BP 2009 Annual Report Download - page 144

BP Annual Report and Accounts 2009
Notes on financial statements
22. Investments in jointly controlled entities
142
The significant jointly controlled entities of the BP group at 31 December 2009 are shown in Note 43. Summarized financial information for the group’s
share of jointly controlled entities is shown below.
$ million
2009 2008 2007
TNK-BP Other Total TNK-BP Other Total
Sales and other operating revenues 9,396 25,936 10,796 36,732 19,463 7,245 26,708
Profit before interest and taxation 1,815 3,588 1,343 4,931 3,743 1,299 5,042
Finance costs 155 275 185 460 264 176 440
Profit before taxation 1,660 3,313 1,158 4,471 3,479 1,123 4,602
Taxation 374 882 397 1,279 993 259 1,252
Minority interest –169 – 169 215 – 215
Profit for the year 1,286 2,262 761 3,023 2,271 864 3,135
Non-current assets 15,857 13,874 15,584 29,458
Current assets 4,124 3,760 3,687 7,447
Total assets 19,981 17,634 19,271 36,905
Current liabilities 2,276 3,287 1,998 5,285
Non-current liabilities 3,768 4,820 3,973 8,793
Total liabilities 6,044 8,107 5,971 14,078
Minority interest –588 – 588
13,937 8,939 13,300 22,239
Group investment in jointly controlled entities
Group share of net assets (as above) 13,937 8,939 13,300 22,239
Loans made by group companies to jointly
controlled entities 1,359 – 1,587 1,587
15,296 8,939 14,887 23,826
Our investment in TNK-BP was reclassified from a jointly controlled entity to an associate with effect from 9 January 2009, the date that BP finalized a
revised shareholder agreement with its Russian partners in TNK-BP, Alfa Access-Renova (AAR). The formerly evenly-balanced main board structure has
been replaced by one with four representatives each from BP and AAR, plus three independent directors. The change in accounting classification from
a jointly controlled entity to an associate reflected the ability of the independent directors of TNK-BP to decide on certain matters in the event of
disagreement between the shareholder representatives on the board. The group's investment continues to be accounted for using the equity method.
In December 2007, BP signed a memorandum of understanding with Husky Energy Inc. (Husky) to form an integrated North American oil
sands business. The transaction was completed on 31 March 2008, with BP contributing its Toledo refinery to a US jointly controlled entity to which
Husky contributed $250 million cash and a payable of $2,588 million. In Canada, Husky contributed its Sunrise field to a second jointly controlled entity,
with BP contributing $250 million in cash and a payable of $2,264 million. Both jointly controlled entities are owned 50:50 by BP and Husky and are
accounted for using the equity method.
Transactions between the group and its jointly controlled entities are summarized below.
$ million
Sales to jointly controlled entities 2009 2008 2007
Amount Amount Amount
receivable at receivable at receivable at
Product Sales 31 December Sales 31 December Sales 31 December
LNG, crude oil and oil products, natural gas, employee services 2,182 1,328 2,971 1,036 2,336 888
$ million
Purchases from jointly controlled entities 2009 2008 2007
Amount Amount Amount
payable at payable at payable at
Product Purchases 31 DecemberaPurchases 31 DecemberaPurchases 31 December
LNG, crude oil and oil products, natural gas, refinery operating costs,
plant processing fees 5,377 214 9,115 182 2,067 66
aAmounts payable to jointly controlled entities shown above exclude payables relating to BP’s contribution on the establishment of the Sunrise Oil Sands joint venture.
The terms of the outstanding balances receivable from jointly controlled entities are typically 30 to 45 days, except for a receivable from Ruhr Oel of
$419 million, which will be paid over several years as it relates partly to pension payments. The balances are unsecured and will be settled in cash.
There are no significant provisions for doubtful debts relating to these balances and no significant expense recognized in the income statement in
respect of bad or doubtful debts. Dividends receivable are not included in the above balances.