BP PLC

Overview Key strengths Key risks Strong position as one of five global oil and gas supermajors. Exposure to the volatile, capital-intensive oil and gas industry. Significant diversity in terms of geographic spread, with lower cash flow exposure to emerging markets than many peers. Mounting challenges from the energy transition and uncertainty about the effects of BP's strategy to expand beyond oil and gas. Solid underlying cash flow generating capacity with increased flexibility for shareholder returns. Ambitious goals to both increase group cash generation and reduce upstream production from 2.3 million barrels of oil equivalent per day (mmboepd) in 2022 to 2.0 mmboepd by 2030. Still sizable downstream operations that can supplement and moderate upstream cycles. We expect strong oil and

...The positive outlook reflects our expectation that BP will continue to reduce net debt amid the supportive market conditions, thereby improving its credit metrics. We expect strong oil and gas prices will translate into high EBITDA and cash flow generation, even if somewhat weaker than in 2022. Under our base case, with Brent oil at $85 per barrel (/bbl) for the rest of 2023 and in 2024, BP will continue to reduce net debt and maintain funds from operations (FFO) to debt above the 45% threshold for a higher rating. However, when calculated under our midcycle Brent price of $55/bbl, FFO to debt is consistent with the current ratings and improving, but not yet close to or above the 45% threshold that could support an upgrade. This is one key aspect of our positive outlook on the ratings. BP is building financial resilience by continuing to commit 40% of surplus cash flow to debt reduction. It also targets making progress within the 'A' credit rating category. After a significant net debt...

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