Final Results - Part 1
BP PLC
11 February 2003
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2002
London 11 February 2003
FOR IMMEDIATE RELEASE
STRONG CASH GENERATION - 175% RESERVE REPLACEMENT
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 $ million 2002 2001 %
======================= ====================
Replacement cost profit
706 766 1,697 before exceptional items 4,698 8,291
461 556 416 Special items(a) 1,443 683
604 977 522 Acquisition amortization(b) 2,574 2,585
----------------------- --------------------
Pro forma result adjusted
1,771 2,299 2,635 for special items 8,715 11,559 (25)
======================= ====================
5.50 6.60 7.61 - per ordinary share (pence) 25.93 35.77 (28)
7.91 10.26 11.78 - per ordinary share (cents) 38.90 51.51 (24)
0.47 0.62 0.71 - per ADS (dollars) 2.33 3.09
======================= ====================
o BP's fourth quarter pro forma result, adjusted for special items, was
$2,635 million, compared with $1,771 million a year ago, an increase of
49%. For the year, the result was $8,715 million compared with
$11,559 million, down 25%. Replacement cost profit, before exceptional
items, for the fourth quarter and year was $1,697 million and
$4,698 million respectively, compared with $706 million and
$8,291 million a year ago.
o The fourth quarter trading environment was more favourable than a year
ago for Exploration and Production with higher oil and gas
realizations, though less favourable for Refining and Marketing where
adverse crude price differentials depressed BP's refining margins
relative to the industry marker. The trading environment for the year
reflected significantly less favourable gas prices and refining
margins.
o Underlying performance improvements were $1.2 billion before tax for
the year. Hydrocarbon production increased by 1.8% and 2.9% for the
fourth quarter and year respectively. The increase for the year
reflected 4.5% growth in liquids production and a 0.9% increase for
gas. The reserve replacement ratio for 2002 was 175%. Production growth
and reserve replacement represent a strong competitive position.
o Net special and exceptional items after tax for the fourth quarter and
for the year were charges of $1,288 million and $400 million
respectively.
o Return on average capital employed for the year, on a pro forma basis
adjusted for special items, was 13% compared with 19% in 2001.
o Quarterly dividend increased to 6.25 cents per share ($0.375 per
ADS). This compares with 5.75 cents a year ago. For the year the
dividend showed an increase of 9.1%. In sterling terms, the quarterly
dividend is 3.815 pence per share compared with 4.055 pence a year ago;
for the year the increase was 1.3%. The company did not repurchase any
shares during the quarter. In 2002, 100 million of its own shares were
purchased for cancellation at a cost of $750 million.
o BP has determined to repurchase $2 billion of its own shares, subject
to market conditions and continuing AGM support.
BP Group Chief Executive, Lord Browne, said:
'The year's trading environment showed significant deterioration, with
gas prices lower and refining margins depressed. The effect of this
was partly offset by underlying performance improvements. Our reserve
replacement ratio places us in a strong position for the future. The
net debt ratio was 28%, below the mid-point of our target range. The
decision to repurchase shares reflects our confidence in our present
financial condition and future cash flows, and our desire to
give shareholders increased cash returns as the situation warrants.'
The pro forma result, adjusted for special items, has been derived from the
group'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 BP'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 include an asset write-down in
Exploration and Production, integration and restructuring costs and an
impairment charge in Refining and Marketing, integration and
restructuring costs in Chemicals, provisions to cover future rental
payments on surplus leasehold property and environmental charges in
Other businesses and corporate, and a bond redemption charge.
(b) Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions. The third quarter 2002
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
Summary Quarterly Results
Exploration and Production's pro forma fourth quarter result, adjusted for
special items, was up 54% on a year ago as a result of higher average
realizations, record production and reduced unit lifting costs. There were six
new discoveries and seven new field start-ups.
In Gas, Power and Renewables, the result reflected the absence of the Ruhrgas
contribution, partly offset by higher volumes and margins in marketing and
trading.
The Refining and Marketing result decreased significantly, reflecting lower US
West Coast refining margins and lower US retail margins than a year ago. BP's
achieved refining margins suffered from adverse crude price differentials versus
the industry marker.
The Chemicals result was down on the prior quarter's, due to margin pressure
from high feedstock costs, particularly in Europe, and weaker demand.
Interest expense for the quarter was $317 million after adjusting for bond
redemption charges, compared to $300 million for the prior quarter. The fourth
quarter charge included $42 million resulting from revaluation of environmental
and other provisions at a lower interest rate. This was partly offset by lower
average interest rates on debt.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, and adjusted for special items, was 34.0% compared to 35.6% a year ago.
Capital expenditure, excluding acquisitions, was $4.1 billion for the quarter.
Disposal proceeds were $1.0 billion.
Net cash inflow was $711 million, compared to an outflow of $983 million a year
ago. The increase reflects higher operating cash flow, lower tax payments and
lower acquisition spending.
Net debt at the end of the year was $20.3 billion. The pro forma ratio of net
debt to net debt plus equity was 28%.
---------
The financial information for 2001 has been restated to reflect (i) the adoption
by the group of FRS 19 'Deferred Tax' with effect from 1 January 2002; and (ii)
the transfer of the solar, renewables and alternative fuels activities from
Other businesses and corporate to Gas and Power on 1 January 2002. To reflect
this transfer, Gas and Power has been renamed Gas, Power and Renewables from the
same date. See Note 1 on page 20 for further information.
The commentaries above and following are based on the pro forma replacement cost
operating results, before exceptional items, adjusted for special items.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 4Q 2002 --------------- adjusted for
special items special items
-------------------
4Q 3Q 4Q Special Acq. Reported Year
2001 2002 2002 Items* Amort+ Earnings $ million 2002 2001
=========================================== ==============
Exploration and
2,374 3,050 3,666 99 319 3,248 Production 12,005 14,498
Gas, Power
102 87 72 - - 72 and Renewables 384 488
Refining and
785 522 587 420 203 (36) Marketing 2,081 4,830
39 272 139 35 - 104 Chemicals 765 242
Other businesses
(102) (116) (146) 61 - (207) and corporate (515) (450)
------------------------------------------- --------------
RC operating
3,198 3,815 4,318 615 522 3,181 profit 14,720 19,608
------------------------------------------- --------------
(414) (300) (317) 15 - (332) Interest expense (1,264) (1,608)
(990)(1,213)(1,360) (214) - (1,146) Taxation (4,673) (6,380)
(23) (3) (6) - - (6) MSI (68) (61)
------------------------------------------- --------------
RC profit before
1,771 2,299 2,635 416 522 1,697 exceptional items 8,715 11,559
------------------------------------------- --------------
(893)Exceptional items before tax
21 Taxation on exceptional items
-----
825 RC profit after exceptional items
(174)Stock holding losses
-----
651 HC profit
=====
* The special items refer to non-recurring charges and credits. The special
items for the fourth quarter include an asset write-down in Exploration
and Production, integration and restructuring costs and an impairment
charge in Refining and Marketing, integration and restructuring costs in
Chemicals, provisions to cover future rental payments on surplus leasehold
property and environmental charges in Other businesses and corporate,
and a bond redemption charge.
+ Acquisition amortization is depreciation and amortization relating to the
fixed asset revaluation adjustments and goodwill consequent upon the ARCO
and Burmah Castrol acquisitions. The third quarter 2002 includes
accelerated depreciation of the revaluation adjustment in respect of the
impairment of former ARCO assets.
Operating Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ==============
Replacement cost
1,880 1,757 3,181 operating profit ($m) 10,246 16,027
----------------------- --------------
Replacement cost profit
706 766 1,697 before exceptional items ($m) 4,698 8,291
----------------------- --------------
Profit after exceptional items ($m)
694 2,535 825 Replacement cost 5,741 8,456
(603) 2,840 651 Historical cost 6,845 6,556
----------------------- --------------
Per ordinary share (cents)
Pro forma result
7.91 10.26 11.78 adjusted for special items 38.90 51.51
RC profit before
3.17 3.42 7.58 exceptional items 20.97 36.95
(2.67) 12.67 2.92 HC profit after exceptional items 30.55 29.21
Per ADS (cents)
Pro forma result
47.46 61.56 70.68 adjusted for special items 233.40 309.06
RC profit before
19.02 20.52 45.48 exceptional items 125.82 221.70
(16.02) 76.02 17.52 HC profit after exceptional items 183.30 175.26
----------------------- --------------
Exploration and Production
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= ==============
1,641 1,572 3,248 Replacement cost operating profit 9,206 12,361
322 703 99 Special items 1,019 322
411 775 319 Acquisition amortization 1,780 1,815
----------------- --------------
Pro forma operating result
2,374 3,050 3,666 adjusted for special items 12,005 14,498
================= ==============
Results include:
144 119 179 Exploration expense 644 480
Of which:
85 55 124 Exploration expenditure written off 385 238
----------------- --------------
Crude oil and natural gas
liquids production (mb/d)
(Net of Royalties)
500 414 472 UK 462 485
116 107 96 Rest of Europe 104 100
772 754 756 USA 765 744
629 708 725 Rest of World 687 602
----------------- --------------
2,017 1,983 2,049 Total liquids production 2,018 1,931
================= ==============
Natural gas production(a)
(mmcf/d)(Net of Royalties)
1,715 1,240 1,752 UK 1,555 1,713
160 131 140 Rest of Europe 147 147
3,621 3,450 3,360 USA 3,483 3,554
3,268 3,661 3,684 Rest of World 3,522 3,218
----------------- --------------
8,764 8,482 8,936 Total natural gas production 8,707 8,632
================= ==============
Average liquids realizations(b)
($/bbl)
18.53 26.26 26.54 UK 24.44 23.55
17.05 22.94 23.28 USA 21.34 21.87
17.70 24.43 25.06 Rest of World 22.65 21.90
17.72 24.40 24.78 BP Average 22.69 22.50
================= ==============
Average oil marker prices
($/bbl)
19.41 26.91 26.88 Brent 25.03 24.44
20.31 28.26 28.31 West Texas Intermediate 26.14 25.89
17.79 27.26 26.86 Alaska North Slope US West Coast 24.77 23.18
================= ==============
Average natural gas realizations
($/mcf)
3.15 2.58 2.88 UK 2.78 3.07
2.06 2.34 3.31 USA 2.63 3.99
1.99 1.99 2.40 Rest of World 2.10 2.52
2.28 2.25 2.87 BP Average 2.46 3.30
----------------- --------------
2.43 3.16 3.99 Henry Hub gas price(c) ($/mmBtu) 3.22 4.26
UK Gas - National
22.32 12.74 19.09 Balancing Point (p/therm) 15.78 22.21
================= ==============
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(b) Crude oil and natural gas liquids.
(c) Henry Hub First of the Month Index.
Exploration and Production
The pro forma result for the fourth quarter, adjusted for special items, was
$3,666 million, up $1,292 million on a year ago. The special items for the
quarter are $94 million for the write-off of our Gas to Liquids demonstration
plant in Alaska and $5 million restructuring charges.
The result for the quarter benefited from higher average liquids realizations,
up $7.06 on a year ago. There was a benefit from a credit of $49 million for
Unrealized Profit in Stock (UPIS) to remove the upstream margin from downstream
inventories following a decrease in the ANS oil price. This compares to a credit
of $119 million in the equivalent quarter of last year. Average natural gas
realizations have increased by $0.59 per thousand cubic feet compared with the
fourth quarter of 2001. North American natural gas realizations have improved
reflecting the strong North American gas market.
Fourth quarter production of 3,590 mboe/d was a record and benefited from seven
new field start-ups. Increased production was partly offset by the effects of
Gulf of Mexico hurricanes, shut-ins in Venezuela and an earthquake in Alaska.
The full year result reflects production growth of 4.5% for liquids and 0.9% for
gas, a 6% decrease in unit lifting costs and slightly higher liquids
realizations, which were more than offset by significantly lower natural gas
realizations.
The reserve replacement ratio for the year was 175% with 2,016 billion barrels
of oil equivalent booked through discoveries, extensions, revisions and improved
recovery. Reserve replacement has exceeded production for ten consecutive years
at an average ratio of 145% over that period.
In support of growth, 2002 capital expenditure at $9.7 billion (including $434
million of acquisitions) was 9% higher than 2001. During the quarter the
development of Atlantis in the Gulf of Mexico and an expansion of the
development at In Amenas in Algeria were approved and there were a total of six
discoveries in the Gulf of Mexico, Angola and Egypt.
In December, the sale of the Arbroath, Montrose and Arkwright fields in the
North Sea to Paladin Resources was announced. In January, we announced the sale
of our stake in the North Sea Forties oil field, together with a package of
shallow-water assets in the Gulf of Mexico, to Apache. Also in January, we
completed the sale of 20% of our upstream interests in Trinidad to Repsol. We
also announced a transaction with Amerada Hess, under which BP will exchange its
interest in block A-18 of the Malaysia Thailand Joint Development Area for
Amerada Hess's interests in Colombia. In February, we announced the sale of a
12.5% share in the Tangguh liquefied natural gas project in Indonesia to China
National Offshore Oil Corporation.
Gas, Power and Renewables
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
====================== ==============
102 57 72 Replacement cost operating profit 354 488
- 30 - Special items 30 -
- - - Acquisition amortization - -
---------------------- --------------
Pro forma operating result
102 87 72 adjusted for special items 384 488
====================== ==============
Gas sales volumes (mmcf/d)
2,534 1,809 2,715 UK 2,372 2,641
232 353 442 Rest of Europe 399 213
8,094 9,332 10,723 USA 9,315 8,327
8,867 9,556 10,659 Rest of World 9,535 7,613
----------------------- --------------
19,727 21,050 24,539 Total gas sales volumes 21,621 18,794
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
226 178 262 USA 208 221
215 185 244 Rest of World 202 189
----------------------- --------------
441 363 506 Total NGL sales volumes 410 410
======================= ==============
Gas, Power and Renewables
The pro forma result for the fourth quarter was $72 million, compared with $102
million a year ago and $87 million during the third quarter. The year's result,
after adjusting for special items, was $384 million compared to $488 million for
2001.
The fourth quarter result is down versus the prior year due to the absence of
contributions from Ruhrgas, partly offset by higher volumes and margins in
marketing and trading. The sale of the Ruhrgas shareholding was effective 1
August 2002.
The full year result is down on 2001 due to a lower contribution from Ruhrgas
and a weaker marketing and trading environment, partly offset by better
performance in the NGL business and increased gas sales volumes, up by 15%.
During the fourth quarter, BP announced a restructuring of its Solar operation
and the withdrawal from Thin Film manufacturing. We also announced the start-up
of our 22.5 megawatt wind farm at the Nerefco oil refinery in the Netherlands
and the first commercial sale of green electricity into the Dutch national power
grid. The refinery and the wind farm are jointly (BP 69%) owned with
ChevronTexaco. In the fourth quarter BP took delivery of the British Trader, the
first of three new LNG ships.
Refining and Marketing
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
======================= =============
379 237 (36) Replacement cost operating profit 872 3,573
213 83 420 Special items 415 487
193 202 203 Acquisition amortization 794 770
----------------------- -------------
Pro forma operating result
785 522 587 adjusted for special items 2,081 4,830
======================= =============
Refinery throughputs (mb/d)
415 394 392 UK 389 364
692 956 959 Rest of Europe 918 663
1,371 1,455 1,439 USA 1,439 1,526
369 349 367 Rest of World 357 376
----------------------- -------------
2,847 3,154 3,157 Total throughput 3,103 2,929
======================= =============
Oil sales volumes (mb/d)
Refined products
268 258 269 UK 253 266
1,084 1,604 1,541 Rest of Europe 1,467 1,062
1,773 1,847 1,875 USA 1,874 1,866
612 613 611 Rest of World 586 603
----------------------- --------------
3,737 4,322 4,296 Total marketing sales 4,180 3,797
2,710 2,589 2,064 Trading/supply sales 2,383 2,409
----------------------- --------------
6,447 6,911 6,360 Total refined product sales 6,563 6,206
4,599 3,648 5,314 Crude oil 4,671 4,473
----------------------- --------------
11,046 10,559 11,674 Total oil sales 11,234 10,679
======================= ==============
Global Indicator Refining Margin(a)
($/bbl)
1.53 1.28 2.19 NWE 1.04 2.24
1.79 1.82 2.98 USGC 2.36 4.84
2.63 3.27 4.09 Midwest 3.30 6.05
6.25 3.54 3.95 USWC 4.34 8.60
1.20 0.47 1.41 Singapore 0.57 0.90
2.40 1.98 2.76 BP Average 2.11 4.06
======================= ==============
(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.
Refining and Marketing
The pro forma result, adjusted for special items, for the fourth quarter was
$587 million, a decrease of $198 million on the same period last year. The
special items include $261 million Veba integration costs, $116 million
restructuring costs, a $35 million write-down of retail assets in Venezuela and
$8 million costs associated with the Olympic pipeline incident. The lower result
was primarily due to lower US retail and US West Coast refining margins, which
more than offset the contribution from Veba. Refining throughputs increased by
11% compared with a year ago due to Veba and a smaller maintenance programme in
the USA. Marketing volumes increased by 15%, but were down slightly excluding
Veba. Shop sales increased by 66%, 7% excluding Veba.
The result for the year was $2,081 million, a decrease of $2,749 million from a
year ago. The result reflects the impact of a halving of worldwide refining
margins with a further adverse effect from price differentials in BP's crude
slate, and lower US retail margins, with some offset from Veba. Refining
throughputs increased by 6% over the previous year and marketing volumes by 10%,
primarily due to Veba. Excluding Veba, marketing volumes were slightly down.
Retail shop sales grew 60% due to Veba and the increased number of BP Connect
stations, 10% excluding Veba.
A total of 486 BP Connect stations were open in the USA, Europe, Australia and
New Zealand at year end. In addition, BP has reimaged over 10,000 retail
stations worldwide to BP's new Helios logo.
In December, BP completed the sale of its interest in Colonial Pipeline in the
USA. BP also announced that it had signed an agreement to sell 494 service
stations to PKN Orlen. On 10 February, BP announced that it had agreed to sell a
45% stake in the Bayernoil Refinery, an 18% stake in the Trans Alpine Pipeline
(TAL), 247 retail stations in Germany, 55 stations in Hungary and 11 in Slovakia
to OMV AG for €377 million in cash and assumption of debt. The sale is
conditional on regulatory approvals and the nonexercise of certain pre-emption
rights. The sale of the German assets enables BP to fully comply with the
conditions imposed by the German Federal Cartel Office (FCO) when it approved
BP's acquisition of Veba Oil in April 2002.
Chemicals
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
======================= =============
(67) 132 104 Replacement cost operating profit 515 128
106 140 35 Special items 250 114
- - - Acquisition amortization - -
----------------------- -------------
Pro forma operating result
39 272 139 adjusted for special items 765 242
======================= =============
112 120 100(b)Chemicals Indicator Margin(a)($/te) 102(b) 109
======================= =============
Chemicals production (kte)
792 858 698 UK 3,221 3,126
2,278 2,669 2,679 Rest of Europe 10,526 7,925
2,279 2,570 2,447 USA 10,201 8,943
699 783 785 Rest of World 3,040 2,722
----------------------- --------------
6,048 6,880 6,609 Total production 26,988 22,716
======================= ==============
(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 broad range of products. 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.
Chemicals
Chemicals' pro forma result for the fourth quarter, after adjusting for special
items, was $139 million, down from $272 million in the third quarter. The
decline was the result of margin compression due to higher feedstock costs,
particularly in Europe, and weaker demand. The fourth quarter result was an
increase of $100 million over a year ago, reflecting higher production and lower
costs than in 2001, despite a weaker environment.
Chemicals production of 6,609 thousand tonnes in the fourth quarter was down 271
thousand tonnes on the previous quarter, as demand weakened. Production for the
year was 26,988 thousand tonnes, up 19%, as a result of new production from
existing and acquired assets.
The year's result of $765 million was an increase of $523 million, in an overall
trading environment which was similar. This improvement was driven by
significantly lower costs and increased production.
Major restructuring continued throughout the year, aimed at repositioning the
portfolio and lowering the cost base. The fourth quarter and full year results
include $14 million and $39 million respectively for restructuring costs not
classified as special. Special items for the fourth quarter include $17 million
Solvay integration costs and $18 million for restructuring.
During the fourth quarter, we announced the intention to exit from a
polyethylene joint venture in Bataan, Philippines and the closure of an older
118 thousand tonnes per annum high-density polyethylene plant at Deer Park,
Texas. Also during the quarter, we sold one of the remaining Burmah Castrol
chemicals businesses and have since announced the sale of the other two. We also
announced the formation of an acetic acid joint venture in Taiwan and plans to
expand our olefins production at Chocolate Bayou, Texas.
Other Businesses and Corporate
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= =============
(175) (241) (207) Replacement cost operating loss (701) (523)
73 125 61 Special items 186 73
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(102) (116) (146) adjusted for special items (515) (450)
================= =============
Other businesses and corporate comprises Finance, the group's coal asset and
aluminium asset, its investments in PetroChina and Sinopec, interest income and
costs relating to corporate activities. The special items for the quarter
include provision of $15 million for future rentals on surplus leasehold
property and a charge of $46 million for environmental liabilities.
Exceptional Items
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= =============
Profit (loss) on sale of fixed assets and
(38)1,794 (893) businesses or termination of operations 1,168 535
26 (25) 21 Taxation credit (charge) (125) (370)
----------------- -------------
(12)1,769 (872) Exceptional items after taxation 1,043 165
================= =============
Exceptional items for the fourth quarter include provisions for losses on
disposal of certain upstream interests announced since the year end and profit
on disposal of BP's interest in the Colonial pipeline in the USA.
2002 Dividends
4Q 3Q 4Q Year
2001 2002 2002 2002 2001
================= ==============
Dividends per ordinary share
5.75 6.00 6.25 cents 24.00 22.00
4.055 3.897 3.815 pence 15.638 15.436
34.5 36.0 37.5 Dividends per ADS (cents) 144.0 132.0
----------------------- --------------
BP today announced a fourth quarterly dividend for 2002 of 6.25 cents per
ordinary share. Holders of ordinary shares will receive 3.815 pence per share
and holders of American Depositary Receipts (ADRs) $0.375 per ADS share. The
dividend is payable on 24 March to shareholders on the register on 28 February.
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 24 March.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
'The world economy slowed during the fourth quarter with weaker growth in
both the USA and much of Continental Europe. Evidence of sustained
recovery is limited and confidence fragile.
'Brent crude oil prices have recently exceeded $30 per barrel compared to
an average of $27 in the fourth quarter. Venezuelan oil production has
declined sharply as a result of the general strike that commenced in
early December. Other OPEC producers have begun to raise production to
replace some of this lost output. Crude oil inventories have fallen,
especially in the USA, and are below normal seasonal levels. The prospect
for crude oil prices is particularly uncertain, and will be affected by
such issues as the timing and extent of developments in Venezuela and
Iraq and global economic growth.
'US natural gas prices have strengthened further as demand has firmed
seasonally, oil prices have increased and production has been weak.
Prices are expected to remain at a premium to residual fuel oil through
the winter heating season.
'Refining margins remain volatile. Crude oil prices have risen and
product inventories are adequate. Although product demand is improving,
margins remain susceptible to market uncertainties.
'Retail margins weakened towards the end of the fourth quarter,
especially in the USA. Margins have since shown some signs of recovery,
although they remain vulnerable to further increases in oil product
prices.
'The Chemicals business environment has remained weak, with demand soft
and margins under pressure from high feedstock prices.
'Capital expenditure for 2002 was $13.5 billion, excluding acquisitions,
and is projected to be in the range of $14-14.5 billion in 2003.
'Our strategy remains to create value from a distinctive set of
opportunities, biased towards the upstream, which, through a disciplined
approach to long term investment growth, can produce returns which are
both secure and highly competitive.'
----------------------------------------------------------------------
The foregoing discussion, in particular certain statements under
'Outlook', focuses on certain trends and general market and economic
conditions and outlook on production levels or rates, prices, margins,
debt, levels of annual investment 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, debt, profitability
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 specific factors
accompanying such statements; 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; prolonged
adverse weather conditions; and wars and acts of terrorism and
sabotage. Additional information, including information on factors
which may affect BP's business, is contained in BP's Annual Report and
Accounts and in the Annual Report on Form 20-F filed with the US
Securities and Exchange Commission.
----------------------------------------------------------------------
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