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

Supplementary information on oil and natural gas (unaudited)Standardized measure of discounted future net cash flows andchanges therein relating to proved oil and gas reservesThe following tables set out the standardized measure of discounted future net cash flows, and changes therein, relating to crude oil and natural gasproduction from the group’s estimated proved reserves. This information is prepared in compliance with FASB Oil and Gas Disclosures requirements.Future net cash flows have been prepared on the basis of certain assumptions which may or may not be realized. These include the timingof future production, the estimation of crude oil and natural gas reserves and the application of average crude oil and natural gas prices and exchangerates from the previous 12 months. Furthermore, both proved reserves estimates and production forecasts are subject to revision as further technicalinformation becomes available and economic conditions change. BP cautions against relying on the information presented because of the highly arbitrarynature of the assumptions on which it is based and its lack of comparability with the historical cost information presented in the financial statements.EuropeUKRest ofEuropeNorthAmericaRest ofNorthUS AmericaSouthAmerica$ million2011Africa Asia Australasia TotalAt 31 December 2011SubsidiariesFuture cash inflows a 97,900 36,400 332,900 100 39,100 82,100 – 59,200 53,900 701,600Future production cost b 30,500 10,900 140,700 100 10,500 16,800 – 16,000 15,600 241,100Future development cost b 8,500 2,700 32,300 – 7,600 13,200 – 9,600 3,200 77,100Future taxation c 37,100 15,200 57,000 – 11,400 19,800 – 8,100 9,000 157,600Future net cash flows 21,800 7,600 102,900 – 9,600 32,300 – 25,500 26,100 225,80010% annual discount d 11,200 3,100 55,500 – 4,100 12,500 – 9,800 13,500 109,700Standardized measure of discountedfuture net cash flows e 10,600 4,500 47,400 – 5,500 19,800 – 15,700 12,600 116,100Equity-accounted entities (BP share) fFuture cash inflows a – – – 9,100 46,700 – 188,900 34,200 – 278,900Future production cost b – – – 3,100 21,500 – 123,800 30,100 – 178,500Future development cost b – – – 1,900 5,000 – 15,600 2,400 – 24,900Future taxation c – – – 900 5,900 – 9,600 200 – 16,600Future net cash flows – – – 3,200 14,300 – 39,900 1,500 – 58,90010% annual discount d – – – 2,800 8,700 – 19,000 600 – 31,100Standardized measure of discountedfuture net cash flows g h – – – 400 5,600 – 20,900 900 – 27,800Total subsidiaries and equity-accounted entitiesStandardized measure of discountedfuture net cash flows 10,600 4,500 47,400 400 11,100 19,800 20,900 16,600 12,600 143,900RussiaRest ofAsiaThe following are the principal sources of change in the standardized measure of discounted future net cash flows:SubsidiariesEquity-accountedentities (BP share)$ millionTotal subsidiaries andequity-accountedentitiesSales and transfers of oil and gas produced, net of production costs (30,900) (5,700) (36,600)Development costs for the current year as estimated in previous year 12,800 2,900 15,700Extensions, discoveries and improved recovery, less related costs 6,600 2,800 9,400Net changes in prices and production cost 75,000 15,800 90,800Revisions of previous reserves estimates (22,000) 2,100 (19,900)Net change in taxation (18,200) (1,400) (19,600)Future development costs (10,800) (2,700) (13,500)Net change in purchase and sales of reserves-in-place (6,500) (2,700) (9,200)Addition of 10% annual discount 10,000 1,500 11,500Total change in the standardized measure during the year i 16,000 12,600 28,600aThe marker prices used were Brent $110.96/bbl, Henry Hub $4.12/mmBtu.bProduction costs, which include production taxes, and development costs relating to future production of proved reserves are based on the continuation of existing economic conditions. Futuredecommissioning costs are included.cTaxation is computed using appropriate year-end statutory corporate income tax rates.dFuture net cash flows from oil and natural gas production are discounted at 10% regardless of the group assessment of the risk associated with its producing activities.eMinority interest in BP Trinidad and Tobago LLC amounted to $1,600 million.fThe standardized measure of discounted future net cash flows of equity-accounted entities includes standardized measure of discounted future net cash flows of equity-accounted investments of thoseentities.gMinority interest in TNK-BP amounted to $1,600 million in Russia.hNo equity-accounted future cash flows in Africa because proved reserves are received as a result of contractual arrangements, with no associated costs.iTotal change in the standardized measure during the year includes the effect of exchange rate movements.Financial statementsBP Annual Report and Form 20-F 2011 277