LONDON, July 29 /PRNewswire-FirstCall/ -- Second First Second
quarter quarter quarter First half 2007 2008 2008 $ million 2008
2007 % 7,376 7,451 9,465 Profit for the period(b) 16,916 12,040
Inventory holding (gains) losses, (888) (863) (2,612) net of tax(c)
(3,475) (1,108) 6,488 6,588 6,853 Replacement cost profit(c) 13,441
10,932 23 17.01 17.63 18.56 - per ordinary share (pence) 36.19
28.77 33.75 34.90 36.40 - per ordinary share (cents) 71.30 56.68 26
2.03 2.09 2.18 - per ADS (dollars) 4.28 3.40 (Logo:
http://www.newscom.com/cgi-bin/prnh/20000724/NYM120LOGO ) -- BP's
second-quarter replacement cost profit was $6,853 million, compared
with $6,488 million a year ago, an increase of 6%. For the half
year, replacement cost profit was $13,441 million compared with
$10,932 million a year ago, up 23%. -- Non-operating items and fair
value accounting effects for the second quarter had a net $1,775
million unfavourable impact compared to a net $973 million
favourable impact in the second quarter of 2007. For the half year,
the respective amounts were $1,779 million unfavourable and $1,009
million favourable - see further details on page 3. The largest
non-operating item for the second quarter and year-to-date was fair
value losses on embedded derivatives which amounted to $2,081
million and $2,771 million respectively on a pre-tax basis. -- Net
cash provided by operating activities for the quarter and half year
was $6.7 billion and $17.6 billion compared with $6.1 billion and
$14.1 billion respectively a year ago. -- The effective tax rate on
replacement cost profit for the second quarter was 35% and for the
half year was 36%; a year ago, the rates were 31% and 32%
respectively. -- Net debt at the end of the quarter was $25.7
billion compared to $20.7 billion a year ago. The ratio of net debt
to net debt plus equity was 19%, the same as a year ago. -- Capital
expenditure, excluding acquisitions and asset exchanges, was $5.5
billion for the quarter and for the half year was $12.6 billion.
Total capital expenditure and acquisitions was $5.8 billion for the
quarter and $14.8 billion for the half year. Capital expenditure,
excluding acquisitions and asset exchanges and excluding the
accounting for our transaction with Husky (see pages 26 and 27), is
expected to be around $21-22 billion for the year. Disposal
proceeds were $59 million for the quarter and $335 million for the
half year. -- The quarterly dividend, to be paid in September, is
14 cents per share ($0.84 per ADS) compared with 10.825 cents per
share a year ago. For the half year, the dividend showed an
increase of 30%. In sterling terms, the quarterly dividend is 7.039
pence per share, compared with 5.278 pence per share a year ago;
for the half year, the increase was 33%. During the quarter, the
company repurchased 85.9 million of its own shares for cancellation
at a cost of $1 billion. For the first half, share repurchases were
176.9 million at a cost of $2 billion. (a) This results
announcement also represents BP's half-yearly financial report for
the purposes of the Disclosure and Transparency Rules (DTR) made by
the UK Financial Services Authority (DTR 4.2 - Half-yearly
financial reports). In this context: (i) the condensed set of
financial statements can be found on pages 13 - 19 and 22 - 30;
(ii) pages 1 - 11, 20 and 21 comprise the interim management
report; (iii) information on material related party transactions
that have taken place in the first six months of the year can be
found in the condensed set of financial statements on pages 13 - 19
and 22 - 30; and (iv) the directors' responsibility statement and
auditors' independent review report can be found on page 12. (b)
Profit attributable to BP shareholders. (c) With effect from 1
January 2008, replacement cost profit excludes inventory holding
gains and losses net of tax. Comparative amounts have been amended
to the new basis. See page 2 for further details. The commentaries
above and following are based on replacement cost profit and should
be read in conjunction with the cautionary statement on page 11.
Analysis of replacement cost profit and reconciliation to profit
for the period Second First Second quarter quarter quarter First
half 2007 2008 2008 $ million 2008 2007 7,119 10,072 10,771
Exploration and Production 20,843 13,425 2,742 1,249 539 Refining
and Marketing 1,788 3,546 (173) (213) (314) Other businesses and
corporate (527) (271) (98) (195) (39) Consolidation adjustment
(234) (56) 9,590 10,913 10,957 RC profit before interest and tax(a)
21,870 16,644 Finance costs and net finance income relating to
pensions and (155) (246) (221) other post-retirement benefits (467)
(326) Taxation on a replacement (2,882) (3,947) (3,760) cost
basis(b) (7,707) (5,239) (65) (132) (123) Minority interest (255)
(147) Replacement cost profit attributable to 6,488 6,588 6,853 BP
shareholders(b) 13,441 10,932 1,289 1,326 3,952 Inventory holding
gains (losses) 5,278 1,592 Taxation (charge) credit on inventory
holding (401) (463) (1,340) gains and losses (1,803) (484) Profit
for the period attributable to 7,376 7,451 9,465 BP shareholders
16,916 12,040 (a) Replacement cost profit reflects the current cost
of supplies. The replacement cost profit for the period is arrived
at by excluding from profit inventory holding gains and losses. BP
uses this measure to assist investors to assess BP's performance
from period to period. Replacement cost profit is not a recognized
GAAP measure. (b) Effective 1 January 2008, replacement cost profit
excludes inventory holding gains and losses and their associated
tax effect. Previously, replacement cost profit excluded inventory
gains and losses while the tax charge remained unadjusted and
included the tax effect on inventory holding gains and losses.
Comparative amounts have been amended to the new basis and the
impact of the change is shown in the table below. There is no
impact on profit for the period. First Second half quarter $
million 2007 2007 Replacement cost profit attributable to BP
shareholders -as previously reported 10,448 6,087 -tax effect on
inventory holding gains and losses 484 401 -as amended 10,932 6,488
Non-operating items and fair value accounting effects Non-operating
items(a) Second First Second quarter quarter quarter First half
2007 2008 2008 $ million 2008 2007 378 (376) (1,976) Exploration
and Production (2,352) 1,135 767 609 (99) Refining and Marketing
510 538 (8) (81) (123) Other businesses and corporate (204) 26
1,137 152 (2,198) (2,046) 1,699 (347) (56) 770 Taxation(b) 714
(539) 790 96 (1,428) (1,332) 1,160 Fair value accounting effects(c)
Second First Second quarter quarter quarter First half 2007 2008
2008 $ million 2008 2007 Exploration and Production Unrecognized
gains (losses) brought forward 124 107 366 from previous period 107
155 Unrecognized (gains) losses (198) (366) (739) carried forward
(739) (198) Favourable (unfavourable) impact relative to
management's (74) (259) (373) measure of performance (632) (43)
Refining and Marketing Unrecognized gains (losses) brought forward
611 429 328 from previous period 429 72 Unrecognized (gains) losses
(274) (328) (489) carried forward (489) (274) Favourable
(unfavourable) impact relative to management's measure 337 101
(161) of performance (60) (202) 263 (158) (534) (692) (245) (80) 58
187 Taxation(b) 245 94 183 (100) (347) (447) (151) Total of
non-operating items and fair value accounting effects Second First
Second quarter quarter quarter First half 2007 2008 2008 $ million
2008 2007 304 (635) (2,349) Exploration and Production (2,984)
1,092 1,104 710 (260) Refining and Marketing 450 336 (8) (81) (123)
Other businesses and corporate (204) 26 1,400 (6) (2,732) (2,738)
1,454 (427) 2 957 Taxation(b) 959 (445) 973 (4) (1,775) (1,779)
1,009 (a) An analysis of non-operating items by type is provided on
page 21 and a geographical analysis is shown on pages 7, 9 and 10.
(b) Tax is calculated using the quarter's effective tax rate on
replacement cost profit. Amounts for comparative periods have been
amended to reflect a redefinition of the effective tax rate on
replacement cost profit arising as a result of the exclusion of tax
effects on inventory holding gains and losses as described on page
2. (c) An explanation of fair value accounting effects is provided
on page 11. Per share amounts Second First Second quarter quarter
quarter First half 2007 2008 2008 2008 2007 Results for the period
($ million) 7,376 7,451 9,465 Profit(a) 16,916 12,040 Replacement
6,488 6,588 6,853 cost profit 13,441 10,932 Shares in issue at
period end 19,133,973 18,877,537 18,805,089 (thousand)(b)
18,805,089 19,133,973 - ADS equivalent 3,188,996 3,146,256
3,134,182 (thousand)(b) 3,134,182 3,188,996 Average number of
shares outstanding 19,186,461 18,875,611 18,823,515 (thousand)(b)
18,849,504 19,284,938 - ADS equivalent 3,197,744 3,145,935
3,137,253 (thousand)(b) 3,141,584 3,214,156 Shares repurchased in
the period 175,806 90,996 85,900 (thousand) 176,896 413,722 Per
ordinary share (cents) Profit for 38.37 39.47 50.27 the period
89.74 62.43 RC profit for 33.75 34.90 36.40 the period 71.30 56.68
Per ADS (cents) Profit for 230.22 236.82 301.62 the period 538.44
374.58 RC profit for 202.50 209.40 218.40 the period 427.80 340.08
(a) Profit attributable to BP shareholders. (b) Excludes treasury
shares. Dividends Dividends payable BP today announced a dividend
of 14 cents per ordinary share to be paid in September. Holders of
ordinary shares will receive 7.039 pence per share and holders of
American Depository Receipts (ADRs) $0.84 per ADS. The dividend is
payable on 8 September to shareholders on the register on 15
August. Participants in the Dividend Reinvestment Plan (DRIP) or
the DRIP facility in the US Direct Access Plan will receive the
dividend in the form of shares, also on 8 September. Dividends paid
Second First Second quarter quarter quarter First half 2007 2008
2008 2008 2007 Dividends paid per ordinary share 10.325 13.525
13.525 cents 27.050 20.650 5.151 6.813 6.830 pence 13.643 10.409
61.95 81.15 81.15 Dividends paid per ADS (cents) 162.30 123.90 Net
debt ratio - net debt: net debt + equity Second First Second
quarter quarter quarter First half 2007 2008 2008 $ million 2008
2007 23,754 29,871 30,189 Gross debt 30,189 23,754 Less: fair value
asset (liability) of hedges 379 1,234 900 related to finance debt
900 379 23,375 28,637 29,289 29,289 23,375 2,643 4,820 3,593 Cash
and cash equivalents 3,593 2,643 20,732 23,817 25,696 Net debt
25,696 20,732 89,423 99,536 106,454 Equity 106,454 89,423 19% 19%
19% Net debt ratio 19% 19% Net debt and net debt ratio are non-GAAP
measures. We believe that 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. Net debt has been
redefined to include the fair value of associated derivative
financial instruments that are used to hedge foreign exchange and
interest rate risks relating to finance debt, for which hedge
accounting is claimed. The derivatives are reported on the balance
sheet within the headings 'Derivative financial instruments'.
Amounts for comparative periods are presented on a consistent
basis. See note 2(c) on page 25 for further information.
Exploration and Production Second First Second quarter quarter
quarter First half 2007 2008 2008 $ million 2008 2007 7,165 10,054
10,819 Profit before interest and tax(a) 20,873 13,482 (46) 18 (48)
Inventory holding (gains) losses (30) (57) Replacement cost profit
before 7,119 10,072 10,771 interest and tax 20,843 13,425 By
region: 1,105 923 (124) UK 799 2,227 182 276 350 Rest of Europe 626
909 2,183 3,085 3,601 US 6,686 3,914 3,649 5,788 6,944 Rest of
World 12,732 6,375 7,119 10,072 10,771 20,843 13,425 (a) Includes
profit after interest and tax of equity-accounted entities. The
replacement cost profit before interest and tax for the second
quarter and half year was $10,771 million and $20,843 million
respectively, increases of 51% and 55% over the same periods of
2007. The increases in both periods were primarily due to higher
oil and gas realizations. Partly offsetting these were higher
charges for non-operating items (see below) and higher costs,
primarily reflecting the impacts of sector-specific inflation,
higher depreciation and higher production taxes. The results also
included higher earnings from equity-accounted entities, primarily
from TNK-BP due to higher prices and the effect of lagged tax
reference prices. The non-operating charge of $1,976 million in the
second quarter primarily comprised fair value losses on embedded
derivatives partly offset by the reversal of a previous impairment
charge. In the first half, the net non- operating charge was $2,352
million with the most significant item being fair value losses on
embedded derivatives partly offset by the reversal of certain
provisions and the reversal of a previous impairment charge. The
corresponding periods in 2007 contained net non-operating gains of
$378 million and $1,135 million respectively. Additionally, in the
second quarter, fair value accounting effects had an unfavourable
impact of $373 million compared with an unfavourable impact of $74
million a year ago. For the first half, the unfavourable effect was
$632 million compared with an unfavourable effect of $43 million a
year ago. Reported production for the quarter was 3,830mboe/d,
broadly flat with the second quarter of 2007. After adjusting for
the impact of lower entitlement in our production-sharing
agreements (PSAs), production was around 6% higher than the second
quarter of 2007 reflecting the continued ramp-up of production
following the start-up of major projects in late 2007 and the first
half of 2008. We expect the quarterly phasing of underlying
production during the year to reflect the normal seasonal effects
associated with turnaround activity. Reported production for the
half year was 3,871mboe/d, broadly flat with the same period of the
previous year. After adjusting for the effect of entitlement
changes in our PSAs, production for the half year was around 6%
higher than the same period of 2007. During the second quarter, we
had first production from the Taurt (BP 50% and operator) and
Saqqara fields in Egypt. Saqqara is operated by the Gulf of Suez
Petroleum Company, an equal joint venture between Egyptian General
Petroleum Corporation and BP. In the Gulf of Mexico, we progressed
the commissioning of Thunder Horse (BP 75% and operator) with
production from the first well and on 3 July, first injection of
water occurred at the Ursa waterflood project (BP 22.69%). Also
during the quarter, we had exploration success in the North Sea
with the Kinnoull discovery (BP 77% and operator) and we acquired
three exploration licences in the Canadian Beaufort Sea. On 28
July, we announced that BP and its co-venturers have received
authorization to develop a series of deepwater oil discoveries in
offshore Angola's Block 31 (BP 26.67% and operator) where we have
made 15 discoveries to date. On 17 July, we announced that we have
agreed to acquire Chesapeake Energy Corporation's interests in
approximately 90,000 net acres of leasehold and producing natural
gas properties in the Arkoma Basin Woodford Shale play for $1.75
billion in cash. In order to comply with the requirements of the
Disclosure and Transparency Rules (DTR) made by the UK Financial
Services Authority, we include here a summary of the principal
disclosures made in our first-quarter results announcement. At the
start of the second quarter, production commenced at Deep Water
Gunashli (BP 34.1% and operator), we announced the Kodiak discovery
in the deepwater Gulf of Mexico and, jointly with ConocoPhillips,
announced that we have combined resources to start Denali - The
Alaska Gas Pipeline. During the first quarter, we had first
production from the Mondo field within the Kizomba C development in
Angola. We also had exploration success in Angola, Egypt and the
North Sea. We completed the deal with Husky Energy Inc. to create
an integrated North American oil sands business by means of two
separate joint ventures. Exploration and Production Second First
Second quarter quarter quarter First half 2007 2008 2008 $ million
2008 2007 Non-operating items 164 (694) (2,082) UK (2,776) 316 (2)
- - Rest of Europe - 531 178 (8) (8) US (16) 171 38 326 114 Rest of
World 440 117 378 (376) (1,976) (2,352) 1,135 Fair value accounting
effects(a) (4) 17 (147) UK (130) 34 - - - Rest of Europe - - (71)
(142) (236) US (378) (77) 1 (134) 10 Rest of World (124) - (74)
(259) (373) (632) (43) Exploration expense 7 92 8 UK 100 27 - - -
Rest of Europe - - 54 72 47 US 119 131 94 129 63 Rest of World 192
153 155 293 118 411 311 Production (net of royalties)(b) Liquids
(mb/d) (net of royalties)(c) 218 191 186 UK 188 227 43 44 40 Rest
of Europe 42 52 532 554 534 US 544 529 1,656 1,664 1,648 Rest of
World 1,657 1,640 2,449 2,453 2,408 2,431 2,448 Natural gas
(mmcf/d) (net of royalties) 731 971 723 UK 847 818 22 25 21 Rest of
Europe 23 32 2,165 2,149 2,140 US 2,144 2,164 4,941 5,319 5,364
Rest of World 5,342 5,165 7,859 8,464 8,248 8,356 8,179 Total
hydrocarbons (mboe/d)(d) 344 358 311 UK 335 368 47 48 43 Rest of
Europe 46 57 905 925 903 US 914 902 2,508 2,582 2,573 Rest of World
2,576 2,530 3,804 3,913 3,830 3,871 3,857 Average realizations(e)
62.58 90.92 109.95 Total liquids ($/bbl) 100.66 57.96 4.45 5.88
6.63 Natural gas ($/mcf) 6.25 4.66 44.97 62.27 75.39 Total
hydrocarbons ($/boe) 68.85 42.97 (a) These effects represent the
favourable (unfavourable) impact relative to management's measure
of performance. Further information on fair value accounting
effects is provided on pages 3 and 11. (b) Includes BP's share of
production of equity-accounted entities. (c) Crude oil and natural
gas liquids. (d) Natural gas is converted to oil equivalent at 5.8
billion cubic feet = 1 million barrels. (e) Based on sales of
consolidated subsidiaries only - this excludes equity-accounted
entities. Because of rounding, some totals may not agree exactly
with the sum of their component parts. Refining and Marketing
Second First Second quarter quarter quarter First half 2007 2008
2008 $ million 2008 2007 3,983 2,573 4,430 Profit before interest
and tax(a) 7,003 5,078 (1,241) (1,324) (3,891) Inventory holding
(gains) losses (5,215) (1,532) Replacement cost profit (loss) 2,742
1,249 539 before interest and tax 1,788 3,546 By region: 937 107
118 UK 225 895 584 629 429 Rest of Europe 1,058 882 966 154 (401)
US (247) 1,095 255 359 393 Rest of World 752 674 2,742 1,249 539
1,788 3,546 (a) Includes profit after interest and tax of
equity-accounted entities. The replacement cost profit before
interest and tax for the second quarter and half year was $539
million and $1,788 million respectively. The results in the
equivalent periods of 2007 were $2,742 million and $3,546 million
respectively. The current-year results included a net non-operating
charge primarily relating to restructuring of $99 million in the
second quarter and a net non-operating gain of $510 million in the
half year. A year ago, the results included net non-operating gains
of $767 million and $538 million respectively. Fair value
accounting effects had unfavourable impacts of $161 million for the
current quarter and $60 million for the half year. A year ago, the
impact was $337 million favourable for the quarter and $202 million
unfavourable for the half year. Compared with 2007, both the second
quarter and half-year results reflected the adverse impacts of
significantly lower refining margins, particularly in the US. This
more than offset the benefits of the underlying performance
improvement of our US refining operations. The Fuels Value Chains
(FVCs) were impacted by lower refining margins and continued to
experience lower sales volumes and generally flat or reduced retail
margins as a result of high fuel prices and lower demand. The
average refining Global Indicator Margin (GIM) and BP's actual
refining margin for the second quarter and half year both remained
significantly lower than in 2007. Refining throughputs for the
quarter and half year were 2,239mb/d and 2,202mb/d respectively,
compared with 2,128mb/d and 2,180mb/d for the same periods last
year. The higher throughputs were mainly from the recoveries at the
Texas City and Whiting refineries, partially offset by the loss of
throughput from the disposal of the Coryton refinery and a reduced
interest in the Toledo refinery due to the Husky joint venture
deal. Excluding portfolio impacts, the underlying improvement in
throughputs in the second quarter was 13% year-on-year. Solomon
refining availability continued to improve, reaching 88.3% in the
second quarter. Following the restoration of Whiting to its full
clean fuel capacity of 360mb/d on 21 March, the Texas City refinery
has successfully restored its full crude capacity and the majority
of its economic capability. The residue hydrotreater at Texas City
is being commissioned with the first train having started up in
mid-July. We have also taken the final investment decision on the
significant upgrading of the Whiting refinery, repositioning it to
run more than 80% Canadian heavy crude oil. We are making good
progress with our focus on simplification and cost efficiency. The
lubricants and aviation businesses are on track to reduce their
geographical footprint, and the franchise model for our retail
sites in the US is also progressing well. Through these changes,
together with the implementation of the FVCs and the simplification
of internal interfaces and processes, we are on track to deliver
the anticipated reduction in headcount. The International
Businesses, in particular lubricants, continue to perform strongly
in a challenging environment. Refining margins in the third quarter
to date remain lower than the second quarter and substantially
below the 2007 level. Higher energy costs continue to impact
refining earnings, more so in the US, offsetting the benefits from
the continuing recovery of our US refining operations and
availability. Refinery turnaround activities will be higher in the
third quarter than in the second. Our marketing businesses continue
to be impacted by the slowing of the OECD economies and the effects
of high and rising wholesale prices. The current volatile pricing
environment is also proving challenging for our supply optimization
activities. In order to comply with the DTR requirements, we
include here a summary of the principal disclosures made in our
first-quarter results announcement. Our new 900ktepa Zhuhai
purified terephthalic acid (PTA) plant was successfully
commissioned in early 2008. On 17 March 2008, BP and Irving Oil
entered into a memorandum of understanding to work together on the
next phase of the proposed Eider Rock refinery in Saint John, New
Brunswick, Canada. Refining and Marketing Second First Second
quarter quarter quarter First half 2007 2008 2008 $ million 2008
2007 Non-operating items 844 (49) (10) UK (59) 681 (44) (85) (32)
Rest of Europe (117) (56) 170 774 (16) US 758 112 (203) (31) (41)
Rest of World (72) (199) 767 609 (99) 510 538 Fair value accounting
effects(a) 83 (4) (177) UK (181) (98) 48 36 (59) Rest of Europe
(23) (117) 174 95 53 US 148 9 32 (26) 22 Rest of World (4) 4 337
101 (161) (60) (202) Refinery throughputs (mb/d) 123 - - UK - 136
700 775 753 Rest of Europe 764 670 996 1,076 1,189 US 1,133 1,074
309 315 297 Rest of World 305 300 2,128 2,166 2,239 Total
throughput 2,202 2,180 82.7 88.0 88.3 Refining availability (%)(b)
88.1 82.2 Oil sales volumes (mb/d) Refined products 343 321 315 UK
318 339 1,271 1,244 1,236 Rest of Europe 1,240 1,258 1,579 1,455
1,498 US 1,477 1,571 615 692 716 Rest of World 704 620 3,808 3,712
3,765 Total marketing sales 3,739 3,788 1,867 2,047 2,017
Trading/supply sales 2,032 1,947 5,675 5,759 5,782 Total refined
product sales 5,771 5,735 2,161 1,860 1,848 Crude oil 1,854 2,089
7,836 7,619 7,630 Total oil sales 7,625 7,824 Global Indicator
Refining Margin ($/bbl)(c) 7.12 4.79 7.46 NWE 6.12 5.65 24.46 6.21
8.59 USGC 7.40 17.34 26.05 1.11 6.53 Midwest 3.82 16.89 22.71 5.91
9.94 USWC 7.92 22.46 6.01 4.76 9.41 Singapore 7.09 5.43 16.66 4.57
8.19 Average 6.38 13.07 Chemicals production (kte) 246 261 164 UK
425 502 655 708 657 Rest of Europe 1,365 1,403 1,047 1,036 1,022 US
2,058 2,123 1,497 1,531 1,598 Rest of World 3,129 3,017 3,445 3,536
3,441 Total production 6,977 7,045 (a) These effects represent the
favourable (unfavourable) impact relative to management's measure
of performance. Further information on fair value accounting
effects is provided on pages 3 and 11. (b) Refining availability is
defined as the ratio of units which are available for processing,
regardless of whether they are actually being used, to total
capacity. Where there is planned maintenance, such capacity is not
regarded as being available. (c) The Global Indicator Refining
Margin (GIM) is the average of regional indicator margins weighted
for BP's crude refining capacity in each region. Each regional
indicator margin is based on a single representative crude with
product yields characteristic of the typical level of upgrading
complexity. The regional indicator margins may not be
representative of the actual margins achieved by BP in any period
because of BP's particular refinery configurations and crude and
product slate. Other businesses and corporate Second First Second
quarter quarter quarter First half 2007 2008 2008 $ million 2008
2007 Profit (loss) before interest (171) (193) (301) and tax(a)
(494) (268) (2) (20) (13) Inventory holding (gains) losses (33) (3)
Replacement cost profit (loss) (173) (213) (314) before interest
and tax (527) (271) By region: (29) (119) (119) UK (238) (55) (9) -
(29) Rest of Europe (29) 12 (128) (152) (185) US (337) (261) (7) 58
19 Rest of World 77 33 (173) (213) (314) (527) (271) Results
include: Non-operating items (15) (6) (41) UK (47) (15) - (13) (47)
Rest of Europe (60) 28 7 (49) (33) US (82) 13 - (13) (2) Rest of
World (15) - (8) (81) (123) (204) 26 (a) Includes profit after
interest and tax of equity-accounted entities. Other businesses and
corporate comprises the Alternative Energy business, Shipping, the
group's aluminium asset, Treasury (which includes interest income
on the group's cash and cash equivalents) and corporate activities
worldwide. The replacement cost profit before interest and tax for
the second quarter was a loss of $314 million, compared with a loss
of $173 million a year ago. For the half year, the replacement cost
profit before interest and tax was a loss of $527 million, compared
with a loss of $271 million a year ago. The net non-operating
charge for the second quarter and half year was $123 million and
$204 million, respectively. The second-quarter loss included a $75
million restructuring charge and a net charge of $48 million for
impairment and other provisions. The prior year included a net
non-operating charge of $8 million in the second quarter and a net
gain of $26 million in the half year. Following the first-quarter
announcement that Alternative Energy and Dominion had entered into
a joint venture to develop a wind farm in Indiana, construction of
the Fowler Ridge installation commenced in May. As previously
announced, we formed a joint venture with NRG Energy, Inc. for the
development and operation of the Sherbino Mesa wind farm in Texas.
In June, we initiated a further wind project, Flat Ridge in Kansas,
a partnership with Westar Energy, Inc. and on 30 June, we acquired
the Whiting Clean Energy facility, a 525MW natural-gas fired
combined-cycle cogeneration power plant, from NiSource, Inc. In
order to comply with the DTR requirements, we include here a
summary of the principal additional disclosures made in our
first-quarter results announcement. During the first quarter,
Alternative Energy announced its intention to pursue development
options for a hydrogen power plant in Abu Dhabi with Abu Dhabi
Future Energy Company (Masdar). In the first quarter, Alternative
Energy announced its intention to take a 50% stake in Tropical
BioEnergia SA, an ethanol refining joint venture in Brazil
established by Brazilian companies Santelisa Vale and Maeda Group
and, on 10 June, we completed this acquisition. Second First Second
quarter quarter quarter 2008 2008 2007 Wind - net rated capacity as
at period end (megawatts)(a) 172 172 32 Solar - cell production
capacity as at period end (megawatts)(b) 255 228 201 (a) Net wind
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 equivalent capacities on a
gross-JV basis (which includes 100% of the capacity of
equity-accounted entities where BP has partial ownership) are 373MW
as at the second quarter of 2008, 373MW as at the first quarter of
2008 and 32MW as at the second quarter last year. (b) Solar
capacity is the theoretical cell production capacity per annum of
in-house manufacturing facilities. Information on fair value
accounting effects BP uses derivative instruments to manage the
economic exposure relating to inventories above normal operating
requirements of crude oil, natural gas and petroleum products as
well as certain contracts to supply physical volumes at future
dates. Under IFRS, these inventories and contracts are recorded at
historic cost and on an accruals basis, respectively. The related
derivative instruments, however, are required to be recorded at
fair value with gains and losses recognized in income because hedge
accounting is either not permitted or not followed, principally due
to the impracticality of effectiveness testing requirements.
Therefore, measurement differences in relation to recognition of
gains and losses occur. Gains and losses on these inventories and
contracts are not recognized until the 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. IFRS requires that inventory held for
trading be 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 which, 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 by comparing the IFRS result with management's
internal measure of performance, under which the inventory and the
supply and capacity contracts in question are valued based on fair
value using relevant forward prices prevailing at the end of the
period. 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 on page 3. Information for all quarters of 2006 and 2007 can
be found at http://www.bp.com/FVAE. Principal risks and
uncertainties The principal risks and uncertainties for the
remaining six months of the year are described in the Risk Factors
section on pages 9 and 10 of BP Annual Report and Accounts 2007.
Information in relation to our investment in TNK-BP is included in
Note 9 on page 30 of this second quarter and half year result
announcement. Cautionary Statement: The foregoing discussion
contains forward-looking statements particularly those regarding
capital expenditure, expected phasing of underlying production,
results of simplification and cost efficiency measures, refinery
turnaround activities, the continuing impact of higher energy costs
on refining earnings, of slowing OECD economies and high and rising
wholesale prices on the marketing businesses as well as the impact
of a volatile pricing environment on supply optimization
activities. By their nature, forward-looking statements involve
risk and uncertainty and actual results may differ from those
expressed in such statements depending on a variety of factors
including the following: the timing of bringing new fields
onstream; industry product supply; demand and pricing; operational
problems; general economic conditions (including inflation);
political stability and economic growth in relevant areas of the
world; changes in laws and governmental regulations and quotas;
exchange rate fluctuations; development and use of new technology;
the success or otherwise of partnering; the actions of competitors;
natural disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and
acts of terrorism or sabotage; and other factors discussed in this
announcement. For more information you should refer to our Annual
Report and Accounts 2007 and our 2007 Annual Report on Form 20-F
filed with the US Securities and Exchange Commission. Statement of
directors' responsibilities The directors confirm that, to the best
of their knowledge, the condensed set of financial statements on
pages 13 - 19 and 22 - 30 has been prepared in accordance with IAS
34 'Interim Financial Reporting', and that the interim management
report on pages 1 - 11, 20 - 21 includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8. The directors of
BP p.l.c. are listed in BP Annual Report and Accounts 2007, with
the exception of Dr D C Allen who retired from the board on 31
March 2008 and Dr W E Massey who retired from the board on 17 April
2008. By order of the board Tony Hayward Byron Grote Group Chief
Executive Chief Financial Officer 28 July 2008 28 July 2008
Independent review report to BP p.l.c. We have been engaged by the
company to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2008
which comprises the group income statement, group balance sheet,
group statement of recognized income and expense, movement in
shareholders' equity, group cash flow statement, the related tables
on pages 18, 19 and 22, and notes 1 to 11. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements. This report is made solely to the company
in accordance with guidance contained in International Standard on
Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Auditing Practices Board for use in the
United Kingdom (ISRE 2410). To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed. Directors' responsibilities The half-yearly financial
report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Services
Authority. As disclosed in Note 1, the annual financial statements
of the group are prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and IFRS as adopted by the
European Union (EU). The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as issued by the IASB and as adopted by the
EU. Our responsibility Our responsibility is to express to the
company a conclusion on the condensed set of financial statements
in the half-yearly financial report based on our review. Scope of
review We conducted our review in accordance with ISRE 2410. A
review of interim financial information consists of making
enquiries primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion. Conclusion Based on our review, nothing
has come to our attention that causes us to believe that the
condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2008 is not prepared, in
all material respects, in accordance with International Accounting
Standard 34 as issued by the IASB and as adopted by the EU and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority. Ernst & Young LLP London 28 July 2008 Group
income statement Second First Second quarter quarter quarter First
half 2007 2008 2008 2008 2007 $ million $ million Sales and other
71,872 87,745 108,747 operating revenues 196,492 133,179 Earnings
from jointly controlled entities - after 910 975 1,752 interest and
tax 2,727 1,243 Earnings from associates - after 173 225 251
interest and tax 476 336 128 278 153 Interest and other revenues
431 361 73,083 89,223 110,903 Total revenues (Note 4) 200,126
135,119 Gains on sale of businesses 1,309 925 79 and fixed assets
1,004 1,989 74,392 90,148 110,982 Total revenues and other income
201,130 137,108 49,983 61,800 77,317 Purchases 139,117 92,643
Production and manufacturing 6,276 6,799 7,408 expenses 14,207
12,028 Production and similar taxes 827 1,609 2,299 (Note 5) 3,908
1,574 Depreciation, depletion and 2,535 2,782 2,850 amortization
5,632 5,054 Impairment and losses on sale of 455 40 23 businesses
and fixed assets 63 678 155 293 118 Exploration expense 411 311
Distribution and administration 3,565 3,896 3,977 expenses 7,873
7,022 Fair value (gain) loss on (283) 690 2,081 embedded
derivatives 2,771 (438) Profit before interest and 10,879 12,239
14,909 taxation 27,148 18,236 317 406 381 Finance costs (Note 6)
787 648 Net finance income relating to pensions and other post-
(162) (160) (160) retirement benefits (Note 7) (320) (322) 10,724
11,993 14,688 Profit before taxation 26,681 17,910 3,283 4,410
5,100 Taxation 9,510 5,723 7,441 7,583 9,588 Profit for the period
17,171 12,187 Attributable to: 7,376 7,451 9,465 BP shareholders
16,916 12,040 65 132 123 Minority interest 255 147 7,441 7,583
9,588 17,171 12,187 Earnings per share - cents Profit for the
period attributable to BP shareholders 38.37 39.47 50.27 Basic
89.74 62.43 38.18 39.12 49.80 Diluted 88.92 62.12 Group balance
sheet 30 June 31 December 2008 2007 $ million Non-current assets
Property, plant and equipment 101,787 97,989 Goodwill 11,016 11,006
Intangible assets 7,386 6,652 Investments in jointly controlled
entities 24,883 18,113 Investments in associates 4,601 4,579 Other
investments 1,981 1,830 Fixed assets 151,654 140,169 Loans 1,057
999 Other receivables 958 968 Derivative financial instruments
12,077 3,741 Prepayments 1,128 1,083 Defined benefit pension plan
surplus 9,086 8,914 175,960 155,874 Current assets Loans 173 165
Inventories 35,182 26,554 Trade and other receivables 48,482 38,020
Derivative financial instruments 16,075 6,321 Prepayments 4,153
3,589 Current tax receivable 195 705 Cash and cash equivalents
3,593 3,562 107,853 78,916 Assets classified as held for sale -
1,286 107,853 80,202 Total assets 283,813 236,076 Current
liabilities Trade and other payables 54,029 43,152 Derivative
financial instruments 15,593 6,405 Accruals and deferred income
7,019 6,640 Finance debt 16,638 15,394 Current tax payable 5,681
3,282 Provisions 2,080 2,195 101,040 77,068 Liabilities directly
associated with the assets classified as held for sale - 163
101,040 77,231 Non-current liabilities Other payables 2,821 1,251
Derivative financial instruments 15,116 5,002 Accruals and deferred
income 882 959 Finance debt 13,551 15,651 Deferred tax liabilities
20,935 19,215 Provisions 13,447 12,900 Defined benefit pension plan
and other post-retirement benefit plan deficits 9,567 9,215 76,319
64,193 Total liabilities 177,359 141,424 Net assets 106,454 94,652
Equity BP shareholders' equity 105,356 93,690 Minority interest
1,098 962 106,454 94,652 Group statement of recognized income and
expense Second First Second quarter quarter quarter First half 2007
2008 2008 2008 2007 $ million $ million 621 778 255 Currency
translation differences 1,033 795 Exchange gain on translation of
foreign operations transferred to gain on sale of (128) - -
businesses and fixed assets - (147) Available-for-sale investments
6 (191) 322 marked to market 131 (103) Available-for-sale
investments - recycled to the - (5) - income statement (5) - 13 74
49 Cash flow hedges marked to market 123 41 Cash flow hedges -
recycled to the (21) (2) 1 income statement (1) (81) Cash flow
hedges - recycled to the - (23) (18) balance sheet (41) (7) 105
(118) 107 Taxation (11) 28 Net income (expense) recognized 596 513
716 directly in equity 1,229 526 7,441 7,583 9,588 Profit for the
period 17,171 12,187 Total recognized income and 8,037 8,096 10,304
expense for the period 18,400 12,713 Attributable to: 7,967 7,960
10,182 BP shareholders 18,142 12,545 70 136 122 Minority interest
258 168 8,037 8,096 10,304 18,400 12,713 Movement in shareholders'
equity BP shareholders' Minority Total equity interest equity $
million At 31 December 2007 93,690 962 94,652 Currency translation
differences (net of tax) 1,093 3 1,096 Available-for-sale
investments (net of tax) 161 - 161 Cash flow hedges (net of tax) 76
- 76 Tax on share-based payments (104) - (104) Profit for the
period 16,916 255 17,171 Total recognized income and expense for
the period 18,142 258 18,400 Dividends (5,099) (122) (5,221)
Repurchase of ordinary share capital (1,796) - (1,796) Share-based
payments 419 - 419 At 30 June 2008 105,356 1,098 106,454 Group cash
flow statement Second First Second quarter quarter quarter First
half 2007 2008 2008 2008 2007 $ million $ million Operating
activities 10,724 11,993 14,688 Profit before taxation 26,681
17,910 Adjustments to reconcile profits before tax to net cash
provided by operating activities Exploration expenditure 60 184 44
written off 228 115 Depreciation, depletion and 2,535 2,782 2,850
amortization 5,632 5,054 Impairment and (gain) loss on sale of
businesses (854) (885) (56) and fixed assets (941) (1,311) Earnings
from jointly controlled (1,083) (1,200) (2,003) entities and
associates (3,203) (1,579) Dividends received from jointly
controlled entities 813 1,387 512 and associates 1,899 1,042
Working capital and other (6,109) (3,367) (9,317) movements
(12,684) (7,167) Net cash provided by operating 6,086 10,894 6,718
activities 17,612 14,064 Investing activities (4,334) (4,435)
(4,713) Capital expenditure (9,148) (7,979) (111) - (209)
Acquisitions, net of cash acquired (209) (1,198) Investment in
jointly controlled (12) (366) (247) entities (613) (21) (65) (4)
(3) Investment in associates (7) (109) Proceeds from disposal of
fixed 836 276 59 assets 335 1,146 Proceeds from disposal of 1,905 -
- businesses, net of cash disposed - 2,513 33 122 212 Proceeds from
loan repayments 334 78 374 - - Other - 374 Net cash (used in)
provided by (1,374) (4,407) (4,901) investing activities (9,308)
(5,196) Financing activities (1,918) (889) (928) Net repurchase of
shares (1,817) (4,320) 1,513 2,177 655 Proceeds from long-term
financing 2,832 2,871 (93) (537) (1,654) Repayments of long-term
financing (2,191) (1,227) Net increase (decrease) in (1,499)
(3,424) 1,516 short-term debt (1,908) (2,057) Dividends paid
(1,983) (2,554) (2,545) - BP shareholders (5,099) (3,984) (71) (36)
(86) - Minority interest (122) (135) Net cash (used in) provided by
(4,051) (5,263) (3,042) financing activities (8,305) (8,852)
Currency translation differences relating to cash 26 34 (2) and
cash equivalents 32 37 Increase (decrease) in cash and 687 1,258
(1,227) cash equivalents 31 53 Cash and cash equivalents at 1,956
3,562 4,820 beginning of period 3,562 2,590 Cash and cash
equivalents at 2,643 4,820 3,593 end of period 3,593 2,643 Group
cash flow statement Second First Second quarter quarter quarter
First half 2007 2008 2008 2008 2007 $ million $ million Working
capital and other movements (93) (97) (118) Interest receivable
(215) (188) 103 99 110 Interest received 209 188 317 406 381
Finance costs 787 648 (335) (366) (396) Interest paid (762) (668)
Net finance income relating to pensions and other (162) (160) (160)
post-retirement benefits (320) (322) 107 65 173 Share-based
payments 238 182 Net operating charge for pensions and other
post-retirement benefits, less contributions and benefit payments
for (31) 117 46 unfunded plans 163 (118) Net charge for provisions,
less (257) (165) (40) payments (205) (414) (Increase) decrease in
(683) 543 (8,485) inventories (7,942) (1,331) (Increase) decrease
in other current and (621) (9,844) (18,626) non-current assets
(28,470) 2,518 Increase (decrease) in other current and (2,429)
7,995 21,219 non-current liabilities 29,214 (4,429) (2,025) (1,960)
(3,421) Income taxes paid (5,381) (3,233) (6,109) (3,367) (9,317)
(12,684) (7,167) Capital expenditure and acquisitions Second First
Second quarter quarter quarter First half 2007 2008 2008 2008 2007
$ million $ million By business Exploration and Production 198 225
256 UK 481 420 108 168 165 Rest of Europe 333 195 1,542 1,215 1,801
US 3,016 2,609 1,886 4,394 1,727 Rest of World(a) 6,121 3,533 3,734
6,002 3,949 9,951 6,757 Refining and Marketing 90 53 77 UK 130 160
266 216 379 Rest of Europe(b) 595 1,476 380 2,297 662 US(a) 2,959
649 118 102 126 Rest of World 228 198 854 2,668 1,244 3,912 2,483
Other businesses and corporate 34 71 45 UK 116 78 3 13 12 Rest of
Europe 25 12 63 267 463 US 730 114 8 24 89 Rest of World 113 12 108
375 609 984 216 4,696 9,045 5,802 14,847 9,456 By geographical area
322 349 378 UK 727 658 377 397 556 Rest of Europe 953 1,683 1,985
3,779 2,926 US 6,705 3,372 2,012 4,520 1,942 Rest of World 6,462
3,743 4,696 9,045 5,802 14,847 9,456 Included above: Acquisitions
and asset 332 1,964 324 exchanges(a)(b) 2,288 1,445 (a) First
quarter 2008 includes capital expenditure of $2,848 million in
Exploration and Production and an asset exchange of $1,793 million
in Refining and Marketing relating to the formation of an
integrated North American oil sands business. Second quarter 2008
includes a further $111 million in Refining and Marketing
reflecting closing adjustments relating to this transaction. For
further information see Note 3. (b) First half 2007 includes $1,132
million for the acquisition of Chevron's Netherlands manufacturing
company. Exchange rates Second First Second quarter quarter quarter
First half 2007 2008 2008 2008 2007 US dollar/sterling average rate
1.99 1.98 1.97 for the period 1.97 1.97 2.00 1.99 1.99 US
dollar/sterling period-end rate 1.99 2.00 US dollar/euro average
rate for 1.35 1.50 1.56 the period 1.53 1.33 1.35 1.58 1.58 US
dollar/euro period-end rate 1.58 1.35 Analysis of profit before
interest and tax Second First Second quarter quarter quarter First
half 2007 2008 2008 2008 2007 $ million $ million By business
Exploration and Production 1,105 923 (124) UK 799 2,227 183 276 350
Rest of Europe 626 910 2,204 3,090 3,639 US 6,729 3,944 3,673 5,765
6,954 Rest of World 12,719 6,401 7,165 10,054 10,819 20,873 13,482
Refining and Marketing 1,002 69 124 UK 193 906 1,029 944 1,722 Rest
of Europe 2,666 1,510 1,633 1,115 1,730 US 2,845 1,929 319 445 854
Rest of World 1,299 733 3,983 2,573 4,430 7,003 5,078 Other
businesses and corporate (29) (119) (119) UK (238) (55) (8) - (29)
Rest of Europe (29) 13 (127) (132) (172) US (304) (259) (7) 58 19
Rest of World 77 33 (171) (193) (301) (494) (268) 10,977 12,434
14,948 27,382 18,292 (98) (195) (39) Consolidation adjustment (234)
(56) 10,879 12,239 14,909 Total for period 27,148 18,236 By
geographical area 2,080 873 (120) UK 753 3,078 1,213 1,163 2,065
Rest of Europe 3,228 2,458 3,622 3,926 5,144 US 9,070 5,554 3,964
6,277 7,820 Rest of World 14,097 7,146 10,879 12,239 14,909 Total
for period 27,148 18,236 Analysis of replacement cost profit before
interest and tax Second First Second quarter quarter quarter First
half 2007 2008 2008 2008 2007 $ million $ million By business
Exploration and Production 1,105 923 (124) UK 799 2,227 182 276 350
Rest of Europe 626 909 2,183 3,085 3,601 US 6,686 3,914 3,649 5,788
6,944 Rest of World 12,732 6,375 7,119 10,072 10,771 20,843 13,425
Refining and Marketing 937 107 118 UK 225 895 584 629 429 Rest of
Europe 1,058 882 966 154 (401) US (247) 1,095 255 359 393 Rest of
World 752 674 2,742 1,249 539 1,788 3,546 Other businesses and
corporate (29) (119) (119) UK (238) (55) (9) - (29) Rest of Europe
(29) 12 (128) (152) (185) US (337) (261) (7) 58 19 Rest of World 77
33 (173) (213) (314) (527) (271) 9,688 11,108 10,996 22,104 16,700
(98) (195) (39) Consolidation adjustment (234) (56) 9,590 10,913
10,957 Total for period 21,870 16,644 By geographical area 2,015
911 (126) UK 785 3,067 766 849 771 Rest of Europe 1,620 1,827 2,933
2,940 2,962 US 5,902 4,689 3,876 6,213 7,350 Rest of World 13,563
7,061 9,590 10,913 10,957 Total for period 21,870 16,644 Analysis
of non-operating items Second First Second quarter quarter quarter
First half 2007 2008 2008 2008 2007 $ million $ million By business
Exploration and Production Impairment and gain (loss) on sale 102
21 111 of businesses and fixed assets 132 707 - - (5) Environmental
and other provisions (5) - Restructuring, integration and - (44) -
rationalization costs (44) - Fair value gain (loss) on embedded 276
(684) (2,082) derivatives (2,766) 428 - 331 - Other 331 - 378 (376)
(1,976) (2,352) 1,135 Refining and Marketing Impairment and gain
(loss) on sale 767 814 (13) of businesses and fixed assets 801 588
- - - Environmental and other provisions - - Restructuring,
integration and - (205) (86) rationalization costs (291) - Fair
value gain (loss) on embedded - - - derivatives - - - - - Other -
(50) 767 609 (99) 510 538 Other businesses and corporate Impairment
and gain (loss) on sale of businesses (15) 50 (42) and fixed assets
8 16 - - - Environmental and other provisions - - Restructuring,
integration and - (58) (75) rationalization costs (133) - Fair
value gain (loss) on embedded 7 (6) 1 derivatives (5) 10 - (67) (7)
Other (74) - (8) (81) (123) (204) 26 1,137 152 (2,198) Total before
taxation (2,046) 1,699 (347) (56) 770 Taxation credit (charge)(a)
714 (539) 790 96 (1,428) Total after taxation for period (1,332)
1,160 (a) Tax on non-operating items is calculated using the
quarter's effective tax rate on replacement cost profit. Amounts
for comparative periods have been amended to reflect a redefinition
of the effective tax rate on replacement cost profit arising as a
result of the exclusion of tax effects on inventory holding gains
and losses as described on page 2. Realizations and marker prices
Second First Second quarter quarter quarter First half 2007 2008
2008 2008 2007 Average realizations(a) Liquids ($/bbl)(b) 63.82
94.86 128.56 UK 111.49 59.47 59.42 87.57 101.88 US 95.23 55.57
64.76 92.04 111.23 Rest of World 101.58 59.36 62.58 90.92 109.95 BP
Average 100.66 57.96 Natural gas ($/mcf) 4.84 8.08 8.39 UK 8.21
6.19 5.94 6.73 8.76 US 7.74 5.85 3.56 4.97 5.26 Rest of World 5.11
3.74 4.45 5.88 6.63 BP Average 6.25 4.66 Average oil marker prices
($/bbl) 68.76 96.71 121.18 Brent 109.05 63.22 64.89 97.86 123.81
West Texas Intermediate 111.14 61.53 65.77 96.53 123.61 Alaska
North Slope US West Coast 110.40 60.86 62.16 90.89 116.82 Mars
104.17 57.76 65.03 93.35 117.47 Urals (NWE - cif) 105.50 59.65
39.56 46.86 63.15 Russian domestic oil 55.01 33.48 Average natural
gas marker prices 7.55 8.03 10.94 Henry Hub gas price ($/mmbtu)(c)
9.49 7.16 UK Gas - National Balancing Point 20.24 52.94 60.72
(p/therm) 56.86 21.31 (a) Based on sales of consolidated
subsidiaries only - this excludes equity-accounted entities. (b)
Crude oil and natural gas liquids. (c) Henry Hub First of Month
Index. http://www.newscom.com/cgi-bin/prnh/20000724/NYM120LOGO
http://photoarchive.ap.org/ DATASOURCE: BP p.l.c. CONTACT: Press
Office - London: Roddy Kennedy, +44 (0)20 7496 4624, or United
States: Ronnie Chappell, +1-281-366-5174; or Investor Relations -
London: Fergus MacLeod, +44 (0)20 7496 4717, or United States:
Rachael MacLean, +1-281-366-6766 Web site: http://www.bp.com/
http://www.bp.com/investors
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