Annual report

An overview of the key activities, events and results in 2016, together with commentary on BP’s performance and our priorities as we move forward

Introductions

Carl-Henric Svanberg, chairman

“We have shown great resilience and character: we returned to profit and maintained our dividend. We had a good year in a tough environment. We have set a new strategic direction for BP – and we have a great team carrying it out.”

Bob Dudley, group chief executive

“Since 2010, BP’s story has been one of recovery, rebuilding and resilience. Now we are looking ahead with a spirit of purpose and invention. From 2017, you can expect a story of growth.”
 

The changing world of energy

The global energy landscape is changing. Traditional centres of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns.

  • World economy anticipated to almost double in next 20 years.
  • World demand for energy expected to grow by around 30%.
  • Market gradually readjusting, as both supply and demand respond to lower oil prices.
  • Diverse mix of fuels and technologies needed to meet demand and climate change concerns.

The three scenarios reflect different assumptions about the pace of the energy transition due to factors such as policy and consumer behaviour.

Energy consumption - billion tonnes of oil equivalenta

changing-energy-mix-1-bp-sr

The sum of the fuel shares may not equal 100% due to rounding.

How we run our business

From the deep sea to the desert, from rigs to retail, we deliver energy products and services to people around the world. We provide customers with fuel for transport, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. 

Our diverse portfolio is balanced across businesses, resource types and geographies. Having upstream and downstream businesses, along with well-established trading capabilities, helps to mitigate the impact of lower oil and gas prices. Our geographic reach gives us access to growing markets and new resources, as well as diversifying exposure to geopolitical events.

Our strategy

Segment performance

Bernard Looney, chief executive, Upstream

“We are building a business that is safer, more modern and efficient, and delivering real value and tangible growth – to 2021 and beyond.”

Tufan Erginbilgic, chief executive, Downstream

“We are building a safer business and growing our earnings potential with more still to come.”

Case studies from 2016

Examples of our performance in action throughout the year.

From Europe to Australia – find out about our progress across the world in 2016.

Key downloads

Our key reports include information about our financial and operating performance, sustainability performance and also global energy trends and projections.

Information for shareholders

This document constitutes the Annual Report and Accounts in accordance with UK requirements and the Annual Report on Form 20-F in accordance with the US Securities Exchange Act of 1934, for BP p.l.c. for the year ended 31 December 2016. A cross reference to Form 20-F requirements is included on page 289.

This document contains the Strategic report on the inside front cover and pages 2-50 and the Directors’ report on pages 51-79, 111-112, 187-214 and 239-287. The Strategic report and the Directors’ report together include the management report required by DTR 4.1 of the UK Financial Conduct Authority’s Disclosure Guidance and Transparency Rules. The Directors’ remuneration report is on pages 80-110. The consolidated financial statements of the group are on pages 113-186 and the corresponding reports of the auditor are on pages 114-121. The parent company financial statements of BP p.l.c. are on pages 184-238. 

The Directors’ statements (comprising the Statement of directors’ responsibilities; Risk management and internal control; Going concern; Longer-term viability; and Fair balanced and understandable), the independent auditor’s report on the annual report and accounts to the members of BP p.l.c., the parent company financial statements of BP p.l.c. and corresponding auditor’s report, a non-GAAP measure of operating cash flow excluding the Gulf of Mexico oil spill payments in the group chief executive’s letter on page 6 and in the tables on pages 18 and 22 do not form part of BP’s Annual Report on Form 20-F as filed with the SEC. 

BP Annual Report and Form 20-F 2016 may be downloaded from bp.com/annualreport. To obtain a hard printed copy of BP’s complete audited financial statements, free of charge, UK based investors should contact BP Distribution Services by clicking the link above or calling +44 (0)870 241 3269 or by emailing bpdistributionservices@bp.com. If based in the US or Canada investors should contact Issuer Direct by calling +1 888 301 2505 or by emailing bpreports@issuerdirect.com. 

No material on the BP website, other than the items identified as BP Annual Report and Form 20-F 2016, forms any part of this document. References in this document to other documents on the BP website, such as BP Energy Outlook, BP Sustainability Report, BP Statistical Review of World Energy and BP Technology Outlook are included as an aid to their location and are not incorporated by reference into this document. 

BP p.l.c. is the parent company of the BP group of companies. The company was incorporated in 1909 in England and Wales and changed its name to BP p.l.c. in 2001. Where we refer to the company, we mean BP p.l.c. Unless otherwise stated, the text does not distinguish between the activities and operations of the parent company and those of its subsidiaries*, and information in this document reflects 100% of the assets and operations of the company and its subsidiaries that were consolidated at the date or for the periods indicated, including non-controlling interests. 

BP’s primary share listing is the London Stock Exchange. Ordinary shares are also traded on the Frankfurt Stock Exchange in Germany and, in the US, the company’s securities are traded on the New York Stock Exchange (NYSE) in the form of ADSs (see page 272 for more details). 

The term ‘shareholder’ in this report means, unless the context otherwise requires, investors in the equity capital of BP p.l.c., both direct and indirect. As BP shares, in the form of ADSs, are listed on the NYSE, an Annual Report on Form 20-F is filed with the SEC. Ordinary shares are ordinary fully paid shares in BP p.l.c. of 25 cents each. Preference shares are cumulative first preference shares and cumulative second preference shares in BP p.l.c. of £1 each.

Legal notice in relation to the material on this page

The material on this BP Annual Report 2016 webpage (the Material) relates to the year ended 31 December 2016 and is provided for general information only. The Material does not (i) form part of the BP Annual Report and Form 20-F 2016; or (ii) contain sufficient information to allow as full an understanding of the results and the state of affairs of BP as BP Annual Report and Form 20-F 2016. As such this Material should not be relied upon or used as the basis for making voting or investment decisions without consulting the full BP Annual Report and Form 20-F 2016 and other more complete or up-to-date sources of information. Information relating to BP’s results for current and prior periods do not necessarily reflect future trends, nor do they provide indicators of results for like periods. This Material is not intended to be and shall not be deemed to be an invitation or inducement to invest in or otherwise deal in any securities of BP p.l.c. or in any other investment, nor to provide or constitute any advice or recommendation in connection with any investment decision, nor to constitute an offer to provide services in any jurisdiction in which BP p.l.c. is not permitted to do so under any applicable law or regulation.

Cautionary statement

The Material may contain certain forward-looking statements, forecasts or projections with respect to the financial condition, results of operations and businesses of BP and certain of the plans and objectives of BP with respect to these items. 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 materially from those expressed in such statements depending on a variety of factors.

Please refer to the Cautionary statement on page 269 of the full BP Annual Report and Form 20-F 2016 for further information on forward-looking statements.