To BP from Rosneft with love

At the operating level, the group reported a 14 per cent dip in underlying replacement cost (RC) profits to $22.8bn (£14.0bn). This was largely attributable to the performance of BP's downstream segment - refining and marketing - where underlying RC profits nearly halved to $3.6bn. BP's fuels business had to contend with weaker refining margins in the US, in addition to bearing the costs of the large-scale Whiting refinery upgrade in the American midwest. Refinery throughput in the US fell by 45 per cent to 0.73m barrels per day, reflecting the impact of the sale of the Carson and Texas City refineries. The reduction in scale and a tightening spread on Brent versus WTI crude prices meant that BP's average marker margin per barrel fell to $15.4 in 2013, from $18.2 the previous year.

The Rosneft stake added $2.2bn to underlying RC profits during the second half of the year, which will come as a relief to chief executive Bob Dudley. Numbers indicate that the new strategic deal in Russia could prove even more profitable than BP's previous benighted relationship with the TNK oligarchs.

BP recorded a highly encouraging reserves-replacement ratio of 129 per cent for 2013, against just 77 per cent for 2012. The group made seven discoveries from its participation in 17 exploration wells through the year, including the Gila prospect - BP's third Paleogene discovery in the Gulf of Mexico. Organic capital expenditure (excluding the Rosneft deal) was $24.6bn through the year, with guidance pitched at a similar level for 2014.