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 30 June 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 30 June 2020(a) 

 
 
 
Page
1.
 
3-14, 29-34, 36-38
 
 
 
 
2.
 
15-28
 
 
 
 
3.
 
35
 
 
 
 
4.
 
36
 
 
 
 
5.
 
39
 
 
 
 
6.
 
40
 
 
 
 
7
 
41
 
 
 
 
8
 
42
(a)
In this Form 6-K, references to the half year 2020 and half year 2019 refer to the six-month periods ended 30 June 2020 and 30 June 2019 respectively. References to the second quarter 2020 and second quarter 2019 refer to the three-month periods ended 30 June 2020 and 30 June 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 second quarter and half year 2020
Highlights
Resetting for the future in face of difficult conditions
Loss for the quarter attributable to BP shareholders was $16.8 billion, compared with a profit of $1.8 billion for the same period a year earlier, including a net post-tax charge of $10.9 billion for non-operating items. This included $9.2 billion in post-tax non-cash impairments across the group largely arising from the revisions to its long-term price assumptions and $1.7 billion of post-tax non-cash exploration write-offs treated as non-operating items.
Underlying replacement cost loss for the quarter was $6.7 billion, compared with a profit of $2.8 billion for the same period a year earlier. The result was driven primarily by non-cash Upstream exploration write-offs – $6.5 billion after tax – principally resulting from a review of BP’s long-term strategic plans and revisions to long-term price assumptions, combined with the impact of lower oil and gas prices and very weak refining margins, reduced oil and gas production and much lower demand for fuels and lubricants. Oil trading delivered an exceptionally strong result.
Operating cash flow for the quarter was $3.7 billion including the impact of Gulf of Mexico oil spill payments(a). Gulf of Mexico oil spill payments in the quarter of $1.1 billion on a post-tax basis included the scheduled annual payment.
Total proceeds from divestments and other disposals received in the quarter were $1.1 billion. This included the first payment from the agreed sale of BP’s petrochemicals business to INEOS, which delivered BP’s plans for $15 billion of announced transactions a year earlier than expected. The sale of the upstream portion of BP’s Alaska business also completed at the end of the quarter.
Total capital expenditure in the first half of 2020 was $6.9 billion, compared with $11.3 billion for the same periods in 2019. Organic capital expenditure in the first half of 2020 was $6.6 billion, on track to meet BP’s revised full year expectation of around $12 billion, announced in April.
BP’s redesign of its organization to become leaner, faster moving and lower cost, including the announced reduction of around 10,000 jobs, is expected to make a significant contribution to the planned $2.5 billion reduction in annual cash costs by the end of 2021, relative to 2019. Restructuring costs of around $1.5 billion are expected to be recognized in 2020.
During the quarter BP issued $11.9 billion in hybrid bonds – a significant step in diversifying its capital structure, supporting its investment grade credit rating, and strengthening its finances.
Finance debt at 30 June 2020 was $76.0 billion, compared with $67.6 billion a year ago. Finance debt ratio at 30 June 2020 was 47.9%, compared with 39.5% a year ago. Net debt at the end of the quarter was $40.9 billion, $10.5 billion lower than in the first quarter. Gearing at the end of the quarter was 33.1% compared with 36.2% at the end of the previous quarter. This reflected the increase in equity associated with the issuance of hybrid bonds and the lower net debt, partly offset by the reduction in equity associated with the second-quarter loss.
A dividend of 5.25 cents per share was announced for the quarter, compared to 10.5 cents per share for the previous quarter. This dividend decision is aligned with BP’s new distribution policy announced separately today.
(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.

Helge Lund  chairman:
Together with our results, we are today announcing BP’s new strategy to deliver our net zero ambition, and a new investor proposition underpinned by a coherent financial frame. Our investor proposition includes a new distribution policy, which is designed to reward our investors with committed distributions, and which has informed the board’s decision on the dividend declared today for the second quarter of 2020.
Financial summary
 
Second

Second

 
First

First

 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Sales and other operating revenues
 
31,676

72,676

 
91,326

138,997

Profit (loss) for the period attributable to BP shareholders
 
(16,848
)
1,822

 
(21,213
)
4,756

Inventory holding (gains) losses, before tax
 
(1,088
)
(81
)
 
3,796

(1,169
)
Taxation charge (credit) on inventory holding gains and losses
 
279

34

 
(868
)
283

RC profit (loss)
 
(17,657
)
1,775

 
(18,285
)
3,870

Net (favourable) adverse impact of non-operating items and fair value accounting effects, before tax
 
14,566

1,341

 
15,930

1,690

Taxation charge (credit) on non-operating items and fair value accounting effects
 
(3,591
)
(305
)
 
(3,536
)
(391
)
Underlying RC profit (loss)
 
(6,682
)
2,811

 
(5,891
)
5,169

Profit (loss) per ordinary share (cents)
 
(83.32
)
8.95

 
(105.02
)
23.47

Profit (loss) per ADS (dollars)
 
(5.00
)
0.54

 
(6.3
)
1.41

RC profit (loss) per ordinary share (cents)
 
(87.32
)
8.72

 
(90.52
)
19.10

RC profit (loss) per ADS (dollars)
 
(5.24
)
0.52

 
(5.43
)
1.15

Underlying RC profit (loss) per ordinary share (cents)
 
(33.05
)
13.82

 
(29.17
)
25.51

Underlying RC profit (loss) per ADS (dollars)
 
(1.98
)
0.83

 
(1.75
)
1.53


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, major project, Upstream plant reliability and refining availability are defined in the Glossary on page 36.

3

Table of contents

Bernard Looney  chief executive officer:
“These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent bp. In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact. Beneath these, however, our performance remained resilient, with good cash flow and – most importantly – safe and reliable operations.”


COVID-19 Update
Outlook:
The ongoing severe impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment.
Looking ahead, the outlook for commodity prices and product demand remains challenging and uncertain.
Global GDP is expected to contract this year by 4-5%.
Global oil demand is expected to be around 8-9 million barrels of oil per day lower than 2019, with OECD oil stocks above their five-year range, and gas markets are likely to remain materially oversupplied. There is also a risk of the pandemic having an enduring impact on the global economy, with the potential for weaker demand for energy for a sustained period.
In July, refining margins remained under pressure, with RMM at $6.3/barrel due to lower product demand and high inventories, while BP refining utilization improved to above 80%. Retail fuel demand recovered in July to 10-15% lower than a year earlier, however, aviation fuel demand continued to be over 70% lower.
The pandemic is not expected to result in Upstream oil and gas outages but has impacted development of the Mad Dog 2, Tangguh Expansion, Trinidad Cassia Compression and Greater Tortue Ahmeyin Phase 1 major projects.
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.

Strengthening finances:
BP continues to take deliberate steps to strengthen its finances and drive down its cash balance point.
These steps include issuing around $7 billion of bonds in April, issuing $12 billion in hybrid bonds in June, agreeing the $5 billion divestment of its petrochemicals business, and completing the sale of the upstream Alaska business. BP also reset its long-term price assumptions.
BP will continue to review these actions, and any further actions that may be appropriate, in response to changes in prevailing market conditions.
Organic capital expenditure was limited to $6.6 billion in the first half.
Net debt fell to $40.9 billion at quarter-end. BP had around $47 billion of liquidity, including cash and undrawn revolving credit facilities, at quarter end.
Costs that are directly attributable to COVID-19 were around $200 million for the quarter.

Protecting our people and operations:
BP continues to monitor the impact of COVID-19 on global operations and to date there has been no direct significant operational impact, although this could change through the rest of the third quarter.
In the second quarter, Upstream production was curtailed as a result of market demand and OPEC+ restrictions, and refinery utilization was more than 10% below normal levels due to COVID-19 demand impacts.
Despite the significant challenges of the environment, BP’s operations continued safely and reliably in the quarter. BP-operated Upstream plant reliability was 95.5% and BP-operated refining availability was strong at 95.6%.
BP continues to take steps to protect and support its staff through the pandemic, including: reduced manning levels, changing working patterns, and deploying appropriate personal protective equipment (PPE), enhanced cleaning and social distancing measures at plants and retail sites. The great majority of BP staff who are able to work from home have done so since mid-March. Decisions on repopulating offices are taken with caution and in compliance with local and national guidelines and regulations.
BP is providing enhanced support and guidance to staff on safety, health and hygiene, homeworking and mental health.

Supporting communities:
BP continues to offer support in response to the pandemic in communities in which it operates.
Recent actions include: providing discounts to emergency service and health workers in the UK and US; donating PPE to health services; campaigning to promote the wearing of masks in Africa; and supporting staff in volunteering efforts, including matching employee donations to charities.

The commentary above and following should be read in conjunction with the cautionary statement on page 39.

4

Table of contents

Group headlines
Results
Loss for the second quarter and half year attributable to BP shareholders was $16,848 million and $21,213 million respectively, compared with a profit of $1,822 million and $4,756 million for the same periods in 2019.
For the half year, replacement cost (RC) loss was $18,285 million, compared with a profit of $3,870 million in 2019. Underlying RC loss* was $5,891 million, compared with a profit of $5,169 million in 2019. Underlying RC loss is after adjusting RC loss* for a net charge for non-operating items* of $12,248 million and net adverse fair value accounting effects* of $146 million (both on a post-tax basis).
For the second quarter, RC loss was $17,657 million, compared with a profit of $1,775 million in 2019. Underlying RC loss was $6,682 million, compared with a profit of $2,811 million in 2019. Underlying RC loss is after adjusting RC loss for a net charge for non-operating items of $10,857 million and net adverse fair value accounting effects of $118 million (both on a post-tax basis).
See further information on pages 6, 30 and 31.
Depreciation, depletion and amortization
The charge for depreciation, depletion and amortization was $3.9 billion in the quarter and $8.0 billion in the half year, compared with $4.6 billion and $9.0 billion for the same periods in 2019. BP now expects the 2020 full-year charge to be around 10% lower than 2019.
Effective tax rate
The effective tax rate (ETR) on the profit or loss for the second quarter and half year was 19% and 16% respectively, compared with 40% and 38% for the same periods in 2019.
The ETR on RC profit or loss* for the second quarter and half year was 19% and 15% respectively, compared with 39% and 41% for the same periods in 2019. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the second quarter and half year was 9% and -3% respectively, compared with 34% and 37% for the same periods a year ago. The lower underlying ETR for the second quarter and half year reflects the exploration write-offs with a limited deferred tax benefit and the reassessment of deferred tax asset recognition. The underlying ETR in the second half of the year remains sensitive to the volatility in the current environment. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
Dividend
BP today announced a quarterly dividend of 5.25 cents per ordinary share ($0.315 per ADS), which is expected to be paid on 25 September 2020. The corresponding amount in sterling will be announced on 14 September 2020. See page 27 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 half year of 2020, all of which was completed 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 $3.7 billion for the second quarter and $4.7 billion for the half year, including the impact of Gulf of Mexico oil spill payments of $1.1 billion and $1.4 billion respectively, compared with $6.8 billion and $12.1 billion for the same periods in 2019.
Capital expenditure*
Total capital expenditure for the second quarter and half year was $3.1 billion and $6.9 billion respectively, compared with $5.7 billion and $11.3 billion for the same periods in 2019.
Organic capital expenditure* for the second quarter and half year was $3.0 billion and $6.6 billion respectively, compared with $3.7 billion and $7.3 billion for the same periods in 2019.
Inorganic capital expenditure* for the second quarter and half year was $33 million and $0.4 billion respectively, compared with $2.0 billion and $4.0 billion for the same periods in 2019.
Organic capital expenditure and inorganic capital expenditure are non-GAAP measures. See page 29 for further information.
Divestment and other proceeds
Total divestment and other proceeds were $1.1 billion for the second quarter, including the first tranche of petrochemicals disposal proceeds and also TANAP pipeline refinancing, and $1.8 billion for the half year. Divestment proceeds* were $0.7 billion for the second quarter and $1.4 billion for the half year, compared with $0.1 billion and $0.7 billion for the same periods in 2019.
Debt
Finance debt at 30 June 2020 was $76.0 billion, compared with $67.6 billion a year ago. Finance debt ratio* at 30 June 2020 was 47.9%, compared with 39.5% a year ago. Net debt* at 30 June 2020 was $40.9 billion, compared with $46.5 billion a year ago. Gearing* at 30 June 2020 was 33.1%, compared with 31.0% a year ago. Gearing including leases* at 30 June 2020 was 37.7%, compared with 35.3% a year ago. Net debt, gearing and gearing including leases are non-GAAP measures. See
pages 27 and 32 for more information.








* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 36.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.

5

Table of contents

Analysis of underlying RC profit (loss)* before interest and tax
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
Upstream
 
(8,487
)
3,413

 
(6,616
)
6,341

Downstream
 
1,405

1,365

 
2,326

3,098

Rosneft
 
(61
)
638

 
(78
)
1,205

Other businesses and corporate
 
(260
)
(290
)
 
(821
)
(708
)
Consolidation adjustment – UPII*
 
(46
)
34

 
132

21

Underlying RC profit (loss) before interest and tax
 
(7,449
)
5,160

 
(5,057
)
9,957

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(677
)
(752
)
 
(1,345
)
(1,506
)
Taxation on an underlying RC basis
 
770

(1,515
)
 
(183
)
(3,135
)
Non-controlling interests
 
674

(82
)
 
694

(147
)
Underlying RC profit (loss) attributable to BP shareholders
 
(6,682
)
2,811

 
(5,891
)
5,169

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 9-14 for the segments.
 
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

RC profit (loss) before interest and tax
 
 
 
 
 
 
Upstream
 
(22,008
)
2,469

 
(20,985
)
5,353

Downstream
 
594

1,288

 
1,258

3,053

Rosneft
 
(124
)
525

 
(141
)
1,011

Other businesses and corporate
 
(317
)
(381
)
 
(1,015
)
(927
)
Consolidation adjustment – UPII
 
(46
)
34

 
132

21

RC profit (loss) before interest and tax
 
(21,901
)
3,935

 
(20,751
)
8,511

Finance costs and net finance expense relating to pensions and other post-retirement benefits
 
(791
)
(868
)
 
(1,581
)
(1,750
)
Taxation on a RC basis
 
4,361

(1,210
)
 
3,353

(2,744
)
Non-controlling interests
 
674

(82
)
 
694

(147
)
RC profit (loss) attributable to BP shareholders
 
(17,657
)
1,775

 
(18,285
)
3,870

Inventory holding gains (losses)*
 
1,088

81

 
(3,796
)
1,169

Taxation (charge) credit on inventory holding gains and losses
 
(279
)
(34
)
 
868

(283
)
Profit (loss) for the period attributable to BP shareholders
 
(16,848
)
1,822

 
(21,213
)
4,756






6

Table of contents

Operational updates
Upstream
Upstream production, which excludes Rosneft, for the first half of the year averaged 2,552mboe/d, 3.3% lower than a year earlier. Underlying production*, was 1.0% higher than 2019 mainly due to ramp up of major projects*.
The sale of the upstream portion of BP’s Alaska business completed on 30 June. Hilcorp Energy and BP continue to work with regulators and subject to approvals, expect to complete the sale of the midstream portion, including BP’s interest in the Trans Alaska Pipeline, during 2020. BP and Premier Oil signed sale and purchase agreements, reflecting final agreed terms, for the divestment of the Andrew Area and Shearwater assets in the UK North Sea. Subject to approvals, the transaction is expected to complete by the end of the third quarter of 2020.
Upstream has delayed exploration and appraisal activities and curtailed 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 reported production by around 70mboe/d.
Downstream
The second quarter saw the weakest industry refining environment in over 15 years, and an unprecedented fall in product demand driven by COVID-19. While refining operations in the quarter were strong, with BP-operated refining availability of 95.6%, demand destruction resulted in lower utilization.
In June BP announced the sale of its petrochemicals business to INEOS for a total consideration of $5 billion. Subject to approvals, the transaction is expected to complete before the end of the year.
In July BP and Reliance Industries completed the formation of the new fuel and mobility joint venture that will operate across India under the Jio-bp brand.
 
Low carbon
BP entered into an agreement with China’s ENN to work together to supply 300,000 tonnes a year of regasified LNG to ENN's customers in Guangdong province. BP also agreed with Enágas in Spain to jointly promote LNG and CNG for transport and the use of renewable gas.
In July BP announced plans to work with JinkoPower, a leading Chinese solar power company, to offer integrated decarbonized energy solutions and services to customers in China. It also announced plans to invest $70 million in India’s Green Growth Equity Fund to support the growing renewable energy sector in India.
Petrofac and BP extended their partnership with a new metering contract for four years. BP has invested in Satelytics whose technology is expected to aid in the deployment of a suite of methane detecting techniques across new and existing major facilities.
Financial framework
Operating cash flow* was $4.7 billion for the half year of 2020, including Gulf of Mexico oil spill payments of $1.4 billion, compared with $12.1 billion for the same period in 2019.
Organic capital expenditure* for the half year of 2020 was $6.6 billion. BP expects 2020 organic capital expenditure to be around $12 billion.
Total divestment and other proceeds were $1.8 billion for the half year of 2020.
Gulf of Mexico oil spill payments on a post-tax basis were $1.4 billion in the half year of 2020. BP now expects the post-tax payments to be around $1.5 billion in 2020.
Gearing* at 30 June 2020 was 33.1%, in part reflecting the recent hybrid bond issue. See page 27 for more information.


Operating metrics
 
First half 2020
 
Financial metrics
 
First half 2020
 
(vs. First half 2019)
 
 
(vs. First half 2019)
Tier 1 and tier 2 process safety events
 
47
 
Underlying RC profit (loss)*i
 
$(5.9)bn
 
(-2)
 
 
(-$11.1bn)
Reported recordable injury frequency*
 
0.131
 
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
 
(b) 
 
(-29.8%)
 
 
 
Group production
 
3,655mboe/d
 
Organic capital expenditureii
 
$6.6bn
 
(-3.5%)
 
 
(-$0.8bn)
Upstream production (excludes Rosneft segment)
 
2,552mboe/d
 
Gulf of Mexico oil spill payments (post-tax)
 
$1.4bn
 
(-3.3%)
 
 
(-$0.7bn)
Upstream unit production costs*(a)
 
$6.13/boe
 
Divestment proceeds*
 
$1.4bn
 
(-12.6%)
 
 
(+$0.7bn)
BP-operated Upstream plant reliability*
 
94.2%
 
Gearingiii
 
33.1%
 
(-0.7)
 
 
(+2.1)
BP-operated refining availability*
 
95.9%
 
Dividend per ordinary share(c)
 
5.25 cents
 
(+2.0)
 
 
(-48.8%)
(a)
Reflecting divestment impacts and lower costs.
(b)
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 half year, net cash provided by operating activities was $5 billion and post-tax Gulf of Mexico oil spill payments were $1.4 billion.
(c)
Represents dividend announced in the quarter (vs. prior year quarter).
Nearest GAAP equivalent measures
i
(Loss) for the period att. to BP shareholders:
$(21.2)bn
ii
Capital expenditure*:
$6.9bn
iii
Finance debt ratio*:
47.9%
 



7

Table of contents

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.

8

Table of contents

Upstream
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Sales and other operating revenues(a)
 
7,194

13,556

 
18,658

28,150

Profit (loss) before interest and tax
 
(21,951
)
2,459

 
(20,996
)
5,345

Inventory holding (gains) losses*
 
(57
)
10

 
11

8

RC profit (loss) before interest and tax
 
(22,008
)
2,469

 
(20,985
)
5,353

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
13,521

944

 
14,369

988

Underlying RC profit (loss) before interest and tax*(b)
 
(8,487
)
3,413

 
(6,616
)
6,341

(a)
Includes sales to other segments.
(b)
See page 10 for a reconciliation to segment RC profit before interest and tax by region.

Financial results
Sales and other operating revenues for the second quarter and half year were $7 billion and $19 billion respectively, compared with $14 billion and $28 billion for the corresponding periods in 2019. For the second quarter and half year, revenues were lower mainly due to lower realizations and lower gas marketing and trading revenues.
The replacement cost loss before interest and tax for the second quarter and half year was $22,008 million and $20,985 million respectively, compared with a profit of $2,469 million and $5,353 million for the same periods in 2019. The second quarter and half year included a net non-operating charge of $13,454 million and $14,525 million respectively, which principally relate to impairments associated with revisions to long-term price assumptions, compared with a net charge of $766 million and $770 million for the same periods in 2019. Fair value accounting effects in the second quarter and half year had an adverse impact of $67 million and a favourable impact of $156 million respectively, compared with an adverse impact of $178 million and $218 million in the same periods of 2019.

After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost loss before interest and tax for the second quarter and half year was $8,487 million and $6,616 million respectively, compared with a profit of $3,413 million and $6,341 million for the same periods in 2019. The results for the second quarter and half year mainly reflect the impact of writing down certain exploration intangible carrying values, and lower liquids and gas realizations.

Production
Production for the quarter was 2,525mboe/d, 3.8% lower than the second quarter of 2019. Underlying production* for the quarter increased by 0.6% mainly due to ramp up of major projects*.
For the half year, production was 2,552mboe/d, 3.3% lower than the first half of 2019. Underlying production for the half year was 1.0% higher than 2019 mainly due to ramp up of major projects.

Key events
On 30 June, BP completed the sale of its upstream Alaska business to Hilcorp. BP and Hilcorp continue to work with regulators to complete the sale of midstream assets, including BP’s interest in the Trans Alaska Pipeline System (TAPS).
On 1 July, BP confirmed the Bashrush gas discovery, located offshore Egypt. Evaluation is ongoing (Eni operator 37.5%, BP 37.5%, Total 25%).
On 20 July, BP signed sale and purchase agreements, reflecting final agreed terms, for the divestment of its interests in the Andrew Area and Shearwater assets, both located in the UK North Sea, to Premier Oil. Subject to approvals, the transaction is expected to complete by the end of the third quarter of 2020.
These events follow the announcements in our first-quarter results, which comprised the following: 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 operator 56%, Kosmos 27%, Petrosen 10%, SMHPM 7%); 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; 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%); BP relocated personnel from the remote Tangguh expansion project in Indonesia, as part of a COVID-19 response plan 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 third-quarter 2020 reported production to be lower than the second quarter reflecting price impacts on TSC* entitlement volumes, divestment of the Alaska business, and seasonal maintenance activities.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.


9

Table of contents

Upstream (continued)
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(2,960
)
861

 
(2,421
)
1,473

Non-US
 
(5,527
)
2,552

 
(4,195
)
4,868

 
 
(8,487
)
3,413

 
(6,616
)
6,341

Non-operating items(a)(b)
 
 
 
 
 
 
US
 
(2,122
)
(446
)
 
(2,754
)
(476
)
Non-US
 
(11,332
)
(320
)
 
(11,771
)
(294
)
 
 
(13,454
)
(766
)
 
(14,525
)
(770
)
Fair value accounting effects
 
 
 
 
 
 
US
 
39

(225
)
 
37

(318
)
Non-US
 
(106
)
47

 
119

100

 
 
(67
)
(178
)
 
156

(218
)
RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(5,043
)
190

 
(5,138
)
679

Non-US
 
(16,965
)
2,279

 
(15,847
)
4,674

 
 
(22,008
)
2,469

 
(20,985
)
5,353

Exploration expense
 
 
 
 
 
 
US
 
2,560

69

 
2,580

94

Non-US
 
7,114

77

 
7,296

419

 
 
9,674

146

 
9,876

513

Of which: Exploration expenditure written off(b)
 
9,618

77

 
9,716

361

Production (net of royalties)(c)(d)
 
 
 
 
 
 
Liquids* (mb/d)
 
 
 
 
 
 
US
 
472

506

 
488

480

Europe
 
166

137

 
156

148

Rest of World
 
728

658

 
691

672

 
 
1,366

1,301

 
1,336

1,300

Of which equity-accounted entities
 
146

130

 
146

134

Natural gas (mmcf/d)
 
 
 
 
 
 
US
 
1,549

2,410

 
1,799

2,360

Europe
 
298

132

 
271

139

Rest of World
 
4,878

5,138

 
4,985

5,276

 
 
6,725

7,680

 
7,056

7,775

Of which equity-accounted entities
 
467

454

 
478

457

Total hydrocarbons* (mboe/d)
 
 
 
 
 
 
US
 
739

921

 
799

887

Europe
 
217

160

 
203

172

Rest of World
 
1,569

1,544

 
1,551

1,581

 
 
2,525

2,625

 
2,552

2,640

Of which equity-accounted entities
 
227

209

 
228

212

Average realizations*(e)
 
 
 
 
 
 
Total liquids(e) ($/bbl)
 
22.75

62.63

 
34.39

59.61

Natural gas ($/mcf)
 
2.53

3.35

 
2.69

3.68

Total hydrocarbons ($/boe)
 
19.06

40.64

 
25.36

40.02

(a)
Second quarter 2020 principally relates to impairments in a number of our businesses resulting from the revisions to BP’s long-term price assumptions. Half year 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. Second quarter and first half 2019 include impairment charges related to the disposal of BPX Energy assets and GUPCO divestment. See Note 3 for further information.
(b)
Second quarter 2020 includes the write-off of $1,969 million relating to value ascribed to certain licences as part of the accounting for the acquisition of upstream assets in Brazil, India and the Gulf of Mexico. This has been classified within the ‘other’ category of non-operating items. See Note 4 for further information.
(c)
Includes BP’s share of production of equity-accounted entities in the Upstream segment.
(d)
Because of rounding, some totals may not agree exactly with the sum of their component parts.
(e)
Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
(f)
Includes condensate, natural gas liquids and bitumen.



10

Table of contents

Downstream
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Sales and other operating revenues(a)
 
27,241

66,396

 
81,205

124,812

Profit (loss) before interest and tax
 
1,572

1,381

 
(2,379
)
4,192

Inventory holding (gains) losses*
 
(978
)
(93
)
 
3,637

(1,139
)
RC profit before interest and tax
 
594

1,288

 
1,258

3,053

Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
811

77

 
1,068

45

Underlying RC profit before interest and tax*(b)
 
1,405

1,365

 
2,326

3,098

(a)
Includes sales to other segments.
(b)
See page 12 for a reconciliation to segment RC profit before interest and tax by region and by business.

Financial results
Sales and other operating revenues for the second quarter and half year were $27 billion and $81 billion respectively, compared with $66 billion and $125 billion for the corresponding periods in 2019. The reduction in the second quarter and half year was due to lower oil prices and COVID-19 related demand destruction.
The replacement cost profit before interest and tax for the second quarter and half year was $594 million and $1,258 million respectively, compared with $1,288 million and $3,053 million for the same periods in 2019.
The second quarter and half year include a net non-operating charge of $780 million and $778 million respectively, mainly relating to impairments, compared with a charge of $31 million and $35 million for the same periods in 2019. Fair value accounting effects in the second quarter and half year had an adverse impact of $31 million and $290 million respectively, compared with an adverse impact of $46 million and $10 million in the same periods in 2019.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the second quarter and half year was $1,405 million and $2,326 million respectively, compared with $1,365 million and $3,098 million for the same periods in 2019.
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 12.

Fuels
The fuels business reported an underlying replacement cost profit before interest and tax of $1,295 million for the second quarter and $1,984 million for the half year, compared with $961 million and $2,253 million for the same periods in 2019. The result for the quarter was primarily driven by an exceptionally strong contribution from supply and trading.
The refining result for the quarter and half year reflects the weakest industry refining environment in over 15 years. In addition, utilization was more than 10% below normal levels at around 80%, driven by COVID-19 demand impacts. These factors were partially offset by lower turnaround activity and continued strong availability.
The fuels marketing result was significantly impacted by COVID-19 related fuels demand destruction with retail fuels volumes in the quarter around 30% lower than last year. In addition, aviation fuels volumes were more than 70% lower than the same period in 2019. Despite these demand impacts, store sales at our retail sites increased year on year on a like for like basis, demonstrating the strength and resilience of our convenience retail offer.
In July we announced the start of our new fuels and mobility joint venture in India, Reliance BP Mobility Limited. Operating under the “Jio-bp” brand, the joint venture aims to become a leading player in India’s growing fuels and mobility markets, expanding from its current retail network of over 1,400 retail sites to up to 5,500 over the next five years.

Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $63 million for the second quarter and $230 million for the half year, compared with $321 million and $593 million for the same periods in 2019. The result for the quarter and half year reflects significant COVID-19 related demand destruction, with lubricants volumes in Europe, North America and India 40-50% lower in the quarter compared with the same period last year. In China, where we experienced significant impacts in the first quarter, we have seen strong volume recovery in the second quarter.

Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $47 million for the second quarter and $112 million for the half year, compared with $83 million and $252 million for the same periods in 2019. The result for the quarter and half year reflects a weaker margin environment and the impact of COVID-19, partly offset by lower turnaround activity.
In the quarter we announced the sale of BP’s petrochemicals business to INEOS for a total consideration of $5 billion, subject to customary adjustments. As a result, the net assets have been classified as held for sale in the group balance sheet at 30 June 2020. Subject to approvals, the transaction is expected to complete before the end of the year.
Outlook
Looking to the third quarter of 2020, we expect higher product demand, albeit still significantly below last year’s levels. We also expect significant continued pressure on industry refining margins into the third quarter.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.

11

Table of contents

Downstream (continued)
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Underlying RC profit before interest and tax - by region
 
 
 
 
 
 
US
 
719

566

 
1,276

1,097

Non-US
 
686

799

 
1,050

2,001

 
 
1,405

1,365

 
2,326

3,098

Non-operating items
 
 
 
 
 
 
US
 
(69
)
2

 
(63
)
3

Non-US
 
(711
)
(33
)
 
(715
)
(38
)
 
 
(780
)
(31
)
 
(778
)
(35
)
Fair value accounting effects(a)
 
 
 
 
 
 
US
 
(71
)
8

 
74

69

Non-US
 
40

(54
)
 
(364
)
(79
)
 
 
(31
)
(46
)
 
(290
)
(10
)
RC profit before interest and tax
 
 
 
 
 
 
US
 
579

576

 
1,287

1,169

Non-US
 
15

712

 
(29
)
1,884

 
 
594

1,288

 
1,258

3,053

Underlying RC profit before interest and tax - by business(b)(c)
 
 
 
 
 
 
Fuels
 
1,295

961

 
1,984

2,253

Lubricants
 
63

321

 
230

593

Petrochemicals
 
47

83

 
112

252

 
 
1,405

1,365

 
2,326

3,098

Non-operating items and fair value accounting effects(a)
 
 
 
 
 
 
Fuels
 
(748
)
(99
)
 
(1,005
)
(62
)
Lubricants
 
(51
)
22

 
(51
)
18

Petrochemicals
 
(12
)

 
(12
)
(1
)
 
 
(811
)
(77
)
 
(1,068
)
(45
)
RC profit before interest and tax(b)(c)
 
 
 
 
 
 
Fuels
 
547

862

 
979

2,191

Lubricants
 
12

343

 
179

611

Petrochemicals
 
35

83

 
100

251

 
 
594

1,288

 
1,258

3,053

 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
5.9

15.2

 
7.4

12.7

 
 
 
 
 
 
 
Refinery throughputs (mb/d)
 
 
 
 
 
 
US
 
614

673

 
681

703

Europe
 
716

715

 
776

741

Rest of World
 
157

209

 
190

223

 
 
1,487

1,597

 
1,647

1,667

BP-operated refining availability* (%)
 
95.6

93.4

 
95.9

93.9

 
 
 
 
 
 
 
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
US
 
872

1,174

 
955

1,126

Europe
 
685

1,091

 
820

1,042

Rest of World
 
364

520

 
441

520

 
 
1,921

2,785

 
2,216

2,688

Trading/supply sales of refined products
 
3,172

3,099

 
3,274

3,197

Total sales volumes of refined products
 
5,093

5,884

 
5,490

5,885

 
 
 
 
 
 
 
Petrochemicals production (kte)
 
 
 
 
 
 
US
 
410

584

 
1,021

1,185

Europe
 
1,246

1,226

 
2,617

2,386

Rest of World
 
1,271

1,156

 
2,424

2,455

 
 
2,927

2,966

 
6,062

6,026

(a)
For Downstream, fair value accounting effects arise solely in the fuels business. See page 31 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.


12

Table of contents

Rosneft
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020(a)

2019

 
2020(a)

2019

Profit (loss) before interest and tax(b)(c)
 
(71
)
523

 
(289
)
1,049

Inventory holding (gains) losses*
 
(53
)
2

 
148

(38
)
RC profit (loss) before interest and tax
 
(124
)
525

 
(141
)
1,011

Net charge (credit) for non-operating items*
 
63

113

 
63

194

Underlying RC profit (loss) before interest and tax*
 
(61
)
638

 
(78
)
1,205


Financial results
Replacement cost (RC) loss before interest and tax for the second quarter and half year was $124 million and $141 million respectively, compared with a profit of $525 million and $1,011 million for the same periods in 2019.
After adjusting for non-operating items, the underlying RC loss before interest and tax for the second quarter and half year was $61 million and $78 million respectively, compared with a profit of $638 million and $1,205 million for the same periods in 2019.
Compared with the same periods in 2019, the result for the second quarter primarily reflects lower oil prices partially offset by favourable foreign exchange, whilst the result for the half year was primarily affected by lower oil prices.

Key events
BP’s two nominees, Bob Dudley and Bernard Looney, were elected to Rosneft’s board at Rosneft's annual general meeting (AGM) on 2 June 2020. At the AGM, shareholders also approved a resolution to pay a dividend of 18.07 roubles per ordinary share, which brings the total dividend for 2019 to 33.41 roubles per ordinary share, constituting 50% of the company’s IFRS net profit. BP received a payment of $480 million, after the deduction of withholding tax, on 14 July.
On 30 April 2020, Rosneft completed a transaction to transfer all of its interest and cease participation in its Venezuelan businesses to a company owned by the government of the Russian Federation. In consideration, Rosneft received shares equal to a 9.6% share of its own equity. The shares are held by a 100% subsidiary of Rosneft and accounted for as treasury shares. Rosneft also has an approved programme of share buybacks under which shares are being repurchased. Those shares are also accounted for as treasury shares.
BP retains 19.75% of the voting rights at meetings of Rosneft shareholders and continues to be entitled to dividends based on that shareholding. BP’s economic interest as of 30 June, however, has increased to 21.93% as a result of its indirect interest in the shares held by the subsidiaries of Rosneft. BP’s share of profit or loss of Rosneft reflects its economic interest.


 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

 
 
2020(a)

2019

 
2020(a)

2019

Production (net of royalties) (BP share)
 
 
 
 
 
 
Liquids* (mb/d)
 
856

912

 
886

924

Natural gas (mmcf/d)
 
1,248

1,250

 
1,261

1,288

Total hydrocarbons* (mboe/d)
 
1,071

1,127

 
1,103

1,146

(a)
The operational and financial information of the Rosneft segment for the second quarter and half year is based on preliminary operational and financial results of Rosneft for the three months and six months ended 30 June 2020. Actual results may differ from these amounts. Amounts reported for the second quarter are based on BP’s 21.2% average economic interest for the quarter and include adjustments to reflect the finalization of Rosneft’s first quarter results. Amounts reported for the first quarter and all comparative periods are based on BP’s 19.75% economic interest.
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP’s economic interest in Rosneft for the second 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.
(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.


13

Table of contents

Other businesses and corporate
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

Sales and other operating revenues(a)
 
450

433

 
903

789

Profit (loss) before interest and tax
 
(317
)
(381
)
 
(1,015
)
(927
)
Inventory holding (gains) losses*
 


 


RC profit (loss) before interest and tax
 
(317
)
(381
)
 
(1,015
)
(927
)
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
 
57

91

 
194

219

Underlying RC profit (loss) before interest and tax*
 
(260
)
(290
)
 
(821
)
(708
)
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(129
)
(224
)
 
(253
)
(379
)
Non-US
 
(131
)
(66
)
 
(568
)
(329
)
 
 
(260
)
(290
)
 
(821
)
(708
)
Non-operating items
 
 
 
 
 
 
US
 
(62
)
(78
)
 
(110
)
(206
)
Non-US
 
46

(13
)
 
(43
)
(13
)
 
 
(16
)
(91
)
 
(153
)
(219
)
Fair value accounting effects
 
 
 
 
 
 
US
 


 


Non-US
 
(41
)

 
(41
)

 
 
(41
)

 
(41
)

RC profit (loss) before interest and tax
 
 
 
 
 
 
US
 
(191
)
(302
)
 
(363
)
(585
)
Non-US
 
(126
)
(79
)
 
(652
)
(342
)
 
 
(317
)
(381
)
 
(1,015
)
(927
)

(a)
Includes sales to other segments.
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 second quarter and half year was $317 million and $1,015 million respectively, compared with $381 million and $927 million for the same periods in 2019.
The results included a net non-operating charge of $16 million for the second quarter and $153 million for the half year, compared with a charge of $91 million and $219 million for the same periods in 2019. Fair value accounting effects in the second quarter and half year had an adverse impact of $41 million. See page 31 for further information.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost loss before interest and tax for the second quarter and half year was $260 million and $821 million respectively, compared with $290 million and $708 million for the same periods in 2019.
Alternative Energy
BP's net ethanol-equivalent production* for the first half of the year averaged 14.4kb/d, compared with 9.3kb/d for the 100% BP-owned business for the same period in 2019.
Net wind generation capacity* was 923MW at 30 June 2020, compared with 926MW at 30 June 2019. BP’s net share of wind generation for the second quarter and half year was 673GWh and 1,450GWh respectively, compared with 688GWh and 1,461GWh for the same periods in 2019. In July, BP agreed to acquire the remaining 50% interest in the BP-operated Fowler Ridge 1 wind asset from its current partner, Dominion Energy. Located in central Indiana, the asset includes 162 wind turbines with a generating capacity of 300MW and will increase BP's net wind generation capacity to 1,073MW.
Lightsource BP has developed assets of 2.2GW to date and has an ambition to reach 10GW of developed assets by the end of 2023.
In April, Lightsource BP and Conway Corp signed a 20-year purchase power agreement for the development of a 132MW solar energy project in White County, Arkansas, US. In the same month Lightsource BP and the Southeastern Pennsylvania Transportation Authority (SEPTA) in the US signed a long-term power contract. The agreement will provide SEPTA with 67,029MWh of electricity from two solar power plants in Franklin county – about 20% of the transportation agency’s annual electricity usage. Lightsource BP also acquired the Wellington North solar project in New South Wales, Australia in July. It will be sited adjacent to Lightsource BP’s existing 200MW Wellington solar asset, which is currently in construction, creating a combined total capacity of 550MW.
This builds on the progress announced in our first-quarter results, which comprised the following: Lightsource BP signed a multi-year module supply agreement with Canadian Solar Inc. to deliver 1.2GW of high-efficiency polycrystalline solar modules for projects in the US and Australia; and Lightsource BP closed on a $250 million financing package for its Impact Solar project located in Lamar County, Texas, USA.
In early July BP signed a memorandum of understanding (MOU) with Chinese solar firm, JinkoPower Technologies, to provide integrated decarbonized energy solutions and services to customers in China.
Outlook
Other businesses and corporate average quarterly charges, excluding non-operating items, fair value accounting effects 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 39.

14

Table of contents

Financial statements
Group income statement
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

 
 
 
 
 
 
 
Sales and other operating revenues (Note 6)
 
31,676

72,676

 
91,326

138,997

Earnings from joint ventures – after interest and tax
 
(567
)
138

 
(589
)
323

Earnings from associates – after interest and tax
 
(100
)
608

 
(344
)
1,257

Interest and other income
 
107

270

 
247

433

Gains on sale of businesses and fixed assets
 
74

55

 
90

144

Total revenues and other income
 
31,190

73,747

 
90,730

141,154

Purchases
 
18,778

55,683

 
67,656

103,955

Production and manufacturing expenses
 
5,211

5,391

 
11,310

10,747

Production and similar taxes (Note 8)
 
124

371

 
327

795

Depreciation, depletion and amortization (Note 7)
 
3,937

4,588

 
7,996

9,049

Impairment and losses on sale of businesses and fixed assets (Note 3)
 
11,770

906

 
12,919

1,002

Exploration expense (Note 4)
 
9,674

146

 
9,876

513

Distribution and administration expenses
 
2,509

2,646

 
5,193

5,413

Profit (loss) before interest and taxation
 
(20,813
)
4,016

 
(24,547
)
9,680

Finance costs
 
783

853

 
1,566

1,720

Net finance expense relating to pensions and other post-retirement benefits
 
8

15

 
15

30

Profit (loss) before taxation
 
(21,604
)
3,148

 
(26,128
)
7,930

Taxation
 
(4,082
)
1,244

 
(4,221
)
3,027

Profit (loss) for the period
 
(17,522
)
1,904

 
(21,907
)
4,903

Attributable to
 
 
 
 
 
 
BP shareholders
 
(16,848
)
1,822

 
(21,213
)
4,756

Non-controlling interests
 
(674
)
82

 
(694
)
147

 
 
(17,522
)
1,904

 
(21,907
)
4,903

 
 
 
 
 
 
 
Earnings per share (Note 9)
 
 
 
 
 
 
Profit (loss) for the period attributable to BP shareholders
 
 
 
 
 
 
Per ordinary share (cents)
 
 
 
 
 
 
Basic
 
(83.32
)
8.95

 
(105.02
)
23.47

Diluted
 
(83.32
)
8.92

 
(105.02
)
23.35

Per ADS (dollars)
 
 
 
 
 
 
Basic
 
(5.00
)
0.54

 
(6.30
)
1.41

Diluted
 
(5.00
)
0.54

 
(6.30
)
1.40





15

Table of contents

Condensed group statement of comprehensive income
 
 
Second

Second

 
First

First

 
 
quarter

quarter

 
half

half

$ million
 
2020

2019

 
2020

2019

 
 
 
 
 
 
 
Profit (loss) for the period
 
(17,522
)
1,904

 
(21,907
)
4,903

Other comprehensive income
 
 
 
 
 
 
Items that may be reclassified subsequently to profit or loss
 
 
 
 
 
 
Currency translation differences(a)
 
1,371

131

 
(3,271
)
1,120

Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
 
3


 
4


Cash flow hedges and costs of hedging
 
68

133

 
153

152

Share of items relating to equity-accounted entities, net of tax
 
(333
)
(30
)
 
109

(80
)
Income tax relating to items that may be reclassified
 
(37
)
(9
)
 
80

(43
)
 
 
1,072

225

 
(2,925
)
1,149

Items that will not be reclassified to profit or loss
 
 
 
 
 
 
Remeasurements of the net pension and other post-retirement benefit liability or asset(b)
 
(1,960
)
(39
)
 
(241
)
(892
)
Cash flow hedges that will subsequently be transferred to the balance sheet
 
(2
)
(7
)
 
(10
)
1

Income tax relating to items that will not be reclassified
 
623

2

 

275

 
 
(1,339
)
(44
)
 
(251
)
(616
)
Other comprehensive income
 
(267
)
181

 
(3,176
)
533

Total comprehensive income
 
(17,789
)
2,085

 
(25,083
)
5,436

Attributable to
 
 
 
 
 
 
BP shareholders
 
(17,142
)
2,001

 
(24,359
)
5,282

Non-controlling interests
 
(647
)
84

 
(724
)
154

 
 
(17,789
)
2,085

 
(25,083
)
5,436

(a)
Second quarter and half year 2020 was principally affected by movements in the Russian rouble against the US dollar.
(b)
See Note 1 for further information.


16

Table of contents

Condensed group statement of changes in equity
 
 
BP shareholders’

Non-controlling interests
 
Total

$ million
 
equity

Hybrid bonds

Other interest

equity

At 1 January 2020
 
98,412


2,296

100,708

 
 
 
 
 
 
Total comprehensive income
 
(24,359
)

(724
)
(25,083
)
Dividends
 
(4,242
)

(105
)
(4,347
)
Cash flow hedges transferred to the balance sheet, net of tax
 
6



6

Repurchase of ordinary share capital
 
(776
)


(776
)
Share-based payments, net of tax
 
342



342

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




Issue of perpetual hybrid bonds
 
(48
)
11,909


11,861

Transactions involving non-controlling interests, net of tax
 
(471
)

571

100

At 30 June 2020
 
68,864

11,909

2,038

82,811

 
 
 
 
 
 
 
 
BP shareholders’

Non-controlling interests
 
Total

$ million
 
equity

Hybrid bonds

Other interest

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
 
5,282


154

5,436

Dividends
 
(3,200
)

(119
)
(3,319
)
Cash flow hedges transferred to the balance sheet, net of tax
 
12



12

Repurchase of ordinary share capital
 
(125
)


(125
)
Share-based payments, net of tax
 
398



398

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



3

At 30 June 2019
 
101,485


2,138

103,623

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



17

Table of contents

Group balance sheet
 
 
30 June

31 December

$ million
 
2020

2019

Non-current assets
 
 
 
Property, plant and equipment
 
117,208

132,642

Goodwill
 
12,352

11,868

Intangible assets
 
5,987

15,539

Investments in joint ventures
 
8,015

9,991

Investments in associates
 
16,982

20,334

Other investments
 
2,559

1,276

Fixed assets
 
163,103

191,650

Loans
 
724

630

Trade and other receivables
 
4,270

2,147

Derivative financial instruments
 
7,381

6,314

Prepayments
 
495

781

Deferred tax assets
 
6,891

4,560

Defined benefit pension plan surpluses
 
6,346

7,053

 
 
189,210

213,135

Current assets
 
 
 
Loans
 
370

339

Inventories
 
12,504

20,880

Trade and other receivables
 
16,522

24,442

Derivative financial instruments
 
4,751

4,153

Prepayments
 
679

857

Current tax receivable
 
637

1,282

Other investments
 
122

169

Cash and cash equivalents
 
34,217

22,472

 
 
69,802

74,594

Assets classified as held for sale (Note 2)