Edgar Filing: BP PLC

e6vk

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

for the period ended 30 June 2008

BP p.l.c.

(Translation of registrant’s name into English)

1 ST JAMES’S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-110203) OF BP CANADA FINANCE COMPANY, BP CAPITAL MARKETS p.l.c., BP CAPITAL MARKETS AMERICA, INC AND BP p.l.c.; THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-9790) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-65996) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-83180) OF BP AUSTRALIA CAPITAL MARKETS LIMITED, BP CANADA FINANCE COMPANY, BP CAPITAL MARKETS p.l.c., BP CAPITAL MARKETS AMERICA INC. AND BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 33-21868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-9020) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-09798) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-34968) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-74414) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-102583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103923) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-119934) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO 333-1326190) OF BP P.L.C., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-149778) OF BP p.l.c.,AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

BP p.l.c. AND SUBSIDIARIES
FORM 6-K FOR THE PERIOD ENDED 30 JUNE 2008*


		Page

1.	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period January-June 2008	3-13, 21, 23

2.	Consolidated Financial Statements including Notes to Consolidated Financial Statements for the period January-June 2008	14-20, 24-38

3.	Environmental, Operating and Other Information	22

4.	Signatures	39

5.	Exhibit 99.1: Computation of Ratio of Earnings to Fixed Charges	40
	Exhibit 99.2: Capitalization and Indebtedness	41
EXHIBIT 99.1
EXHIBIT 99.2


*		In this Form 6-K, references to the first half 2008 and first half 2007 refer to the six months ended 30 June 2008 and 30 June 2007 respectively. References to second quarter 2008 and second quarter 2007 refer to the three months ended 30 June 2008 and 30 June 2007 respectively.

Group results January — June 2008

Second Quarter

First half

2007

2008

$ million

2008

2007

81,938

125,755

Total revenues

227,875

152,341

7,376

9,465

Profit for the period(a)

16,916

12,040

19.35

25.62

— per ordinary share (pence)

45.55

31.69

38.37

50.27

— per ordinary share (cents)

89.74

62.43

2.30

3.02

— per ADS (dollars)

5.38

3.75

•

The following discussion should be read in conjunction with the consolidated financial statements and the related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, for the year ended 31 December 2007 in BP’s Annual Report on Form-20-F for the year ended 31 December 2007.

•

BP’s second-quarter profit was $9,465 million, compared with $7,376 million a year ago, an increase of 28%. For the half year, profit was $16,916 million compared with $12,040 million a year ago, up 40%. The second quarter profit included inventory holding gains of $2,612 million compared with gains of $888 million in the same quarter last year. For the half year, inventory holding gains were $3,475 million compared with $1,108 million in the first half of 2007. See footnote (b) below for further information.

•

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 4. 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. See page 21 for further information.

•

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 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. Net debt is defined on page 6.

•

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 page 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)		Profit attributable to BP shareholders.

(b)		Inventory holding gains and losses represent the difference between the cost of sales calculated using the average cost to BP of supplies incurred during the period and the cost of sales calculated on the first-in first-out (“FIFO”) method. Under the FIFO method, which we use for IFRS reporting, the cost of inventory charged to the income statement is based upon the historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant distorting effect on reported income. The amounts disclosed represent the difference between the charge to the income statement on a FIFO basis and the charge which would arise using average cost of supplies incurred during the period. For this purpose, average cost of supplies incurred during the period is calculated by dividing the total cost of inventory purchased in the period by the number of barrels acquired. The amounts disclosed are not separately reflected in the financial statements as a gain or loss.

		Management believes this information is useful to illustrate to investors the fact that crude oil and product prices can vary significantly from period to period and that the impact on our reported result under IFRS can be significant. Inventory holding gains and losses vary from period to period due principally to changes in oil prices as well as changes to underlying inventory levels. In order for investors to understand the operating performance of the group excluding the impact of oil price changes on the replacement of inventories, and to make comparisons of operating performance between reporting periods, BP’s management believes it is helpful to disclose this information.

		Effective 1 January 2008, inventory holding gains and losses disclosed above include the associated tax effect. Previously the tax effect was not included. Comparative amounts have been amended to the new basis.

The commentaries above and following should be read in conjunction with the cautionary statement on page 13.

Non-operating items and fair value accounting effects

Non-operating items(a)


Second quarter							First half
2007			2008			$ million	2008			2007


	378			(1,976	)	Exploration and Production		(2,352	)		1,135
	767			(99	)	Refining and Marketing		510			538
	(8	)		(123	)	Other businesses and corporate		(204	)		26

	1,137			(2,198	)			(2,046	)		1,699
	(347	)		770		Taxation(b)		714			(539	)

	790			(1,428	)			(1,332	)		1,160

Fair value accounting effects(c)


Second quarter							First half
2007			2008			$ million	2008			2007

						Exploration and Production
	124			366		Unrecognized gains (losses) brought forward from previous period		107			155
	(198	)		(739	)	Unrecognized (gains) losses carried forward		(739	)		(198	)

	(74	)		(373	)	Favourable (unfavourable) impact relative to management’s measure of performance		(632	)		(43	)

						Refining and Marketing
	611			328		Unrecognized gains (losses) brought forward from previous period		429			72
	(274	)		(489	)	Unrecognized (gains) losses carried forward		(489	)		(274	)

	337			(161	)	Favourable (unfavourable) impact relative to management’s measure of performance		(60	)		(202	)


	263			(534	)			(692	)		(245	)
	(80	)		187		Taxation(b)		245			94

	183			(347	)			(447	)		(151	)

Total of non-operating items and fair value accounting effects


Second quarter							First half
2007			2008			$ million	2008			2007


	304			(2,349	)	Exploration and Production		(2,984	)		1,092
	1,104			(260	)	Refining and Marketing		450			336
	(8	)		(123	)	Other businesses and corporate		(204	)		26

	1,400			(2,732	)			(2,738	)		1,454
	(427	)		957		Taxation(b)		959			(445	)

	973			(1,775	)			(1,779	)		1,009


(a)		Non-operating items are charges and credits that BP discloses separately because it considers such disclosure to be meaningful and relevant to the economic decision-making needs of users. The main categories of non-operating items in the periods presented are: impairments; gains or losses on sale of fixed assets and the sale of businesses; environmental remediation; restructuring, integration and rationalisation costs; and changes in the fair value of embedded derivatives. These disclosures are provided in order to enable investors better to understand and evaluate the group’s financial performance. An analysis of non-operating items by type is provided on page 21 and a geographical analysis is shown on pages 8, 10 and 11.

(b)		Tax is calculated using the quarter’s effective tax rate on group profit.

(c)		Information on fair value accounting effects is non-GAAP. An explanation of fair value accounting effects is provided on page 12.

Per share amounts

Second quarter

First half

2007

2008

2007

7,376

9,465

Profit for the period ($ million) (a)

16,916

12,040

19,133,973

18,805,089

Shares in issue at period end (thousand)(b)

18,805,089

19,133,973

3,188,996

3,134,182

— ADS equivalent (thousand)(b)

3,134,182

3,188,996

19,186,461

18,823,515

Average number of shares outstanding (thousand)(b)

18,849,504

19,284,938

3,197,744

3,137,253

— ADS equivalent (thousand)(b)

3,141,584

3,214,156

175,806

85,900

Shares repurchased in the period (thousand)

176,896

413,722

Per ordinary share (cents)

38.37

50.27

Profit for the period

89.74

62.43

Per ADS (cents)

230.22

301.62

Profit for the period

538.44

374.58


(a)		Profit attributable to BP shareholders.

(b)		Excludes treasury shares.

Dividends

Dividends payable

On 29 July 2008, BP 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 quarter

First half

2007

2008

2007

Dividends paid per ordinary share

10.325

13.525

cents

27.050

20.650

5.151

6.830

pence

13.643

10.409

61.95

81.15

Dividends paid per ADS (cents)

162.30

123.90

Net debt ratio — net debt: net debt + equity


Second quarter							First half
2007			2008			$ million	2008			2007

	23,754			30,189		Gross debt		30,189			23,754
	379			900		Less: fair value asset (liability) of hedges related to finance debt		900			379

	23,375			29,289				29,289			23,375
	2,643			3,593		Cash and cash equivalents		3,593			2,643

	20,732			25,696		Net debt		25,696			20,732

	89,423			106,454		Equity		106,454			89,423
	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 26 for further information.

Exploration and Production


Second quarter						First half
2007		2008			$ million	2008		2007

	17,002		26,294		Total revenues		50,359		33,349
	7,165		10,819		Profit before interest and tax(a)		20,873		13,482

					By region:
	1,105		(124	)	UK		799		2,227
	183		350		Rest of Europe		626		910
	2,204		3,639		US		6,729		3,944
	3,673		6,954		Rest of World		12,719		6,401

	7,165		10,819				20,873		13,482

					Analysis of total revenues
	16,040		24,506		Sales and other operating revenues		47,428		31,905
	962		1,788		Earnings from equity-accounted entities (after interest and tax), interest, and other revenues		2,931		1,444

	17,002		26,294				50,359		33,349


(a)		Includes profit after interest and tax of equity-accounted entities.

Total revenues for the second quarter were $26 billion and were $17 billion in the corresponding period in 2007. Sales and other operating revenues increased by $8 billion primarily due to higher oil and gas realizations. Total revenues for the first half were $50 billion, compared with $33 billion in the corresponding period in 2007. The increase of $16 billion in sales and other operating revenues was primarily due to higher oil and gas realizations. Gas marketing sales (included in sales and other operating revenues) increased slightly compared with the equivalent periods of 2007, primarily as a result of higher prices.

The profit before interest and tax for the second quarter and half year was $10,819 million and $20,873 million respectively, increases of 51% and 55% over the same periods of 2007. These figures included inventory holding gains of $48 million and $30 million respectively compared with inventory holding gains of $46 million and $57 million in the second quarter and first half 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. Information on fair value accounting effects is set out on page 12.

Reported production for the quarter was 2,500mboe/d for subsidiaries and 1,330mboe/d for equity-accounted entities, broadly flat with the second quarter of 2007. For subsidiaries, this reflects the continued ramp-up of production following the start-up of major projects in late 2007 and the first half of 2008, offset by the impact of lower entitlement in our production-sharing agreements (PSAs). We expect the quarterly phasing of underlying production for the group (before the impact of lower entitlement in our PSAs) during the year to reflect the normal seasonal effects associated with turnaround activity.

Reported production for the half year was 2,562mboe/d for subsidiaries and 1,309mboe/d for equity-accounted entities, broadly flat with the same period of the previous year.

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.

Exploration and Production (continued)


Second quarter							First half
2007			2008			$ million	2008			2007


						Non-operating items
	164			(2,082	)	UK		(2,776	)		316
	(2	)		—		Rest of Europe		—			531
	178			(8	)	US		(16	)		171
	38			114		Rest of World		440			117

	378			(1,976	)			(2,352	)		1,135

						Fair value accounting effects(a)
	(4	)		(147	)	UK		(130	)		34
	—			—		Rest of Europe		—			—
	(71	)		(236	)	US		(378	)		(77	)
	1			10		Rest of World		(124	)		—

	(74	)		(373	)			(632	)		(43	)

						Exploration expense
	7			8		UK		100			27
	—			—		Rest of Europe		—			—
	54			47		US		119			131
	94			63		Rest of World		192			153

	155			118				411			311

						Liquids(b)
	62.58			109.95		Average prices realized by BP(c)($/bbl)		100.66			57.96
	1,320			1,260		Production for subsidiaries (mb/d) (net of royalties)		1,299			1,343
	1,129			1,148		Production for equity-accounted entities (mb/d) (net of royalties)		1,132			1,105

						Natural gas
	4.45			6.63		Average prices realized by BP(c)($/mcf)		6.25			4.66
	6,945			7,194		Production for subsidiaries (mmcf/d) (net of royalties)		7,329			7,224
	914			1,054		Production for equity-accounted entities (mmcf/d) (net of royalties)		1,027			955

						Total hydrocarbons(d)
	44.97			75.39		Average prices realized by BP(c)($/boe)		68.85			42.97
	2,517			2,500		Production for subsidiaries (mboe/d)		2,562			2,588
	1,287			1,330		Production for equity-accounted entities (mboe/d)		1,309			1,269


(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 4 and 12.

(b)		Crude oil and natural gas liquids.

(c)		Based on sales of consolidated subsidiaries only — this excludes equity-accounted entities.

(d)		Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels.

(e)		Additional operating information is provided on pages 19, 22 and 23

Refining and Marketing

Second quarter

First half

2007

2008

$ million

2008

2007

63,960

98,206

Total revenues

175,069

117,124

3,983

4,430

Profit before interest and tax(a)

7,003

5,078

By region:

1,002

124

193

906

1,029

1,722

Rest of Europe

2,666

1,510

1,633

1,730

2,845

1,929

319

854

Rest of World

1,299

733

3,983

4,430

7,003

5,078

Analysis of total revenues

11,587

19,684

Sale of crude oil through spot and term contracts

33,752

20,549

49,591

75,133

Marketing, spot and term sales of refined products

135,196

89,875

2,587

3,076

Other sales and operating revenues

5,557

6,317

195

313

Earnings from equity-accounted entities (after interest and tax), interest, and other revenues

564

383

63,960

98,206

175,069

117,124

Mb/d

2,161

1,848

Sales of crude oil through spot term contracts

1,854

2,089

5,675

5,782

Marketing, spot and term sales of refined products

5,771

5,735


(a)		Includes profit after interest and tax of equity-accounted entities.

Refining and Marketing comprises Fuels Value Chains (FVC) and International Businesses. The FVCs include refineries, supply, logistics and marketing and trading activities. The International Businesses include lubricants, chemicals, LPG, aviation and marine fuels.

Total revenues for the second quarter were $98 billion compared with $64 billion for the same period in the prior year. Marketing, spot and term sales of refined products increased by $26 billion due to higher prices of around $22 billion, a positive foreign exchange impact of around $3 billion and higher volumes of around $1 billion. Sales of crude oil through spot term contracts increased by $8 billion due to higher prices of around $9 billion partly offset by lower volumes of around $1 billion.

Total revenues for the first half were $175 billion compared with $117 billion for the same period in the prior year. Marketing, spot and term sales of refined products increased by $45 billion due to higher prices of around $39 billion, a positive foreign exchange impact of around $5 billion and higher volumes of around $1 billion. Sales of crude oil through spot and term contracts increased by $13 billion due to higher prices of around $15 billion, partly offset by lower volumes of around $2 billion.

The profit before interest and tax for the second quarter and half year was $4,430 million and $7,003 million respectively. This included inventory holding gains of $3,891 million and $5,215 million respectively. The results in the equivalent periods of 2007 were $3,983 million and $5,078 million respectively and included inventory holding gains of $1,241 million and $1,532 million. 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. Information on fair value accounting effects is set out on page 12.

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 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.

Refining and Marketing (continued)


Second quarter							First half
2007			2008			$ million	2008			2007
						Non-operating items
	844			(10	)	UK		(59	)		681
	(44	)		(32	)	Rest of Europe		(117	)		(56	)
	170			(16	)	US		758			112
	(203	)		(41	)	Rest of World		(72	)		(199	)

	767			(99	)			510			538


						Fair value accounting effects(a)
	83			(177	)	UK		(181	)		(98	)
	48			(59	)	Rest of Europe		(23	)		(117	)
	174			53		US		148			9
	32			22		Rest of World		(4	)		4

	337			(161	)			(60	)		(202	)


						Refinery throughputs (mb/d)
	123			—		UK		—			136
	700			753		Rest of Europe		764			670
	996			1,189		US		1,133			1,074
	309			297		Rest of World		305			300

	2,128			2,239		Total throughput		2,202			2,180

	82.7			88.3		Refining availability (%)(b)		88.1			82.2


						Oil sales volumes (mb/d)
						Refined products
	343			315		UK		318			339
	1,271			1,236		Rest of Europe		1,240			1,258
	1,579			1,498		US		1,477			1,571
	615			716		Rest of World		704			620

	3,808			3,765		Total marketing sales		3,739			3,788
	1,867			2,017		Trading/supply sales		2,032			1,947

	5,675			5,782		Total refined product sales		5,771			5,735
	2,161			1,848		Crude oil		1,854			2,089

	7,836			7,630		Total oil sales		7,625			7,824


						Global Indicator Refining Margin ($/bbl)(c)
	7.12			7.46		NWE		6.12			5.65
	24.46			8.59		USGC		7.40			17.34
	26.05			6.53		Midwest		3.82			16.89
	22.71			9.94		USWC		7.92			22.46
	6.01			9.41		Singapore		7.09			5.43
	16.66			8.19		Average		6.38			13.07


						Chemicals production (kte)
	246			164		UK		425			502
	655			657		Rest of Europe		1,365			1,403
	1,047			1,022		US		2,058			2,123
	1,497			1,598		Rest of World		3,129			3,017

	3,445			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 4 and 12.

(b)		Refining Solomon 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 quarter							First half
2007			2008			$ million	2008			2007
	976			1,255		Total revenues		2,447			1,868
	(171	)		(301	)	Profit (loss) before interest and tax(a)		(494	)		(268	)

						By region:
	(29	)		(119	)	UK		(238	)		(55	)
	(8	)		(29	)	Rest of Europe		(29	)		13
	(127	)		(172	)	US		(304	)		(259	)
	(7	)		19		Rest of World		77			33

	(171	)		(301	)			(494	)		(268	)

						Results include:
						Non-operating items
	(15	)		(41	)	UK		(47	)		(15	)
	—			(47	)	Rest of Europe		(60	)		28
	7			(33	)	US		(82	)		13
	—			(2	)	Rest of World		(15	)		—

	(8	)		(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 loss before interest and tax for the second quarter was $301 million, compared with a loss of $171 million a year ago. This included inventory holding gains of $13 million and $2 million respectively. For the half year, the loss before interest and tax was $494 million, compared with $268 million a year ago. This included inventory holding gains of $33 million and $3 million respectively.

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.


	Second quarter
	2008		2007
Wind — net rated capacity as at period end (megawatts)(a)		172		32
Solar — cell production capacity as at period end (megawatts)(b)		255		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 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.

Non-GAAP 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 4 and are non-GAAP. A reconciliation to GAAP information is set out below.

Reconciliation of non-GAAP information


Second quarter							First half
2007			2008			$ million	2008			2007
						Exploration and Production
	7,239			11,192		Profit before interest and tax adjusted for fair value accounting effects		21,505			13,525
	(74	)		(373	)	Impact of fair value accounting effects		(632	)		(43	)

	7,165			10,819		Profit before interest and tax		20,873			13,482


						Refining and Marketing
	3,646			4,591		Profit before interest and tax adjusted for fair value accounting effects		7,063			5,280
	337			(161	)	Impact of fair value accounting effects		(60	)		(202	)

	3,983			4,430		Profit before interest and tax		7,003			5,078

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 8 and 9 of BP’s Annual Report on Form-20-F for the year ended 31 December 2007 filed with the Securities and Exchange Commission. Information in relation to our investment in TNK-BP is included in Note 9 on page 30 of this Form 6-K.

FORWARD-LOOKING STATEMENTS

In order to utilize the ‘Safe Harbour’ provisions of the United States Private Securities Litigation Reform Act of 1995, BP is providing the following cautionary statement. This report on Form 6-K contains certain forward-looking statements with respect to 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. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘may’, ‘objective’, ‘believes’ or similar expressions. 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 on stream; 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; exchange rate fluctuations; development and use of new technology; the success or otherwise non-success of partnering; the actions of competitors; natural disasters and severe 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 report. In addition to factors set forth elsewhere in this report, those set out above are important factors, although not exhaustive, that may cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. 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.

Group income statement


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
	71,872			108,747		Sales and other operating revenues		196,492			133,179
	910			1,752		Earnings from jointly controlled entities — after interest and tax		2,727			1,243
	173			251		Earnings from associates — after interest and tax		476			336
	128			153		Interest and other revenues		431			361

	73,083			110,903		Total revenues (Note 4)		200,126			135,119
	1,309			79		Gains on sale of businesses and fixed assets		1,004			1,989

	74,392			110,982		Total revenues and other income		201,130			137,108

	49,983			77,317		Purchases		139,117			92,643
	6,276			7,408		Production and manufacturing expenses		14,207			12,028
	827			2,299		Production and similar taxes (Note 5)		3,908			1,574
	2,535			2,850		Depreciation, depletion and amortization		5,632			5,054
	455			23		Impairment and losses on sale of businesses and fixed assets		63			678
	155			118		Exploration expense		411			311
	3,565			3,977		Distribution and administration expenses		7,873			7,022
	(283	)		2,081		Fair value (gain) loss on embedded derivatives		2,771			(438	)

	10,879			14,909		Profit before interest and taxation		27,148			18,236
	317			381		Finance costs (Note 6)		787			648
	(162	)		(160	)	Net finance income relating to pensions and other post-retirement benefits (Note 7)		(320	)		(322	)

	10,724			14,688		Profit before taxation		26,681			17,910
	3,283			5,100		Taxation		9,510			5,723

	7,441			9,588		Profit for the period		17,171			12,187

						Attributable to:
	7,376			9,465		BP shareholders		16,916			12,040
	65			123		Minority interest		255			147

	7,441			9,588				17,171			12,187

						Earnings per share — cents (Note 10)
						Profit for the period attributable to BP shareholders
	38.37			50.27		Basic		89.74			62.43
	38.18			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		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		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 quarter							First half
2007			2008				2008			2007
$ million							$ million
	621			255		Currency translation differences		1,033			795
	(128	)		—		Exchange gain on translation of foreign operations transferred to gain on sale of businesses and fixed assets		—			(147	)
	6			322		Available-for-sale investments marked to market		131			(103	)
	—			—		Available-for-sale investments — recycled to the income statement		(5	)		—
	13			49		Cash flow hedges marked to market		123			41
	(21	)		1		Cash flow hedges — recycled to the income statement		(1	)		(81	)
	—			(18	)	Cash flow hedges — recycled to the balance sheet		(41	)		(7	)
	105			107		Taxation		(11	)		28

	596			716		Net income (expense) recognized directly in equity		1,229			526
	7,441			9,588		Profit for the period		17,171			12,187

	8,037			10,304		Total recognized income and expense for the period		18,400			12,713

						Attributable to:
	7,967			10,182		BP shareholders		18,142			12,545
	70			122		Minority interest		258			168

	8,037			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 quarter							First half
2007			2008				2008			2007
$ million							$ million
						Operating activities
	10,724			14,688		Profit before taxation		26,681			17,910
						Adjustments to reconcile profits before tax to net cash provided by operating activities
	60			44		Exploration expenditure written off		228			115
	2,535			2,850		Depreciation, depletion and amortization		5,632			5,054
	(854	)		(56	)	Impairment and (gain) loss on sale of businesses and fixed assets		(941	)		(1,311	)
	(1,083	)		(2,003	)	Earnings from jointly controlled entities and associates		(3,203	)		(1,579	)
	813			512		Dividends received from jointly controlled entities and associates		1,899			1,042
	(6,109	)		(9,317	)	Working capital and other movements		(12,684	)		(7,167	)

	6,086			6,718		Net cash provided by operating activities		17,612			14,064

						Investing activities
	(4,334	)		(4,713	)	Capital expenditure		(9,148	)		(7,979	)
	(111	)		(209	)	Acquisitions, net of cash acquired		(209	)		(1,198	)
	(12	)		(247	)	Investment in jointly controlled entities		(613	)		(21	)
	(65	)		(3	)	Investment in associates		(7	)		(109	)
	836			59		Proceeds from disposal of fixed assets		335			1,146
	1,905			—		Proceeds from disposal of businesses, net of cash disposed		—			2,513
	33			212		Proceeds from loan repayments		334			78
	374			—		Other		—			374

	(1,374	)		(4,901	)	Net cash (used in) provided by investing activities		(9,308	)		(5,196	)

						Financing activities
	(1,918	)		(928	)	Net repurchase of shares		(1,817	)		(4,320	)
	1,513			655		Proceeds from long-term financing		2,832			2,871
	(93	)		(1,654	)	Repayments of long-term financing		(2,191	)		(1,227	)
	(1,499	)		1,516		Net increase (decrease) in short-term debt		(1,908	)		(2,057	)
	(1,983	)		(2,545	)	Dividends paid — BP shareholders		(5,099	)		(3,984	)
	(71	)		(86	)	— Minority interest		(122	)		(135	)

	(4,051	)		(3,042	)	Net cash (used in) provided by financing activities		(8,305	)		(8,852	)

	26			(2	)	Currency translation differences relating to cash and cash equivalents		32			37

	687			(1,227	)	Increase (decrease) in cash and cash equivalents		31			53
	1,956			4,820		Cash and cash equivalents at beginning of period		3,562			2,590

	2,643			3,593		Cash and cash equivalents at end of period		3,593			2,643

Group cash flow statement


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
						Working capital and other movements
	(93	)		(118	)	Interest receivable		(215	)		(188	)
	103			110		Interest received		209			188
	317			381		Finance costs		787			648
	(335	)		(396	)	Interest paid		(762	)		(668	)
	(162	)		(160	)	Net finance income relating to pensions and other post-retirement benefits		(320	)		(322	)
	107			173		Share-based payments		238			182
	(31	)		46		Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans		163			(118	)
	(257	)		(40	)	Net charge for provisions, less payments		(205	)		(414	)
	(683	)		(8,485	)	(Increase) decrease in inventories		(7,942	)		(1,331	)
	(621	)		(18,626	)	(Increase) decrease in other current and non-current assets		(28,470	)		2,518
	(2,429	)		21,219		Increase (decrease) in other current and non-current liabilities		29,214			(4,429	)
	(2,025	)		(3,421	)	Income taxes paid		(5,381	)		(3,233	)

	(6,109	)		(9,317	)			(12,684	)		(7,167	)

Capital expenditure and acquisitions


Second quarter					First half
2007		2008			2008		2007
$ million					$ million
				By business

				Exploration and Production
	198		256	UK		481		420
	108		165	Rest of Europe		333		195
	1,542		1,801	US		3,016		2,609
	1,886		1,727	Rest of World ^(a)		6,121		3,533

	3,734		3,949			9,951		6,757

				Refining and Marketing
	90		77	UK		130		160
	266		379	Rest of Europe ^(b)		595		1,476
	380		662	US ^(a)		2,959		649
	118		126	Rest of World		228		198

	854		1,244			3,912		2,483

				Other businesses and corporate
	34		45	UK		116		78
	3		12	Rest of Europe		25		12
	63		463	US		730		114
	8		89	Rest of World		113		12

	108		609			984		216

	4,696		5,802			14,847		9,456

				By geographical area
	322		378	UK		727		658
	377		556	Rest of Europe		953		1,683
	1,985		2,926	US		6,705		3,372
	2,012		1,942	Rest of World		6,462		3,743

	4,696		5,802			14,847		9,456

				Included above:
	332		324	Acquisitions and asset exchanges ^(a)(b)		2,288		1,445


(a)		First half 2008 includes capital expenditure of $2,848 million in Exploration and Production and an asset exchange of $1,904 million in Refining and Marketing relating to the formation of an integrated North American oil sands business. Second quarter 2008 includes $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 quarter

First half

2007

2008

2007

1.99

1.97

US dollar/sterling average rate for the period

1.97

1.97

2.00

1.99

US dollar/sterling period-end rate

1.99

2.00

1.35

1.56

US dollar/euro average rate for the period

1.53

1.33

1.35

1.58

US dollar/euro period-end rate

1.58

1.35

Analysis of profit before interest and tax


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
						By business

						Exploration and Production
	1,105			(124	)	UK		799			2,227
	183			350		Rest of Europe		626			910
	2,204			3,639		US		6,729			3,944
	3,673			6,954		Rest of World		12,719			6,401

	7,165			10,819				20,873			13,482


						Refining and Marketing
	1,002			124		UK		193			906
	1,029			1,722		Rest of Europe		2,666			1,510
	1,633			1,730		US		2,845			1,929
	319			854		Rest of World		1,299			733

	3,983			4,430				7,003			5,078


						Other businesses and corporate
	(29	)		(119	)	UK		(238	)		(55	)
	(8	)		(29	)	Rest of Europe		(29	)		13
	(127	)		(172	)	US		(304	)		(259	)
	(7	)		19		Rest of World		77			33

	(171	)		(301	)			(494	)		(268	)

	10,977			14,948				27,382			18,292
	(98	)		(39	)	Consolidation adjustment		(234	)		(56	)

	10,879			14,909		Total for period		27,148			18,236


						By geographical area
	2,080			(120	)	UK		753			3,078
	1,213			2,065		Rest of Europe		3,228			2,458
	3,622			5,144		US		9,070			5,554
	3,964			7,820		Rest of World		14,097			7,146

	10,879			14,909		Total for period		27,148			18,236

Analysis of non-operating items


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
						By business

						Exploration and Production
	102			111		Impairment and gain (loss) on sale of businesses and fixed assets		132			707
	—			(5	)	Environmental and other provisions		(5	)		—
	—			—		Restructuring, integration and rationalization costs		(44	)		—
	276			(2,082	)	Fair value gain (loss) on embedded derivatives		(2,766	)		428
	—			—		Other		331			—

	378			(1,976	)			(2,352	)		1,135

						Refining and Marketing
	767			(13	)	Impairment and gain (loss) on sale of businesses and fixed assets		801			588
	—			—		Environmental and other provisions		—			—
	—			(86	)	Restructuring, integration and rationalization costs		(291	)		—
	—			—		Fair value gain (loss) on embedded derivatives		—			—
	—			—		Other		—			(50	)

	767			(99	)			510			538

						Other businesses and corporate
	(15	)		(42	)	Impairment and gain (loss) on sale of businesses and fixed assets		8			16
	—			—		Environmental and other provisions		—			—
	—			(75	)	Restructuring, integration and rationalization costs		(133	)		—
	7			1		Fair value gain (loss) on embedded derivatives		(5	)		10
	—			(7	)	Other		(74	)		—

	(8	)		(123	)			(204	)		26


	1,137			(2,198	)	Total before taxation		(2,046	)		1,699
	(347	)		770		Taxation credit (charge) ^(a)		714			(539	)

	790			(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 group profit.

Realizations and marker prices

Second quarter

First half

2007

2008

2007

Average realizations ^(a)

Liquids ($/bbl) ^(b)

63.82

128.56

111.49

59.47

59.42

101.88

95.23

55.57

64.76

111.23

Rest of World

101.58

59.36

62.58

109.95

BP Average

100.66

57.96

Natural gas ($/mcf)

4.84

8.39

8.21

6.19

5.94

8.76

7.74

5.85

3.56

5.26

Rest of World

5.11

3.74

4.45

6.63

BP Average

6.25

4.66

Average oil marker prices ($/bbl)

68.76

121.18

Brent

109.05

63.22

64.89

123.81

West Texas Intermediate

111.14

61.53

65.77

123.61

Alaska North Slope US West Coast

110.40

60.86

62.16

116.82

Mars

104.17

57.76

65.03

117.47

Urals (NWE — cif)

105.50

59.65

39.56

63.15

Russian domestic oil

55.01

33.48

Average natural gas marker prices

7.55

10.94

Henry Hub gas price($/mmbtu) ^(c)

9.49

7.16

20.24

60.72

UK Gas — National Balancing Point (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.

Operating information


Second quarter					First half
2007		2008			2008		2007

				Liquids production for subsidiaries ^(a)(c) (mb/d) (net of royalties)
	218		186	UK		188		227
	43		40	Rest of Europe		42		52
	532		534	US		544		529
	527		500	Rest of World		525		535

	1,320		1,260			1,299		1,343


				Natural gas production for subsidiaries^(c) (mmcf/d) (net of royalties)
	731		723	UK		847		818
	22		21	Rest of Europe		23		32
	2,165		2,140	US		2,144		2,164
	4,027		4,310	Rest of World		4,315		4,210

	6,945		7,194			7,329		7,224


				Total production for subsidiaries ^{(b) (c)} (mboe/d) (net of royalties)
	344		311	UK		335		368
	47		43	Rest of Europe		46		57
	905		903	US		914		902
	1,221		1,243	Rest of World		1,267		1,260

	2,517		2,500			2,562		2,588


				Equity-accounted entitites (BP share)
	1,287		1,330	Total production ^(b) (mboe/d) (net of royalties)		1,309		1,269


(a)		Crude oil and natural gas liquids.

(b)		Expressed in thousand barrels of oil equivalent per day (mboe/d). Natural gas is converted to oil equivalent at 5.8 billion cubic feet: 1 million barrels.

(c)		Because of rounding, some totals may not agree exactly with the sum of their component parts.

Notes

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 the periods presented. All such adjustments are of a normal recurring nature. The interim financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2007 included in BP’s Annual Report on Form 20-F filed with the Securities and Exchange Commission.

BP prepares its consolidated financial statements included within its Annual Report on Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union (EU). IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB, however, 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 the Annual Report on Form 20-F for the year ended 2008, which do not differ significantly from those used in the Annual Report on Form 20-F for the year ended 31 December 2007.

2.		Resegmentation and other changes to comparatives

(a)		Resegmentation

On 11 October 2007, we announced our intention to simplify the organizational structure of BP. From 1 January 2008, there are only two business segments — Exploration and Production and Refining and Marketing. A separate business, Alternative Energy, handles BP’s low-carbon businesses and future growth options outside oil and gas. This includes solar, wind, gas-fired power, hydrogen, biofuels and coal conversion.

As a result, and with effect from 1 January 2008:

•			The Gas, Power and Renewables segment ceased to report separately.

•			The natural gas liquids (NGLs), liquefied natural gas and gas and power marketing and trading businesses were transferred from the Gas, Power and Renewables segment to the Exploration and Production segment.

•			The Alternative Energy business was transferred from the Gas, Power and Renewables segment to Other businesses and corporate.

•			The Emerging Consumers Marketing Unit was transferred from Refining and Marketing to Alternative Energy.

•			The Biofuels business was transferred from Refining and Marketing to Alternative Energy.

•			The Shipping business was transferred from Refining and Marketing to Other businesses and corporate.

As a result of the transfers identified above, Other businesses and corporate has been redefined. It now consists of 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.

Notes

Resegmentation and other changes to comparatives (continued)


	Resegmented						As reported
	First			Second			First			Second
	half			quarter			half			quarter
	2007			2007			2007			2007

$ million
Total revenues
Exploration and Production		18,170			9,028			8,910			4,483
Refining and Marketing		115,735			63,438			116,013			63,570
Gas, Power and Renewables		—			—			9,746			4,824
Other businesses and corporate		1,214			617			450			206

Total third party revenues		135,119			73,083			135,119			73,083


Profit before interest and tax
Exploration and Production		13,482			7,165			12,948			6,894
Refining and Marketing		5,078			3,983			5,110			3,981
Gas, Power and Renewables		—			—			441			235
Other businesses and corporate		(268	)		(171	)		(277	)		(162	)

		18,292			10,977			18,222			10,948

Consolidation adjustment		(56	)		(98	)		14			(69	)

Profit before interest and tax		18,236			10,879			18,236			10,879

(b)

Revised income statement presentation

We have implemented a minor change in the presentation of the group income statement whereby the unwinding of the discount on provisions and on other payables is now included within finance costs. Previously, this was included within other finance income or expense. This line item has now been renamed net finance income or expense relating to pensions and other post-retirement benefits. This change does not affect profit before interest and taxation, profit before taxation or profit for the period. The financial information for comparative periods shows the revised presentation, as set out below.


	First			Second
	half			quarter
	2007			2007

As reported
$ million
Profit before interest and taxation		18,236			10,879
Finance costs		515			251
Other finance income		(189	)		(96	)

Profit before taxation		17,910			10,724


As amended
$ million
Profit before interest and taxation		18,236			10,879
Finance costs		648			317
Net finance income relating to pensions and other post-retirement benefits		(322	)		(162	)

Profit before taxation		17,910			10,724

Notes

2.		Resegmentation and other changes to comparatives (continued)

(c)		Revised definition of net debt

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.


	First half
	and
	second
	quarter
	2007
As reported
$ million
Net debt		21,111
Equity		89,423


Ratio of net debt to net debt plus equity		19	%


As amended
$ million
Net debt		20,732
Equity		89,423


Ratio of net debt to net debt plus equity		19	%

Notes

Significant transaction in the first half

In December 2007, BP signed a memorandum of understanding with Husky Energy Inc. to form an integrated North American oil sands business. The transaction was completed on 31 March 2008, with BP contributing its Toledo refinery to a US jointly controlled entity to which Husky contributed $250 million cash and a payable of $2,590 million. In Canada, Husky contributed its Sunrise field to a second jointly controlled entity, with BP contributing $250 million in cash and a payable of $2,290 million. The Toledo refinery assets and associated liabilities were classified as a disposal group held for sale at 31 December 2007.

Both jointly controlled entities are owned 50:50 by BP and Husky and are accounted for using the equity method.

The amounts set out below reflect the initial recording of the transaction at 31 March 2008 and subsequent closing adjustments.


	$ million

Income statement
Gains on sale of businesses and fixed assets		806

Profit before taxation		806
Taxation		345

Profit for the period		461


Balance sheet
Non-current assets — investments in jointly controlled entities		4,752
Current liabilities — trade and other payables		266
Non-current liabilities
Other payables		2,024
Deferred tax liabilities		653

		2,677

Total liabilities		2,943

Net assets		1,809


Cash flow statement
Investment in jointly controlled entities		(250	)


Capital expenditure and acquisitions
Exploration and Production		2,848
Refining and Marketing		1,904

		4,752

Including acquisitions and asset exchanges:		1,904

During the second quarter, equity-accounted earnings from these jointly controlled entities amounted to $145 million.

BP purchased refined products from the Toledo jointly controlled entity during the second quarter amounting to $1,551 million. In addition, BP purchased crude oil from third parties which it sold to the Toledo jointly controlled entity under an agency agreement. The fees earned by BP for this service, and the total amounts receivable and payable at 30 June 2008 under these arrangements, were not significant. BP will also purchase refinery feedstocks from the Sunrise jointly controlled entity once production commences, which is expected in 2012.

Notes

Total revenues

Second quarter

First half

2007

2008

2007

$ million

By business

17,002

26,294

Exploration and Production

50,359

33,349

63,960

98,206

Refining and Marketing

175,069

117,124

976

1,255

Other businesses and corporate

2,447

1,868

81,938

125,755

227,875

152,341

Less: sales between businesses

7,974

13,485

Exploration and Production

25,704

15,179

522

960

Refining and Marketing

1,229

1,389

359

407

Other businesses and corporate

816

654

8,855

14,852

27,749

17,222

Third party revenues

9,028

12,809

Exploration and Production

24,655

18,170

63,438

97,246

Refining and Marketing

173,840

115,735

617

848

Other businesses and corporate

1,631

1,214

73,083

110,903

Total third party revenues

200,126

135,119

By geographical area

27,630

48,202

85,099

51,730

19,219

27,806

Rest of Europe

51,463

35,875

26,923

39,157

70,888

50,073

19,314

33,263

Rest of World

60,120

36,658

93,086

148,428

267,570

174,336

20,003

37,525

Less: sales between areas

67,444

39,217

73,083

110,903

200,126

135,119

Production and similar taxes

Second quarter

First half

2007

2008

2007

$ million

—

225

827

2,231

Overseas

3,683

1,507

827

2,299

3,908

1,574

Finance costs


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
	345			316		Interest payable		698			692
	(94	)		(44	)	Capitalized		(89	)		(177	)
	66			74		Unwinding of discount on provisions		143			133
	—			35		Unwinding of discount on other payables		35			—

	317			381				787			648

Notes

Net finance income relating to pensions and other post-retirement benefits


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
	546			612		Interest on pension and other post-retirement benefit plan liabilities		1,224			1,084
	(708	)		(772	)	Expected return on pension and other post-retirement benefit plan assets		(1,544	)		(1,406	)

	(162	)		(160	)			(320	)		(322	)

Analysis of changes in net debt


Second quarter							First half
2007			2008				2008			2007
$ million							$ million
						Opening balance
	23,728			29,871		Finance debt		31,045			24,010
	1,956			4,820		Less: Cash and cash equivalents		3,562			2,590
	328			1,234		Less: FV asset (liability) of hedges related to finance debt		666			298

	21,444			23,817		Opening net debt		26,817			21,122


						Closing balance
	23,754			30,189		Finance debt		30,189			23,754
	2,643			3,593		Less: Cash and cash equivalents		3,593			2,643
	379			900		Less: FV asset (liability) of hedges related to finance debt		900			379

	20,732			25,696		Closing net debt		25,696			20,732

	712			(1,879	)	Decrease (increase) in net debt		1,121			390


	661			(1,225	)	Movement in cash and cash equivalents (excluding exchange adjustments)		(1	)		16
	79			(517	)	Net cash outflow (inflow) from financing (excluding share capital)		1,267			413
	(13	)		(114	)	Other movements		(121	)		(24	)

	727			(1,856	)	Movement in net debt before exchange effects		1,145			405
	(15	)		(23	)	Exchange adjustments		(24	)		(15	)

	712			(1,879	)	Decrease (increase) in net debt		1,121			390

Net debt has been redefined, for further information see Note 2. Amounts for comparative periods are presented on a consistent basis.

Notes

TNK-BP operational and financial information

Second quarter

First half

2007

2008

2007

Production (Net of royalties) (BP share)

837

825

Crude oil (mb/d)

821

835

441

546

Natural gas (mmcf/d)

529

503

913

919

Total hydrocarbons (mboe/d)(a)

913

922


$ million						$ million

					Income statement (BP share)
	1,016		2,026		Profit before interest and tax		3,235		1,372
	(64	)	(56	)	Finance costs		(132	)	(126	)
	(188	)	(524	)	Taxation		(855	)	(291	)
	(78	)	(95	)	Minority interest		(153	)	(107	)

	686		1,351		Net Income		2,095		848

					Cash Flow
	500		—		Dividends received		1,200		500


	30 June		31 December
Balance Sheet	2008		2007
Investments in jointly controlled entities		9,712		8,817

A number of differences have arisen between BP and Alfa, Access/Renova group (AAR), the shareholders of TNK-BP Limited. These differences include disputes with regard to the provision of services by BP specialists to the TNK-BP group, the employment of non-Russian nationals by the TNK-BP group, the board of director nomination process for certain subsidiaries of the TNK-BP group, including TNK-BP Holding, and the tenure of TNK-BP’s chief executive officer, Robert (Bob) Dudley. AAR has been reported as stating that it intends to initiate legal proceedings with regard to certain of these matters. In addition, a minority shareholder in TNK-BP Holding has filed a suit in Russia against certain subsidiaries of TNK-BP and BP Exploration Services Limited alleging that an agreement for BP specialists to provide services to the TNK-BP group is invalid and demanding repayment of sums paid to BP for such services. On 23 July, the court ruled in favour of the minority shareholder on the validity issue. BP expects to appeal this decision. A ruling on the claim for repayment has been postponed pending the outcome of such appeal. On 24 July, Mr Dudley announced his decision to leave Russia temporarily. He will continue as TNK-BP’s chief executive officer. TNK-BP and certain executives, including Mr Dudley, as well as certain BP group companies, are also the subject of a number of tax, labour and other regulatory investigations in Russia.

BP continues to work to resolve these matters. However, currently, it is not possible to predict the ultimate outcome if these matters remain unresolved.


(a)		Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels

Notes

10.		Earnings per share

Basic earnings per ordinary share amounts are calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The average number of shares outstanding excludes treasury shares and the shares held by the Employee Share Ownership Plans.

For the diluted earnings per share calculation the weighted average number of shares outstanding during the period is adjusted for number of shares that would be issued on conversion of outstanding share options into ordinary shares using the treasury stock method.

Second quarter

First half

2007

2008

2007

$ million

7,376

9,465

Profit for the period attributable to BP shareholders

16,916

12,040

Less: dividend requirements on preference shares

7,375

9,464

Profit attributable to BP ordinary shareholders

16,915

12,039

shares thousands

19,186,461

18,823,515

Basic weighted average number of ordinary shares

18,849,504

19,284,938

80,405

191,495

Potential dilutive effect of ordinary shares issuable under employee share schemes

172,496

94,366

19,266,866

19,015,010

19,022,000

19,379,304

11.		Condensed consolidating information

BP p.l.c. fully and unconditionally guarantees the payment obligations of its 100%-owned subsidiary BP Exploration (Alaska) Inc. under the BP Prudhoe Bay Royalty Trust. The following financial information for BP p.l.c., and BP Exploration (Alaska) Inc. and all other subsidiaries on a condensed consolidating basis is intended to provide investors with meaningful and comparable financial information about BP p.l.c. and its subsidiary issuers of registered securities and is provided pursuant to Rule 3-10 of Regulation S-X in lieu of the separate financial statements of each subsidiary issuer of public debt securities. Investments include the investments in subsidiaries recorded under the equity method for the purposes of the condensed consolidating financial information. Equity income of subsidiaries is the group’s share of income related to such investments. The eliminations and reclassifications column includes the necessary amounts to eliminate the intercompany balances and transactions between BP p.l.c., BP Exploration (Alaska) Inc. and other subsidiaries.

BP p.l.c. also fully and unconditionally guarantees securities issued by BP Canada Finance Company, BP Capital Markets p.l.c. and BP Capital Markets America Inc. These companies are 100%-owned finance subsidiaries of BP p.l.c.

Notes

11.

Condensed consolidating information (continued)


	Issuer		Guarantor
	BP							Eliminations
	Exploration					Other		and			BP
Income statement	(Alaska) Inc.		BP p.l.c.			subsidiaries		reclassifications			group
	$ million
First half 2008
Sales and other operating revenues		4,103		—			196,492		(4,103	)		196,492
Earnings from jointly controlled entities — after interest and tax		—		—			2,727		—			2,727
Earnings from associates — after interest and tax		—		—			476		—			476
Equity-accounted income of subsidiaries — after interest and tax		421		17,018			—		(17,439	)		—
Interest and other revenues		271		52			260		(152	)		431

Total revenues		4,795		17,070			199,955		(21,694	)		200,126
Gains on sale of businesses and fixed assets		—		—			1,004		—			1,004

Total revenues and other income		4,795		17,070			200,959		(21,694	)		201,130
Purchases		576		—			142,644		(4,103	)		139,117
Production and manufacturing expenses		501		—			13,706		—			14,207
Production and similar taxes		1,308		—			2,600		—			3,908
Depreciation, depletion amortization		176		—			5,456		—			5,632
Impairment and losses on sale of businesses and fixed assets		—		—			63		—			63
Exploration expense		—		—			411		—			411
Distribution and administration expenses		12		500			7,387		(26	)		7,873
Fair value (gain) loss on embedded derivatives		—		—			2,771		—			2,771

Profit before interest and taxation		2,222		16,570			25,921		(17,565	)		27,148
Finance costs		—		100			813		(126	)		787
Net finance income relating to pensions and other post-retirement benefits		76		(442	)		46		—			(320	)

Profit before taxation		2,146		16,912			25,062		(17,439	)		26,681
Taxation		665		(4	)		8,849		—			9,510

Profit for the period		1,481		16,916			16,213		(17,439	)		17,171

Attributable to:
BP shareholders		1,481		16,916			15,958		(17,439	)		16,916
Minority interest		—		—			255		—			255

Profit for the period		1,481		16,916			16,213		(17,439	)		17,171

Notes

11.

Condensed consolidating information (continued)


	Issuer		Guarantor
	BP								Eliminations
	Exploration					Other			and			BP
Income statement	(Alaska) Inc.		BP p.l.c.			subsidiaries			reclassifications			group
	$ million
First half 2007
Sales and other operating revenues		2,114		—			133,179			(2,114	)		133,179
Earnings from jointly controlled entities — after interest and tax		—		—			1,243			—			1,243
Earnings from associates — after interest and tax		—		—			336			—			336
Equity-accounted income of subsidiaries — after interest and tax		356		12,288			—			(12,644	)		—
Interest and other revenues		388		258			407			(692	)		361

Total revenues		2,858		12,546			135,165			(15,450	)		135,119
Gains on sale of businesses and fixed assets		1		—			1,988			—			1,989

Total revenues and other income		2,859		12,546			137,153			(15,450	)		137,108
Purchases		300		—			94,457			(2,114	)		92,643
Production and manufacturing expenses		450		—			11,578			—			12,028
Production and similar taxes		269		—			1,305			—			1,574
Depreciation, depletion and amortization		185		—			4,869			—			5,054
Impairment and losses on sale of businesses and fixed assets		—		—			678			—			678
Exploration expense		—		—			311			—			311
Distribution and administration expenses		10		279			6,756			(23	)		7,022
Fair value (gain) loss on embedded derivatives		—		—			(438	)		—			(438	)

Profit before interest and taxation		1,645		12,267			17,637			(13,313	)		18,236
Finance costs		—		434			883			(669	)		648
Net finance income relating to pensions and other post-retirement benefits		7		(404	)		75			—			(322	)
Profit before taxation		1,638		12,237			16,679			(12,644	)		17,910
Taxation		501		197			5,025			—			5,723

Profit for the period		1,137		12,040			11,654			(12,644	)		12,187

Attributable to:
BP shareholders		1,137		12,040			11,507			(12,644	)		12,040
Minority interest		—		—			147			—			147

Profit for the period		1,137		12,040			11,654			(12,644	)		12,187

Notes

11.

Condensed consolidating information (continued)


	Issuer			Guarantor
	BP							Eliminations
	Exploration					Other		and			BP
Balance sheet	(Alaska) Inc			BP p.l.c.		subsidiaries		reclassifications			group
	$ million
At 30 June 2008 Non-current assets
Property, plant and equipment		6,594			—		95,193		—			101,787
Goodwill		—			—		11,016		—			11,016
Intangible assets		241			—		7,145		—			7,386
Investments in jointly controlled entities		—			—		24,883		—			24,883
Investments in associates		—			2		4,599		—			4,601
Other investments		—			—		1,981		—			1,981
Subsidiaries — equity-accounted basis		3,538			127,665		—		(131,203	)		—

Fixed assets		10,373			127,667		144,817		(131,203	)		151,654
Loans		4,482			1,190		1,263		(5,878	)		1,057
Other receivables		—			—		958		—			958
Derivative financial instruments		—			—		12,077		—			12,077
Prepayments		—			—		1,128		—			1,128
Defined benefit pension plan surplus		—			7,464		1,622		—			9,086

		14,855			136,321		161,865		(137,081	)		175,960

Current assets
Loans		—			—		173		—			173
Inventories		121			—		35,061		—			35,182
Trade and other receivables		14,320			145		54,586		(20,569	)		48,482
Derivative financial instruments		—			—		16,075		—			16,075
Prepayments		91			—		4,062		—			4,153
Current tax receivable		—			—		195		—			195
Cash and cash equivalents		(10	)		24		3,579		—			3,593

		14,522			169		113,731		(20,569	)		107,853

Total assets		29,377			136,490		275,596		(157,650	)		283,813

Current liabilities
Trade and other payables		5,096			2,784		66,718		(20,569	)		54,029
Derivative financial instruments		—			—		15,593		—			15,593
Accruals		—			19		7,000		—			7,019
Finance debt		55			—		16,583		—			16,638
Current tax payable		401			—		5,280		—			5,681
Provisions		—			—		2,080		—			2,080

		5,552			2,803		113,254		(20,569	)		101,040
Non-current liabilities
Other payables		237			23		8,439		(5,878	)		2,821
Derivative financial instruments		—			—		15,116		—			15,116
Accruals		—			85		797		—			882
Finance debt		—			—		13,551		—			13,551
Deferred tax liabilities		1,788			1,975		17,172		—			20,935
Provisions		915			—		12,532		—			13,447
Defined benefit pension plan and other post-retirement benefit plan deficits		—			—		9,567		—			9,567

		2,940			2,083		77,174		(5,878	)		76,319

Total liabilities		8,492			4,886		190,428		(26,447	)		177,359

Net assets		20,885			131,604		85,168		(131,203	)		106,454

Equity
BP shareholders’ equity		20,885			131,604		84,070		(131,203	)		105,356
Minority interest		—			—		1,098		—			1,098

Total equity		20,885			131,604		85,168		(131,203	)		106,454

Notes

11.

Condensed consolidating information (continued)


	Issuer			Guarantor
	BP							Eliminations
	Exploration					Other		and			BP
Balance sheet	(Alaska) Inc			BP p.l.c.		subsidiaries		reclassification			group
	$ million
At 31 December 2007 Non-current assets
Property, plant and equipment		6,310			—		91,679		—			97,989
Goodwill		—			—		11,006		—			11,006
Intangible assets		349			—		6,303		—			6,652
Investments in jointly controlled entities	—				—		18,113		—			18,113
Investments in associates		—			2		4,577		—			4,579
Other investments		—			—		1,830		—			1,830
Subsidiaries — equity-accounted basis		3,117			115,476		—		(118,593	)		—

Fixed assets		9,776			115,478		133,508		(118,593	)		140,169
Loans		2,151			1,192		1,541		(3,885	)		999
Other receivables		—			—		968		—			968
Derivative financial instruments		—			—		3,741		—			3,741
Prepayments		—			—		1,083		—			1,083
Defined benefit pension plan surplus		—			7,265		1,649		—			8,914

		11,927			123,935		142,490		(122,478	)		155,874

Current assets
Loans		—			—		165		—			165
Inventories		202			—		26,352		—			26,554
Trade and other receivables		15,986			840		44,422		(23,228	)		38,020
Derivative financial instruments		—			—		6,321		—			6,321
Prepayments		24			—		3,565		—			3,589
Current tax receivable		—			—		705		—			705
Cash and cash equivalents		(10	)		244		3,328		—			3,562

		16,202			1,084		84,858		(23,228	)		78,916
Assets classified as held for sale		—			—		1,286		—			1,286

		16,202			1,084		86,144		(23,228	)		80,202

Total assets		28,129			125,019		228,634		(145,706	)		236,076

Current liabilities
Trade and other payables(a)		4,969			3,115		58,296		(23,228	)		43,152
Derivative financial instruments		—			—		6,405		—			6,405
Accruals		—			10		6,630		—			6,640
Finance debt		55			—		15,339		—			15,394
Current tax payable		306			—		2,976		—			3,282
Provisions		—			—		2,195		—			2,195

		5,330			3,125		91,841		(23,228	)		77,068
Liabilities directly associated with assets classified as held for sale		—			—		163		—			163

		5,330			3,125		92,004		(23,228	)		77,231

Non-current liabilities
Other payables		559			27		4,550		(3,885	)		1,251
Derivative financial instruments		—			—		5,002		—			5,002
Accruals		—			44		915		—			959
Finance debt		—			—		15,651		—			15,651
Deferred tax liabilities		1,765			1,885		15,565		—			19,215
Provisions		946			—		11,954		—			12,900
Defined benefit pension plan and other retirement benefit plan deficits		—			—		9,215		—			9,215

		3,270			1,956		62,852		(3,885	)		64,193

Total liabilities		8,600			5,081		154,856		(27,113	)		141,424

Net assets		19,529			119,938		73,778		(118,593	)		94,652

Equity
BP shareholders’ equity		19,529			119,938		72,816		(118,593	)		93,690
Minority interest		—			—		962		—			962

Total equity		19,529			119,938		73,778		(118,593	)		94,652

Notes

11.

Condensed consolidating information (continued)

(a)

Within Current liabilities — Trade and other payables, the amount of other payables for BP Exploration (Alaska) Inc. has been reduced by $264 million from the amount previously reported and the amount of other payables for other subsidiaries has been increased by $264 million from the amount previously reported. As a result of this immaterial change, the net assets and BP shareholders’ equity of BP Exploration (Alaska) Inc. have increased by $264 million and the net assets and BP shareholders’ equity of other subsidiaries have decreased by $264 million. This change has been made to reflect the allocation of tax charges and liabilities between BP Exploration (Alaska) Inc. and other Alaskan subsidiaries in the BP group. There is no impact on the consolidated BP group profit for the period or the BP group total equity.

Notes

11.

Condensed consolidating information (continued)


	Issuer			Guarantor
	BP									Eliminations
Cash flow statement	Exploration						Other			and			BP
	(Alaska) Inc			BP p.l.c.			subsidiaries			reclassification			group
	$ million
Six months ended 30 June 2008

Net cash provided by operating activities		5,806			6,663			11,442			(6,299	)		17,612

Net cash used in investing activities		(307	)		—			(9,001	)		—			(9,308	)

Net cash used in financing activities		(5,499	)		(6,883	)		(2,222	)		6,299			(8,305	)

Currency translation differences relating to cash and cash equivalents		—			—			32			—			32


(Decrease) increase in cash and cash equivalents		—			(220	)		251			—			31

Cash and cash equivalents at beginning of period		(10	)		244			3,328			—			3,562


Cash and cash equivalents at end of period		(10	)		24			3,579			—			3,593

Notes

11.

Condensed consolidating information (continued)


	Issuer			Guarantor
	BP									Eliminations
Cash flow statement	Exploration						Other			and			BP
	(Alaska) Inc			BP p.l.c.			subsidiaries			reclassification			group
	$ million
First half 2007

Net cash provided by operating activities		1,006			8,749			6,406			(2,097	)		14,064

Net cash used in investing activities		(235	)		8			(4,969	)		—			(5,196	)

Net cash used in financing activities		(766	)		(8,759	)		(1,424	)		2,097			(8,852	)

Currency translation differences relating to cash and cash equivalents		—			—			37			—			37


(Decrease) increase in cash and cash equivalents		5			(2	)		50			—			53

Cash and cash equivalents at beginning of period		(5	)		(21	)		2,616			—			2,590


Cash and cash equivalents at end of period		—			(23	)		2,666			—			2,643

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BP p.l.c.
(Registrant)



Dated: 1 August 2008	/s/ D J Pearl
	D J PEARL
	Deputy Company Secretary

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