BP 2015 Annual Report Download - page 43

Rosneft segment performance
BP’s investment in Rosneft is managed and reported as a separate
segment under IFRS. The segment result includes equity-accounted
earnings, representing BP’s 19.75% share of the profit or loss of Rosneft,
as adjusted for the accounting required under IFRS relating to BP’s
purchase of its interest in Rosneft and the amortization of the deferred gain
relating to the disposal of BP’s interest in TNK-BP. See Financial
statements – Note 16 for further information.
$ million
2015a2014 2013b
Profit before interest and taxc d 1,314 2,076 2,053
Inventory holding (gains) losses (4) 24 100
RC profit before interest and tax 1,310 2,100 2,153
Net charge (credit) for non-operating
items –(225) 45
Underlying RC profit before interest
and tax 1,310 1,875 2,198
Average oil marker prices $ per barrel
Urals (Northwest Europe – CIF) 50.97 97.23 107.38
a The operational and financial information of the Rosneft segment for 2015 is based on preliminary
operational and financial results of Rosneft for the three months ended 31 December 2015.
Actual results may differ from these amounts.
b From 21 March 2013.
c BP’s share of Rosneft’s earnings after finance costs, taxation and non-controlling interests is
included in the BP group income statement within profit before interest and taxation.
d Includes $16 million (2014 $25 million, 2013 $5 million) of foreign exchange losses arising on the
dividend received.
Market price
The price of Urals delivered in North West European (Rotterdam) averaged
$50.97/bbl in 2015, $1.42/bbl below dated Brent . The differential to Brent
narrowed marginally from -$1.72/bbl in 2014 as stronger demand from
European refineries offset the impact of increased supplies of competing
medium sour crude from the Middle East.
Financial results
Replacement cost (RC) profit before interest and tax for the segment for
the year ended 31 December 2015 did not include any non-operating
items, whereas the 2014 result included a non-operating gain of $225
million, relating to Rosneft’s sale of its interest in the Yugragazpererabotka
joint venture .
After adjusting for non-operating items, the decrease in the underlying RC
profit before interest and tax compared with 2014 reflected lower oil
prices, foreign exchange, and comparatively favourable duty lag effects.
The rouble weakened against the US dollar during 2015. This impacts both
Rosneft’s earnings in roubles and BP’s share of the Rosneft result when it
is translated to US dollars. Compared with 2013, the 2014 result was
affected by an unfavourable duty lag effect, lower oil prices and other
items, partially offset by certain foreign exchange effects which had a
favourable impact on the result. See also Financial statements – Notes 16
and 31 for other foreign exchange effects.
Balance sheet
$ million
2015 2014 2013
Investments in associates e
(as at 31 December) 5,7977,312 13,681
Production and reserves
2015a 2014 2013f
Production (net of royalties) (BP share)c
Liquids (mb/d)
Crude oilg809 816 643
Natural gas liquids 45 7
Total liquids 813 821 650
Natural gas (mmcf/d) 1,195 1,084 617
Total hydrocarbons (mboe/d) 1,019 1,008 756
Estimated net proved reservesh (net of royalties)
(BP share)
Liquids (million barrels)
Crude oilg4,8234,961 4,860
Natural gas liquids 47 47 115
Total liquidsi4,871 5,007 4,975
Natural gasj (billion cubic feet) 11,1699,827 9,271
Total hydrocarbons (mmboe) 6,7966,702 6,574
e See Financial statements – Note 16 for further information.
f 2013 reflects production for the period 21 March to 31 December, averaged over the full year.
Information on BP’s share of TNK-BP’s production for comparative periods is provided on pages
230 and 231.
g Includes condensate.
h Because of rounding, some totals may not agree exactly with the sum of their component parts.
i Includes 70 million barrels of crude oil in respect of the 1.27% non-controlling interest in Rosneft
held assets in Russia including 28 million barrels held through BP’s equity-accounted interest in
Taas-Yuryakh Neftegazodobycha.
j Includes 129 billion cubic feet of natural gas in respect of the 0.23% non-controlling interest in
Rosneft held assets in Russia including 5 billion cubic feet held through BP’s equity-accounted
interest in Taas-Yuryakh Neftegazodobycha.
Defined on page 256.
Rosneft’s operations in West Siberia.
BP Annual Report and Form 20-F 2015 39
Strategic report