'We have moved past many milestones in 2012' - BP CEO

Two major upstream projects began production in the fourth quarter, making a total of five new major projects brought online in 2012. The PSVM project on Block 31 offshore Angola, one of the largest subsea developments in the world, started production in early December and the Skarv field in the Norwegian Sea began production at the end of the quarter.

BP expects four new major upstream projects to begin production by the end of 2013 — Angola LNG, North Rankin 2 in Australia, Na Kika 3 in the Gulf of Mexico, and the Chirag Oil project in Azerbaijan. A further six major projects are expected to come onstream through 2014. In addition, the major upgrade of the Whiting refinery in Indiana is expected to come online in the second half of 2013.

“We aim to be a focused oil and gas company, creating value by growing long-term sustainable free cash flow,” said Dudley. “We will deliver this through safe and reliable operations, and through disciplined and paced capital investment into a portfolio rich in high-margin opportunities.”

Organic capital expenditure is expected to be $24—$25 billion in 2013, up from $23 billion in 2012. As BP increases reinvestment in higher margin upstream projects and sustains levels of access and exploration, gross organic capital expenditure is expected to be managed in the range of $24—$27 billion from 2014 to the end of the decade, together with $2—$3 billion of divestments a year on average.

BP continued to work through the legal proceedings in the US during 2012, completing payments into the Trust Fund, and agreeing settlements with the Plaintiffs’ Steering Committee, criminal settlement with the US Department of Justice (DOJ) and settlement of civil claims against BP with the Securities and Exchange Commission (SEC). Primarily reflecting the criminal settlement agreement with the DOJ, BP took an additional $4.1 billion charge in the fourth quarter. The total cumulative net charge for the Gulf of Mexico incident at the end of the year was $42.2 billion.

BP remains prepared to settle the remaining civil claims but only on reasonable terms, and continues to prepare for the civil trial scheduled to start in late February.

Concluding, Bob Dudley said: “We are doing the work that needs to be done to be a safer, stronger company. We are steadily building the strong platform for growth in BP for the coming decade.”

BP