Annual report

An overview of the key activities, events and results in 2015, together with commentary on BP’s performance and our priorities as we move forward

Performance summary

Operating cash flow (2014: $32.8 billion)
3.3 million
3.3 million
3.3 million
Barrels of oil equivalent per day(a) (2014: 3.2 million)
Dividends paid to shareholders
Loss attributable to BP shareholders (2014: $3.8 billion)
Gearing (net debt ratio) (2014: 16.7%)
Tier 1 safety process events (2014: 28)
(a) Includes BP’s share of Rosneft (2015 and 2014).



“We are prepared and well positioned to respond to the volatile environment as we move through 2016.”

Carl-Henric Svanberg, chairman

Group chief executive

“By focusing on our distinctive areas of strength, BP has become an increasingly agile business, able to respond quickly to changing conditions.”

Bob Dudley, group chief executive

Growing demand for energy

We believe a diverse mix of fuels and technologies is needed to meet growing energy demand, while supporting the transition to a lower-carbon economy. These are reasons why our portfolio includes oil, gas and renewables.

Over the next few decades, we think oil and natural gas are likely to continue to play a significant part in meeting demand for energy.

The world economy is likely to more than double from 2014 to 2035, largely driven by rising incomes in the emerging economies and a projected population increase of 1.5 billion.

We expect world demand for energy to increase by as much as 34% between 2014 and 2035.

Energy consumption by fuel (billion tonnes of oil equivalent)

Today around 32% of energy consumed comes from oil, 30% from coal, and 24% from gas - so 86% from fossil fuels in total. Hydroelectricity accounts for 7%, nuclear for 4% and other renewables for just 3%.
Source: BP Energy Outlook

Our strategy

We prioritize value over volume by actively managing a high-value upstream and downstream portfolio and investing where we can apply the distinctive strengths, capabilities and technologies we have built up over decades. 

We are pursuing our strategy by setting clear priorities, actively managing a quality portfolio and employing our distinctive capabilities.

Our strategy in action

Improving reliability

Safe, reliable and compliant operations

Periodic breaks in production for planned maintenance are essential to keep our operations running safely and reliably, but BP’s production in the UK North Sea had suffered from unplanned shutdowns from equipment failure on ageing infrastructure. 

In 2013 we took action to address these unplanned shut-downs through the development and implementation of reliability improvement plans. These focused on three key areas: having spare equipment available for parts that are particularly vulnerable; investing in getting our basic maintenance activities right to prevent failures in the first place; and learning from the equipment failures, by identifying the root cause and sharing those learnings across the organization. 

We are rolling these plans out across all five UK offshore assets and as a result, our plant reliability has improved from 70% in 2014 to more than 84% in 2015. We expect that this will not only improve production and revenue, but also extend the life of our fields.

Capturing value

Disciplined financial choices

Continued declines in oil prices have put upstream earnings under pressure across the industry. In this challenging environment we are focused on maximizing the value of our assets, improving the quality of investment and maintaining capital discipline.

As part of this, we are reviewing our projects to find opportunities to improve their value. Our Thunder Horse South Expansion project in the Gulf of Mexico is designed to sustain and grow quality deepwater oil production from our existing field. We have been able to simplify our plans and reduce drilling costs by examining the project’s scope and costs and working with BP suppliers to use more of their standard offerings that take advantage of current deflation in price. Adopting newer and proven subsea metering technology has allowed the team to reduce complexity and simplify execution.

At the same time we’ve further optimized the drilling sequence to increase the production forecast for this project by 10% without changing the planned start-up date. As a result the expected development cost per barrel is now more than 25% lower than before.

Unlocking energy potential

Grow our exploration position

BP has invested in Egypt for half a century. And in recent years, it has been a key location for BP discoveries. Our ongoing investment and exploration activities are helping to unlock energy potential in the area. 

In March we made a gas discovery 6,400 metres below sea level in the North Damietta offshore area. We are working with the Egyptian government to accelerate the development of the Atoll discovery. 

The discovery is in line to become our next major project in Egypt after completion of our West Nile Delta project.

Optimizing our assets

Focus on high-value upstream assets

The Caspian Sea is one of the world’s leading hydrocarbon provinces and we have been the major presence in development of Azerbaijan’s offshore oil and gas fields since our office in Baku opened in 1992. 

The country’s gas production is dominated by one of the world’s largest fields, Shah Deniz – BP’s biggest discovery since Prudhoe Bay in Alaska in 1968. 

Developing Shah Deniz Stage 1 involved drilling some of BP’s most difficult wells – at depths of around 6,000 metres below sea level and under high pressures. And in only seven years, we also drilled the deepest exploration well in the Caspian to date, built the platform and onshore terminal and laid the 700km South Caucasus pipeline through Azerbaijan and Georgia to the Turkish border. 

Our technical expertise and ongoing maintenance of the facilities has helped Shah Deniz provide a consistently secure and reliable supply of gas to the region and in 2015 we achieved almost 100% plant reliability. 

This has helped to increase production from the existing facilities. Shah Deniz Stage 1 has reliably delivered plateau production throughout 2015, with 9.9 billion standard cubic metres of gas and about 18.3 million barrels of condensate produced.

Adapting rapidly

Competitive project execution

To enable us to respond rapidly to the unique and highly competitive operating environment of the US onshore exploration and production industry, the Lower 48 began operating as a separate BP-operated onshore business in the US in 2015.

With its own governance, processes and systems, Lower 48 is better equipped to operate competitively across several basins from the onshore Gulf Coast north to the Rocky Mountains, and develop the vast resource within these large acreage positions.

In the San Juan basin of Colorado and New Mexico, we are drawing on our deep understanding of the area’s reservoirs and utilizing innovative well designs to significantly improve capital efficiency and increase the number of economic development opportunities.

In 2015 we successfully completed three multi-lateral wells in the San Juan basin, our first-ever wells of this type there. With multiple horizontal laterals from the main wellbore, instead of only one, we can access more of the reservoir and produce significantly more resource. Our multilateral wells are already among the most productive we have ever drilled in the basin, with an average development cost that is about 60% lower than wells we drilled in the basin just a few years ago. 

We now plan for the majority of our new wells in the San Juan basin to be multi-laterals, and are pursuing well design improvements like these across our extensive resource base.

In addition to enhancing returns on new capital investments, Lower 48 is working to improve operating efficiency through various initiatives to reduce production deferments and lower costs. These efforts have begun to reduce production costs, which were down by about 7% year-over-year in 2015 and are expected to decline even further in 2016.

Improving operations

Build high-quality downstream businesses

Our Castellón refinery in Spain has been ranked among the best refineries for availability in the world by Solomon international standards. Since 2009 the refinery has had an ongoing programme in place that is focused on unlocking local employee knowledge to find efficiencies and improvements to safety and operations. 

Using BP’s continuous improvement methodology, the programme has captured more than 2,500 ideas, with contributions from around 80% of the refinery’s employees. Ideas have covered everything from reducing risks, improving efficiency, increasing margins, reducing costs and increasing plant availability to improving staff engagement. All of these have been analysed to draw out underlying issues and develop actions that address these. 

By April 2015 around 1,000 ideas had been implemented and the benefits of the programme are being realized with reduced break-even margins, improved safety ratios and increased plant availability and utilization. 

The programme has contributed to the improvement in Castellón’s break-even margin by more than $2 per barrel between 2009 and 2015. The refinery has also seen that steps to improve safety go hand-in-hand with improving operational reliability. Since the programme began, there has been a steady reduction in tier 1 and 2 process safety events – those with the potential to cause the most harm to people and property. Over the same time, the refinery’s utilization – a measure of how much crude is being processed – improved, up from 78% in 2009 to 93% in 2015.

Segment performance


Our strategy is to have a balanced portfolio across the world’s key basins, working safely and reliably while maintaining a focus on capital discipline and quality execution to deliver value.


underlying replacement cost profit before interest and tax


new exploration access


major project start-ups


Upstream BP-operated plant reliability


We continued to improve our personal and process safety and delivered strong operations and marketing performance, contributing to record replacement cost profit before interest and tax.


underlying replacement cost profit before interest and tax


refining availability

14.8 million

Tonnes of petrochemicals produced in the year


Castrol launched Nexcel, an innovative automotive oil-change technology.

Key downloads

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

Related content

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 2015. A cross reference to Form 20-F requirements is included on page 260.

This document contains the Strategic report on pages 1-54 and the inside cover (Who we are) and the Directors’ report on pages 55-75, 93-94, 169-195 and 215-258. 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 and Transparency Rules. The Directors’ remuneration report is on pages 22-23 and 76-92. The consolidated financial statements of the group are on pages 95-168 and the corresponding reports of the auditor are on pages 96-102. The parent company financial statements of BP p.l.c. are on pages 196-213.

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. and the parent company financial statements of BP p.l.c. and corresponding auditor’s report 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 2015 and BP Strategic Report 2015 (comprising the Strategic report and supplementary information) may be downloaded from No material on the BP website, other than the items identified as BP Annual Report and Form 20-F 2015 or BP Strategic Report 2015 (comprising the Strategic report and supplementary information), forms any part of those documents. 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 248 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 2015 webpage (the Material) relates to the year ended 31 December 2015 and is provided for general information only. The Material does not (i) form part of the BP Annual Report and Form 20-F 2015 or the BP Strategic Report; 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 2015. 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 2015 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 246 of the full BP Annual Report and Form 20-F 2015 for further information on forward-looking statements.