REG - BP PLC - 2Q16 Part 1 of 1 <Origin Href="QuoteRef">BP.L</Origin> - Part 3

BPAnnouncement

26/07/2016 07:05

- Part 3: For the preceding part double click  ID:nRSZ1829Fb 

commodity is sold in a subsequent accounting
period. Gains and losses on the related derivative commodity contracts are recognized in the income statement, from the
time the derivative commodity contract is entered into, on a fair value basis using forward prices consistent with the
contract maturity. 
 
BP enters into commodity contracts to meet certain business requirements, such as the purchase of crude for a refinery or
the sale of BP's gas production. Under IFRS these contracts are treated as derivatives and are required to be fair valued
when they are managed as part of a larger portfolio of similar transactions. Gains and losses arising are recognized in the
income statement from the time the derivative commodity contract is entered into. 
 
IFRS requires that inventory held for trading is recorded at its fair value using period-end spot prices whereas any
related derivative commodity instruments are required to be recorded at values based on forward prices consistent with the
contract maturity. Depending on market conditions, these forward prices can be either higher or lower than spot prices
resulting in measurement differences. 
 
BP enters into contracts for pipelines and storage capacity, oil and gas processing and liquefied natural gas (LNG) that,
under IFRS, are recorded on an accruals basis. These contracts are risk-managed using a variety of derivative instruments,
which are fair valued under IFRS. This results in measurement differences in relation to recognition of gains and losses. 
 
The way that BP manages the economic exposures described above, and measures performance internally, differs from the way
these activities are measured under IFRS. BP calculates this difference for consolidated entities by comparing the IFRS
result with management's internal measure of performance. Under management's internal measure of performance the inventory
and capacity contracts in question are valued based on fair value using relevant forward prices prevailing at the end of
the period, the fair values of certain derivative instruments used to risk manage LNG and oil and gas contracts are
deferred to match with the underlying exposure and the commodity contracts for business requirements are accounted for on
an accruals basis. We believe that disclosing management's estimate of this difference provides useful information for
investors because it enables investors to see the economic effect of these activities as a whole. The impacts of fair value
accounting effects, relative to management's internal measure of performance, are shown in the table above. A
reconciliation to GAAP information is set out below. 
 
 Second   First    Second                                                           First    First    
 quarter  quarter  quarter                                                          half     half     
 2015     2016     2016       $ million                                             2016     2015     
                              Upstream                                                                
                              Replacement cost profit (loss) before interest and                      
 258      (1,102)  36         tax adjusted for fair value accounting effects        (1,066)  620      
 (30)     (103)    (145)      Impact of fair value accounting effects               (248)    (20)     
 228      (1,205)  (109)      Replacement cost profit before interest and tax       (1,314)  600      
                              Downstream                                                              
                              Replacement cost profit before interest and                             
 1,745    2,099    1,476      tax adjusted for fair value accounting effects        3,575    3,940    
 (117)    (219)    (71)       Impact of fair value accounting effects               (290)    (229)    
 1,628    1,880    1,405      Replacement cost profit before interest and tax       3,285    3,711    
                              Total group                                                             
                              Profit (loss) before interest and tax adjusted for                      
 (8,101)  (103)    (2,700)    fair value accounting effects                         (2,803)  (5,365)  
 (147)    (322)    (216)      Impact of fair value accounting effects               (538)    (249)    
 (8,248)  (425)    (2,916)    Profit (loss) before interest and tax                 (3,341)  (5,614)  
 
 
Top of page 29 
 
Additional information (continued) 
 
   
 
 
Realizations and marker prices 
 
 Second   First    Second                                                    First  First  
 quarter  quarter  quarter                                                   half   half   
 2015     2016     2016                                                      2016   2015   
                              Average realizations(a)                                      
                              Liquids* ($/bbl)                                             
 50.97    28.75    34.89      US                                             31.82  48.53  
 57.42    31.73    43.62      Europe                                         37.46  55.25  
 60.78    25.16    55.10      Rest of World                                  35.97  52.63  
 56.69    26.97    44.99      BP Average                                     34.63  51.49  
                              Natural gas ($/mcf)                                          
 2.15     1.57     1.53       US                                             1.55   2.27   
 9.16     4.30     4.64       Europe                                         4.46   8.27   
 4.05     3.31     3.10       Rest of World                                  3.21   4.57   
 3.80     2.84     2.66       BP Average                                     2.75   4.12   
                              Total hydrocarbons* ($/boe)                                  
 34.93    20.73    24.00      US                                             22.38  34.04  
 56.35    29.81    39.25      Europe                                         34.28  53.28  
 39.93    22.53    33.90      Rest of World                                  27.34  38.58  
 40.04    22.57    30.63      BP Average                                     26.24  38.47  
                              Average oil marker prices ($/bbl)                            
 61.88    33.94    45.59      Brent                                          39.81  57.84  
 57.85    33.45    45.53      West Texas Intermediate                        39.64  53.25  
 49.56    22.11    33.78      Western Canadian Select                        28.09  43.12  
 62.65    33.98    45.74      Alaska North Slope                             40.00  57.39  
 59.57    30.14    42.08      Mars                                           36.25  54.44  
 61.21    31.66    43.37      Urals (NWE - cif)                              37.56  56.83  
                              Average natural gas marker prices                            
 2.65     2.09     1.95       Henry Hub gas price ($/mmBtu)(b)               2.02   2.82   
 44.63    30.42    31.37      UK Gas - National Balancing Point (p/therm)    30.90  46.29  
 
 
 (a)  Based on sales of consolidated subsidiaries only - this excludes equity-accounted entities.  
 (b)  Henry Hub First of Month Index.                                                              
 
 
Exchange rates 
 
 Second   First    Second                                             First  First  
 quarter  quarter  quarter                                            half   half   
 2015     2016     2016                                               2016   2015   
 1.53     1.43     1.43       $/£ average rate for the period         1.43   1.52   
 1.57     1.44     1.34       $/£ period-end rate                     1.34   1.57   
                                                                                    
 1.11     1.10     1.13       $/E average rate for the period         1.12   1.12   
 1.11     1.14     1.11       $/E period-end rate                     1.11   1.11   
                                                                                    
 52.68    74.97    65.86      Rouble/$ average rate for the period    70.35  57.94  
 55.42    67.31    63.64      Rouble/$ period-end rate                63.64  55.42  
 
 
Top of page 30 
 
Glossary 
 
   
 
 
Capital expenditure on an accruals basis is a non-GAAP measure. It comprises additions to property, plant and equipment,
intangible assets and investments in joint ventures and associates, and reflects consideration payable in business
combinations. It does not include additions arising from asset exchanges and certain other non-cash items. 
 
Consolidation adjustment - UPII is unrealized profit in inventory arising on inter-segment transactions. 
 
Fair value accounting effects are non-GAAP adjustments to our IFRS profit (loss) relating to certain physical inventories,
pipelines and storage capacity. Management uses a fair-value basis to value these items which, under IFRS, are accounted
for on an accruals basis with the exception of trading inventories, which are valued using spot prices. The adjustments
have the effect of aligning the valuation basis of the physical positions with that of any associated derivative
instruments, which are required to be fair valued under IFRS, in order to provide a more representative view of the
ultimate economic value. Further information and a reconciliation to GAAP information is provided on page 28. 
 
Hydrocarbons - Liquids and natural gas. Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million
barrels. 
 
Inorganic capital expenditureis a non-GAAP measure. Itcomprises consideration in business combinations and certain other
significant investments made by the group. Inorganic capital expenditure is reported on an accruals basis. 
 
Inventory holding gains and losses represent the difference between the cost of sales calculated using the replacement cost
of inventory and the cost of sales calculated on the first-in first-out (FIFO) method after adjusting for any changes in
provisions where the net realizable value of the inventory is lower than its cost. Under the FIFO method, which we use for
IFRS reporting, the cost of inventory charged to the income statement is based on its historical cost of purchase or
manufacture, rather than its replacement cost. In volatile energy markets, this can have a significant distorting effect on
reported income. The amounts disclosed represent the difference between the charge to the income statement for inventory on
a FIFO basis (after adjusting for any related movements in net realizable value provisions) and the charge that would have
arisen based on the replacement cost of inventory. For this purpose, the replacement cost of inventory is calculated using
data from each operation's production and manufacturing system, either on a monthly basis, or separately for each
transaction where the system allows this approach. The amounts disclosed are not separately reflected in the financial
statements as a gain or loss. No adjustment is made in respect of the cost of inventories held as part of a trading
position and certain other temporary inventory positions. See Replacement cost (RC) profit or loss definition below. 
 
Joint arrangement is an arrangement in which two or more parties have joint control. 
 
Liquids - Liquids for Upstream and Rosneft comprises crude oil, condensate and natural gas liquids. For Upstream, liquids
also includes bitumen. 
 
Major projects have a BP net investment of at least $250 million, or are considered to be of strategic importance to BP or
of a high degree of complexity. 
 
Net debt and net debt ratio are non-GAAP measures. Net debt is calculated as gross finance debt, as shown in the balance
sheet, plus the fair value of associated derivative financial instruments that are used to hedge foreign currency exchange
and interest rate risks relating to finance debt, for which hedge accounting is applied, less cash and cash equivalents.
The net debt ratio is defined as the ratio of net debt to the total of net debt plus shareholders' equity. All components
of equity are included in the denominator of the calculation. BP believes these measures provide useful information to
investors. Net debt enables investors to see the economic effect of gross debt, related hedges and cash and cash
equivalents in total. The net debt ratio enables investors to see how significant net debt is relative to equity from
shareholders. The derivatives are reported on the balance sheet within the headings 'Derivative financial instruments'. 
 
Net wind generation capacity is the sum of the rated capacities of the assets/turbines that have entered into commercial
operation, including BP's share of equity-accounted entities. The gross data is the equivalent capacity on a gross-JV
basis, which includes 100% of the capacity of equity-accounted entities where BP has partial ownership. 
 
Non-operating items are charges and credits included in the financial statements that BP discloses separately because it
considers such disclosures to be meaningful and relevant to investors. They are items that management considers not to be
part of underlying business operations and are disclosed in order to enable investors better to understand and evaluate the
group's reported financial performance. Non-operating items within equity-accounted earnings are reported net of
incremental income tax reported by the equity-accounted entity. An analysis of non-operating items by region is shown on
pages 5, 7 and 9, and by segment and type is shown on page 27. 
 
Organic capital expenditure is a non-GAAP measure. It comprises capital expenditure on an accruals basis less inorganic
capital expenditure. An analysis of organic capital expenditure by segment and region is shown on page 26. 
 
Production-sharing agreement (PSA) is an arrangement through which an oil company bears the risks and costs of exploration,
development and production. In return, if exploration is successful, the oil company receives entitlement to variable
physical volumes of hydrocarbons, representing recovery of the costs incurred and a stipulated share of the production
remaining after such cost recovery. 
 
Top of page 31 
 
Glossary (continued) 
 
   
 
 
Realizations are the result of dividing revenue generated from hydrocarbon sales, excluding revenue generated from
purchases made for resale and royalty volumes, by revenue generating hydrocarbon production volumes. Revenue generating
hydrocarbon production reflects the BP share of production as adjusted for any production which does not generate revenue.
Adjustments may include losses due to shrinkage, amounts consumed during processing, and contractual or regulatory host
committed volumes such as royalties. 
 
Refining availability represents Solomon Associates' operational availability, which is defined as the percentage of the
year that a unit is available for processing after subtracting the annualized time lost due to turnaround activity and all
planned mechanical, process and regulatory downtime. 
 
The Refining marker margin (RMM) is the average of regional indicator margins weighted for BP's crude refining capacity in
each region. Each regional marker margin is based on product yields and a marker crude oil deemed appropriate for the
region. The regional indicator margins may not be representative of the margins achieved by BP in any period because of
BP's particular refinery configurations and crude and product slate. 
 
Replacement cost (RC) profit or loss reflects the replacement cost of inventories sold in the period and is arrived at by
excluding inventory holding gains and losses from profit or loss. RC profit or loss is the measure of profit or loss that
is required to be disclosed for each operating segment under International Financial Reporting Standards (IFRS). RC profit
or loss for the group is not a recognized GAAP measure. Management believes this measure is useful to illustrate to
investors the fact that crude oil and product prices can vary significantly from period to period and that the impact on
our reported result under IFRS can be significant. Inventory holding gains and losses vary from period to period due to
changes in prices as well as changes in underlying inventory levels. In order for investors to understand the operating
performance of the group excluding the impact of price changes on the replacement of inventories, and to make comparisons
of operating performance between reporting periods, BP's management believes it is helpful to disclose this measure. 
 
Underlying production is production after adjusting for divestments and entitlement impacts in our production-sharing
agreements. 
 
Underlying RC profit or loss is RC profit or loss after adjusting for non-operating items and fair value accounting
effects. Underlying RC profit or loss and fair value accounting effects are not recognized GAAP measures. See pages 27 and
28 for additional information on the non-operating items and fair value accounting effects that are used to arrive at
underlying RC profit or loss in order to enable a full understanding of the events and their financial impact. 
 
BP believes that underlying RC profit or loss is a useful measure for investors because it is a measure closely tracked by
management to evaluate BP's operating performance and to make financial, strategic and operating decisions and because it
may help investors to understand and evaluate, in the same manner as management, the underlying trends in BP's operational
performance on a comparable basis, period on period, by adjusting for the effects of these non-operating items and fair
value accounting effects. The nearest equivalent measure on an IFRS basis for the group is profit or loss for the year
attributable to BP shareholders. The nearest equivalent measure on an IFRS basis for segments is RC profit or loss before
interest and taxation. 
 
Top of page 32 
 
Principal risks and uncertainties 
 
   
 
 
The principal risks and uncertainties affecting BP are described in the Risk factors section of BP Annual Report and Form
20-F 2015 (pages 53-54) and are summarized below. Other than the removal of the Gulf of Mexico oil spill Risk factor
(following the announcement on 14 July 2016 of the non-operating charge to be taken associated with the oil spill), there
are no material changes in those risk factors for the remaining six months of the financial year. 
 
The risks summarized below, separately or in combination, could have a material adverse effect on the implementation of our
strategy, our business, financial performance, results of operations, cash flows, liquidity, prospects, shareholder value
and returns and reputation. 
 
Strategic and commercial risks 
 
·      Prices and markets - our financial performance is subject to fluctuating prices of oil, gas, refined products,
technological change, exchange rate fluctuations, and the general macroeconomic outlook. 
 
·      Access, renewal and reserves progression - our inability to access, renew and progress upstream resources in a
timely manner could adversely affect our long-term replacement of reserves. 
 
·      Major project* delivery - failure to invest in the best opportunities or deliver major projects successfully could
adversely affect our financial performance. 
 
·      Geopolitical - we are exposed to a range of political developments and consequent changes to the operating and
regulatory environment. 
 
·      Liquidity, financial capacity and financial, including credit, exposure - failure to work within our financial
framework could impact our ability to operate and result in financial loss. 
 
·      Joint arrangements* and contractors - we may have limited control over the standards, operations and compliance of
our partners, contractors and sub-contractors. 
 
·      Digital infrastructure and cybersecurity - breach of our digital security or failure of our digital infrastructure
could damage our operations and our reputation. 
 
·      Climate change and carbon pricing - public policies could increase costs and reduce future revenue and strategic
growth opportunities. 
 
·      Competition - inability to remain efficient, innovate and retain an appropriately skilled workforce could negatively
impact delivery of our strategy in a highly competitive market. 
 
·      Crisis management and business continuity - potential disruption to our business and operations could occur if we do
not address an incident effectively. 
 
·      Insurance - our insurance strategy could expose the group to material uninsured losses. 
 
Safety and operational risks 
 
·      Process safety, personal safety, and environmental risks - we are exposed to a wide range of health, safety,
security and environmental risks that could result in regulatory action, legal liability, increased costs, damage to our
reputation and potentially denial of our licence to operate. 
 
·      Drilling and production - challenging operational environments and other uncertainties can impact drilling and
production activities. 
 
·      Security - hostile acts against our staff and activities could cause harm to people and disrupt our operations. 
 
·      Product quality - supplying customers with off-specification products could damage our reputation, lead to
regulatory action and legal liability, and potentially impact our financial performance. 
 
Compliance and control risks 
 
·      US government settlements - failure to comply with the terms of our settlements with legal and regulatory bodies in
the US announced in November 2012 in respect of certain charges related to the Gulf of Mexico oil spill may expose us to
further penalties or liabilities or could result in suspension or debarment of certain BP entities. 
 
·      Regulation - changes in the regulatory and legislative environment could increase the cost of compliance, affect our
provisions and limit our access to new exploration opportunities. 
 
·      Ethical misconduct and non-compliance - ethical misconduct or breaches of applicable laws by our businesses or our
employees could be damaging to our reputation, and could result in litigation, regulatory action and penalties. 
 
·      Treasury and trading activities - ineffective oversight of treasury and trading activities could lead to business
disruption, financial loss, regulatory intervention or damage to our reputation. 
 
·      Reporting - failure to accurately report our data could lead to regulatory action, legal liability and reputational
damage. 
 
Top of page 33 
 
Legal proceedings 
 
   
 
 
The following discussion sets out the material developments in the group's material legal proceedings during the half year
2016. For a full discussion of the group's material legal proceedings, see pages 237-242 of BP Annual Report and Form 20-F
2015. 
 
Matters relating to the Deepwater Horizon accident and oil spill (the Incident) 
 
Consent Decree and Settlement Agreement  On 2 July 2015, BP reached agreements in principle with the United States federal
government and five Gulf states to settle all federal and state claims arising from the Incident. On 5 October 2015, the
United States lodged a proposed Consent Decree with the federal district court in New Orleans to resolve all United States
and Gulf states natural resource damage claims and all Clean Water Act penalty claims and certain other claims. At the same
time, BP entered a Settlement Agreement with the Gulf states for economic, property and other losses. On 22 March 2016, the
United States filed a motion with the court to enter the Consent Decree as a final settlement. On 4 April 2016, the court
entered the Consent Decree and also entered a final judgment on the terms set forth in the Consent Decree, at which time
the Consent Decree and Settlement Agreement became effective. 
 
Oil Pollution Act (OPA) Test Case Proceedings  Six OPA test cases were before the federal district court to address certain
OPA liability questions focusing on, among other issues, whether plaintiffs' alleged losses tied to the 2010 federal
government moratoria on deepwater drilling and federal permit delays are compensable. In December 2015, BP filed a motion
to dismiss plaintiffs' claims arising from the moratoria or permit process, and plaintiffs filed a motion asking the court
to prevent BP from arguing that government action and/or inaction following the oil spill is a "superseding" cause with
respect to some or all of the damages that plaintiffs claim. On 10 March 2016, the court granted BP's motion and denied the
plaintiffs' motion, ruling that BP is not, as a "Responsible Party" under OPA, liable for economic losses that resulted
from the 2010 deepwater drilling moratoria. The court's order dismissed the plaintiffs' claims with prejudice. On 19 March
2016, the plaintiffs appealed the court's ruling to the Fifth Circuit. 
 
Securities Class Action  Since the Incident, shareholders have sued BP and various of its current and former officers and
directors asserting class securities fraud claims. On 31 May 2016, the federal district court in Houston issued a decision
on the parties' summary judgment motions in relation to the claims by the class of post-explosion ADS purchasers from 26
April 2010 to 28 May 2010. In that decision, the court denied the plaintiffs' motion and granted in part and denied in part
BP's motion. Following that decision, on 2 June 2016, BP announced that it agreed with the plaintiffs' representatives to
settle the post-explosion class claims for the amount of $175 million, payable during 2016-2017, subject to approval by the
court. The parties are preparing the final settlement agreement and other papers in support of approval for submission to
the court. 
 
Other Civil Complaints  On 29 March 2016, the federal district court in New Orleans issued an order (the March Order)
dismissing in its entirety the master complaint raising claims for economic loss and property damage by private plaintiffs
relating to the Incident. The court ordered all private plaintiffs who filed a timely claim for economic loss or property
damage and did not release those claims to file and serve on BP by 2 May 2016 a sworn statement disclosing information
regarding their claims. In addition, the court required most plaintiffs who had not filed an individual complaint (defined
as a complaint not joined in by other plaintiffs) against BP to file a new individual complaint by 2 May 2016. The court
further ordered that plaintiffs who failed to comply with the order by 2 May 2016 (later extended by 14 days for many
plaintiffs) would have their claims deemed dismissed with prejudice without further notice. On 7 June 2016, the court
issued an order requiring private plaintiffs who had not complied with the March Order to show cause in writing by 28 June
2016 why their claims should not be dismissed with prejudice. The court also dismissed all joinders by plaintiffs in the
master complaint for private plaintiff economic loss and property damages claims. On 14 July 2016 the federal district
court issued an order listing those plaintiffs who complied with the March Order and those plaintiffs whose compliance with
the March Order remains to be determined by the court. The court dismissed with prejudice any remaining claims by private
plaintiffs for economic loss and property damage. Accordingly the vast majority of economic loss and property damage claims
from individuals and businesses that either opted out of the 2012 settlement with the Plaintiffs' Steering Committee and/or
were excluded from that settlement have either been resolved or dismissed. 
 
Non-US Government Lawsuits  On 18 October 2012, before a Mexican Federal District Court located in Mexico City, a class
action complaint was filed against BP Exploration & Production Inc., BP America Production Company and other BP
subsidiaries seeking, among other things, compensatory damages for the class members who allegedly suffered economic
losses, as well as an order requiring BP to remediate environmental damage resulting from the Incident, to provide funding
for the preservation of the environment and to conduct environmental impact studies in the Gulf of Mexico for the next 10
years. BP has not been formally served with the action. However, after learning that the Mexican Federal District Court
issued a resolution in the class action that impacted BP's rights, BP filed a constitutional challenge in Mexico asserting
that BP has never been formally served with process in the class action. This challenge remains pending. 
 
On 3 December 2015 and 29 March 2016, Acciones Colectivas de Sinaloa filed two class actions in the Mexican Federal
District Court on behalf of several Mexican States.  In these class actions, plaintiffs seek an order requiring the BP
defendants to repair the damage to the Gulf of Mexico, to pay penalties, and to compensate plaintiffs for damage to
property, to health and for economic loss. BP has not been formally served with either class action. 
 
Top of page 34 
 
Legal proceedings (continued) 
 
   
 
 
CSB Investigation  On 13 April 2016, the US Chemical Safety and Hazard Investigation Board (CSB) publicly released drafts
of the final two volumes of its four-volume report on its investigation into the Incident. The final two volumes primarily
concern the role of the regulator in the oversight of the offshore industry and organizational and cultural factors. They
include proposed recommendations to the US Department of Interior's Bureau of Safety and Environmental Enforcement, the
American Petroleum Institute, the Ocean Energy Safety Institute and the Sustainability Accounting Standards Board. 
 
Other legal proceedings 
 
FERC and CFTC Matters  The US Federal Energy Regulatory Commission (FERC) and the US Commodity Futures Trading Commission
(CFTC) investigated several BP entities regarding trading in the next-day natural gas market at Houston Ship Channel in
2008. The FERC Administrative Law Judge ruled on 13 August 2015 that BP manipulated the market by selling next-day, fixed
price natural gas at Houston Ship Channel in 2008 in order to suppress the Gas Daily index and benefit its financial
position. On 11 July 2016, the FERC issued an order affirming the initial decision and directing BP to pay a civil penalty
of $20.2 million and to disgorge $0.2 million in unjust profits. BP intends to seek rehearing before the FERC and
ultimately appeal to the US court of appeal if necessary. 
 
CSB Matters  In March 2007, the CSB issued a report on the March 2005 explosion and fire at the Texas City refinery
incident. The report contained recommendations to the BP Texas City refinery and to the board of directors of BP. On 25 May
2016, the CSB closed its last open recommendation to BP. The CSB has now accepted that all of BP's responses to its
recommendations have been satisfactorily addressed. 
 
Scharfstein v. BP West Coast Products, LLC  A purported class action lawsuit was filed against BP West Coast Products, LLC
in Oregon State Court under the Oregon Unlawful Trade Practices Act on behalf of customers who used a debit card at ARCO
gasoline stations in Oregon during the period 1 January 2011 to 30 August 2013, alleging that ARCO's Oregon sites failed to
provide sufficient notice of the 35 cents per transaction debit card fee. After a jury trial and subsequent hearing, in
2014 the jury rendered a verdict against BP. On 31 May 2016, the court entered a judgment for the amount of $417.3 million.
On 1 June 2016, BP filed a notice of appeal. No provision has been made for damages arising out of this class action. 
 
Top of page 35 
 
Cautionary statement 
 
   
 
 
In order to utilize the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995 (the
'PSLRA'), BP is providing the following cautionary statement: The discussion in this results announcement contains certain
forecasts, projections and forward-looking statements - that is, statements related to future, not past events - with
respect to the financial condition, results of operations and businesses of BP and certain of the plans and objectives of
BP with respect to these items. These statements may generally, but not always, be identified by the use of words such as
'will', 'expects', 'is expected to', 'aims', 'should', 'may', 'objective', 'is likely to', 'intends', 'believes',
'anticipates', 'plans', 'we see' or similar expressions. In particular, among other statements, the expected quarterly
dividend payment and timing of such payment; plans and expectations regarding Upstream activities in Azerbaijan, the Gulf
of Mexico, Norway, the Russian Federation, Egypt, Indonesia, Kuwait and China; expectations regarding the planned
restructuring of the German refining joint operation with Rosneft and the combination of BP's and Det norske's Norwegian
businesses; expectations regarding Upstream third-quarter 2016 reported production and Downstream third-quarter 2016
turnaround activity and industry refining margins;statements regarding the estimate of the amount of dividend payable by
Rosneft to BP; expectations with respect to the total amounts that will ultimately be paid by BP in relation to the Gulf of
Mexico incident and the timing thereof; and certain statements regarding the legal and trial proceedings, court decisions,
claims, penalties, potential investigations and civil actions by regulators, government entities and/or other entities or
parties and the risks associated with such proceedings; are all forward looking in nature. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in
the future and are outside the control of BP. Actual results may differ materially from those expressed in such statements,
depending on a variety of factors, including: the specific factors identified in the discussions accompanying such
forward-looking statements; the receipt of relevant third party and/or regulatory approvals; the timing and level of
maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new
fields onstream; the timing, quantum and nature of certain divestments; future levels of industry product supply, demand
and pricing, including supply growth in North America; OPEC quota restrictions; PSA effects; operational and safety
problems; potential lapses in product quality; economic and financial market conditions generally or in various countries
and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental
regulations; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies
sought or imposed; the actions of prosecutors, regulatory authorities and courts; exchange rate fluctuations; development
and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the
actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; our access to
future credit resources; business disruption and crisis management; the impact on our reputation of ethical misconduct and
non-compliance with regulatory obligations; trading losses; major uninsured losses; decisions by Rosneft's management and
board of directors; the actions of contractors; natural disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other
factors discussed elsewhere in this report and under "Risk factors" in BP Annual Report and Form 20-F 2015 as filed with
the US Securities and Exchange Commission. 
 
Contacts 
 
   
 
 
                     London               Houston          
                                                           
 Press Office        David Nicholas       Brett Clanton    
                     +44 (0)20 7496 4708  +1 281 366 8346  
                                                           
 Investor Relations  Jessica Mitchell     Craig Marshall   
 bp.com/investors    +44 (0)20 7496 4962  +1 281 892 4312  
 
 
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