BP PLC — Earnings Release 2005

Jan 11, 2006

News Details

Ad-hoc | 11 January 2006 07:01

BP p.l.c.: BP Fourth Quarter 2005 Trading Update part 1

Ad hoc announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Part 1 of 2 January 11, 2006 BP Fourth Quarter 2005 Trading Update This trading update is aimed at providing estimates regarding revenue and trading conditions experienced by BP in the fourth quarter ending December 31, 2005, and estimates of identified non-operating items expected to be included in that quarter’s result. The fourth quarter margin, price, realisation, cost, production and other data referred to below are currently provisional, some being drawn from figures applicable to the first month or so of the quarter. All such data are subject to change and may differ quite considerably from the final numbers that will be reported on February 7, 2006. This trading update is produced in order to provide greater disclosure to investors and potential investors of currently expected outcomes, and to ensure that they all receive equal access to the same information at the same time. Resources Business: Exploration and Production Marker Prices 4Q’04 1Q’05 2Q’05 3Q’05 4Q’05 Brent Dated ($/bbl) 43.85 47.62 51.63 61.63 56.87 WTI ($/bbl) 48.29 49.88 53.08 63.18 60.01 ANS USWC ($/bbl) 42.62 45.07 50.10 60.91 57.89 US gas Henry Hub first of month index ($/mmbtu) 7.07 6.27 6.74 8.53 13.00 UK gas price – National Balance Point (p/therm) 28.51 37.96 30.15 29.26 65.30 Urals (NWE – cif) ($/bbl) 37.75 42.54 48.08 57.13 53.23 Russian domestic Oil($/bbl)22.30 19.14 27.39 36.60 31.73 Overall BP production in 4Q’05 is expected to be around 4,010 mboed. Excluding volumes from TNK-BP operations, production in 4Q’05 is expected to be around 2,990 mboed. Production in 4Q’05 is expected to be higher than 3Q’05, reflecting continued growth in the new profit centres and the completion of the planned maintenance season (primarily in the North Sea), partially offset by the impact of Hurricanes Katrina and Rita (around 160 mboed in 4Q’05 vs. 135 mboed in 3Q’05). BP’s net share of production from TNK-BP is anticipated to be approximately 1,020 mboed. The contribution of TNK-BP to BP’s financial results is expected to be negatively impacted in 4Q’05 relative to 3Q’05 due to the lagged calculation of export duties in a declining market, largely offset by an expected gain on divestments. Relative to 3Q’05 liquids and gas realisations have broadly tracked the markers, except for UK gas which is largely under contract and not priced on a spot market related basis. Approximately $130m of costs are expected to be incurred in the quarter, the majority to repair hurricane damage and the remainder in ongoing work on the Thunder Horse facility. Refining and Marketing Refining Indicator Margins ($/bbl) 4Q’04 1Q’05 2Q’05 3Q’05 4Q’05 USA – West Coast 10.36 12.88 14.53 17.57 8.90 – Gulf Coast 5.52 7.30 9.37 17.12 11.64 – Midwest 1.65 3.84 7.45 13.40 7.91 North West Europe 4.72 2.84 5.68 7.78 5.51 Singapore 8.02 4.98 6.30 6.52 4.42 Refining Global Indicator Margin* 5.69 5.94 8.42 12.35 7.60 * The Refining Global Indicator Margin (GIM) is a generic indicator. Actual margins realised by BP may vary significantly due to a variety of factors, including specific refinery configurations, crude slate and operating practices. The fourth quarter’s average global indicator margin (GIM) was substantially lower than the GIM for 3Q’05. The decline in BP’s actual realised refining margins in 4Q’05 is expected to be similar to the decline in the GIM. Lower wholesale product prices resulted in a recovery in marketing margins during the fourth quarter relative to 3Q’05, which is expected to offset around half of the decline in refining margins. BP’s Texas City Refinery was shut down as a result of Hurricane Katrina throughout 4Q’05. Total refinery throughputs in 4Q’05 were significantly lower as a result. Storm-related supply disruptions also reduced volumes in a number of our US-based businesses. The overall impact of the profits foregone as a result of the closure of Texas City and Hurricane Katrina are expected to be in excess of $400m in 4Q’05 relative to 3Q’05. Charges of more than $400m are expected to be taken in 4Q’05 as the initial tranche of a restructuring and efficiency programme in Europe. The phasing of marketing activities and refining maintenance in 4Q’05 is expected to result in higher costs than 3Q’05. Gas, Power and Renewables Margins from the GP&R business are expected to be higher than 3Q’05 and similar to 4Q’04, as a result of strong gas marketing margins and seasonality. End of part 1 BP p.l.c. 1 St James’s Square London, SW1Y 4PD United Kingdom ISIN: GB0007980591 WKN: 850517 Listed: Amtlicher Markt in Düsseldorf (Dt. Zertifikate DE0008618737), Frankfurt (General Standard) und Hamburg; Freiverkehr in Berlin-Bremen, Hamburg, Hannover, München und Stuttgart; Swiss Exchange End of ad hoc announcement (c)DGAP 11.01.2006