bp201407296k.htm
SECURITIES AND EXCHANGE COMMISSION
 
 
 
Washington, D.C. 20549
 
 
 
 
 
Form 6-K
 
 
 
Report of Foreign Issuer
 
 
 
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
 
 

 
for the period ended July, 2014


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 Form 20-F or Form 40-F.
 
 
Form 20-F        |X|          Form 40-F
     ---------------               ----------------
 
 

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby  furnishing  the  information to the
Commission  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
     1934.
 
Yes                            No        |X|
      ---------------           ----------------
 
 
 
 

 

 
BP p.l.c.
Group results
Second quarter and half year results 2014(a)
 
 
Top of page 1
FOR IMMEDIATE RELEASE                                                 London 29 July 2014
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
2,042
3,528
3,369
  
Profit for the period(b)
  
6,897
18,905
358
(53)
(187)
  
Inventory holding (gains) losses*, net of tax
  
(240)
91
2,400
3,475
3,182
  
Replacement cost profit*
  
6,657
18,996
       
Net (favourable) unfavourable impact of non-operating
      
312
(250)
453
  
  items* and fair value accounting effects*, net of tax
  
203
(12,069)
2,712
3,225
3,635
  
Underlying replacement cost profit*
  
6,860
6,927
       
Replacement cost profit
      
12.62
18.80
17.25
  
    per ordinary share (cents)
  
36.05
99.55
0.76
1.13
1.03
  
    per ADS (dollars)
  
2.16
5.97
       
Underlying replacement cost profit
      
14.26
17.45
19.71
  
    per ordinary share (cents)
  
37.15
36.30
0.86
1.05
1.18
  
    per ADS (dollars)
  
2.23
2.18
 
·   BP's second-quarter replacement cost (RC) profit was $3,182 million, compared with $2,400 million a year ago. After adjusting for a net charge for non-operating items of $481 million and net favourable fair value accounting
     effects of $28 million (both on a post-tax basis), underlying RC profit for the second quarter 2014 was $3,635 million, compared with $2,712 million for the same period in 2013. For the half year, RC profit was $6,657 million,
     compared with $18,996 million a year ago which included a $12.5-billion gain relating to the disposal of our interest in TNK-BP. After adjusting for a net charge for non-operating items of $257 million and net favourable fair
     value accounting effects of $54 million (both on a post-tax basis), underlying RC profit for the half year was $6,860 million, compared with $6,927 million for the same period last year. RC profit or loss for the group, underlying RC
     profit or loss and fair value accounting effects are non-GAAP measures and further information is provided on pages 3 and 31.
 
·   All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $260 million for the quarter and $299 million for the half year. For further information on the Gulf of
     Mexico oil spill and its consequences, including information on utilization of the Deepwater Horizon Oil Spill Trust fund, see page 10 and Note 2 on page 18. See also Principal risks and uncertainties on page 35 and Legal
     proceedings on page 42.
 
·   Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the quarter and half year was $7.9 billion and $16.1 billion respectively, compared with $5.4 billion and $9.4 billion for the same periods 
     in 2013. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $7.6 billion and $16.5 billion respectively, compared with $5.2 billion and
     $9.5 billion respectively for the same periods in 2013.
 
·   Net debt at 30 June 2014 was $24.4 billion, compared with $18.2 billion a year ago. The ratio of net debt to net debt plus equity at 30 June 2014 was 15.5%, compared with 12.3% a year ago. Net debt and the ratio of net debt to net
     debt plus equity are non-GAAP measures. See page 27 for more information.
 
·   Total capital expenditure on an accruals basis for the second quarter was $5.6 billion, almost all of which was organic*. For the half year, total capital expenditure on an accruals basis was $11.7 billion, of which organic capital
     expenditure was $11.0 billion.
 
·   In October 2013, BP announced plans to divest a further $10 billion of assets before the end of 2015, having completed its earlier divestment programme of $38 billion in 2012. BP has agreed around $3.4 billion of such further
     divestments to date. Disposal proceeds received in cash were $0.8 billion for the quarter and $1.8 billion for the half year.
 
·   BP today announced a quarterly dividend of 9.75 cents per ordinary share ($0.585 per ADS), which is expected to be paid on 19 September 2014. The corresponding amount in sterling will be announced on 9 September 2014. See
     page 27 for further information.
 
 
 *
 
(a)
For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 33.
 
This results announcement also represents BP's half-yearly financial report (see page 11).
(b)
Profit attributable to BP shareholders.
 
 
The commentaries above and following should be read in conjunction with the cautionary statement on page 45.
 
 
Top of page 2
Group headlines (continued)
 
 
 
 
·   The effective tax rate (ETR) on RC profit for the second quarter and half year was 34% and 32% respectively, compared with 46% and 20% for the same periods in 2013. Adjusting for non-operating items and fair value accounting effects, the underlying ETR in the second quarter and half year was 33% for both periods, compared with 45% and 41% for the same periods in 2013. The underlying ETR was higher in 2013 due to foreign exchange impacts on deferred tax and a lower level of equity-accounted earnings (which are reported net of tax), compared with the corresponding periods in 2014.
 
 
 
·   Finance costs and net finance expense relating to pensions and other post-retirement benefits were a charge of $356 million for the second quarter, compared with $369 million for the same period in 2013. For the half year, the respective amounts were $723 million and $773 million.
 
 
 
·   BP repurchased 53 million ordinary shares at a cost of $0.5 billion, including fees and stamp duty, during the second quarter of 2014. For the half year, BP repurchased 298 million ordinary shares at a cost of $2.4 billion, including fees and stamp duty. As at 30 June 2014, BP had bought back 1,051 million shares for a total amount of $7.9 billion, including fees and stamp duty, since the announcement on 22 March 2013 of a share repurchase programme with a total value of up to $8 billion. The $8-billion share repurchase programme was completed in July 2014.
 
 
Top of page 3
Analysis of RC profit before interest and tax
and reconciliation to profit for the period
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
       
RC profit before interest and tax*
      
4,400
4,659
4,049
  
    Upstream
  
8,708
9,962
1,016
794
933
  
    Downstream
  
1,727
2,663
-
-
-
  
    TNK-BP(a)
  
-
12,500
218
518
1,024
  
    Rosneft(b)
  
1,542
303
(573)
(497)
(434)
  
    Other businesses and corporate
  
(931)
(1,040)
(199)
(29)
(251)
  
    Gulf of Mexico oil spill response(c)
  
(280)
(221)
129
90
(76)
  
    Consolidation adjustment - UPII*
  
14
556
4,991
5,535
5,245
  
RC profit before interest and tax
  
10,780
24,723
       
Finance costs and net finance expense relating to
      
(369)
(367)
(356)
  
  pensions and other post-retirement benefits
  
(723)
(773)
(2,138)
(1,602)
(1,643)
  
Taxation on a RC basis
  
(3,245)
(4,791)
(84)
(91)
(64)
  
Non-controlling interests
  
(155)
(163)
2,400
3,475
3,182
  
RC profit attributable to BP shareholders
  
6,657
18,996
(506)
102
258
  
Inventory holding gains (losses)
  
360
(100)
       
Taxation (charge) credit on inventory holding gains
      
148
(49)
(71)
  
  and losses
  
(120)
9
2,042
3,528
3,369
  
Profit for the period attributable to BP shareholders
  
6,897
18,905
 
 
(a)
BP ceased equity accounting for its share of TNK-BP's earnings from 22 October 2012. First half 2013 includes the gain arising on disposal of BP's interest in TNK-BP.
(b)
BP's investment in Rosneft is accounted under the equity method from 21 March 2013. See page 8 for further information.
(c)
See Note 2 on page 18 for further information on the accounting for the Gulf of Mexico oil spill response.
 
 
Analysis of underlying RC profit before interest and tax
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
       
Underlying RC profit before interest and tax*
      
4,288
4,401
4,655
  
    Upstream
  
9,056
9,990
1,201
1,011
733
  
    Downstream
  
1,744
2,842
218
271
1,024
  
    Rosneft
  
1,295
303
(438)
(489)
(438)
  
    Other businesses and corporate
  
(927)
(899)
129
90
(76)
  
    Consolidation adjustment - UPII
  
14
556
5,398
5,284
5,898
  
Underlying RC profit before interest and tax
  
11,182
12,792
       
Finance costs and net finance expense relating to
      
(359)
(357)
(347)
  
  pensions and other post-retirement benefits
  
(704)
(753)
(2,243)
(1,611)
(1,852)
  
Taxation on an underlying RC basis
  
(3,463)
(4,949)
(84)
(91)
(64)
  
Non-controlling interests
  
(155)
(163)
2,712
3,225
3,635
  
Underlying RC profit attributable to BP shareholders
  
6,860
6,927
 
Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 4-9 for the segments.
 
 
Top of page 4
Upstream
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
4,396
4,653
4,048
  
Profit before interest and tax
  
8,701
9,956
4
6
1
  
Inventory holding (gains) losses*
  
7
6
4,400
4,659
4,049
  
RC profit before interest and tax
  
8,708
9,962
       
Net (favourable) unfavourable impact of non-operating
      
(112)
(258)
606
  
  items* and fair value accounting effects*
  
348
28
4,288
4,401
4,655
  
Underlying RC profit before interest and tax*(a)
  
9,056
9,990
 
 
(a)
See page 5 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 second quarter and half year was $4,049 million and $8,708 million respectively, compared with $4,400 million and $9,962 million for the same periods in 2013. The second quarter and half year included a net non-operating charge of $516 million and $240 million respectively, compared with a net non-operating gain of $143 million and $63 million a year ago. Fair value accounting effects in the second quarter and half year had unfavourable impacts of $90 million and $108 million respectively, compared with unfavourable impacts of $31 million and $91 million in the same periods of 2013.
 
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 $4,655 million and $9,056 million respectively, compared with $4,288 million and $9,990 million for the same periods in 2013. The result for the second quarter reflected higher production in higher-margin areas and higher liquids and gas realizations, partly offset by higher costs, primarily depreciation, depletion and amortization and wellwork, and the impact of divestments. The result for the first half reflected the same factors as the second quarter, with the exception of liquids realizations, which were lower, the impact of higher exploration write-offs, mainly in the first quarter, and a benefit from stronger gas marketing and trading activities, again mainly in the first quarter.
 
Production
 
Reported production for the quarter was 2,106mboe/d, 6% lower than the second quarter of 2013. Underlying production* for the quarter was 3.1% higher. This reflected growth in production from higher-margin areas, mainly driven by strong performance in the Gulf of Mexico. For the first half, production was 2,118mboe/d, 7.3% lower than in the same period of 2013. First-half underlying production was 1.4% higher than in 2013.
 
Key events
 
In May, Rosneft and BP signed a heads of agreement that provides for implementation of a joint pilot project relating to the Domanik formations in Central Russia's Volga-Urals region and, in the event of success, the possible development of unconventional Domanik resources.
 
In June, production commenced from the CLOV (Cravo, Lirio, Orquidea and Violeta) major project in Angola (BP 16.67%). This is the fifth major project start-up in 2014.
 
Also in June, BP and the China National Offshore Oil Corporation (CNOOC) announced a heads of agreement for BP to supply up to 1.5 million tonnes of liquefied natural gas (LNG) per year over 20 years starting in 2019.
 
Furthermore, BP and Pantera Acquisition Group, LLC (Pantera) signed an agreement under which Pantera has agreed to acquire BP's interests in the Panhandle West and Texas Hugoton gas fields for a purchase price of $390 million.
 
This builds on the progress we announced with our first-quarter results, which comprised: the start-up of production from the Chirag Oil project in Azerbaijan and from the Na Kika Phase 3, Mars B and Atlantis North expansion Phase 2 projects in the Gulf of Mexico; the award of further key contracts for the development of the Shah Deniz Stage 2 and South Caucasus Pipeline expansion projects; our intention to create a separate BP business to manage our US lower 48 onshore oil and gas assets; BP being high bidder on 24 out of 31 blocks in the March Gulf of Mexico lease sales (regulatory approval has now been received); and the agreement to sell interests in four BP-operated oilfields on the North Slope of Alaska to Hilcorp (see Note 3 on page 23 for further information).
 
Outlook
 
Looking ahead, we expect third-quarter 2014 reported production to be lower than the second quarter, primarily reflecting planned major turnaround and seasonal maintenance activities in Alaska and the Gulf of Mexico. We expect the seasonal reduction to be slightly larger than we experienced in the same quarters of 2013 due to phasing of these activities.
 
 
See also Note 1 on page 18.
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 45.
 
Top of page 5
Upstream
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
       
Underlying RC profit before interest and tax(a)
      
561
731
1,419
  
US(b)
  
2,150
1,515
3,727
3,670
3,236
  
Non-US(c)
  
6,906
8,475
4,288
4,401
4,655
      
9,056
9,990
       
Non-operating items
      
62
(59)
(72)
  
US
  
(131)
56
81
335
(444)
  
Non-US
  
(109)
7
143
276
(516)
      
(240)
63
       
Fair value accounting effects
      
(33)
(49)
(31)
  
US
  
(80)
(73)
2
31
(59)
  
Non-US
  
(28)
(18)
(31)
(18)
(90)
      
(108)
(91)
       
RC profit before interest and tax(a)
      
590
623
1,316
  
US
  
1,939
1,498
3,810
4,036
2,733
  
Non-US
  
6,769
8,464
4,400
4,659
4,049
      
8,708
9,962
       
Exploration expense
      
85
659
68
  
US(d)
  
727
165
349
289
321
  
Non-US
  
610
591
434
948
389
      
1,337
756
       
Production (net of royalties)(e)
      
       
Liquids* (mb/d)
      
335
396
429
  
US
  
413
351
97
106
92
  
Europe
  
99
106
732
582
562
  
Rest of World
  
572
722
1,165
1,085
1,083
      
1,084
1,179
       
Natural gas (mmcf/d)
      
1,573
1,478
1,525
  
US
  
1,502
1,553
286
199
166
  
Europe
  
182
307
4,386
4,390
4,244
  
Rest of World
  
4,317
4,558
6,244
6,067
5,936
      
6,001
6,418
       
Total hydrocarbons* (mboe/d)
      
606
651
692
  
US
  
672
618
147
140
121
  
Europe
  
130
159
1,488
1,339
1,293
  
Rest of World
  
1,316
1,508
2,241
2,131
2,106
      
2,118
2,285
       
Average realizations(f)
      
94.92
97.16
96.90
  
Total liquids ($/bbl)
  
97.03
99.08
5.37
6.20
5.67
  
Natural gas ($/mcf)
  
5.94
5.45
61.27
66.16
64.90
  
Total hydrocarbons ($/boe)
  
65.53
63.23
 
 
(a)
A minor amendment has been made to the analysis by region for the comparative periods in 2013.
(b)
The increase in the second quarter 2014 compared with the second quarter 2013 primarily reflects higher production in the Gulf of Mexico and higher realizations.
(c)
The decrease in the second quarter 2014 compared with the second quarter 2013 primarily reflects higher costs, mainly depreciation, depletion and amortization, and the impact of divestments, partly offset by higher realizations.
(d)
Following on from the decision to create a separate BP business around our US lower 48 onshore oil and gas activities, and as a consequence of disappointing appraisal results, we have decided not to proceed with development plans in the Utica shale. First quarter and first half 2014 include a $521-million write-off relating to the Utica acreage.
(e)
Includes BP's share of production of equity-accounted entities in the Upstream segment.
(f)
Based on sales by consolidated subsidiaries only - this excludes equity-accounted entities.
 
Because of rounding, some totals may not agree exactly with the sum of their component parts.
 
 
Top of page 6
Downstream
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
501
871
1,166
  
Profit before interest and tax
  
2,037
2,556
515
(77)
(233)
  
Inventory holding (gains) losses*
  
(310)
107
1,016
794
933
  
RC profit before interest and tax
  
1,727
2,663
       
Net (favourable) unfavourable impact of non-operating
      
185
217
(200)
  
  items* and fair value accounting effects*
  
17
179
1,201
1,011
733
  
Underlying RC profit before interest and tax*(a)
  
1,744
2,842
 
 
(a)
See page 7 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 second quarter and half year was $933 million and $1,727 million respectively, compared with $1,016 million and $2,663 million for the same periods in 2013.
 
The 2014 results included net non-operating gains of $50 million for the second quarter and a net non-operating charge of $228 million for the half year, compared with net non-operating charges of $323 million and $304 million for the same periods a year ago (see pages 7 and 30 for further information on non-operating items). The second-quarter net non-operating gains are principally associated with divestments in the fuels and lubricants businesses, and the charges for the half year reflect an impairment relating to the announced halt of the refining operations at the Bulwer refinery in Australia, planned for 2015. Fair value accounting effects had favourable impacts of $150 million for the second quarter and $211 million for the half year, compared with $138 million for the second quarter and $125 million for the half year of 2013.
 
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 $733 million and $1,744 million respectively, compared with $1,201 million and $2,842 million a year ago.
 
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 7.
 
Fuels business
 
The fuels business delivered an underlying replacement cost profit before interest and tax of $516 million for the second quarter and $1,216 million for the half year, compared with $853 million and $2,090 million for the same periods in 2013. The lower result in the first half was principally due to significantly weaker refining margins in both the quarter and half year and a lower contribution from supply and trading in the second quarter. These impacts were partially offset by significantly higher production at the Whiting refinery due to the commissioning of its largest crude unit which had a planned outage in the same period last year, and associated processing of heavy crude. Heavy crude processing reached a peak of 270,000 barrels per day during the quarter.
 
Lubricants business
 
The lubricants business delivered an underlying replacement cost profit before interest and tax of $315 million in the second quarter and $622 million in the half year, compared with $372 million and $717 million in the same periods last year. The lower result was due to restructuring programmes and foreign exchange effects. The positive long-term performance trend continues to reflect execution of our strategy, including delivery from our premium brands and focus on high growth markets.
 
Petrochemicals business
 
The petrochemicals business incurred an underlying replacement cost loss before interest and tax of $98 million in the second quarter and $94 million in the half year, compared with $24 million and an underlying replacement cost profit before interest and tax of $35 million, respectively, in the same periods last year. The loss was principally due to environmental factors, especially in the aromatics business, as excess supply in Asia and high xylene prices in the US created downward pressures on product margins. In the first quarter we acquired the remaining 50% joint venture interests in our purified terephthalic acid (PTA) plant in Indonesia. 
 
Outlook
 
In the third quarter, in the fuels business we expect stronger margin capture relative to the second quarter, driven by a lower level of turnarounds and Whiting operations. In the petrochemicals business the challenging environment is expected to continue, but we should benefit from a lower level of turnarounds.
 
 
 
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 45.
 
 
Top of page 7
Downstream
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
       
Underlying RC profit before interest and tax - 
      
       
  by region
      
557
412
331
  
US
  
743
1,307
644
599
402
  
Non-US
  
1,001
1,535
1,201
1,011
733
      
1,744
2,842
       
Non-operating items
      
(17)
(1)
180
  
US
  
179
11
(306)
(277)
(130)
  
Non-US
  
(407)
(315)
(323)
(278)
50
      
(228)
(304)
       
Fair value accounting effects
      
219
91
206
  
US
  
297
154
(81)
(30)
(56)
  
Non-US
  
(86)
(29)
138
61
150
      
211
125
       
RC profit before interest and tax
      
759
502
717
  
US
  
1,219
1,472
257
292
216
  
Non-US
  
508
1,191
1,016
794
933
      
1,727
2,663
       
Underlying RC profit (loss) before interest and tax - 
      
       
  by business(a)(b)
      
853
700
516
  
Fuels
  
1,216
2,090
372
307
315
  
Lubricants
  
622
717
(24)
4
(98)
  
Petrochemicals
  
(94)
35
1,201
1,011
733
      
1,744
2,842
       
Non-operating items and fair value accounting
      
       
  effects(c)
      
(188)
(217)
15
  
Fuels
  
(202)
(177)
3
-
186
  
Lubricants
  
186
(2)
-
-
(1)
  
Petrochemicals
  
(1)
-
(185)
(217)
200
      
(17)
(179)
       
RC profit (loss) before interest and tax(a)(b)
      
665
483
531
  
Fuels
  
1,014
1,913
375
307
501
  
Lubricants
  
808
715
(24)
4
(99)
  
Petrochemicals
  
(95)
35
1,016
794
933
      
1,727
2,663
               
19.1
13.3
15.4
  
BP average refining marker margin (RMM)* ($/bbl)
  
14.4
18.2
       
Refinery throughputs (mb/d)
      
711
614
645
  
US
  
630
824
745
798
757
  
Europe
  
777
775
252
308
250
  
Rest of World
  
279
287
1,708
1,720
1,652
      
1,686
1,886
95.3
95.0
95.3
  
Refining availability* (%)
  
95.1
95.2
       
Marketing sales of refined products (mb/d)
      
1,340
1,120
1,183
  
US
  
1,152
1,371
1,316
1,139
1,154
  
Europe
  
1,146
1,237
549
545
515
  
Rest of World
  
530
553
3,205
2,804
2,852
      
2,828
3,161
2,527
2,416
2,468
  
Trading/supply sales of refined products
  
2,442
2,418
5,732
5,220
5,320
  
Total sales volumes of refined products
  
5,270
5,579
       
Petrochemicals production (kte)
      
1,081
1,071
969
  
US
  
2,040
2,157
814
972
895
  
Europe
  
1,867
1,828
1,519
1,422
1,501
  
Rest of World
  
2,923
2,936
3,414
3,465
3,365
      
6,830
6,921
 
 
(a)
Segment-level overhead expenses are included in the fuels business result.
(b)
BP's share of income from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany is reported in the fuels business.
(c)
For Downstream, fair value accounting effects arise solely in the fuels business.
 
 
Top of page 8
Rosneft
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013(a)
2014
2014
  
$ million
  
2014
2013
231
549
1,050
  
Profit before interest and tax(b)
  
1,599
316
(13)
(31)
(26)
  
Inventory holding (gains) losses*
  
(57)
(13)
218
518
1,024
  
RC profit before interest and tax
  
1,542
303
-
(247)
-
  
Net charge (credit) for non-operating items*
  
(247)
-
218
271
1,024
  
Underlying RC profit before interest and tax*
  
1,295
303
 
Replacement cost profit before interest and tax for the second quarter and half year was $1,024 million and $1,542 million respectively, compared with $218 million and $303 million for the same periods in 2013.
 
There were no non-operating items in the second quarter of 2014 and a non-operating gain of $247 million in the first half of 2014, relating to Rosneft's sale of its interest in the Yugragazpererabotka joint venture. There were no non-operating items in the first half of 2013.
 
After adjusting for non-operating items, the underlying replacement cost profit for the second quarter and half year was $1,024 million and $1,295 million respectively, compared with $218 million and $303 million for the same periods in 2013. The primary factor impacting the second-quarter result, compared with the same period last year, was favourable foreign exchange effects. The half-year result reflected a full six months this year compared with 11 days of the first quarter and three months of the second quarter reported in the same period last year as well as favourable foreign exchange effects.
 
On 27 June 2014, Rosneft's Annual General Meeting of Shareholders approved the distribution of a dividend of 12.85 roubles per share. We received our share of this dividend in July 2014, which amounted to $693 million after the deduction of withholding tax.
 
See also Principal risks and uncertainties - Rosneft investment on page 36 and Other matters on page 44 for information on sanctions.
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
      
2014
2013(c)
       
Production (net of royalties) (BP share)
      
826
827
816
  
Liquids* (mb/d)
  
822
466
689
987
1,000
  
Natural gas (mmcf/d)
  
993
391
945
997
988
  
Total hydrocarbons* (mboe/d)
  
993
533
 
 
(a)
Second quarter 2013 as reported includes an amendment to first-quarter profit, which was reported based on a BP estimate.
(b)
The Rosneft segment result includes equity-accounted earnings arising from BP's 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BP's purchase of its interest in Rosneft and the amortization of the deferred gain relating to the disposal of BP's interest in TNK-BP. BP's share of Rosneft's earnings after their finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation.
(c)
First half 2013 reflects production for the period 21 March - 30 June averaged over the half year.
 
 
Top of page 9
Other businesses and corporate
 
 
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
(573)
(497)
(434)
  
Profit (loss) before interest and tax
  
(931)
(1,040)
-
-
-
  
Inventory holding (gains) losses*
  
-
-
(573)
(497)
(434)
  
RC profit (loss) before interest and tax
  
(931)
(1,040)
135
8
(4)
  
Net charge (credit) for non-operating items*
  
4
141
(438)
(489)
(438)
  
Underlying RC profit (loss) before interest and tax*
  
(927)
(899)
       
Underlying RC profit (loss) before interest and tax
      
(142)
(99)
(226)
  
US
  
(325)
(263)
(296)
(390)
(212)
  
Non-US
  
(602)
(636)
(438)
(489)
(438)
      
(927)
(899)
       
Non-operating items
      
(134)
(1)
4
  
US
  
3
(138)
(1)
(7)
-
  
Non-US
  
(7)
(3)
(135)
(8)
4
      
(4)
(141)
       
RC profit (loss) before interest and tax
      
(276)
(100)
(222)
  
US
  
(322)
(401)
(297)
(397)
(212)
  
Non-US
  
(609)
(639)
(573)
(497)
(434)
      
(931)
(1,040)
 
Other businesses and corporate comprises the Alternative Energy business, Shipping, Treasury (which includes interest income on the group's cash and cash equivalents), and corporate activities including centralized functions.
 
Financial results
 
The replacement cost loss before interest and tax for the second quarter and half year was $434 million and $931 million respectively, compared with $573 million and $1,040 million for the same periods last year.
 
The second-quarter result included a net non-operating gain of $4 million, compared with a net non-operating charge of $135 million a year ago. The charge in the second quarter last year related principally to impairments of assets in our wind business. For the half year, the net non-operating charge was $4 million, compared with a net non-operating charge of $141 million a year ago.
 
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the second quarter and half year was $438 million and $927 million respectively, compared with $438 million and $899 million for the same periods last year.
 
Alternative Energy
 
Biofuels
In our biofuels business we have three operating mills in Brazil where ethanol-equivalent production (which includes ethanol and sugar) for the second quarter was 113 million litres compared with 116 million litres in the same period a year ago. There was no production at our Brazilian mills in the first quarter of 2014 or 2013 due to the inter-harvest season. In the UK, the Vivergo joint venture (BP 47%) had ethanol production of 26 million litres (54 million litres gross) for the second quarter and 43 million litres (90 million litres gross) for the first half of 2014.
 
Wind
Net wind generation capacity*(a) was 1,590MW (2,619MW gross) at 30 June 2014, the same level as at 30 June 2013. BP's net share of wind generation for the second quarter and half year was 1,248GWh (2,082GWh gross) and 2,540GWh (4,303GWh gross) respectively, compared with 1,143GWh (1,957GWh gross) and 2,287GWh (4,021GWh gross) for the same periods of 2013.
 
 
(a)
Capacity figures include 32MW in the Netherlands managed by our Downstream segment.
 
 
Top of page 10
Gulf of Mexico oil spill
 
 
 
In April 2014, the US Coast Guard ended patrols and operations on the final three shoreline miles in Louisiana. The Coast Guard has now transitioned all shoreline areas to the National Response Center process and has indicated that if oil is later discovered in a shoreline segment where removal actions have been deemed complete, it will follow long-standing response protocols established under the law and contact whoever it believes is the responsible party or parties.
 
Financial update
 
The replacement cost loss before interest and tax for the second quarter and half year was $251 million and $280 million respectively, compared with a $199 million loss and a $221 million loss for the same periods last year. The second-quarter charge reflects an increase in the provision for legal costs and the ongoing costs of the Gulf Coast Restoration Organization. The cumulative pre-tax charge recognized to date amounts to $43.0 billion.
 
The cumulative income statement charge does not include amounts for obligations that BP considers are not possible, at this time, to measure reliably. The total amounts that will ultimately be paid by BP in relation to all the obligations relating to the incident are subject to significant uncertainty and the ultimate exposure and cost to BP will be dependent on many factors, as discussed under Provisions and contingent liabilities in Note 2 on page 18, including in relation to any new information or future developments. These could have a material impact on our consolidated financial position, results and cash flows. The risks associated with the incident could also heighten the impact of the other risks to which the group is exposed, as further described under Principal risks and uncertainties on page 35.
 
Trust update
 
During the second quarter, $219 million was paid out of the Deepwater Horizon Oil Spill Trust (the Trust) and qualified settlement funds (QSFs), including $201 million for claims payments, administrative costs of the Deepwater Horizon Court Supervised Settlement Program (DHCSSP) and other resolved items, and $18 million for natural resource damage assessment. In addition, $15 million was paid to claimants from the seafood compensation fund, for which the related provision and reimbursement asset had been previously derecognized upon funding of the QSF. At 30 June 2014, the aggregate cash balances in the Trust and the QSFs amounted to $6.3 billion, including $1.1 billion remaining in the seafood compensation fund which is yet to be distributed, and $0.9 billion held for natural resource damage early restoration projects.
 
As at 30 June 2014, the cumulative charges to be paid from the Trust, and the associated reimbursement asset recognized, amounted to $19.3 billion. No amount is provided for business economic loss claims not yet received, processed, and paid by the DHCSSP. See Note 2 on page 18 and Legal proceedings on page 42 for further details.
 
Legal proceedings
 
The federal district court in New Orleans (the District Court) scheduled the penalty phase in MDL 2179 to commence in January 2015. In this phase, the District Court will determine the amount of civil penalties owed to the United States under the Clean Water Act based on the court's rulings as to the presence of negligence, gross negligence or wilful misconduct and quantification of discharge in the earlier phases of the trial and the application of the penalty factors under the Clean Water Act. The District Court could issue its decision on the issues presented in the earlier trial phases at any time.
 
The District Court ruled in December 2013 requiring the claims administrator, in administering business economic loss claims, to match a claimant's revenue with corresponding variable expenses and develop a revised matching policy accordingly. In March 2014, the claims administrator issued a revised matching policy reflecting this order and in May 2014 it was approved by the District Court. The Plaintiffs' Steering Committee has filed a motion seeking to amend the revised policy.
 
In March 2014, the US Court of Appeals for the Fifth Circuit (the Fifth Circuit) affirmed the District Court's ruling that the Economic and Property Damages Settlement Agreement contained no causation requirement beyond the revenue and related tests set out in an exhibit to that agreement. In March 2014, BP filed a petition that all the active judges of the Fifth Circuit review the decision; in May 2014 this was denied. The District Court dissolved the injunction that had halted the processing and payment of business economic loss claims and instructed the claims administrator to resume the processing and payment of claims. BP has announced it will seek review by the US Supreme Court of the Fifth Circuit's decisions relating to compensation of claims for losses with no apparent connection to the Deepwater Horizon spill. In June 2014, BP also asked the District Court to order the return of excessive payments made by the DHCSSP under the matching policy in effect before the December 2013 Ruling.
 
The Medical Benefits Class Action Settlement Agreement provides for claims to be paid to qualifying class members for one year from the agreement's effective date, which was February 2014.
 
In March 2014, BP p.l.c., BP Exploration & Production and all other temporarily suspended BP entities entered into an agreement with the US Environmental Protection Agency resolving all issues related to suspension or debarment arising from the Deepwater Horizon incident, allowing BP entities to enter into new contracts or leases with the US Government. Under the terms and conditions of the agreement, which will apply for five years, BP has agreed to a set of safety and operations, ethics and compliance and corporate governance requirements.
 
In May 2014, the judge denied plaintiffs' motion in the multi-district litigation proceeding in federal district court in Houston (MDL 2185) to certify a proposed class of ADS purchasers before the explosion (from 8 November 2007 to 20 April 2010) and granted plaintiffs' motion to certify a class of post-explosion ADS purchasers (from 26 April 2010 to 28 May 2010). Both defendants and plaintiffs were granted permission by the Fifth Circuit to appeal from that decision in July 2014.
 
For further details, see Legal proceedings on page 42.
 
Top of page 11
Half-yearly financial report
 
 
 
This results announcement also represents BP's half-yearly financial report for the purposes of the Disclosure and Transparency Rules made by the UK Financial Conduct Authority. In this context: (i) the condensed set of financial statements can be found on pages 13-28; (ii) pages 1-10, and 29-45 comprise the interim management report; and (iii) the directors' responsibility statement and auditors' independent review report can be found on pages 11-12.
 
 
Statement of directors' responsibilities
 
 
 
The directors confirm that, to the best of their knowledge, the condensed set of financial statements on pages 13-28 has been prepared in accordance with IAS 34 'Interim Financial Reporting', and that the interim management report on pages 1-10 and 29-45 includes a fair review of the information required by the Disclosure and Transparency Rules.
 
The directors draw attention to Note 2 to the condensed set of financial statements on pages 18-23 which describes the uncertainties surrounding the amounts and timings of liabilities arising from the Gulf of Mexico oil spill.
 
The directors of BP p.l.c. are listed on pages 61-65 of BP Annual Report and Form 20-F 2013.
 
 
By order of the board
 
 
Bob Dudley
Brian Gilvary
Group Chief Executive
Chief Financial Officer
28 July 2014
28 July 2014
 
 
Top of page 12
Independent review report to BP p.l.c.
 
 
 
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 which comprises the group income statement, group statement of comprehensive income, group statement of changes in equity, group balance sheet, condensed group cash flow statement, and Notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
 
This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom (ISRE 2410). To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
 
 
Directors' responsibilities
 
 
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
 
 
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union (EU). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as issued by the IASB and as adopted by the EU.
 
 
Our responsibility
 
 
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
 
 
Scope of review
 
 
We conducted our review in accordance with ISRE 2410. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
 
 
Conclusion
 
 
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as issued by the IASB and as adopted by the EU and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
 
 
Emphasis of matter - significant uncertainty over provisions and contingent liabilities related to the Gulf of Mexico oil spill
 
In forming our review conclusion we have considered the adequacy of the disclosures made in Note 2 to the condensed financial statements concerning the provisions, future expenditures for which reliable estimates cannot be made and other contingencies related to the Gulf of Mexico oil spill. The total amounts that will ultimately be paid by BP in relation to all obligations relating to the incident are subject to significant uncertainty and the ultimate exposure and cost to BP will be dependent on many factors. Furthermore, significant uncertainty exists in relation to the amount of claims that will become payable by BP, the amount of fines that will ultimately be levied on BP (including any determination of BP's culpability based on any findings of negligence, gross negligence or wilful misconduct), the outcome of litigation, and any costs arising from any longer-term environmental consequences of the oil spill, which will also impact upon the ultimate cost for BP. Our review conclusion is not qualified in respect of these matters.
 
Ernst & Young LLP
London
28 July 2014
 
 
The maintenance and integrity of the BP p.l.c. website are the responsibility of the directors; the review work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial information since it was initially presented on the website.
 
 
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
 
 
Top of page 13
Financial statements
 
 
 
Group income statement
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
               
94,711
91,710
93,957
  
Sales and other operating revenues (Note 5)
  
185,667
188,818
102
115
155
  
Earnings from joint ventures - after interest and tax
  
270
227
448
783
1,228
  
Earnings from associates - after interest and tax
  
2,011
732
207
331
157
  
Interest and other income
  
488
364
236
49
330
  
Gains on sale of businesses and fixed assets
  
379
12,777
95,704
92,988
95,827
  
Total revenues and other income
  
188,815
202,918
75,127
71,468
74,536
  
Purchases
  
146,004
146,788
7,126
6,831
6,980
  
Production and manufacturing expenses
  
13,811
13,994
1,672
986
816
  
Production and similar taxes (Note 6)
  
1,802
3,667
3,162
3,590
3,751
  
Depreciation, depletion and amortization
  
7,341
6,359
       
Impairment and losses on sale of businesses and
      
610
426
774
  
  fixed assets
  
1,200
720
434
948
389
  
Exploration expense
  
1,337
756
3,223
3,200
3,110
  
Distribution and administration expenses
  
6,310
6,177
(135)
(98)
(32)
  
Fair value gain on embedded derivatives
  
(130)
(166)
4,485
5,637
5,503
  
Profit before interest and taxation
  
11,140
24,623
252
287
277
  
Finance costs
  
564
534
       
Net finance expense relating to pensions and other
      
117
80
79
  
  post-retirement benefits
  
159
239
4,116
5,270
5,147
  
Profit before taxation
  
10,417
23,850
1,990
1,651
1,714
  
Taxation
  
3,365
4,782
2,126
3,619
3,433
  
Profit for the period
  
7,052
19,068
       
Attributable to
      
2,042
3,528
3,369
  
  BP shareholders
  
6,897
18,905
84
91
64
  
  Non-controlling interests
  
155
163
2,126
3,619
3,433
      
7,052
19,068
               
       
Earnings per share (Note 7)
      
       
Profit for the period attributable to BP shareholders
      
       
  Per ordinary share (cents)
      
10.73
19.09
18.26
  
    Basic
  
37.35
99.07
10.68
18.97
18.15
  
    Diluted
  
37.11
98.53
       
  Per ADS (dollars)
      
0.64
1.15
1.10
  
    Basic
  
2.24
5.94
0.64
1.14
1.09
  
    Diluted
  
2.23
5.91
 
 
Top of page 14
Financial statements (continued)
 
 
 
Group statement of comprehensive income
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
               
2,126
3,619
3,433
  
Profit for the period
  
7,052
19,068
       
Other comprehensive income
      
       
Items that may be reclassified subsequently to profit
      
       
  or loss
      
(1,506)
(913)
1,005
  
  Currency translation differences
  
92
(2,093)
-
(3)
2
  
  Available-for-sale investments marked to market
  
(1)
(172)
       
  Available-for-sale investments reclassified to the
      
-
-
1
  
    income statement
  
1
(523)
(25)
23
77
  
  Cash flow hedges marked to market(a)
  
100
(2,166)
(1)
(20)
(49)
  
  Cash flow hedges reclassified to the income statement
  
(69)
(1)
12
(1)
(2)
  
  Cash flow hedges reclassified to the balance sheet
  
(3)
15
       
  Share of items relating to equity-accounted entities,
      
(88)
(73)
51
  
    net of tax
  
(22)
(55)
26
-
9
  
  Income tax relating to items that may be reclassified
  
9
195
(1,582)
(987)
1,094
      
107
(4,800)
       
Items that will not be reclassified to profit or loss
      
       
  Remeasurements of the net pension and other post-
      
2,206
(936)
222
  
    retirement benefit liability or asset
  
(714)
2,156
       
  Share of items relating to equity-accounted entities,
      
-
5
-
  
    net of tax
  
5
-
(732)
294
(73)
  
  Income tax relating to items that will not be reclassified
  
221
(731)
1,474
(637)
149
      
(488)
1,425
(108)
(1,624)
1,243
  
Other comprehensive income
  
(381)
(3,375)
2,018
1,995
4,676
  
Total comprehensive income
  
6,671
15,693
       
Attributable to
      
1,956
1,903
4,606
  
  BP shareholders
  
6,509
15,556
62
92
70
  
  Non-controlling interests
  
162
137
2,018
1,995
4,676
      
6,671
15,693
 
 
(a)
First half 2013 includes $2,061 million loss relating to the contracts to acquire Rosneft shares.
 
 
Top of page 15
Financial statements (continued)
 
 
 
Group statement of changes in equity
 
 
   
BP
    
   
shareholders'
Non-controlling
Total
$ million
  
equity
interests
equity
         
At 1 January 2014
  
129,302
1,105
130,407
         
Total comprehensive income
  
6,509
162
6,671
Dividends
  
(2,999)
(153)
(3,152)
Repurchases of ordinary share capital
  
(1,527)
-
(1,527)
Share-based payments, net of tax
  
576
-
576
Transactions involving non-controlling interests
  
-
3
3
At 30 June 2014
  
131,861
1,117
132,978
         
   
BP
    
   
shareholders'
Non-controlling
Total
$ million
  
equity
interests
equity
         
At 1 January 2013
  
118,546
1,206
119,752
         
Total comprehensive income
  
15,556
137
15,693
Dividends
  
(3,020)
(236)
(3,256)
Repurchases of ordinary share capital
  
(2,469)
-
(2,469)
Share-based payments, net of tax
  
378
-
378
Transactions involving non-controlling interests
  
-
35
35
At 30 June 2013
  
128,991
1,142
130,133
 
 
Top of page 16
Financial statements (continued)
 
 
 
Group balance sheet
 
 
   
30 June
31 December
$ million
  
2014
2013
Non-current assets
      
Property, plant and equipment
  
135,854
133,690
Goodwill
  
12,197
12,181
Intangible assets
  
21,931
22,039
Investments in joint ventures
  
9,173
9,199
Investments in associates
  
17,370
16,636
Other investments
  
1,270
1,565
Fixed assets
  
197,795
195,310
Loans
  
681
763
Trade and other receivables
  
5,782
5,985
Derivative financial instruments
  
3,609
3,509
Prepayments
  
983
922
Deferred tax assets
  
1,308
985
Defined benefit pension plan surpluses
  
978
1,376
   
211,136
208,850
Current assets
      
Loans
  
334
216
Inventories
  
29,442
29,231
Trade and other receivables
  
40,056
39,831
Derivative financial instruments
  
2,852
2,675
Prepayments
  
1,630
1,388
Current tax receivable
  
648
512
Other investments
  
376
467
Cash and cash equivalents
  
27,506
22,520
   
102,844
96,840
Assets classified as held for sale (Note 3)
  
1,475
-
   
104,319
96,840
Total assets
  
315,455
305,690
Current liabilities
      
Trade and other payables
  
50,025
47,159
Derivative financial instruments
  
2,323
2,322
Accruals
  
7,245
8,960
Finance debt
  
7,570
7,381
Current tax payable
  
2,386
1,945
Provisions
  
4,454
5,045
   
74,003
72,812
Liabilities directly associated with assets classified as held for sale (Note 3)
  
428
-
   
74,431
72,812
Non-current liabilities
      
Other payables
  
3,652
4,756
Derivative financial instruments
  
1,765
2,225
Accruals
  
807
547
Finance debt
  
45,336
40,811
Deferred tax liabilities
  
18,328
17,439
Provisions
  
28,204
26,915
Defined benefit pension plan and other post-retirement benefit plan deficits
  
9,954
9,778
   
108,046
102,471
Total liabilities
  
182,477
175,283
Net assets
  
132,978
130,407
Equity
      
BP shareholders' equity
  
131,861
129,302
Non-controlling interests
  
1,117
1,105
   
132,978
130,407
 
 
Top of page 17
Financial statements (continued)
 
 
 
Condensed group cash flow statement
 
 
Second
First
Second
      
First
First
quarter
quarter
quarter
      
half
half
2013
2014
2014
  
$ million
  
2014
2013
       
Operating activities
      
4,116
5,270
5,147
  
Profit before taxation
  
10,417
23,850
       
Adjustments to reconcile profit before taxation to net
      
       
  cash provided by operating activities
      
       
  Depreciation, depletion and amortization and
      
3,453
4,422
3,953
  
    exploration expenditure written off
  
8,375
6,822
       
  Impairment and (gain) loss on sale of businesses and
      
374
377
444
  
    fixed assets
  
821
(12,057)
       
  Earnings from equity-accounted entities, less
      
(254)
(684)
(1,080)
  
    dividends received
  
(1,764)
(454)
       
  Net charge for interest and other finance expense,
      
21
170
(3)
  
    less net interest paid
  
167
193
175
106
178
  
  Share-based payments
  
284
221
       
  Net operating charge for pensions and other post-
      
       
    retirement benefits, less contributions and benefit
      
(86)
(102)
(105)
  
    payments for unfunded plans
  
(207)
(370)
1,308
(193)
56
  
  Net charge for provisions, less payments
  
(137)
1,505
       
  Movements in inventories and other current and
      
(1,796)
(315)
654
  
   non-current assets and liabilities(a)
  
339
(7,141)
(1,924)
(820)
(1,367)
  
  Income taxes paid
  
(2,187)
(3,215)
5,387
8,231
7,877
  
Net cash provided by operating activities
  
16,108
9,354
       
Investing activities
      
(6,111)
(5,891)
(5,499)
  
Capital expenditure
  
(11,390)
(11,840)
-
(10)
-
  
Acquisitions, net of cash acquired
  
(10)
-
(47)
(33)
(3)
  
Investment in joint ventures
  
(36)
(98)
(8)
(88)
(47)
  
Investment in associates
  
(135)
(4,891)
656
978
227
  
Proceeds from disposal of fixed assets
  
1,205
17,436
       
Proceeds from disposal of businesses, net of
      
2,284
26
571
  
  cash disposed
  
597
3,785
68
17
53
  
Proceeds from loan repayments
  
70
90
(3,158)
(5,001)
(4,698)
  
Net cash provided by (used in) investing activities
  
(9,699)
4,482
       
Financing activities
      
(1,890)
(1,726)
(447)
  
Net issue (repurchase) of shares
  
(2,173)
(1,835)
3,039
5,979
856
  
Proceeds from long-term financing
  
6,835
3,102
(891)
(1,237)
(1,720)
  
Repayments of long-term financing
  
(2,957)
(1,179)
(382)
77
(57)
  
Net increase (decrease) in short-term debt
  
20
(1,873)
(1,398)
(1,427)
(1,572)
  
Dividends paid
- BP shareholders
  
(2,999)
(3,020)
(85)
(13)
(140)
    
- non-controllinginterests
  
(153)
(116)
(1,607)
1,653
(3,080)
  
Net cash provided by (used in) financing activities
  
(1,427)
(4,921)
       
Currency translation differences relating to cash and
      
12
(45)
49
  
  cash equivalents
  
4
(237)
634
4,838
148
  
Increase (decrease) in cash and cash equivalents
  
4,986
8,678
27,679
22,520
27,358
  
Cash and cash equivalents at beginning of period
  
22,520
19,635
28,313
27,358
27,506
  
Cash and cash equivalents at end of period
  
27,506
28,313
 
 
(a)
Includes
 
 
509
(74)
(233)
  
Inventory holding (gains) losses
  
(307)
102
(135)
(98)
(32)
  
Fair value gain on embedded derivatives
  
(130)
(166)
(1,430)
(578)
(33)
  
Movements related to the Gulf of Mexico oil spill response
  
(611)
(2,258)
 
 
 
Inventory holding gains and losses and fair value gains on embedded derivatives are also included within profit before taxation. See Note 2 for further information on the cash flow impacts of the Gulf of Mexico oil spill.
 
 
Top of page 18
Financial statements (continued)
 
 
 
Notes
 
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 2013 included in the BP Annual Report and Form 20-F 2013.
 
After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the interim financial statements.
 
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. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB; however, 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 expected to be used in preparing BP Annual Report and Form 20-F 2014, which do not differ significantly from those used in BP Annual Report and Form 20-F 2013.
 
In BP Annual Report and Form 20-F 2013 we disclosed a significant estimate or judgement in relation to exploration and appraisal expenditure which is capitalized and is subject to regular technical, commercial and management review on at least an annual basis to confirm the continued intent to develop, or otherwise extract value from, the discovery. Under IFRS 6 'Exploration for and Evaluation of Mineral Resources', one of the facts and circumstances which indicates that an entity should test such assets for impairment, is that the period for which the entity has a right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed.
 
BP has leases in the Gulf of Mexico making up a prospect, some with terms which were scheduled to expire at the end of last year and some with terms which are scheduled to expire in the near future. A significant proportion of our capitalized exploration and appraisal costs in the Gulf of Mexico relate to this prospect. This prospect requires the development of subsea technology to ensure that the hydrocarbons can be extracted safely. BP is in correspondence with the US Bureau of Safety and Environmental Enforcement in relation to seeking extension of these leases so that the discovered hydrocarbons can be developed. BP remains committed to developing this prospect and expects that the lease terms will be extended and therefore continues to carry the capitalized costs on its balance sheet. See also Notes 10 and 16 in BP Annual Report and Form 20-F 2013 - Financial statements.
 
2.       Gulf of Mexico oil spill
 
(a) Overview
 
 
As a consequence of the Gulf of Mexico oil spill, BP continues to incur various costs and has also recognized liabilities for future costs. The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2013 - Financial statements - Note 2 and Legal proceedings on pages 257-265 and page 42 of this report.
 
 
 
The group income statement includes a pre-tax charge of $260 million for the second quarter and $299 million for the first half of 2014 in relation to the Gulf of Mexico oil spill. The second-quarter charge reflects an increase in the provision for legal costs and the ongoing costs of the Gulf Coast Restoration Organization. The cumulative pre-tax income statement charge since the incident, in April 2010, amounts to $42,975 million.
 
 
 
The cumulative income statement charge does not include amounts for obligations that BP considers are not possible, at this time, to measure reliably. For further information, including developments in relation to the interpretation of business economic loss claims under the Plaintiffs' Steering Committee (PSC) settlement, see Provisions below.
 
 
 
The total amounts that will ultimately be paid by BP in relation to all the obligations relating to the incident are subject to significant uncertainty and the ultimate exposure and cost to BP will be dependent on many factors, as discussed under Provisions and contingent liabilities below, including in relation to any new information or future developments. These could have a material impact on our consolidated financial position, results and cash flows. The risks associated with the incident could also heighten the impact of the other risks to which the group is exposed as further described under Principal risks and uncertainties on page 35.
 
 
Top of page 19
Financial statements (continued)
 
 
 
Notes
 
2.       Gulf of Mexico oil spill (continued)
 
The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for the periods presented. The income statement, balance sheet and cash flow statement impacts are included within the relevant line items in those statements as set out below.
 
 
 
Second
First
Second
      
First
First
 
quarter
quarter
quarter
      
half
half
 
2013
2014
2014
  
$ million
  
2014
2013
         
Income statement
      
 
199
29
251
  
Production and manufacturing expenses
  
280
221
 
(199)
(29)
(251)
  
Profit (loss) before interest and taxation
  
(280)
(221)
 
10
10
9
  
Finance costs
  
19
20
 
(209)
(39)
(260)
  
Profit (loss) before taxation
  
(299)
(241)
 
42
10
44
  
Taxation
  
54
37
 
(167)
(29)
(216)
  
Profit (loss) for the period
  
(245)
(204)
 
 
 
 
$ million
  
30 June 2014
31 December 2013
 
Balance sheet
      
 
Current assets
      
 
  Trade and other receivables
  
1,944
2,457
 
Current liabilities
      
 
  Trade and other payables
  
(838)
(1,030)
 
  Provisions
  
(2,345)
(2,951)
 
Net current assets (liabilities)
  
(1,239)
(1,524)
 
Non-current assets
      
 
  Other receivables
  
2,569
2,442
 
Non-current liabilities
      
 
  Other payables
  
(2,397)
(2,986)
 
  Accruals
  
(170)
-
 
  Provisions
  
(6,653)
(6,395)
 
  Deferred tax
  
2,285
2,748
 
Net non-current assets (liabilities)
  
(4,366)
(4,191)
 
Net assets (liabilities)
  
(5,605)
(5,715)
 
 
 
 
Second
First
Second
      
First
First
 
quarter
quarter
quarter
      
half
half
 
2013
2014
2014
  
$ million
  
2014
2013
         
Cash flow statement - Operating activities
      
 
(209)
(39)
(260)
  
Profit (loss) before taxation
  
(299)
(241)
         
Adjustments to reconcile profit (loss) before
      
         
  taxation to net cash provided by
      
         
  operating activities
      
         
Net charge for interest and other finance
      
 
10
10
9
  
  expense, less net interest paid
  
19
20
 
1,390
(97)
116
  
Net charge for provisions, less payments
  
19
1,694
         
Movements in inventories and other current
      
 
(1,430)
(578)
(33)
  
  and non-current assets and liabilities
  
(611)
(2,258)
 
(239)
(704)
(168)
  
Pre-tax cash flows
  
(872)
(785)
 
 
Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an inflow of $229 million and outflow of $355 million in the second quarter and first half of 2014 respectively. For the same periods in 2013, the amounts were an inflow of $142 million and an outflow of $189 million respectively.
 
 
 
Trust fund
 
 
 
BP established the Deepwater Horizon Oil Spill Trust (the Trust), funded in the amount of $20 billion, to satisfy legitimate individual and business claims, state and local government claims resolved by BP, final judgments and settlements, state and local response costs, and natural resource damages and related costs. Fines and penalties are not covered by the trust fund.
 
 
Top of page 20
Financial statements (continued)
 
 
 
Notes
 
2.       Gulf of Mexico oil spill (continued)
 
           The funding of the Trust was completed in the fourth quarter of 2012. The obligation to fund the $20-billion trust fund, adjusted to take account of the time value of money, was recognized in full in 2010 and charged to the
           income statement. An asset has been recognized representing BP's right to receive reimbursement from the trust fund. This is the portion of the estimated future expenditure provided for that will be settled by payments from
           the trust fund.
 
           The table below shows movements in the reimbursement asset during the period to 30 June 2014. For more information about the movement in provisions for items covered by the trust fund, see Provisions below. At 30 June
           2014, $4,487 million of the provisions, and $26 million of the payables are eligible to be paid from the Trust. The reimbursement asset is recorded within other receivables on the balance sheet apportioned between current and
           non-current elements.
 
 
       
Second
First
       
quarter
half
 
$ million
  
2014
2014
 
Opening balance
  
4,730
4,899
 
Net increase in provision for items covered by the trust fund
  
2
6
 
Amounts paid directly by the trust fund
  
(219)
(392)
 
At 30 June 2014
  
4,513
4,513
 
Of which
- current
  
1,944
1,944
   
- non-current
  
2,569
2,569
 
Increases in estimated future expenditure that will be covered by the trust fund up to an aggregate of $20 billion have no net income statement effect as a reimbursement asset is also recognized, as described above. As at 30 June 2014, the cumulative charges, and the associated reimbursement asset recognized, amounted to $19,344 million. Thus, a further $656 million could be charged in subsequent periods for items covered by the trust fund with no net impact on the income statement. Additional liabilities in excess of this amount regarding claims under the Oil Pollution Act of 1990 (OPA 90), claims that are currently administered by the Deepwater Horizon Court Supervised Settlement Program (DHCSSP), or otherwise, including the various claims described in Legal proceedings on pages 257-265 of BP Annual Report and Form 20-F 2013 and page 42 of this report, would be expensed to the income statement. Information on those items that currently cannot be estimated reliably is provided under Provisions and contingent liabilities below.
 
As at 30 June 2014, the aggregate cash balances in the Trust and the associated qualifying settlement funds amounted to $6.3 billion, including $1.1 billion remaining in the seafood compensation fund which has yet to be distributed and $0.9 billion held for natural resource damage early restoration. Should the cash balances in the trust fund not be sufficient, payments in respect of legitimate claims and other costs will be made directly by BP.
 
(b) Provisions and contingent liabilities
 
BP has recorded certain provisions and disclosed certain contingent liabilities as a consequence of the Gulf of Mexico oil spill. These are described below and in more detail in BP Annual Report and Form 20-F 2013 - Financial statements - Note 2.
 
Provisions
 
BP has recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, litigation and claims, and Clean Water Act penalties. Movements in each class of provision during the second quarter and first half are presented in the tables below.
 
 
         
Litigation
Clean
  
         
and
Water Act
  
 
$ million 
  
Environmental
claims
penalties
Total
 
At 1 April 2014
  
1,627
3,939
3,510
9,076
 
Increase in provision - items not covered by
          
 
  the trust fund
  
-
224
-
224
 
Net increase in provision - items
          
 
  covered by the trust fund
  
-
2
-
2
 
Utilization
- paid by BP
  
(16)
(94)
-
(110)
 
              
- paid by the trust fund
  
(18)
(176)
-
(194)
 
At 30 June 2014
  
1,593
3,895
3,510
8,998
 
Of which
- current
  
747
1,598
-
2,345
 
              
- non-current
  
846
2,297
3,510
6,653
 
 
Top of page 21
 
Financial statements (continued)
 
 
 
Notes
 
2.       Gulf of Mexico oil spill (continued)
 
 
         
Litigation
Clean
  
         
and
Water Act
  
       
Environmental
claims
penalties
Total
 
$ million 
          
 
At 1 January 2014
  
1,679
4,157
3,510
9,346
 
Increase (decrease) in provision - items not
          
 
  covered by the trust fund
  
-
224
-
224
 
Net increase in provision - items covered by
          
 
  the trust fund
  
-
6
-
6
 
Utilization
- paid by BP
  
(44)
(167)
-
(211)
   
- paid by the trust fund
  
(42)
(325)
-
(367)
 
At 30 June 2014
  
1,593
3,895
3,510
8,998
                 
 
 
 
Environmental
 
The environmental provision includes amounts for BP's commitment to fund the Gulf of Mexico Research Initiative, estimated natural resource damage assessment costs and early natural resource damage restoration projects under the $1-billion framework agreement with natural resource trustees for the US and five Gulf coast states. Until the size, location and duration of the impact is assessed, it is not possible to estimate reliably the amounts or timing of any further natural resource damages claims, therefore no additional amounts have been provided for these items and they are disclosed as a contingent liability.
 
 
 
Litigation and claims
 
The litigation and claims provision includes amounts that can be estimated reliably for the future cost of settling claims by individuals and businesses for damage to real or personal property, lost profits or impairment of earning capacity and loss of subsistence use of natural resources (Individual and Business Claims), and claims by state and local government entities for removal costs, damage to real or personal property, loss of government revenue and increased public services costs (State and Local Claims) under OPA 90 and other legislation, except as described under Contingent liabilitiesbelow. Claims administration costs and legal costs have also been provided for.
 
 
 
BP has provided for its best estimate of the cost associated with the PSC settlement agreements with the exception of the cost of business economic loss claims. As disclosed in BP Annual Report and Form 20-F 2013, as part of its monitoring of payments made by the DHCSSP, BP identified multiple business economic loss claim determinations that appeared to result from an interpretation of the Economic and Property Damages Settlement Agreement (EPD Settlement Agreement) by the claims administrator that BP believes was incorrect. See Legal proceedings on pages 257-265 of BP Annual Report and Form 20-F 2013 and page 42 of this report for further details on the settlements with the PSC and related matters.
 
 
 
Until the uncertainties described below are resolved, management is unable to estimate reliably the value and volume of future business economic loss claims and whether, and to what extent, received or processed but unpaid business economic loss claims will be paid. Firstly, the inherent uncertainty as to the interpretation of the EPD Settlement Agreement in respect of causation issues will continue until the issue of causation and the requirements for class membership under the EPD Settlement Agreement are resolved on appeal, if an appeal to the Supreme Court is allowed, and until the impact of any new policies and procedures implemented in response to these issues and of the revised policy for the matching of revenue and expenses for business economic loss claims on the value and volume of business economic loss claims becomes clear. Secondly, uncertainty arises from the lack of sufficient claims data under the DHCSSP from which to extrapolate any reliable trends - the number of business economic loss claims received and the average amounts paid in respect of such claims prior to the district court's injunction were higher than previously assumed by BP. This inability to extrapolate any reliable trends may or may not continue once claims have been assessed against the revised policy for the matching of revenue and expenses for business economic loss claims (implemented in May 2014) and uncertainties concerning interpretation of the EPD Settlement Agreement described above have been resolved. Reassessment of existing claims by the DHCSSP under the revised matching policy is ongoing. The PSC has filed a motion seeking to amend the revised matching policy. Thirdly, the ultimate deadline for filing business economic loss claims is uncertain as claims can be brought at any point up to six months after the date on which all relevant appeals are concluded and the date when all relevant appeals will be concluded is not yet known. Management believes, therefore, that no reliable estimate can currently be made of any business economic loss claims not yet received, processed and paid by the DHCSSP. A provision for business economic loss claims will be established when a reliable estimate can be made of the liability.
 
 
Top of page 22
Financial statements (continued)
 
 
 
Notes
 
2.           Gulf of Mexico oil spill (continued)
 
The current estimate for the total cost of those elements of the PSC settlement that BP considers can be reliably estimated is $9.2 billion. The DHCSSP has issued eligibility notices, most of which are disputed by BP, in respect of business economic loss claims of $987 million which have not yet been paid. The majority of these claims are being re-assessed using the new matching policy. Furthermore, a significant number of business economic loss claims have been received but have not yet been processed, and further claims are likely to be received. The total cost of the PSC settlement is likely to be significantly higher than the amount recognized to date of $9.2 billion because the current estimate does not reflect business economic loss claims not yet received, processed and paid.
 
The provision recognized for litigation and claims includes an estimate for State and Local Claims. Although the provision recognized is BP's current reliable best estimate of the amount required to settle these obligations, significant uncertainty exists in relation to the outcome of any litigation proceedings and the amount of claims that will become payable by BP. See Legal proceedings on pages 257-265 of BP Annual Report and Form 20-F 2013 and Contingent liabilities below for further details.
 
Significant uncertainties exist in relation to the amount of claims that are to be paid and will become payable, including claims payable under the DHCSSP and State and Local Claims. There is significant uncertainty in relation to the amounts that ultimately will be paid in relation to current claims, and the number, type and amounts payable for claims not yet reported as described above and in Legal proceedings on page 42 and the outcomes of any further litigation including in relation to potential opt-outs from the PSC settlement or otherwise. There is also uncertainty as to the cost of administering the claims process under the DHCSSP.
 
Clean Water Act penalties
A provision was recognized in 2010 for the estimated civil penalties for strict liability under the Clean Water Act, which are based on a specified range per barrel of oil released. No adjustments have been made subsequently to this estimate. The penalty rate per barrel used to calculate the provision is based upon the company's conclusion, amongst other things, that it did not act with gross negligence or engage in wilful misconduct. The amount and timing of the amount to be paid ultimately is subject to significant uncertainty since it will depend on what is determined by the court in the federal multi-district litigation proceedings in New Orleans (MDL 2179) as to negligence, gross negligence or wilful misconduct, the volume of oil spilled and the application of statutory penalty factors. The trial court could issue its decision on the first two phases of the trial at any time and has scheduled a trial on the subsequent phase regarding the application of statutory penalty factors starting on 20 January 2015. The court has wide discretion in its determination as to whether a defendant's conduct involved negligence or gross negligence as well as in its determinations on the volume of oil spilled and the application of statutory penalty factors. See BP Annual Report and Form 20-F 2013 - Financial statements - Note 2 for further details and Legal proceedings on pages 257-265 and on page 42 of this report.
 
Provision movements and analysis of income statement charge
An increase in the provision for the estimated cost of the settlement with the PSC of $32 million for the second quarter and $36 million for the first half was recognized, partially offset by other provision reductions. The second-quarter income statement charge reflects an increase in the provision for legal costs and the ongoing costs of the Gulf Coast Restoration Organization. The total charge in the income statement is analysed in the table below.
 
 
     
Second
First
Cumulative
     
quarter
half
since the
 
$ million 
  
2014
2014
incident
 
Environmental costs
  
-
-
3,031
 
Spill response costs
  
-
-
14,304
 
Litigation and claims costs
  
226
230
25,873
 
Clean Water Act penalties - amount provided
  
-
-
3,510
 
Other costs charged directly to the income statement
  
27
56
1,199
 
Recoveries credited to the income statement
  
-
-
(5,681)
 
Charge (credit) related to the trust fund
  
(2)
(6)
519
 
Other costs of the trust fund
  
-
-
8
 
Loss before interest and taxation
  
251
280
42,763
 
Finance costs
- related to the trust fund
  
-
-
137
   
- not related to the trust fund
  
9
19
75
 
Loss before taxation
  
260
299
42,975
 
Further information on provisions is provided in BP Annual Report and Form 20-F 2013 - Financial statements - Note 2.
 
 
Top of page 23
Financial statements (continued)
 
 
 
Notes
 
2.       Gulf of Mexico oil spill (continued)
 
Contingent liabilities
 
BP considers that it is not possible, at this time, to measure reliably other obligations arising from the incident, namely any obligation in relation to natural resource damages claims or associated legal costs (except for the estimated costs of the assessment phase and the costs relating to early restoration agreements referred to above), claims asserted in civil litigation including any further litigation through excluded parties from the PSC settlement including as set out in Legal proceedings on pages 257-265 of BP Annual Report and Form 20-F 2013 and page 42 of this report, the cost of business economic loss claims under the PSC settlement not yet received, processed and paid by the DHCSSP, any further obligation that may arise from state and local government submissions under OPA 90, any obligation that may arise from securities-related litigation, and any obligation in relation to other potential private or governmental litigation, fines or penalties (except for the Clean Water Act civil penalty claims and State and Local Claims as described above under Provisions), nor is it practicable to estimate their magnitude or possible timing of payment.
 
The magnitude and timing of all possible obligations in relation to the Gulf of Mexico oil spill continue to be subject to a very high degree of uncertainty.
 
See also BP Annual Report and Form 20-F 2013 - Financial statements - Note 2.
 
 
3.        Non-current assets held for sale
 
On 22 April 2014, BP announced that it had reached agreement to sell its interests in the Northstar and Endicott oilfields and 50% of its interests in each of the Milne Point and Liberty oilfields on the North Slope of Alaska to Hilcorp Alaska LLC, a subsidiary of Hilcorp Energy for $1.25 billion plus an additional carry of up to $250 million if the Liberty field is developed. The sale also includes BP's interests in the oil and gas pipelines associated with these fields. These assets, amounting to $1,475 million, and associated liabilities of $428 million, have been classified as held for sale in the group balance sheet at 30 June 2014. The sale is expected to be complete by the end of the year, subject to state and federal regulatory approval.
 
 
Top of page 24
Financial statements (continued)
 
 
 
Notes
 
4.       Analysis of replacement cost profit before interest and tax and reconciliation to
           profit before taxation
 
 
 
Second
First
Second
      
First
First
 
quarter
quarter
quarter
      
half
half
 
2013
2014
2014
  
$ million
  
2014
2013
 
4,400
4,659
4,049
  
Upstream
  
8,708
9,962
 
1,016
794
933
  
Downstream
  
1,727
2,663
 
-
-
-
  
TNK-BP(a)
  
-
12,500
 
218
518
1,024
  
Rosneft(b)
  
1,542
303
 
(573)
(497)
(434)
  
Other businesses and corporate
  
(931)
(1,040)
 
5,061
5,474
5,572
      
11,046
24,388
 
(199)
(29)
(251)
  
Gulf of Mexico oil spill response
  
(280)
(221)
 
129
90
(76)
  
Consolidation adjustment - UPII*
  
14
556
 
4,991
5,535
5,245
  
RC profit before interest and tax
  
10,780
24,723
         
Inventory holding gains (losses)*
      
 
(4)
(6)
(1)
  
  Upstream
  
(7)
(6)
 
(515)
77
233
  
  Downstream
  
310
(107)
 
13
31
26
  
  Rosneft (net of tax)
  
57
13
 
4,485
5,637
5,503
  
Profit before interest and tax
  
11,140
24,623
 
252
287
277
  
Finance costs
  
564
534
         
Net finance expense relating to pensions
      
 
117
80
79
  
  and other post-retirement benefits
  
159
239
 
4,116
5,270
5,147
  
Profit before taxation
  
10,417
23,850
                 
         
RC profit before interest and tax*(c)
      
 
1,156
1,125
1,643
  
US
  
2,768
2,883
 
3,835
4,410
3,602
  
Non-US
  
8,012
21,840
 
4,991
5,535
5,245
      
10,780
24,723
 
 
(a)
BP ceased equity accounting for its share of TNK-BP's earnings from 22 October 2012. First half 2013 includes the gain arising on disposal of BP's interest in TNK-BP.
(b)
BP's investment in Rosneft is accounted under the equity method from 21 March 2013. See Rosneft on page 8 for further information.
(c)
A minor amendment has been made to the analysis by region for the comparative periods in 2013.
 
 
Top of page 25
Financial statements (continued)
 
 
 
Notes
 
5.        Sales and other operating revenues
 
 
 
Second
First
Second
      
First
First
 
quarter
quarter
quarter
      
half
half
 
2013
2014
2014
  
$ million
  
2014
2013
         
By segment
      
 
16,418
17,006
16,739
  
Upstream
  
33,745
34,636
 
88,348
84,298
86,871
  
Downstream
  
171,169
175,132
 
414
431
412
  
Other businesses and corporate
  
843
834
 
105,180
101,735
104,022
      
205,757
210,602
                 
         
Less: sales and other operating revenues
      
         
  between segments
      
 
10,116
9,217
9,729
  
Upstream
  
18,946
20,977
 
109
562
152
  
Downstream
  
714
349
 
244
246
184
  
Other businesses and corporate
  
430
458
 
10,469
10,025
10,065
      
20,090
21,784
                 
         
Third party sales and other operating revenues
      
 
6,302
7,789
7,010
  
Upstream
  
14,799