BP 2009 Annual Report Download - page 127

3. Disposals and impairment continued
BP Annual Report and Accounts 2009
Notes on financial statements
125
Financial statements
Disposals
As part of the strategy to upgrade the quality of its asset portfolio, the group has an active programme to dispose of non-strategic assets. In the
normal course of business in any particular year, the group may sell interests in exploration and production properties, service stations and pipeline
interests as well as non-core businesses. The group may also dispose of other assets, such as refineries, when this meets strategic objectives.
Exploration and Production
The group divested interests in a number of oil and natural gas properties in all three years. In 2009, the major transactions were the sale of BP West
Java Limited in Indonesia, the sale of our 49.9% interest in Kazakhstan Pipeline Ventures LLC and the sale of our 46% stake in LukArco, all of which
resulted in gains. We also exchanged interests in a number of fields in the North Sea with BG Group plc.
There were no significant disposals in 2008.
During 2007, the major transactions were the disposal of an exploration and production and gas infrastructure business in the Netherlands and
the divestments of our interests in non-core Permian assets in the US and in the Entrada field in the Gulf of Mexico, all of which resulted in gains. We
also sold our interests in a number of fields in Egypt, Canada and the US.
Refining and Marketing
In 2009, gains on disposal mainly resulted from the disposal of our ground fuels marketing business in Greece and retail churn in the US, Europe and
Australasia. Losses resulted from the continued disposal of company-owned and company-operated retail sites in the US, retail churn and disposals of
assets elsewhere in the segment portfolio. Retail churn is the overall process of acquiring and disposing of retail sites by which the group aims to
improve the quality and mix of its portfolio of service stations.
In 2008, the major transactions resulting in gains were the contribution of our Toledo refinery to a US jointly controlled entity in an exchange
transaction with Husky Energy and the disposals of our interest in the Dixie Pipeline and certain retail assets in the US. The losses on sale related
mainly to the disposal of retail assets in the US and Europe. In addition, certain assets at our Acetyls plant in Hull, UK, and other interests in the UK
and Europe were sold.
During 2007, we disposed of the Coryton refinery in the UK, our interest in the West Texas Pipeline in the US, and our interest in the Samsung
Petrochemical Company in South Korea, all of which resulted in gains. Losses were incurred related to the decision to withdraw from the company-
owned and company-operated channel of trade in the US and retail churn.
Other businesses and corporate
During 2009, we disposed of our wind energy business in India and contributed our Fowler II wind energy development asset in exchange for a 50%
equity interest in a jointly controlled entity, Fowler II Holdings LLC. In addition, there was a return of capital in the jointly controlled entity Fowler Ridge
Wind Farm LLC which did not change our percentage interest in the entity.
Summarized financial information for the sale of businesses is shown below.
$ million
2009 2008 2007
Non-current assets 536 759 753
Current assets 444 485 587
Non-current liabilities (146) – (64)
Current liabilities (152) (134) (27)
Total carrying amount of net assets disposed 682 1,110 1,249
Recycling of foreign exchange on disposal (27) – (147)
Costs on disposal 3 7 22
658 1,117 1,124
Profit (loss) on sale of businessesa314 1,721 1,384
Total consideration 972 2,838 2,508
Fair value of interest received in a jointly controlled entity –(2,838) –
Consideration received (receivable)b(6) 11 10
Proceeds from the sale of businessesc966 11 2,518
aOf which $929 million gain was not recognized in the income statement in 2008 as it represented an unrealized gain on the transfer of the Toledo refinery into a jointly controlled entity.
bConsideration received from prior year business disposals or not yet received from current year disposals.
cNet of cash and cash equivalents disposed of $91 million (2008 nil and 2007 $115 million).