BP Annual Report and Form 20-F 2011 - Company Reporting

Notes on financial statements5. Disposals and impairment$ million2011 2010 2009Proceeds from disposals of fixed assets 3,500 7,492 1,715Proceeds from disposals of businesses, net of cash disposed (768) 9,462 9662,732 16,954 2,681By businessExploration and Production 1,080 14,392 940Refining and Marketing 721 1,840 1,294Other businesses and corporate 931 722 4472,732 16,954 2,681Included in proceeds from disposal for 2010 are deposits of $6,197 million received from counterparties in respect of disposal transactions in theExploration and Production segment not completed at 31 December 2010, of which $30 million related to transactions still not completed at 31 December2011. This included a deposit of $3,530 million received in advance of the expected sale of our interest in Pan American Energy LLC. 2011 proceeds fromdisposal included the repayment of the same amount following the termination of the sale agreement as described in Note 4. No disposal deposits werereceived in 2011 or 2009 for expected transactions which had not completed by the end of those years. For further information on disposal transactionsnot yet completed see Note 4.Deferred consideration relating to disposals of businesses and fixed assets at 31 December 2011 amounted to $117 million receivable within oneyear (2010 $562 million and 2009 $807 million) and $111 million receivable after one year (2010 $271 million and 2009 $691 million).$ million2011 2010 2009Gains on sale of businesses and fixed assetsExploration and Production 3,477 5,267 1,717Refining and Marketing 317 999 384Other businesses and corporate 336 117 724,130 6,383 2,173$ million2011 2010 2009Losses on sale of businesses and fixed assetsExploration and Production 49 196 28Refining and Marketing 52 119 154Other businesses and corporate 3 6 21104 321 203Impairment lossesExploration and Production 1,443 1,259 118Refining and Marketing 599 144 1,834Other businesses and corporate 58 113 1892,100 1,516 2,141Impairment reversalsExploration and Production (146) – (3)Refining and Marketing – (141) –Other businesses and corporate – (7) (8)(146) (148) (11)Impairment and losses on sale of businesses and fixed assets 2,058 1,689 2,333DisposalsAs part of the response to the consequences of the Gulf of Mexico oil spill, the group announced plans to deliver up to $30 billion of disposal proceeds bythe end of 2011. This target has now been increased to $38 billion of disposal proceeds by the end of 2013. Prior to this, in the normal course of business,the group has sold interests in exploration and production properties, service stations and pipeline interests as well as non-core businesses. The group hasalso disposed of other assets in the past, such as refineries, when this has met strategic objectives.See Note 4 for further information relating to assets and associated liabilities held for sale at 31 December 2011.Exploration and ProductionIn 2011, the major disposal transactions were the sale of our interests in Colombia to Ecopetrol and Talisman, the sale of our upstream and midstreamassets in Vietnam and our investments in equity-accounted entities in Venezuela to TNK-BP, and the sale of our assets in Pakistan to United EnergyGroup. In addition, we also completed the disposal of half of the 3.29% interest in the Azeri-Chirag-Gunashli development in Azerbaijan to SOCAR and anumber of interests in the Gulf of Mexico to Marubeni Group. All of these transactions resulted in gains.In 2010, the major transactions were the sale of Permian Basin assets in the US, upstream gas assets in Canada and exploration concessions inEgypt to Apache Corporation. In addition, we sold 50% of our interests in Kirby oil sands in Canada to Devon Energy as part of a business combinationdescribed in Note 3. All of these transactions resulted in gains.In 2009, the major transactions were the sale of BP West Java Limited in Indonesia, the sale of our 49.9% interest in Kazakhstan PipelineVentures LLC and the sale of our 46% stake in LukArco, all of which resulted in gains. We also exchanged interests in a number of fields in the North Seawith BG Group plc.Financial statementsBP Annual Report and Form 20-F 2011 197