BP p.l.c.

Good morning, everyone, and welcome to BP's second quarter 2022 results presentation. I'm here today with Bernard Looney, Chief Executive Officer, and Murray Auchincloss, Chief Financial Officer. Before we begin today, let me draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements, including those 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.

Very good. Well, thanks, Craig, and good morning to everyone, and welcome to our second quarter Results, it's great to have you join us on the call, obviously, and it's great to see those of you who are here in person. Thank you for making the trip. You're going to hear about what I hope you will agree is some good progress from us today. But before we do that, let me take a moment to put what follows in context. Russia's military action is continuing rapidly. in the Ukraine, devastating people's lives and disrupting energy supplies. And the cost of living is spiraling upwards with energy costs a big contributor to that. And since the start of the Ukraine conflict, power generation from coal in Europe has significantly increased. And these are stark examples of what we call the energy trilemma. Energy security under threat, energy affordability an acute problem for many and a pressing need for lower carbon energy. And we see this at BP obviously and the question, the obvious question for us and for our people and that our people ask is how can we help? And that is why we are absolutely focused on delivering our strategy to become an integrated energy company, a company that we believe can help solve that energy trilemma. And we do that two ways. We do that by working hard to keep the energy flowing today and, not or, and at the same time investing to accelerate the energy transition. That's the role of an integrated energy company. And I believe and we believe that its purpose has never been clearer. And we do all of that while remaining acutely focused on delivering long-term value for our owners, our shareholders. That is the context against which we present today's results, a set of results that show us performing while transforming. During the quarter, we generated operating cash flow of $10.9 billion. We reduced net debt for the ninth consecutive quarter to reach $22.8 billion, and we're growing distributions to our shareholders, our owners, by announcing a 10% increase in the quarterly dividend per ordinary share and a further $3.5 billion share buyback. Crucially, we're doing this within a financial frame which is unchanged and maintaining a resilient $40 per barrel cash balance point. With all the uncertainty in the world, now is not the time to lose discipline. We also have real momentum in our transformation and in a moment I will update you on how we are driving improvements in our oil and gas portfolio and making good progress in our transition growth engines. But for now, I'm going to hand over to Murray to take us through the second quarter results. Over to you, Murray.

Great. Thanks, Bernard. And good morning, everyone. It's nice to see you here in the room. Let's begin with the macro environment, starting with the oil price. During the second quarter, Brent averaged $114 per barrel, up from $102 per barrel in the first quarter. This was driven by reduced spare global capacity and inventory levels significantly below the five-year average. Looking ahead, we expect these factors to keep oil prices elevated during the third quarter. Turning to gas prices, during the second quarter, average European prices declined as high LNG imports supported a recovery in inventories. However, in the latter stages of the quarter, prices moved sharply higher, driven by reduced Russian supply and the outage at Freeport. In the U.S., Henry Hub rose by an average of 60% from the first quarter, This was supported by limited gas production growth and strong gas-to-power demand. The outlook for global gas prices is heavily dependent on Russian pipeline flows. We expect prices to remain elevated and volatile during the third quarter due to a lack of supply to Europe. Moving to refining, margins more than doubled to average 45.50 per barrel in the second quarter. This reflects resilient demand, lower stocks, and sanctioning of Russian crude and product. In the third quarter, we expect refining margins to remain elevated due to ongoing supply disruptions. Moving to results. In the second quarter, we reported an underlying replacement cost profit of $8.5 billion compared to $6.2 billion last quarter. Compared to the first quarter, in gas and low-carbon energy, the result benefited from higher realizations. This was offset by an average gas marketing and trading result following the exceptional performance in the first quarter. The result includes our best estimate of the impact of the recent outage at Freeport LNG, leading to a significant reduction in the number of cargoes expected to be received. In oil production and operations, the result reflects higher realizations. In customers and products, the products result benefited from a significant increase in refining margins, partially offset by higher turnaround and maintenance activity. The contribution from oil trading remained exceptionally strong. Strength in products more than offset the impact of weaker fuel retail margins and higher inflation in a challenging environment in our customers' businesses. Despite these factors, the convenience contribution remains strong. Turning to cash flow. Operating cash flow was $10.9 billion in the second quarter. This included $1.2 billion of Gulf of Mexico oil spill payments, within a working capital build of $2.9 billion. Capital expenditure was $2.8 billion, with our guidance for 2022 remaining in a range of $14 to $15 billion. And disposal proceeds were $700 million in the quarter, bringing the first half total to $1.9 billion. Guidance of $2 to $3 billion in 2022 is unchanged. During the quarter, we repurchased 2.3 billion of shares, The $2.5 billion program announced with first quarter 2022 results was completed on July 22nd. Reflecting underlying cash flow delivery, net debt fell for the ninth consecutive quarter to reach $22.8 billion. And with second quarter surplus cash flow of $6.6 billion, we intend to execute a share buyback of $3.5 billion prior to reporting third quarter results. Moving to our discipline financial frame, which has five priorities and importantly remains unchanged. Our first priority remains a resilient dividend. As Bernard has outlined, we have announced a 10% increase in the quarterly dividend. Crucially, this is funded within an unchanged 2021 to 2025 cash balance point of around $40 per barrel Brent, $3 Henry Hub, and $11 per barrel RMM, all 2020 real. This increase reflects the underlying performance and cash generation of the business, which has enabled strong progress in delivering share buybacks and net debt reduction. Our second priority is to maintain a strong investment grade credit rating. We intend to continue to allocate 40% of 2022 surplus cashflow to further strengthen the balance sheet. Our third and fourth priorities are the disciplined allocation of investment to our low carbon and convenience and mobility businesses and to resilient hydrocarbons. And our fifth priority is share buybacks. We are committed to returning 60% of 2022 surplus cash flow through share buybacks, subject to maintaining a strong investment grade credit rating. And we have now announced share buybacks from 2021 and the first half of 2022 surplus cash flow of over $10 billion. This is equivalent to 60% of the cumulative surplus. I'll now hand back to Bernard.