BP.

BP PLC on Tuesday reported a 41% fall in its headline replacement cost profit for the fourth quarter of the year when compared with the third quarter, but a rise from the fourth quarter of 2021. The company attributed the result to below average gas marketing and trading result after the exceptional result in the third quarter, lower oil and gas realizations, a higher level of refinery turnaround and maintenance activity, and lower marketing margins and seasonally lower volumes. Here's what the oil giant had to say:

On gas & low carbon energy:

"Reported production for the quarter was 956,000 barrels of oil per day [mboe/d], 1.8% lower than the same period in 2021. Underlying production was 2.4% lower, mainly due to base decline in Trinidad."

"Reported production for the full year was 957mboe/d, 4.9% higher than the same period in 2021. Underlying production for the full year was 4.9% higher due to the ramp-up of major projects."

"Renewables pipeline at the end of the quarter was 37.2GW (BP net). The renewables pipeline increased by 10.3GW during the quarter due to additions to the renewables pipeline in support of hydrogen in Australia."

"The renewables pipeline increased by 14.1GW for the full year, primarily as a result of BP and its partner EnBW being awarded a lease option off the east coast of Scotland to develop an offshore wind project (1.45GW BP net) in the first quarter of 2022, net additions to Lightsource BP's pipeline, and the additions to the renewables pipeline in the fourth quarter in support of hydrogen in Australia."

On oil production & operations:

"Reported production for the quarter was 1,309mboe/d, 3.6% lower than the fourth quarter of 2021. Underlying production for the quarter was flat compared with the fourth quarter of 2021."

"Reported production for the full year was 1,297mboe/d, 0.8% lower than the same period of 2021. Underlying production for the full year was 2.1% higher compared with the same period of 2021 reflecting bpx energy performance, major projects and reduced weather impacts in the US Gulf of Mexico partly offset by base performance."

"Progressed operational performance in upstream in 2022, delivering the highest BP-operated hydrocarbon plant reliability on record at 96%."

On CapEx:

"BP continues to focus on disciplined investment allocation. For 2023 BP expects capital expenditure of $16-18 billion and for 2024-30 now expects capital expenditure in a range of $14-18 billion including inorganic capital expenditure.

On shareholder returns:

"Based on BP's current forecasts, at around $60 per barrel Brent and subject to the board's discretion each quarter, BP expects to be able to deliver share buybacks of around $4.0 billion per annum, at the lower end of its capital expenditure range, and have capacity for an annual increase in the dividend per ordinary share of around 4%."

On macro outlook:

"In the first quarter, BP expects oil prices to remain supported by recovering Chinese demand, ongoing uncertainty around the level of Russian exports and low inventory levels."

"BP expects the outlook for global gas prices during the first quarter to remain dependent on weather in the Northern Hemisphere and the pace of Chinese demand recovery."

"BP expects industry refining margins to remain elevated in the first quarter due to sanctioning of Russian crude and product."

On 1Q 2023 guidance:

"Looking ahead, we expect first-quarter 2023 reported upstream production to be broadly flat compared to fourth quarter 2022."

"In our customers business, we expect seasonally lower volumes and in Castrol base oil prices to remain high, although lower than the fourth quarter 2022. In refining, we expect margins to remain elevated and a lower level of turnaround activity."

On 2023 guidance:

"BP expects both reported and underlying upstream production to be broadly flat compared with 2022. Within this, BP expects underlying production from oil production & operations to be slightly higher and production from gas & low carbon energy to be lower."

"BP expects the start-up of Mad Dog Phase 2 in the second quarter of 2023 and first gas from the Tangguh expansion and GTA Phase 1 Tortue projects in the fourth quarter of 2023."

"BP expects the other businesses & corporate underlying annual charge to be in a range of $1.1-1.3 billion for 2023. The charge may vary from quarter to quarter."

"BP expects the depreciation, depletion and amortization to be slightly above 2022."

"The underlying ETR for 2023 is expected to be around 40% but is sensitive to the impact that volatility in the current price environment may have on the geographical mix of the group's profits and losses."

"BP expects capital expenditure of $16-18 billion in 2023 including inorganic capital expenditure."

"Having realized $15.9 billion of divestment and other proceeds since the second quarter of 2020, BP now expects divestment and other proceeds of $2-3 billion in 2023 and continues to expect to reach $25 billion of divestment and other proceeds between the second half of 2020 and 2025."

"BP expects Gulf of Mexico oil spill payments for the year to be around $1.3 billion pre-tax including $1.2 billion pre-tax to be paid during the second quarter."

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

February 07, 2023 03:17 ET (08:17 GMT)

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