Capital Markets Update - 4 February 2021 - Aker BP ASA
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Capital Markets Update
4 February 2021
Disclaimer This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker BP ASA’s lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as ”expects”, ”believes”, ”estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Aker BP ASA’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Document. Although Aker BP ASA believes that its expectations and the Document are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Document. Aker BP ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Document, and neither Aker BP ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
CAPITAL MARKETS UPDATE 2021
Strong performance in a challenging year
2020 in review
Handling challenges with Preserving financial strength by Delivering on
Covid-19 pandemic adapting to macro uncertainty operational targets
Protecting the safety of our people Non-sanctioned projects put on hold Safety and emissions
Maintaining stable operations Dividend reduction Production
Mobilising to deliver profitable growth Cost and capital spending
3
CAPITAL MARKETS UPDATE 2021
Aker BP is uniquely positioned for value creation
Pure-play oil and gas company with industry-leading low emissions
Efficient low-cost operations enabled by digitalization
Project execution through world-class alliances
Strong production growth by investing in high-return barrels
Robust free cash flow and attractive returns in supportive fiscal regime
4
PURE-PLAY
OIL AND GAS COMPANY
WITH INDUSTRY-LEADING
LOW EMISSIONS
5
The global energy transition
Affordable, reliable and sustainable energy for all
6
AKER BP’S ROLE IN THE GLOBAL ENERGY TRANSITION
Oil and gas – essential to the energy transition
A significant share of the energy mix for decades
Renewables
Renewables
Coal & nuclear
55% Coal & nuclear
46%
Natural gas
Natural gas
Oil
Oil
2019 2040
IEA's Sustainable
Development Scenario
Source: IEA World Energy Outlook 2020 7
AKER BP’S ROLE IN THE GLOBAL ENERGY TRANSITION
Our contribution as a pure-play oil & gas company
Produce efficiently to
return high value from
oil & gas resources to
Maximise our stakeholders
value
Reduce emissions
from our operations
Minimise focusing on the
total footprint
emissions
Contribute with
data, know-how and
Improve technology to other
and share industries
8
EFFICIENT
LOW-COST
OPERATIONS
ENABLED BY
DIGITALIZATION
9
2P reserves 2C resources 2020 production
Harstad
842 895 211
mmboe mmboe mboepd
Sandnessjøen
Skarv
Ivar Johan
Vallhall Alvheim Skarv Ula Other NOAKA
Aasen Sverdrup
Trondheim
Noaka
Alvheim Fornebu Vallhall area Alvheim area Skarv area
Operator, 90% Operator, ~65% Operator, ~24%
Ivar Aasen Stavanger
Johan Sverdrup
Ula/Tambar Free
Valhall/Hod float
Ivar Aasen Ula area Johan Sverdrup
40% 30% 30% Operator, ~35% Operator, 15-80% 11.6%
10EFFICIENT LOW-COST OPERATIONS
The future of E&P belongs to the most efficient producers
Lower emission intensity Lower cost
CO2 - kg/boe Aker BP ambition - Production cost USD/boe1
26.5 12.4
12.1
22.7
17.4 8.3
9.4
Below
6.9 USD 7
4.5
Below
5 kg/boe
North Africa Global avg. Norway Aker BP Aker BP Aker BP ambition 2018 2019 2020 Aker BP ambition next decade
America 2018 2018 2019 2019 2020 next decade
2018
Source: NOROG/IOGP. Numbers for Aker BP are company data (equity share)
1) Assuming USDNOK of 8.5 in 2021 and onwards 11EFFICIENT LOW-COST OPERATIONS
HSSE is always the number one priority in Aker BP
Achievements 2020 Serious incident frequency (SIF) Recordable injuries (TRIF)
0.7 3.5
Robust COVID response with no 0.6 0.6 3.1
2.9
2.6
incidents on operated installations 0.5 0.5
1.6
Positive safety trend in 2020
Zero process safety events tier 1
and tier 2 last two years
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
HSSE: Health, Safety, Security and Environment SIF: Per million exposure hours. TRIF: Total Recordable Injuries Frequency 12EFFICIENT LOW-COST OPERATIONS
Building new operating model by using our improvement toolbox
Standardization as driver for cost efficiency and safety, improved collaboration and accelerated improvements
AKER BP OPERATING MODEL
HSSE OPERATIONS MAINTENANCE PROCUREMENT LOGISTICS
13EFFICIENT LOW-COST OPERATIONS
Remote first!
MOVING ACTIVITIES ONSHORE IF POSSIBLE
Digital infrastructure with real-time data access Offshore operators equipped with handheld devices
for easy access to data and communication
Incentivising suppliers to take part in the transformation
and further develop remote capabilities Onshore collaboration centres to remotely support
offshore activities
14EFFICIENT LOW-COST OPERATIONS
2020 CO2 emission reductions in practice
ANNUAL CO2 REDUCTIONS OF ~15 000 TONNES
Systematic approach to energy efficiency 2020 example from Skarv:
Aker BP has established a structured process to map energy Reduced plant pressure loss in gas export by new larger
use and identify energy improvement opportunities (EIO) bypass JT valve and various adjustments
The EIOs are ranked according to environmental, technical and Effects:
economic effects, and the best projects are selected for Lower annual CO2 emissions 4 800 tonnes
implementation
Reduced power requirements
In 2020, six projects were carried out with total emissions
reductions of ~15 000 tonnes of CO2
15PROJECT EXECUTION
THROUGH WORLD-CLASS
ALLIANCES
16PROJECT EXECUTION THROUGH WORLD-CLASS ALLIANCES
Alliances – the cornerstone of our execution model
ONE TEAM COMMON GOALS SHARED INCENTIVES
17PROJECT EXECUTION THROUGH WORLD-CLASS ALLIANCES
Hod – prime example of alliance project
Five alliances involved
Copy of the Valhall Flank West development
Same team, same job, same blueprints
Efficiency gains and cost reductions
18STRONG PRODUCTION
GROWTH BY
INVESTING IN
HIGH-RETURN BARRELS
19Tax changes support activity and value creation
• Stimulate investment activity through
the cycle by improving liquidity and
accelerating cash flow
• Contribute to maintain competence
and jobs in the Norwegian oil and
gas industry
• Lead to increased value creation for
all stakeholders
20STRONG PRODUCTION GROWTH BY INVESTING IN HIGH-RETURN BARRELS
Strong growth potential from large resource base
2P oil and gas reserves 2C contingent resources
in production and under development oil and gas discoveries
Other
10%
Other
Alvheim 23%
8%
Valhall
NOAKA
36%
37%
Skarv 842 mmboe 895 mmboe
12%
83 % liquids Skarv
72 % liquids
8%
Alvheim
10%
Johan Sverdrup
Valhall
34%
22%
The reserves and resources for Aker BP, company equity share 21STRONG PRODUCTION GROWTH BY INVESTING IN HIGH-RETURN BARRELS
Targeting highly profitable barrels next two years
Project Area Net mmboe FID First oil
Johan Sverdrup phase 2 Johan Sverdrup 71 2015 2022
~550
Ongoing
Ærfugl phase 2 Skarv 18 2018 2022
Gråsel Skarv 3 2020 2021
net mmboe,
Hod Valhall 36 2020 2022 new projects
Sum ~125
Valhall infill drilling Valhall 10 2020 2021
Frosk Alvheim 10 2021 2023OPERATED FIELDS
Alvheim area Skogul
Production outlook1, net mboepd
Vilje 60
50
Boa
Trell
Trine
Alvheim
40
Kobra East/Gekko
~30 mmboe, net Trell & Trine
Aker BP 65% Gekko 10 mmboe, net
Aker BP 50%/64% 30
Volund
20
Froskelår
Frosk 10
Frosk
10 mmboe, net
Aker BP 65%
Bøyla
0
2018 2020 2022 2024 2026 2028
Caterpillar
Actual Plan Sanctioned Non-sanctioned
1) Included in production prognosis – Sanctioned: Skogul Non-sanctioned: Frosk, Froskelår, Trine & Trell, Kobra East/Gekko, Boa sidetrack, Kneler
NE, Kameleon infill wells. PDO: Plan for Development and Operation 23OPERATED FIELDS
Skarv area Alve
Nord
Production outlook1, net mboepd
Alve Nord
Ærfugl
~40 mmboe, net 50
Nord
Aker BP 88%
Ærfugl 40
Ørn Gråsel
3 mmboe, net
Aker BP 24%
30
Ørn
~20 mmboe, net Skarv
Aker BP 30% 20
Shrek
10
Ærfugl
Shrek
~5 mmboe, net
Aker BP 30%
0
2018 2020 2022 2024 2026 2028
Actual Plan Sanctioned Non-sanctioned
1) Included in production prognosis – Sanctioned: Ærfugl, Non-sanctioned: Alve North, Gråsel, Idun North, Shrek, Ørn 24OPERATED FIELDS
Valhall area
Production outlook1, net mboepd
70
60
50
40
30
Valhall NCP
~70 mmboe, net
Aker BP 90%
20
Valhall infill 10
~10 mmboe, net
Aker BP 90%
0
2018 2020 2022 2024 2026 2028
Actual Plan Sanctioned Non-sanctioned
1) Included in production prognosis – Sanctioned: Valhall Flank West Non-sanctioned: Hod, Valhall Diatomite, Valhall Tor, Valhall FW and other
infill wells 25OPERATED FIELDS
Ivar Aasen
Production outlook1, net mboepd
Hanz
~5 mmboe, net
25
Aker BP 35%
Lille Prinsen
exploration/appraisal 20
Aker BP 10%
Ivar Aasen
15
Edvard Grieg
10
Johan Sverdrup
5
0
2018 2020 2022 2024 2026 2028
Actual Plan Sanctioned Non-sanctioned
1) Included in production prognosis – Sanctioned: Hanz Non-sanctioned: Infill wells 26OPERATED FIELDS
Ula Ula
Nord Production outlook1, net mboepd
15
Ula
Oda
Tambar
Tambar
Øst 10
5
King Lear
Ekofisk area 0
2018 2020 2022 2024 2026 2028
Actual Plan Sanctioned Non-sanctioned
1) Non-sanctioned consists of Ula infill wells 27Oseberg
NOAKA
Prospective area with significant resources
>500 mmboe
LOTOS Equinor
operated
Equinor
Krafla
Noaka
Rind
Langfjellet Aker BP
Frøy Aker BP operated
>60%1)
Fulla
Frigg Gamma/Delta
Alvheim
Discoveries Owners
1) Based on current resource estimates for each of the discoveries multiplied by company interest in the respective licences. 28NOAKA
Moving towards concept select
ASKJA
FULLA KRAFLA
FRIGG GD
RIND
LANGFJELLET
FRØY
NOAKA: Krafla, Fulla and North of Alvheim License partners: 29JOHAN SVERDRUP
Johan Sverdrup - a world class oil field
PHASE 1 PLATEAU 2020 CO2 EMISSIONS BREAK-EVEN FULL FIELD PRODUCTION COST PHASE 1
~535 000 0.2 kg < $20 < $2
bbl per day per boe per bbl per boe
Picture: Equinor
Aker BP interest 11.5733% in Johan Sverdrup. Operated by Equinor. Field-life CO2 emissions of around 0.7 kg per boe 30JOHAN SVERDRUP
Phase 2 to increase capacity to 720,000 bbl/day in 2022
• New processing platform
• 28 wells and 5 subsea templates
• Capex NOK 41 billion
• Increasing processing capacity to 720,000 bbl/day
Illustration: Equinor
Aker BP’s interest in Johan Sverdrup is 11.5733% 31PRODUCTION AMBITION
Strong production growth by investing in high-return barrels
~70% higher production in 2028 than in 2020, mboepd
400
300 +70%
200
100
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Sanctioned Non-sanctioned ex. NOAKA NOAKA
32EXPLORATION
The Aker BP exploration formula
Maximize value of Explore for new Smart integration of
existing infrastructure hub potential data and technology
80 % 20 %
33EXPLORATION
2021 exploration programme 4
3
Licence Prospect Operator Aker BP Pre-drill Status
share mmboe
PL 533 Bask Lundin 35 % 14 - 585 Dry
PL 981 Merckx Ty 1 Lundin 40 % 43 - 304
PL 544 Garantiana W 2 Equinor 30 % 7 - 28
PL 858 Stangnestind 3 Aker BP 40 % 13 - 108
PL 722 Shenzhou 4 Equinor 20 % 191 - 505
PL 006C Gomez 5 DNO 15 % 17 - 57
PL 1041 Lyderhorn 6 Aker BP 40 % 6 - 14
PL 167 Lille Prinsen 7 Equinor 10 % Appraisal 2
PL 442 Liatårnet 8 Aker BP 90 % Appraisal
8
7
6
1
5
34MERGERS & ACQUISITIONS
Disciplined approach to M&A
FINANCIALLY OPERATED PREDOMINANTLY UPSIDE
ACCRETIVE ASSETS LIQUIDS POTENTIAL
2014 2015 2016 2017 2018 2019 2020
Logos represents acquisitions, mergers and asset transactions by Aker BP in Norway in the respective year. (M&A: mergers & acquisitions) 35ROBUST
FREE CASH FLOW
AND ATTRACTIVE RETURNS
IN SUPPORTIVE
FISCAL REGIME
36STRONG PERFORMANCE IN CLEAR UNIQUELY POSITIONED FOR
A TURBULENT YEAR PRIORITIES VALUE CREATION
371) Free cash flow: Net cash flow from operating activities plus Net cash flow from investment activities 38
2020 PERFORMANCE
Oil and gas production, sales and revenues
Volume Realised prices Total income
mboepd USD/boe USDm
Production Sales Liquids Natural gas
211 210 64.8 3 347
2 979
156 158
40.0
29.1
21.8
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020
392020 PERFORMANCE
Lifted volumes and realised prices
Crude oil liftings 20201) Breakdown of realised liquids prices in 2020
mmbbl USD/bbl
6.6 Brent Dated
6.4 6.3 Brent front month
6.0
5.4 5.5
4.9
4.7
4.4 4.3
4.0
2.6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1) Price data sources: Platts (Brent Dated), Bloomberg (Brent front month) 402020 PERFORMANCE
Production cost trending down
Production cost (USD/boe) 2020 cost guiding development
14 15
12.4 Significant reduction in cost/boe from
12.1
12
14
2019 driven by increased production
13
and reduced underlying cost
10
10
12
2020 cost in USD impacted by
8.3 7-8 ~8 8.3
8
Estimated
FX impact1 currency movements
11
6
10 10
Guiding reduced in March due to
9.4 9.5 9.4 activity reduction and weaker NOK
9
8.8
4
8.5
8.1 8 2020 cost down by 1 USD/boe
2
compared to original guiding when
7
adjusting for currency effects
0 6
2018 2019 2020 actual Feb March Oct 2020 actual
= USDNOK rate2
1) Estimated production cost 2020 at alternative FX rates for 2020 of USDNOK 10 (low) and USDNOK 8,5 (high) respectively
2) The full-year USDNOK rates are realized figures, while Feb, March and Oct refer to assumed USDNOK rate for full year 2020 at the time of guiding 412020 PERFORMANCE
Free cash flow generation above USD 350 million
Cash flow development, USD million
2 722 2 064
181 55 1 555
1 676 Abex
Expex
159
Capex 425
538
107
Cash Operations Net tax Asset sale Investments Bond issues Repayments Other Dividends Cash
end-2019 RCF + bonds end-2020
CF from operations CF from investments CF from financing
422020 PERFORMANCE
Performance vs. guidance
Production Capital spend Production cost Dividend
mboepd USD million USD/boe USD million
850
2 200
205-220 210-215 211 10
200
1 800
1 730 8.3
500 ~8
200
178
300 246
425 425
1 500
1 300 1 306
Original Latest guidance Actual Original Latest guidance Actual Original Latest guidance Actual Original Latest guidance Actual
Capex Exploration Abex
Original 2020 guidance was based on USDNOK 8.5. Latest 2020 guidance was based on USDNOK 9.5 and Actual 2020 was USDNOK 9.4. 43FINANCIAL STRATEGY
Capital allocation priorities to maximize value creation
1 Maintain sufficient
financial capacity
2 Invest in
profitable growth
3 Return
value creation
44MAINTAIN SUFFICIENT FINANCIAL CAPACITY
Superior financial flexibility further improved
Net debt and leverage ratio Available liquidity Debt maturity profile
USD billion (bars), Net debt/EBITDAX1 (line) USD billion2 USD billion
3.2 3.4
4.5 1.0 1.0
Cash
0.75 0.75
1.5x 2.6 0.5
1.2x
RCF
End 2019 End 2020 End 2019 End 2020 2021 2023 2025 2027 2029 2031
1) Leverage ratio: Net interest-bearing debt divided by EBITDAX last 12 months, excluding effects of IFRS16 Leasing
2) Available liquidity: Undrawn bank facilities and Cash and cash equivalents. (RCF: Revolving Credit Facility) 45MAINTAIN SUFFICIENT FINANCIAL CAPACITY
Effective capital market activity in turbulent times
10 $80
9
$70
8
$60
7
Oil price, Brent Blend USD/bbl $50
6
5 $40
4
$30
YTM, Aker BP 3,75% 10-year bond (LHS)
3
$20
2
$10
1
0 $0
Bond issue Bond issue
USD 1.5 billion USD 1.25 billion
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Extension to Settled Called
Repaid Repaid
2025 RCF USD NOK 1.9 billion USD 400 million
RCF drawings RCF drawings
2.0 billion tranche1 NIBOR + 6.5% Bond 2022, 6% Bond
1) Unchanged terms & conditions 46MAINTAIN SUFFICIENT FINANCIAL CAPACITY
Prudent risk management
Business risks Risk management policies
Credit rating
Liquidity • Committed to maintain investment grade profile
Liquidity
Investment
Forex • Liquidity buffer of minimum USD 2 billion
process
Hedging
Prudent risk • Using options and forwards to manage forex exposure
management • Put options to manage short-term oil price risk (1-2 years)
Insurance
Operational Commodity
risks prices • All assets insured in commercial market
• Loss of production covered after 45 days at net USD 50/bbl
Interest Investment criteria
rates • Full-cycle NPV1) break-even at or below USD 30/bbl
• Climate risk integrated in investment decisions
1) Net present value after tax at 10% discount rate 47INVEST IN PROFITABLE GROWTH
Prioritizing highly profitable investments from resource hopper
IRR for projects targeted for FID by 2022
Preliminary figures
~550
90%
USD 40/bbl oil price
80% USD 65/bbl oil price
net mmboe1 USD 50/bbl oil price
70%
60%
30% 10%
avg. IRR @ USD 50/bbl
0%
0 100 200 300 400 500 600
Accumulated volume (Mmboe)
1) In projects targeted for final investment decision (FID) by end 2022. Represents a selection of total 2C resources. IRR: Internal Rate of Return 48INVEST IN PROFITABLE GROWTH
Economics substantially improved in temporary fiscal regime
Break-even for projects targeted for FID by 2022 Accelerated tax deductions for investments on NCS
Preliminary figures, USD/boe2 Tax deduction in percent of invested amount on tax bill for fiscal year
89.6 91.4
40
73.1
Improvement: USD ~8/bbl
30
20
10
15.9 15.9 15.9 15.9
13.0 13.0
Year-end 2019 Year-end 2020
3.7 3.7 3.7 3.7 3.7
0
0 100 200 300 400 500 600 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total
Accumulated volume (Mmboe)
Ordinary tax system Temporary tax system
1) Projects included: Frosk, Garantiana, Hanz, Kobra East Gekko, NOAKA, Skarv satellites, Trell & Trine, Valhall infill drilling, Valhall NCP.
2) Break-even defined as the oil price necessary to achieve positive NPV using 10% discount rate 49INVEST IN PROFITABLE GROWTH
Summary of Norwegian tax changes
Ordinary tax system Temporary tax system
Capex depreciated
Corporate tax (22%) over 6 years
No change
Capex depreciated Immediate
Special tax (56%) over 6 years depreciation
20.8% 24%
Uplift on capex over 4 years in year 1
All capex 2020-21
Time limit N/A
PDOs by end-2022 2)
Tax losses Carried forward 1) Cash refund in 2020 and 2021
1) Refund of tax value for exploration costs if company in a tax loss position
2) All capex related to projects with PDO delivered by end 2022, until year of first oil 50INVEST IN PROFITABLE GROWTH
Expected tax payments
USD million
For fiscal year 2019 For fiscal year 2020 Sensitivity for fiscal year 20211)
$65 $65
199
106 81 $65 $65
48
$50 $50 $50 $50
(109) (12) (23) $40 $40
(201)
$40 $40
$30 $30
$30 $30
Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22
1) Estimated current tax on income for fiscal year 2021 for Aker BP at various oil price scenarios, assuming USDNOK 8.5. Excluding potential
payments related to uncertain tax cases. 51INVEST IN PROFITABLE GROWTH
Attractive investment program driven by FIDs in 2021/22
Capex outlook, USD billion
3.0
Near all capex related to sanctioned
projects or projects planned to be
2.5 sanctioned by end-2022
2.0 Expected 2021 capex of USD 1.6 bn
1.7 ~1.6 • Accelerating infill wells to benefit from
1.5 Other the temporary fiscal regime
1.3 NOAKA
Skarv
• Strengthened NOK increases capex
Sverdrup estimates measured in USD
1.0 Ula
Alvheim
2021 capex breakdown
0.5 • Ca. ½ related to production drilling
Valhall
• Ca. ⅓ related to development
investments
-
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Sanctioned Non-sanctioned NOAKA
52INVEST IN PROFITABLE GROWTH
Post-tax capex outflow significantly reduced
Illustrative pre-tax and post-tax capex outlook, USD billion
Temporary fiscal regime accelerates
tax deductions for capital investments
1.7
~1.6
Capital required to fund growth capex
1.3
reduced by 50-60% compared to
ordinary tax regime
Significantly improved near-term
cash flow balanced by higher tax
after the investment period
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Actual capex Capex pre tax
Capex post tax - temporary system Capex post tax - ordinary system
53INVEST IN PROFITABLE GROWTH
Economics of a typical project with below USD 30/bbl break-even
Illustrative project on the Norwegian Continental Shelf, USD million
400
300 $65
$50
USD 27/bbl
200
break-even at 10% discount rate
$40
100
0
20-35% IRR
-100 at 40-65 USD/bbl Brent
-200
-300
-400
1 year payback
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 from first oil
Year
Revenue (Oil price/bbl) Facility capex Tax (@$65/bbl) Acc. CF $40/bbl
Opex & CO2 cost Drilling capex Abandonment cost Acc. CF $65/bbl
Illustrative oil field of 25 mmboe, two producer wells, one water injector, plateau production of 15 mboepd, average decline of ~20% per year.
Total CAPEX of 500 USDm and OPEX of 7 USD/bbl. Consolidated tax position, assuming temporary tax regime. Assuming USDNOK of 8.5. 54INVEST IN PROFITABLE GROWTH
Carbon pricing consistent with meeting climate goals
Climate risk embedded in all investment decisions, USD per tonne CO2
200
2021 carbon price 2025 carbon price
All investments tested against a cost
of carbon significantly higher than the
IEA’s Sustainable Development
150 Scenario
Carbon price assumptions (2021 real):
100 • USD ~ 110/tonne CO2 in 2021
• USD ~ 150/tonne CO2 in 2025
• USD ~ 240/tonne CO2 in 2030
50
Carbon price assumptions increased
in line with new targets from
Norwegian government
0
EU-ETS forward Aker BP 2021 carbon IEA's Sustainable Aker BP 2025 carbon
price assumption Development price assumption
Scenario
Sources: IEA World Energy Outlook 2020 (IEA 2025 figures in USD 2019)
55INVEST IN PROFITABLE GROWTH
Strong production growth by investing in high-return barrels
Production outlook, mboepd
400
> 350 Plan to increase production by more
than 70% towards 2028
300 Assumed start-up Sverdrup phase 2
late-2022 and NOAKA mid-2027
210-220
210 210-220
200
Non-sanctioned Break-even below USD 30/bbl on
current project portfolio
Limited capital requirements due to
100 temporary tax changes
Sanctioned
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Sanctioned Non-sanctioned ex. NOAKA NOAKA
56INVEST IN PROFITABLE GROWTH
Ambition to drive down production cost further
Production cost outlook, USD/boe
Underlying cost continues to trend
12.1
12.4 down in 2021, offset by stronger NOK
Key drivers are operating model
improvements and new production
8.5-9.0
8.3
Well maintenance Cost of emissions set to increase in line
Maintenance and modification
with government targets
Target of reaching USD 7/bbl sustained
Base opex
Tariffs
Environmental taxes
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Assuming USDNOK of 8.5 in 2021 and onwards. 57INVEST IN PROFITABLE GROWTH
Exploration provides upside to current plan
Exploration spend outlook, USD million
2020 program reduced
• 4 wells completed and 6 moved
• Discovered net 10-30 mmboe
501
400-500
2021 plan includes 9 wells
• Near-field and appraisal wells
Well cost • Finishing the Barents campaign
246
NOAKA categorized as field evaluation
Field until final concept is selected
evaluation
High flexibility on future exploration activity
Expex is fully deductible same year as
Other incurred at 78% tax rate
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Assuming USDNOK of 8.5 in 2021 and onwards 58INVEST IN PROFITABLE GROWTH
Strong performance driving down decommissioning cost
Abandonment spend outlook, USD million
2020 program driven by P&A at
Valhall with strong performance
~200 In 2021 P&A at Valhall continues,
178 and together with slot recoveries at
Other Ula it makes up most of the spend
109
~85% of spend from 2022-28
related Valhall with ⅔ being P&A
P&A
Abex is fully deductible same year
High flexibility on timing as incurred at 78% tax rate
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
P&A: Plug & Abandonment. Assuming USDNOK of 8.5 in 2021 and onwards 59RETURN VALUE CREATION
Robust free cash flow generation
Annual free cash flow outlook, USD million1
2,500
$ 65/bbl
2,000
$ 50/bbl
1,500
$ 40/bbl
1,000
500
0
-500
2021 2022 2023 2024 2025 2026 2027 2028
1) Free cash flow: Net cash flow from operating activities minus Net cash flow used in investment activities
All oil price levels refer to Brent Blend USD 2021 real. Assuming USDNOK 9.5 @ USD 40/bbl, USDNOK 8.5 @ USD 50/bbl and USDNOK 8.0 @ USD 65/bbl 60RETURN VALUE CREATION
Dividend policy supports goal of maximizing value creation
Integrated part of capital allocation framework Dividends, USD million
750
Dividends reflect distribution capacity through the cycle,
considering long-term financial outlook and credit profile
Ambition of minimum 5% annual increase in dividends
from 2022 at oil price above USD 40/bbl 450 450
425
Cash dividends main mechanism for distribution
250
Proposed dividend to be paid in 2021 of USD 450 million
(USD 1.25 per share) in four installments
62.5
2016 2017 2018 2019 2020 2021
proposed
61RETURN VALUE CREATION
Clear priorities - attractive returns - capacity to grow
Dividend considerations across oil price scenarios Aker BP investment plan 2021-2028
USD billion, accumulated
30
>65 Consider extra shareholder distributions
USD/bbl
25 USD 65 oil price Additional
dividend capacity
USD 50 oil price
20 USD 40 oil price Dividends1
3 Grow distributions in line with value creation
FCF BE Financing cost
40-65 Deliver on profitable investment planCOMBINING THE FULL CAPITAL ALLOCATION PLAN
Plan set for deleveraging while growing cash flow and returns
Leverage ratio - an approximation incl. all investments and annual dividend increase of 5% from 2022
2.5
2.0 Investment
Grade
1.5 credit profile commitment
1.0
$ 40/bbl >70%
0.5 production increase to 2028
$ 50/bbl
0.0
$ 65/bbl USD 450m
-0.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
minimum annual dividend ambition
Leverage ratio: Net debt/EBITDAX. Effect of oil put options are not included. Assumed no change in investment behavior or impact on supplier costs from changes
in oil price. All oil price levels refer to Brent Blend USD 2021 real. Assuming USDNOK 9.5 @ USD 40/bbl, USDNOK 8.5 @ USD 50/bbl and USDNOK 8.0 @ USD 63
65/bbl. Dividend in 2021 of USD 450m and 5% annual increase assumed thereafter (for illustration).Guidance for 2021
PRODUCTION CAPITAL SPEND1 PRODUCTION COST PROPOSED DIVIDEND
210-220 2.2-2.3 8.5-9.0 450
mboepd USD billion USD/boe USD million
1) Approx. split: Capex USD 1.6 billion, Expex USD 0.4-0.5 billion, Abex USD 0.2 billion 64CAPITAL MARKETS UPDATE 2021
Our priorities
EXECUTE IMPROVE GROW
Safe and efficient operations New operating model for Mature NOAKA and other
with flawless project execution increased efficiency and reduced prioritized projects for FID by
through our alliances emissions end of 2022 and significantly lift
production towards 2028
65CAPITAL MARKETS UPDATE 2021
Aker BP is uniquely positioned for value creation
Pure-play oil and gas company with industry-leading low emissions
Efficient low-cost operations enabled by digitalization
Project execution through world-class alliances
Strong production growth by investing in high-return barrels
Robust free cash flow and attractive returns in supportive fiscal regime
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