Annual report

An overview of the key activities, events and results in 2014, together with commentary on BP’s performance and our priorities as we move forward


Profit attributable to BP shareholders (2013: $23.5bn)
Gearing (net debt ratio) (2013: 16.2%)
Operating cash flow (2013: $21.1bn)
3.2 million
3.2 million
3.2 million
Barrels of oil equivalent per day(a) (2013: 3.2 million)
Dividends paid
Ordinary shareholders annual dividend yield
ADS shareholders annual dividend yield
(a) Includes BP’s share of Rosneft (2014 and 2013) and TNK-BP production (2013 and 2012).


Growing demand for energy

We believe a diverse mix of fuels and technologies will be essential to meet the growing demand for energy and the challenges facing our industry.
Population and economic growth are the main drivers of global energy demand. The world’s population is projected to increase by 1.6 billion from 2013 to 2035, and the world economy is likely to more than double in size over the same period.

We expect world demand for energy to increase by as much as 37% between 2013 and 2035.

Energy consumption by fuel (billion tonnes of oil equivalent)

Source: BP Energy Outlook 2035
* Includes biofuels

Our strategy

Our goal is to be a focused oil and gas company that delivers value over volume. We are pursuing our strategy by setting clear priorities, actively managing a quality portfolio and employing our distinctive capabilities.

Our strategy in action

Running reliably

Safe, reliable and compliant operations

Every day Air BP fuels more than 6,000 flights – that’s around four a minute, making safe and efficient processes critical to the way we operate for each and every one of these flights.

With a combination of flammable liquids, people and aircraft, running operations safely is Air BP’s first priority. Technical and operations teams are dedicated to servicing customers safely at more than 700 locations across 50 countries.

The business designs, builds and operates aviation fuelling facilities around the world, and each year it supplies more than 23.2 billion litres of aviation fuel, helping to make it one of the world’s largest aviation fuel products and services suppliers.

Air BP is delivering its growth strategy through efficient operations and investment in assets. In 2014 we expanded our activities with a supply contract at Brazil’s largest heliport, Helibase, in São Paulo. We also acquired Statoil Fuel & Retail’s aviation fuel business, which is principally based in Scandinavia. This has added more than 70 airports to our global network, helping to position Air BP as one of Scandinavia’s leading, competitive suppliers.

Increasing value

Disciplined financial choices

Delivering our goal of value over volume means tough decisions can be necessary to make the best financial choices for BP.

An important part of our portfolio in the Gulf of Mexico is the deepwater Atlantis field which is early in its life cycle. To increase recovery from the field, we had planned to install new subsea infrastructure, requiring a long and expensive construction period.

When reassessing our field development plan we concluded that our approach would not generate the most value from the field, so we decided to look for an alternative solution.

By using our existing subsea facilities to safely drill future wells, rather than building new infrastructure, we aim to deliver just as much value to BP as originally planned, while requiring millions less in capital expenditure and reducing corresponding risk and demand for resources. The change in plan could significantly increase the Atlantis field’s capital efficiency and cash flow over the next five years.

This focus on capital allocation discipline is being rigorously applied on all of our fields around the world.

Extending the life of the North Sea

Grow our exploration position

This year marked 50 years since we were awarded our first licence in the UK North Sea. And now, after producing more than 5 billion barrels of oil equivalent, we are not only finding more oil and gas, but also extending the life of our existing fields.

Our latest discovery in the Central North Sea – called Vorlich – demonstrates the basin’s ongoing potential. The find was made jointly with GDF SUEZ E&P, underlining the benefits increased collaboration can bring to a mature basin. Vorlich spans two adjacent but separately operated blocks – one by BP and one by GDF SUEZ. It has been tested to a flow rate of 5,350 barrels a day.

We identified Vorlich through analysis of existing wells in the area, along with detailed mapping of high-quality seismic data, and are now looking at options to develop it. These options range from a simple subsea tie back into existing infrastructure, through to possibly introducing new infrastructure that could also serve to unlock additional undeveloped resources in the area.

Committing to the future

Focus on high-value upstream assets

The Gulf of Mexico is one of four key areas where we believe further growth in higher-margin barrels is possible. As the region’s leading acreage holder and largest investor for the last 10 years, BP has focused its activities on this important location for many years. Our four deepwater production platforms – Thunder Horse, Atlantis, Mad Dog and Na Kika – are all in the early stages of their life cycles. These major hubs offer long-term growth opportunities for BP and we aim to optimize production from them, as well as from our non-operated hubs.

In 2014 we made significant progress on a multi-billion dollar investment programme by starting up three major projects in the region. Na Kika Phase 3 began oil production from our first well in February; our Atlantis North Expansion Phase 2 development started up in April with the first of four planned production wells; and with technical input and support from our experts, Shell-operated Mars B started up in February. We also entered a strategic partnership with Chevron in January 2015 to explore and develop Paleogene assets, combining our subsurface expertise with Chevron’s Paleogene development design and build experience.

Our progress highlights the potential of our portfolio to unlock value for investors while also delivering vital energy resources to the US.

Unlocking hidden resources

Competitive project execution

Accessing gas resources locked in hot sandstone almost three miles below the earth’s surface is a task that our advanced technology and exploration experience has made possible.

Faced with the particular challenge of Oman’s remote desert, we used our expertise to safely and successfully complete one of our largest ever 3D seismic surveys across the Khazzan field, an area the size of Greater London. To unlock this huge resource, we used the technical knowledge we gained from accessing the tight gas that is common in our US Lower 48 onshore business.

We proved our approach by conducting an extended well test – producing gas from four appraisal wells and acquiring a surveillance programme that significantly helped our understanding of the reservoir and enabled us to proceed with a field development plan.

By the end of 2014, we had three rigs in operation and large-scale construction under way to build the central processing facility, roads and well pads, as well as accommodation and facilities.

Khazzan represents the first phase in developing one of the largest known tight gas accumulations in the Middle East. It has the potential to be a major new source of gas supply for Oman over many decades.

Driving success

Build high-quality downstream businesses

Since 2005, our retail partnership with Marks & Spencer (M&S) has gone from strength to strength, offering a premium convenience experience that’s helped to drive overall service station sales growth above the industry average.

Our success is reflected not only by our expansion rate – 26 stores opening across the UK in 2014 – but also by strong sales growth across our existing M&S Simply Food® forecourts. The combination of BP and M&S brands complement each other, creating a highly differentiated offer for our target customers who are looking for a forecourt offer that combines high-quality fuel, premium convenience foods and the Wild Bean Cafe.

A typical customer’s spend in a M&S Simply Food® outlet is more than 50% higher than in our other stores, and we’ve had a significant increase in customers visiting the store specifically for our food offer.

BP currently owns and operates nearly 200 BP forecourts with an M&S Simply Food®.

Upstream and Downstream performance


We continued to actively manage our portfolio to play to our strengths, divesting non-core assets and finding alternative ways to create long-term value.


Replacement cost profit before interest and tax
(2013: $16.7bn)


New exploration access
(2013: 43,000km(2))


Major project start-ups
(2013: 3)


Upstream BP-operated plant efficiency
(2013: 88%)


In 2014 we saw continued improvement in our process safety and delivered strong operational performance resulting in profit and operating cash flow growth.


Replacement cost profit before interest and tax
(2013: $2.9bn)


Refining avalibility
(2013: 95.3%)

14 million

tonnes of petrochemicals produced in the year
(2013: 13.9 million)


Launched Castrol EDGE boosted with Titanium Fluid Strength 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 2014. A cross reference to Form 20-F requirements is included on page 257.

This document contains the Strategic report on pages 1- 50 and the inside cover (Who we are section) and the Directors’ report on pages 51- 71, 90, 167-196 and 207-255. 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 72-88. The consolidated financial statements of the group are on pages 89-166 and the corresponding reports of the auditor are on pages 91-95. The parent company financial statements of BP p.l.c. are on pages 197-206.

The statement of directors’ responsibilities, 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 2014 and BP Strategic Report 2014 (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 2014 or BP Strategic Report 2014 (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, 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 244 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 Reporting 2014 webpage (the Material) relates to the year ended 31 December 2014 and is provided for general information only. The Material does not (i) form part of the BP Annual Report and Form 20-F 2013 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 2014. 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 2014 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 241 of the full BP Annual Report and Form 20-F 2014 for further information on forward-looking statements.