BP 2015 Annual Report Download - page 262

Plant reliability
Plant reliability is calculated taking 100% less the ratio of total unplanned
plant deferrals divided by installed production capacity. Unplanned plant
deferrals are associated with the topside plant and where applicable the
subsea equipment (excluding wells and reservoir). Unplanned plant
deferrals include breakdowns and weather.
Pre-tax returns
Non-GAAP measure. Pre-tax returns is the ratio of underlying
replacement cost profit before interest and tax to the average operating
capital employed for the period.
Production-sharing agreement (PSA)
An arrangement through which an oil company bears the risks and costs
of exploration, development and production. In return, if exploration is
successful, the oil company receives entitlement to variable physical
volumes of hydrocarbons, representing recovery of the costs incurred and
a stipulated share of the production remaining after such cost recovery.
Proved reserves replacement ratio
The extent to which production is replaced by proved reserves additions.
This ratio is expressed in oil equivalent terms and includes changes
resulting from revisions to previous estimates, improved recovery, and
extensions and discoveries.
Realizations
Realizations are the result of dividing revenue generated from
hydrocarbon sales, excluding revenue generated from purchases made
for resale and royalty volumes, by revenue generating hydrocarbon
production volumes. Revenue generating hydrocarbon production reflects
the BP share of production as adjusted for any production which does not
generate revenue. Adjustments may include losses due to shrinkage,
amounts consumed during processing, and contractual or regulatory host
committed volumes such as royalties.
Refining availability
Represents Solomon Associates’ operational availability, which is defined
as the percentage of the year that a unit is available for processing after
subtracting the annualized time lost due to turnaround activity and all
planned mechanical, process and regulatory downtime.
Refining marker margin (RMM)
The average of regional indicator margins weighted for BP’s crude
refining capacity in each region. Each regional marker margin is based on
product yields and a marker crude oil deemed appropriate for the region.
The regional indicator margins may not be representative of the margins
achieved by BP in any period because of BP’s particular refinery
configurations and crude and product slate.
Replacement cost (RC) profit or loss
Reflects the replacement cost of inventories sold in the period and is
arrived at by excluding inventory holding gains and losses from profit or
loss. RC profit or loss is the measure of profit or loss that is required to be
disclosed for each operating segment under IFRS. RC profit or loss for
the group is not a recognized GAAP measure. Management believes this
measure is useful to illustrate to investors the fact that crude oil and
product prices can vary significantly from period to period and that the
impact on our reported result under IFRS can be significant. Inventory
holding gains and losses vary from period to period due to changes in
prices as well as changes in underlying inventory levels. In order for
investors to understand the operating performance of the group excluding
the impact of price changes on the replacement of inventories, and to
make comparisons of operating performance between reporting periods,
BP’s management believes it is helpful to disclose this measure. See
Financial statements – Note 5.
Subsidiary
An entity that is controlled by the BP group. Control of an investee exists
when an investor is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns
through its power over the investee.
Tier 1 process safety events
Losses of primary containment from a process of greatest consequence –
causing harm to a member of the workforce or costly damage to equipment
or exceeding defined quantities.
Tight oil and gas
Natural oil and gas reservoirs locked in hard sandstone rocks with low
permeability, making the underground formation extremely tight.
UK National Balancing Point
A virtual trading location for sale, purchase and exchange of UK natural
gas. It is the pricing and delivery point for the Intercontinental Exchange
natural gas futures contract.
Unconventionals
Resources found in geographic accumulations over a large area, that usually
present additional challenges to development such as low permeability or
high viscosity. Examples include shale gas and oil, coalbed methane, gas
hydrates and natural bitumen deposits. These typically require specialized
extraction technology such as hydraulic fracturing or steam injection.
Underlying production
Production after adjusting for divestments and entitlement impacts in our
production-sharing agreements.
Underlying RC profit or loss
RC profit or loss after adjusting for non-operating items and fair value
accounting effects. Underlying RC profit or loss and fair value accounting
effects are not recognized GAAP measures. See pages 217 and 218 for
additional information on the non-operating items and fair value accounting
effects that are used to arrive at underlying RC profit or loss in order to
enable a full understanding of the events and their financial impact. BP
believes that underlying RC profit or loss is a useful measure for investors
because it is a measure closely tracked by management to evaluate BP’s
operating performance and to make financial, strategic and operating
decisions and because it may help investors to understand and evaluate, in
the same manner as management, the underlying trends in BP’s
operational performance on a comparable basis, year on year, by adjusting
for the effects of these non-operating items and fair value accounting
effects. The nearest equivalent measure on an IFRS basis for the group is
profit or loss for the year attributable to BP shareholders. The nearest
equivalent measure on an IFRS basis for segments is RC profit or loss
before interest and taxation.
Trade marks
Trade marks of the BP group appear throughout this report.
They include:
ACTIVE
Aral
ARCO
BP
Nexcel
Field of the Future
Wild Bean Cafe
Bright Water Apple Pay is a registered trade mark
of Apple Inc.Castrol
Independent Simultaneous
Source
M&S Simply Food is a registered
trade mark of Marks & Spencer plc.
The Directors’ report on pages 55-75, 93-94, 169-195 and 215-258 was approved by the board and signed on its behalf by David J Jackson, company
secretary on 4 March 2016.
BP p.l.c.
Registered in England and Wales No. 102498
258 BP Annual Report and Form 20-F 2015