For the half year, underlying replacement cost (RC) profit was $5,169 million, compared with $5,408 million in 2018. Underlying RC profit is after adjusting RC profit for a net charge for non-operating items of $1,113 million, mainly relating to impairment charges, and net adverse fair value accounting effects of $186 million (both on a post-tax basis). RC profit was $3,870 million for the half year, compared with $4,178 million in 2018.

For the second quarter, underlying RC profit was $2,811 million, compared with $2,822 million in 2018. Underlying RC profit is after adjusting RC profit for a net charge for non-operating items of $861 million, mainly relating to impairment charges, and net adverse fair value accounting effects of $175 million (both on a post-tax basis).

RC profit was $1,775 million for the second quarter, compared with $1,789 million in 2018. BP’s profit for the second quarter and half year was $1,822 million and $4,756 million respectively, compared with $2,799 million and $5,268 million for the same periods in 2018. 

Strong financial results

• Underlying replacement cost profit for the second quarter of 2019 was $2.8 billion, similar to a year earlier. The quarter’s result largely reflected continued good operating performance, offset by oil prices lower than in the second quarter of 2018.
• Non-operating items in the second quarter of $0.9 billion, post-tax, related mainly to impairment charges.
• Operating cash flow, excluding Gulf of Mexico oil spill payments, was $8.2 billion for the second quarter, including a $1.5-billion working capital release (after adjusting for net inventory holding gains), and $14.2 billion for the first half, including a $0.5-billion working capital release.
• Gulf of Mexico oil spill payments of $1.4 billion on a post-tax basis in the second quarter were primarily the scheduled annual payments.
• A dividend of 10.25 cents a share was announced for the quarter.

Solid Upstream and Downstream performance

• Reported oil and gas production for the quarter averaged 3.8 million barrels a day of oil equivalent, 4% higher than a year earlier.
• With the start-up of Culzean in the North Sea this quarter, four Upstream major projects have begun production in the first half of the year.
• Final investment decisions were taken in the quarter for new Upstream major projects in India and the Gulf of Mexico, as well as agreement for additional investment in Angola.
• In Downstream, quarter on quarter growth in lubricants and fuels marketing, more than offset by planned turnarounds ahead of IMO 2020.

Growing low carbon businesses

• BP agreed to combine its Brazilian biofuels and biopower business with that of Bunge in a new equally-owned joint venture. On completion, BP’s interest in the venture will be more than 50% larger than its existing biofuels business.
• Lightsource BP (43% owned by BP) has continued to make strong progress, including agreeing a significant expansion in Brazil.
• BP agreed a $30 million venturing investment in Calysta, which will use BP's natural gas to produce protein feed for aquaculture and agriculture.

Upstream
Upstream production, which excludes Rosneft, for the first half of the year averaged 2,640mboe/d, 4.2% higher than a year earlier. Underlying production, adjusted for portfolio changes and PSA impacts was broadly flat.

Culzean in the North Sea (BP 32%) was BP’s fourth Upstream major project to start up in 2019 and the 23rd since the start of 2016.

Final investment decisions were made for the Thunder Horse South Expansion Phase 2 project in the US Gulf of Mexico and the MJ project on Block KG D6 offshore India. BP and partners also agreed additional investment expected to increase and extend production from deepwater Block 15 offshore Angola. In the quarter BP agreed the sale of mature oil interests in the Gulf of Suez, Egypt, including its interests in GUPCO, to Dragon Oil of Dubai. BP has agreed to sell its interest in oil and gas fields in Cleveland and McClain counties in Oklahoma, US. 

Bob Dudley, Group chief executive:
"At the midpoint of our five-year plan, BP is right on target. Reliable performance and disciplined growth across our businesses are delivering strong earnings, cash flow and returns to shareholders. And this is also allowing us to grow businesses that can make a significant contribution in the energy transition, helping deliver the energy the world needs with lower carbon. "