Hello everyone, and thank you for your interest in bp's fourth quarter and full year 2024 results. Today's video presentation features Murray Auchincloss, Chief Executive Officer, and Kate Thompson, Chief Financial Officer. Before I hand over to Murray, let me draw your attention to our cautionary statement. In this presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to factors we note on this slide and in our U.K. and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filings for more details. These documents are available on our website. Over to you, Murray.
Thanks, Craig. Early in 2024, we laid out six priorities to support bp in becoming a simpler, more focused, and higher value company. 2024 was also a year where we made deliberate choices to focus and highlight our portfolio. The scale and pace of the action we have taken in the past year is greater than anything we've seen over the past 20 years, laying a strong foundation on which to build. Many of our businesses performed well during 2024, as seen through higher upstream production and strong plant reliability in oil and gas. Another good year for trading, and of course, the good progress we've made on cost reductions that Kate will cover shortly, and while it was also a difficult year for our customer and products business, notably in refining, I remain confident that the actions we are taking will drive an improvement in performance.
Now, safety underpins everything we do. Our goal to eliminate fatalities, life-changing injuries, and Tier 1 process safety events remains unchanged. We have demonstrated that strong progress is achievable, including in process safety, where we have continued the pattern of reducing Tier 1 events. However, in the fourth quarter, a colleague died following an incident at an industrial facility at a recently acquired bp Bioenergy site in Brazil. This is deeply regrettable, and we must and will learn from this incident. Turning to emissions, our focus also remains unchanged, and we continue to track well above our 2025 target for operational emission reductions. The implementation of our methane measurement approach at the end of 2023 across our upstream oil and gas assets is providing enhanced insight and improving management and reporting.
Turning to financial and operational performance, in 2024, we delivered operating cash flow of $27.3 billion and adjusted EBITDA of $38 billion, around $5.7 billion lower than 2023, reflecting the impact of lower refining margins, trading results, and realizations partly offset by higher upstream production. Our upstream production for the year was 2.36 million barrels per day, an increase of 2% compared to 2023, with plant reliability over 95%. We saw the startup of oil production from the new Azeri Central East platform in the Caspian Sea, and we brought online our third centralized processing facility in the Permian Basin. Across the group, we took FID on 10 major projects, including with our partners, the Tangguh UCC project in Indonesia, sanctioned in November.
In December, we established a new gas joint venture, Arcius Energy, with ADNOC International Energy Investment Company, XRG, and we also announced an agreement to form JERA Nex bp, our offshore wind joint venture that will combine the complementary capabilities and portfolios of both companies and help grow the scale of the business in a capital-light way for bp. We have signed an agreement with ONGC as the technical services provider for the largest offshore oil and gas field in India, responsible for around 25% of the country's oil production. In Iraq, we have agreed the majority of commercial terms with the government for the redevelopment of several oil fields in Kirkuk. This builds on our longstanding and strategic relationship and delivers access to a new material resource opportunity. In refining, availability declined to 94.3%, including the impact of the Whiting outage in the first quarter.
We saw continued stronger performance in Castrol, aviation, and momentum in EV charging, convenience, and retail fuels. However, midstream results were lower due to lower biofuels and B2B margins due to supply-demand imbalances. And in trading, the consistent delivery of an average uplift of 4% to Group ROACE now extends to the past five years. We grew our dividend per ordinary share by 10% and announced $7 billion of share buybacks for the year, including the $1.75 billion announced today. We are confident in the actions we are taking, and we're excited to tell you about our plans and our Capital Markets Update on February 26th. Let me now hand over to Kate to cover our fourth quarter results and provide an update on our progress on our cost agenda.
Thanks, Murray. In the fourth quarter, we reported group underlying replacement cost profit before interest and tax of $4 billion. The result was around $1.2 billion lower than the third quarter, primarily driven by a lower Customers & Product segment result and a higher charge in other businesses and corporate, which was largely due to foreign exchange effects. Looking at segment performance in more detail, in the Gas & Low Carbon Energy segment, the underlying profit was around $200 million higher than the third quarter, largely driven by higher realizations. The gas marketing and trading result was average. The fourth quarter included a one-off $100 million favorable impact. In the Oil Production & Operations segment, the underlying profit was around $100 million higher than the third quarter, reflecting lower exploration write-offs, partly offset by lower realizations and volumes.
In the quarter, there was also a cumulative benefit of around $300 million for several items, including hedging and income from a sale of royalties. The Customers & Product s segment was around $700 million lower quarter on quarter. In customers, the underlying profit was around $400 million lower, reflecting lower fuels margins, seasonally lower volumes, and adverse foreign exchange impacts. In products, the underlying result was around $300 million lower, mainly reflecting weaker realized refining margins and a higher impact from turnaround activity. The oil trading contribution was weak. Below the operating segments, our underlying finance costs were $1.1 billion in the fourth quarter, around $100 million higher than the third quarter, which was mainly reflecting the higher gross debt. Our non-controlling interest was $340 million in the fourth quarter, around $180 million higher than the third quarter, mainly reflecting earnings from our subsidiaries with minority interests.
Our underlying effective tax rate was 49%, bringing the full year to 41%. Taken together, our reported group underlying replacement cost profit was $1.2 billion. On an IFRS basis, our headline loss was $2 billion after net adverse adjusting items of $3.1 billion. And finally, today, we have announced a dividend of $0.08 per ordinary share for the fourth quarter. Moving to cash flow and the balance sheet. Operating cash flow was $7.4 billion in the fourth quarter, which was around $700 million higher than the previous quarter, reflecting lower cash taxes paid and timing of provision settlements, partly offset by lower underlying earnings. There was also a working capital release of $1.3 billion in the quarter. Capital expenditure in the fourth quarter was $3.7 billion. This brought full year CapEx to $16.2 billion, which is in line with guidance set at the start of the year.
Divestment and other proceeds were $2.8 billion in the quarter, bringing the full year proceeds to $4.2 billion. Net debt reduced by $1.3 billion to $23 billion, including the impacts of acquired net debt of around $3 billion from the completion of the bp Bioenergy and Lightsource bp acquisitions and the issuance of $2.6 billion USD equivalent of perpetual hybrid bonds, where we proactively took advantage of attractive credit spreads on the hybrid market to manage the refinancing of our portfolio through 2026. I'd like now to touch on how we think about costs and update you on our cost efficiency program, where we are making really good progress.
For the detailed readers of our quarterly and annual accounts, we report costs of sales, expenses directly involved in generating revenue across three lines in the income statement: purchases, production and manufacturing expense, or P&M, and distribution and administration expense, or D&A. It's important to note that companies report costs differently, so the reported expense line items may not be comparable. In 2024, our P&M and D&A costs totaled to around $43 billion. While these two expense line items have increased by $10 billion over the last six years, $8 billion of this increase, a substantial majority, is related to variable costs. This increase in variable costs is primarily driven by higher transportation and shipping expenses, including freight costs, and reflects higher activity levels as we drive increased value and returns, largely in our oil and gas trading business.
Over this period, we also saw higher costs associated with emissions compliance, primarily related to the German Emissions Trading Act that was introduced in 2021. In addition, we saw an increase in marketing and distribution costs, largely reflecting increased volumes as we grow our customers' business. Of course, we are continually reviewing these variable costs to ensure we're safely running the most efficient business and that we are delivering a strong cost-to-margin ratio. Beyond these variable costs, we are focused on our underlying operating expenditure. As you know, we've previously referred to these as cash costs, but going forward, we will now refer to them as underlying operating expenditure. This expenditure is a subset of P&M plus D&A expenses that exclude the variable costs.
A detailed reconciliation of P&M plus D&A expenses to underlying operating expenditure is provided as an appendix to our results presentation and in our stock exchange announcement. On this slide, you can see our track record of delivering structural cost reductions. We updated you at the 2021 second quarter results that we had delivered $2.5 billion of structural cost reductions, and this slide shows continued progress through to 2023. However, this was more than offset by environmental factors such as supply chain inflation, higher energy costs, and growth costs. In 2024, we announced a target to reduce underlying operating expenditure by at least $2 billion by the end of 2026 from a 2023 baseline. I'm pleased to report that we've delivered structural cost reductions of around $800 million this year, more than offsetting the impacts of inflation, energy costs, foreign exchange effects, and growth costs.
Taken together, we've reduced absolute underlying operating expenditures by $300 million. Over half of these reductions were delivered in the customers and product segment, and a third in other business and corporate. Looking forward, we will provide regular updates in our disclosures on the further progress we're making on structural cost reductions. And now to guidance. So starting with the first quarter 2025. In the upstream, we expect reported upstream production to be around 90,000 barrels of oil equivalent per day lower, including the already announced divestments in Egypt and Trinidad, which completed towards the end of the fourth quarter, as well as base decline in both of those regions. In customers, we expect seasonally lower volumes. In addition, we expect fuels margins to remain sensitive to movements in cost of supply and for earnings to remain sensitive to the relative strength of the U.S. dollar.
In products, we expect realized refining margins to remain low with a lower level of refining turnaround activity, and as a reminder, we had roughly $400 million of favorable impacts in the fourth quarter across the oil production and operations and the gas and low carbon segments. Turning to our full year 2025 guidance, reported upstream production is expected to be lower, primarily reflecting previously announced divestments in gas regions. Underlying upstream production is expected to be slightly lower year on year. In our customers' business, we expect growth, including a full year contribution from bp Bioenergy and a higher contribution from TravelCenters of America. Fuels margins are expected to remain sensitive to the cost of supply and earnings delivery to remain sensitive to the relative strength of the U.S. dollar. Earnings growth is also expected to be supported by structural cost reductions.
In products, we expect broadly flat refining margins relative to 2024 and stronger underlying performance, underpinned by the absence of the plant-wide power outage at Whiting refinery and improvement plans across the portfolio. We expect similar levels of refinery turnaround activity to 2024, which was lower than 2023, with phasing in 2025 heavily weighted towards the first half and the highest impact in the second quarter. I won't go through the full year guidance line by line. It's on this slide and in our stock exchange announcement published this morning. Lastly, we are today retiring our 2025 EBITDA target. For completeness, let me reflect on how we hold this. As we've previously mentioned, the basket of prices in 2023 was in aggregate equivalent to our planned prices at the time we set our 2025 EBITDA target.
2024 reported EBITDA was $38 billion, and adjusting that to 2023 prices, it would be around $42 billion. When considering the underlying growth in our businesses, the absence of the plant-wide power outage at Whiting refinery and the full year impact of recent acquisitions and disposals, we would expect 2025 EBITDA to be slightly below the bottom end of the previously guided target of $46-$49 billion. Looking ahead and consistent with our focus on growing cash line returns, we will be updating our metrics, our targets, and financial frame at our capital markets update on the 26th of February. Now, let me hand back to Murray.
Thanks, Kate. I'll close by looking ahead to our capital markets update on the 26th of February. Since setting out our strategy five years ago, a lot has changed in the global economy, across the energy sector, and within bp.
We have come through a period of active transformation. We have learned, and we have been actively engaging with and listening to you, our shareholders. We are also a far more focused business than 12 months ago, having delivered significant changes across bp in 2024. Our oil and gas business is well positioned and performing strongly, and we have been taking action to reshape our portfolio and grow free cash flow, including sanctioning new projects such as Kaskida and through new access in India and Iraq. We are focused on improving performance in refining, have stopped projects that won't compete for capital, and are restructuring our low carbon business to grow, but in a more capital-light way. Our capital markets event will be a comprehensive update that builds on this. It will be a fundamental reset of our strategy.
It will demonstrate our focus on actions to drive performance, and it will enable us to grow cash flow and returns and shareholder value. It will be a new direction for bp and not business as usual. I'm excited about it and look forward to updating the market and seeing many of you then.