BP 2015 Annual Report Download - page 127

4. Disposals and impairment – continued
At 31 December 2015, deferred consideration relating to disposals amounted to $41 million receivable within one year (2014 $1,137 million and 2013
$23 million) and $385 million receivable after one year (2014 $333 million and 2013 $1,374 million). In addition, contingent consideration receivable
relating to disposals amounted to $292 million at 31 December 2015 (2014 $454 million and 2013 $953 million), see Note 29 for further information.
Upstream
In 2015, gains principally resulted from the sale of our interests in the Central Area Transmission System in the North Sea, and from adjustments to
prior year disposals in Canada.
In 2014, gains principally resulted from the sale of certain onshore assets in the US, and the sale of certain interests in the Gulf of Mexico and the
North Sea. Losses principally arose from adjustments to prior year disposals in Canada and the North Sea.
In 2013, gains principally resulted from the sale of certain of our interests in the central North Sea, and the Yacheng field in China.
Downstream
In 2015, gains principally resulted from the disposal of our investment in the UTA European fuel cards business and our Australian bitumen business.
In 2014, gains principally resulted from the disposal of our global aviation turbine oils business. Losses principally arose from costs associated with the
decision to cease refining operations at Bulwer Island in Australia.
In 2013, gains principally resulted from the disposal of our global LPG business and closing adjustments on the sales of the Texas City and Carson
refineries with their associated marketing and logistics assets.
TNK-BP
In 2013, BP disposed of its 50% interest in TNK-BP to Rosneft, resulting in a gain on disposal of $12,500 million.
Summarized financial information relating to the sale of businesses is shown in the table below. The principal transactions categorized as business
disposals in 2015 were the sales of our interests in the Central Area Transmission System in the North Sea and in the UTA European fuel cards
business. The principal transaction categorized as a business disposal in 2014 was the sale of certain of our interests on the North Slope of Alaska in
our upstream business. 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
2015 2014 2013
Non-current assets 154 1,452 2,124
Current assets 80 182 2,371
Non-current liabilities (70) (395) (94)
Current liabilities (50) (65) (62)
Total carrying amount of net assets disposed 114 1,174 4,339
Recycling of foreign exchange on disposal 16 (7) 23
Costs on disposala8128 13
138 1,295 4,375
Gains on sale of businesses 446 280 69
Total consideration 584 1,575 4,444
Consideration received (receivable)b1,116 96 (414)
Proceeds from the sale of businesses related to completed transactions 1,700 1,671 4,030
Depositsc26 – (146)
Proceeds from the sale of businesses 1,726 1,671 3,884
a2013 includes pension and other post-retirement benefit plan curtailment gains of $109 million.
bConsideration received from prior year business disposals or to be received from current year disposals. 2015 includes $1,079 million of proceeds from our Toledo refinery partner, Husky Energy, in
place of capital commitments relating to the original divestment transaction that have not been subsequently sanctioned. 2013 includes contingent consideration of $475 million relating to the disposal
of the Texas City refinery.
cProceeds received in the current year in advance of business disposals, less deposits received in prior years in relation to business disposals completed in the current year.
Impairments
Impairment losses and impairment reversals in each segment are described below. For information on significant estimates and judgements made in
relation to impairments see Impairment of property, plant and equipment, intangibles and goodwill within Note 1. For information on impairments
recognized by joint ventures see Note 15.
Upstream
The 2015 impairment losses of $2,484 million included $761 million in Angola, of which $371 million related to the Greater Plutonio cash-generating
unit (CGU), which has a recoverable amount of $2,222 million. Impairment losses also included $830 million in relation to CGUs in the North Sea, of
which $328 million relates to the Andrew area CGU, which has a recoverable amount of $766 million. The impairment losses primarily arose as a result
of a lower price environment in the near term, and were also affected to a lesser extent by certain technical reserves revisions and increases in
decommissioning cost estimates. The 2015 impairment reversals of $1,080 million included $945 million in the North Sea business, of which
$473 million related to the Eastern Trough Area Project (ETAP) CGU, which has a recoverable amount of $2,489 million. The impairment reversals
mainly arose as a result of decreases in cost estimates and a reduction in the discount rate applied, offsetting the impact of lower prices in the near
term. Impairment losses and reversals relate to producing assets. The recoverable amounts of the Greater Plutonio CGU, the Andrew area CGU, and
the ETAP CGU are their values in use. See Impairment of property, plant and equipment, intangible assets and goodwill within Note 1 for further
information on assumptions used for impairment testing. The discount rate used to determine the recoverable amount of the Greater Plutonio CGU
included the 2% premium for higher-risk countries as described in Note 1; a premium was not applied in determining the recoverable amount of the
other CGUs.
The 2014 impairment losses of $6,737 million included $4,876 million in relation to CGUs in the North Sea, of which $1,964 million related to the Valhall
CGU, $660 million related to the Andrew area CGU, and $515 million related to the ETAP CGU. Impairment losses also included an $859-million
impairment of our PSVM CGU in Angola, and a $415-million impairment of the Block KG D6 CGU in India. All of the impairments related to producing
BP Annual Report and Form 20-F 2015 123
Financial statements