BP 2007 Annual Report Download - page 51

BP ANNUAL REPORT AND ACCOUNTS 2007 49
holding losses of $18 million and charges for legal provisions of around $1,000 million due to the absence of disposal gains in 2006 in
$335 million. equity-accounted entities.
Profit before interest and tax for the year ended 31 December 2005 The primary additional factors reflected in profit before interest and
was $25,502 million, including inventory holding gains of $17 million and tax for the year ended 31 December 2006 compared with the year ended
net gains of $1,159 million on the sales of assets, primarily from our 31 December 2005 were higher overall realizations contributing around
interest in the Ormen Lange field in Norway, and was after net fair value $5,050 million (liquids realizations were higher and gas realizations were
losses of $1,688 million on embedded derivatives, an impairment charge lower), partially offset by decreases of around $1,825 million due to
of $226 million in respect of fields in the Gulf of Mexico, a charge for lower reported volumes, $350 million due to higher production taxes
impairment of $40 million relating to fields in the UK North Sea and a and $1,950 million due to higher costs, reflecting the impacts of
charge of $265 million on the cancellation of an intra-group gas supply sector-specific inflation, increased integrity spend and revenue
contract. investments. Additionally, BP’s share of the TNK-BP result was higher
The primary additional factors reflected in profit before interest and by around $500 million, primarily reflecting higher disposal gains.
tax for the year ended 31 December 2007 compared with the year ended Total production for 2007 was 2,549mboe/d for subsidiaries and
31 December 2006 were higher overall realizations contributing around 1,269mboe/d for equity-accounted entities, compared with 2,629mboe/d
$3,000 million (liquids realizations were higher and gas realizations were and 1,297mboe/d respectively in 2006. In aggregate, the decrease
lower) and a favourable effect from lagged tax reference prices in primarily reflected the effect of disposals and net entitlement reductions
TNK-BP contributing around $500 million; however, these factors were in our PSAs.
more than offset by decreases of around $1,000 million due to lower Total production for 2006 was 2,629mboe/d for subsidiaries and
reported volumes, around $200 million due to higher production taxes in 1,297mboe/d for equity-accounted entities, compared with 2,718mboe/d
Alaska and around $2,800 million due to higher costs, reflecting the and 1,296mboe/d respectively in 2005. For subsidiaries, increases in
impacts of sector-specific inflation, increased integrity spend and higher production in our new profit centres were offset by anticipated decline in
depreciation charges. Additionally, the full-year result was lower by our existing profit centres and the effect of disposals.
Refining and Marketing
$ million
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2007 2006 2005
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Sales and other operating revenues from continuing operations 250,866 232,855 213,326
Profit before interest and tax from continuing operationsa6,072 5,041 6,926
$ per barrel
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Global Indicator Refining Margin (GIM)b
Northwest Europe 4.99 3.92 5.47
US Gulf Coast 13.48 12.00 11.40
Midwest 12.81 9.14 8.19
US West Coast 15.05 14.84 13.49
Singapore 5.29 4.22 5.56
BP average 9.94 8.39 8.60
%
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Refining availabilityc82.9 82.5 92.9
thousand barrels per day
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Refinery throughputs 2,127 2,198 2,399
aIncludes profit after interest and tax of equity-accounted entities.
bThe GIM is the average of regional industry indicator margins that we weight for BP’s crude refining capacity in each region. Each regional indicator margin is based on a
single representative crude with product yields characteristic of the typical level of upgrading complexity. The refining margins are industry-specific rather than BP-specific
measures, which we believe are useful to investors in analyzing trends in the industry and their impact on our results. The margins are calculated by BP based on published
crude oil and product prices and take account of fuel utilization and catalyst costs. No account is taken of BP’s other cash and non-cash costs of refining, such as wages
and salaries and plant depreciation. The indicator margin may not be representative of the margins achieved by BP in any period because of BP’s particular refining
configurations and crude and product slate.
cRefining availability is defined as the ratio of units that are available for processing, regardless of whether they are actually being used, to total capacity. Where there is
planned maintenance, such capacity is not regarded as being available. During 2006 and 2007, there was planned maintenance of a substantial part of the Texas
City refinery.
The changes in sales and other operating revenues are explained in more detail below.
$ million
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2007 2006 2005
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Sale of crude oil through spot and term contracts 43,004 38,577 36,992
Marketing, spot and term sales of refined products 194,979 177,995 155,098
Other sales including non-oil and to other segments 12,883 16,283 21,236
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250,866 232,855 213,326
thousand barrels per day
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Sale of crude oil through spot and term contracts 1,885 2,110 2,464
Marketing, spot and term sales of refined products 5,624 5,801 5,888
Sales and other operating revenues for 2007 was $251 billion, compared impact due to a weaker dollar of $6 billion, partially offset by lower
with $233 billion in 2006 and $213 billion in 2005. The increase in 2007 volumes of $2 billion. Additionally, sales of crude oil, spot and term
compared with 2006 was principally due to an increase of around contracts increased by $4 billion, primarily reflecting higher prices, and
$17 billion in marketing, spot and term sales of refined products. This other sales decreased by $3 billion, due to lower volumes of $4 billion
was due to higher prices of $13 billion and a positive foreign exchange partially offset by a positive foreign exchange impact of $1 billion.