Final Results Part 1 of 3
BP PLC
10 February 2004
Part 1 of 3
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2003
London 10 February 2004
FOR IMMEDIATE RELEASE
RECORD ANNUAL RESULT, UP 42%; CONTINUING STRONG CASH GENERATION
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 $ million 2003 2002 %
======================= ====================
Replacement cost profit
1,697 2,142 1,819 before exceptional items 9,543 4,698
416 228 211 Special items(a) 444 1,443
522 498 637 Acquisition amortization(b) 2,392 2,574
----------------------- --------------------
Pro forma result adjusted
2,635 2,868 2,667 for special items 12,379 8,715 42
======================= ====================
7.61 8.07 7.07 - per ordinary share (pence) 34.25 25.93 32
11.78 13.00 12.07 - per ordinary share (cents) 55.83 38.90 44
0.71 0.78 0.72 - per ADS (dollars) 3.35 2.33
======================= ====================
• BP's fourth quarter pro forma result, adjusted for special items, was
$2,667 million, compared with $2,635 million a year ago, an increase of
1%. For the year, the result was a record $12,379 million compared with
$8,715 million, up 42%. Replacement cost profit, before exceptional
items, for the fourth quarter and year was $1,819 million and a record
$9,543 million respectively, compared with $1,697 million and
$4,698 million a year ago.
• The fourth quarter overall trading environment was more favourable than
a year ago.
• In Exploration and Production, the impact of higher prices and volumes
in the fourth quarter was offset by higher depreciation, foreign
exchange effects, one-time charges and an increase in the provision for
Unrealized Profit in Stock.
• Reserve replacement in 2003 was 122%. Including equity-accounted
entities and the effect of acquisitions (notably our interest in
TNK-BP) and disposals, additions to year end reserves were 158% of 2003
production.
• On 16 January 2004, we completed the deal to include AAR's 50% interest
in Slavneft into TNK-BP, at a cost of $1.4 billion in cash. On
13 January 2004, we sold our investment in PetroChina for
$1.65 billion.
• Net cash outflow for the quarter was $1,837 million and net cash inflow
for the year was $1,342 million, compared with an inflow of
$711 million and an outflow of $344 million a year ago.
• The pro forma ratio of net debt to net debt plus equity was 24% at the
end of the quarter.
• Return on average capital employed for the quarter and year
respectively, on a pro forma basis adjusted for special items, was 13%
and 16%, compared with 15% and 13% a year ago.
• The quarterly dividend was 6.75 cents per share ($0.405 per ADS). This
compares with 6.25 cents a year ago. For the year the dividend showed
an increase of 8.3%. In sterling terms, the quarterly dividend is
3.674 pence per share compared with 3.815 pence a year ago; for the
year the decrease was 0.8%.
BP Group Chief Executive, Lord Browne, said:
'Our results in 2003 have set a new record. We have delivered a good
result from our existing assets and operations, while building a strong
platform for the future. Our focus is now on delivering the growth in
free cash flow of which we believe our portfolio is capable. We intend
to restart our share buyback programme this quarter, subject to market
conditions.'
The pro forma result is replacement cost profit before exceptional items
excluding acquisition amortization. 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 BP's current 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 impairment charges and
restructuring costs in Exploration and Production, Veba integration
costs in Refining and Marketing and a provision to cover future rental
payments on surplus property in Other businesses and corporate and tax
restructuring benefits.
(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 fourth quarter 2003
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
Summary Fourth Quarter Results
Exploration and Production's fourth quarter result was broadly in line with a
year ago, after reflecting the effects of higher oil and gas prices and a full
quarter of TNK-BP, offset by higher depreciation, foreign exchange effects,
one-time charges and an increase in the provision for Unrealized Profit in
Stock.
In Gas, Power and Renewables, the result reflects improvement in marketing and
trading, including LNG, partly offset by a lower result for the natural gas
liquids business.
The Refining and Marketing result increased 23% compared with a year ago due to
improved refining margins and marketing margins, particularly retail margins in
the USA and Europe, with some offset from higher gas fuel costs.
The Petrochemicals result reflects operational difficulties in the nitriles
business, the strength of the euro on our European cost base and non-routine
charges, partly offset by a slight improvement in margins.
Interest expense for the quarter was $227 million compared with $213 million for
the prior quarter. The increase reflects the inclusion of TNK-BP for a full
quarter, partly offset by lower debt buy-back costs and an increase in
capitalized interest.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, and adjusted for special items, was 33.5% for the quarter compared with
34.0% a year ago. The special items in the quarter include tax restructuring
benefits of $150 million.
Capital expenditure was $4.7 billion for the quarter; there were no
acquisitions. Disposal proceeds for the quarter were $1.4 billion.
Net cash outflow was $1,837 million compared with an inflow of $711 million a
year ago, due to lower cash flow from operating activities and higher tax
payments, partly offset by higher disposal proceeds. The reduced cash flow from
operating activities reflects the payments of $1.6 billion to group pension
schemes.
Net debt at the end of the quarter was $20.2 billion. The pro forma ratio of net
debt to net debt plus equity was 24%.
---------
The commentaries above and following are based on the pro forma replacement cost
operating results, before exceptional items, adjusted for special items.
To reflect BP's increased focus on chemical products derived from oil and gas,
the Chemicals segment has been renamed Petrochemicals.
BP's share of the result of the TNK-BP joint venture has been included within
Exploration and Production with effect from 29 August. TNK-BP operational and
financial information has been estimated.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 4Q 2003 --------------- adjusted for
special items special items
-------------------
4Q 3Q 4Q Special Acq. Reported Year
2002 2003 2003 Items* Amort+ Earnings $ million 2003 2002
=========================================== ==============
Exploration and
3,666 3,813 3,687 323 426 2,938 Production 15,977 12,005
Gas, Power
72 98 77 - - 77 and Renewables 472 384
Refining and
587 978 722 146 211 365 Marketing 3,689 2,081
139 124 35 - - 35 Petrochemicals 606 765
Other businesses
(146) (320) (221) 74 - (295) and corporate (840) (515)
------------------------------------------- --------------
RC operating
4,318 4,693 4,300 543 637 3,120 profit 19,904 14,720
------------------------------------------- --------------
(317) (213) (227) - - (227)Interest expense (851) (1,264)
(1,360)(1,569)(1,365) (332) - (1,033)Taxation (6,504) (4,673)
(6) (43) (41) - - (41)MSI (170) (68)
------------------------------------------- --------------
RC profit before
2,635 2,868 2,667 211 637 1,819 exceptional items 12,379 8,715
------------------------------------------- --------------
(15)Exceptional items before tax
84 Taxation on exceptional items
-----
1,888 RC profit after exceptional items
84 Stock holding gains
-----
1,972 HC profit
=====
* The special items refer to non-recurring charges and credits. The special
items for the fourth quarter comprise impairment charges and restructuring
costs in Exploration and Production, Veba integration costs in Refining
and Marketing and a provision to cover future rental payments on surplus
property in Other businesses and corporate and tax restructuring benefits.
+ Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions. The fourth quarter 2003
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
2002 2003 2003 2003 2002
======================= ==============
Replacement cost
3,181 3,844 3,120 operating profit ($m) 16,413 10,246
----------------------- --------------
Replacement cost profit
1,697 2,142 1,819 before exceptional items ($m) 9,543 4,698
----------------------- --------------
Profit after exceptional items ($m)
825 2,310 1,888 Replacement cost 10,251 5,741
651 2,394 1,972 Historical cost 10,267 6,845
----------------------- --------------
Per ordinary share (cents)
Pro forma result
11.78 13.00 12.07 adjusted for special items 55.83 38.90
RC profit before
7.58 9.71 8.23 exceptional items 43.03 20.97
2.92 10.85 8.93 HC profit after exceptional items 46.30 30.55
Per ADS (cents)
Pro forma result
70.68 78.00 72.42 adjusted for special items 334.98 233.40
RC profit before
45.48 58.26 49.38 exceptional items 258.18 125.82
17.52 65.10 53.58 HC profit after exceptional items 277.80 183.30
----------------------- --------------
Exploration and Production
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= ==============
3,248 3,520 2,938 Replacement cost operating profit 13,937 9,206
99 - 323 Special items 474 1,019
319 293 426 Acquisition amortization 1,566 1,780
----------------- --------------
Pro forma operating result
3,666 3,813 3,687 adjusted for special items 15,977 12,005
================= ==============
Results include:
179 136 193 Exploration expense 542 644
Of which:
124 75 129 Exploration expenditure written off 297 385
----------------- --------------
Production (Net of Royalties)
1,787 1,852 2,248 Crude oil (mb/d) 1,911 1,771
262 202 206 Natural gas liquids (mb/d) 210 247
2,049 2,054 2,454 Total liquids (mb/d)(a) 2,121 2,018
8,936 8,401 8,600 Natural gas (mmcf/d) 8,613 8,707
3,590 3,502 3,936 Total hydrocarbons (mboe/d)(b) 3,606 3,519
================= ==============
Average realizations
26.22 27.72 28.18 Crude oil ($/bbl) 28.23 24.06
14.62 19.39 20.15 Natural gas liquids ($/bbl) 19.26 12.85
24.78 26.79 27.30 Total liquids ($/bbl) 27.25 22.69
2.87 3.08 3.18 Natural gas ($/mcf) 3.39 2.46
21.03 22.58 23.15 Total hydrocarbons ($/bbl) 23.69 18.88
================= ==============
Average oil marker prices
($/bbl)
26.88 28.38 29.43 Brent 28.83 25.03
28.31 30.19 31.15 West Texas Intermediate 31.06 26.14
26.86 28.83 29.43 Alaska North Slope US West Coast 29.59 24.77
================= ==============
3.99 4.97 4.58 Henry Hub gas price ($/mmbtu)(c) 5.37 3.22
UK Gas - National
19.09 15.08 27.30 Balancing Point (p/therm) 20.28 15.78
================= ==============
(a) Crude oil and natural gas liquids.
(b) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(c) Henry Hub First of the Month Index.
Exploration and Production
The pro forma result for the fourth quarter was $3,687 million, slightly ahead
of the result for the fourth quarter of 2002 when adjusted for special charges
of $323 million. Acquisition amortization of $426 million includes accelerated
amortization of $121 million. The special items and the accelerated acquisition
amortization relate to impairment of the Miller field ($133 million) in the UK
following a decision not to proceed with waterflood and gas import options and
four assets in the Gulf of Mexico Shelf ($296 million) following technical
reassessments and re-evaluation of future investment options, and special
restructuring charges of $15 million in respect of ongoing restructuring in the
UK and North America.
The quarter saw increased production and higher oil and gas prices. Liquids
realizations increased by $2.52/bbl, and natural gas realizations by $0.31/mcf
compared with a year ago. Higher depreciation, foreign exchange effects,
one-time charges in the USA and an increase in the provision for Unrealized
Profit in Stock (UPIS) offset the impact of higher volumes and prices in the
quarter. The charge of $57 million in the quarter for UPIS, which removes the
upstream margin from downstream inventories, compares with a credit of $49
million in the equivalent quarter of last year.
The full year result at $15,977 million, up $3,972 million on a year ago,
reflects the impact of increased production, higher oil and gas prices and a
reduction in exploration expense partly offset by an increase in the
depreciation charge.
During the quarter we had further exploration success in Angola on Block 31 with
the Marte discovery and in Block 15 with the Tchichumba discovery and in
Deepwater Gulf of Mexico with the Tubular Bells and the Puma discoveries.
Progress continues in our new profit centres. During the fourth quarter, the
deepwater developments of Jasmim and Xikomba in Angola and Na Kika in the Gulf
of Mexico started production. Other deepwater developments in the Gulf of Mexico
are progressing well with the Holstein and Mad Dog spars now on the Gulf Coast
for final construction and installation. Hull construction on Atlantis has
commenced in South Korea. In Azerbaijan, construction is well advanced on the
Azeri project and the BTC pipeline is on track for start-up in the first half of
2005. The Cannonball gas development in Trinidad has been approved and in Angola
we have commenced the awarding of major contracts on the Greater Plutonio
deepwater project.
Production for the quarter was up by more than 9% at 3,936 mboe/d compared with
the fourth quarter of 2002. This reflects a full quarter's production volumes
from our interest in TNK-BP partly offset by a reduction from divestments. Total
production for the year was 3,606 mboe/d, an increase of over 2% on last year
and reflects the offsetting impacts of divestments and the inclusion of TNK-BP
volumes from 29 August.
The reserve replacement ratio for the year was 122% with 1,342 billion barrels
of oil equivalent booked through discoveries, extensions, revisions and improved
recovery. Reserve replacement has exceeded production for the eleventh
consecutive year. Including equity-accounted entities and the effect of
acquisitions and disposals, additions to year end reserves were 158% of 2003
production.
During the fourth quarter we completed our 2003 programme of portfolio upgrading
with the sale of our 50% interest in the In Salah gas project in Algeria with
proceeds received on 23 December. This brought divestment proceeds for the year
to $4.9 billion.
On 16 January, we announced the completion of the transaction in which Alfa
Group and Access-Renova's 50% interest in Slavneft was transferred into TNK-BP.
Gas, Power and Renewables
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
====================== ==============
72 98 77 Replacement cost operating profit 472 354
- - - Special items - 30
- - - Acquisition amortization - -
---------------------- --------------
Pro forma operating result
72 98 77 adjusted for special items 472 384
====================== ==============
Gas sales volumes (mmcf/d)
2,715 2,174 2,565 UK 2,631 2,372
442 362 511 Rest of Europe 441 399
10,723 11,808 12,121 USA 11,528 9,315
10,659 11,133 13,138 Rest of World 11,669 9,535
----------------------- --------------
24,539 25,477 28,335 Total gas sales volumes 26,269 21,621
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
262 188 206 USA 164 196
244 163 209 Rest of World 182 214
----------------------- --------------
506 351 415 Total NGL sales volumes 346 410
======================= ==============
Gas, Power and Renewables
The pro forma result for the fourth quarter was $77 million compared with $72
million a year ago. The year's result, after adjusting for special items, was
$472 million compared to $384 million for 2002.
The fourth quarter result is up due to an improved marketing and trading result,
including LNG, which more than offset a lower result in the natural gas liquids
business. The full year result reflects a strong performance from marketing and
trading, including LNG, partly offset by a lower result for the natural gas
liquids business, restructuring charges in Solar and the absence of a
contribution from Ruhrgas following the sale of our interest last year.
The increased marketing and trading results for the quarter and the year were
driven by higher gas sales volumes in North America and a strong performance
from the global LNG business. Fourth quarter gas sales volumes were up 15% and
equity LNG sales were up 36%. During the quarter BP and Sonatrach announced a
joint venture that has secured long term capacity rights to the Isle of Grain
import regasification terminal in the South East of England, which will enable
the two companies to source and then supply 500 mmscfd of LNG into the UK market
from 2005. BP announced that it proposes to build an LNG terminal in New Jersey,
USA, which is scheduled to come into service around 2008. BP and BPMIGAS of
Indonesia have signed a Heads of Agreement with Sempra LNG Corporation for a
20-year supply of LNG from Indonesia to markets in the USA and Mexico. BP has
acquired a 35% interest in SK Power (previously a subsidiary of SK Corporation
of South Korea), which has begun construction of a power station in Gwangyang,
South Korea. The Tangguh LNG project was selected earlier as the supplier to the
power station.
The result for the natural gas liquids business for the fourth quarter and year
is down due to high gas prices relative to liquids prices in North America,
which has led to lower sales volumes.
Refining and Marketing
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
======================= =============
(36) 455 365 Replacement cost operating profit 2,340 872
420 318 146 Special items 523 415
203 205 211 Acquisition amortization 826 794
----------------------- -------------
Pro forma operating result
587 978 722 adjusted for special items 3,689 2,081
======================= =============
Refinery throughputs (mb/d)
392 405 389 UK 397 389
959 909 873 Rest of Europe 932 918
1,439 1,406 1,374 USA 1,386 1,439
367 366 378 Rest of World 382 357
----------------------- -------------
3,157 3,086 3,014 Total throughput 3,097 3,103
======================= =============
96.1 96.2 94.9 Refining availability(a)(%) 95.5 96.1
======================= =============
Oil sales volumes (mb/d)
Refined products
269 270 257 UK 271 253
1,541 1,293 1,295 Rest of Europe 1,316 1,467
1,875 1,828 1,788 USA 1,797 1,874
611 657 681 Rest of World 648 586
----------------------- --------------
4,296 4,048 4,021 Total marketing sales 4,032 4,180
2,064 2,647 2,350 Trading/supply sales 2,691 2,383
----------------------- --------------
6,360 6,695 6,371 Total refined product sales 6,723 6,563
5,314 5,316 4,504 Crude oil 5,007 4,671
----------------------- --------------
11,674 12,011 10,875 Total oil sales 11,730 11,234
======================= ==============
Global Indicator Refining Margin(b)
($/bbl)
2.19 2.47 2.21 NWE 2.62 1.04
2.98 5.61 3.53 USGC 4.71 2.36
4.09 6.39 2.89 Midwest 4.54 3.30
3.95 9.04 6.09 USWC 7.06 4.34
1.41 1.27 2.20 Singapore 1.77 0.57
2.76 4.59 3.14 BP Average 3.88 2.11
======================= ==============
(a) Refining availability is the weighted average percentage of the period
that refinery units are available for processing, after accounting for
downtime such as turnarounds.
(b) 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.
Refining and Marketing
The pro forma result for the fourth quarter, adjusted for special items, was
$722 million. This compares with $587 million a year ago, an increase of $135
million. The net special items of $146 million for the quarter consisted of Veba
integration costs of $156 million and a credit of $10 million arising from the
reversal of restructuring provisions. This represents the final charge in
respect of the Veba integration.
The result for the year of $3,689 million is up $1,608 million compared to last
year, an increase of 77%. The net special items for the year of $523 million
comprised a $246 million charge resulting from a reassessment of our
environmental remediation provisions, Veba integration costs of $287 million and
a credit of $10 million arising from the reversal of restructuring provisions.
The results for the fourth quarter and year reflect improved refining margins
despite higher gas fuel costs, and higher marketing margins, particularly retail
margins in the USA and Europe. Improved operating performance in the marketing
businesses also contributed to the results.
Refining throughputs for the quarter were 4.5% lower than the same period last
year due to disposals, with refining availability at 94.9% compared with 96.1% a
year ago. Full year refining throughputs were flat compared with 2002, while
availability for the year was 95.5% compared with 96.1%. Marketing volumes for
the quarter were 6% lower than the same period last year and 4% lower for the
year, as expected, due to divestments.
The roll-out of our new premium retail fuels, Ultimate gasoline and diesel,
continued this quarter. Ultimate is now available in the UK, the USA, Greece,
Spain, Portugal and Australia.
During the quarter we reached agreement in principle for H&R WASAG to purchase
BP's European Special Products business, including the Neuhof base oil refinery
in Hamburg, Germany.
Petrochemicals
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
======================= =============
104 81 35 Replacement cost operating profit 568 515
35 43 - Special items 38 250
- - - Acquisition amortization - -
----------------------- -------------
Pro forma operating result
139 124 35 adjusted for special items 606 765
======================= =============
108 109 114(b)Chemicals Indicator Margin(a)($/te) 113(b) 104
======================= =============
Petrochemicals production (kte)
698 771 832 UK 3,186 3,221
2,679 2,724 2,790 Rest of Europe 10,958 10,526
2,447 2,563 2,466 USA 10,068 10,201
785 982 1,065 Rest of World 3,731 3,040
----------------------- --------------
6,609 7,040 7,153 Total production 27,943 26,988
======================= ==============
(a) The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected
by Nexant (formerly Chem Systems) in their quarterly market analyses,
then weighted based on BP's product portfolio. It does not cover our
entire portfolio of products, and consequently is only indicative rather
than representative of the margins achieved by BP in any particular
period. Amongst the products and businesses covered in the CIM are
olefins and derivatives, the aromatics and derivatives, linear alpha-
olefins (LAOs), acetic acid, vinyl acetate monomers and nitriles. Not
included are fabrics and fibres, plastic fabrications, poly alpha-
olefins (PAOs), anhydrides, 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.
Petrochemicals
Petrochemicals' pro forma result for the fourth quarter was $35 million, down
from $124 million in the third quarter. A slight improvement in margins was more
than offset by several factors including operational difficulties in the
nitriles business, the strength of the euro on our European cost base and a
number of non-routine charges.
There were no special items in the fourth quarter. Special items for the year
were $38 million.
The year's result of $606 million was down $159 million. In addition to the
factors affecting the fourth quarter, the decrease reflected prolonged margin
weakness, primarily in our European polymers businesses, and a lower result from
SARS affected businesses in Asia during the first half year.
Petrochemicals production of 7,153 thousand tonnes in the fourth quarter was up
113 thousand tonnes on the previous quarter. Production for the year was 27,943
thousand tonnes, up 3.5% on 2002, establishing a new record for the business.
The increase was due to improved asset utilization across the business as well
as new production capacity and increased ownership in our Asian associated
undertakings.
During the fourth quarter, our portfolio management actions continued. We sold
our interest in AG International Chemical Company, a purified isophthalic acid
associated undertaking in Japan. Engineering contracts were awarded for a new
300 thousand-tonne acetic acid plant to be built in Taiwan as part of the
Formosa BP Chemicals Corporation joint venture.
Other Businesses and Corporate
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= =============
(207) (310) (295) Replacement cost operating loss (904) (701)
61 (10) 74 Special items 64 186
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(146) (320) (221) adjusted for special items (840) (515)
================= =============
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. BP sold its interest in PetroChina for
$1.65 billion on 13 January 2004. The special item for the quarter is a
provision for future rental payments on surplus leasehold property. Although not
classifed as special items, the result also includes charges of $59 million in
respect of additional provisions for litigation and $41 million for BP
Foundation funding and a foreign exchange credit of $42 million.
Exceptional Items
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= =============
Profit (loss) on sale of fixed assets and
(893) 172 (15) businesses or termination of operations 831 1,168
21 (4) 84 Taxation (charge) credit (123) (125)
----------------- -------------
(872) 168 69 Exceptional items after taxation 708 1,043
================= =============
Exceptional items for the fourth quarter include a gain on the sale of our
interest in PT Kaltim Prima Coal, more than offset by losses on various minor
Exploration and Production and Refining and Marketing disposals.
2003 Dividends
4Q 3Q 4Q Year
2002 2003 2003 2003 2002
================= =============
Dividends per ordinary share
6.25 6.50 6.75 cents 26.00 24.00
3.815 3.857 3.674 pence 15.517 15.638
37.5 39.0 40.5 Dividends per ADS (cents) 156.0 144.0
----------------------- --------------
BP today announced a fourth quarterly dividend for 2003 of 6.75 cents per
ordinary share. Holders of ordinary shares will receive 3.674 pence per share
and holders of American Depositary Receipts (ADRs) $0.405 per ADS share. The
dividend is payable on 15 March to shareholders on the register on 20 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 15 March. The first quarter 2004 results and dividend will be announced on 27
April 2004.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
'The world economy recovered in the fourth quarter. Growth was robust in
the USA and in Asia, particularly China, but Europe continued to lag. The
USA and Asia are expected to continue growing above trend in 2004 but
European growth is expected to remain below trend, with the exception of
the UK.
'Crude oil prices continued to strengthen in the fourth quarter, adding
around $1 per barrel compared with the third quarter to average $29.43
per barrel (Dated Brent). Prices remained strong in January, averaging
$31.32 (Dated Brent) in the face of low US crude oil inventories and cold
weather in the eastern USA. Underlying oil demand appears to be strong on
the back of global economic recovery and the ongoing economic boom in
China, and has been growing faster than oil supply outside OPEC. OPEC
fourth quarter production is thought to have increased modestly, despite
the 900,000 barrels per day quota cut that became effective on 1
November. We expect that future oil prices will largely depend on OPEC's
ability to realign production in line with seasonal requirements.
'US natural gas prices continued to trade between residual fuel oil and
distillate parity in the fourth quarter, with the Henry Hub First of the
Month Index averaging $4.58/mmbtu, 39 cents per mmbtu below the third
quarter. Cold January weather raised prices to above $6/mmbtu on average,
but they have since eased. Working gas inventories are above last year's
and 5-year average levels. We expect the path of gas prices will depend
on weather during the balance of winter and movements in oil prices.
'Refining margins in the fourth quarter weakened relative to the third
quarter in the face of crude market tightness and recovering product
inventories, but remained above historic average levels. Margins have
been mostly firm so far in 2004 on the back of strong global oil demand
growth and cold US weather. Demand strength should continue to be a
constructive factor for refining margins. Retail margins were lower in
the fourth quarter relative to the third quarter.
'Petrochemical margins in the fourth quarter remained under pressure from
high feedstock costs and this has carried over into the first quarter of
2004. However, margins and sales are expected to improve in 2004,
reflecting modest increases in industry utilization rates.
'Capital expenditure for 2003 was $14.0 billion, excluding acquisitions,
and is projected to be approximately $13.5 billion in 2004. Production
capacity is expected to grow to more than 4 mmboe/d in 2004, an increase
of more than 10% from actual 2003 output. After adjusting for the impact
of portfolio changes, this is consistent with the lower end of the
guidance range for 2004 capacity of 3.6 to 3.7 mmboe/d given in February
2003. The company intends to restart its share buyback programme this
quarter, subject to market conditions. Purchases may be increased,
decreased or discontinued at any time without prior notice.'
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under 'Outlook',
contains forward looking statements particularly those regarding BP's
asset portfolio and changes in it, capital expenditure, costs, demand,
future performance, gearing, growth and other trend projections,
margins, prices, production, sales, share repurchases and the timing of
pending transactions. Forward looking statements by their nature
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; political stability
and economic growth in relevant areas of the world; changes in
governmental regulations; exchange rate fluctuations; development and
use of new technology and successful commercial relationships; the
actions of competitors; natural disasters and other changes in business
conditions; prolonged adverse weather conditions; and wars and acts of
terrorism or sabotage. For more information you should refer to our
Annual Report and Accounts 2002 and our 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 Exchange
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