BP Annual Report and Form 20-F 2010

Performance
Production (thousand barrels of oil equivalent per day)
We report crude oil, natural gas liquids
(NGLs) and natural gas produced from
subsidiaries and equity-accounted
entities. These are converted to barrels
of oil equivalent (boe) at 1 barrel of
NGL = 1boe and 5,800 standard cubic
feet of natural gas = 1boe.
Reported production in 2010 was
4% lower than in 2009, due to the
effect of entitlement changes in our
production-sharing agreements, the
effect of acquisitions and disposals,
and the impact of events in the Gulf
of Mexico.
Reserves replacement ratio a (%)
Proved reserves replacement ratio (also
known as the production replacement
ratio) is the extent to which production
is replaced by proved reserves additions.
The ratio is expressed in oil equivalent
terms and includes changes resulting
from revisions to previous estimates,
improved recovery and extensions,
and discoveries.
Our reserves replacement ratio
in 2010 exceeded 100% once again.
We continue to drive renewal through
new access, exploration, targeted
acquisitions and a strategic focus
on increasing resources from fields
we currently operate.
Refining availability (%)
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
maintenance downtime.
Refining availability continued
its increasing trend in 2010, with
the biggest contributor being the
restoration of our Texas City refinery.
Operating cash flow ($ billion)
Operating cash flow is net cash
flow provided by operating activities,
from the group cash flow statement.
Operating activities are the principal
revenue-generating activities of the
group and other activities that are
not investing or financing activities.
The reduction in operating cash
flow primarily reflected the impacts
of the Gulf of Mexico incident.
a Combined basis of subsidiaries and
equity-accounted entities, excluding
acquisitions and disposals.
Replacement cost profit (loss) per ordinary share (cents)
Replacement cost profit (loss) reflects
the replacement cost of supplies. It is
arrived at by excluding from profit
inventory holding gains and losses
and their associated tax effect.
Replacement cost profit for the group
is the profitability measure used by
management. It is a non-GAAP
measure. See page 23 for the
equivalent measure on an IFRS basis.
In 2010 we recorded a replacement
cost loss primarily driven by a
$40.9-billion pre-tax charge in relation
to the Gulf of Mexico incident.
Dividends paid per ordinary share
This measure shows the total dividend
per share paid to ordinary shareholders
in the year.
In June 2010 the BP board reviewed
its dividend policy in light of the Gulf of
Mexico incident, and the agreement
to establish a $20-billion trust fund,
and decided to cancel ordinary share
dividends in respect of the first three
quarters of 2010.
Total shareholder return (%)
Total shareholder return represents
the change in value of a shareholding
over a calendar year, assuming that
dividends are re-invested to purchase
additional shares at the closing price
applicable on the ex-dividend date.
Total shareholder returns in 2010
were significantly impacted by the
cancellation of dividend payments and
the fall in share price brought about by
the events in the Gulf of Mexico.
Cents
Pence
55.05
2008
29.387
2008
56.00
2009
36.417
2009
ADS basis
Ordinary share basis
2008
(34.6)
2008
(15.1)
33.0 27.6
2009 2009
Business review
14.00
2010
2010
(24.1)
8.679
2010
2010
(21.4)
75
60
45
30
15
60
40
20
0
-20
BP Annual Report and Form 20-F 2010 13
Business review