7th Feb 2006 07:02
BP PLC07 February 2006 BP p.l.c.Group Results4th Quarter and Full Year 2005 London 7 February 2006 FOR IMMEDIATE RELEASE RECORD 2005 RESULT, CASH FLOWS AND SHAREHOLDER DISTRIBUTIONS --------------------------------------------------------------------------- Fourth Third FourthQuarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004 %======================= ==================== 3,010 6,463 3,685 Profit for the period* 22,341 17,075 Inventory holding 494 (2,053) 747 (gains) losses (3,027) (1,643)----------------------- -------------------- 3,504 4,410 4,432 Replacement cost profit 19,314 15,432 25======================= ==================== 8.71 11.86 12.15 - per ordinary share (pence) 50.23 38.64 16.23 21.04 21.34 - per ordinary share (cents) 91.41 70.71 29 0.97 1.26 1.28 - per ADS (dollar) 5.48 4.24======================= ==================== Innovene operations have been treated as discontinued operations andpresented accordingly within this document. o BP's fourth quarter replacement cost profit was $4,432 million compared with $3,504 million a year ago, an increase of 26%. For the year, replacement cost profit was $19,314 million compared with $15,432 million, up 25%. o The fourth quarter result includes a net non-operating charge of $553 millon compared with a net non-operating charge of $1,261 million in the fourth quarter of 2004. In addition, the fourth quarter 2005 result for the Refining and Marketing and Gas, Power and Renewables segments reflects significant volatility arising under IFRS fair value accounting. Furthermore, the Refining and Marketing result includes a significant charge in respect of planned restructuring actions. For the year, the net non-operating charge was $1,754 million compared with a net charge of $1,072 million for the year 2004. o The fourth quarter trading environment was stronger than a year ago with higher oil and gas realizations and higher refining and retail marketing margins but with lower olefins margins. o Net cash provided by operating activities for the quarter and year was $4.2 billion and $26.7 billion, respectively, compared with $5.2 billion and $23.4 billion a year ago. o The sale of Innovene to INEOS completed on 16 December 2005. o The ratio of net debt to net debt plus equity was 17% compared with 22% a year ago. o The quarterly dividend, to be paid in March, is 9.375 cents per share ($0.5625 per ADS) compared with 8.50 cents per share a year ago. For the year, the dividend showed an increase of 21%. In sterling terms, the quarterly dividend is 5.288 pence per share, compared with 4.522 pence per share a year ago; for the year the increase was 24%. During the year, the company repurchased 1,060 million of its own shares at a cost of $11.6 billion. Notwithstanding shares issued in respect of the TNK-BP transaction during the year, shares in issue at end 2005 were 4% lower than a year previously. BP Group Chief Executive, Lord Browne, said: "BP's fourth quarter result was particularly hit by the continued shutdown of our Texas City refinery, during its refurbishment, and significant non-economic effects of the application of IFRS fair value accounting. Our 2005 result was a record; this reflects the quality of our asset base and operations. Innovene has been sold for an attractive price and earlier than expected. Strong operating cash flows and proceeds from disposals have enabled record distributions to shareholders". * Profit attributable to BP shareholders. Summary Quarterly Results Exploration and Production's fourth quarter result was a record and up 38% on ayear ago. This result benefited from higher realizations, partially offset bythe hurricane impact on volumes and associated repair costs, the cost of theThunder Horse stability incident, and higher operating and revenue investmentcosts. The Refining and Marketing result reflects the impact of the shutdown of theTexas City refinery for the whole quarter, due to hurricane Rita, along withother storm related disruptions, a significant negative impact related to IFRSfair value accounting and a significant charge in respect of rationalization andefficiency programmes. In Gas, Power and Renewables, the result reflects lower contributions from thegas trading and marketing business. It also includes a positive impact relatedto IFRS fair value accounting, in addition to a significant charge related toembedded derivatives. Finance costs and Other finance expense was $215 million for the quartercompared with $181 million in the previous quarter. This reflects higherinterest costs partially offset by higher capitalized interest. The consolidation adjustment, which removes the margin on sales between segmentsin respect of inventory at the period end, was a credit of $234 million in thefourth quarter, mainly reflecting the changes in supply patterns and inventorylevels due to the shutdown of the Texas City refinery. The effective tax rate on replacement cost profit of continuing operations was32.4%. Capital expenditure was $4.8 billion for the quarter; there were no significantacquisitions. Disposal proceeds were $9.2 billion, primarily from the sale ofInnovene to INEOS. Net debt at the end of the quarter was $16.2 billion. The ratio of net debt tonet debt plus equity was 17%. During the fourth quarter, the company repurchased 332 million of its ownshares, at a cost of $3.7 billion. These shares are held in treasury. The commentaries above and following are based on replacement cost profit. The financial information for 2004 has been restated to reflect the following,all with effect from 1 January 2005: (a) the adoption by the group ofInternational Financial Reporting Standards (IFRS) (see Note 1); (b) the changein accounting policy for sales and purchases (see Note 4); (c) the Mardi Graspipeline system has been transferred from Exploration and Production to Refiningand Marketing; (d) the aromatics and acetyls operations and the petrochemicalsassets that are integrated with our Gelsenkirchen refinery in Germany have beentransferred from the former Petrochemicals segment to Refining and Marketing;(e) the olefins and derivatives operations have been transferred from the formerPetrochemicals segment to the Olefins and Derivatives business. The legacyhistorical results of other petrochemicals assets that had been divested during2004 and 2003 are included within Other businesses and corporate; (f) theGrangemouth and Lavera refineries have been transferred from Refining andMarketing to the Olefins and Derivatives business; and (g) the Hobbsfractionator has been transferred from Gas, Power and Renewables to the Olefinsand Derivatives business. The Olefins and Derivatives business is reportedwithin Other businesses and corporate. This re-organisation was a precursor toseeking to divest the Olefins and Derivatives business. As indicated in Note 3,during 2005 we have divested Innovene and shown these activities as discontinuedoperations in these accounts. Innovene represented the majority of the Olefinsand Derivatives business. Non-operating Items Fourth Quarter$ million 2005 =======Exploration and Production (979)Refining and Marketing 50Gas, Power and Renewables (307)Other businesses and corporate (64) ------- (1,300)Taxation(a) 421 -------Continuing operations (879)Innovene Operations 136Taxation(a) 190 326 ------- -------Total for all operations (553) ======= (a) Taxation on non-operating items related to Innovene operations includes the actual tax effects arising on the loss on re-measurement to fair value and the sale to INEOS; other non-operating items are tax effected at 32.4%, the effective tax rate for continuing operations. Reconciliation of Replacement Cost Profit to Profit for the Period Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004============================= ================ 4,750 6,535 6,567 Exploration and Production 25,491 18,077 1,337 1,858 (160) Refining and Marketing 4,405 5,240 495 314 117 Gas, Power and Renewables 1,009 915 Other businesses and (245) (452) (403) corporate (1,186) 156 Consolidation adjustments Unrealized profit 57 (285) 234 in inventory (208) (191) Net profit on transactions between continuing and 31 144 128 Innovene operations (a) 527 188----------------------------- ---------------- RC profit before interest 6,425 8,114 6,483 and tax 30,038 24,385----------------------------- ---------------- Finance costs and other (264) (181) (215) finance expense (761) (780) (1,818) (2,674) (2,029) Taxation(b) (9,473) (7,082) (59) (68) (93) Minority interest (291) (187)----------------------------- ---------------- RC profit for continuing operations attributable 4,284 5,191 4,146 to BP shareholders (c) 19,513 16,336============================= ================ Inventory holding gains (losses) for continuing (493) 1,938 (903) operations 2,644 1,361----------------------------- ---------------- Profit for the period for continuing operations attributable to BP 3,791 7,129 3,243 shareholders 22,157 17,697 Profit (loss) for the period (781) (666) 442 from Innovene operations(d) 184 (622)----------------------------- ---------------- Profit for the period attributable to 3,010 6,463 3,685 BP shareholders 22,341 17,075============================= ================ RC profit for continuing operations attributable to 4,284 5,191 4,146 BP shareholders 19,513 16,336 RC profit for Innovene (780) (781) 286 operations (199) (904)----------------------------- ---------------- 3,504 4,410 4,432 Replacement cost profit 19,314 15,432============================= ================ (a) In the circumstances of discontinued operations, Accounting Standards require that the profits earned by the discontinued operations, in this case the Innovene operations, on sales to the continuing operations be eliminated on consolidation from the discontinued operations, and attributed to the continuing operations and vice versa. This adjustment has two offsetting elements: the net margin on crude refined by Innovene as substantially all crude for their refineries is supplied by BP and most of the refined products manufactured are taken by BP; and the margin on sales of feedstock from BP's US refineries to Innovene's manufacturing plants. The profits attributable to individual segments are not affected by this adjustment. Neither does this representation indicate the profits earned by continuing or Innovene operations, as if they were stand- alone entities, for past periods or likely to be earned in future periods. (b) The fourth quarter effective tax rate on continuing operations of 32.4% is calculated as the tax charge ($2,029 million) divided by RC profit for continuing operations after interest ($6,483-$215=$6,268 million). (c) Replacement cost profit reflects the current cost of supplies. The replacement cost profit for the period is arrived at by excluding from profit inventory holding gains and losses. BP uses this measure to assist investors to assess BP's performance from period to period. Replacement cost profit is not a recognized GAAP measure. Operating cash flow is calculated from the starting point of profit before taxation which includes inventory holding gains and losses. Operating cash flow also reflects working capital movements including inventories, trade and other receivables and trade and other payables. The carrying value of these working capital items will change for various reasons, including movements in oil, gas and products prices. (d) See further detail in Note 3. Per Share Amounts Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004================================ ===================== Results for the period ($m) 3,010 6,463 3,685 Profit* 22,341 17,075 3,504 4,410 4,432 Replacement cost profit 19,314 15,432-------------------------------- -------------------- Shares in issue at21,525,978 20,984,851 20,657,045 period end (thousand)20,657,045 21,525,978 - ADS equivalent 3,587,663 3,497,475 3,442,841 (thousand) 3,442,841 3,587,663 Average number of shares outstanding21,607,872 21,007,316 20,792,896 (thousand) 21,125,902 21,820,535 - ADS equivalent 3,601,312 3,501,219 3,465,483 (thousand) 3,520,984 3,636,756-------------------------------- --------------------- Per ordinary share (cents) 14.00 30.75 17.90 Profit for the period 105.74 78.24 RC profit 16.23 21.04 21.34 for the period 91.41 70.71 Per ADS (cents) 84.00 184.50 107.40 Profit for the period 634.44 469.44 RC profit 97.38 126.24 128.04 for the period 548.46 424.26-------------------------------- --------------------- * Profit attributable to BP shareholders. Exploration and Production Fourth Third FourthQuarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004======================= ============== 4,747 6,536 6,575 Profit before interest and tax(a) 25,508 18,087 3 (1) (8) Inventory holding (gains) losses (17) (10)----------------------- -------------- Replacement cost profit 4,750 6,535 6,567 before interest and tax 25,491 18,077======================= ============== Results include: Impairment and gain (loss) on sale of (236) (106) 62 businesses and fixed assets 893 (469) - - - Environmental and other provisions - - Restructuring, integration and - - - rationalization costs - - Fair value gain (loss) on - (53) (801) embedded derivatives (1,688) - 8 12 (240) Other (203) (27)----------------------- -------------- (228) (147) (979) Total non-operating items (998) (496) ======================= ============== 258 177 208 Exploration expense 684 637 Of which: 151 93 81 Exploration expenditure written off 305 274======================= ============== Production (Net of Royalties) (b) 2,396 2,313 2,400 Crude oil (mb/d) 2,389 2,340 197 159 164 Natural gas liquids (mb/d) 173 191 2,593 2,472 2,564 Total liquids (mb/d)(c) 2,562 2,531 8,714 7,841 8,458 Natural gas (mmcf/d) 8,424 8,503 4,095 3,824 4,022 Total hydrocarbons (mboe/d)(d) 4,014 3,997======================= ============== Average realizations (e) 41.01 56.83 53.92 Crude oil ($/bbl) 50.27 36.45 31.20 36.70 39.29 Natural gas liquids ($/bbl) 33.23 26.75 39.88 54.80 52.44 Total liquids ($/bbl) 48.51 35.39 4.28 4.75 6.24 Natural gas ($/mcf) 4.90 3.86 32.64 41.68 44.56 Total hydrocarbons ($/boe) 38.86 29.20======================= ============== Average oil marker prices($/bbl) 43.85 61.63 56.87 Brent 54.48 38.27 48.29 63.18 60.01 West Texas Intermediate 56.58 41.49 42.62 60.91 57.89 Alaska North Slope US West Coast 53.55 38.96======================= ============== Average natural gas marker prices 7.07 8.53 13.00 Henry Hub gas price ($/mmbtu)(f) 8.65 6.13 UK Gas - National 28.51 29.26 65.30 Balancing Point (p/therm) 40.71 24.39 ======================= ============== (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. (b) Includes BP's share of production of equity-accounted entities. (c) Crude oil and natural gas liquids. (d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels. (e) Based on turnover of consolidated subsidiaries only - this excludes equity-accounted entities. (f) Henry Hub First of the Month Index. Exploration and Production The replacement cost profit before interest and tax for the fourth quarter was$6,567 million, a record result, up 38% from the fourth quarter of 2004. Thisresult benefited from higher realizations, partially offset by the hurricaneimpact on volumes and associated repair costs, the cost of the Thunder Horsestability incident, and higher operating and revenue investment costs. Included in the result for the quarter were net non-operating charges of $979million, primarily arising from fair value losses of $801 million on embeddedderivatives relating to North Sea gas contracts, and a charge of $265 million onthe cancellation of an intra-group gas supply contract (which is offset by again in our Gas, Power and Renewables segment). The corresponding quarter of2004 contained net non-operating charges of $228 million. The replacement cost profit before interest and tax for the full year at $25,491million was a record, up 41% on a year ago. This reflects higher realizations,partly offset by costs associated with the hurricanes and Thunder Horse, andhigher operating and revenue investment costs. The year's result included netnon-operating charges of $998 million primarily arising from fair value losseson embedded derivatives of $1,688 million, net gains on sales of assets of$1,159 million, mainly from the sale of Ormen Lange in the first quarter, andnet impairment charges of $266 million. The full year results in 2004 includednet non-operating charges of $496 million. Production for the quarter at 4,022 mboe/d was 2% lower than in the fourthquarter of 2004, principally as a result of the lost production owing to thehurricane damage in the Gulf of Mexico. Total production for the year was 4,014 mboe/d, compared with 3,997 mboe/d in2004. Increases in production in our New Profit Centres and TNK-BP were offsetby the effect of the hurricanes, higher planned maintenance shutdowns,anticipated decline and operational issues in our Existing Profit Centres. We estimate the opportunity losses caused by the hurricanes in the fourthquarter and year to be in the region of $950 million for the fourth quarter and$1,600 million for the full year. Projects in our New Profit Centres are progressing well. During the quarter theWest Azeri project in Azerbaijan achieved first production four months ahead ofschedule, and good progress is being made on the completion of the BTC pipelinewith the first lifting at Ceyhan in Turkey expected in the second quarter of2006. In Trinidad, Atlantic LNG Train 4 started production in mid December withthe Cannonball gas development expected to start production in the first quarterof 2006. Repairs and construction of the Thunder Horse platform in the Gulf ofMexico are proceeding offshore, and production is expected to start in thesecond half of 2006. In Russia, TNK-BP disposed of non-core producing assets inthe Saratov region, along with the Orsk refinery. In our Existing ProfitCentres, production commenced from the Rhum and Farragon fields in the NorthSea. BP's proved reserve replacement ratio, on a UK SORP basis, was 100% on acombined basis of subsidiaries and equity-accounted entities, excludingacquisitions and disposals. This is the thirteenth consecutive year that we haveat least replaced our production. Refining and Marketing Fourth Third FourthQuarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004======================= ============= Profit (loss) before interest 811 3,697 (1,068) and tax(a) 6,942 6,544 526 (1,839) 908 Inventory holding (gains) losses (2,537) (1,304)----------------------- ------------- Replacement cost profit (loss) 1,337 1,858 (160) before interest and tax 4,405 5,240======================= ============= Results include: Impairment and gain (loss) on sale (333) (14) 50 of businesses and fixed assets 84 (456) - (140) - Environmental and other provisions (140) (206) Restructuring, integration and (32) - - rationalization costs - (32) Fair value gain (loss) on - - - embedded derivatives - - - - - Other (733) ------------------------ ------------- (365) (154) 50 Total non-operating items (789) (694)======================= ============= Refinery throughputs(b) (mb/d) 218 202 144 UK 180 208 601 687 664 Rest of Europe 667 684 1,436 1,328 942 USA 1,255 1,373 296 296 288 Rest of World 297 342----------------------- ------------- 2,551 2,513 2,038 Total throughput 2,399 2,607======================= ============= 96.5 92.6 90.9 Refining availability (%) 92.9 95.4======================= ============= Oil sales volumes (mb/d) Refined products 335 369 358 UK 355 322 1,363 1,402 1,343 Rest of Europe 1,354 1,360 1,664 1,674 1,559 USA 1,634 1,682 627 599 573 Rest of World 599 638----------------------- -------------- 3,989 4,044 3,833 Total marketing sales 3,942 4,002 2,194 2,010 1,448 Trading/supply sales 1,946 2,396----------------------- -------------- 6,183 6,054 5,281 Total refined product sales 5,888 6,398 2,569 2,803 2,710 Crude oil 2,804 2,691----------------------- -------------- 8,752 8,857 7,991 Total oil sales 8,692 9,089======================= ============== Global Indicator Refining Margin(c) ($/bbl) 4.72 7.78 5.51 NWE 5.47 4.28 5.52 17.12 11.64 USGC 11.40 7.15 1.65 13.40 7.91 Midwest 8.19 5.08 10.36 17.57 8.90 USWC 13.49 11.27 8.02 6.52 4.42 Singapore 5.56 4.94 5.69 12.35 7.60 BP Average 8.60 6.31======================= ============== Chemicals production (kte) 316 284 281 UK 1,199 1,302 779 771 811 Rest of Europe 3,123 3,189 1,122 890 676 USA 3,891 4,643 990 1,115 1,049 Rest of World 4,154 4,016----------------------- -------------- 3,207 3,060 2,817 Total production 12,367 13,150======================= ============== (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. (b) Refinery throughputs exclude the Grangemouth and Lavera refineries which are now treated as discontinued operations within Other businesses and corporate. (c) The Global Indicator Refining Margin (GIM) is the average of six regional indicator margins weighted for BP's crude refining capacity in each region. Each regional indicator margin is based on a single representative crude with product yields characteristic of the typical level of upgrading complexity. The regional indicator margins may not be representative of the margins achieved by BP in any period because of BP's particular refinery configurations and crude and product slate. The GIM data shown above excludes the Grangemouth and Lavera refineries. Refining and Marketing The replacement cost loss before interest and tax for the fourth quarter was$160 million compared with a profit of $1,337 million for the same period in2004. The replacement cost profit before interest and tax for the year was$4,405 million compared with $5,240 million in 2004. The reduction in the fourth quarter result compared with a year ago was drivenby three significant factors. Firstly, the impact of the shutdown, throughoutthe quarter, of the Texas City refinery, along with other storm-related supplydisruptions to a number of our US-based businesses. Compared with the fourthquarter of 2004, the reduction in replacement cost profit before interest andtax in respect of these disruptions was some $870 million; compared with thethird quarter of 2005 the reduction was $670 million. Secondly, the fourthquarter's result was adversely impacted by $454 million of accounting effects.This resulted from a combination of changes in both inventory levels and theforward trajectory of market prices across the quarter, and compares to a netgain of $114 million in the third quarter of 2005. The third factor was a chargeof $467 million in respect of rationalization and efficiency programmes, mainlyacross our marketing activities in Europe. This has not been identified as anon-operating item. The fourth quarter's result includes a net non-operating gain of $50 millionprimarily from retail divestments. In comparison, the net charge fornon-operating items in the fourth quarter of 2004 was $365 million. Supply disruptions in the USA and market uncertainty continued into the fourthquarter of 2005. The average refining Global Indicator Margin (GIM) fell sharplyfrom the record levels of last quarter but was higher than those of theequivalent quarter last year. Retail marketing margins recovered strongly fromthe third quarter and were above those of the equivalent quarter last year,although margins in our other marketing businesses were lower. In addition tothe impact of the three significant factors identified above, the fourth quarterresult also reflects the impact of lower refining availability compared to theequivalent quarter last year. Refining throughputs for the quarter were 2,038 mb/d, some 513 mb/d lower thanin the fourth quarter of 2004 due principally to the complete shut down of theTexas City refinery late in the third quarter. Marketing volumes were 3,833 mb/d, lower than those in the same quarter last year due primarily tohurricane-related supply disruptions in the USA. The full year result of $4,405 million was also impacted by the factors outlinedabove: the Texas City refinery outage, adverse impacts related to fair valueaccounting and costs associated with the rationalization and efficiencyprogrammes. The full year average GIM was higher than that for the full year 2004, andconsistent with the increase in BP's actual realized refining margin. Retailmarketing margins, despite the recovery in the fourth quarter, weresignificantly lower than those for the full year 2004, although partly offset byincreases in our other marketing businesses. Our purchased energy costs andoperating and investment costs were higher year-on-year due to refinery repair,manufacturing integrity costs and the initial charges for the rationalizationand efficiency programmes mentioned above. The full year result includes a charge of $789 million for non-operating itemscompared with a charge of $694 million in 2004. Included in the 2005 charge is$700 million in respect of fatality and personal injury claims associated withthe Texas City incident and charges in respect of new, and revisions toexisting, environmental and other provisions. The total opportunity loss in respect of the Texas City refinery shutdown andstorms, at prevailing margins, is estimated at around $1,800 million for theyear. Gas, Power and Renewables Fourth Third FourthQuarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004======================= ============= 523 412 114 Profit before interest and tax(a) 1,104 954 (28) (98) 3 Inventory holding (gains) losses (95) (39)----------------------- ------------- Replacement cost profit 495 314 117 before interest and tax 1,009 915======================= ============= Results include: Impairment and gain (loss) on sale 40 (2) (26) of businesses and fixed assets 55 56 - 6 - Environmental and other provisions 6 - Restructuring, integration and - - - rationalization costs - - Fair value gain (loss) - 91 (546) on embedded derivatives (346) - - - 265 Other 265 ------------------------ ------------- 40 95 (307) Total non-operating items (20) 56======================= ============= (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. The replacement cost profit before interest and tax for the fourth quarter andfull year was $117 million and $1,009 million respectively, compared with $495million and $915 million a year ago. Non-operating items for the fourth quarterinclude fair value losses on embedded derivatives of $546 million and $265million compensation received on the cancellation of an intra-group gas supplycontract (which is offset by a loss in our Exploration and Production segment). The fourth quarter result is lower than the same period in 2004 primarily due tolower contributions from the gas trading and marketing business and the netnon-operating charge described above, partially offset by a $289 millionpositive impact related to IFRS fair value accounting. The full year result ishigher than in 2004 reflecting higher contributions from the operatingbusinesses. Other Businesses and Corporate Fourth Third FourthQuarter Quarter Quarter Year 2004 2005 2005 $ million 2005 2004======================= ============= Profit (loss) before (237) (452) (403) interest and tax(a) (1,191) 164 (8) - - Inventory holding (gains) losses 5 (8)----------------------- ------------- Replacement cost profit (loss) (245) (452) (403) before interest and tax (b) (1,186) 156======================= ============= Results include: Impairment and gain (loss) on sale 8 4 - of businesses and fixed assets 38 1,164 - (296) (4) Environmental and other provisions (278) (283) Restructuring, integration and (85) (6) (57) rationalization costs (134) (102) Fair value gain (loss) on - 8 (3) embedded derivatives (13) - 66 - - Other 3 66----------------------- ------------- (11) (290) (64) Total non-operating items (384) 845======================= ============= (a) Profit from continuing operations and includes profit after interest and tax of equity-accounted entities. (b) Includes the portion of Olefins and Derivatives not included in the sale of Innovene to INEOS. This includes the equity-accounted investments in China and Malaysia that were part of Olefins and Derivatives. Other businesses and corporate comprises Finance, the group's aluminium asset,interest income and costs relating to corporate activities. The group'sinterests in PetroChina and Sinopec were divested in early 2004. The fourthquarter's result includes a net charge of $64 million in respect ofnon-operating items. Dividends Payable June, September, March December March December and March 2005 2005 2006 2005/06 2004/05============================ =================== Dividends per ordinary share 8.50 8.925 9.375 cents 35.725 29.45 4.522 5.061 5.288 pence 19.918 16.099 51.0 53.55 56.25 Dividends per ADS (cents) 214.35 176.70---------------------------- ------------------- BP today announced a dividend of 9.375 cents per ordinary share to be paid inMarch. Holders of ordinary shares will receive 5.288 pence per share and holdersof American Depository Receipts (ADRs) $0.5625 per ADS share. The dividend ispayable on 13 March to shareholders on the register on 24 February. Participantsin the Dividend Reinvestment Plan (DRIP) or the DRIP facility in the US DirectAccess Plan will receive the dividend in the form of shares, also on 13 March. Outlook BP Group Chief Executive, Lord Browne, concluded: "World economic growth has continued at near trend rates. In addition tosustained growth in the US and Asia, there has been an acceleration of activityin Europe; the near-term global outlook appears solid. "Crude oil prices averaged $56.87 per barrel (Dated Brent) in the fourthquarter, a decline of nearly $5 per barrel from the third quarter average butmore than $13 per barrel above the same period last year. Prices weakened inface of ample inventories and relatively mild weather in the early part of thefourth quarter, and despite large production losses from hurricanes Katrina andRita. Prices rebounded in December with the onset of colder weather and havebeen sustained above $60 in 2006. Oil prices are expected to remain strong butremain dependent upon OPEC production levels and geopolitical concerns. "US natural gas prices averaged $13/mmbtu (Henry Hub first of month index) inthe fourth quarter, up nearly $4.50 per mmbtu versus the third quarter. Lostsupply following hurricanes Katrina and Rita and the onset of the winter heatingseason pushed prices above distillate parity for most of December. In recentweeks prices have traded closer to parity with residual fuel oil. US gas pricesare expected to track oil prices but remain vulnerable to weather-related pricespikes in the months ahead. "UK gas prices (National Balancing Point) more than doubled in the fourthquarter to 65.3 pence per therm from 29.3 pence per therm in the third quarterin face of concerns about gas availability through the winter. Prompt priceshave recently eased but remain volatile. Supplies are expected to be adequate inthe face of normal winter weather. "Average global refining margins softened to $7.60/bbl in the fourth quarter.The disruptions caused by last autumn's hurricanes eased during the quarter asnew sources of product supply were accessed. Oil product stocks currently appearadequate to meet winter demand and global margins have softened further during2006 to date. However, margin spikes are still possible during extended periodsof cold weather and a heavier than normal maintenance programme. "During the fourth quarter, retail margins benefited from falling product pricesparticularly in the first two months of the quarter. During December and so farin 2006, a rise in wholesale gasoline and crude prices is evident. Marketingmargins are expected to remain volatile. "Following a comprehensive refurbishment, the steam system at the Texas Cityrefinery was successfully recommissioned in December 2005. Initial production isexpected to commence in the first quarter, with further units restarting in aphased programme, primarily in the second and third quarters. "Our strategy is unchanged. We continue to execute it with discipline and focus.Our ability to capture the benefit of current prices and margin strengthunderpins continued dividend growth and continuing share buybacks subject tomarket conditions and constraints. Capital expenditure excluding acquisitionsfor the year was about $14 billion and is expected to be around $15 billion in2006 with divestments in the region of $3 billion." ---------------------------------------------------------------------- The foregoing discussion, in particular the statements under "Outlook", contains forward looking statements particularly those regarding first lifting of oil from the BTC pipeline, the start-up of production from the Cannonball gas development, the timing of production from the Thunder Horse platform, world economic growth, oil prices, US and UK gas prices and supplies, oil product stocks, margins, production at Texas City, dividends and share buy-backs and capital expenditure. By their nature, forward looking statements involve risks and uncertainties and actual results may differ from those expressed in such statements depending on a variety of factors including the following: the timing of bringing new fields on stream; industry product supply; demand and pricing; currency exchange rates; operational problems; general economic conditions including inflationary pressures; political stability and economic growth in relevant areas of the world; changes in governmental regulations; exchange rate fluctuations; development and use of new technology; the actions of competitors; natural disasters and other changes in business conditions; prolonged adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed in this Announcement. For more information you should refer to our Annual Report and Accounts 2004 and our 2004 Annual Report on Form 20-F filed with the US Securities and Exchange Commission. ---------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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