BP 2009 Annual Report Download - page 191

189
BP Annual Report and Accounts 2009
Supplementary information on oil and natural gas (unaudited)
Financial statements
Standardized measure of discounted future net cash flows and changes therein relating to proved oil and gas reserves
The following tables set out the standardized measure of discounted future net cash flows, and changes therein, relating to crude oil and natural gas
production 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 timing of
future production, the estimation of crude oil and natural gas reserves and the application of average crude oil and natural gas prices and exchange rates
from the previous 12 months. Furthermore, both proved reserves estimates and production forecasts are subject to revision as further technical
information becomes available and economic conditions change. BP cautions against relying on the information presented because of the highly arbitrary
nature of the assumptions on which it is based and its lack of comparability with the historical cost information presented in the financial statements.
$ million
2009
Europe North South Africa Asia Australasia Total
America America
Rest of
Rest of North Rest of
UK Europe US America Russia Asia
At 31 December 2009
Subsidiaries
Future cash inflowsa50,800 17,700 204,000 4,900 26,400 58,400 – 36,100 32,500 430,800
Future production costb20,000 8,000 91,300 2,700 6,700 12,000 – 9,200 11,000 160,900
Future development costb5,000 2,500 24,900 1,000 5,600 12,200 – 6,400 3,100 60,700
Future taxationc12,900 3,700 27,300 200 5,800 11,300 – 4,700 4,500 70,400
Future net cash flows 12,900 3,500 60,500 1,000 8,300 22,900 – 15,800 13,900 138,800
10% annual discountd5,800 1,600 29,500 500 3,200 9,800 – 6,300 7,300 64,000
Standardized measure of discounted
future net cash flowse7,100 1,900 31,000 500 5,100 13,100 – 9,500 6,600 74,800
Equity-accounted entities (BP share)f
Future cash inflowsa––––37,700 – 96,700 30,000 – 164,400
Future production costb––––17,000 – 65,200 25,200 – 107,400
Future development costb––––4,000 – 10,200 3,100 – 17,300
Future taxationc––––5,200 – 4,300 100 – 9,600
Future net cash flows ––––11,500 – 17,000 1,600 – 30,100
10% annual discountd––––6,800 – 7,900 800 – 15,500
Standardized measure of discounted
future net cash flowsgh ––––4,700 – 9,100 800 – 14,600
Total subsidiaries and equity-accounted entities
Standardized measure of discounted
future net cash flows 7,100 1,900 31,000 500 9,800 13,100 9,100 10,300 6,600 89,400
The following are the principal sources of change in the standardized measure of discounted future net cash flows:
$ million
Equity-accounted Total subsidiaries and
Subsidiaries entities (BP share) equity-accounted entities
Sales and transfers of oil and gas produced, net of production costs (18,900) (3,400) (22,300)
Previously estimated development costs incurred during the year 11,700 2,100 13,800
Extensions, discoveries and improved recovery, less related costs 8,500 1,600 10,100
Net changes in prices and production cost 37,200 5,900 43,100
Revisions of previous reserves estimates (4,300) (200) (4,500)
Net change in taxation (10,600) (1,600) (12,200)
Future development costs (600) 900 300
Net change in purchase and sales of reserves-in-place (100) (900) (1,000)
Addition of 10% annual discount 4,700 900 5,600
Total change in the standardized measure during the yeari27,600 5,300 32,900
aThe marker prices used were Brent $59.91/bbl, Henry Hub $3.82/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. Future
decommissioning 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 $1,300 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
those entities.
gMinority interest in TNK-BP amounted to $600 million.
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.