Blueprint
 
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 31 October 2017
 
 
 
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|
 
      ---------------           ----------------
 
 
 
FOR IMMEDIATE RELEASE
London 31 October 2017
 
BP p.l.c. Group results
Third quarter and nine months 2017
 
For a printer friendly copy of this announcement, please click on the link below to open a PDF version:
http://www.rns-pdf.londonstockexchange.com/rns/0280V_-2017-10-30.pdf
 
 
Top of page 1
 
 
 
 
Highlights
Year-to-date organic balance at $49 a barrel
Share buybacks announced to offset scrip dilution
Reported third quarter group oil and gas production up 14%
 
●      Underlying replacement cost (RC) profit* for the third quarter was $1.9 billion, compared with $684 million in previous quarter.
●      Third-quarter operating cash flow, excluding Gulf of Mexico oil spill payments*, was $6.6 billion. Including these payments, operating cash flow*
         for the quarter was $6.0 billion.
●      Underlying operating cash flow* in first nine months exceeded organic capital expenditure* plus full dividend* - equivalent to organic cash balance
         including full dividend at Brent oil price of $49 a barrel, or $42 a barrel including cash dividend only(a).
●      Dividend unchanged at 10 cents per share.  
●      Recommencing share buyback programme in fourth quarter to offset ongoing dilutive effect of scrip dividends over time.
●      Reported group oil and gas production in the third quarter averaged 3.6 million barrels of oil equivalent a day, 14% higher than in the third quarter
        of 2016.
●      Three Upstream major projects* began production in the quarter.
●      Downstream underlying quarterly earnings were the highest for five years, second-highest on a RC basis.
●     Around $4.5 billion in disposal proceeds are expected for full year 2017, with $1.0 billion received in first nine months. Proceeds expected in the  
       fourth quarter include those from the SECCO transaction ($1.4 billion) and the initial public offering of BP Midstream Partners LP's common units
        ($0.7 billion). 
 
 
Financial summary
Third quarter 2017
 
 
 
 
 
 
See chart on PDF
 
 
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Profit (loss) for the period(b)
 
1,769
144
1,620
 
3,362
(382)
Inventory holding (gains) losses*, net of tax
 
(390)
409
41
 
(18)
(689)
RC profit (loss)*
 
1,379
553
1,661
 
3,344
(1,071)
Net (favourable) adverse impact of
 
 
 
 
 
 
 
  non-operating items* and fair value accounting
 
 
 
 
 
 
 
  effects*, net of tax
 
486
131
(728)
 
715
3,256
Underlying RC profit
 
1,865
684
933
 
4,059
2,185
RC profit (loss) per ordinary share (cents)*
 
6.98
2.80
8.82
 
17.01
(5.74)
RC profit (loss) per ADS (dollars)
 
0.42
0.17
0.53
 
1.02
(0.34)
Underlying RC profit per ordinary share (cents)*
 
9.44
3.47
4.96
 
20.65
11.70
Underlying RC profit per ADS (dollars)
 
0.57
0.21
0.30
 
1.24
0.70
 
(a)
 
See organic balance/organic cash balance definition and further information in the Glossary on page 29.
 
(b)
 
Profit attributable to BP shareholders.
 
 
Bob Dudley - Group chief executive:
"We are steadily building a track record of delivering on our plans and growing across our businesses. This quarter, three new Upstream projects and the highest Downstream earnings in five years, underpinned by reliable operations and disciplined spending, have generated healthy earnings and cash flow. There is still room for further improvement and we will keep striving to increase sustainable free cash flow* and distributions to shareholders."
 
* See definitions in the Glossary on page 29. RC profit (loss), underlying RC profit, operating cash flow excluding Gulf of Mexico oil spill payments / Underlying operating cash flow and organic capital expenditure are non-GAAP measures.
The commentary above and following should be read in conjunction with the cautionary statement on page 32.
 
 
Top of page 2
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
 
Group headlines
 
Earnings
BP's profit for the third quarter and nine months was $1,769 million and $3,362 million respectively, compared with a profit of $1,620 million and a loss of $382 million for the same periods in 2016.
 
The third-quarter replacement cost (RC) profit was $1,379 million, compared with $1,661 million for the same period in 2016. After adjusting for a net charge for non-operating items of $274 million and net adverse fair value accounting effects of $212 million (both on a post-tax basis), underlying RC profit for the third quarter was $1,865 million, compared with $933 million for the same period in 2016.
 
For the nine months, RC profit was $3,344 million, compared with a loss of $1,071 million a year ago. After adjusting for a net charge for non-operating items of $794 million and net favourable fair value accounting effects of $79 million (both on a post-tax basis), underlying RC profit for the nine months was $4,059 million, compared with $2,185 million for the same period in 2016.
 
See further information on page 3.
 
Non-operating items
Non-operating items amounted to a charge of $385 million pre-tax and $274 million post-tax for the quarter and a charge of $1,297 million pre-tax and $794 million post-tax for the nine months. See further information on page 25.
 
Effective tax rate
The effective tax rate (ETR) on RC profit or loss* for the third quarter and nine months was 43% for both periods, compared with -16% and 73% for the same periods in 2016. Adjusting for non-operating items and fair value accounting effects and the impact of the reduction in the rate of the UK North Sea supplementary charge in the third quarter 2016, the adjusted ETR* for the third quarter and nine months was 40% and 42% respectively, compared with 37% and 25% for the same periods in 2016.
 
The adjusted ETR for the third quarter and nine months is higher than a year ago mainly due to changes in the mix of profits, notably the impact of the renewal of our interest in the Abu Dhabi onshore oil concession. We continue to expect the full year adjusted ETR to be above 40%. Adjusted ETR is a non-GAAP measure. See further information on page 29.
 
Dividend
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 21 December 2017. The corresponding amount in sterling will be announced on 11 December 2017. See page 22 for further information.
 
Share buybacks
BP will recommence a share buyback programme in the fourth quarter, intended to offset the ongoing dilutive effect of scrip dividends over time. The programme will not necessarily match the dilution on a quarterly basis but will reflect the ongoing judgement of various factors including changes in the price environment, the underlying performance of the business, the outlook for the group's financial framework and other market factors which may vary from quarter to quarter.
 
Operating cash flow*
Excluding post-tax amounts related to the Gulf of Mexico oil spill, operating cash flow* for the third quarter and nine months was $6.6 billion and $17.9 billion respectively, compared with $4.8 billion and $13.1 billion for the same periods in 2016. Including amounts relating to the Gulf of Mexico oil spill, operating cash flow for the third quarter and nine months was $6.0 billion and $13.0 billion respectively, compared with $2.5 billion and $8.3 billion for the same periods in 2016.
 
Capital expenditure*
Organic capital expenditure* for the third quarter and nine months was $4.0 billion and $11.9 billion respectively, compared with $3.5 billion and $12.2 billion for the same periods in 2016.
 
Inorganic capital expenditure* for the third quarter and nine months was $0.5 billion and $1.1 billion respectively, compared with $0.05 billion, and $0.3 billion for the same periods in 2016.
 
Organic and inorganic capital expenditure are non-GAAP measures. See page 24 for further information.
 
Divestment proceeds*
Divestment proceeds were $0.2 billion for the third quarter and $1.0 billion for the nine months, compared with $0.6 billion and $2.2 billion for the same periods in 2016.
 
Net debt*
Net debt at 30 September 2017 was $39.8 billion, compared with $32.4 billion a year ago. The net debt ratio* at 30 September 2017 was 28.4%, compared with 25.9% a year ago. Net debt and the net debt ratio are non-GAAP measures. See page 23 for more information.
 
 
Brian Gilvary - Chief financial officer:
"We have made strong progress this year in adjusting to the lower oil price environment and have now brought our finances, including the full dividend, back into organic balance at an oil price just below $50 a barrel. Given the momentum we see across our businesses and our confidence in the outlook for the group's finances, we will be recommencing a share buyback programme this quarter. We intend to offset the ongoing dilution from the scrip dividend over time."
 
 
The commentary above should be read in conjunction with the cautionary statement on page 32.
 
 
Top of page 3
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Analysis of underlying RC profit before interest and tax
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Underlying RC profit before interest and tax*
 
 
 
 
 
 
 
    Upstream
 
1,562
710
(224)
 
3,642
(942)
    Downstream
 
2,338
1,413
1,431
 
5,493
4,757
    Rosneft
 
137
279
120
 
515
432
    Other businesses and corporate
 
(398)
(366)
(260)
 
(1,204)
(814)
    Consolidation adjustment - UPII*
 
(130)
135
17
 
(63)
(64)
Underlying RC profit before interest and tax
 
3,509
2,171
1,084
 
8,383
3,369
Finance costs and net finance expense relating to
 
 
 
 
 
 
 
  pensions and other post-retirement benefits
 
(444)
(420)
(358)
 
(1,251)
(1,012)
Taxation on an underlying RC basis
 
(1,212)
(1,055)
164
 
(3,030)
(161)
Non-controlling interests
 
12
(12)
43
 
(43)
(11)
Underlying RC profit attributable to BP
 
 
 
 
 
 
 
  shareholders
 
1,865
684
933
 
4,059
2,185
 
Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 6-11 for the segments.
 
Analysis of RC profit (loss) before interest and tax and reconciliation to
profit (loss) for the period
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
RC profit (loss) before interest and tax*
 
 
 
 
 
 
 
  Upstream
 
1,242
795
1,196
 
3,293
(118)
  Downstream
 
2,175
1,567
978
 
5,448
4,263
  Rosneft
 
137
279
120
 
515
432
  Other businesses and corporate(a)
 
(460)
(721)
(441)
 
(1,612)
(7,040)
  Consolidation adjustment - UPII
 
(130)
135
17
 
(63)
(64)
RC profit (loss) before interest and tax
 
2,964
2,055
1,870
 
7,581
(2,527)
Finance costs and net finance expense relating to
 
 
 
 
 
 
 
  pensions and other post-retirement benefits
 
(566)
(541)
(481)
 
(1,620)
(1,381)
Taxation on a RC basis
 
(1,031)
(949)
229
 
(2,574)
2,848
Non-controlling interests
 
12
(12)
43
 
(43)
(11)
RC profit (loss) attributable to BP shareholders
 
1,379
553
1,661
 
3,344
(1,071)
Inventory holding gains (losses)
 
557
(586)
(60)
 
37
996
Taxation (charge) credit on inventory holding
 
 
 
 
 
 
 
  gains and losses
 
(167)
177
19
 
(19)
(307)
Profit (loss) for the period attributable to
 
 
 
 
 
 
 
  BP shareholders
 
1,769
144
1,620
 
3,362
(382)
 
(a)
 
Includes costs related to the Gulf of Mexico oil spill. See page 11 and also Note 2 from page 17 for further information on the accounting for the Gulf of Mexico oil spill.
 
 
 
Top of page 4
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Strategic progress
Financial framework
Upstream
Three Upstream major projects, the Persephone project in Australia, the Juniper project in Trinidad, and the first phase of the Khazzan tight gas development in Oman, all started production in the third quarter.  Six of the seven major projects BP expects to start production in 2017 are now online. The seventh, Zohr in Egypt, is on track to start up before the end of the year.
 
The delivery of the major projects continues to underpin Upstream production growth. Over the first nine months of 2017, Upstream production - which excludes Rosneft - was 10% higher than in the same period in 2016. Upstream unit production costs* are also 16% lower than the prior year, benefiting from production growth and continued focus on cost discipline.
 
In September, BP, together with our partners, extended the production-sharing agreement* (PSA) for the Azeri, Chirag and Deep Water Gunashli fields (ACG) in Azerbaijan by 25 years to the end of 2049.
 
Downstream
BP delivered double digit earnings growth from fuels marketing in the first nine months - premium fuel sales volumes have continued to grow and BP's convenience partnership model has been rolled out to more than 170 retail sites worldwide so far this year. In lubricants, BP renewed its global partnership and supply agreement with Volvo Car Group. 
 
In manufacturing, both refining and petrochemicals have grown earnings, with our US refineries processing record levels of advantaged crude.
 
 
Operating cash flow, excluding Gulf of Mexico payments*, was $6.6 billion in the third quarter, and $17.9 billion for the first nine months of 2017. This compares with $13.1 billion for the first nine months of 2016.  
 
Organic capital expenditure* of $4.0 billion in the third quarter brought the total for the first nine months to $11.9 billion. BP now expects total organic capital expenditure for 2017 will be around $16 billion, within the $15-17 billion range previously indicated.
 
In the first nine months of 2017, operating cash flow excluding Gulf of Mexico payments exceeded organic capital expenditure and cash dividend payments to BP shareholders by $1.5 billion.
 
Divestment proceeds*, as per the cash flow statement, for the first nine months of 2017 were $1.0 billion.
 
Significant proceeds are expected to be received in the fourth quarter, including those from the sale of BP's interest in the SECCO joint venture in China ($1.4 billion) and from the initial public offering of BP Midstream Partners LP's common units ($0.7 billion). Total proceeds in 2017 are expected to be around $4.5 billion.
 
Gulf of Mexico oil spill payments were $0.6 billion in the third quarter, significantly lower than in the first two quarters of the year. Payments over the first nine months of 2017 were $4.9 billion; for the full year payments are now expected to be around $5.5 billion.
 
BP continues to target a gearing* range of 20-30%. At the end of the third quarter, gearing was 28.4%.
 
 
Operating
metrics
 
Nine months 2017(vs. Nine months 2016)
 
Financial
metrics
 
Nine months 2017(vs. Nine months 2016)
SafetyTier 1 process safety events*
 
 
12
(-1)
 
Underlying RC profit
 
$4.1bn
(+$1.9bn)
SafetyReported recordable injury frequency*
 
 
0.21
(-4%)
 
Operating cash flow excluding Gulf of Mexico oil spill payments
 
$17.9bn
(+$4.8bn)
Group production
 
 
3,557mboe/d
(+10%)
 
Organic capital expenditure
 
$11.9bn
(-$0.3bn)
Upstream production (excludes Rosneft segment)
 
2,427mboe/d
(+10%)
 
Gulf of Mexico oil spill payments
 
$4.9bn
(+$0.03bn)
Upstream unit production costs
 
$7.17/boe
(-16%)
 
Divestment proceeds
 
$1.0bn
(-$1.2bn)
BP-operated Upstream operating efficiency*(a)
 
80.4%
 
 
Net debt ratio (gearing)
 
28.4%
(+2.5)
Refining availability*
 
95.0%
(-0.4)
 
Dividend per ordinary share(b)
 
10.00 cents
(-)
 
 
(a)
 
Reported on a one-quarter lagged basis and represents first half 2017 actuals only.
 
(b)
 
Represents dividend announced in the quarter (vs. prior year quarter).

 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 32.
 
 
 
Top of page 5
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
 
 
INTENTIONALLY BLANK
Top of page 6
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Upstream
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Profit (loss) before interest and tax
 
1,255
796
1,183
 
3,301
(77)
Inventory holding (gains) losses*
 
(13)
(1)
13
 
(8)
(41)
RC profit (loss) before interest and tax
 
1,242
795
1,196
 
3,293
(118)
Net (favourable) adverse impact of
 
 
 
 
 
 
 
  non-operating items* and fair value
 
 
 
 
 
 
 
  accounting effects*
 
320
(85)
(1,420)
 
349
(824)
Underlying RC profit (loss) before interest
 
 
 
 
 
 
 
  and tax*(a)
 
1,562
710
(224)
 
3,642
(942)
 
(a)
 
See page 7 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 third quarter and nine months was $1,242 million and $3,293 million respectively, compared with a profit of $1,196 million and a loss of $118 million for the same periods in 2016. The third quarter and nine months included a net non-operating charge of $146 million and $527 million respectively, compared with a net non-operating gain of $1,465 million and $1,117 million for the same periods in 2016. Fair value accounting effects in the third quarter and nine months had an adverse impact of $174 million and a favourable impact of $178 million respectively, compared with an adverse impact of $45 million and $293 million in the same periods of 2016.
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the third quarter and nine months was $1,562 million and $3,642 million respectively, compared with a loss of $224 million and a loss of $942 million for the same periods in 2016. The result for the third quarter mainly reflected higher liquids and gas realizations, higher production including the impact of the Abu Dhabi concession renewal and major project start-ups, and lower exploration write-offs, partly offset by higher depreciation, depletion and amortization. The result for the nine months reflected higher liquids and gas realizations, and higher production including the impact of the Abu Dhabi concession renewal and major project start-ups, partly offset by higher depreciation, depletion and amortization, and higher exploration write-offs.
 
Production
Production for the quarter was 2,462mboe/d, 16.3% higher than the third quarter of 2016. Underlying production* for the quarter increased by 10.9%, due to the ramp-up of major projects. For the nine months, production was 2,427mboe/d, 9.6% higher than in the same period of 2016. Nine months underlying production was 6.7% higher than the same period of 2016 due to major project start-ups.
 
Key events
On 7 August, BP announced that it has brought online a natural gas well (BP 100%) in the Mancos Shale, New Mexico in the US Lower 48, highlighting the potential of the field to be a significant new source of US natural gas supply.
 
On 14 August, BP Trinidad and Tobago announced first gas from the Juniper development in Trinidad. On the same day, BP confirmed that production has started from the Persephone project off the coast of Western Australia (Woodside operator, BP 16.67%).
 
On 11 September, BP announced an agreement with Bridas Corporation to form a new integrated energy company in Argentina, Pan American Energy Group (PAEG), by combining their interests in the oil and gas producer Pan American Energy with the refining and marketing company Axion Energy in a cash-free transaction. PAEG will be owned equally by BP and Bridas Corporation.
 
On 14 September, the joint development and production-sharing agreement* (PSA) for the Azeri, Chirag fields and the Deep Water Portion of the Gunashli field in the Azerbaijan sector of the Caspian Sea (ACG PSA) was extended by signing an amended and restated PSA between the State Oil Company of the Republic of Azerbaijan (SOCAR) and the contractor parties. The renewed PSA, expected to be ratified by the Azerbaijani parliament before year end, extends the PSA's term by 25 years to 2049 and includes an improved contractor parties' profit share at a fixed rate of 25%. Under the terms of the agreement, BP's interest changes from 35.78% to 30.37% from the agreement's effective date following ratification, with a bonus of $1.46 billion (BP net), payable to the government of Azerbaijan in equal instalments over 8 years.
 
On 25 September, BP, together with the Ministry of Oil & Gas of the Sultanate of Oman, announced that first gas had been achieved from the Khazzan gas field (BP operator 60%, Oman Oil Company 40%).
 
On 24 October, Aker BP ASA (Aker BP), in which BP holds a 30% ownership interest, announced an agreement to acquire Hess Norge AS. Upon completion of the transaction, Aker BP will become the sole owner of the Valhall and Hod fields. This transaction is subject to regulatory approvals.
 
On 27 October, BP won two licences in the third Pre-Salt Bid Round in Brazil, the Alto De Cabo Frio Central block (Petrobras operator 50%, BP 50%), and the Peroba block (Petrobras operator 40%, BP 40%, and China National Petroleum Corporation 20%).
 
Outlook
Looking ahead, we expect fourth-quarter reported production to be higher than the third quarter reflecting the continued ramp-up of major projects and recovery from seasonal turnaround and maintenance activities.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 32.
 
 
 
Top of page 7
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
 
Upstream (continued)
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Underlying RC profit (loss) before interest and tax
 
 
 
 
 
 
 
US
 
264
179
(151)
 
609
(1,123)
Non-US
 
1,298
531
(73)
 
3,033
181
 
 
1,562
710
(224)
 
3,642
(942)
Non-operating items(a)
 
 
 
 
 
 
 
US(b)
 
(97)
(34)
326
 
(143)
106
Non-US(c)(d)
 
(49)
13
1,139
 
(384)
1,011
 
 
(146)
(21)
1,465
 
(527)
1,117
Fair value accounting effects
 
 
 
 
 
 
 
US
 
(100)
92
(15)
 
184
(105)
Non-US
 
(74)
14
(30)
 
(6)
(188)
 
 
(174)
106
(45)
 
178
(293)
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
US
 
67
237
160
 
650
(1,122)
Non-US
 
1,175
558
1,036
 
2,643
1,004
 
 
1,242
795
1,196
 
3,293
(118)
Exploration expense
 
 
 
 
 
 
 
US(b)
 
190
25
22
 
255
182
Non-US(d)(e)
 
107
825
781
 
1,304
1,225
 
 
297
850
803
 
1,559
1,407
Of which: Exploration expenditure written off(b)(d)(e)
 
217
753
687
 
1,231
1,108
Production (net of royalties)(f)
 
 
 
 
 
 
 
Liquids*(g) (mb/d)
 
 
 
 
 
 
 
US
 
408
418
353
 
425
386
Europe
 
123
122
112
 
120
119
Rest of World(g)
 
809
812
669
 
816
714
 
 
1,341
1,352
1,134
 
1,360
1,219
Natural gas (mmcf/d)
 
 
 
 
 
 
 
US
 
1,703
1,576
1,679
 
1,625
1,649
Europe
 
217
274
262
 
251
263
Rest of World
 
4,581
4,410
3,753
 
4,311
3,867
 
 
6,502
6,260
5,695
 
6,187
5,779
Total hydrocarbons*(g) (mboe/d)
 
 
 
 
 
 
 
US
 
702
689
643
 
705
670
Europe
 
161
169
157
 
163
164
Rest of World(g)
 
1,599
1,572
1,316
 
1,559
1,381
 
 
2,462
2,431
2,116
 
2,427
2,215
Average realizations*(h)
 
 
 
 
 
 
 
Total liquids(g)(i) ($/bbl)
 
47.45
46.27
40.99
 
47.87
36.50
Natural gas ($/mcf)
 
2.89
3.19
2.77
 
3.18
2.76
Total hydrocarbons(g) ($/boe)
 
33.23
33.59
29.37
 
34.63
27.20
 
(a)
 
Third quarter and nine months 2016 principally relate to impairment reversals in Angola and the North Sea.
 
(b)
 
Third quarter and nine months 2017 include the write-off of $145 million in relation to the value ascribed to certain licences in the deepwater Gulf of Mexico as part of the accounting for the acquisition of upstream assets from Devon Energy in 2011. This has been classified within the 'other' category of non-operating items.
 
(c)
 
Nine months 2017 includes an impairment charge arising following the announcement on 3 April 2017 of the agreement to sell the Forties Pipeline System business to INEOS.
 
(d)
 
Third quarter and nine months 2016 include $601 million of exploration write-offs relating to a licence in Brazil, of which $334 million relates to the value ascribed to the licence when acquired from Devon Energy in 2011, and has been classified within the 'other' category of non-operating items.
 
(e)
 
Second quarter and nine months 2017 include the write-off of exploration well and lease costs in Angola. Nine months 2017 also includes the write-off of exploration well costs in Egypt.
 
(f)
 
Includes BP's share of production of equity-accounted entities in the Upstream segment.
 
(g)
 
A minor adjustment has been made to comparative periods in 2016. See page 28 for more information.
 
(h)
 
Realizations are based on sales by consolidated subsidiaries only - this excludes equity-accounted entities.
 
(i)
 
Includes condensate, natural gas liquids and bitumen.
 
 
Because of rounding, some totals may not agree exactly with the sum of their component parts.
 
 
Top of page 8
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Downstream
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Profit (loss) before interest and tax
 
2,695
988
943
 
5,487
5,189
Inventory holding (gains) losses*
 
(520)
579
35
 
(39)
(926)
RC profit before interest and tax
 
2,175
1,567
978
 
5,448
4,263
Net (favourable) adverse impact of
 
 
 
 
 
 
 
  non-operating items* and fair value
 
 
 
 
 
 
 
  accounting effects*
 
163
(154)
453
 
45
494
Underlying RC profit before interest and tax*(a)
 
2,338
1,413
1,431
 
5,493
4,757
 
 
(a)
 
See page 9 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 third quarter and nine months was $2,175 million and $5,448 million respectively, compared with $978 million and $4,263 million for the same periods in 2016.
 
The third quarter and nine months include a net non-operating charge of $55 million and a net non-operating gain of $7 million respectively, compared with a net non-operating charge of $196 million and a net non-operating gain of $53 million for the same periods in 2016. Fair value accounting effects had an adverse impact of $108 million in the third quarter and $52 million for the nine months, compared with an adverse impact of $257 million and $547 million for the same periods in 2016.
 
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the third quarter and nine months was $2,338 million and $5,493 million respectively, compared with $1,431 million and $4,757 million for the same periods in 2016.
 
Replacement cost profit before interest and tax for fuels, lubricants and petrochemicals is set out on page 9.
 
Fuels business
The fuels business reported an underlying replacement cost profit before interest and tax of $1,788 million for the third quarter and $3,896 million for the nine months, compared with $983 million and $3,310 million for the same periods in 2016 driven by higher refining and fuels marketing results. The result for the quarter also reflects an improved contribution from supply and trading. The contribution was however lower for the nine months compared to last year.
 
The refining result for the quarter and nine months reflects continued strong operational performance, capturing higher industry refining margins which were partially offset by narrower North American heavy crude oil differentials. The result also benefited from increased commercial optimization and higher levels of advantaged feedstock processed in the US.  The nine-months result also reflects the impact of a higher level of planned turnaround activity.
 
The fuels marketing result for both the quarter and nine months reflects continued profit growth supported by higher premium volume and the continued rollout of our convenience partnership sites.
 
On 30 October, we completed the initial public offering of common units in our subsidiary, BP Midstream Partners LP. As a result of the initial public offering, we received net proceeds of around $0.7 billion.
 
Lubricants business
The lubricants business reported an underlying replacement cost profit before interest and tax of $356 million for the third quarter and $1,104 million for the nine months, compared with $370 million and $1,166 million for the same periods in 2016. The result for the quarter and nine months reflects continued premium brand growth, more than offset by the impact of higher base oil prices due to temporary supply constraints and increasing crude oil prices.
 
Petrochemicals business
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $194 million for the third quarter and $493 million for the nine months, compared with $78 million and $281 million for the same periods in 2016. The result for the quarter and nine months reflects an improved margin environment, stronger margin optimization and lower costs reflecting the continued benefits from our simplification and efficiency programmes.
 
In April, we announced our intention to divest our 50% shareholding in our Shanghai SECCO Petrochemical Company Limited joint venture in China. The transaction is expected to complete in the fourth quarter. As a result, the asset relating to our shareholding has been classified as held for sale in the group balance sheet at 30 September 2017.
 
Outlook
While industry refining margins have remained robust coming into the fourth quarter, we would expect a normal seasonal decline compared with the third quarter. In the fourth quarter, we also expect a higher level of turnaround activity.
 
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 32.
 
Top of page 9
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Downstream (continued)
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Underlying RC profit before interest and tax -
 
 
 
 
 
 
 
  by region
 
 
 
 
 
 
 
US
 
640
283
298
 
1,477
1,224
Non-US
 
1,698
1,130
1,133
 
4,016
3,533
 
 
2,338
1,413
1,431
 
5,493
4,757
Non-operating items
 
 
 
 
 
 
 
US
 
(39)
28
(56)
 
(23)
74
Non-US
 
(16)
110
(140)
 
30
(21)
 
 
(55)
138
(196)
 
7
53
Fair value accounting effects
 
 
 
 
 
 
 
US
 
20
10
(178)
 
(32)
(343)
Non-US
 
(128)
6
(79)
 
(20)
(204)
 
 
(108)
16
(257)
 
(52)
(547)
RC profit before interest and tax
 
 
 
 
 
 
 
US
 
621
321
64
 
1,422
955
Non-US
 
1,554
1,246
914
 
4,026
3,308
 
 
2,175
1,567
978
 
5,448
4,263
Underlying RC profit before interest and tax - 
 
 
 
 
 
 
 
  by business(a)(b)
 
 
 
 
 
 
 
Fuels
 
1,788
908
983
 
3,896
3,310
Lubricants
 
356
355
370
 
1,104
1,166
Petrochemicals
 
194
150
78
 
493
281
 
 
2,338
1,413
1,431
 
5,493
4,757
Non-operating items and fair value
 
 
 
 
 
 
 
  accounting effects(c)
 
 
 
 
 
 
 
Fuels
 
(154)
159
(455)
 
9
(493)
Lubricants
 
(3)
(2)
1
 
(8)
(3)
Petrochemicals
 
(6)
(3)
1
 
(46)
2
 
 
(163)
154
(453)
 
(45)
(494)
RC profit before interest and tax(a)(b)
 
 
 
 
 
 
 
Fuels
 
1,634
1,067
528
 
3,905
2,817
Lubricants
 
353
353
371
 
1,096
1,163
Petrochemicals
 
188
147
79
 
447
283
 
 
2,175
1,567
978
 
5,448
4,263
 
 
 
 
 
 
 
 
BP average refining marker margin (RMM)* ($/bbl)
 
16.3
13.8
11.6
 
14.0
12.0
Refinery throughputs (mb/d)
 
 
 
 
 
 
 
US
 
737
708
613
 
713
660
Europe
 
768
782
795
 
784
802
Rest of World
 
240
198
242
 
207
237
 
 
1,745
1,688
1,650
 
1,704
1,699
Refining availability* (%)
 
95.3
94.5
95.4
 
95.0
95.4
Marketing sales of refined products (mb/d)
 
 
 
 
 
 
 
US
 
1,186
1,177
1,205
 
1,160
1,130
Europe
 
1,204
1,153
1,236
 
1,143
1,184
Rest of World
 
480
497
503
 
496
502
 
 
2,870
2,827
2,944
 
2,799
2,816
Trading/supply sales of refined products
 
3,088
2,996
2,581
 
3,015
2,755
Total sales volumes of refined products
 
5,958
5,823
5,525
 
5,814
5,571
Petrochemicals production (kte)
 
 
 
 
 
 
 
US
 
617
672
564
 
1,787
2,018
Europe
 
1,285
1,365
898
 
3,903
2,799
Rest of World
 
2,025
2,001
1,987
 
6,099
5,863
 
 
3,927
4,038
3,449
 
11,789
10,680
 
(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 10
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
 
Rosneft
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017(a)
2017
2016
 
2017(a)
2016
Profit before interest and tax(b)
 
161
271
108
 
505
461
Inventory holding (gains) losses*
 
(24)
8
12
 
10
(29)
RC profit before interest and tax
 
137
279
120
 
515
432
Net charge (credit) for non-operating items*
 
-
-
-
 
-
-
Underlying RC profit before interest and tax*
 
137
279
120
 
515
432
 
Financial results
 
Replacement cost profit before interest and tax and underlying replacement cost profit before interest and tax for the third quarter and nine months was $137 million and $515 million respectively, compared with $120 million and $432 million for the same periods in 2016. There were no non-operating items in the third quarter and nine months of either year.
 
Compared with the same period in 2016, the result for the third quarter was primarily affected by higher oil prices and favourable duty lag effects partially offset by adverse foreign exchange effects. For the nine months, the result was primarily affected by higher oil prices partially offset by adverse foreign exchange effects.
 
In June 2017 Rosneft's annual general meeting adopted a resolution to pay dividends of 5.98 Russian roubles per ordinary share. In July BP received a dividend in relation to the 2016 annual results of $190 million, after the deduction of withholding tax.
 
BP's two nominees, Bob Dudley and Guillermo Quintero, were re-elected to Rosneft's board by the extraordinary general meeting (EGM) on 29 September. The EGM also adopted a resolution to pay interim dividends for the first half of 2017 of 3.83 Russian roubles per ordinary share. BP expects to receive a dividend of approximately $120 million after the deduction of withholding tax, subject to fluctuations in foreign exchange.
 
Key events
 
In August, Rosneft completed the acquisition of a 49.13% stake in Essar Oil Limited (EOL), an Indian downstream business, from the Essar group.
 
In October Rosneft completed the deal to acquire a 30% stake in a concession agreement to develop the Zohr field in Egypt from the Italian company Eni S.p.A.
 
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
 
 
2017(a)
2017
2016
 
2017(a)
2016
Production (net of royalties) (BP share)
 
 
 
 
 
 
 
Liquids* (mb/d)
 
903
902
820
 
906
813
Natural gas (mmcf/d)
 
1,263
1,302
1,221
 
1,300
1,256
Total hydrocarbons* (mboe/d)
 
1,120
1,126
1,030
 
1,130
1,030
 
 
(a)
 
The operational and financial information of the Rosneft segment for the third quarter and nine months of the year is based on preliminary operational and financial results of Rosneft for the nine months ended 30 September 2017. Actual results may differ from these amounts.
 
(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 divestment of BP's interest in TNK-BP. These adjustments have increased the reported profit before interest and tax for the third quarter and nine months 2017, as shown in the table above, compared with the equivalent amount in Russian roubles that we expect Rosneft to report in its own financial statements under IFRS. BP's share of Rosneft's profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BP's share of Rosneft's earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation.
 
 
Top of page 11
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
 
Other businesses and corporate
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Profit (loss) before interest and tax
 
 
 
 
 
 
 
Gulf of Mexico oil spill
 
(84)
(347)
(66)
 
(466)
(5,966)
Other
 
(376)
(374)
(375)
 
(1,146)
(1,074)
Profit (loss) before interest and tax
 
(460)
(721)
(441)
 
(1,612)
(7,040)
Inventory holding (gains) losses*
 
-
-
-
 
-
-
RC profit (loss) before interest and tax
 
(460)
(721)
(441)
 
(1,612)
(7,040)
Net charge (credit) for non-operating items*
 
 
 
 
 
 
 
Gulf of Mexico oil spill
 
84
347
66
 
466
5,966
Other
 
(22)
8
115
 
(58)
260
Net charge (credit) for non-operating items
 
62
355
181
 
408
6,226
Underlying RC profit (loss) before interest and
 
 
 
 
 
 
 
  tax*
 
(398)
(366)
(260)
 
(1,204)
(814)
Underlying RC profit (loss) before interest and
 
 
 
 
 
 
 
  tax
 
 
 
 
 
 
 
US
 
(145)
(104)
(107)
 
(446)
(326)
Non-US
 
(253)
(262)
(153)
 
(758)
(488)
 
 
(398)
(366)
(260)
 
(1,204)
(814)
Non-operating items
 
 
 
 
 
 
 
US
 
(92)
(350)
(168)
 
(480)
(6,152)
Non-US
 
30
(5)
(13)
 
72
(74)
 
 
(62)
(355)
(181)
 
(408)
(6,226)
RC profit (loss) before interest and tax
 
 
 
 
 
 
 
US
 
(237)
(454)
(275)
 
(926)
(6,478)
Non-US
 
(223)
(267)
(166)
 
(686)
(562)
 
 
(460)
(721)
(441)
 
(1,612)
(7,040)
 
Other businesses and corporate comprises our alternative energy business, shipping, treasury, corporate activities including centralized functions, and the costs of the Gulf of Mexico oil spill.
 
Financial results
The replacement cost loss before interest and tax for the third quarter and nine months was $460 million and $1,612 million respectively, compared with $441 million and $7,040 million for the same periods in 2016.
 
The results included a net non-operating charge of $62 million for the third quarter and $408 million for the nine months, compared with a net non-operating charge of $181 million and $6,226 million for the same periods in 2016.
 
After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the third quarter and nine months was $398 million and $1,204 million respectively, compared with $260 million and $814 million for the same periods in 2016. The underlying charge for the nine months was impacted by weaker business results, and adverse foreign exchange effects which had a favourable effect in the same period in 2016.
 
Alternative energy - biofuels, wind
The net ethanol-equivalent production (which includes ethanol and sugar) for the third quarter and nine months was 362 million litres and 588 million litres respectively, compared with 352 million litres and 635 million litres for the same periods in 2016.
 
Net wind generation capacity*(a) was 1,432MW at 30 September 2017 compared with 1,474MW at 30 September 2016. BP's net share of wind generation for the third quarter and nine months was 644GWh and 2,856GWh respectively, compared with 828GWh and 3,235GWh for the same periods in 2016.
 
 
(a)
Capacity figures for 2016 include 23MW in the Netherlands managed by our Downstream segment.
 
 
 
Top of page 12
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Financial statements
Group income statement
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
 
 
 
 
 
 
 
 
Sales and other operating revenues (Note 5)
 
60,018
56,511
47,047
 
172,392
132,001
Earnings from joint ventures - after interest
 
 
 
 
 
 
 
  and tax
 
231
160
174
 
596
477
Earnings from associates - after interest and tax
 
282
371
209
 
804
731
Interest and other income
 
185
127
146
 
434
392
Gains on sale of businesses and fixed assets
 
92
197
467
 
334
884
Total revenues and other income
 
60,808
57,366
48,043
 
174,560
134,485
Purchases
 
44,612
42,713
34,981
 
128,462
94,336
Production and manufacturing expenses(a)
 
5,454
5,761
5,517
 
16,470
22,482
Production and similar taxes (Note 6)
 
278
189
212
 
773
484
Depreciation, depletion and amortization (Note 5)
 
3,904
3,793
3,496
 
11,539
10,863
Impairment and losses on sale of businesses and
 
 
 
 
 
 
 
  fixed assets
 
108
51
(1,424)
 
612
(1,359)
Exploration expense
 
297
850
803
 
1,559
1,407
Distribution and administration expenses
 
2,634
2,540
2,648
 
7,527
7,803
Profit (loss) before interest and taxation
 
3,521
1,469
1,810
 
7,618
(1,531)
Finance costs(a)
 
511
487
433
 
1,458
1,241
Net finance expense relating to pensions and
 
 
 
 
 
 
 
  other post-retirement benefits
 
55
54
48
 
162
140
Profit (loss) before taxation
 
2,955
928
1,329
 
5,998
(2,912)
Taxation(a)
 
1,198
772
(248)
 
2,593
(2,541)
Profit (loss) for the period
 
1,757
156
1,577
 
3,405
(371)
Attributable to
 
 
 
 
 
 
 
  BP shareholders
 
1,769
144
1,620
 
3,362
(382)
  Non-controlling interests
 
(12)
12
(43)
 
43
11
 
 
1,757
156
1,577
 
3,405
(371)
 
 
 
 
 
 
 
 
Earnings per share (Note 7)
 
 
 
 
 
 
 
Profit (loss) for the period attributable to
 
 
 
 
 
 
 
  BP shareholders
 
 
 
 
 
 
 
  Per ordinary share (cents)
 
 
 
 
 
 
 
    Basic
 
8.95
0.73
8.61
 
17.10
(2.05)
    Diluted
 
8.90
0.72
8.56
 
17.00
(2.05)
  Per ADS (dollars)
 
 
 
 
 
 
 
    Basic
 
0.54
0.04
0.52
 
1.03
(0.12)
    Diluted
 
0.53
0.04
0.51
 
1.02
(0.12)
 
 
(a)
 
See Note 2 for information on the impact of the Gulf of Mexico oil spill on these income statement line items.
 
Top of page 13
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Group statement of comprehensive income
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
1,757
156
1,577
 
3,405
(371)
Other comprehensive income
 
 
 
 
 
 
 
Items that may be reclassified subsequently to
 
 
 
 
 
 
 
  profit or loss
 
 
 
 
 
 
 
  Currency translation differences
 
611
(103)
192
 
1,722
1,031
  Exchange gains (losses) on translation of
 
 
 
 
 
 
 
    foreign operations reclassified to gain or loss
 
 
 
 
 
 
 
    on sale of businesses and fixed assets
 
13
4
-
 
18
6
  Available-for-sale investments
 
-
1
1
 
3
1
  Cash flow hedges marked to market
 
49
81
(84)
 
178
(435)
  Cash flow hedges reclassified to the income
 
 
 
 
 
 
 
    statement
 
20
31
71
 
93
110
  Cash flow hedges reclassified to the
 
 
 
 
 
 
 
    balance sheet
 
29
36
30
 
104
49
  Share of items relating to equity-accounted
 
 
 
 
 
 
 
    entities, net of tax
 
128
72
174
 
431
661
  Income tax relating to items that may
 
 
 
 
 
 
 
    be reclassified
 
(59)
4
(78)
 
(180)
(84)
 
 
791
126
306
 
2,369
1,339
Items that will not be reclassified to profit or loss
 
 
 
 
 
 
 
  Remeasurements of the net pension and other
 
 
 
 
 
 
 
    post-retirement benefit liability or asset
 
1,002
318
(2,995)
 
2,047
(5,980)
  Income tax relating to items that will not be
 
 
 
 
 
 
 
    reclassified
 
(351)
(102)
510
 
(699)
1,504
 
 
651
216
(2,485)
 
1,348
(4,476)
Other comprehensive income
 
1,442
342
(2,179)
 
3,717
(3,137)
Total comprehensive income
 
3,199
498
(602)
 
7,122
(3,508)
Attributable to
 
 
 
 
 
 
 
  BP shareholders
 
3,206
472
(558)
 
7,041
(3,513)
  Non-controlling interests
 
(7)
26
(44)
 
81
5
 
 
3,199
498
(602)
 
7,122
(3,508)
 
Top of page 14
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Group statement of changes in equity
 
 
 
BP
 
 
 
 
shareholders'
Non-controlling
Total
$ million
 
equity
interests
equity
 
 
 
 
 
At 1 January 2017
 
95,286
1,557
96,843
 
 
 
 
 
Total comprehensive income
 
7,041
81
7,122
Dividends
 
(4,526)
(109)
(4,635)
Share-based payments, net of tax
 
514
-
514
Share of equity-accounted entities' change in equity, net of tax
 
206
-
206
Transactions involving non-controlling interests
 
-
88
88
At 30 September 2017
 
98,521
1,617
100,138
 
 
 
 
 
 
 
BP
 
 
 
 
shareholders'
Non-controlling
Total
$ million
 
equity
interests
equity
 
 
 
 
 
At 1 January 2016
 
97,216
1,171
98,387
 
 
 
 
 
Total comprehensive income
 
(3,513)
5
(3,508)
Dividends
 
(3,429)
(83)
(3,512)
Share-based payments, net of tax
 
622
-
622
Share of equity-accounted entities' change in equity, net of tax
 
49
-
49
Transactions involving non-controlling interests
 
431
328
759
At 30 September 2016
 
91,376
1,421
92,797
 
Top of page 15
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Group balance sheet
 
 
 
30 September
31 December
$ million
 
2017
2016
Non-current assets
 
 
 
Property, plant and equipment
 
130,651
129,757
Goodwill
 
11,514
11,194
Intangible assets
 
18,586
18,183
Investments in joint ventures
 
6,703
8,609
Investments in associates
 
15,921
14,092
Other investments
 
1,051
1,033
Fixed assets
 
184,426
182,868
Loans
 
553
532
Trade and other receivables
 
1,461
1,474
Derivative financial instruments
 
4,470
4,359
Prepayments
 
1,094
945
Deferred tax assets
 
4,819
4,741
Defined benefit pension plan surpluses
 
2,297
584
 
 
199,120
195,503
Current assets
 
 
 
Loans
 
267
259
Inventories
 
18,078
17,655
Trade and other receivables
 
21,833
20,675
Derivative financial instruments
 
2,248
3,016
Prepayments
 
1,441
1,486
Current tax receivable
 
746
1,194
Other investments
 
84
44
Cash and cash equivalents
 
25,780
23,484
 
 
70,477
67,813
Assets classified as held for sale (Note 3)
 
1,892
-
 
 
72,369
67,813
Total assets
 
271,489
263,316
Current liabilities
 
 
 
Trade and other payables
 
39,965
37,915
Derivative financial instruments
 
2,154
2,991
Accruals
 
4,797
5,136
Finance debt
 
8,891
6,634
Current tax payable
 
1,455
1,666
Provisions
 
2,304
4,012
 
 
59,566
58,354
Non-current liabilities
 
 
 
Other payables
 
13,805
13,946
Derivative financial instruments
 
3,881
5,513
Accruals
 
501
469
Finance debt
 
56,893
51,666
Deferred tax liabilities
 
7,619
7,238
Provisions
 
20,078
20,412
Defined benefit pension plan and other post-retirement benefit plan deficits
 
9,008
8,875
 
 
111,785
108,119
Total liabilities
 
171,351
166,473
Net assets
 
100,138
96,843
Equity
 
 
 
BP shareholders' equity
 
98,521
95,286
Non-controlling interests
 
1,617
1,557
Total equity
 
100,138
96,843
 
Top of page 16
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Condensed group cash flow statement
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Operating activities
 
 
 
 
 
 
 
Profit (loss) before taxation
 
2,955
928
1,329
 
5,998
(2,912)
Adjustments to reconcile profit (loss) before taxation
 
 
 
 
 
 
 
  taxation to net cash provided by operating
 
 
 
 
 
 
 
  activities
 
 
 
 
 
 
 
  Depreciation, depletion and amortization and
 
 
 
 
 
 
 
    exploration expenditure written off
 
4,121
4,546
4,183
 
12,770
11,971
  Impairment and (gain) loss on sale of businesses
 
 
 
 
 
 
 
    and fixed assets
 
16
(146)
(1,891)
 
278
(2,243)
  Earnings from equity-accounted entities,
 
 
 
 
 
 
 
    less dividends received
 
(111)
(103)
259
 
(434)
(250)
  Net charge for interest and other finance
 
 
 
 
 
 
 
    expense, less net interest paid
 
163
84
204
 
499
485
  Share-based payments
 
177
156
166
 
495
629
  Net operating charge for pensions and other post-
 
 
 
 
 
 
 
    retirement benefits, less contributions and
 
 
 
 
 
 
 
    benefit payments for unfunded plans
 
(160)
54
(96)
 
(179)
(120)
  Net charge for provisions, less payments
 
(144)
183
(184)
 
(138)
5,116
  Movements in inventories and other current and
 
 
 
 
 
 
 
    non-current assets and liabilities
 
305
3
(1,001)
 
(3,292)
(3,591)
  Income taxes paid
 
(1,298)
(815)
(461)
 
(2,969)
(822)
Net cash provided by operating activities
 
6,024
4,890
2,508
 
13,028
8,263
Investing activities
 
 
 
 
 
 
 
Expenditure on property, plant and equipment,
 
 
 
 
 
 
 
  intangible and other assets
 
(4,136)
(4,181)
(3,379)
 
(12,140)
(12,043)
Acquisitions, net of cash acquired
 
(146)
(123)
-
 
(311)
-
Investment in joint ventures
 
(5)
(10)
(1)
 
(35)
(13)
Investment in associates
 
(176)
(174)
(185)
 
(533)
(474)
Total cash capital expenditure
 
(4,463)
(4,488)
(3,565)
 
(13,019)
(12,530)
Proceeds from disposal of fixed assets
 
149
312
590
 
649
981
Proceeds from disposal of businesses, net of
 
 
 
 
 
 
 
  cash disposed
 
92
140
(21)
 
305
1,181
Proceeds from loan repayments
 
308
19
9
 
341
61
Net cash used in investing activities
 
(3,914)
(4,017)
(2,987)
 
(11,724)
(10,307)
Financing activities
 
 
 
 
 
 
 
Proceeds from long-term financing
 
3,078
1,720
3,925
 
8,511
9,373
Repayments of long-term financing
 
(1,239)
(1,463)
(75)
 
(3,619)
(4,952)
Net increase (decrease) in short-term debt
 
123
(299)
(512)
 
139
(324)
Net increase (decrease) in non-controlling interests
 
-
51
323
 
81
761
Dividends paid
- BP shareholders
 
(1,676)
(1,546)
(1,161)
 
(4,526)
(3,429)
 
- non-controlling interests
 
(32)
(62)
(31)
 
(109)
(83)
Net cash provided by (used in) financing activities
 
254
(1,599)
2,469
 
477
1,346
Currency translation differences relating to cash
 
 
 
 
 
 
 
  and cash equivalents
 
146
202
13
 
515
(171)
Increase (decrease) in cash and cash equivalents
 
2,510
(524)
2,003
 
2,296
(869)
Cash and cash equivalents at beginning of period
 
23,270
23,794
23,517
 
23,484
26,389
Cash and cash equivalents at end of period
 
25,780
23,270
25,520
 
25,780
25,520
 
Top of page 17
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Notes
Note 1. Basis of preparation
 
The interim financial information included in this report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.
 
The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2016 included in BP Annual Report and Form 20-F 2016.
 
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. 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 2017, which do not differ significantly from those used in BP Annual Report and Form 20-F 2016.
 
 
Note 2. Gulf of Mexico oil spill
 
(a) Overview
 
The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2016 - Financial statements - Note 2 and Legal proceedings on page 261.
 
The group income statement includes a pre-tax charge for the third quarter of $84 million to reflect the latest estimate for claims and associated administration costs, and $122 million for finance costs relating to the unwinding of discounting effects. The equivalent amounts for the nine months were $466 million and $369 million respectively. The cumulative pre-tax income statement charge since the incident, in April 2010, amounts to $63,420 million.
 
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.
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Income statement
 
 
 
 
 
 
 
Production and manufacturing expenses
 
84
347
66
 
466
5,966
Profit (loss) before interest and taxation
 
(84)
(347)
(66)
 
(466)
(5,966)
Finance costs
 
122
121
123
 
369
369
Profit (loss) before taxation
 
(206)
(468)
(189)
 
(835)
(6,335)
Taxation
 
71
154
53
 
273
2,837
Profit (loss) for the period
 
(135)
(314)
(136)
 
(562)
(3,498)
 
Top of page 18
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Note 2. Gulf of Mexico oil spill (continued)
 
 
 
30 September
31 December
$ million
 
2017
2016
Balance sheet
 
 
 
Current assets
 
 
 
  Trade and other receivables
 
214
194
Current liabilities
 
 
 
  Trade and other payables
 
(2,069)
(3,056)
  Provisions
 
(726)
(2,330)
Net current assets (liabilities)
 
(2,581)
(5,192)
Non-current assets
 
 
 
  Deferred tax assets
 
2,821
2,973
Non-current liabilities
 
 
 
  Other payables
 
(12,197)
(13,522)
  Provisions
 
-
(112)
  Deferred tax liabilities
 
5,544
5,119
Net non-current assets (liabilities)
 
(3,832)
(5,542)
Net assets (liabilities)
 
(6,413)
(10,734)
 
 
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Cash flow statement - Operating activities
 
 
 
 
 
 
 
Profit (loss) before taxation
 
(206)
(468)
(189)
 
(835)
(6,335)
Adjustments to reconcile profit (loss) before
 
 
 
 
 
 
 
  taxation to net cash provided by
 
 
 
 
 
 
 
  operating activities
 
 
 
 
 
 
 
Net charge for interest and other finance
 
 
 
 
 
 
 
  expense, less net interest paid
 
122
121
123
 
369
369
Net charge for provisions, less payments
 
68
298
(494)
 
361
4,729
Movements in inventories and other current
 
 
 
 
 
 
 
  and non-current assets and liabilities
 
(548)
(1,976)
(1,766)
 
(4,778)
(3,825)
Pre-tax cash flows
 
(564)
(2,025)
(2,326)
 
(4,883)
(5,062)
 
Cash outflows in 2016 and 2017 include payments made under the 2012 agreement with the US government to resolve all federal criminal claims arising from the incident and the 2016 consent decree and settlement agreement with the United States and the five Gulf coast states. Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an outflow of $564 million and $4,883 million in the third quarter and nine months of 2017 respectively. For the same periods in 2016, the amount was an outflow of $2,326 million and $4,849 million respectively.
 
Top of page 19
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Note 2. Gulf of Mexico oil spill (continued)
 
(b) Provisions and other payables
 
Provisions
 
Movements in the remaining provision, which relates to litigation and claims, are shown in the table below.
 
 
$ million 
 
 
At 1 July 2017
 
955
Net increase in provision
 
75
Reclassified to other payables
 
(19)
Utilization
 
(285)
At 30 September 2017
 
726
 
Movements in the remaining provision during the nine months are shown in the table below.
 
$ million 
 
 
At 1 January 2017
 
2,442
Net increase in provision
 
437
Reclassified to other payables
 
(709)
Utilization
 
(1,444)
At 30 September 2017
 
726
 
The provision includes amounts for the future cost of resolving 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.
 
PSC settlement
The provision for the cost associated with the 2012 Plaintiffs' Steering Committee (PSC) settlement reflects the latest estimate for claims, including business economic loss claims and associated administration costs. However, the amounts ultimately payable may differ from the amount provided and the timing of payments is uncertain.
 
The settlement programme's determination of business economic loss claims is now expected to be substantially complete by the end of 2017. Nevertheless a significant number of claims determined by the settlement programme have been and continue to be appealed by BP and/or the claimants. Depending upon the resolution of these claims under appeal, the amounts payable may differ from those currently provided.
 
There is additional uncertainty in relation to the impact of the May 2017 Fifth Circuit opinion (on the policy addressing the matching of revenue with expenses in relation to business economic loss claims) including on those business economic loss claims that have not yet been determined and those that are under appeal within the settlement programme. This includes uncertainty in relation to the impact of recently filed appeals of the district court's orders instructing the settlement programme on how to implement the Fifth Circuit's opinion. See Legal proceedings on page 32 for further details on the Fifth Circuit opinion and appeal of the district court's orders.
 
Amounts to resolve remaining claims under the PSC settlement are expected to be substantially paid by the end of 2018. The timing of payments is uncertain, and in particular, will be impacted by how long it takes to resolve claims that have been appealed and may be appealed in the future.
 
Other payables
 
Other payables include amounts payable under the 2012 agreement with the US government to resolve all federal criminal claims arising from the incident, amounts payable under the consent decree and settlement agreement with the United States and the five Gulf coast states for natural resource damages, state claims and Clean Water Act penalties, BP's remaining commitment to fund the Gulf of Mexico Research Initiative, and amounts payable for certain economic loss and property damage claims.
 
Further information on provisions, other payables, and contingent liabilities is provided in BP Annual Report and Form
20-F 2016 - Financial statements - Note 2.
 
Top of page 20
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Note 3. Non-current assets held for sale and events after the reporting period
 
In September, BP announced that it had agreed with Bridas Corporation (Bridas) to form a new integrated energy company by combining their interests in the oil and gas producer Pan American Energy (PAE) and the refiner and marketer Axion Energy (Axion) in a cash-free transaction. PAE is currently owned 60% by BP and 40% by Bridas. The new company, Pan American Energy Group, will be owned equally by BP and Bridas. The transaction, which is subject to certain pre-closing conditions being fulfilled, is expected to complete in the first quarter 2018. As a result, one sixth of BP's investment in PAE has been classified as held for sale in the group balance sheet at 30 September 2017.
 
In April, BP announced its intention to divest its 50% shareholding in the Shanghai SECCO Petrochemical Company Limited joint venture in China. During the quarter a number of steps in the regulatory process, and certain conditions precedent, were completed and the investment has been classified as held for sale in the group balance sheet at 30 September 2017. We expect to complete the transaction and receive estimated proceeds of $1.4 billion in the fourth quarter.
 
On 30 October, we completed the initial public offering of common units in our subsidiary, BP Midstream Partners LP. As a result of the initial public offering, we received net proceeds of around $0.7 billion.
 
 
Note 4. Analysis of replacement cost profit (loss) before interest and tax and
reconciliation to profit (loss) before taxation
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Upstream
 
1,242
795
1,196
 
3,293
(118)
Downstream
 
2,175
1,567
978
 
5,448
4,263
Rosneft
 
137
279
120
 
515
432
Other businesses and corporate(a)
 
(460)
(721)
(441)
 
(1,612)
(7,040)
 
 
3,094
1,920
1,853
 
7,644
(2,463)
Consolidation adjustment - UPII*
 
(130)
135
17
 
(63)
(64)
RC profit (loss) before interest and tax*
 
2,964
2,055
1,870
 
7,581
(2,527)
Inventory holding gains (losses)*
 
 
 
 
 
 
 
  Upstream
 
13
1
(13)
 
8
41
  Downstream
 
520
(579)
(35)
 
39
926
  Rosneft (net of tax)
 
24
(8)
(12)
 
(10)
29
Profit (loss) before interest and tax
 
3,521
1,469
1,810
 
7,618
(1,531)
Finance costs
 
511
487
433
 
1,458
1,241
Net finance expense relating to pensions and
 
 
 
 
 
 
 
  other post-retirement benefits
 
55
54
48
 
162
140
Profit (loss) before taxation
 
2,955
928
1,329
 
5,998
(2,912)
 
 
 
 
 
 
 
 
RC profit (loss) before interest and tax*
 
 
 
 
 
 
 
US
 
428
302
(15)
 
1,243
(6,665)
Non-US
 
2,536
1,753
1,885
 
6,338
4,138
 
 
2,964
2,055
1,870
 
7,581
(2,527)
 
 
(a)
Includes costs related to the Gulf of Mexico oil spill. See Note 2 for further information.
 
 
Top of page 21
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Note 5. Segmental analysis
 
Sales and other operating revenues
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
By segment
 
 
 
 
 
 
 
Upstream
 
10,969
10,493
8,452
 
32,789
24,059
Downstream
 
54,881
52,195
43,488
 
157,156
120,849
Other businesses and corporate
 
378
326
425
 
989
1,243
 
 
66,228
63,014
52,365
 
190,934
146,151
 
 
 
 
 
 
 
 
Less: sales and other operating revenues
 
 
 
 
 
 
 
  between segments
 
 
 
 
 
 
 
Upstream
 
5,312
6,161
4,952
 
17,250
12,886
Downstream
 
765
208
175
 
887
768
Other businesses and corporate
 
133
134
191
 
405
496
 
 
6,210
6,503
5,318
 
18,542
14,150
 
 
 
 
 
 
 
 
Third party sales and other operating revenues
 
 
 
 
 
 
 
Upstream
 
5,657
4,332
3,500
 
15,539
11,173
Downstream
 
54,116
51,987
43,313
 
156,269
120,081
Other businesses and corporate
 
245
192
234
 
584
747
Total sales and other operating revenues
 
60,018
56,511
47,047
 
172,392
132,001
 
 
 
 
 
 
 
 
By geographical area
 
 
 
 
 
 
 
US
 
21,853
21,577
18,853
 
64,582
50,130
Non-US
 
44,212
41,103
31,762
 
125,335
91,390
 
 
66,065
62,680
50,615
 
189,917
141,520
Less: sales and other operating revenues
 
 
 
 
 
 
 
  between areas
 
6,047
6,169
3,568
 
17,525
9,519
 
 
60,018
56,511
47,047
 
172,392
132,001
 
 
 
Depreciation, depletion and amortization
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Upstream
 
 
 
 
 
 
 
US
 
1,154
1,133
1,027
 
3,524
3,180
Non-US
 
2,154
2,090
1,879
 
6,298
5,976
 
 
3,308
3,223
2,906
 
9,822
9,156
Downstream
 
 
 
 
 
 
 
US
 
222
219
217
 
657
637
Non-US
 
287
274
275
 
840
821
 
 
509
493
492
 
1,497
1,458
Other businesses and corporate
 
 
 
 
 
 
 
US
 
17
16
16
 
49
51
Non-US
 
70
61
82
 
171
198
 
 
87
77
98
 
220
249
 
 
3,904
3,793
3,496
 
11,539
10,863
 
 
Note 6. Production and similar taxes
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
US
 
(69)
41
32
 
8
117
Non-US
 
347
148
180
 
765
367
 
 
278
189
212
 
773
484
 
Top of page 22
BP p.l.c. Group results
Third quarter and nine months 2017
 
 
Note 7. Earnings per share and shares in issue
 
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
 
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.
 
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.
 
 
 
 
Third
Second
Third
 
Nine
Nine
 
 
quarter
quarter
quarter
 
months
months
$ million
 
2017
2017
2016
 
2017
2016
Results for the period
 
 
 
 
 
 
 
Profit (loss) for the period attributable to
 
 
 
 
 
 
 
  BP shareholders
 
1,769
144
1,620
 
3,362
(382)
Less: preference dividend
 
-
1
-
 
1
1
Profit (loss) attributable to BP ordinary
 
 
 
 
 
 
 
  shareholders
 
1,769
143
1,620
 
3,361
(383)
 
 
 
 
 
 
 
 
Number of shares (thousand)(a)(b)
 
 
 
 
 
 
 
Basic weighted average number of
 
 
 
 
 
 
 
  shares outstanding
 
19,756,117
19,686,613
18,824,739
 
19,654,608
18,660,397
ADS equivalent
 
3,292,686
3,281,102
3,137,456
 
3,275,768
3,110,066
 
 
 
 
 
 
 
 
Weighted average number of shares
 
 
 
 
 
 
 
  outstanding used to calculate
 
 
 
 
 
 
 
  diluted earnings per share
 
19,866,745
19,783,548
18,920,920
 
19,771,579
18,660,397
ADS equivalent
 
3,311,124
3,297,258
3,153,486
 
3,295,263
3,110,066
 
 
 
 
 
 
 
 
Shares in issue at period-end
 
19,797,657