BP 2008 Annual Report Download - page 178

Financial statements
BP Annual Report and Accounts 2008
Notes on financial statements
47. Oil and natural gas exploration and production activitiesa
$ million
2008
Rest of Rest of Asia
UK Europe US Americas Pacific Africa Russia Other Total
Capitalized costs at 31 December
Gross capitalized costs
Proved properties 34,614 5,507 59,918 11,451 4,720 21,563 – 8,550 146,323
Unproved properties 626 – 5,006 299 1,019 2,011 – 464 9,425
35,240 5,507 64,924 11,750 5,739 23,574 – 9,014 155,748
Accumulated depreciation 26,564 3,125 28,511 6,358 2,181 10,451 – 3,159 80,349
Net capitalized costs 8,676 2,382 36,413 5,392 3,558 13,123 – 5,855 75,399
The group’s share of jointly controlled entities’ and associates’ net capitalized costs at 31 December 2008 was $13,393 million.
Costs incurred for the year ended 31 December
Acquisition of properties
Proved – – 1,374 2 – – – 136 1,512
Unproved 4 – 2,942 – – – – 41 2,987
4 – 4,316 2 – – – 177 4,499
Exploration and appraisal costsb137 – 862 123 79 838 12 239 2,290
Development 907 695 4,914 1,077 465 2,966 – 743 11,767
Total costs 1,048 695 10,092 1,202 544 3,804 12 1,159 18,556
The group’s share of jointly controlled entities’ and associates’ costs incurred in 2008 was $3,259 million: in Russia $1,921 million, Rest of Americas
$1,039 million, Asia Pacific $24 million and other $275 million.
Results of operations for the year ended 31 December
Sales and other operating revenues
Third parties 3,865 105 8,010 3,573 1,410 3,745 – 549 21,257
Sales between businesses 4,374 1,416 15,610 3,755 1,420 6,022 – 11,087 43,684
8,239 1,521 23,620 7,328 2,830 9,767 – 11,636 64,941
Exploration expenditure 121 1 305 62 41 213 14 125 882
Production costs 1,357 150 3,002 718 213 875 18 334 6,667
Production taxes 503 – 2,603 360 110 – – 3,083 6,659
Other costs (income)c(28) (43) 3,440 541 309 245 196 4,041 8,701
Depreciation, depletion and amortization 1,049 199 2,729 911 251 2,120 – 624 7,883
Impairments and (gains) losses on sale
of businesses and fixed assets – – 308 6 219 8 – – 541
3,002 307 12,387 2,598 1,143 3,461 228 8,207 31,333
Profit before taxationd5,237 1,214 11,233 4,730 1,687 6,306 (228) 3,429 33,608
Allocable taxes 2,280 883 3,857 2,423 618 2,672 (36) 879 13,576
Results of operations 2,957 331 7,376 2,307 1,069 3,634 (192) 2,550 20,032
The group’s share of jointly controlled entities’ and associates’ results of operations (including the group’s share of total TNK-BP results) in 2008 was a
profit of $2,793 million after deducting interest of $355 million, taxation of $1,217 million and minority interest of $169 million.
Exploration and Production segment profit before interest and tax
Exploration and production activities
Group (as above) 5,237 1,214 11,233 4,730 1,687 6,306 (228) 3,429 33,608
Jointly controlled entities and
associates (1) – 1 344 48 (1) 2,259 143 2,793
Midstream activitiese743 16 425 619 (228) 112 – (173) 1,514
Total profit before interest and tax 5,979 1,230 11,659 5,693 1,507 6,417 2,031 3,399 37,915
aThis note contains information relating to oil and natural gas exploration and production activities. Midstream activities relating to the management and ownership of crude oil and natural gas
pipelines, processing and export terminals and LNG processing facilities and transportation are excluded. In addition, our midstream activities of marketing and trading of natural gas, power and
NGLs in the US, Canada, UK and Europe are excluded. The most significant midstream pipeline interests include the Trans-Alaska Pipeline System, the Forties Pipeline System, the Central Area
Transmission System pipeline and the Baku-Tbilisi-Ceyhan pipeline. Major LNG activities are located in Trinidad, Indonesia and Australia and BP is also investing in the LNG business in Angola. The
group’s share of jointly controlled entities’ and associates’ activities are excluded from the tables and included in the footnotes with the exception of the Abu Dhabi operations, which are included in
the results of operations above.
bIncludes exploration and appraisal drilling expenditures, which are capitalized within intangible fixed assets, and geological and geophysical exploration costs, which are charged to income as incurred.
cIncludes property taxes, other government take and the fair value loss on embedded derivatives of $102 million. The UK region includes a $499 million gain offset by corresponding charges primarily
in the US, relating to the group self-insurance programme.
dExcludes the unwinding of the discount on provisions and payables amounting to $285 million which is included in finance costs in the group income statement.
eIncludes a $517 million write-down of our investment in Rosneft based on its quoted market price at the end of the year.
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