.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35.

10

Table of contents

Downstream (continued)
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Underlying RC profit before interest and tax - by region
 
 
 
US
 
557

531

Non-US
 
364

1,202

 
 
921

1,733

Non-operating items
 
 
 
US
 
6

1

Non-US
 
(4
)
(5
)
 
 
2

(4
)
Fair value accounting effects(a)
 
 
 
US
 
145

61

Non-US
 
(404
)
(25
)
 
 
(259
)
36

RC profit before interest and tax
 
 
 
US
 
708

593

Non-US
 
(44
)
1,172

 
 
664

1,765

Underlying RC profit before interest and tax - by business(b)(c)
 
 
 
Fuels
 
689

1,292

Lubricants
 
167

272

Petrochemicals
 
65

169

 
 
921

1,733

Non-operating items and fair value accounting effects(a)
 
 
 
Fuels
 
(257
)
37

Lubricants
 

(4
)
Petrochemicals
 

(1
)
 
 
(257
)
32

RC profit before interest and tax(b)(c)
 
 
 
Fuels
 
432

1,329

Lubricants
 
167

268

Petrochemicals
 
65

168

 
 
664

1,765

 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
8.8

10.2

 
 
 
 
Refinery throughputs (mb/d)
 
 
 
US
 
748

735

Europe
 
835

767

Rest of World
 
223

237

 
 
1,806

1,739

BP-operated refining availability* (%)
 
96.1

94.3

 
 
 
 
Marketing sales of refined products (mb/d)
 
 
 
US
 
1,038

1,077

Europe
 
954

993

Rest of World
 
519

520

 
 
2,511

2,590

Trading/supply sales of refined products
 
3,377

3,296

Total sales volumes of refined products
 
5,888

5,886

 
 
 
 
Petrochemicals production (kte)
 
 
 
US
 
611

601

Europe
 
1,371

1,160

Rest of World
 
1,153

1,299

 
 
3,135

3,060

(a)
For Downstream, fair value accounting effects arise solely in the fuels business. See page 28 for further information.
(b)
Segment-level overhead expenses are included in the fuels business result.
(c)
Results from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany are reported in the fuels business.


11

Table of contents

Rosneft
 
 
First

First

 
 
quarter

quarter

$ million
 
2020(a)

2019

Profit (loss) before interest and tax(b)(c)
 
(218
)
526

Inventory holding (gains) losses*
 
201

(40
)
RC profit (loss) before interest and tax
 
(17
)
486

Net charge (credit) for non-operating items*
 

81

Underlying RC profit (loss) before interest and tax*
 
(17
)
567


Financial results
Replacement cost (RC) loss before interest and tax for the first quarter was $17 million, compared with a profit of $486 million for the same period in 2019.
After adjusting for non-operating items, the underlying RC loss before interest and tax for the first quarter was $17 million, compared with a profit of $567 million for the same period in 2019. There were no non-operating items in the first quarter of 2020.
Compared with the same period in 2019, the result for the first quarter primarily reflects lower oil prices, unfavourable foreign exchange and duty lag effects partially offset by certain one-off items.

Key events
On 28 March 2020, Rosneft concluded an agreement with a company owned by the Government of the Russian Federation, to sell all of its interest and cease participation in its Venezuelan businesses. On completion, the transaction and the sale of assets will result in Rosneft receiving as a settlement payment a 9.6% share of Rosneft’s equity, which will be held by a 100% subsidiary of Rosneft and accounted for as treasury shares. Furthermore, Rosneft has an approved programme of share buybacks under which shares have been purchased by a Rosneft subsidiary during March and April. These will also be accounted for as treasury shares.
BP will retain 19.75% of the voting rights at meetings of Rosneft shareholders and will continue to be entitled to dividends based on its current shareholding. BP’s economic interest, however, will increase as a result of its indirect interest in the shares held by the subsidiary of Rosneft. BP’s share of profit or loss of Rosneft reflects its economic interest.
On 21 April 2020, Rosneft announced that the board of directors had recommended the annual general meeting (AGM) adopts a resolution to pay dividends of 18.07 roubles per ordinary share, bringing the total dividend for 2019 to 33.41 roubles per ordinary share, which constitutes 50% of the company’s IFRS net profit. In addition to the dividend received in November 2019 in relation to the results for the first half of 2019, BP expects to receive later this year a dividend of 34 billion roubles, after the deduction of withholding tax, subject to approval at the AGM.

 
 
First

First

 
 
quarter

quarter

 
 
2020(a)

2019

Production (net of royalties) (BP share)
 
 
 
Liquids* (mb/d)
 
916

937

Natural gas (mmcf/d)
 
1,275

1,327

Total hydrocarbons* (mboe/d)
 
1,136

1,166

(a)
The operational and financial information of the Rosneft segment for the first quarter is based on preliminary operational and financial results of Rosneft for January and February 2020, and estimated results for March 2020. Actual results may differ from these amounts and adjustments will be made as necessary in our second-quarter reporting.
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP’s 19.75% economic interest in Rosneft for the first quarter 2020 as adjusted for accounting required under IFRS relating to BP’s purchase of its interest in Rosneft and the amortization of the deferred gain relating to the divestment of BP’s interest in TNK-BP. These adjustments increase the segment's reported profit before interest and tax, as shown in the table above, compared with the amounts reported in Rosneft’s IFRS financial statements.
(c)
BP’s adjusted share of Rosneft’s earnings after Rosneft's own finance costs, taxation and non-controlling interests is included in the BP group income statement within profit before interest and taxation. For each year-to-date period it is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date.


12

Table of contents

Other businesses and corporate
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Profit (loss) before interest and tax
 
(698
)
(546
)
Inventory holding (gains) losses*
 


RC profit (loss) before interest and tax
 
(698
)
(546
)
Net charge (credit) for non-operating items*
 
137

128

Underlying RC profit (loss) before interest and tax*
 
(561
)
(418
)
Underlying RC profit (loss) before interest and tax
 
 
 
US
 
(124
)
(155
)
Non-US
 
(437
)
(263
)
 
 
(561
)
(418
)
Non-operating items
 
 
 
US
 
(48
)
(128
)
Non-US
 
(89
)

 
 
(137
)
(128
)
RC profit (loss) before interest and tax
 
 
 
US
 
(172
)
(283
)
Non-US
 
(526
)
(263
)
 
 
(698
)
(546
)

Other businesses and corporate comprises our alternative energy business, shipping, treasury, BP ventures and corporate activities including centralized functions, and any residual costs of the Gulf of Mexico oil spill.
Financial results
The replacement cost loss before interest and tax for the first quarter was $698 million, compared with $546 million for the same period in 2019.
The result included a net non-operating charge of $137 million for the first quarter, compared with a charge of $128 million for the same period in 2019.
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the first quarter was $561 million, compared with $418 million for the same period in 2019, reflecting foreign exchange impacts on finance debt and other non-US dollar balances.

Alternative Energy
BP’s net share of ethanol-equivalent production (which includes ethanol and sugar) for the first quarter was 9.8 million litres, compared with 14 million litres for the 100% BP-owned business for the same period in 2019. In order to optimize the sugar recovery curve, the BP Bunge Bioenergia joint venture (BP 50%) had fewer harvest days in March compared with the previous year.
Net wind generation capacity* was 926MW at 31 March 2020, compared with 1,001MW at 31 March 2019. BP’s net share of wind generation for the first quarter was 777GWh, compared with 773GWh for the same period in 2019.
Lightsource BP had an operating portfolio of 2GW of solar projects under its management at 31 March 2020 and remains on track to deliver 10GW of developed assets by the end of 2023.
In February, Lightsource BP signed a multi-year module supply agreement with Canadian Solar Inc., one of the world’s largest solar power companies, to deliver 1.2GW of high-efficiency polycrystalline solar modules for projects in the US and Australia.
In March, Lightsource BP successfully closed on a $250 million financing package for its Impact Solar project located in Lamar County, Texas, USA.

Outlook
Other businesses and corporate average quarterly charges, excluding non-operating items and foreign exchange volatility impact, are expected to be around $350 million although this will fluctuate quarter to quarter.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35.


13

Table of contents

Financial statements
Group income statement
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

 
 
 
 
Sales and other operating revenues (Note 5)
 
59,650

66,321

Earnings from joint ventures – after interest and tax
 
(22
)
185

Earnings from associates – after interest and tax(a)
 
(244
)
649

Interest and other income
 
140

163

Gains on sale of businesses and fixed assets
 
16

89

Total revenues and other income
 
59,540

67,407

Purchases
 
48,878

48,272

Production and manufacturing expenses
 
6,099

5,356

Production and similar taxes (Note 7)
 
203

424

Depreciation, depletion and amortization (Note 6)
 
4,059

4,461

Impairment and losses on sale of businesses and fixed assets (Note 3)
 
1,149

96

Exploration expense
 
202

367

Distribution and administration expenses
 
2,684

2,767

Profit (loss) before interest and taxation
 
(3,734
)
5,664

Finance costs
 
783

867

Net finance expense relating to pensions and other post-retirement benefits
 
7

15

Profit (loss) before taxation
 
(4,524
)
4,782

Taxation
 
(139
)
1,783

Profit (loss) for the period
 
(4,385
)
2,999

Attributable to
 
 
 
BP shareholders
 
(4,365
)
2,934

Non-controlling interests
 
(20
)
65

 
 
(4,385
)
2,999

 
 
 
 
Earnings per share (Note 8)
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
 
Per ordinary share (cents)
 
 
 
Basic
 
(21.63
)
14.54

Diluted
 
(21.63
)
14.47

Per ADS (dollars)
 
 
 
Basic
 
(1.30
)
0.87

Diluted
 
(1.30
)
0.87

(a)
The financial information of the Rosneft segment for the first quarter is based on preliminary financial results of Rosneft for January and February 2020, and estimated results for March 2020. Actual results may differ from these amounts and adjustments will be made as necessary in our second-quarter reporting.



14

Table of contents

Condensed group statement of comprehensive income
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

 
 
 
 
Profit (loss) for the period
 
(4,385
)
2,999

Other comprehensive income
 
 
 
Items that may be reclassified subsequently to profit or loss
 
 
 
Currency translation differences(a)
 
(4,642
)
989

Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
 
1


Cash flow hedges and costs of hedging
 
85

19

Share of items relating to equity-accounted entities, net of tax
 
442

(50
)
Income tax relating to items that may be reclassified
 
117

(34
)
 
 
(3,997
)
924

Items that will not be reclassified to profit or loss
 
 
 
Remeasurements of the net pension and other post-retirement benefit liability or asset(b)
 
1,719

(853
)
Cash flow hedges that will subsequently be transferred to the balance sheet
 
(8
)
8

Income tax relating to items that will not be reclassified
 
(623
)
273

 
 
1,088

(572
)
Other comprehensive income
 
(2,909
)
352

Total comprehensive income
 
(7,294
)
3,351

Attributable to
 
 
 
BP shareholders
 
(7,217
)
3,281

Non-controlling interests
 
(77
)
70

 
 
(7,294
)
3,351

(a)
First quarter 2020 was principally affected by the weakening of the Russian rouble against the US Dollar.
(b)
See Note 1 for further information.


15

Table of contents

Condensed group statement of changes in equity
 
 
BP shareholders’

Non-controlling

Total

$ million
 
equity

interests

equity

At 1 January 2020
 
98,412

2,296

100,708

 
 
 
 
 
Total comprehensive income
 
(7,217
)
(77
)
(7,294
)
Dividends
 
(2,120
)
(31
)
(2,151
)
Cash flow hedges transferred to the balance sheet, net of tax
 
3


3

Repurchase of ordinary share capital
 
(776
)

(776
)
Share-based payments, net of tax
 
(15
)

(15
)
Share of equity-accounted entities’ changes in equity, net of tax
 
(5
)

(5
)
Transactions involving non-controlling interests, net of tax
 
4

6

10

At 31 March 2020
 
88,286

2,194

90,480

 
 
 
 
 
 
 
BP shareholders’

Non-controlling

Total

$ million
 
equity

interests

equity

At 31 December 2018
 
99,444

2,104

101,548

Adjustment on adoption of IFRS 16, net of tax(a)
 
(329
)
(1
)
(330
)
At 1 January 2019
 
99,115

2,103

101,218

 
 
 
 
 
Total comprehensive income
 
3,281

70

3,351

Dividends
 
(1,435
)
(36
)
(1,471
)
Cash flow hedges transferred to the balance sheet, net of tax
 
5


5

Repurchase of ordinary share capital
 
(50
)

(50
)
Share-based payments, net of tax
 
280


280

Share of equity-accounted entities’ changes in equity, net of tax
 
3


3

At 31 March 2019
 
101,199

2,137

103,336

(a)
See Note 1 in BP Annual Report and Form 20-F 2019 for further information.



16

Table of contents

Group balance sheet
 
 
31 March

31 December

$ million
 
2020

2019

Non-current assets
 
 
 
Property, plant and equipment
 
130,226

132,642

Goodwill
 
11,692

11,868

Intangible assets
 
15,555

15,539

Investments in joint ventures
 
9,655

9,991

Investments in associates
 
17,319

20,334

Other investments
 
1,084

1,276

Fixed assets
 
185,531

191,650

Loans
 
619

630

Trade and other receivables
 
2,074

2,147

Derivative financial instruments
 
7,836

6,314

Prepayments
 
793

781

Deferred tax assets
 
4,693

4,560

Defined benefit pension plan surpluses
 
8,014

7,053

 
 
209,560

213,135

Current assets
 
 
 
Loans
 
356

339

Inventories
 
11,641

20,880

Trade and other receivables
 
17,210

24,442

Derivative financial instruments
 
8,224

4,153

Prepayments
 
834

857

Current tax receivable
 
1,600

1,282

Other investments
 
88

169

Cash and cash equivalents
 
18,139

22,472

 
 
58,092

74,594

Assets classified as held for sale (Note 2)
 
6,212

7,465

 
 
64,304

82,059

Total assets
 
273,864

295,194

Current liabilities
 
 
 
Trade and other payables
 
34,420

46,829

Derivative financial instruments
 
5,846

3,261

Accruals
 
3,854

5,066

Lease liabilities
 
2,097

2,067

Finance debt
 
12,376

10,487

Current tax payable
 
1,673

2,039

Provisions
 
2,414

2,453

 
 
62,680

72,202

Liabilities directly associated with assets classified as held for sale (Note 2)
 
1,018

1,393

 
 
63,698

73,595

Non-current liabilities
 
 
 
Other payables
 
12,323

12,626

Derivative financial instruments
 
6,470

5,537

Accruals
 
954

996

Lease liabilities
 
7,276

7,655

Finance debt
 
56,741

57,237

Deferred tax liabilities
 
9,771

9,750

Provisions
 
18,057

18,498

Defined benefit pension plan and other post-retirement benefit plan deficits
 
8,094

8,592

 
 
119,686

120,891

Total liabilities
 
183,384

194,486

Net assets
 
90,480

100,708

Equity
 
 
 
BP shareholders’ equity
 
88,286

98,412

Non-controlling interests
 
2,194

2,296

Total equity
 
90,480

100,708




17

Table of contents

Condensed group cash flow statement
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Operating activities
 
 
 
Profit (loss) before taxation
 
(4,524
)
4,782

Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
 
 
 
Depreciation, depletion and amortization and exploration expenditure written off
 
4,157

4,745

Impairment and (gain) loss on sale of businesses and fixed assets
 
1,133

7

Earnings from equity-accounted entities, less dividends received
 
505

(589
)
Net charge for interest and other finance expense, less net interest paid
 
137

88

Share-based payments
 
(6
)
297

Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans
 
(20
)
(77
)
Net charge for provisions, less payments
 
(59
)
(116
)
Movements in inventories and other current and non-current assets and liabilities
 
683

(2,695
)
Income taxes paid
 
(1,054
)
(1,146
)
Net cash provided by operating activities
 
952

5,296

Investing activities
 
 
 
Expenditure on property, plant and equipment, intangible and other assets
 
(3,789
)
(3,695
)
Acquisitions, net of cash acquired
 
(17
)
(1,795
)
Investment in joint ventures
 
(18
)

Investment in associates
 
(37
)
(145
)
Total cash capital expenditure
 
(3,861
)
(5,635
)
Proceeds from disposal of fixed assets
 
10

235

Proceeds from disposal of businesses, net of cash disposed
 
671

365

Proceeds from loan repayments
 
63

55

Net cash used in investing activities
 
(3,117
)
(4,980
)
Financing activities
 
 
 
Net issue (repurchase) of shares (Note 8)
 
(776
)
(45
)
Lease liability payments
 
(569
)
(617
)
Proceeds from long-term financing
 
2,684

2,124

Repayments of long-term financing
 
(3,717
)
(2,640
)
Net increase (decrease) in short-term debt
 
2,517

1,089

Net increase (decrease) in non-controlling interests
 
9


Dividends paid - BP shareholders
 
(2,102
)
(1,435
)
 - non-controlling interests
 
(31
)
(36
)
Net cash provided by (used in) financing activities
 
(1,985
)
(1,560
)
Currency translation differences relating to cash and cash equivalents
 
(183
)
32

Increase (decrease) in cash and cash equivalents
 
(4,333
)
(1,212
)
Cash and cash equivalents at beginning of period
 
22,472

22,468

Cash and cash equivalents at end of period
 
18,139

21,256





18

Table of contents

Notes
Note 1. Basis of preparation

The interim financial information included in this report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.
The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2019 included in BP Annual Report and Form 20-F 2019.
BP prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006 as applicable to companies reporting under IFRS. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the periods presented.
The financial information presented herein has been prepared in accordance with the accounting policies used in preparing BP Annual Report and Form 20-F 2019 with the exception of the adoption of amendments to IFRS 9 'Financial Instruments' relating to interest rate benchmark reform from 1 January 2020. There are no other new or amended standards or interpretations adopted from 1 January 2020 that have a significant impact on the interim financial information.
Considerations in respect of COVID 19 (coronavirus) and the current economic environment
The impact of COVID-19 and the current economic environment on the basis of preparation of this interim financial information has been considered. The directors continue to consider it appropriate to adopt the going concern basis of accounting in preparing the interim financial information. Forecast liquidity has been assessed under a number of stressed scenarios and a reverse stress test performed to support this assertion.
BP's significant accounting judgements and estimates were disclosed in BP Annual Report and Form 20-F 2019. These were subsequently reviewed at the end of the first quarter to determine if any changes were required to those judgements and estimates as a result of current market conditions. The valuation of certain assets and liabilities is subject to a greater level of uncertainty than when reported in BP Annual Report and Form 20-F 2019, including those set out below.
Impairment testing assumptions
The price assumptions used in value-in-use impairment testing were reviewed as a result of the significant changes in market prices during the first quarter of 2020. The group’s price assumptions for 2020 and 2021 have been lowered to management’s revised best estimates. Price assumptions for the remainder of 2020 reflect market conditions since prices fell in March 2020. Prices are assumed to increase from current levels during 2021 and reach previous estimates in 2022. The group’s long-term assumptions for Brent oil and Henry Hub gas, as disclosed in BP Annual Report and Form 20-F 2019, remain unchanged.
The discount rates used in value-in-use impairment testing were also reviewed. As these are set using a number of parameters that are applicable to longer-term assets, a revision of the discount rate assumption was determined not to be appropriate and therefore the rates, as disclosed in BP Annual Report and Form 20-F 2019, remain unchanged.
Impairment charges for the first quarter of 2020 relate to the ongoing disposal programme, changes to price assumptions and other factors. For further information see Note 3.
Provisions assumptions
The nominal risk-free discount rate applied to provisions was reviewed as a result of the changes in long-dated US government bond yields during the first quarter of 2020. The changes have not affected the group's overall assessment of the discount rate applied to the group's provisions and therefore the rate, as disclosed in BP Annual Report and Form 20-F 2019, remains unchanged. The timing and amount of cash flows relating to group's existing provisions are not currently expected to change significantly as a result of the current environment however the detailed annual review will take place later in 2020.
Pensions and other post-retirement benefits
The group's defined benefit pension plans are reviewed quarterly to determine any changes to the fair value of the plan assets or present value of the defined benefit obligations. As a result of the review during the first quarter of 2020, the group's total net defined benefit pension plan deficit as at 31 December 2019 of $1.5 billion has moved to a total net defined benefit pension plan deficit as at 31 March 2020 of $0.1 billion. This principally reflects actuarial gains reported in other comprehensive income arising from improved discount rates and lower inflation assumptions reducing the plan obligations offset by reductions in the valuation of plan assets. The current environment is likely to continue to affect the values of the plan assets and obligations resulting in potential volatility in the amount of the net defined benefit pension plan surplus/deficit recognized.
Impairment of financial assets measured at amortized cost
The estimate of the loss allowance recognised on financial assets measured at amortized cost using an expected credit loss approach was determined not to be a significant accounting estimate in preparing BP Annual Report and Form 20-F 2019. Expected credit loss allowances are, however, reviewed and updated quarterly. Allowances are recognized on assets where there is evidence that the asset is credit-impaired and on a forward-looking expected credit loss basis for assets that are not credit-impaired. The current economic environment and future credit risk outlook have been considered in updating the estimate of loss allowances although the full economic impact of COVID-19 on the forward-looking expected credit loss is subject to significant uncertainty due to the limited forward-looking information currently available.
Whilst credit risk has increased since 31 December 2019, there has also been a significant reduction in the group's trade and other receivables balance. Therefore, the total expected credit loss allowances recognized as at 31 March 2020 have not significantly increased from the amounts disclosed in BP Annual Report and Form 20-F 2019 - Financial statements - Note 21 Valuation and qualifying accounts.

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Note 1. Basis of preparation (continued)
The group continues to believe that the calculation of expected credit loss allowances is not a significant accounting estimate. The group continues to apply its credit policy as disclosed in BP Annual Report and Form 20-F 2019 - Financial statements - Note 29 Financial instruments and financial risk factors - credit risk.
Other accounting judgements and estimates
All other significant accounting judgements and estimates disclosed in BP Annual Report and Form 20-F 2019 remain applicable and no new significant accounting judgements or estimates have been identified.
Changes in significant accounting policies
Interest Rate Benchmark Reform: Amendments to IFRS 9 'Financial instruments'
Financial authorities in the US, UK, EU and other territories are currently undertaking reviews of key interest rate benchmarks such as the London Inter-bank Offered Rate (LIBOR) with a view to replacing them with alternative benchmarks. Uncertainty around the method and timing of transition from Inter-bank Offered Rates (IBORs) to alternative risk-free rates (RfRs) may impact the assessment of whether hedge accounting can be applied to certain hedging relationships.
BP is significantly exposed to benchmark interest rate components e.g. USD LIBOR, GBP LIBOR, EURIBOR and CHF LIBOR. All of the group's existing fair value hedge relationships are directly affected by interest rate benchmark reform as they all manage interest rate risk. Further information about the group’s fair value hedges is included in BP Annual Report and Form 20-F 2019 - Financial statements - Note 30 Derivative financial instruments - Fair value hedges.
BP adopted the amendments to IFRS 9 and IFRS 7 ‘Financial Instruments: Disclosures’ relating to interest rate benchmark reform with effect from 1 January 2020. This first phase of amendments provides temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by interest rate benchmark reforms.
The reliefs provided by the amendments allow BP, in the event that significant uncertainty around the reforms arise, to assume that:
the interest rate benchmark component at initial designation of fair value hedges is separately identifiable; and
the interest rate benchmark is not altered for the purposes of assessing the economic relationship between the hedged item and the hedging instrument for fair value hedges.
In accordance with the transition provisions, the amendments have been adopted retrospectively to hedging relationships that existed at the start of the current reporting period and will be applied to new hedging relationships designated after that date. The reliefs have meant that the uncertainty over the interest rate benchmark reforms has not resulted in discontinuation of hedge accounting for any of BP’s fair value hedges.
An exposure draft of the second phase of IFRS amendments was recently issued by the IASB to address the financial reporting impacts of transitioning from IBORs to RfRs. BP has set up an internal working group to monitor and manage the transition to alternative benchmark rates and are currently assessing the population of contracts and arrangements that are linked to existing interest rate benchmarks. BP is also participating on external committees and taskforces dedicated to interest rate benchmark reform.
Deferral of change in accounting policy - physically settled derivative contracts
In March 2019, the IFRS Interpretations Committee (“IFRIC”) issued an agenda decision on the application of IFRS 9 to the physical settlement of contracts to buy or sell a non-financial item, such as commodities, that are not accounted for as 'own-use' contracts. IFRIC concluded that such contracts are settled by the delivery or receipt of a non-financial item in exchange for both cash and the settlement of the derivative asset or liability. The IASB expects an entity to be entitled to sufficient time to determine the impact of an agenda decision and, where applicable, to implement any resulting change in accounting policy.
BP regularly enters into forward sale and purchase contracts. As described in the group's accounting policy for revenue in BP Annual Report and Form 20-F 2019, revenue recognized at the time such contracts were physically settled was measured at the contractual transaction price and was presented together with revenue from contracts with customers in those financial statements.
BP had intended to implement a change in its accounting policy for these contracts from 1 January 2020 in accordance with the conclusions included in the agenda decision. However, the group has decided to defer implementation after balancing the limited effect the change would have on financial statement presentation and disclosures with operational constraints arising from COVID-19. BP considers that the change in policy will still be implemented within a sufficient time period from the date of the agenda decision.
When the group’s accounting policy is changed, which is expected to be later in 2020:
Revenues and purchases from such contracts will be measured at the contractual transaction price plus the carrying amount of the related derivative at the date of settlement. Realized derivative gains and losses on physically settled derivative contracts will be included in other revenues.
It is expected there will be no significant effect on comparative information for ‘Sales and other operating revenues’ and ‘Purchases’ as presented in the group income statement.
There will be no significant effect on net assets or on comparative information for ‘Profit before taxation’ or ‘Profit after taxation’ as presented in the group income statement.
BP has, however, chosen to change its presentation of revenues from physically settled derivative sales contracts from first quarter 2020. Revenues from physically settled derivative sales contracts are no longer presented together with revenue from contracts with customers in Note 5 and are now presented as other revenues. Comparative information for revenue from contracts with customers has been re-presented to align with the current period.


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Note 2. Non-current assets held for sale

The carrying amount of assets classified as held for sale at 31 March 2020 is $6,212 million, with associated liabilities of $1,018 million. These principally relate to one material disposal transaction which has been classified as held for sale in the group balance sheet.
On 27 August 2019, BP announced that it had agreed to sell all its Alaska operations and interests to Hilcorp Energy. On 27 April 2020, BP reconfirmed its commitment to completing the sale, subject to regulatory approvals. The total consideration of $5.6 billion, subject to customary closing adjustments, is unchanged but the structure of the consideration and phasing of payments have been revised to respond to the current environment. The revised agreement adjusts the consideration to include lower completion payments in 2020, new cash flow sharing arrangements over the near-term, interest-bearing vendor financing and, potentially, an increase in the proportion of the consideration subject to earnout arrangements, up to $2.3 billion.
The sale will include BP’s entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc., which owns all of BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.’s 49% interest in the Trans Alaska Pipeline System (TAPS). BP will retain its decommissioning liability relating to TAPS, which will be partially offset by a 30% cost reimbursement from Hilcorp. The deal, which is subject to regulatory approvals, is expected to complete during 2020. Assets of $6,190 million and associated liabilities of $987 million relating to this transaction are classified as held for sale at 31 March 2020.

Note 3. Impairment and losses on sale of businesses and fixed assets
Impairment and losses on sale of businesses and fixed assets for the first quarter was $1,149 million and includes a net impairment charge of $797 million. 
The impairment charges, which are substantially all reported in the Upstream segment, relate to the group’s ongoing divestment programme, changes to the group’s price assumptions for 2020 and 2021, and other factors. They include $438 million relating to the disposal of the group’s interests in its Alaska business due to completion adjustments, changes to structure and phasing of consideration and discounting impacts. See Note 1 and Note 2 for further information.


Note 4. Analysis of replacement cost profit (loss) before interest and tax and reconciliation to profit (loss) before taxation
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Upstream
 
1,023

2,884

Downstream
 
664

1,765

Rosneft
 
(17
)
486

Other businesses and corporate
 
(698
)
(546
)
 
 
972

4,589

Consolidation adjustment – UPII*
 
178

(13
)
RC profit (loss) before interest and tax*
 
1,150

4,576

Inventory holding gains (losses)*
 
 
 
Upstream
 
(68
)
2

Downstream
 
(4,615
)
1,046

Rosneft (net of tax)
 
(201
)
40

Profit (loss) before interest and tax
 
(3,734
)
5,664

Finance costs
 
783

867

Net finance expense relating to pensions and other post-retirement benefits
 
7

15

Profit (loss) before taxation
 
(4,524
)
4,782

 
 
 
 
RC profit (loss) before interest and tax*
 
 
 
US
 
595

771

Non-US
 
555

3,805

 
 
1,150

4,576



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Note 5. Sales and other operating revenues
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

By segment
 
 
 
Upstream
 
11,464

14,594

Downstream
 
53,964

58,416

Other businesses and corporate
 
453

356

 
 
65,881

73,366

 
 
 
 
Less: sales and other operating revenues between segments
 
 
 
Upstream
 
6,907

6,324

Downstream
 
(782
)
586

Other businesses and corporate
 
106

135

 
 
6,231

7,045

 
 
 
 
Third party sales and other operating revenues
 
 
 
Upstream
 
4,557

8,270

Downstream
 
54,746

57,830

Other businesses and corporate
 
347

221

Total sales and other operating revenues
 
59,650

66,321

 
 
 
 
By geographical area
 
 
 
US
 
21,219

21,848

Non-US
 
43,955

49,618

 
 
65,174

71,466

Less: sales and other operating revenues between areas
 
5,524

5,145

 
 
59,650

66,321

 
 
 
 
Revenues from contracts with customers(a)
 
 
 
Sales and other operating revenues include the following in relation to revenues from contracts with customers:
 
 
 
Crude oil
 
1,435

2,490

Oil products
 
20,254

22,705

Natural gas, LNG and NGLs
 
3,638

5,357

Non-oil products and other revenues from contracts with customers
 
2,853

3,236

Revenue from contracts with customers
 
28,180

33,788

Other operating revenues(b)
 
31,470

32,533

Total sales and other operating revenues
 
59,650

66,321

(a)
Comparative information for revenue from contracts with customers and other operating revenues has been represented to align with the current period. See Note 1 for further information.
(b)
Principally relates to physically settled derivative sales contracts.

Note 6. Depreciation, depletion and amortization
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Upstream
 
 
 
US
 
1,068

1,113

Non-US
 
2,082

2,498

 
 
3,150

3,611

Downstream
 
 
 
US
 
342

323

Non-US
 
405

383

 
 
747

706

Other businesses and corporate
 
 
 
US
 
15

13

Non-US
 
147

131

 
 
162

144

Total group
 
4,059

4,461



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Note 7. Production and similar taxes
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

US
 
13

81

Non-US
 
190

343

 
 
203

424


Note 8. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit (loss) for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. During the quarter the company repurchased for cancellation 120 million ordinary shares for a total cost of $776 million, including transaction costs of $4 million, as part of the share buyback programme announced on 31 October 2017. The number of shares in issue is reduced when shares are repurchased.
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Results for the period
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
(4,365
)
2,934

Less: preference dividend
 


Profit (loss) attributable to BP ordinary shareholders
 
(4,365
)
2,934

 
 
 
 
Number of shares (thousand)(a)(b)
 
 
 
Basic weighted average number of shares outstanding
 
20,178,803

20,175,634

ADS equivalent
 
3,363,133

3,362,605

 
 
 
 
Weighted average number of shares outstanding used to calculate diluted earnings per share
 
20,178,803

20,281,773

ADS equivalent
 
3,363,133

3,380,295

 
 
 
 
Shares in issue at period-end
 
20,197,527

20,330,597

ADS equivalent
 
3,366,254

3,388,432

(a)
Excludes treasury shares and includes certain shares that will be issued in the future under employee share-based payment plans.
(b)
If the inclusion of potentially issuable shares would decrease loss per share, the potentially issuable shares are excluded from the weighted average number of shares outstanding used to calculate diluted earnings per share. The number of potentially issuable shares that have been excluded from the calculation for the first quarter 2020 is 74,240 thousand (ADS equivalent 12,374 thousand).

Issued ordinary share capital as at 31 March 2020 comprised 20,258,850,956 ordinary shares (31 December 2019 20,372,762,750 ordinary shares). This includes shares held in trust to settle future employee share plan obligations and excludes 1,156,931,394 ordinary shares which have been bought back and are held in treasury by BP (31 December 2019 1,163,077,064 ordinary shares).

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Table of contents

Note 9. Dividends
Dividends payable
BP today announced an interim dividend of 10.50 cents per ordinary share which is expected to be paid on 19 June 2020 to ordinary shareholders on the register on 7 May 2020 and American Depositary Share (ADS) holders on the register on 8 May 2020. The corresponding amount in sterling is due to be announced on 8 June 2020, calculated based on the average of the market exchange rates for the four dealing days commencing on 2 June 2020. Holders of ADSs are expected to receive $0.630 per ADS (less applicable fees). The board has decided not to offer a scrip dividend alternative in respect of the first quarter 2020 dividend. Ordinary shareholders and ADS holders (subject to certain exceptions) will be able to participate in a dividend reinvestment programme. Details of the first quarter dividend and timetable are available at bp.com/dividends and further details of the dividend reinvestment programmes are available at bp.com/drip.

 
 
First

First

 
 
quarter

quarter

 
 
2020

2019

Dividends paid per ordinary share
 
 
 
cents
 
10.500

10.250

pence
 
8.156

7.738

Dividends paid per ADS (cents)
 
63.00

61.50

Scrip dividends
 
 
 
Number of shares issued (millions)
 

90.1

Value of shares issued ($ million)
 

629

Note 10. Net debt and net debt including leases
Net debt*
 
First

Fourth

First

 
 
quarter

quarter

quarter

$ million
 
2020

2019

2019

Finance debt(a)
 
69,117

67,724

65,990

Fair value (asset) liability of hedges related to finance debt(b)
 
426

190

350

 
 
69,543

67,914

66,340

Less: cash and cash equivalents
 
18,139

22,472

21,256

Net debt
 
51,404

45,442

45,084

Total equity
 
90,480

100,708

103,336

Gearing*
 
36.2%
31.1%
30.4%
(a)
The fair value of finance debt at 31 March 2020 was $67,500 million (31 December 2019 $69,376 million).
(b)
Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $663 million (fourth quarter 2019 liability of $601 million and first quarter 2019 liability of $609 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments.

On 6 and 7 April 2020, in the ordinary course of business, the group issued bonds totalling $6.8 billion with maturity dates ranging from 3 to 12 years.

Net debt including leases*
 
First

Fourth

First

 
 
quarter

quarter

quarter

$ million
 
2020

2019

2019

Net debt
 
51,404

45,442

45,084

Lease liabilities
 
9,373

9,722

10,294

Net partner (receivable) payable for leases entered into on behalf of joint operations
 
(159
)
(158
)
(303
)
Net debt including leases
 
60,618

55,006

55,075





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Table of contents

Note 11. Inventory valuation

A provision of $3,596 million was held against hydrocarbon inventories at 31 March 2020 ($124 million at 31 March 2019) to write them down to their net realizable value. The net movement charged to the income statement during the first quarter 2020 was $3,341 million as a result of significant decreases in prices for refined products, oil and gas during March (first quarter 2019 was a credit of $480 million).
Note 12. Statutory accounts

The financial information shown in this publication, which was approved by the Board of Directors on 27 April 2020, is unaudited and does not constitute statutory financial statements. Audited financial information will be published in BP Annual Report and Form 20-F 2020.


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Table of contents

Additional information
Capital expenditure*
 
 
First

First

 
 
quarter

quarter

$ million
 
2020

2019

Capital expenditure on a cash basis
 
 
 
Organic capital expenditure*
 
3,539

3,648

Inorganic capital expenditure*(a)
 
322

1,987

 
 
3,861

5,635


 
 
First

First

 
 
quarter

quarter

$ million