Final Results
BP PLC
12 February 2002
PART 1
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2001
London 12 February 2002
FOR IMMEDIATE RELEASE
PERFORMANCE AND GROWTH FIRMLY ON TRACK - DIVIDEND INCREASED
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2000 2001 2001 $ million 2001 2000 %
======================= ====================
Replacement cost profit
2,799 2,355 1,056 before exceptional items 9,880 11,214
693 91 571 Special items(a) 821 1,454
598 603 577 Acquisition amortization(b) 2,477 1,535
----------------------- --------------------
Pro forma result adjusted
4,090 3,049 2,204 for special items 13,178 14,203 (7.2)
======================= ====================
12.59 9.44 6.84 - per ordinary share (pence) 40.78 43.46 (6.2)
18.25 13.60 9.85 - per ordinary share (cents) 58.73 65.63 (10.5)
1.10 0.81 0.59 - per ADS (dollars) 3.52 3.94
======================= ====================
o BP's fourth quarter pro forma result, adjusted for special items, was
$2,204 million compared to $4,090 million a year ago, a reduction of
46%.
o The result for the year was $13,178 million, compared with
$14,203 million in 2000. The result per share reflects a decrease of
10.5%, 6.2% in sterling terms. Replacement cost profit, before
exceptional items, for the fourth quarter and year was $1,056 million
and $9,880 million respectively, compared to $2,799 million and
$11,214 million in 2000.
o The 2001 underlying performance improvement target of $2 billion
pre-tax has been achieved. This includes $0.8 billion of cost
reduction.
o The trading environment in the fourth quarter showed a marked
deterioration for all BP's businesses compared to a year ago. For the
year the environment has also been less favourable.
o Return on average capital employed, on a pro forma basis and adjusted
for special items, was 13% and 19% for the quarter and year,
respectively. This compares with 25% and 23% for 2000.
o Oil and gas production for the year was up 5.5% on the prior year, in
line with our target. When adjusted for acquisitions and disposals, the
increase was 4% and 2% for the fourth quarter and year, respectively.
The reserve replacement ratio was 191% with 2.2 billion barrels of oil
equivalent booked through extensions, discoveries, revisions and
improved recovery. Replacement exceeded production for the eighth
consecutive year.
o The company purchased for cancellation 14 million of its own shares
during the quarter, at a cost of $99 million. The totals for the year
are 154 million shares and $1,281 million, respectively.
o Quarterly dividend increased to 5.75 cents per share ($0.345 per ADS).
For the year, the dividend was 22 cents per share compared with
20.50 cents for 2000, an increase of 7%. In sterling terms the year on
year increase was 12%.
BP Group Chief Executive, Lord Browne, commented:
'This is a strong result in a mixed year. We have met our targets to
improve underlying performance by $2 billion and boost our annual
production rate by 5.5%. We have also again significantly more than
replaced our production, which is a good indicator of the
sustainability of the growth of the company.
'General economic slowdown, and a sharp fall in oil and gas prices,
certainly made for tough going. Following our strategy in a disciplined
way, we were able, despite the external climate, to deliver growth in
volumes while at the same time enhancing underlying returns.'
The pro forma result, adjusted for special items, has been derived from the
company's reported UK GAAP accounting information but is not in itself a
recognized UK or US GAAP measure. This financial performance information and
measures derived therefrom, shown above and elsewhere in the document, are
provided in order to enable investors to evaluate better both the company's
current performance, in the context of past performance, and its performance
against that of its competitors.
(a) The special items refer to non-recurring charges and credits. The
special items for the fourth quarter comprise additional severance
charges, mainly related to former ARCO employees, an impairment charge
for our partner operated Venezuelan Lake Maracaibo operations, Castrol,
Solvay and Erdolchemie integration costs, Grangemouth restructuring,
and litigation costs. For the year, special items also include
rationalization costs in the European downstream commercial business.
(b) Depreciation and amortization relating to the fixed asset revaluation
adjustment and goodwill consequent upon the ARCO and Burmah Castrol
acquisitions.
Summary Quarterly Results
Exploration and Production's result was down 49% on a year ago because of
significantly lower liquids and natural gas realizations. The year's production
was up 5.5% in line with the growth target. Production for the quarter was a
record 3.5 mmboe/d. During the quarter, three new fields came on stream and the
Mad Dog development in the US Gulf of Mexico was approved.
In Gas and Power, the result is down 42% compared to a year ago, reflecting a
weaker trading environment and lower NGL margins.
The Refining and Marketing result reflects significantly lower refining margins,
and marketing margins falling away towards the end of the quarter, versus a year
ago, partly offset by performance improvements.
The Chemicals result reflects the continued effect of a weak environment, partly
offset by higher productivity and volumes.
Interest expense for the quarter was $414 million, compared to $367 million in
the third quarter after adjusting for bond redemption charges. Lower interest
rates were more than offset by higher average debt and the impact of revaluing
environmental and other provisions at a lower interest rate. The interest
expense, net of interest income and excluding bond redemption charges, for the
year was $1,338 million compared with $1,201 million a year ago.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, was 20% in the quarter, reflecting tax relief on stock losses. The
effective rate for the year was 26%.
Capital expenditure, excluding acquisitions, was $4.0 billion for the quarter
and $13.2 billion for the year, in line with long-term targets when adjusted for
portfolio changes outside acquisitions. Total capital expenditure for the two
periods was $4.4 billion and $14.1 billion respectively. Disposal proceeds for
the two periods were $0.8 billion and $2.9 billion respectively.
Net debt at the end of the quarter was $19.6 billion. The pro forma ratio of net
debt to net debt plus equity was 26%, down from 27% a year ago.
Net cash outflow for the quarter was $983 million, compared with a net cash
outflow of $1,647 million for the same period in 2000. Operating cash flow was
similar in both periods, with higher tax payments in the fourth quarter of 2000.
---------
The commentaries above and following are based on the pro forma replacement cost
operating results for the quarter and year, before exceptional items, adjusted
for special items. The results of ARCO and Burmah Castrol have been included
with effect from 14 April and 7 July 2000 respectively. The European fuels
business has been consolidated with effect from 1 August 2000.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 4Q 2001 --------------- adjusted for
special items special items
-------------------
4Q 3Q 4Q Special Acq. Reported Year
2000 2001 2001 Items* Amort+ Earnings $ million 2001 2000
=========================================== ==============
Exploration and
4,700 3,070 2,374 322 397 1,655 Production 14,498 15,710
183 130 106 - - 106 Gas and Power 521 571
Refining and
1,321 1,289 785 213 180 392 Marketing 4,830 4,558
140 113 39 106 - (67)Chemicals 242 1,036
Other businesses
(132) (122) (106) 73 - (179) and corporate (483) (622)
------------------------------------------- --------------
RC operating
6,212 4,480 3,198 714 577 1,907 profit 19,608 21,253
------------------------------------------- --------------
(500) (367) (414) - - (414)Interest expense (1,608) (1,659)
(1,605)(1,049) (554) (143) - (411)Taxation (4,749) (5,220)
(17) (15) (26) - - (26)MSI (73) (171)
------------------------------------------- --------------
RC profit before
4,090 3,049 2,204 571 577 1,056 exceptional items 13,178 14,203
------------------------------------------- --------------
(38)Exceptional items before tax
(126)Taxation on exceptional items
-----
892 RC profit after exceptional items
(1,297)Stock holding gains (losses)
-----
(405)HC profit (loss)
=====
* The special items refer to non-recurring charges and credits. The special
items for the fourth quarter comprise additional severance charges, mainly
related to former ARCO employees, an impairment charge for our partner
operated Venezuelan Lake Maracaibo operations, Castrol, Solvay and
Erdolchemie integration costs, Grangemouth restructuring, and litigation
costs. For the year, special items also include rationalization costs in
the European downstream commercial business.
+ Acquisition amortization is depreciation and amortization relating to the
fixed asset revaluation adjustment and goodwill consequent upon the ARCO
and Burmah Castrol acquisitions.
Net special and exceptional items before tax were a $752 million charge and a
$523 million charge for the fourth quarter and year respectively. The major
components of special items in the fourth quarter were additional ARCO severance
and the impairment charge for our partner operated Venezuelan Lake Maracaibo
operations.
Operating Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2000 2001 2001 2001 2000
======================= ==============
Replacement cost
4,763 3,757 1,907 operating profit ($m) 16,135 17,756
----------------------- --------------
Replacement cost profit
2,799 2,355 1,056 before exceptional items ($m) 9,880 11,214
----------------------- --------------
Profit after exceptional items ($m)
2,971 2,345 892 Replacement cost 9,910 11,142
2,410 1,940 (405) Historical cost 8,010 11,870
----------------------- --------------
Per ordinary share (cents)
Pro forma result
18.25 13.60 9.85 adjusted for special items 58.73 65.63
RC profit before
12.40 10.50 4.73 exceptional items 44.03 51.82
HC profit (loss) after
10.53 8.66 (1.78) exceptional items 35.70 54.85
Per ADS (cents)
Pro forma result
109.50 81.60 59.10 adjusted for special items 352.38 393.78
RC profit before
74.40 63.00 28.38 exceptional items 264.18 310.92
HC profit (loss) after
63.18 51.96 (10.68) exceptional items 214.20 329.10
----------------------- --------------
Dividends per ordinary share
5.25 5.50 5.75 cents 22.0 20.5
3.617 3.805 4.055 pence 15.436 13.791
31.5 33.0 34.5 Dividends per ADS (cents) 132.0 123.0
----------------------- --------------
EBITDA(a) (cents)
28.82 25.04 13.43 per ordinary share 104.83 120.86
172.92 150.24 80.58 per ADS 628.98 725.16
----------------------- --------------
Adjusted EBITDA(b) (cents)
35.01 26.57 22.56 per ordinary share 115.35 125.18
210.06 159.42 135.36 per ADS 692.10 751.08
======================= ==============
(a) Profit for the period before interest, tax, depreciation and
amortization.
(b) Replacement cost profit before exceptional items, adjusted for special
items, and before interest, tax, depreciation and amortization.
Operating Statistics
Fourth Third Fourth
Quarter Quarter Quarter Year
2000 2001 2001 2001 2000
======================= =============
Crude oil and natural gas
liquids production (mb/d)
(Net of Royalties)
514 457 500 UK 485 534
92 96 116 Rest of Europe 100 90
725 741 772 USA 744 729
600 589 629 Rest of World 602 575
----------------------- -------------
Total crude oil and
1,931 1,883 2,017 liquids production 1,931 1,928
======================= =============
Natural gas production (mmcf/d)
(Net of Royalties)
1,893 1,305 1,715 UK 1,713 1,652
156 139 160 Rest of Europe 147 136
3,403 3,577 3,621 USA 3,554 3,054
3,169 3,298 3,268 Rest of World 3,218 2,767
----------------------- -------------
8,621 8,319 8,764 Total natural gas production 8,632 7,609
======================= =============
Gas sales volumes (mmcf/d)
3,019 2,170 2,534 UK 2,641 2,526
224 170 232 Rest of Europe 213 178
8,206 8,692 8,094 USA 8,327 6,524
6,007 7,331 8,867 Rest of World 7,613 5,243
----------------------- --------------
17,456 18,363 19,727 Total gas sales volumes 18,794 14,471
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
169 233 226 USA 221 154
241 162 215 Rest of World 189 195
----------------------- --------------
410 395 441 Total NGL sales volumes 410 349
======================= ==============
Operating Statistics (continued)
Fourth Third Second
Quarter Quarter Quarter Year
2000 2001 2001 2001 2000
======================= =============
Oil sales volumes (mb/d)
Refined products
295 269 268 UK 266 256
1,077 1,058 1,084 Rest of Europe 1,062 901
1,974 1,863 1,773 USA 1,866 1,783
539 612 612 Rest of World 603 480
----------------------- --------------
3,885 3,802 3,737 Total marketing sales 3,797 3,420
2,878 2,744 2,710 Trading/supply sales 2,409 2,103
----------------------- --------------
6,763 6,546 6,447 Total refined product sales 6,206 5,523
5,442 4,680 4,599 Crude oil 4,473 5,984
----------------------- --------------
12,205 11,226 11,046 Total oil sales 10,679 11,507
======================= ==============
Chemicals production (kte)
833 804 792 UK 3,126 3,137
1,701 2,164 2,278 Rest of Europe 7,925 6,713
2,255 2,299 2,279 USA 8,943 9,874
596 703 699 Rest of World 2,722 2,341
----------------------- --------------
5,385 5,970 6,048 Total production 22,716 22,065
======================= ==============
Exploration and Production
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
================= ==============
4,238 2,641 1,655 Replacement cost operating profit 12,417 14,012
49 - 322 Special items 322 524
413 429 397 Acquisition amortization 1,759 1,174
----------------- --------------
Pro forma operating result
4,700 3,070 2,374 adjusted for special items 14,498 15,710
================= ==============
Results include:
157 86 144 Exploration expense 480 599
----------------- --------------
28.08 23.08 17.72 BP average oil realizations(a) ($/bbl) 22.50 26.63
29.56 25.30 19.41 Brent Oil Price ($/bbl) 24.44 28.44
31.99 26.72 20.31 West Texas Intermediate oil price ($/bbl) 25.89 30.38
29.42 24.05 17.79 Alaska North Slope US West Coast ($/bbl) 23.18 28.35
================= ==============
BP average
3.76 2.49 2.28 natural gas realizations ($/mcf) 3.30 2.91
5.28 2.93 2.43 Henry Hub gas price(b) ($/mmBtu) 4.26 3.90
================= ==============
(a) Crude oil and natural gas liquids.
(b) Henry Hub First of the Month Index.
The pro forma result, adjusted for special items, for the fourth quarter was
$2,374 million, down $2,326 million on a year ago. The special items for the
quarter and the year included an impairment of our partner operated Venezuelan
Lake Maracaibo operations, following a technical reassessment, and charges for
severance, litigation and other costs. The result was significantly affected by
lower oil and gas prices. Average liquids realizations declined by over $10 a
barrel whilst average North American natural gas realizations were down around
$3 per thousand cubic feet. The result benefited from higher volumes and
continued productivity driven cost savings with lifting costs declining versus
the previous quarter and the equivalent quarter last year.
The pro forma result for the year was $14,498 million which was $1,212 million
below 2000. The effect of the oil price decrease of over $4 a barrel was
partially offset by operational improvements. 2001 production was up 5.5% in
line with our growth target. The reserve replacement ratio was 191% with 2.2
billion barrels of oil equivalent booked through extensions, discoveries,
revisions and improved recovery. Replacement exceeded production for the eighth
consecutive year.
Production for the quarter was a record 3.5 mmboe/d, which was up over 3%
compared with a year ago and up over 4% when adjusted for disposal activity.
Liquids production increased by over 4% and benefited from new production from
Girassol in Angola, Northstar in Alaska and Qinghangdao in China as well as
further production increases in Norway and the Gulf of Mexico. Natural gas
production for the quarter was up 1.5% and 3.5% when adjusted for disposals.
This included record production in North America of 4,213 mmcf/d.
In support of continued growth, 2001 capital expenditure, at $8.9 billion
(including $0.3 billion of acquisitions), was nearly $2.5 billion higher than
last year. During the quarter, the Mad Dog development (BP 60.5% and operator),
in the US Gulf of Mexico, was approved. Reserves are estimated at between 200
and 450 mmboe. Also, BP announced that the assets of Chernogorneft have been
returned to Sidanco (BP 11.2%). This completes the restructuring of Sidanco with
its debt substantially repaid, subsidiaries recovered and non-core assets
disposed of. Sidanco is now positioned as a low cost Russian producer.
Gas and Power
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
=================== ==============
183 130 106 Replacement cost operating profit 521 571
- - - Special items - -
- - - Acquisition amortization - -
------------------- --------------
Pro forma operating result
183 130 106 adjusted for special items 521 571
=================== ==============
The pro forma result for the fourth quarter was $106 million compared with $183
million a year ago. The year's result was $521 million compared to $571 million
for 2000.
The result for the quarter is down on a year ago due to lower contributions from
trading and marketing and NGLs. Despite continued growth in gas sales volumes
(up 13% on the fourth quarter of 2000), marketing and trading profit is down due
to less favourable market conditions. NGL volumes have increased but margins are
lower than the exceptional levels of a year ago.
The year's result is down on 2000 due to a lower contribution from NGLs, partly
offset by better results from marketing and trading and Ruhrgas. In 2000 the NGL
business benefited from exceptionally strong margins which have returned to more
normal levels in 2001.
The BP gas and power business in Spain took part in the Spanish Release Gas
programme and emerged with the maximum allowed 25% allocation.
The Tangguh LNG project (BP approximately 50%) in Eastern Indonesia has secured
the first letter of intent for delivery of LNG to GNPower in the Philippines.
BP and Chevron Texaco have announced that they are to build and operate a 22.5
megawatt wind farm at their jointly owned Nerefco oil refinery in the
Netherlands. It will generate electricity equivalent to the consumption of
20,000 households, displacing 20,000 tonnes of carbon dioxide emissions a year.
The scheme will begin operations in the second half of 2002.
Refining and Marketing
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
================= =============
792 1,003 392 Replacement cost operating profit 3,625 3,523
344 112 213 Special items 487 595
185 174 180 Acquisition amortization 718 440
----------------- -------------
Pro forma operating result
1,321 1,289 785 adjusted for special items 4,830 4,558
================= =============
4.46 3.83 2.40 Global Indicator Refining Margin(a)($/bbl) 4.06 4.22
----------------- -------------
Refinery throughputs (mb/d)
391 414 415 UK 364 324
727 646 692 Rest of Europe 663 602
1,584 1,568 1,371 USA 1,526 1,625
383 375 369 Rest of World 376 365
----------------- -------------
3,085 3,003 2,847 Total throughput 2,929 2,916
================= =============
(a) The Global Indicator Refining Margin (GIM) is the average of seven
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 pro forma result for the fourth quarter, after adjusting for special items,
was $785 million, a decrease of $536 million on the same period last year. The
special items comprised Castrol integration costs, costs associated with
restructuring of operations at the Grangemouth, Scotland refinery and additional
severance charges related to former ARCO employees. The lower earnings were
primarily the result of lower US and European refining margins. Refining
throughputs in the quarter declined by 8% compared with the previous year
because of the sale of the Mandan, North Dakota and Salt Lake City, Utah
refineries in the third quarter of 2001 and a turnaround at the Whiting, Indiana
refinery. Marketing volumes declined by 3% in the quarter, reflecting the
slowdown in the world economy. Retail shop sales increased by 14% versus a year
ago, reflecting the impact of new BP Connect stations and worldwide growth in
shop sales. Average retail margins were little changed from a year ago, though
fell away at the end of the quarter.
The result for the year was $4,830 million, an increase of $272 million. The
result reflects the benefit of the ARCO and Burmah Castrol acquisitions and the
consolidation of the fuels business in Europe, and improved marketing volumes,
offset by the effects of a larger refinery maintenance programme in 2001.
For the year marketing volumes increased by 11% (2% excluding portfolio
changes). Retail shop sales grew 23% (7% excluding portfolio changes). We
achieved a unit cash cost reduction of 6% during the year, compared to our
target of 2.5%. Specials for the year also include rationalization costs in the
European Downstream commercial business.
The clean fuels programme was rolled out to the 113th city by the end of the
year. A total of 339 BP Connect stations were open at the end of the year, in
the USA, Europe, Australia and New Zealand. In addition, we have reimaged in
excess of 4,600 retail stations worldwide to incorporate BP's new Helios logo.
In December, BP received approval from the European Commission and German Cartel
office for its acquisition of Veba Oel AG, subject to certain disposals. The
deal, initially for a 51% interest, was completed on 1 February. This completes
one part of the arrangement initially announced in mid 2001.
Chemicals
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
================= =============
(82) 105 (67) Replacement cost operating profit 128 760
222 8 106 Special items 114 276
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
140 113 39 adjusted for special items 242 1,036
================= =============
117(c)114 108(b)Chemicals Indicator Margin(a) ($/te) 108(b) 126(c)
================= =============
(a) The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected
by Chem Systems in their quarterly market analyses, then weighted based
on BP's product portfolio. While it does not cover our entire portfolio,
it includes a broader range of products than our previous indicator.
Amongst the products and businesses covered in the CIM are olefins and
derivatives, aromatics and derivatives, linear alpha olefins, acetic
acid, vinyl acetate monomer and nitriles. Not included are fabrics and
fibres, plastic fabrications, poly alpha olefins, anhydrides,
engineering polymers and carbon fibres, speciality intermediates, and
the remaining parts of the solvents and acetyls businesses.
(b) Provisional. The data for the fourth quarter is based on two months'
actuals and one month of provisional data.
(c) Restated following review of product margins with Chem Systems.
Chemicals' pro forma result for the fourth quarter, after adjusting for special
items, was $39 million, down from $113 million in the third quarter. The decline
was a result of a weaker market environment, which led to lower plant
utilization despite increased volumes from portfolio additions. The fourth
quarter result was a decrease of $101 million compared with a year ago, and
reflected ongoing deterioration in market conditions during 2001.
Chemicals production of 6,048 thousand tonnes in the fourth quarter was just
above the previous quarter, as a result of the Solvay joint venture and organic
growth from our new linear alpha olefins, vinyl acetate monomer and ethyl
acetate plants coming on stream. Production for the year was 22,716 thousand
tonnes, up 3% on 2000 due to new production and acquired assets.
The year's result of $242 million was down $794 million on 2000. This was due to
a weaker trading environment, operational problems in the first half of 2001,
and restructuring to improve the efficiency of underlying operations.
Major restructuring continued throughout the year, aimed at repositioning the
portfolio and lowering the cost base. Special items of $106 million and $114
million for the quarter and year, respectively, include charges for Grangemouth
restructuring and those related to Erdolchemie and Solvay integration costs. In
addition to special items, the fourth quarter and full year results include $36
million and $102 million, respectively, for rationalization costs.
During the quarter we announced further portfolio rationalization, including the
sale of our butyl and isopropyl acetate business in Antwerp, Belgium, the
closure of a high-density polyethylene facility as part of the restructuring at
Grangemouth, Scotland, the idling of one of the polypropylene lines at Chocolate
Bayou, USA and the cessation of alcohol production to concentrate on production
of linear alpha olefins at Pasadena, USA.
Other Businesses and Corporate
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
================= =============
(368) (122) (179) Replacement cost operating loss (556) (1,110)
236 - 73 Special items 73 488
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(132) (122) (106) adjusted for special items (483) (622)
================= =============
Other Businesses and Corporate comprises Finance, BP Solar, the group's coal
asset, aluminium asset, its investments in PetroChina and Sinopec, interest
income and costs relating to corporate activities. Special items for the quarter
comprise additional severance charges mainly related to former ARCO employees.
BP Solar increased its share of the world's solar market to 18% during 2001;
production for the year was 30% higher. At the end of the year, as part of its
global real estate strategy, BP completed the purchase of a new head office
building in London, England. This will permit rationalization of other BP
occupied London properties.
Exceptional Items
4Q 3Q 4Q Year
2000 2001 2001 $ million 2001 2000
================= =============
Profit (loss) on sale of fixed assets and
78 184 (38) businesses and termination of operations 535 220
94 (194) (126) Taxation charge (505) (292)
----------------- -------------
172 (10) (164) Exceptional items after taxation 30 (72)
================= =============
Exceptional items for the fourth quarter include losses on the termination or
sale of chemicals activities and the sale of BP's interest in Kazakhstan
pipeline ventures, largely offset by gains on the sale of our majority interest
in Vysis and the Frontier and Mandan pipeline systems in the USA.
2001 Dividends
BP today announced a fourth quarterly dividend for 2001 of 5.75 cents per
ordinary share. Holders of ordinary shares will receive 4.055 pence per share
and holders of American Depository Receipts (ADRs) $0.345 per ADS share. The
dividend is payable on 18 March 2002 to shareholders on the register on 22
February 2002. Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP
facility in the US Direct Access Plan will receive the dividend in the form of
shares, also on 18 March 2002. The first quarter 2002 results and dividend will
be announced on 30 April 2002.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
'Demand for oil and gas is weaker than last year because of the global
economy, a mild US winter and reduced jet fuel demand following the
events of 11 September. The crude oil market looks broadly balanced for
the first half of 2002, if OPEC's latest round of quota reductions offset
current demand weakness. Additional OPEC oil may be required in the
second half of the year to balance the market if demand improves in line
with an economic recovery.
'In the US gas market, a combination of economic recovery and lower gas
prices may boost demand over the course of 2002 whilst lower drilling
activity could curtail domestic production growth. In the near term, high
levels of gas in storage are likely to maintain the downward pressure on
prices. UK gas fundamentals had improved following cold weather across
Europe during November and December, though prices have eased recently,
reflecting warmer weather.
'Refining margins have been poor so far in 2002 and may remain under
pressure in the near term because of weak oil product demand growth and
relatively high inventories, especially in the key US market. Retail
margins are currently weaker due to intense competitive pressure.
'In Chemicals, the near-term pattern of demand is likely to be unchanged.
'Our strategy and targets are unchanged. BP's achievements in 2001
reaffirm our confidence in continuing to invest in our strong portfolio
of opportunities, while continuing to achieve our targeted returns. This
will result in underlying growth within a tightly controlled financial
framework.'
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under 'Outlook',
focuses on certain trends and general market and economic conditions
and outlook on production levels or rates, prices, margins and currency
exchange rates and, as such, are forward-looking statements that
involve risk and uncertainty that could cause actual results and
developments to differ materially from those expressed or implied by
this discussion. By their nature, trends and outlook on production,
price, margin and currency exchange rates are difficult to forecast
with any precision, and there are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by these forward-looking statements, including
future levels of industry product supply, demand and pricing; currency
exchange rates; political stability and economic growth in relevant
areas of the world; development and use of new technology and
successful partnering; the actions of competitors, natural disasters
and other changes to business conditions. Additional information,
including information on factors which may affect BP's business, is
contained in BP's Annual Report and Accounts for 2000 and in the Annual
Report on Form 20-F filed with the US Securities and Exchange
Commission.
----------------------------------------------------------------------
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The company news service from the London Stock Exchange
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