BP 2013 Annual Report Download - page 151

5. Disposals and impairment – continued
Summarized financial information relating to the sale of businesses is shown in the table below. The principal transactions categorized as business
disposals in 2013 were the sales of the Texas City and Carson refineries with their associated marketing and logistics assets. Information relating to
sales of fixed assets is excluded from the table.
$ million
2013 2012 2011
Non-current assets 2,124 610 2,085
Current assets 2,371 570 1,008
Non-current liabilities (94) (263) (212)
Current liabilities (62) (232) (611)
Total carrying amount of net assets disposed 4,339 685 2,270
Recycling of foreign exchange on disposal 23 (15) 8
Costs on disposala13 39 17
4,375 709 2,295
Profit on sale of businessesb69 675 2,232
Total consideration 4,444 1,384 4,527
Consideration received (receivable)c(414) 76 116
Proceeds from the sale of businesses related to completed transactions 4,030 1,460 4,643
Deposits received (repaid) related to assets classified as held for saled–146 (3,530)
Disposals completed in relation to which deposits had been received in prior year (146) – (1,776)
Proceeds from the sale of businessese3,884 1,606 (663)
a2013 includes pension and other post-retirement benefit plan curtailment gains of $109 million.
bIn 2011 a $278-million gain was not recognized in the income statement as it represented an unrealized gain on the sale of business assets in Vietnam to our former associate TNK-BP.
cConsideration received from prior year business disposals or to be received from current year disposals. 2013 includes contingent consideration of $475 million relating to the disposal of the Texas City
refinery.
d2011 relates to the repayment of a deposit received in advance of $3,530 million following the termination of the sale agreement in respect of the expected sale of our interest in Pan American Energy
LLC.
eSubstantially all of the consideration received was in the form of cash and cash equivalents. Proceeds are stated net of cash and cash equivalents disposed of $42 million (2012 $4 million and 2011 $14
million).
Impairment
Upstream
During 2013, the Upstream segment recognized impairment losses of $1,255 million. The main elements were impairment losses of $251 million and
$159 million relating to the Browse project in Australia and the Mad Dog Phase 2 project in the Gulf of Mexico respectively, resulting from the selection
of alternative development scenarios for both projects; write-downs of a number of assets in the North Sea, caused by increases in expected
decommissioning costs, amounting to $253 million in aggregate; a $134-million write-down of pipelines in the North Sea due to cost increases; a
$122-million write-down to fair value less costs to sell based on expected proceeds resulting from a decision to divest our interest in the Polvo field in
Brazil; and other impairment losses amounting to $335 million in total that were not individually significant. These impairment losses were partly offset
by reversals of impairment of certain of our interests in Alaska, the Gulf of Mexico, and the North Sea amounting to $226 million in total, triggered by
reductions in expected decommissioning costs, partly as a result of an increase in the discount rate for provisions.
During 2012, the Upstream segment recognized impairment losses of $3,046 million. The main elements were a $1,082-million write-down of our
interests in the Fayetteville and Woodford shale gas assets in the US, due to reserves revisions, lower values being attributed to recent market
transactions and a fall in the gas price; a $999-million impairment loss relating to the decision to suspend the Liberty project in Alaska; a $706-million
aggregate write-down of a number of assets, primarily in the Gulf of Mexico and North Sea, caused by increases in the decommissioning provision
resulting from continued review of the expected decommissioning costs; a $144-million write-down of certain gas storage assets in Europe due to
changes to the European gas market; and other impairment losses amounting to $116 million in total that were not individually significant. These
impairment losses were partly offset by reversals of impairment of certain of our interests in the Gulf of Mexico amounting to $222 million, triggered
by a decision to divest assets; and other reversals of impairment amounting to $67 million in total that were not individually significant.
During 2011, the Upstream segment recognized impairment losses of $1,443 million. The main elements were a $555-million impairment loss relating
to a number of our interests in the Gulf of Mexico, caused by an increase in the decommissioning provision as a result of further assessments of the
regulations relating to idle infrastructure and a decrease in our assumption of the discount rate for provisions; the $393-million write-down of our
interest in the Fayetteville shale gas asset in the US, triggered by a decrease in value by reference to a sale transaction by a partner of its interest in the
same asset; and the $153-million write-down of our interest in the proposed Denali gas pipeline in Alaska, resulting from a decision not to proceed with
the project. There were several other impairment losses amounting to $342 million in total that were not individually significant. These impairment
losses were partly offset by reversals of impairment of certain of our interests in the Gulf of Mexico and Egypt amounting to $146 million in total,
triggered by an increase in our assumption of long-term oil prices.
Downstream
During 2013, the Downstream segment recognized impairment losses of $484 million which mainly relates to impairments of certain refineries in the
US and elsewhere in our global fuels portfolio.
During 2012, the Downstream segment recognized impairment losses of $2,892 million largely related to assets held for sale for which sales prices
had been agreed, see Note 4 for further information. This impairment loss included $1,552 million relating to the Texas City refinery and associated
assets and $1,042 million relating to the Carson refinery and associated assets.
During 2011, the Downstream segment recognized impairment losses of $599 million, of which $398 million related to assets classified as held for
sale. Other impairment losses, related to retail churn in Europe and other minor asset disposals, amounted to $201 million in total.
Other businesses and corporate
Impairment losses totalling $218 million, $320 million and $58 million were recognized in 2013, 2012 and 2011 respectively related to various assets in
the Alternative Energy business. The amount for 2013 is principally in respect of our US wind business. The amount for 2012 includes $258 million in
respect of the decision not to proceed with an investment in a biofuels production facility under development in the US.
Financial statements
BP Annual Report and Form 20-F 2013 147