BP LOSS $(6.266) BLN
BP's second-quarter replacement cost (RC) loss was $6,266 million, compared with a profit of $3,182 million a year ago. After adjusting for a net charge for non-operating items of $7,486 million, mainly relating to the recently announced agreements in principle to settle federal, state and the vast majority of local government claims arising from the 2010 Deepwater Horizon accident, and net unfavourable fair value accounting effects of $93 million (both on a post-tax basis), underlying RC profit for the second quarter was $1,313 million, compared with $3,635 million for the same period in 2014. For the half year, RC loss was $4,163 million, compared with a profit of $6,657 million a year ago. After adjusting for a net charge for non-operating items of $7,899 million and net unfavourable fair value accounting effects of $154 million (both on a post-tax basis), underlying RC profit for the half year was $3,890 million, compared with $6,860 million for the same period in 2014. Non-operating items include a restructuring charge of $272 million for the quarter and $487 million for the half year. Restructuring charges are now expected to be around $1.5 billion by the end of 2015 relative to the $1 billion announced back in December.
On 2 July 2015, BP announced that it has reached agreements in principle to settle all outstanding federal and state claims and claims made by more than 400 local government entities arising from the 2010 Deepwater Horizon oil spill. BP has accepted releases received from the vast majority of local government entities and the District Court has ordered BP to commence processing payments under the releases.
The group income statement for the second quarter reflects a pre-tax charge of $9.8 billion related to the agreements in principle. All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $10,755 million for the second quarter and $11,087 million for the half year ($7,154 million and $7,374 million respectively on a post-tax basis).
Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.3 billion and $8.1 billion respectively, compared with $7.9 billion and $16.1 billion for the same periods in 2014.
Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.4 billion and $8.9 billion respectively, compared with $7.6 billion and $16.5 billion for the same periods in 2014.
Net debt at 30 June 2015 was $24.8 billion, compared with $24.4 billion a year ago. The net debt ratio* at 30 June 2015 was 18.8%, compared with 15.5% a year ago.
Total capital expenditure on an accruals basis for the second quarter was $4.7 billion, of which organic capital expenditure was $4.5 billion, compared with $5.6 billion for the same period in 2014, almost all of which was organic. For the half year, total capital expenditure on an accruals basis was $9.1 billion, of which organic capital expenditure was $8.9 billion, compared with $11.7 billion for the same period in 2014, of which organic capital expenditure was $11.0 billion. For full year 2015, now expect organic capital expenditure to be below $20 billion.
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 18 September 2015. The corresponding amount in sterling will be announced on 8 September 2015.
In October 2013, BP announced plans to divest a further $10 billion of assets before the end of 2015, having completed its earlier divestment programme of $38 billion. Transactions to date have reached around $7.4 billion. Disposal proceeds were $0.5 billion for the second quarter and $2.3 billion for the half year. The half-year amount includes proceeds from our Toledo refinery partner, Husky Energy, in place of capital commitments relating to the original divestme nt transaction that have not been subsequently sanctioned.
The effective tax rate (ETR) on RC profit or loss for the second quarter and half year was 33% and 47% compared with 34% and 32% for the same periods in 2014. Excluding the one-off deferred tax adjustment in the first quarter 2015 as a result of the reduction in the UK North Sea supplementary charge, the ETR for the half year was 35%. Adjusting for non-operating items, fair value accounting effects and the first-quarter 2015 one-off deferred tax adjustment, the underlying ETR in the second quarter and half year was 35% and 28% respectively, compared with 33% for the same periods in 2014. The underlying ETR for the half year is lower than a year ago mainly due to changes in the mix of our profits and certain one-off items, partly offset by foreign exchange effects from a stronger US dollar.
Finance costs and net finance expense relating to pensions and other post-retirement benefits were a charge of $364 million for the second quarter, compared with $356 million for the same period in 2014. For the half year, the respective amounts were $722 million and $723 million.
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BLOOMBERG - While Europe as a whole gets more than a third of its gas from Russia, that share is lower in the U.K., which receives the bulk of its fuel from North Sea fields and Norway. Still, Moscow-based Gazprom PJSC was the second-biggest supplier to major industrial consumers in the U.K. last year, according to Britain’s energy regulator Ofgem.
FT - of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.
REUTERS - So far this year, two Yamal cargoes unloaded at British terminals for domestic consumption, accounting for about a third of Britain’s 2018 LNG imports after typical supplier Qatar pre-sold the bulk of its winter output to Asia last year.
REUTERS - U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement. Brent crude futures LCOc1 were at $64.62 per barrel, down just 2 cents from their last close.