BP 2006 Annual Report Download - page 112

110
2 Resegmentation and other changes to comparatives continued
Sales and other operating revenues $ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2005
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By geographical area – as reported UK
Rest of
Europe USA
Rest of
World Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment sales and other operating revenues 98,744 72,972 107,494 60,314 339,524
Less: sales attributable to Innovene operations (2,610) (8,667) (4,309) (686) (16,272)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment revenues from continuing operations 96,134 64,305 103,185 59,628 323,252
Less: sales between areas (38,081) (5,013) (2,362) (16,541) (61,997)
Less: sales by continuing operations to Innovene (5,599) (4,640) (1,508) (43) (11,790)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Third party sales of continuing operations 52,454 54,652 99,315 43,044 249,465
By geographical area – as restated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment sales and other operating revenues 95,375 72,972 101,190 60,314 329,851
Less: sales attributable to Innovene operations (2,610) (8,667) (4,309) (686) (16,272)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment revenues from continuing operations 92,765 64,305 96,881 59,628 313,579
Less: sales between areas (38,081) (5,013) (2,362) (16,541) (61,997)
Less: sales by continuing operations to Innovene (5,599) (4,640) (1,508) (43) (11,790)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Third party sales of continuing operations 49,085 54,652 93,011 43,044 239,792
$ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2004
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By geographical area – as reported UK
Rest of
Europe USA
Rest of
World Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment sales and other operating revenues 62,516 52,540 91,309 48,534 254,899
Less: sales attributable to Innovene operations (2,365) (7,682) (4,109) (672) (14,828)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment revenues from continuing operations 60,151 44,858 87,200 47,862 240,071
Less: sales between areas (18,846) (1,396) (1,539) (10,188) (31,969)
Less: sales by continuing operations to Innovene (5,263) (896) (2,064) (3) (8,226)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Third party sales of continuing operations 36,042 42,566 83,597 37,671 199,876
By geographical area – as restated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment sales and other operating revenues 59,615 52,540 86,358 48,534 247,047
Less: sales attributable to Innovene operations (2,365) (7,682) (4,109) (672) (14,828)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment revenues from continuing operations 57,250 44,858 82,249 47,862 232,219
Less: sales between areas (18,846) (1,396) (1,539) (10,188) (31,969)
Less: sales by continuing operations to Innovene (5,263) (896) (2,064) (3) (8,226)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Third party sales of continuing operations 33,141 42,566 78,646 37,671 192,024
$ million
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Purchases 2005 2004
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
As reported 172,699 135,907
As restated 163,026 128,055
3 Oil and natural gas reserves estimates
At the end of 2006, BP adopted the US Securities and Exchange Commission (SEC) rules for estimating oil and natural gas reserves for all accounting
and reporting purposes instead of the UK accounting rules contained in the Statement of Recommended Practice ‘Accounting for Oil and Gas
Exploration, Development, Production and Decommissioning Activities’ (UK SORP). The main differences relate to the SEC requirement to use year-end
prices, the application of SEC interpretations of SEC regulations relating to the use of technology (mainly seismic) to estimate reserves in the reservoir
away from wellbores and the reporting of fuel gas (i.e. gas used for fuel in operations) within proved reserves. Consequently, reserves quantities under
SEC rules differ from those that would be reported under application of the UK SORP.
The change to SEC reserves represents a simplification of the group’s reserves reporting, as in the future only one set of reserves estimates will be
disclosed. In addition, the use of SEC reserves for accounting purposes will bring our IFRS and US GAAP reporting into closer alignment, as well as
making our results more comparable with those of our major competitors.
This change in accounting estimate has a direct impact on the amount of depreciation, depletion and amortization (DD&A) charged in the income
statement in respect of oil and natural gas properties which are depreciated on a unit-of-production basis as described in Note 1. The change in estimate
is applied prospectively, with no restatement of prior periods’ results. The group’s actual DD&A charge for the year is $9,128 million, whereas the
charge based on UK SORP reserves would have been $9,057 million, i.e. an increase of $71 million due to the change in reserves estimates which was
used to calculate DD&A for the last three months of the year. Over the life of a field this change would have no overall effect on DD&A but the
estimated effect for 2007 is expected to be an increase of approximately $400 million to $500 million for the group.