SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the period ended 05 April 2006
BP p.l.c.
(Translation of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No |X|
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press release
April 5, 2006
BP First Quarter 2006 Trading Update
This trading update is aimed at providing estimates regarding revenue and
trading conditions experienced by BP in the first quarter ended March 31, 2006,
and estimates of identified non-operating items expected to be included in that
quarter's result. The first quarter margin, price, realisation, cost, production
and other data referred to below are currently provisional, some being drawn
from figures applicable to the first month or so of the quarter. All such data
are subject to change and may differ quite considerably from the final numbers
that will be reported on April 25, 2006. In particular, data is not available at
this time that would allow an estimate of potential IFRS fair value accounting
gains or charges, or of any potential consolidation adjustment. This trading
update is produced in order to provide greater disclosure to investors and
potential investors of currently expected outcomes, and to ensure that they all
receive equal access to the same information at the same time.
Note: Following the launch of BP Alternative Energy in November 2005 and the
sale of Innovene in December 2005, certain assets have been transferred between
segments to reflect the changed operational structure of the Group. These
transfers are effective from 1 January 2006. Financial information for 2005 and
2004 has been restated to reflect these transfers. Full details are available at
www.bp.com/investors
Exploration and Production
Marker Prices
1Q'05 2Q'05 3Q'05 4Q'05 1Q'06
Brent Dated ($/bbl) 47.62 51.63 61.63 56.87 61.79
WTI ($/bbl) 49.88 53.08 63.18 60.01 63.29
ANS USWC ($/bbl) 45.07 50.10 60.91 57.89 60.89
US gas Henry Hub first of month
index ($/mmbtu) 6.27 6.74 8.53 13.00 9.01
UK gas price - National Balance
Point (p/therm) 37.96 30.15 29.26 65.30 70.00
Urals (NWE - cif) ($/bbl) 42.54 48.08 57.13 53.23 58.15
Russian domestic Oil ($/bbl) 19.14 27.39 36.60 31.73 34.41
Overall BP production in 1Q'06 is expected to be around 4,025 thousand barrels
of oil equivalent per day (mboed). Excluding volumes from TNK-BP operations,
production in 1Q'06 is expected to be around 3,035 mboed, versus 2,995 mboed in
4Q'05. This increase primarily reflects the progressive return of production
impacted by Hurricanes Katrina and Rita.
BP's net share of production from TNK-BP is expected to be approximately 990
mboed, versus 1,027 mboed in 4Q'05. This reduction reflects the impact of
disposals and of extremely cold weather in 1Q'06. The $270m contribution in
respect of gains on disposals in TNK-BP in 4Q'05 is not expected to recur in
1Q'06.
Refining and Marketing
Refining Indicator Margins ($/bbl)
1Q'05 2Q'05 3Q'05 4Q'05 1Q'06
USA
- West Coast 12.88 14.53 17.57 8.90 11.22
- Gulf Coast 7.30 9.37 17.12 11.64 10.86
- Midwest 3.84 7.45 13.40 7.91 4.89
North West Europe 2.84 5.68 7.78 5.51 2.88
Singapore 4.98 6.30 6.52 4.42 3.54
Refining Global Indicator Margin* 5.94 8.42 12.35 7.60 6.28
* The Refining Global Indicator Margin (GIM) is a generic indicator. Actual
margins realised by BP may vary significantly due to a variety of factors,
including specific refinery configurations, crude slate and operating practices.
The 1Q'06 average Global Indicator Margin (GIM) was lower than the GIM for
4Q'05. Marketing margins in 1Q'06 are also expected to be lower than those for
4Q'05.
Compared to 4Q'05, the result in 1Q'06 is expected to benefit from strong supply
optimisation, a lower level of refinery turnarounds (other than at Texas City)
and seasonally lower costs. Together these factors are expected to offset lower
refining and marketing margins.
BP's Texas City Refinery remained shut-down to the end of 1Q'06. A phased
recommissioning began at the end of March.
4Q'05 included a charge of $467m in respect of restructuring and efficiency
programs. Charges in respect of these ongoing programs in 1Q'06 are not expected
to be material.
Gas, Power and Renewables
Margins in the GP&R business are expected to be significantly higher than in
4Q'05 (excluding that quarter's $289m of IFRS fair value accounting gains), as a
result of strong North American trading margins and seasonality.
Other Businesses and Corporate
The charge in Other Businesses and Corporate is expected to be in line with
guidance given in our February '06 investor webcast for an annual charge of
$900m +/- $200m.
Identified Non-Operating Items (NOIs)
Non-operating items in 1Q'06 are expected to amount to an overall credit of
around $100m.
Interest Expense
The total consolidated interest charge is expected to be around $100m.
Tax Rate
The effective tax rate for the quarter is expected to be around 35%. The
expected 2006 full year effective tax rate remains at around 39%, as indicated
in our February 2006 Strategy Review.
Gearing
Gearing for the quarter is expected to be comparable to the year-end 2005 level
of 17%.
Distributions to Shareholders
During the quarter the company bought back 349 million shares for a total
consideration of $4.0 bn. Shares outstanding at March 29, 2006, excluding
treasury shares, were 20,336 million. As in previous quarters, BP has entered
into an arrangement that allows the share buy back programme to be continued
during the closed period which commenced at close of business in London on March
31, 2006.
The 1Q'06 dividend of 9.375 cents per share announced at the time of our 4Q'05
results was paid in March. The dividend to be paid in 2Q'06 will be announced on
April 25, 2006 in conjunction with our 1Q'06 Stock Exchange Announcement.
Rules of Thumb
Important note: The rules of thumb shown below were provided with BP's strategy
update on February 7, 2006 and were intended to give directional indicators of
the impact of changes in the trading environment relative to that of 2005 on
BP's 2006 full year pre-tax results. These rules of thumb are approximate.
Especially over short periods, changes in prices, margins, differentials,
seasonal demand patterns, and other factors can be material. Particular
differences may arise due to higher government shares of Exploration and
Production revenues in some jurisdictions at current price levels, as well as
from variations between the refining Global Indicator Margin (GIM) and BP's
realised refining margins due to crude price levels and differentials, product
price movements and other factors. The GIM rule of thumb reflects the
sensitivity to the overall group to changes in refining margins. Many other
factors will affect BP's earnings quarter by quarter. Actual results in
individual quarters may therefore differ significantly from the estimates
implied by the application of these rules of thumb.
2006 Operating Environment Rules of Thumb: impact on replacement cost pre-tax
operating profit per year of changes relative to 2005 environment
Full Year
Oil Price - Brent +/- $1/bbl $500m
Gas - Henry Hub +/- $ 0.10/mcf $80m
Refining - GIM +/- $ 1/bbl $950m
This trading update contains forward looking statements, particularly those
regarding oil and gas production; BP's net share of production from TNK-BP;
refinery and marketing margins; the R&M result; the level of charges in respect
of restructuring and efficiency programs; the charge in Other Businesses &
Corporate; margins in the GP&R business; the amount of non-operating items; the
total consolidated interest charge; the effective tax rate; and gearing. By
their nature, forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that will or may occur in the
future. Actual results may differ from those expressed in such statements,
depending on a variety of factors, including the timing of bringing new fields
on stream; future levels of industry product supply, demand and pricing;
operational problems; general economic conditions; political stability and
economic growth in relevant areas of the world; changes in laws and governmental
regulations; exchange rate fluctuations; development and use of new technology;
changes in public expectations and other changes in business conditions; the
actions of competitors; natural disasters and adverse weather conditions; wars
and acts of terrorism or sabotage; and other factors discussed elsewhere in this
trading update and in BP Annual Report and Accounts 2005.
- ENDS -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP p.l.c.
(Registrant)
Dated: 05 April 2006 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary