BP p.l.c.

Welcome to the BP presentation to the financial community webcast and conference call. I now hand over to Craig Marshall, Head of Investor Relations.

Good morning, everyone, and welcome to BP's fourth quarter and full year 2020 results presentation. I'm Craig Marshall, Senior Vice President, Investor Relations, and I'm joined today by BP's Chief Executive Officer, Bernard Looney, and our Chief Financial Officer, Murray Auchincloss. Before we begin today's presentation, let me first draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to factors we note on this slide and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filings for more details. These documents are available on our website. I'll now hand over to Bernard.

Thanks, Greg. And hello. And I hope everyone is managing to stay safe and well. And my best wishes go out to all of you and your families. I think it's fair to say that we are reporting on a tough quarter at the end of a tough year for everyone. A year in many ways, unlike any we've ever had. The COVID pandemic has been first a human tragedy. It's taken lives and challenged our mental health. It has also impacted the global economy significantly, and we've seen the impact in our sector, where road and air travel are down significantly as our demand for products and commodity prices. But looking forward, as we must do, I'm optimistic, particularly given the vaccines, but also because of the actions that we have taken across the company. Before we discuss that future, let me take a moment to reflect on 2020, It was a pivotal year for BP. We set a new direction, launched a net zero ambition, introduced a new strategy to transition from an international oil company to an integrated energy company, and started to execute on it on multiple fronts, including entering offshore wind in the United States. Began reinventing BP, reshaping it to support the delivery of our strategy. And through all of this, we focused on performance, Our operational teams have kept the energy flowing with fewer injuries and fewer safety incidents compared to 2019. And that levels of efficiency and reliability that are, I think, remarkable given the additional challenges. We have brought four major oil and gas projects online and seen the completion of a three and a half thousand kilometer gas supply pipeline. And we have strengthened our finances, taking out costs, and closing some major divestments. This is great delivery by our team, all the more so given the year that we've just had. And as always, we have more to do. We'll update you on that today and also address some of the big questions we've been asked since our Capital Markets Day in September. In a minute, Murray will take you through our latest results and the financial frame. But first, let me recap on some of the key areas of progress. Turning firstly to our performance in 2020, starting with safety, as we always do, it's our core value and it's at the heart of performance across BP. We had fewer tier one and tier two process safety events compared with 2019 and fewer people injured at work, an achievement we are proud of, but there is always more to do. And it is not just about having fewer incidents, but also supporting the welfare of our people, particularly at such a difficult time. Later this quarter, we will release our 2020 sustainability report, and we expect to report a decrease in our scope one and two greenhouse gas emissions. We also expect a reduction in the estimated scope three greenhouse gas emissions from the carbon in our upstream production, reflecting our strategy to high grade and focus our hydrocarbons business, turning to our financial performance. For the full year, we delivered a $5.7 billion underlying replacement cost loss with underlying operating cash flow of $13.8 billion. The result reflects lower oil and gas prices, significant non-cash exploration write-offs taken in the second quarter, resulting from a review of our long-term strategic plans and lower refining margins and depressed demand due to the pandemic. During the year, we took a series of decisive actions to strengthen our finances and create a strong foundation from which to advance our strategy. In April, we outlined measures to support our cash flow, resulting in a 28% reduction in total capital expenditure and a 12% reduction in cash costs. In June, we revised our long-term price assumptions. Later that month, we issued our first hybrid bond, We received $6.6 billion of divestment and other proceeds during the year. And as part of our new financial frame, we introduced a new distribution policy, including a reset dividend. As a result of these actions, at the end of the year, our net debt reduced to $38.9 billion, and we remain confident in reducing this further to our target of $35 billion. And Murray will talk about this more shortly. Turning now to our operational and strategic delivery, where we continue to focus on performing while transforming. I'd like to draw out a few examples that I think really highlight the progress we have made. Starting with resilient and focused hydrocarbons, where we delivered four major projects in the year. Since 2016, we have brought 28 major projects online, delivered on average, on schedule and under budget. On Raven, wells are online and we are in the live commissioning phase. Once ramped up, major project capacity is expected to approach 900,000 barrels of oil equivalent a day, with four more projects scheduled to start up in 2021. On the 31st of December, First gas flowed from the Chactonese field in the Caspian Sea through the Southern Gas Corridor Pipeline to customers in Europe. This project was delivered ahead of schedule and 25% under budget, an enormous achievement for one of the most complex energy projects in the world. Responding to the environment in the upstream, we delivered 20% lower capital spending than in 2019 with a continued focus on capital efficiency. An example is our Mad Dog 2 project where we completed six wells using 218 fewer rig days and delivered just over $280 million of savings compared to the sanction case. On Mad Dog Phase 2, sale away of the Argos FPU from the Samsung yard in Korea is imminent, an important milestone for a key project. And with all pre-first oil wells drilled, This further underpins our confidence in delivery. We have also taken steps to focus and high-grade our portfolio that create value for BP, completing the divestment of our Alaska and petrochemicals businesses, both of which did not compete for capital inside our portfolio. Taking the decision to convert our Kwinana refinery in Australia to an import terminal as we focus our portfolio on top quartile assets, And just yesterday, we announced a divestment of a 20% stake in Oman's Block 61 for a total consideration of $2.6 billion, while retaining a 40% interest and operatorship. In convenience and mobility, we continue to make strategic progress, unlocking access to a key growth market with GOBP, our Indian mobility joint venture with Reliance, growing the number of EV charging points to over 10,000, now with more than 1,400 in China through our joint venture with Didi, adding around 300 strategic convenience retail sites and increasing our convenience gross margin by 6%. In low carbon, effective last week, we completed the formation of a strategic partnership with Equinor to pursue offshore wind opportunities in the United States. The partnership initially intends to develop 4.4 gigawatts gross of offshore wind power across four projects, and we've already made great progress. Last month, two projects were selected to provide New York State with power earlier than expected, and subject to contract means three of four projects will have secured offtake. LightSource BP continues to grow. It developed 1.4 gigawatts gross to final investment decision, or FID, in the year. It also added around 6 gigawatts gross to its pipeline. And elsewhere, we are pursuing opportunities to partner with corporates, cities, and industries looking to decarbonize. We have announced partnerships with Microsoft and Amazon and with the cities of Aberdeen and Houston. And last week, we announced our first decarbonisation strategic partnership in the aviation sector with Qantas. Together, we will seek to reduce carbon emissions and contribute to the development of a sustainable aviation fuel industry in Australia. These examples highlight the real value we place on partnerships. Building strong and enduring relationships with partners around the world is part of our heritage and integral to the success of our strategy. By working together with partners who bring complementary skills, we can accelerate our low carbon transition. Let me now hand over to Murray to take you through our results and financial frame. Thanks, Bernard. Good morning, everyone.