BP Plc Q3 FY2024 earnings call

• Operations: Upstream production, refining availability, EV charging growth, and biogas expansion were noted. Year-to-date upstream production up 3%, liquids up 5%; refining availability >96%; EV charging had 80% Y/Y growth and hit 1 TWh sold; 23 kbd biogas supply online with 8 plants in 4Q.
• Portfolio Management: Stopped/paused 24 projects to high-grade portfolio; divesting non-competitive assets; progress on Kaskida since FID in summer, with Tiber expected next year; accessing new resources in Iraq, Azerbaijan, Abu Dhabi.
• Acquisitions/Divestments: Completed Bunge and Lightsource bp transactions; increased divestment guidance for 2024; focusing on integrating acquired businesses like EDF, GETEC, etc.
• Cost Savings: Targeting over $0.5B in cost savings in 2025, aiming for at least $2B by end 2026, with progress on options nearly doubling the target.

Upstream: Year-to-date upstream production was around 3% up, including liquids production up 5%; plant reliability in upstream was more than 95%. Refining: Refining availability was more than 96% for the quarter. EV Charging: 80% year-on-year growth, cumulatively hit 1 terawatt hour of electrons sold. Biogas: 23 kbd of biogas supply online, with eight plants commissioning in 4Q. Trading: Oil trading was weak in the quarter, impacting downstream earnings.

• Buyback: Announced $1.75B share buyback for 3Q and reconfirmed 4Q, with balance sheet strength supporting. Upstream: Confident in growing cash flow from upstream through the decade with significant optionality in oil and gas resources. Divestments: Increased divestment guidance for 2024, with focus on continuing divestments in 2025, targeting $25B divestments over 5 years.

• Market Volatility: Impact on trading performance, especially oil trading due to low VIX and market conditions. Balance Sheet: Debt considerations and impact on capital allocation, including hybrid bonds and refinancing. Operational Challenges: Refining margin issues in continental Europe, particularly Germany, and TARs affecting results.

Q: On CapEx flexibility and divestments?

A: No flex between $70-80 oil on upstream; can decapitalize pipelines with infra funds; divestments include Egypt and Trinidad, with 75 kbd removed from 200 kbd target.

Q: On Kirkuk project and balance sheet buyback?

A: Kirkuk has 20B+ barrels yet to produce, terms competitive; balance sheet strong, buyback based on 80% surplus cash flow with flexibility.

Q: On cash flow and trading contribution?

A: Trading year-to-date on track for average, contributing ~4% similar to past years, with confidence in sustaining at current level.

Q: On GTA Phase 1 and cost savings breakdown?

A: GTA making good progress, with equipment in field and pre-commissioning LNG; cost savings with 4 levers, line of sight to over $500M in 2025, targeting $2B by end 2026.

Q: On Paleogene opportunities and other business/corporate?

A: Guadalupe appraisal ongoing, tieback to Tiber or Kaskida possible; other business/corporate movement due to interest income and favorable FX.