BP (BP)

GROUP RESULTS JANUARY – SEPTEMBER 2006 (concluded)

In addition to the factors above, the decrease in profit for the period attributable to BP shareholders for the third quarter reflects lower gas realization, higher production taxes, lower refining margins, reduced supply optimization benefits, a reduced contribution from gas and power marketing and trading and higher costs, partially offset by the impact of higher oil realizations, strongly improved retail margins, significant gains related to IFRS fair value accounting effects and better operational performance in the natural gas liquids business.

The primary additional factors contributing to the increase in profit for the period attributable to BP shareholders for the nine months ended September 30, 2006 are lower production volumes, higher production taxes, higher IFRS fair value accounting charges and higher costs, partially offset by the impact of higher oil and gas realisations, higher marketing margins and higher supply optimizations benefits.

Capital expenditure and acquisitions in the third quarter and nine months 2006 was $4.8 billion and $11.8 billion respectively, including $1 billion in respect of our investment in Rosneft. Capital expenditure and acquisitions for the third quarter and nine months 2005 was $3.3 billion and $9.4 billion respectively. Disposal proceeds in the third quarter and nine months 2006 were $2.8 billion and $5.4 billion respectively and in the third quarter and nine months 2005 disposal proceeds were $0.2 billion and $2 billion respectively.

Net cash provided by operating activities for the three months ended September 30, 2006 was $5.1billion compared with $6.4 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations, lower working capital requirements and higher dividends from jointly controlled entities and associates, more than offset by a higher net credit in respect of impairment and gains and losses on disposal, higher earnings from jointly controlled entities and associates and a lower net credit for provisions, less payments. Net cash used in investing activities was $1.4 billion compared with $2.9 billion for the equivalent period of 2005, reflecting higher proceeds from the sale of fixed assets and businesses, partially offset by higher capital expenditure.

Net cash provided by operating activities for the nine months ended September 30, 2006 was $23.2 billion compared with $22.5 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations, lower working capital requirements and higher dividends from jointly controlled entities and associates, partially offset by higher taxes paid and a lower net credit for provisions, less payments. Net cash used in investing activities was $5.6 billion compared with $7.2 billion for the equivalent period of 2005, reflecting higher proceeds from the disposal of fixed assets and businesses partially offset by higher capital expenditure.

Net debt at September 30, 2006 was $16.8 billion compared with $16.2 billion at December 31, 2005. The ratio of net debt to net debt plus equity was 16% at September 30, 2006 compared with 17% at December 31, 2005. This ratio shows the proportion of debt and equity used to finance our operations, and can also be used to measure borrowing capacity. In addition to reported debt, BP uses conventional off balance sheet sources of finance such as operating leases and joint venture and associate borrowings.

The Group has access to other sources of liquidity in the form of committed facilities and other funding through the capital markets. BP believes that, taking into account the substantial amounts of undrawn borrowing facilities available, the Group has sufficient working capital for foreseeable requirements.

In the normal course of business the Group has entered into certain long-term purchase commitments principally relating to take or pay contracts for the purchase of natural gas, crude oil and chemicals feedstocks and throughput arrangements for pipelines. The Group expects to fulfil its obligations under these arrangements with no adverse consequences to the Group’s results of operations or financial condition.

On October 24, 2006, BP announced a quarterly dividend of 9.825 cents per ordinary share, to be paid on December 4, 2006 to shareholders on the register on November 10, 2006. Holders of ordinary shares will receive 5.241 pence per share and holders of American Depositary Receipts (ADRs) $0.5895 per ADS. Participants in the Dividend Reinvestment Plan or the dividend reinvestment plan facility in the US Direct Access Plan will receive the dividend in the form of shares, also on December 4, 2006. The Company repurchased 299 million of its own shares during the quarter, at a cost of $3.5 billion. Additionally, shares to the value of $1.25 billion were issued to Alfa Group and Access Renova (AAR) being the last instalment of the deferred consideration for our investment in TNK-BP. During the nine months ended September 30,2006, 1,024 million shares were repurchased at a cost of $12 billion.

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GROUP RESULTS JANUARY – SEPTEMBER 2006 (concluded)

In addition to the factors above, the decrease in profit for the period attributable to BP shareholders for the third quarter reflects lower gas realization, higher production taxes, lower refining margins, reduced supply optimization benefits, a reduced contribution from gas and power marketing and trading and higher costs, partially offset by the impact of higher oil realizations, strongly improved retail margins, significant gains related to IFRS fair value accounting effects and better operational performance in the natural gas liquids business.

The primary additional factors contributing to the increase in profit for the period attributable to BP shareholders for the nine months ended September 30, 2006 are lower production volumes, higher production taxes, higher IFRS fair value accounting charges and higher costs, partially offset by the impact of higher oil and gas realisations, higher marketing margins and higher supply optimizations benefits.

Capital expenditure and acquisitions in the third quarter and nine months 2006 was $4.8 billion and $11.8 billion respectively, including $1 billion in respect of our investment in Rosneft. Capital expenditure and acquisitions for the third quarter and nine months 2005 was $3.3 billion and $9.4 billion respectively. Disposal proceeds in the third quarter and nine months 2006 were $2.8 billion and $5.4 billion respectively and in the third quarter and nine months 2005 disposal proceeds were $0.2 billion and $2 billion respectively.

Net cash provided by operating activities for the three months ended September 30, 2006 was $5.1billion compared with $6.4 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations, lower working capital requirements and higher dividends from jointly controlled entities and associates, more than offset by a higher net credit in respect of impairment and gains and losses on disposal, higher earnings from jointly controlled entities and associates and a lower net credit for provisions, less payments. Net cash used in investing activities was $1.4 billion compared with $2.9 billion for the equivalent period of 2005, reflecting higher proceeds from the sale of fixed assets and businesses, partially offset by higher capital expenditure.

Net cash provided by operating activities for the nine months ended September 30, 2006 was $23.2 billion compared with $22.5 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations, lower working capital requirements and higher dividends from jointly controlled entities and associates, partially offset by higher taxes paid and a lower net credit for provisions, less payments. Net cash used in investing activities was $5.6 billion compared with $7.2 billion for the equivalent period of 2005, reflecting higher proceeds from the disposal of fixed assets and businesses partially offset by higher capital expenditure.

Net debt at September 30, 2006 was $16.8 billion compared with $16.2 billion at December 31, 2005. The ratio of net debt to net debt plus equity was 16% at September 30, 2006 compared with 17% at December 31, 2005. This ratio shows the proportion of debt and equity used to finance our operations, and can also be used to measure borrowing capacity. In addition to reported debt, BP uses conventional off balance sheet sources of finance such as operating leases and joint venture and associate borrowings.

The Group has access to other sources of liquidity in the form of committed facilities and other funding through the capital markets. BP believes that, taking into account the substantial amounts of undrawn borrowing facilities available, the Group has sufficient working capital for foreseeable requirements.

In the normal course of business the Group has entered into certain long-term purchase commitments principally relating to take or pay contracts for the purchase of natural gas, crude oil and chemicals feedstocks and throughput arrangements for pipelines. The Group expects to fulfil its obligations under these arrangements with no adverse consequences to the Group’s results of operations or financial condition.

On October 24, 2006, BP announced a quarterly dividend of 9.825 cents per ordinary share, to be paid on December 4, 2006 to shareholders on the register on November 10, 2006. Holders of ordinary shares will receive 5.241 pence per share and holders of American Depositary Receipts (ADRs) $0.5895 per ADS. Participants in the Dividend Reinvestment Plan or the dividend reinvestment plan facility in the US Direct Access Plan will receive the dividend in the form of shares, also on December 4, 2006. The Company repurchased 299 million of its own shares during the quarter, at a cost of $3.5 billion. Additionally, shares to the value of $1.25 billion were issued to Alfa Group and Access Renova (AAR) being the last instalment of the deferred consideration for our investment in TNK-BP. During the nine months ended September 30,2006, 1,024 million shares were repurchased at a cost of $12 billion.

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