BP 2011 Annual Report Download - page 211

Financial statements
BP Annual Report and Form 20-F 2011 209
Notes on financial statements
15. Exploration for and evaluation of oil and natural gas resources
The following financial information represents the amounts included within the group totals relating to activity associated with the exploration for and
evaluation of oil and natural gas resources. All such activity is recorded within the Exploration and Production segment.
$ million
2011 2010 2009
Exploration and evaluation costs
Exploration expenditure written off 1,024 375 593
Other exploration costs 496 468 523
Exploration expense for the year 1,520 843 1,116
Intangible assets – exploration and appraisal expenditure 19,887 13,126 10,388
Liabilities 306 157 –
Net assets 19,581 12,969 10,388
Capital expenditure 8,911 6,422 2,715
Net cash used in operating activities 496 468 523
Net cash used in investing activities 8,556 6,428 3,306
16. Auditor’s remuneration
$ million
Fees – Ernst & Young 2011 2010 2009
Fees payable to the company’s auditors for the audit of the company’s accountsa15 13 13
Fees payable to the company’s auditors and its associates for other services
Audit of the company’s subsidiaries pursuant to legislation 19 22 22
Other services pursuant to legislation 10 12 11
44 47 46
Tax services 22 1
Services relating to corporate finance transactions 41 –
All other services 44 6
Audit fees in respect of the BP pension plans 11 1
55 55 54
a Fees in respect of the audit of the accounts of BP p.l.c. including the group’s consolidated financial statements.
2011 includes $1 million of additional fees for 2010 and 2010 includes $1 million of additional fees for 2009. Auditor’s remuneration is included in the
income statement within distribution and administration expenses.
The tax services relate to income tax and indirect tax compliance, employee tax services and tax advisory services.
The audit committee has established pre-approval policies and procedures for the engagement of Ernst & Young to render audit and certain
assurance and tax services. The audit fees payable to Ernst & Young are reviewed by the audit committee in the context of other global companies for
cost-effectiveness. Ernst & Young performed further assurance and tax services that were not prohibited by regulatory or other professional requirements
and were pre-approved by the committee. Ernst & Young is engaged for these services when its expertise and experience of BP are important. Most of
this work is of an audit nature. Tax services were awarded either through a full competitive tender process or following an assessment of the expertise of
Ernst & Young compared with that of other potential service providers. These services are for a fixed term.
Under SEC regulations, the remuneration of the auditor of $55 million (2010 $55 million and 2009 $54 million) is required to be presented as
follows: audit $44 million (2010 $47 million and 2009 $46 million); other audit-related services $1 million (2010 $1 million and 2009 $2 million); tax
$2 million (2010 $2 million and 2009 $1 million); and fees for all other services $8 million (2010 $5 million and 2009 $5 million).
17. Finance costs
$ million
2011 2010 2009
Interest payable 1,135 955 906
Capitalized at 2.63% (2010 2.75% and 2009 2.75%)a(347) (254) (188)
Unwinding of discount on provisionsb243 234 247
Unwinding of discount on other payablesb215 235 145
1,246 1,170 1,110
a Tax relief on capitalized interest is $107 million (2010 $71 million and 2009 $63 million).
b Unwinding of discount on provisions relating to the Gulf of Mexico oil spill was $6 million (2010 $4 million and 2009 nil) and unwinding of discount on other payables relating to the Gulf of Mexico oil spill
was $52 million (2010 $73 million and 2009 nil). See Note 2 for further information on the financial impacts of the Gulf of Mexico oil spill.