Net debt reduced for seventh quarter in a row to $30.6bn end 2021
2021 ROACE 13.3%
Delivering distributions – $4.15bn total buyback from 2021 surplus cash flow
Continued strategic momentum – seven major projects; accelerated EV strategy; growing offshore wind portfolio
Underlying results and cash flow
Underlying replacement cost profit* for the quarter was $4.1 billion, compared with $3.3 billion for the previous quarter. This result was driven by higher oil and gas realizations, higher upstream* production volumes and stronger refining commercial optimization, partly offset by a significantly lower oil trading result and an average contribution from gas marketing and trading and the impact of higher energy costs.
Building a track-record of delivery against our disciplined financial frame
For the fourth quarter bp has announced a dividend of 5.46 cents per ordinary share payable in March 2022.
Net debt* fell to $30.6 billion at the end of the fourth quarter – a reduction of $8.3 billion compared to fourth quarter 2020.
Capital expenditure* in the fourth quarter and full year was $3.6 billion and $12.8 billion respectively. bp now expects capital expenditure of $14-15 billion in 2022 and continues to expect a range of $14-16 billion per annum through 2025.
During 2021 bp generated surplus cash flow* of $6.3 billion.
Investing for the future – transforming to an Integrated Energy Company
In a separate announcement, bp has today provided an update on the significant progress made in executing its transformation to an IEC since outlining its new strategy. Since announcing third quarter results:
In resilient and focused hydrocarbons bp announced the start-up of Platina, offshore Angola – the seventh major project* start-up during the year. In addition, bp has taken further steps to drive portfolio competitiveness supporting the proposed acquisition of Lundin Energy’s oil and gas business by Aker BP.
2021 shows bp doing what we said we would – performing while transforming. We’ve strengthened the balance sheet and grown returns. We’re delivering distributions to shareholders with $4.15 billion of buybacks announced and the dividend increased. And we’re investing for the future. We’ve made strong progress in our transformation to an integrated energy company: focusing and high grading our hydrocarbons business, growing in convenience and mobility and building with discipline a low carbon energy business – now with over 5GW in offshore wind projects – and significant opportunities in hydrogen.Bernard Looney,chief executive officer
Transition growth businesses
We are aiming to increase the proportion of capital expenditure in transition growth businesses to more than 40% by 2025 and around 50% by 2030. Driven by five transition growth engines (see left), our aim is to deliver earnings of $9-10 billion from these businesses by 2030.
Bioenergy, including biofuels, biogas and sustainable aviation fuel-bp anticipates investing in five major biofuels projects, including the conversion of up to two refineries, and growing biogas in the US, Europe and the UK.
Convenience and EV charging-With a focus on fast and on-the-go charging – almost half bp’s current network is fast or ultra-fast – and on fleets, bp aims to increase the energy sold across its EV charging networks 100-fold from 2019 to 2030.
Renewables-bp is on track for its target of having developed 20GW of renewables to FID by 2025 and aims for 50GW by 2030. bp remains confident of achieving 8-10% levered returns for these investments.
Hydrogen-Where we have built a significant portfolio of options in advantaged markets worldwide with potential capacity of between 0.7-1.3 million tonnes a year. We expect these to also enable additional value creation through integration with renewables and CCS.
Accelerating the greening of bp
The strategic progress and the growing confidence in the opportunities of the energy transition are allowing us to raise our ambition to becoming net zero for our sales, as well as for our operations and production – making bp unique among our peers.
- Aim 1: bp now aims to reduce operational emissions by 50% (from 2019 baseline) by 2030, compared with an aim of 30-35% previously.
- Aim 3: bp is now aiming for net zero lifecycle emissions for the energy products it sells by 2050 or sooner – a significant advance from the previous aim of a 50% reduction in their lifecycle emissions intensity. Additionally, the aim’s scope is expanding to include physically traded energy products. And for 2030, bp is aiming for a 15-20% reduction in the lifecycle carbon intensity of these products – the range within which we believe we can deliver.
“We enter 2022 with growing confidence. The past two years have reinforced our belief in the opportunities that the energy transition presents – to create value for our shareholders and to get to net zero.”
