BP p.l.c. Group results Third quarter and nine months 2015

Transcription

1 BP p.l.c. Group results Third quarter and nine months 2015 FOR IMMEDIATE RELEASE London 27 October ,290 (5,823) 46 Profit (loss) for the period(a) (3,175) 8,187 1,095 (443) 1,188 Inventory holding (gains) losses*, net of tax ,385 (6,266) 1,234 Replacement cost profit (loss)* (2,929) 9,042 Net (favourable) unfavourable impact of non-operating items* and 652 7, fair value accounting effects*, net of tax 8, ,037 1,313 1,819 Underlying replacement cost profit* 5,709 9,897 Replacement cost profit (loss) (34.25) 6.73 per ordinary share (cents) (16.01) (2.05) 0.40 per ADS (dollars) (0.96) 2.94 Underlying replacement cost profit per ordinary share (cents) per ADS (dollars) BP s third-quarter replacement cost (RC) profit was $1,234 million, compared with $2,385 million a year ago. After adjusting for a net charge for non-operating items of $756 million and net favourable fair value accounting effects of $171 million (both on a post-tax basis), underlying RC profit for the third quarter was $1,819 million, compared with $3,037 million for the same period in For the nine months, RC loss was $2,929 million, compared with a profit of $9,042 million a year ago. After adjusting for a net charge for non-operating items of $8,655 million and net favourable fair value accounting effects of $17 million (both on a post-tax basis), underlying RC profit for the nine months was $5,709 million, compared with $9,897 million for the same period in Non-operating items include a restructuring charge of $151 million for the quarter and $638 million for the nine months. Cumulative restructuring charges from the beginning of the fourth quarter 2014 are expected to total around $2.5 billion by the end of RC profit or loss for the group, underlying RC profit or loss and fair value accounting effects are non-gaap measures and further information is provided on pages 3 and 28. All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $426 million for the third quarter and $11,513 million for the nine months. For further information on the Gulf of Mexico oil spill and its consequences see page 10 and Note 2 on page 16. See also Legal proceedings on page 32. Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the third quarter and nine months was $5.2 billion and $13.3 billion respectively, compared with $9.4 billion and $25.5 billion for the same periods in Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the third quarter and nine months was $5.4 billion and $14.3 billion respectively, compared with $9.4 billion and $25.8 billion for the same periods in Net debt* at 30 September 2015 was $25.6 billion, compared with $22.4 billion a year ago. The net debt ratio* at 30 September 2015 was 20.0%, compared with 15.0% a year ago. Net debt and the net debt ratio are non-gaap measures. See page 24 for more information. Total capital expenditure on an accruals basis for the third quarter was $4.3 billion, compared with $5.3 billion for the same period in For both periods almost all of the capital expenditure was organic*. For the nine months, total capital expenditure on an accruals basis was $13.4 billion, of which organic capital expenditure was $13.2 billion, compared with $17.0 billion for the same period in 2014, of which organic capital expenditure was $16.3 billion. See page 26 for further information. Our current plans are for organic capital expenditure to be in the range $17-19 billion per annum in the near term and closer to $19 billion for BP today announced a quarterly dividend of cents per ordinary share ($0.600 per ADS), which is expected to be paid on 18 December The corresponding amount in sterling will be announced on 7 December See page 23 for further information. * For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 30. (a) Profit attributable to BP shareholders. The commentaries above and following should be read in conjunction with the cautionary statement on page 35. 1

2 Group headlines (continued) In October 2013, BP announced plans to divest a further $10 billion of assets before the end of 2015, having completed its earlier divestment programme of $38 billion. Transactions to date have reached around $7.8 billion. Disposal proceeds were $0.3 billion for the third quarter and $2.6 billion for the nine months. The nine-months amount includes proceeds from our Toledo refinery partner, Husky Energy, in place of capital commitments relating to the original divestment transaction that have not been subsequently sanctioned. The effective tax rate (ETR) on RC profit or loss for the third quarter and nine months was 52% and 45% respectively compared with 42% and 35% for the same periods in Excluding the one-off deferred tax adjustment in the first quarter 2015 as a result of the reduction in the UK North Sea supplementary charge, the ETR for the nine months was 27%. Adjusting for non-operating items, fair value accounting effects and the first-quarter 2015 one-off deferred tax adjustment, the underlying ETR in the third quarter and nine months was 39% and 32% respectively, compared with 41% and 36% for the same periods in The underlying ETR for both periods is lower than a year ago mainly due to changes in the geographical mix of profits partly offset by foreign exchange effects from a stronger US dollar. Finance costs and net finance expense relating to pensions and other post-retirement benefits were a charge of $474 million for the third quarter, compared with $358 million for the same period in For the nine months, the respective amounts were $1,196 million and $1,081 million. 2

3 Analysis of RC profit (loss) before interest and tax and reconciliation to profit (loss) for the period RC profit (loss) before interest and tax* 3, Upstream 1,343 12,019 1,231 1,628 2,562 Downstream 6,273 2, Rosneft 1,075 1,649 (432) (455) (378) Other businesses and corporate (1,141) (1,363) (33) (10,747) (311) Gulf of Mexico oil spill response(a) (11,381) (313) 370 (39) 67 Consolidation adjustment UPII* (101) 384 4,554 (8,875) 3,065 RC profit (loss) before interest and tax (3,932) 15,334 Finance costs and net finance expense relating (358) (364) (474) to pensions and other post-retirement benefits (1,196) (1,081) (1,777) 3,013 (1,347) Taxation on a RC basis 2,298 (5,022) (34) (40) (10) Non-controlling interests (99) (189) 2,385 (6,266) 1,234 RC profit (loss) attributable to BP shareholders (2,929) 9,042 (1,585) 627 (1,726) Inventory holding gains (losses) (343) (1,225) Taxation (charge) credit on inventory holding 490 (184) 538 gains and losses Profit (loss) for the period attributable to 1,290 (5,823) 46 BP shareholders (3,175) 8,187 (a) See Note 2 on page 16 for further information on the accounting for the Gulf of Mexico oil spill response. Analysis of underlying RC profit before interest and tax Underlying RC profit before interest and tax* 3, Upstream 1,921 12,955 1,484 1,867 2,302 Downstream 6,327 3, Rosneft 1,075 1,405 (293) (401) (231) Other businesses and corporate (922) (1,220) 370 (39) 67 Consolidation adjustment - UPII (101) 384 5,570 2,431 3,343 Underlying RC profit before interest and tax 8,300 16,752 Finance costs and net finance expense relating to (348) (356) (359) pensions and other post-retirement benefits (1,064) (1,052) (2,151) (722) (1,155) Taxation on an underlying RC basis (1,428) (5,614) (34) (40) (10) Non-controlling interests (99) (189) 3,037 1,313 1,819 Underlying RC profit attributable to BP shareholders 5,709 9,897 Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 1 for the group and on pages 4-9 for the segments. 3

4 Upstream 3, Profit before interest and tax 1,331 12,013 (1) 3 27 Inventory holding (gains) losses* , RC profit before interest and tax 1,343 12,019 Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects* , Underlying RC profit before interest and tax*(a) 1,921 12,955 (a) See page 5 for a reconciliation to segment RC profit before interest and tax by region. Financial results The replacement cost profit before interest and tax for the third quarter and nine months was $743 million and $1,343 million respectively, compared with $3,311 million and $12,019 million for the same periods in The third quarter and nine months included a net non-operating charge of $118 million and $596 million respectively, compared with a net non-operating charge of $501 million and $741 million for the same periods a year ago. Fair value accounting effects in the third quarter and nine months had favourable impacts of $38 million and $18 million respectively, compared with unfavourable impacts of $87 million and $195 million in the same periods of After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the third quarter and nine months was $823 million and $1,921 million respectively, compared with $3,899 million and $12,955 million for the same periods in The result for the third quarter reflected significantly lower liquids and gas realizations partly offset by lower costs, including the benefits from simplification and efficiency activities, and strong gas marketing and trading results. The result for the nine months reflected significantly lower liquids and gas realizations partly offset by lower costs and increased production. Costs were lower reflecting benefits from simplification and efficiency activities and lower exploration write-offs partly offset by rig cancellation costs. Production Production for the quarter was 2,242mboe/d, 4.4% higher than the third quarter of Underlying production* for the quarter decreased by 2.2%, mainly due to higher seasonal turnaround activity. For the nine months, production was 2,220mboe/d, 4.3% higher than in the same period of Underlying production for the nine months was flat versus Key events In July, BP was awarded five new blocks in the North Sea as part of the second tranche of the 28 th licensing round by the UK Oil and Gas Authority. BP has been awarded 12 licences to date in this licensing round. On 31 August, Maersk Oil announced approval by the UK Oil and Gas Authority of development plans for the Culzean field in the UK North Sea. Culzean is operated by Maersk Oil on behalf of its partners, JX Nippon and BP (16%). In October, BP was provisionally awarded three blocks in the shallow waters of the Mediterranean Sea in Egypt, subject to government approval. Also in October, the Western Flank A project (BP 17%) in offshore Western Australia, began production. The project is operated by Woodside. Outlook Third-quarter production benefited from the absence of seasonal adverse weather in the Gulf of Mexico. We expect fourth-quarter 2015 reported production to be slightly higher than the third quarter mainly reflecting recovery from planned seasonal turnaround activity. The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35. 4

5 Upstream Underlying RC profit (loss) before interest and tax 1,181 (66) (152) US (763) 3,331 2, Non-US 2,684 9,624 3, ,921 12,955 Non-operating items 125 (135) (139) US (342) (6) (626) (101) 21 Non-US(a) (254) (735) (501) (236) (118) (596) (741) Fair value accounting effects (49) (55) 26 US (32) (129) (38) Non-US 50 (66) (87) (30) (195) RC profit (loss) before interest and tax 1,257 (256) (265) US (1,137) 3,196 2, ,008 Non-US 2,480 8,823 3, ,343 12,019 Exploration expense US(b) Non-US(a)(c) 1,097 1, ,430 2,177 Production (net of royalties)(d) Liquids* (mb/d) US Europe Rest of World ,106 1,111 1,231 1,200 1,091 Natural gas (mmcf/d) 1,546 1,477 1,569 US 1,521 1, Europe ,328 4,046 4,062 Rest of World 4,138 4,321 6,038 5,805 5,864 5,918 6,014 Total hydrocarbons* (mboe/d) US Europe ,352 1,328 1,447 Rest of World 1,424 1,328 2,147 2,112 2,242 2,220 2,128 Average realizations(e) Total liquids ($/bbl) Natural gas ($/mcf) Total hydrocarbons ($/boe) (a) (b) (c) (d) (e) Third quarter and nine months 2014 include a $375-million write-off relating to Block KG D6 in India. This is classified in the other category of non-operating items. In addition, an impairment charge of $395 million was also recorded in relation to this block. See page 27. Third quarter and nine months 2014 include write-offs of $23 million and $544 million respectively, relating to the Utica shale acreage in Ohio, following the decision not to proceed with development plans. Second quarter and nine months 2015 include a $432-million write-off in Libya. BP has declared force majeure in Libya and there is significant uncertainty on when drilling operations might be able to proceed. Includes BP s share of production of equity-accounted entities in the Upstream segment. Based on sales by consolidated subsidiaries only this excludes equity-accounted entities. Because of rounding, some totals may not agree exactly with the sum of their component parts. 5

6 Downstream (335) 2, Profit (loss) before interest and tax 5,892 1,702 1,566 (606) 1,687 Inventory holding (gains) losses* 381 1,256 1,231 1,628 2,562 RC profit before interest and tax 6,273 2,958 Net (favourable) unfavourable impact of non-operating items* and (260) fair value accounting effects* ,484 1,867 2,302 Underlying RC profit before interest and tax*(a) 6,327 3,228 (a) See page 7 for a reconciliation to segment RC profit before interest and tax by region and by business. Financial results The replacement cost profit before interest and tax for the third quarter and nine months was $2,562 million and $6,273 million respectively, compared with $1,231 million and $2,958 million for the same periods in The 2015 results include a net non-operating gain of $43 million for the third quarter and a net non-operating charge of $42 million for the nine months, compared with net non-operating charges of $552 million and $780 million for the same periods in 2014 (see pages 7 and 27 for further information on non-operating items). Fair value accounting effects had favourable impacts of $217 million for the third quarter and unfavourable impacts of $12 million for the nine months, compared with favourable impacts of $299 million and $510 million in the same periods of After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the third quarter and nine months was $2,302 million and $6,327 million respectively, compared with $1,484 million and $3,228 million for the same periods in Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 7. Fuels business The fuels business reported an underlying replacement cost profit before interest and tax of $1,917 million for the third quarter and $5,107 million for the nine months, compared with $1,078 million and $2,294 million for the same periods in The results for the quarter and nine months reflect an improved refining environment and strong refining operations, benefits from our simplification and efficiency programmes leading to lower costs and strong fuels marketing performance reflecting retail volume and margin growth. The nine-months result also reflects a higher contribution from supply and trading in the first half. Lubricants business The lubricants business reported an underlying replacement cost profit before interest and tax of $348 million in the third quarter and $1,090 million in the nine months, compared with $336 million and $958 million in the same periods last year. The results for the quarter and nine months reflect strong performance in growth markets and premium brands despite adverse foreign exchange impacts, and the benefits from our simplification and efficiency programmes leading to lower costs. Petrochemicals business The petrochemicals business reported an underlying replacement cost profit before interest and tax of $37 million in the third quarter and $130 million in the nine months, compared with a profit of $70 million and a loss of $24 million in the same periods last year. The result for the quarter was impacted by a weaker environment and the results for the quarter and nine months reflect lower costs from simplification and efficiency programmes and improved operational performance. Outlook Looking forward to the fourth quarter, we expect reduced refining margins and lower seasonal demand to adversely impact fuels margins and volumes compared with the third quarter. The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 35. 6

7 Downstream Underlying RC profit before interest and tax - by region US 2,122 1, ,291 1,417 Non-US 4,205 1,882 1,484 1,867 2,302 6,327 3,228 Non-operating items (181) US 110 (2) (371) (185) (8) Non-US (152) (778) (552) (122) 43 (42) (780) Fair value accounting effects 238 (48) 153 US (22) (69) 64 Non-US 10 (25) 299 (117) 217 (12) 510 RC profit before interest and tax ,089 US 2,210 1, ,037 1,473 Non-US 4,063 1,079 1,231 1,628 2,562 6,273 2,958 Underlying RC profit (loss) before interest and tax - by business(a)(b) 1,078 1,394 1,917 Fuels 5,107 2, Lubricants 1, Petrochemicals 130 (24) 1,484 1,867 2,302 6,327 3,228 Non-operating items and fair value accounting effects(c) 196 (152) 295 Fuels 83 (6) (5) (87) (25) Lubricants (126) 181 (444) (10) Petrochemicals (11) (445) (253) (239) 260 (54) (270) RC profit (loss) before interest and tax(a)(b) 1,274 1,242 2,212 Fuels 5,190 2, Lubricants 964 1,139 (374) Petrochemicals 119 (469) 1,231 1,628 2,562 6,273 2, BP average refining marker margin (RMM)* ($/bbl) Refinery throughputs (mb/d) US Europe Rest of World ,729 1,656 1,696 1,701 1, Refining availability* (%) Marketing sales of refined products (mb/d) 1,197 1,145 1,121 US 1,122 1,167 1,240 1,160 1,272 Europe 1,202 1, Rest of World ,959 2,874 2,935 2,896 2,872 2,439 2,649 2,718 Trading/supply sales of refined products 2,638 2,441 5,398 5,523 5,653 Total sales volumes of refined products 5,534 5,313 Petrochemicals production (kte) US 2,728 2,972 1, Europe 2,800 2,915 1,676 1,898 2,004 Rest of World 5,565 4,599 3,656 3,696 3,857 11,093 10,486 (a) (b) (c) Segment-level overhead expenses are included in the fuels business result. BP s share of income from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany is reported in the fuels business. For Downstream, fair value accounting effects arise solely in the fuels business. 7

8 Rosneft (a) $ million 2015(a) Profit before interest and tax(b) 1,125 1, (24) 12 Inventory holding (gains) losses* (50) (37) RC profit before interest and tax 1,075 1,649 3 Net charge (credit) for non-operating items* (244) Underlying RC profit before interest and tax* 1,075 1,405 Replacement cost profit before interest and tax for the third quarter and nine months was $382 million and $1,075 million respectively, compared with $107 million and $1,649 million for the same periods in There were no non-operating items in the third quarter and nine months 2015, compared with a non-operating charge of $3 million and a gain of $244 million for the same periods in After adjusting for non-operating items, the underlying replacement cost profit before interest and tax for the third quarter and nine months was $382 million and $1,075 million respectively, compared with $110 million and $1,405 million for the same periods in Compared with the same period last year, the result for the third quarter was favourably impacted by foreign exchange movements partly offset by lower prices. For the nine months, the result was primarily affected by lower oil prices and favourable foreign exchange effects. See also Group statement of comprehensive income Share of items relating to equity-accounted entities, net of tax, and footnote (a), on page 12 for other foreign exchange effects. In June, Rosneft s Annual General Meeting of Shareholders approved the distribution of a dividend of 8.21 roubles per share. We received our share of this dividend in July 2015, which amounted to $271 million after the deduction of withholding tax (a) 2015(a) 2014 Production (net of royalties) (BP share) Liquids* (mb/d) ,073 1,172 1,125 Natural gas (mmcf/d) 1,173 1,044 1,002 1,017 1,003 Total hydrocarbons* (mboe/d) 1,016 1,002 (a) (b) The operational and financial information of the Rosneft segment for the third quarter and nine months is based on preliminary operational and financial results of Rosneft for the nine months ended 30 September Actual results may differ from these amounts. The Rosneft segment result includes equity-accounted earnings arising from BP s 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BP s purchase of its interest in Rosneft and the amortization of the deferred gain relating to the disposal of BP s interest in TNK-BP. These adjustments have increased the reported profit before interest and tax for the third quarter and nine months 2015, as shown in the table above, compared with the equivalent amount in Russian roubles that we expect Rosneft to report in its own financial statements under IFRS. BP s share of Rosneft s profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BP's share of Rosneft s earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation. 8

9 Other businesses and corporate (432) (455) (378) Profit (loss) before interest and tax (1,141) (1,363) Inventory holding (gains) losses* (432) (455) (378) RC profit (loss) before interest and tax (1,141) (1,363) Net charge (credit) for non-operating items* (293) (401) (231) Underlying RC profit (loss) before interest and tax* (922) (1,220) Underlying RC profit (loss) before interest and tax (102) (144) (126) US (332) (427) (191) (257) (105) Non-US (590) (793) (293) (401) (231) (922) (1,220) Non-operating items (144) (10) (127) US (138) (141) 5 (44) (20) Non-US (81) (2) (139) (54) (147) (219) (143) RC profit (loss) before interest and tax (246) (154) (253) US (470) (568) (186) (301) (125) Non-US (671) (795) (432) (455) (378) (1,141) (1,363) Other businesses and corporate comprises biofuels and wind businesses, shipping, treasury (which includes interest income on the group's cash and cash equivalents), and corporate activities including centralized functions. Financial results The replacement cost loss before interest and tax for the third quarter and nine months was $378 million and $1,141 million respectively, compared with $432 million and $1,363 million for the same periods in The third-quarter result included a net non-operating charge of $147 million, compared with a net non-operating charge of $139 million a year ago. For the nine months, the net non-operating charge was $219 million, compared with a net non-operating charge of $143 million a year ago. After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the third quarter and nine months was $231 million and $922 million respectively, compared with $293 million and $1,220 million for the same periods in The nine-months charge is lower compared with the same period in 2014 mainly reflecting benefits from our simplification programmes and improved performance in our other businesses. Biofuels The net ethanol-equivalent production (which includes ethanol and sugar) for the third quarter and nine months was 359 million litres and 606 million litres respectively, compared with 255 million litres and 411 million litres for the same periods in Wind Net wind generation capacity*(a) was 1,588MW at 30 September 2015, compared with 1,590MW at 30 September BP s net share of wind generation for the third quarter and nine months was 894GWh and 3,171GWh respectively, compared with 837GWh and 3,377GWh for the same periods in (a) Capacity figures include 32MW in the Netherlands managed by our Downstream segment. 9

10 Gulf of Mexico oil spill We announced on 2 July 2015 that BP Exploration & Production Inc. has reached agreements in principle with the US federal government and five Gulf states to settle all outstanding federal and state claims arising from the Deepwater Horizon oil spill. On 5 October 2015 the United States lodged the proposed Consent Decree with the court and BP entered into a definitive Settlement Agreement with the five Gulf states. The proposed Consent Decree and the Settlement Agreement are conditional upon each other and neither will become effective unless there is final court approval of the Consent Decree. Public comments on the proposed Consent Decree will be accepted until early December 2015 and a hearing has been scheduled by the court to consider approval of the Consent Decree in March The proposed Consent Decree and the Settlement Agreement do not cover claims relating to the 2012 class action settlements with the Plaintiffs Steering Committee, including business economic loss claims; private claims from other litigants not included within or who opted out of the class action settlements; or private securities litigation in MDL A condition of the 2 July 2015 agreements in principle was that local government entities execute releases to BP s satisfaction. BP has accepted releases received from the vast majority of local government entities and payments required under those releases were made during the third quarter. For further details see Note 2 on page 16 and Legal proceedings on page 32. Financial update The replacement cost loss before interest and tax for the third quarter and nine months was $311 million and $11,381 million respectively, compared with $33 million and $313 million for the same periods last year. The third-quarter loss reflects additional business economic loss claims under the Plaintiffs Steering Committee settlements and adjustments to other provisions, as well as the ongoing costs of the Gulf Coast Restoration Organization. The loss for the first nine months also includes amounts provided for the agreements described above, and additional increases in the provision for business economic loss claims, associated claims administration costs and other items. The cumulative pre-tax charge recognized to date amounts to $55.0 billion. The cumulative income statement charge does not include amounts for obligations that BP currently considers are not possible to measure reliably. The total amounts that will ultimately be paid by BP in relation to the incident will be dependent on many factors, as discussed under Provisions and contingent liabilities in Note 2 on page 18. These could have a material impact on our consolidated financial position, results and cash flows. 10

11 Financial statements Group income statement 93,904 60,646 54,730 Sales and other operating revenues (Note 4) 169, , Earnings from joint ventures after interest and tax Earnings from associates after interest and tax 1,536 2, Interest and other income Gains on sale of businesses and fixed assets ,767 61,800 55,879 Total revenues and other income 172, ,582 75,492 44,748 41,063 Purchases 123, ,496 6,562 17,185 6,407 Production and manufacturing expenses 30,592 20, Production and similar taxes (Note 5) 773 2,546 3,956 3,765 3,737 Depreciation, depletion and amortization 11,338 11,297 Impairment and losses on sale of businesses and fixed assets 523 2, Exploration expense 1,430 2,177 3,207 2,989 2,699 Distribution and administration expenses 8,471 9,387 2,969 (8,248) 1,339 Profit (loss) before interest and taxation (4,275) 14, Finance costs Net finance expense relating to pensions and other post-retirement benefits ,611 (8,612) 865 Profit (loss) before taxation (5,471) 13,028 1,287 (2,829) 809 Taxation (2,395) 4,652 1,324 (5,783) 56 Profit (loss) for the period (3,076) 8,376 Attributable to 1,290 (5,823) 46 BP shareholders (3,175) 8, Non-controlling interests ,324 (5,783) 56 (3,076) 8,376 Earnings per share (Note 6) Profit (loss) for the period attributable to BP shareholders Per ordinary share (cents) 7.01 (31.83) 0.25 Basic (17.35) (31.83) 0.25 Diluted (17.35) Per ADS (dollars) 0.42 (1.91) 0.02 Basic (1.04) (1.91) 0.02 Diluted (1.04)

12 Financial statements (continued) Group statement of comprehensive income 1,324 (5,783) 56 Profit (loss) for the period (3,076) 8,376 Other comprehensive income Items that may be reclassified subsequently to profit or loss (3,434) 698 (2,247) Currency translation differences (3,161) (3,342) Exchange gains (losses) on translation of foreign operations reclassified to gain or loss on sale of (3) 16 7 businesses and fixed assets 23 (3) 1 Available-for-sale investments marked to market 1 (1) Available-for-sale investments reclassified to the income statement 1 (144) 128 (70) Cash flow hedges marked to market (154) (44) Cash flow hedges reclassified to the (21) income statement 220 (90) (8) 4 7 Cash flow hedges reclassified to the balance sheet 16 (11) Share of items relating to equity-accounted (144) 329 (830) entities, net of tax(a) (581) (166) (13) (92) 268 Income tax relating to items that may be reclassified 300 (4) (3,767) 1,165 (2,800) (3,336) (3,660) Items that will not be reclassified to profit or loss Remeasurements of the net pension and other (1,051) 2,688 (551) post-retirement benefit liability or asset 1,569 (1,765) Share of items relating to equity-accounted (1) entities, net of tax (1) 5 Income tax relating to items that will not be 257 (754) 80 reclassified (516) 478 (794) 1,934 (472) 1,052 (1,282) (4,561) 3,099 (3,272) Other comprehensive income (2,284) (4,942) (3,237) (2,684) (3,216) Total comprehensive income (5,360) 3,434 Attributable to (3,257) (2,732) (3,204) BP shareholders (5,423) 3, (12) Non-controlling interests (3,237) (2,684) (3,216) (5,360) 3,434 (a) Includes the effects of hedge accounting adopted by Rosneft from 1 October 2014 in relation to a portion of future export revenue denominated in US dollars. For further information see BP Annual Report and Form 20-F 2014 Financial statements Note

13 Financial statements (continued) Group statement of changes in equity BP shareholders Non-controlling Total $ million equity interests equity At 1 January ,441 1, ,642 Total comprehensive income (5,423) 63 (5,360) Dividends (5,118) (71) (5,189) Share-based payments, net of tax Share of equity-accounted entities changes in equity, net of tax (3) (3) Transactions involving non-controlling interests At 30 September ,383 1, ,599 BP shareholders Non-controlling Total $ million equity interests equity At 1 January ,302 1, ,407 Total comprehensive income 3, ,434 Dividends (4,121) (215) (4,336) Repurchases of ordinary share capital (3,147) (3,147) Share-based payments, net of tax Share of equity-accounted entities changes in equity, net of tax Transactions involving non-controlling interests 4 4 At 30 September ,818 1, ,894 13

14 Financial statements (continued) Group balance sheet 30 September 31 December $ million Non-current assets Property, plant and equipment 130, ,692 Goodwill 11,692 11,868 Intangible assets 19,232 20,907 Investments in joint ventures 9,129 8,753 Investments in associates 9,804 10,403 Other investments 1,019 1,228 Fixed assets 181, ,851 Loans Trade and other receivables 2,282 4,787 Derivative financial instruments 4,559 4,442 Prepayments Deferred tax assets 1,850 2,309 Defined benefit pension plan surpluses , ,043 Current assets Loans Inventories 16,933 18,373 Trade and other receivables 25,862 31,038 Derivative financial instruments 3,824 5,165 Prepayments 2,038 1,424 Current tax receivable Other investments Cash and cash equivalents 31,702 29,763 81,542 87,262 Total assets 273, ,305 Current liabilities Trade and other payables 34,700 40,118 Derivative financial instruments 2,844 3,689 Accruals 5,825 7,102 Finance debt 8,982 6,877 Current tax payable 1,318 2,011 Provisions 4,494 3,818 58,163 63,615 Non-current liabilities Other payables 2,908 3,587 Derivative financial instruments 3,908 3,199 Accruals Finance debt 48,423 45,977 Deferred tax liabilities 9,845 13,893 Provisions 36,578 29,080 Defined benefit pension plan and other post-retirement benefit plan deficits 9,911 11, , ,048 Total liabilities 170, ,663 Net assets 102, ,642 Equity BP shareholders equity 101, ,441 Non-controlling interests 1,216 1, , ,642 14

15 Financial statements (continued) Condensed group cash flow statement Operating activities 2,611 (8,612) 865 Profit (loss) before taxation (5,471) 13,028 Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities Depreciation, depletion and amortization and 4,602 4,571 3,971 exploration expenditure written off 12,470 12,977 Impairment and (gain) loss on sale of businesses (127) and fixed assets 85 1,463 Earnings from equity-accounted entities, less 527 (654) (295) dividends received (1,225) (1,237) Net charge for interest and other finance expense, less net interest paid Share-based payments Net operating charge for pensions and other postretirement benefits, less contributions and benefit (92) (30) (41) payments for unfunded plans (128) (299) , Net charge for provisions, less payments 11, Movements in inventories and other current and 1, ,231 non-current assets and liabilities (2,135) 2,083 (1,607) (602) (867) Income taxes paid (1,962) (3,794) 9,399 6,286 5,183 Net cash provided by operating activities 13,327 25,507 Investing activities (5,256) (4,529) (4,357) Capital expenditure (13,522) (16,646) (3) 33 Acquisitions, net of cash acquired 33 (13) (78) (54) (55) Investment in joint ventures (178) (114) (73) (218) (119) Investment in associates (424) (208) Proceeds from disposal of fixed assets 1,049 1,596 Proceeds from disposal of businesses, net of cash disposed 1, Proceeds from loan repayments (4,816) (4,224) (4,149) Net cash used in investing activities (11,422) (14,515) Financing activities (1,623) Net repurchase of shares (3,796) 2, Proceeds from long-term financing 7,988 9,615 (388) (542) (18) Repayments of long-term financing (2,867) (3,345) (527) (13) (115) Net increase (decrease) in short-term debt 597 (507) (1,122) (1,691) (1,718) Dividends paid BP shareholders (5,118) (4,121) (62) (30) (29) non-controlling interests (71) (215) (942) (2,193) (1,763) Net cash provided by (used in) financing activities 529 (2,369) Currency translation differences relating to cash (418) 286 (158) and cash equivalents (495) (414) 3, (887) Increase (decrease) in cash and cash equivalents 1,939 8,209 27,506 32,434 32,589 Cash and cash equivalents at beginning of period 29,763 22,520 30,729 32,589 31,702 Cash and cash equivalents at end of period 31,702 30,729 15

16 Financial statements (continued) Notes 1. Basis of preparation The interim financial information included in this report has been prepared in accordance with IAS 34 Interim Financial Reporting. The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2014 included in the BP Annual Report and Form 20-F BP prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the group s consolidated financial statements for the periods presented. The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing BP Annual Report and Form 20-F 2015, which do not differ significantly from those used in BP Annual Report and Form 20-F Gulf of Mexico oil spill (a) Overview As a consequence of the Gulf of Mexico oil spill, BP continues to incur various costs and has also recognized liabilities for future costs. The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2014 Financial statements Note 2 and Legal proceedings on page 228 and on page 32 of this report. The group income statement includes a pre-tax charge of $426 million for the third quarter and $11,513 million for the nine months of 2015 in relation to the Gulf of Mexico oil spill. The third-quarter charge reflects additional business economic loss claims under the Plaintiffs Steering Committee (PSC) settlement, finance costs and adjustments to provisions due to discounting effects, as well as the ongoing costs of the Gulf Coast Restoration Organization. The cumulative pre-tax income statement charge since the incident, in April 2010, amounts to $55,008 million. The cumulative income statement charge does not include amounts for obligations that BP considers are not possible, at this time, to measure reliably. For further information, see Provisions and contingent liabilities below. The agreements in principle signed on 2 July 2015 to settle all federal and state claims and claims made by more than 400 local government entities were subject to execution of definitive agreements, including a Consent Decree with the United States and Gulf states with respect to the Clean Water Act penalty and natural resource damages and other claims, a Settlement Agreement with five Gulf states with respect to state claims for economic loss, property damage and other claims, and resolution to BP s satisfaction of the economic loss, property damage and other claims with more than 400 local government entities. During the third quarter, the United States lodged with the court in MDL 2179 a proposed Consent Decree between the United States, the Gulf states and BP, and the Settlement Agreement with the five Gulf states was executed. The proposed Consent Decree is available for public comment until early December 2015 and is subject to final court approval. The Consent Decree and Settlement Agreement with the five Gulf states are conditional upon each other and neither will become effective unless there is final court approval of the Consent Decree. BP has accepted releases received from the vast majority of local government entities and payments required under those releases were made during the third quarter. For more information on the proposed Consent Decree and Settlement Agreement see Legal proceedings on page 32. The agreements described above (the Agreements) significantly reduce the uncertainties faced by BP following the Gulf of Mexico oil spill in There continues to be uncertainty regarding the outcome or resolution of current or future litigation and the extent and timing of costs and liabilities relating to the incident not covered by the Agreements. The total amounts that will ultimately be paid by BP in relation to the incident will be dependent on many factors, as discussed under Provisions and contingent liabilities below, including in relation to any new information or future developments. These uncertainties could have a material impact on our consolidated financial position, results and cash flows. 16

17 2. Gulf of Mexico oil spill (continued) Financial statements (continued) Notes The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for the periods presented. The income statement, balance sheet and cash flow statement impacts are included within the relevant line items in those statements as set out below. Income statement 33 10, Production and manufacturing expenses 11, (33) (10,747) (311) Profit (loss) before interest and taxation (11,381) (313) Finance costs (43) (10,755) (426) Profit (loss) before taxation (11,513) (342) 45 3,601 (87) Taxation 3, (7,154) (513) Profit (loss) for the period (7,887) (243) 30 September 31 December $ million Balance sheet Current assets Trade and other receivables 1,205 1,154 Current liabilities Trade and other payables (797) (655) Accruals (40) Provisions (2,523) (1,702) Net current assets (liabilities) (2,155) (1,203) Non-current assets Trade and other receivables 223 2,701 Non-current liabilities Other payables (2,068) (2,412) Accruals (187) (169) Provisions (14,304) (6,903) Deferred tax 5,334 1,723 Net non-current assets (liabilities) (11,002) (5,060) Net assets (liabilities) (13,157) (6,263) Cash flow statement - Operating activities (43) (10,755) (426) Profit (loss) before taxation (11,513) (342) Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities Net charge for interest and other finance expense, less net interest paid , Net charge for provisions, less payments 11, Movements in inventories and other current (846) 34 (135) and non-current assets and liabilities (696) (1,457) (293) (106) (211) Pre-tax cash flows (1,008) (1,165) Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an outflow of $196 million and an outflow of $993 million in the third quarter and nine months of 2015 respectively. For the same periods in 2014, the amounts were an inflow of $42 million and an outflow of $313 million respectively. 17

18 2. Gulf of Mexico oil spill (continued) Trust fund Financial statements (continued) Notes BP established the Deepwater Horizon Oil Spill Trust (the Trust), funded in the amount of $20 billion, to satisfy legitimate individual and business claims, state and local government claims resolved by BP, final judgments and settlements, state and local response costs, and natural resource damages and related costs. Fines and penalties are not covered by the trust fund. The funding of the Trust was completed in The obligation to fund the $20-billion trust fund, adjusted to take account of the time value of money, was recognized in full in 2010 and charged to the income statement. An asset has been recognized representing BP s right to receive reimbursement from the trust fund. This is the portion of the estimated future expenditure provided for that will be settled by payments from the trust fund. During 2014, cumulative charges to be paid by the Trust reached $20 billion. Subsequent additional costs, over and above those provided within the $20 billion, are expensed to the income statement as incurred. At 30 September 2015, $1,428 million of the provisions and payables are eligible to be paid from the Trust. The reimbursement asset is recorded within other receivables on the balance sheet, of which $1,205 million is classified as current and $223 million as non-current. During the third quarter of 2015, $1,376 million of provisions and $37 million of payables were paid from the Trust. At 30 September 2015, the aggregate cash balances in the Trust and the associated qualifying settlement funds amounted to $2.2 billion, including $0.7 billion remaining in the seafood compensation fund which has yet to be distributed and $0.3 billion held for natural resource damage early restoration projects. When the cash balances in the trust funds are exhausted, payments in respect of legitimate claims and other costs will be made directly by BP. (b) Provisions and contingent liabilities BP has recorded certain provisions and disclosed certain contingent liabilities as a consequence of the Gulf of Mexico oil spill. These are described below and in more detail in BP Annual Report and Form 20-F 2014 Financial statements Note 2. Provisions BP has recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, litigation and claims, and Clean Water Act penalties. Movements in each class of provision during the third quarter and nine months are presented in the table below. Litigation Clean and Water Act $ million Environmental claims penalties Total At 1 July ,185 7,598 4,210 17,993 Net increase (decrease) in provision (42) 443 (39) 362 Unwinding of discount Change in discount rate (34) (15) (26) (75) Reclassified to other payables (130) (130) Utilization paid by BP (52) (52) paid by the trust fund (21) (1,355) (1,376) At 30 September ,004 6,644 4,179 16,827 Of which current 244 2,279 2,523 non-current 5,760 4,365 4,179 14,304 Litigation Clean and Water Act Environmental claims penalties Total $ million At 1 January ,141 3,954 3,510 8,605 Net increase (decrease) in provision 5,402 5, ,320 Unwinding of discount Change in discount rate (34) (15) (26) (75) Reclassified to other payables (459) (125) (584) Utilization paid by BP (22) (154) (176) paid by the trust fund (71) (2,298) (2,369) At 30 September ,004 6,644 4,179 16,827 18

19 2. Gulf of Mexico oil spill (continued) Financial statements (continued) Notes Environmental The environmental provision includes amounts payable for natural resource damage costs under the proposed Consent Decree. These amounts are payable in instalments over 16 years commencing one year after the court approves the Consent Decree; the majority of the unpaid balance of this natural resource damages settlement accrues interest at a fixed rate. The remaining amounts payable under the $1-billion early restoration framework agreement with natural resource trustees for the US and five Gulf states are also included in environmental provisions. Litigation and claims The litigation and claims provision includes amounts that can be estimated reliably for the future cost of settling claims by individuals and businesses for damage to real or personal property, lost profits or impairment of earning capacity and loss of subsistence use of natural resources (Individual and Business Claims), and amounts provided under the Agreements in relation to state claims that have not yet been paid. Claims administration costs and legal costs have also been provided for. Amounts that cannot be measured reliably and which have therefore not been provided for are described under Contingent liabilities below. Litigation and claims PSC settlement BP has provided for its best estimate of the cost associated with the 2012 PSC settlement agreements with the exception of the cost of business economic loss claims, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility. See BP Annual Report and Form 20-F 2014 Financial statements Note 2 and Legal proceedings on pages for further details on the settlements with the PSC and related matters. Management believes that no reliable estimate can currently be made of any business economic loss claims not yet processed or processed but not yet paid, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility. The submission deadline for business economic loss claims passed on 8 June 2015; no further claims to the claims facility may be submitted. A significant number of business economic loss claims have been received but have not yet been processed and it is not possible to quantify the total value of the claims. A revised policy for the matching of revenue and expenses for business economic loss claims was introduced in May 2014 and, of the claims assessable under the new policy, the majority have not yet been determined at this time. Uncertainties regarding the proper application of the revised policy to particular claims and categories of claims continue to arise as the claims administrator has applied the revised policy. There have been no, or only a small number of, claim determinations made under some of the specialized frameworks that have been put in place for particular industries and so determinations to date may not be representative of the total population of claims. In addition, while detailed data on pre-determination claims is not available due to a court order to protect claimant confidentiality, aggregated predetermination data has recently been provided. While this data does provide some insights, it is not at a sufficient level of detail to obtain a complete or clear understanding of the composition of the underlying claims population. There is limited data available to build up a track record of claims determinations under the policies and protocols that are now being applied following resolution of the matching and causation issues. We are unable to reliably estimate future trends of the number and proportion of claims that will be determined to be eligible, nor can we reliably estimate the value of such claims. A provision for such business economic loss claims will be established when these uncertainties are resolved and a reliable estimate can be made of the liability. The current estimate for the total cost of those elements of the PSC settlement that BP considers can be reliably estimated, including amounts already paid, is $11.8 billion. The Deepwater Horizon Court Supervised Settlement Program (DHCSSP) has issued eligibility notices, many of which are disputed by BP, in respect of business economic loss claims of approximately $371 million which have not been provided for. The total cost of the PSC settlement is likely to be significantly higher than the amount recognized to date of $11.8 billion because the current estimate does not reflect business economic loss claims not yet processed or processed but not yet paid, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility. 19