Edgar Filing: BP PLC

Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

for the period ended 30 June 2015

Commission File Number 1-06262

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 of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN PRE-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT ON FORM F-3 (FILE NOS. 333-201894 AND 333-201894-01) OF BP CAPITAL MARKETS p.l.c. AND 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. 333-79399) 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. 333-123482) 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. 333-132619) 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. 333-173136) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200796) 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 2015^(a)


		Page

1.	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period January-June 2015^(b)		3-12, 33-38

2.	Consolidated Financial Statements including Notes to Consolidated Financial Statements for the period January-June 2015		13-32

3.	Principal risks and uncertainties		39

4.	Legal proceedings		40-42

5.	Cautionary statement		43

6.	Computation of Ratio of Earnings to Fixed Charges		44

7.	Capitalization and Indebtedness		45

8.	Recent credit ratings update		46

9.	Signatures		47

^(a)	In this Form 6-K, references to the first half 2015 and first half 2014 refer to the six-month periods ended 30 June 2015 and 30 June 2014 respectively. References to second quarter 2015 and second quarter 2014 refer to the three-month periods ended 30 June 2015 and 30 June 2014 respectively.

^(b)

This discussion should be read in conjunction with the consolidated financial statements and related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, in BP’s Annual Report on Form 20-F for the year ended 31 December 2014.

Group results second quarter and half year 2015


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
	93,957			60,646		Sales and other operating revenues		114,842			185,667

	3,369			(5,823	)	Profit (loss) for the period^(a)		(3,221	)		6,897
	(187	)		(443	)	Inventory holding (gains) losses*, net of tax		(942	)		(240	)

	3,182			(6,266	)	Replacement cost profit (loss)*		(4,163	)		6,657
	453			7,579		Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects*, net of tax		8,053			203

	3,635			1,313		Underlying replacement cost profit*		3,890			6,860

	18.26			(31.83	)	Profit (loss) per ordinary share (cents)		(17.62	)		37.35
	1.10			(1.91	)	Profit (loss) per ADS (dollars)		(1.06	)		2.24
	17.25			(34.25	)	Replacement cost profit (loss) per ordinary share (cents)		(22.77	)		36.05
	1.03			(2.05	)	Replacement cost profit (loss) per ADS (dollars)		(1.37	)		2.16
	19.71			7.17		Underlying replacement cost profit per ordinary share (cents)		21.27			37.15
	1.18			0.43		Underlying replacement cost profit per ADS (dollars)		1.28			2.23

•

BP’s loss for the second quarter and half year was $5,823 million and $3,221 million respectively, compared with a profit of $3,369 million and $6,897 million for the same periods a year ago. BP’s second-quarter replacement cost (RC) loss was $6,266 million, compared with a profit of $3,182 million a year ago. After adjusting for a net charge for non-operating items of $7,486 million, mainly relating to the recently announced agreements in principle to settle federal, state and the vast majority of local government claims arising from the 2010 Deepwater Horizon accident, and net unfavourable fair value accounting effects of $93 million (both on a post-tax basis), underlying RC profit for the second quarter was $1,313 million, compared with $3,635 million for the same period in 2014. For the half year, RC loss was $4,163 million, compared with a profit of $6,657 million a year ago. After adjusting for a net charge for non-operating items of $7,899 million and net unfavourable fair value accounting effects of $154 million (both on a post-tax basis), underlying RC profit for the half year was $3,890 million, compared with $6,860 million for the same period in 2014. Non-operating items include a restructuring charge of $272 million for the quarter and $487 million for the half year. Restructuring charges are now expected to be around $1.5 billion by the end of 2015 relative to the $1 billion we announced back in December. RC profit or loss for the group, underlying RC profit or loss and fair value accounting effects are non-GAAP measures and further information is provided on pages 5 and 35.

•

On 2 July 2015, BP announced that it has reached agreements in principle to settle all outstanding federal and state claims and claims made by more than 400 local government entities arising from the 2010 Deepwater Horizon oil spill. BP has accepted releases received from the vast majority of local government entities and the District Court has ordered BP to commence processing payments under the releases.

•

The group income statement for the second quarter reflects a pre-tax charge of $9.8 billion related to the agreements in principle. All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $10,755 million for the second quarter and $11,087 million for the half year ($7,154 million and $7,374 million respectively on a post-tax basis). For further information on the Gulf of Mexico oil spill and its consequences see page 12 and Note 2 on page 18. See also Principal risks and uncertainties on page 39 and Legal proceedings on page 40.

•

Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.3 billion and $8.1 billion respectively, compared with $7.9 billion and $16.1 billion for the same periods in 2014. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.4 billion and $8.9 billion respectively, compared with $7.6 billion and $16.5 billion for the same periods in 2014.

•

Gross debt at 30 June 2015 was $57.1 billion compared with $52.9 billion a year ago. The ratio of gross debt to gross debt plus equity at 30 June 2015 was 34.7%, compared with 28.5% a year ago. Net debt* at 30 June 2015 was $24.8 billion, compared with $24.4 billion a year ago. The net debt ratio* at 30 June 2015 was 18.8%, compared with 15.5% a year ago. Net debt and the net debt ratio are non-GAAP measures. See page 26 for more information.

•

Total capital expenditure on an accruals basis for the second quarter was $4.7 billion, of which organic capital expenditure* was $4.5 billion, compared with $5.6 billion for the same period in 2014, almost all of which was organic. For the half year, total capital expenditure on an accruals basis was $9.1 billion, of which organic capital expenditure was $8.9 billion, compared with $11.7 billion for the same period in 2014, of which organic capital expenditure was $11.0 billion. For full year 2015, we now expect organic capital expenditure to be below $20 billion.

•

BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 18 September 2015. The corresponding amount in sterling will be announced on 8 September 2015. See page 25 for further information.

*	For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 37.

^(a)	Profit attributable to BP shareholders.

The commentaries above and following should be read in conjunction with the cautionary statement on page 43.

Group headlines (continued)

•

In October 2013, BP announced plans to divest a further $10 billion of assets before the end of 2015, having completed its earlier divestment programme of $38 billion. Transactions to date have reached around $7.4 billion. Disposal proceeds were $0.5 billion for the second quarter and $2.3 billion for the half year. The half-year amount includes proceeds from our Toledo refinery partner, Husky Energy, in place of capital commitments relating to the original divestment transaction that have not been subsequently sanctioned.

•

The effective tax rate (ETR) on the profit or loss for the second quarter and half year was 33% and 51% respectively, compared with 33% and 32% for the same periods in 2014. The ETR on RC profit or loss for the second quarter and half year was 33% and 47% compared with 34% and 32% for the same periods in 2014. Excluding the one-off deferred tax adjustment in the first quarter 2015 as a result of the reduction in the UK North Sea supplementary charge the ETR on the RC loss for the half year was 35%. Adjusting for non-operating items, fair value accounting effects and the first-quarter 2015 one-off deferred tax adjustment, the underlying ETR in the second quarter and half year was 35% and 28% respectively, compared with 33% for the same periods in 2014. The underlying ETR for the half year is lower than a year ago mainly due to changes in the mix of our profits and certain one-off items, partly offset by foreign exchange effects from a stronger US dollar.

•

Finance costs and net finance expense relating to pensions and other post-retirement benefits were a charge of $364 million for the second quarter, compared with $356 million for the same period in 2014. For the half year, the respective amounts were $722 million and $723 million.

Analysis of RC profit (loss) before interest and tax

and reconciliation to profit (loss) for the period


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						RC profit (loss) before interest and tax*
	4,049			228		Upstream		600			8,708
	933			1,628		Downstream		3,711			1,727
	1,024			510		Rosneft		693			1,542
	(434	)		(455	)	Other businesses and corporate		(763	)		(931	)
	(251	)		(10,747	)	Gulf of Mexico oil spill response^(a)		(11,070	)		(280	)
	(76	)		(39	)	Consolidation adjustment – UPII*		(168	)		14

	5,245			(8,875	)	RC profit (loss) before interest and tax		(6,997	)		10,780
	(356	)		(364	)	Finance costs and net finance expense relating to pensions and other post-retirement benefits		(722	)		(723	)
	(1,643	)		3,013		Taxation on a RC basis		3,645			(3,245	)
	(64	)		(40	)	Non-controlling interests		(89	)		(155	)

	3,182			(6,266	)	RC profit (loss) attributable to BP shareholders		(4,163	)		6,657

	258			627		Inventory holding gains (losses)		1,383			360
	(71	)		(184	)	Taxation (charge) credit on inventory holding gains and losses		(441	)		(120	)

	3,369			(5,823	)	Profit (loss) for the period attributable to BP shareholders		(3,221	)		6,897

^(a)	See Note 2 on page 18 for further information on the accounting for the Gulf of Mexico oil spill response.

Analysis of underlying RC profit before interest and tax


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Underlying RC profit before interest and tax*
	4,655			494		Upstream		1,098			9,056
	733			1,867		Downstream		4,025			1,744
	1,024			510		Rosneft		693			1,295
	(438	)		(401	)	Other businesses and corporate		(691	)		(927	)
	(76	)		(39	)	Consolidation adjustment - UPII		(168	)		14

	5,898			2,431		Underlying RC profit before interest and tax		4,957			11,182
	(347	)		(356	)	Finance costs and net finance expense relating to pensions and other post-retirement benefits		(705	)		(704	)
	(1,852	)		(722	)	Taxation on an underlying RC basis		(273	)		(3,463	)
	(64	)		(40	)	Non-controlling interests		(89	)		(155	)

	3,635			1,313		Underlying RC profit attributable to BP shareholders		3,890			6,860

Reconciliations of underlying RC profit or loss to the nearest equivalent IFRS measure are provided on page 3 for the group and on pages 6-11 for the segments.

Upstream

Second
quarter
2014

Second
quarter
2015

$ million

First
half
2015

First
half
2014

16,739

11,036

Sales and other operating revenues

22,666

33,745

4,048

225

Profit before interest and tax

615

8,701

Inventory holding (gains) losses*

(15

)

4,049

228

RC profit before interest and tax

600

8,708

606

266

Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects*

498

348

4,655

494

Underlying RC profit before interest and tax*^(a)

1,098

9,056

^(a)	See page 7 for a reconciliation to segment RC profit before interest and tax by region.

Financial results

Sales and other operating revenues for the second quarter and half year were $11 billion and $23 billion respectively, compared with $17 billion and $34 billion for the corresponding periods in 2014. For the second quarter, revenues were lower mainly due to significantly lower realizations and lower gas marketing and trading revenues. For the half year, the reduction was mainly due to significantly lower realizations and lower gas marketing and trading revenues, partially offset by higher volumes.

The replacement cost profit before interest and tax for the second quarter and half year was $228 million and $600 million respectively, compared with $4,049 million and $8,708 million for the same periods in 2014. The second quarter and half year included a net non-operating charge of $236 million and $478 million respectively, compared with a net non-operating charge of $516 million and $240 million for the same periods a year ago. Fair value accounting effects in the second quarter and half year had unfavourable impacts of $30 million and $20 million respectively, compared with unfavourable impacts of $90 million and $108 million in the same periods of 2014.

After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the second quarter and half year was $494 million and $1,098 million respectively, compared with $4,655 million and $9,056 million for the same periods in 2014. The result for the second quarter reflected significantly lower liquids and gas realizations and higher exploration write-offs, partly offset by lower costs including the benefits from simplification and efficiency activities. In Libya, we recorded exploration write-offs and other costs totalling $598 million in the quarter. The result for the first half reflected significantly lower liquids and gas realizations, and lower gas marketing and trading results, partly offset by increased production and lower costs. Costs were lower reflecting benefits from simplification and efficiency activities and lower exploration write-offs, partly offset by rig cancellation costs.

Production

Production for the quarter was 2,112mboe/d, 0.3% higher than the second quarter of 2014. Underlying production* for the quarter decreased by 1.7%, mainly due to increased seasonal turnaround activity partly offset by the ramp-up of major projects which started up in 2014. For the first half, production was 2,209mboe/d, 4.3% higher than in the same period of 2014. First-half underlying production was 1.0% higher than in 2014.

Key events

In April, BP confirmed the start of oil production from the Kizomba Satellites Phase-2 development in Block 15, offshore Angola. This deepwater project is operated by ExxonMobil.

In April, BP signed agreements to become a shareholder in the Trans Anatolian Natural Gas Pipeline (TANAP), and will hold a 12% equity share in the project. TANAP is a central part of the Southern Corridor pipeline system that will transport gas from the Shah Deniz field in Azerbaijan to markets in Turkey, Greece, Bulgaria and Italy.

BP signed agreements to purchase a 20% participatory interest in Taas-Yuryakh Neftegazodobycha, a Rosneft subsidiary which will further develop the Srednebotuobinskoye oil and gas condensate field in East Siberia. Related to this, Rosneft and BP will jointly undertake the exploration of an Area of Mutual Interest in the region. Rosneft and BP have also agreed to jointly explore two additional Areas of Mutual Interest in the West Siberian and Yenisey-Khatanga basins covering a combined area of approximately 260,000km².

Greater Plutonio Phase 3 successfully started up production, BP’s second major project start-up in Angola this year.

In Australia, front-end engineering and design has commenced on the Browse floating LNG development.

Following Atoll in the first quarter, we made a further gas discovery at the Nooros prospect, located in the Abu Madi West concession in the Nile Delta in Egypt, operated by our partner ENI. BP holds a 25% interest.

Outlook

Looking ahead, we expect third-quarter 2015 reported production to be broadly flat with the second quarter, primarily reflecting the continuation of seasonal maintenance activity consistent with the second-quarter activity levels.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

Upstream


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Underlying RC profit (loss) before interest and tax
	1,419			(66	)	US		(611	)		2,150
	3,236			560		Non-US		1,709			6,906

	4,655			494				1,098			9,056

						Non-operating items
	(72	)		(135	)	US		(203	)		(131	)
	(444	)		(101	)	Non-US		(275	)		(109	)

	(516	)		(236	)			(478	)		(240	)

						Fair value accounting effects
	(31	)		(55	)	US		(58	)		(80	)
	(59	)		25		Non-US		38			(28	)

	(90	)		(30	)			(20	)		(108	)

						RC profit (loss) before interest and tax
	1,316			(256	)	US		(872	)		1,939
	2,733			484		Non-US		1,472			6,769

	4,049			228				600			8,708

						Exploration expense
	68			194		US^(a)		272			727
	321			708		Non-US^(b)		802			610

	389			902				1,074			1,337

						Production (net of royalties)^(c)
						Liquids* (mb/d)
	429			334		US		362			413
	92			147		Europe		130			99
	562			631		Rest of World		692			572

	1,083			1,111				1,184			1,084

	164			169		Of which equity-accounted entities		170			175

						Natural gas (mmcf/d)
	1,525			1,477		US		1,497			1,502
	166			281		Europe		273			182
	4,244			4,046		Rest of World		4,176			4,317

	5,936			5,805				5,945			6,001

	422			460		Of which equity-accounted entities		450			435

						Total hydrocarbons* (mboe/d)
	692			588		US		621			672
	121			196		Europe		177			130
	1,293			1,328		Rest of World		1,412			1,316

	2,106			2,112				2,209			2,118

	237			249		Of which equity-accounted entities		247			250

						Average realizations^(d)
	96.90			56.69		Total liquids ($/bbl)		51.49			97.03
	5.67			3.80		Natural gas ($/mcf)		4.12			5.94
	64.90			40.04		Total hydrocarbons ($/boe)		38.47			65.53

^(a)	First half 2014 includes a $521-million write-off relating to the Utica shale acreage in Ohio, following the decision not to proceed with development plans.

^(b)	Second quarter and first half 2015 include a $432-million write-off in Libya. BP has declared force majeure in Libya and there is significant uncertainty on when drilling operations might be able to proceed.

^(c)	Includes BP’s share of production of equity-accounted entities in the Upstream segment.

^(d)	Based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.

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

Downstream


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
	86,871			55,332		Sales and other operating revenues		103,457			171,169

	1,166			2,234		Profit before interest and tax		5,017			2,037
	(233	)		(606	)	Inventory holding (gains) losses*		(1,306	)		(310	)

	933			1,628		RC profit before interest and tax		3,711			1,727
	(200	)		239		Net (favourable) unfavourable impact of non-operating items* and fair value accounting effects*		314			17

	733			1,867		Underlying RC profit before interest and tax*^(a)		4,025			1,744

^(a)	See page 9 for a reconciliation to segment RC profit before interest and tax by region and by business.

Financial results

Sales and other operating revenues for the second quarter and half year were $55 billion and $103 billion respectively, compared with $87 billion and $171 billion for the corresponding periods in 2014. The reduction in the second quarter and half year compared with the same periods in 2014 was mainly due to lower oil prices.

The replacement cost profit before interest and tax for the second quarter and half year was $1,628 million and $3,711 million respectively, compared with $933 million and $1,727 million for the same periods in 2014.

The 2015 results include a net non-operating charge of $122 million for the second quarter and $85 million for the half year mainly reflecting restructuring charges, compared with a net non-operating gain of $50 million and a net non-operating charge of $228 million for the same periods in 2014 (see pages 9 and 34 for further information on non-operating items). Fair value accounting effects had unfavourable impacts of $117 million for the second quarter and $229 million for the half year, compared with favourable impacts of $150 million and $211 million in the same periods of 2014.

Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 9.

Fuels business

The fuels business reported an underlying replacement cost profit before interest and tax of $1,394 million for the second quarter and $3,190 million for the half year, compared with $516 million and $1,216 million for the same periods in 2014. The results for the quarter and half year were driven by improved refining environment and production mix, partially offset by weaker North American crude oil differentials. The quarter and half year also benefited from a higher oil supply and trading contribution, returning to average levels in the second quarter, as well as lower costs, including the benefits from our simplification and efficiency programmes.

During the quarter we completed the cessation of refining operations at our Bulwer Island facility and we announced, with our partner, Rosneft, a planned reorganization of our German refining joint operations.

Lubricants business

The lubricants business reported an underlying replacement cost profit before interest and tax of $397 million in the second quarter and $742 million in the half year, compared with $315 million and $622 million in the same periods last year. The strong quarterly and half-year performance reflects continued momentum in growth markets, premium brand performance and benefits from our simplification and efficiency programmes leading to lower costs. These benefits were partially offset by adverse foreign exchange effects.

Petrochemicals business

The petrochemicals business reported an underlying replacement cost profit before interest and tax of $76 million in the second quarter and $93 million in the half year, compared with losses of $98 million and $94 million in the same periods last year. The improved results reflect stronger operational performance, improved margins and the benefits of our simplification and efficiency programmes.

Our new advanced technology purified terephthalic acid (PTA) plant in Zhuhai, China which will add over one million tonnes of PTA capacity per year, is now fully commissioned and operational.

Outlook

Looking forward to the third quarter, we expect reduced refining margins and lower levels of turnaround activity.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 43.

Downstream


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Underlying RC profit before interest and tax - by region
	331			576		US		1,237			743
	402			1,291		Non-US		2,788			1,001

	733			1,867				4,025			1,744

						Non-operating items
	180			63		US		59			179
	(130	)		(185	)	Non-US		(144	)		(407	)

	50			(122	)			(85	)		(228	)

						Fair value accounting effects
	206			(48	)	US		(175	)		297
	(56	)		(69	)	Non-US		(54	)		(86	)

	150			(117	)			(229	)		211

						RC profit before interest and tax
	717			591		US		1,121			1,219
	216			1,037		Non-US		2,590			508

	933			1,628				3,711			1,727

						Underlying RC profit (loss) before interest and tax - by business^(a)(b)
	516			1,394		Fuels		3,190			1,216
	315			397		Lubricants		742			622
	(98	)		76		Petrochemicals		93			(94	)

	733			1,867				4,025			1,744

						Non-operating items and fair value accounting effects^(c)
	15			(152	)	Fuels		(212	)		(202	)
	186			(87	)	Lubricants		(101	)		186
	(1	)		—		Petrochemicals		(1	)		(1	)

	200			(239	)			(314	)		(17	)

						RC profit (loss) before interest and tax^(a)(b)
	531			1,242		Fuels		2,978			1,014
	501			310		Lubricants		641			808
	(99	)		76		Petrochemicals		92			(95	)

	933			1,628				3,711			1,727


	15.4			19.4		BP average refining marker margin (RMM)* ($/bbl)		17.3			14.4

						Refinery throughputs (mb/d)
	645			622		US		623			630
	757			810		Europe		807			777
	250			224		Rest of World		274			279

	1,652			1,656				1,704			1,686

	95.3			94.0		Refining availability* (%)		94.1			95.1

						Marketing sales of refined products (mb/d)
	1,183			1,145		US		1,122			1,152
	1,154			1,160		Europe		1,167			1,146
	515			569		Rest of World		588			530

	2,852			2,874				2,877			2,828
	2,468			2,649		Trading/supply sales of refined products		2,597			2,442

	5,320			5,523		Total sales volumes of refined products		5,474			5,270

						Petrochemicals production (kte)
	969			946		US		1,851			2,040
	895			852		Europe		1,824			1,867
	1,501			1,898		Rest of World		3,561			2,923

	3,365			3,696				7,236			6,830

^(a)	Segment-level overhead expenses are included in the fuels business result.

^(b)	BP’s share of income from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany is reported in the fuels business.

^(c)	For Downstream, fair value accounting effects arise solely in the fuels business.

Rosneft


Second quarter 2014			Second quarter 2015^(a)			$ million	First half 2015^(a)			First half 2014
	1,050			534		Profit before interest and tax^(b)		755			1,599
	(26	)		(24	)	Inventory holding (gains) losses*		(62	)		(57	)

	1,024			510		RC profit before interest and tax		693			1,542
	—			—		Net charge (credit) for non-operating items*		—			(247	)

	1,024			510		Underlying RC profit before interest and tax*		693			1,295

Replacement cost profit before interest and tax for the second quarter and half year was $510 million and $693 million respectively, compared with $1,024 million and $1,542 million for the same periods in 2014.

There were no non-operating items in the second quarter 2015, half year 2015, or second quarter 2014, and there was a non-operating gain of $247 million in the first half of 2014.

After adjusting for non-operating items, the underlying replacement cost profit for the second quarter and half year was $510 million and $693 million respectively, compared with $1,024 million and $1,295 million for the same periods in 2014. Compared with the same period last year, the result for the second quarter was primarily affected by lower oil prices. For the half year, the result was primarily affected by lower oil prices partly offset by favourable foreign exchange effects.

See also Group statement of comprehensive income – Share of items relating to equity-accounted entities, net of tax, and footnote (a), on page 14 for other foreign exchange effects.

A second BP representative, Guillermo Quintero, president of BP Energy do Brasil Ltda, was elected to Rosneft’s board of directors at Rosneft’s Annual General Meeting of Shareholders (AGM) on 17 June 2015.

Rosneft’s AGM also approved the distribution of a dividend of 8.21 roubles per share. We received our share of this dividend in July 2015, which amounted to $271 million after the deduction of withholding tax.

Second
quarter
2014

Second
quarter
2015^(a)

First
half
2015^(a)

First
half
2014

Production (net of royalties) (BP share)

820

815

Liquids* (mb/d)

815

825

1,036

1,172

Natural gas (mmcf/d)

1,198

1,030

999

1,017

Total hydrocarbons* (mboe/d)

1,022

1,002

^(a)	The operational and financial information of the Rosneft segment for the second quarter and first half is based on preliminary operational and financial results of Rosneft for the six months ended 30 June 2015. Actual results may differ from these amounts.

^(b)

The Rosneft segment result includes equity-accounted earnings arising from BP’s 19.75% shareholding in Rosneft as adjusted for the accounting required under IFRS relating to BP’s purchase of its interest in Rosneft and the amortization of the deferred gain relating to the disposal of BP’s interest in TNK-BP. These adjustments have increased the reported profit for the second quarter and first half 2015, as shown in the table above, compared with the equivalent amount in Russian roubles that we expect Rosneft to report in its own financial statements under IFRS. BP’s share of Rosneft’s profit before interest and tax for each year-to-date period is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date. BP’s share of Rosneft’s earnings after finance costs, taxation and non-controlling interests, as adjusted, is included in the BP group income statement within profit before interest and taxation.

Other businesses and corporate


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
	412			512		Sales and other operating revenues		940			843

	(434	)		(455	)	Profit (loss) before interest and tax		(763	)		(931	)
	—			—		Inventory holding (gains) losses*		—			—

	(434	)		(455	)	RC profit (loss) before interest and tax		(763	)		(931	)
	(4	)		54		Net charge (credit) for non-operating items*		72			4

	(438	)		(401	)	Underlying RC profit (loss) before interest and tax*		(691	)		(927	)

						Underlying RC profit (loss) before interest and tax
	(226	)		(144	)	US		(206	)		(325	)
	(212	)		(257	)	Non-US		(485	)		(602	)

	(438	)		(401	)			(691	)		(927	)

						Non-operating items
	4			(10	)	US		(11	)		3
	—			(44	)	Non-US		(61	)		(7	)

	4			(54	)			(72	)		(4	)

						RC profit (loss) before interest and tax
	(222	)		(154	)	US		(217	)		(322	)
	(212	)		(301	)	Non-US		(546	)		(609	)

	(434	)		(455	)			(763	)		(931	)

Other businesses and corporate comprises biofuels and wind businesses, shipping, treasury (which includes interest income on the group’s cash and cash equivalents), and corporate activities including centralized functions.

Financial results

The replacement cost loss before interest and tax for the second quarter and half year was $455 million and $763 million respectively, compared with $434 million and $931 million for the same periods in 2014.

The second-quarter result included a net non-operating charge of $54 million, compared with a net non-operating gain of $4 million a year ago. For the half year, the net non-operating charge was $72 million, compared with a net non-operating charge of $4 million a year ago.

After adjusting for non-operating items, the underlying replacement cost loss before interest and tax for the second quarter and half year was $401 million and $691 million respectively, compared with $438 million and $927 million for the same periods in 2014. The 2015 results reflected improved business performance and lower corporate and functional costs, partly offset by adverse foreign exchange impacts.

Biofuels

The net ethanol-equivalent production (which includes ethanol and sugar) for the second quarter was 247 million litres, compared with 113 million litres for the same period in 2014, as there was no production in the second quarter of 2014 at one of our mills in Brazil due to an expansion project.

Wind

Net wind generation capacity*^(a) was 1,588MW at 30 June 2015, compared with 1,590MW at 30 June 2014. BP’s net share of wind generation for the second quarter and half year was 1,150GWh and 2,277GWh respectively, compared with 1,248GWh and 2,540GWh for the same periods in 2014.

^(a)	Capacity figures include 32MW in the Netherlands managed by our Downstream segment.

Gulf of Mexico oil spill

We announced on 2 July 2015 that BP Exploration & Production Inc. has reached agreements in principle with the US federal government and five Gulf states to settle all outstanding federal and state claims arising from the Deepwater Horizon oil spill. The agreement with the Gulf states also provides for the settlement of claims made by more than 400 local government entities. The agreements in principle are subject to execution of definitive agreements, including a Consent Decree with the United States and Gulf states with respect to the Clean Water Act and natural resource damage claims. The definitive agreements will only become effective if there is final court approval of the Consent Decree. We expect that the definitive agreement with the Gulf states will be executed and that the court will approve the Consent Decree. BP advised the Court that it is satisfied with and has accepted releases received from the vast majority of local government entities. Accordingly, on 27 July, the District Court ordered BP to commence processing payments required under the releases and that such payments be made within 30 days of the Court’s order. The agreements in principle do not cover claims relating to the 2012 class action settlements with the Plaintiffs’ Steering Committee, including business economic loss claims; private claims from other litigants not included within the class action settlements; or private securities litigation in MDL 2185.

For further details see Note 2 on page 18 and Legal proceedings on page 40.

Financial update

The replacement cost loss before interest and tax for the second quarter and half year was $10,747 million and $11,070 million respectively, compared with $251 million and $280 million for the same periods last year. The second-quarter loss reflects a $9.8 billion charge associated with the government settlements mentioned above, additional claims administration costs and business economic loss claims under the Plaintiffs’ Steering Committee settlement, and adjustments to other provisions, as well as the ongoing costs of the Gulf Coast Restoration Organization. The cumulative pre-tax charge recognized to date amounts to $54.6 billion.

The cumulative income statement charge does not include amounts for obligations that BP currently considers are not possible to measure reliably. The total amounts that will ultimately be paid by BP in relation to the incident will be dependent on many factors, as discussed under Provisions and contingent liabilities in Note 2 on page 20. These could have a material impact on our consolidated financial position, results and cash flows.

Financial statements

Group income statement


Second quarter 2014		Second quarter 2015			$ million	First half 2015			First half 2014

	93,957		60,646		Sales and other operating revenues (Note 4)		114,842			185,667
	155		156		Earnings from joint ventures – after interest and tax		260			270
	1,228		670		Earnings from associates – after interest and tax		1,032			2,011
	157		195		Interest and other income		315			488
	330		133		Gains on sale of businesses and fixed assets		271			379

	95,827		61,800		Total revenues and other income		116,720			188,815
	74,536		44,748		Purchases		82,684			146,004
	6,980		17,185		Production and manufacturing expenses		24,185			13,811
	816		173		Production and similar taxes (Note 5)		535			1,802
	3,751		3,765		Depreciation, depletion and amortization		7,601			7,341
	774		286		Impairment and losses on sale of businesses and fixed assets		483			1,200
	389		902		Exploration expense		1,074			1,337
	3,078		2,989		Distribution and administration expenses		5,772			6,180

	5,503		(8,248	)	Profit (loss) before interest and taxation		(5,614	)		11,140
	277		289		Finance costs		570			564
	79		75		Net finance expense relating to pensions and other post-retirement benefits		152			159

	5,147		(8,612	)	Profit (loss) before taxation		(6,336	)		10,417
	1,714		(2,829	)	Taxation		(3,204	)		3,365

	3,433		(5,783	)	Profit (loss) for the period		(3,132	)		7,052

					Attributable to
	3,369		(5,823	)	BP shareholders		(3,221	)		6,897
	64		40		Non-controlling interests		89			155

	3,433		(5,783	)			(3,132	)		7,052


					Earnings per share (Note 6)
					Profit (loss) for the period attributable to BP shareholders
					Per ordinary share (cents)
	18.26		(31.83	)	Basic		(17.62	)		37.35
	18.15		(31.83	)	Diluted		(17.62	)		37.11
					Per ADS (dollars)
	1.10		(1.91	)	Basic		(1.06	)		2.24
	1.09		(1.91	)	Diluted		(1.06	)		2.23

Financial statements (continued)

Group statement of comprehensive income


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014

	3,433			(5,783	)	Profit (loss) for the period		(3,132	)		7,052

						Other comprehensive income
						Items that may be reclassified subsequently to profit or loss
	1,005			698		Currency translation differences		(914	)		92
	—			16		Exchange gains (losses) on translation of foreign operations reclassified to gain or loss on sale of business and fixed assets		16			—
	2			1		Available-for-sale investments marked to market		1			(1	)
	1			—		Available-for-sale investments reclassified to the income statement		—			1
	77			128		Cash flow hedges marked to market		(84	)		100
	(49	)		81		Cash flow hedges reclassified to the income statement		155			(69	)
	(2	)		4		Cash flow hedges reclassified to the balance sheet		9			(3	)
	51			329		Share of items relating to equity-accounted entities, net of tax^(a)		249			(22	)
	9			(92	)	Income tax relating to items that may be reclassified		32			9

	1,094			1,165				(536	)		107

						Items that will not be reclassified to profit or loss
	222			2,688		Remeasurements of the net pension and other post-retirement benefit liability or asset		2,120			(714	)
	—			—		Share of items relating to equity-accounted entities, net of tax		—			5
	(73	)		(754	)	Income tax relating to items that will not be reclassified		(596	)		221

	149			1,934				1,524			(488	)

	1,243			3,099		Other comprehensive income		988			(381	)

	4,676			(2,684	)	Total comprehensive income		(2,144	)		6,671

						Attributable to
	4,606			(2,732	)	BP shareholders		(2,219	)		6,509
	70			48		Non-controlling interests		75			162

	4,676			(2,684	)			(2,144	)		6,671

^(a)	Includes the effects of hedge accounting adopted by Rosneft from 1 October 2014 in relation to a portion of future export revenue denominated in US dollars. For further information see BP Annual Report and Form 20-F 2014 – Financial statements – Note 15.

Financial statements (continued)

Group statement of changes in equity


$ million	BP shareholders’ equity			Non-controlling interests			Total equity

At 1 January 2015		111,441			1,201			112,642


Total comprehensive income		(2,219	)		75			(2,144	)
Dividends		(3,400	)		(42	)		(3,442	)
Share-based payments, net of tax		300			—			300
Share of equity-accounted entities’ changes in equity, net of tax		(3	)		—			(3	)
Transactions involving non-controlling interests		—			(2	)		(2	)

At 30 June 2015		106,119			1,232			107,351


$ million	BP shareholders’ equity			Non-controlling interests			Total equity

At 1 January 2014		129,302			1,105			130,407


Total comprehensive income		6,509			162			6,671
Dividends		(2,999	)		(153	)		(3,152	)
Repurchases of ordinary share capital		(1,527	)		—			(1,527	)
Share-based payments, net of tax		576			—			576
Transactions involving non-controlling interests		—			3			3

At 30 June 2014		131,861			1,117			132,978

Financial statements (continued)

Group balance sheet


$ million	30 June 2015		31 December 2014
Non-current assets
Property, plant and equipment		130,659		130,692
Goodwill		11,837		11,868
Intangible assets		19,411		20,907
Investments in joint ventures		9,037		8,753
Investments in associates		11,340		10,403
Other investments		1,108		1,228

Fixed assets		183,392		183,851
Loans		584		659
Trade and other receivables		2,310		4,787
Derivative financial instruments		3,965		4,442
Prepayments		999		964
Deferred tax assets		2,011		2,309
Defined benefit pension plan surpluses		1,223		31

		194,484		197,043

Current assets
Loans		325		333
Inventories		20,034		18,373
Trade and other receivables		31,476		31,038
Derivative financial instruments		3,599		5,165
Prepayments		1,899		1,424
Current tax receivable		731		837
Other investments		294		329
Cash and cash equivalents		32,589		29,763

		90,947		87,262

Total assets		285,431		284,305

Current liabilities
Trade and other payables		40,077		40,118
Derivative financial instruments		2,863		3,689
Accruals		5,770		7,102
Finance debt		9,110		6,877
Current tax payable		1,881		2,011
Provisions		5,666		3,818

		65,367		63,615

Non-current liabilities
Other payables		2,942		3,587
Derivative financial instruments		3,847		3,199
Accruals		937		861
Finance debt		47,994		45,977
Deferred tax liabilities		9,975		13,893
Provisions		37,039		29,080
Defined benefit pension plan and other post-retirement benefit plan deficits		9,979		11,451

		112,713		108,048

Total liabilities		178,080		171,663

Net assets		107,351		112,642

Equity
BP shareholders’ equity		106,119		111,441
Non-controlling interests		1,232		1,201

		107,351		112,642

Financial statements (continued)

Condensed group cash flow statement


Second quarter 2014			Second quarter 2015			$ million		First half 2015			First half 2014
						Operating activities
	5,147			(8,612	)	Profit (loss) before taxation			(6,336	)		10,417
						Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
	3,953			4,571		Depreciation, depletion and amortization and exploration expenditure written off			8,499			8,375
	444			153		Impairment and (gain) loss on sale of businesses and fixed assets			212			821
	(1,080	)		(654	)	Earnings from equity-accounted entities, less dividends received			(930	)		(1,764	)
	(3	)		13		Net charge for interest and other finance expense, less net interest paid			142			167
	178			255		Share-based payments			17			284
	(105	)		(30	)	Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans			(87	)		(207	)
	56			10,700		Net charge for provisions, less payments			11,088			(137	)
	654			492		Movements in inventories and other current and non-current assets and liabilities			(3,366	)		339
	(1,367	)		(602	)	Income taxes paid			(1,095	)		(2,187	)

	7,877			6,286		Net cash provided by operating activities			8,144			16,108

						Investing activities
	(5,499	)		(4,529	)	Capital expenditure			(9,165	)		(11,390	)
	—			—		Acquisitions, net of cash acquired			—			(10	)
	(3	)		(54	)	Investment in joint ventures			(123	)		(36	)
	(47	)		(218	)	Investment in associates			(305	)		(135	)
	227			308		Proceeds from disposal of fixed assets			961			1,205
	571			224		Proceeds from disposal of businesses, net of cash disposed			1,311			597
	53			45		Proceeds from loan repayments			48			70

	(4,698	)		(4,224	)	Net cash used in investing activities			(7,273	)		(9,699	)

						Financing activities
	(447	)		—		Net repurchase of shares			—			(2,173	)
	856			83		Proceeds from long-term financing			7,871			6,835
	(1,720	)		(542	)	Repayments of long-term financing			(2,849	)		(2,957	)
	(57	)		(13	)	Net increase (decrease) in short-term debt			712			20
	(1,572	)		(1,691	)	Dividends paid	– BP shareholders		(3,400	)		(2,999	)
	(140	)		(30	)		– non-controlling interests		(42	)		(153	)

	(3,080	)		(2,193	)	Net cash provided by (used in) financing activities			2,292			(1,427	)

	49			286		Currency translation differences relating to cash and cash equivalents			(337	)		4

	148			155		Increase (decrease) in cash and cash equivalents			2,826			4,986

	27,358			32,434		Cash and cash equivalents at beginning of period			29,763			22,520
	27,506			32,589		Cash and cash equivalents at end of period			32,589			27,506

Financial statements (continued)

Notes

1.	Basis of preparation

The interim financial information included in this report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’.

The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2014 included in the BP Annual Report and Form 20-F 2014.

The directors have made an assessment of the group’s ability to continue as a going concern and consider it appropriate to adopt the going concern basis of accounting in preparing these interim financial statements.

BP prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the periods presented.

The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing BP Annual Report and Form 20-F 2015, which do not differ significantly from those used in BP Annual Report and Form 20-F 2014.

2.	Gulf of Mexico oil spill

(a) Overview

As a consequence of the Gulf of Mexico oil spill, BP continues to incur various costs and has also recognized liabilities for future costs. The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2014 – Financial statements – Note 2 and Legal proceedings on page 228 and on page 40 of this report.

The group income statement includes a pre-tax charge of $10,755 million for the second quarter and $11,087 million for the first half of 2015 in relation to the Gulf of Mexico oil spill. The second-quarter charge includes additional amounts provided for the Clean Water Act penalty, natural resource damages and state and local government claims following the 2 July 2015 agreements in principle to settle all federal and state claims and claims made by more than 400 local government entities arising from the oil spill (the Agreements in Principle). The second-quarter charge also reflects additional business economic loss claims and claims administration costs under the Plaintiffs’ Steering Committee (PSC) settlement and the ongoing costs of the Gulf Coast Restoration Organization. The cumulative pre-tax income statement charge since the incident, in April 2010, amounts to $54,582 million.

The cumulative income statement charge does not include amounts for obligations that BP considers are not possible, at this time, to measure reliably. For further information, see Provisions and contingent liabilities below.

The Agreements in Principle signed on 2 July 2015 are subject to execution of definitive agreements including a Consent Decree with the United States and Gulf states with respect to the Clean Water Act penalty and natural resource damages and other claims, a settlement agreement with five Gulf states with respect to state claims for economic loss, property damage and other claims, and release agreements for economic loss, property damage and other claims with local government entities. The state and local government claims cover economic loss, property damage, business interruption, breach of contract, loss of royalties, lost tourism, lost revenue, lost taxes, operating or other costs, losses or damages arising under the Oil Pollution Act of 1990 and other legislation. The Consent Decree will be subject to public comment and final court approval. The Consent Decree and settlement agreement with the Gulf states are conditional upon each other and neither will become effective unless there is final court approval of the Consent Decree and local government entities execute releases to BP’s satisfaction. We expect that the definitive agreement with the Gulf states will be executed and that the court will approve the Consent Decree. BP advised the Court that it is satisfied with and has accepted releases received from the vast majority of local government entities. Accordingly, on 27 July, the District Court ordered BP to commence processing payments required under the releases and that such payments be made within 30 days of the Court’s order. As part of the Agreements in Principle, BP agreed to pay up to $1 billion to resolve claims made by local government entities. For more information on the Agreements in Principle see Legal proceedings on page 40.

The Agreements in Principle described above significantly reduce the uncertainties faced by BP following the Gulf of Mexico oil spill in 2010. There continues to be uncertainty regarding the outcome or resolution of current or future litigation and the extent and timing of costs and liabilities relating to the incident not covered by the Agreements in Principle. The total amounts that will ultimately be paid by BP in relation to the incident will be dependent on many factors, as discussed under Provisions and contingent liabilities below, including in relation to any new information or future developments. These uncertainties could have a material impact on our consolidated financial position, results and cash flows.

Financial statements (continued)

Notes

2.	Gulf of Mexico oil spill (continued)

The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for the periods presented. The income statement, balance sheet and cash flow statement impacts are included within the relevant line items in those statements as set out below.


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Income statement
	251			10,747		Production and manufacturing expenses		11,070			280

	(251	)		(10,747	)	Profit (loss) before interest and taxation		(11,070	)		(280	)
	9			8		Finance costs		17			19

	(260	)		(10,755	)	Profit (loss) before taxation		(11,087	)		(299	)
	44			3,601		Taxation		3,713			54

	(216	)		(7,154	)	Profit (loss) for the period		(7,374	)		(245	)


$ million	30 June 2015			31 December 2014
Balance sheet
Current assets
Trade and other receivables		2,638			1,154
Current liabilities
Trade and other payables		(817	)		(655	)
Accruals		(40	)		—
Provisions		(3,569	)		(1,702	)

Net current assets (liabilities)		(1,788	)		(1,203	)

Non-current assets
Trade and other receivables		203			2,701
Non-current liabilities
Other payables		(2,077	)		(2,412	)
Accruals		(190	)		(169	)
Provisions		(14,424	)		(6,903	)
Deferred tax		5,436			1,723

Net non-current assets (liabilities)		(11,052	)		(5,060	)

Net assets (liabilities)		(12,840	)		(6,263	)


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Cash flow statement - Operating activities
	(260	)		(10,755	)	Profit (loss) before taxation		(11,087	)		(299	)
						Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
	9			8		Net charge for interest and other finance expense, less net interest paid		17			19
	116			10,607		Net charge for provisions, less payments		10,834			19
	(33	)		34		Movements in inventories and other current and non-current assets and liabilities		(561	)		(611	)

	(168	)		(106	)	Pre-tax cash flows		(797	)		(872	)

Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an outflow of $106 million and outflow of $797 million in the second quarter and first half of 2015 respectively. For the same periods in 2014, the amounts were an inflow of $229 million and an outflow of $355 million respectively.

Financial statements (continued)

Notes

2.	Gulf of Mexico oil spill (continued)

Trust fund

BP established the Deepwater Horizon Oil Spill Trust (the Trust), funded in the amount of $20 billion, to satisfy legitimate individual and business claims, state and local government claims resolved by BP, final judgments and settlements, state and local response costs, and natural resource damages and related costs. Fines and penalties are not covered by the trust fund.

The funding of the Trust was completed in 2012. The obligation to fund the $20-billion trust fund, adjusted to take account of the time value of money, was recognized in full in 2010 and charged to the income statement. An asset has been recognized representing BP’s right to receive reimbursement from the trust fund. This is the portion of the estimated future expenditure provided for that will be settled by payments from the trust fund. During 2014, cumulative charges to be paid by the Trust reached $20 billion. Subsequent additional costs, over and above those provided within the $20 billion, are expensed to the income statement as incurred.

At 30 June 2015, $2,841 million of the provisions and payables are eligible to be paid from the Trust. The reimbursement asset is recorded within other receivables on the balance sheet, of which $2,638 million is classified as current and $203 million as non-current. During the second quarter of 2015, $523 million of provisions and $19 million of payables were paid from the Trust.

At 30 June 2015, the aggregate cash balances in the Trust and the associated qualifying settlement funds amounted to $3.7 billion, including $0.8 billion remaining in the seafood compensation fund which has yet to be distributed and $0.4 billion held for natural resource damage early restoration projects. When the cash balances in the trust fund are exhausted, payments in respect of legitimate claims and other costs will be made directly by BP.

(b) Provisions and contingent liabilities

BP has recorded certain provisions and disclosed certain contingent liabilities as a consequence of the Gulf of Mexico oil spill. These are described below and in more detail in BP Annual Report and Form 20-F 2014 – Financial statements – Note 2.

Provisions

BP has recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, litigation and claims, and Clean Water Act penalties. Movements in each class of provision during the second quarter and first half are presented in the table below.

$ million

Environmental

Litigation
and
claims

Clean
Water Act
penalties

Total

At 1 April 2015

760

3,764

3,510

8,034

Net increase in provision

5,443

4,520

700

10,663

Reclassified to other payables

—

(125

)

—

(125

)

Utilization

– paid by BP

)

(53

)

—

(56

)

– paid by the trust fund

(15

)

(508

)

—

(523

)

At 30 June 2015

6,185

7,598

4,210

17,993

Of which

– current

399

3,170

—

3,569

– non-current

5,786

4,428

4,210

14,424

Environmental

Litigation
and
claims

Clean
Water Act
penalties

Total

$ million

At 1 January 2015

1,141

3,954

3,510

8,605

Net increase in provision

5,444

4,814

700

10,958

Unwinding of discount

—

Reclassified to other payables

(329

)

(125

)

—

(454

)

Utilization

– paid by BP

(22

)

(102

)

—

(124

)

– paid by the trust fund

(50

)

(943

)

—

(993

)

At 30 June 2015

6,185

7,598

4,210

17,993

Financial statements (continued)

Notes

2.	Gulf of Mexico oil spill (continued)

Provisions recorded include $18.7 billion, plus interest and adjusted to take account of the time value of money, in relation to the Agreements in Principle. In addition, $0.4 billion has been provided in relation to natural resource damage assessment costs under the Agreements in Principle. After taking account of amounts previously provided for, the net increase in provisions as a result of the settlement amounted to $9.8 billion.

Environmental

The environmental provision includes amounts payable for natural resource damage costs under one of the Agreements in Principle referred to above. These amounts are payable in instalments over 16 years commencing one year after the court approves the Consent Decree; the majority of the unpaid balance of this natural resource damages settlement accrues interest at a fixed rate. The remaining amounts payable under the $1-billion early restoration framework agreement with natural resource trustees for the US and five Gulf states are also included in environmental provisions.

Litigation and claims

The litigation and claims provision includes amounts that can be estimated reliably for the future cost of settling claims by individuals and businesses for damage to real or personal property, lost profits or impairment of earning capacity and loss of subsistence use of natural resources (Individual and Business Claims), and amounts agreed under the Agreements in Principle in relation to state claims and amounts in respect of local government claims. Claims administration costs and legal costs have also been provided for. Amounts that cannot be measured reliably and which have therefore not been provided for are described under Contingent liabilities below.

Litigation and claims – PSC settlement

BP has provided for its best estimate of the cost associated with the PSC settlement agreements with the exception of the cost of business economic loss claims, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility. See BP Annual Report and Form 20-F 2014 – Financial statements – Note 2 and Legal proceedings on pages 228-237 and page 40 of this report for further details on the settlements with the PSC and related matters.

Management believes that no reliable estimate can currently be made of any business economic loss claims not yet processed or processed but not yet paid, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility.

The submission deadline for business economic loss claims passed on 8 June 2015; no further claims may be submitted. A significant number of business economic loss claims have been received but have not yet been processed and it is not possible to quantify the total value of the claims.

A revised policy for the matching of revenue and expenses for business economic loss claims was introduced in May 2014 and, of the claims assessable under the new policy, the majority have not yet been determined at this time. Uncertainties regarding the proper application of the revised policy to particular claims and categories of claims continue to arise as the claims administrator has applied the revised policy. There have been no, or only a small number of, claim determinations made under some of the specialized frameworks that have been put in place for particular industries and so determinations to date may not be representative of the total population of claims. In addition, while detailed data on pre-determination claims is not available due to a court order to protect claimant confidentiality, aggregated pre-determination data has recently been provided. While this data does provide some insights, it is not at a sufficient level of detail to review claim demographics or identify potential populations for each category of claims.

There is limited data available to build up a track record of claims determinations under the policies and protocols that are now being applied following resolution of the matching and causation issues. We are unable to reliably estimate future trends of the number and proportion of claims that will be determined to be eligible, nor can we reliably estimate the value of such claims. A provision for such business economic loss claims will be established when these uncertainties are resolved and a reliable estimate can be made of the liability.

The current estimate for the total cost of those elements of the PSC settlement that BP considers can be reliably estimated, including amounts already paid, is $11.3 billion. The Deepwater Horizon Court Supervised Settlement Program (DHCSSP) has issued eligibility notices, many of which are disputed by BP, in respect of business economic loss claims of approximately $415 million which have not been provided for. The total cost of the PSC settlement is likely to be significantly higher than the amount recognized to date of $11.3 billion because the current estimate does not reflect business economic loss claims not yet processed or processed but not yet paid, except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility.

Financial statements (continued)

Notes

2.	Gulf of Mexico oil spill (continued)

There continues to be a high level of uncertainty in relation to the amounts that ultimately will be paid in relation to current claims as described above and in Legal proceedings on page 40 and the outcomes of any further litigation including by parties excluded from, or parties who opted out of, the PSC settlement, as well as uncertainty arising from the PSC’s appeal to the Fifth Circuit of the District Court’s 31 March 2015 decision to deny its motion seeking to alter or amend the revised matching policy for business economic loss claims. There is also uncertainty as to the cost of administering the claims process under the DHCSSP and in relation to future legal costs. The timing of payment of provisions related to the PSC settlement is dependent upon ongoing claims facility activity and is therefore also uncertain.

Litigation and claims – other claims

The provision recognized for litigation and claims includes amounts agreed under the Agreements in Principle in relation to state claims and amounts in respect of local government claims. The amount provided in respect of state claims is payable over 18 years from the date the court approves the Consent Decree, of which $1 billion is due following the court approval of the Consent Decree. BP advised the Court that it is satisfied with and has accepted releases received from the vast majority of local government entities. Accordingly, on 27 July, the District Court ordered BP to commence processing payments required under the releases and that such payments be made within 30 days of the Court’s order. As part of the Agreements in Principle, BP agreed to pay up to $1 billion to resolve claims made by local government entities.

See Legal proceedings on page 40 for further details.

Clean Water Act penalties

A provision has been recognized for penalties under Section 311 of the Clean Water Act, as agreed in the Agreements in Principle. The penalty is payable in instalments over 15 years, commencing one year after the court approves the Consent Decree and execution of the associated agreements. The unpaid balance of this penalty accrues interest at a fixed rate.

Provision movements and analysis of income statement charge

A net increase in provisions of $10,663 million and $10,958 million was recognized for the second quarter and half year respectively. The second-quarter net increase arises primarily due to increases in provisions of $9.8 billion in relation to the Agreements in Principle. The remainder of the income statement charge relates to net increases in the litigation and claims provision for business economic loss claims, associated claims administration costs and other items. The net increase for the first half also includes additional increases in business economic loss claim provisions arising in the first quarter. The following table shows an analysis of the income statement charge.


$ million		Second quarter 2015		First half 2015		Cumulative since the incident
Environmental costs			5,502		5,503		8,726
Spill response costs			—		—		14,304
Litigation and claims costs			4,520		4,814		31,594
Clean Water Act penalties – amount provided			700		700		4,210
Other costs charged directly to the income statement			25		53		1,310
Recoveries credited to the income statement			—		—		(5,681	)
Charge (credit) related to the trust fund			—		—		(137	)
Other costs of the trust fund			—		—		8

Loss before interest and taxation			10,747		11,070		54,334
Finance costs	– related to the trust funds		—		—		137
	– not related to the trust funds		8		17		111

Loss before taxation			10,755		11,087		54,582

Further information on provisions is provided in BP Annual Report and Form 20-F 2014 – Financial statements – Note 2.

Financial statements (continued)

Notes

2.	Gulf of Mexico oil spill (continued)

Contingent liabilities

BP currently considers that it is not possible to measure reliably other obligations arising from the incident, including:

•

Claims asserted in civil litigation, including any further litigation by parties excluded from, or parties who opted out of, the PSC settlement, including as set out in Legal proceedings on pages 228-237 of BP Annual Report and Form 20-F 2014 and page 40 of this report, except for claims covered by the Agreements in Principle.

•

The cost of business economic loss claims under the PSC settlement not yet processed or processed but not yet paid (except where an eligibility notice has been issued and is not subject to appeal by BP within the claims facility).

•

Any obligation that may arise from securities-related litigation.

•

Any obligation in relation to other potential private or non-US government litigation or claims (except for those items provided for as described above under Provisions).

It is not practicable to estimate the magnitude or possible timing of payment of these contingent liabilities.

As a result of the Agreements in Principle, contingent liabilities are no longer disclosed in relation to Clean Water Act penalties, natural resource damages and state claims and the vast majority of local claims. See additional information on the Agreements in Principle above and in Legal proceedings on page 40.

The magnitude and timing of all possible obligations in relation to the Gulf of Mexico oil spill continue to be subject to uncertainty.

See also BP Annual Report and Form 20-F 2014 – Financial statements – Note 2.

3.	Analysis of replacement cost profit (loss) before interest and tax and reconciliation to profit (loss) before taxation


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
	4,049			228		Upstream		600			8,708
	933			1,628		Downstream		3,711			1,727
	1,024			510		Rosneft		693			1,542
	(434	)		(455	)	Other businesses and corporate		(763	)		(931	)

	5,572			1,911				4,241			11,046
	(251	)		(10,747	)	Gulf of Mexico oil spill response		(11,070	)		(280	)
	(76	)		(39	)	Consolidation adjustment – UPII*		(168	)		14

	5,245			(8,875	)	RC profit (loss) before interest and tax		(6,997	)		10,780
						Inventory holding gains (losses)*
	(1	)		(3	)	Upstream		15			(7	)
	233			606		Downstream		1,306			310
	26			24		Rosneft (net of tax)		62			57

	5,503			(8,248	)	Profit (loss) before interest and tax		(5,614	)		11,140
	277			289		Finance costs		570			564
	79			75		Net finance expense relating to pensions and other post-retirement benefits		152			159

	5,147			(8,612	)	Profit (loss) before taxation		(6,336	)		10,417


						RC profit (loss) before interest and tax*
	1,643			(10,641	)	US		(11,138	)		2,768
	3,602			1,766		Non-US		4,141			8,012

	5,245			(8,875	)			(6,997	)		10,780

Financial statements (continued)

Notes

4.	Sales and other operating revenues

Second
quarter
2014

Second
quarter
2015

$ million

First
half
2015

First
half
2014

By segment

16,739

11,036

Upstream

22,666

33,745

86,871

55,332

Downstream

103,457

171,169

412

512

Other businesses and corporate

940

843

104,022

66,880

127,063

205,757

Less: sales and other operating revenues between segments

9,729

5,590

Upstream

11,153

18,946

152

402

Downstream

578

714

184

242

Other businesses and corporate

490

430

10,065

6,234

12,221

20,090

Third party sales and other operating revenues

7,010

5,446

Upstream

11,513

14,799

86,719

54,930

Downstream

102,879

170,455

228

270

Other businesses and corporate

450

413

93,957

60,646

Total third party sales and other operating revenues

114,842

185,667

By geographical area

35,507

21,824

40,665

70,332

67,303

43,130

Non-US

81,818

133,608

102,810

64,954

122,483

203,940

8,853

4,308

Less: sales and other operating revenues between areas

7,641

18,273

93,957

60,646

114,842

185,667

5.	Production and similar taxes


Second quarter 2014		Second quarter 2015		$ million	First half 2015		First half 2014
	215		33	US		67		494
	601		140	Non-US		468		1,308

	816		173			535		1,802

6.	Earnings per share and shares in issue

Basic earnings per ordinary share (EpS) 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 calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.

Financial statements (continued)

Notes

6.	Earnings per share and shares in issue (continued)

For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.


Second quarter 2014		Second quarter 2015			$ million	First half 2015			First half 2014
					Results for the period
	3,369		(5,823	)	Profit (loss) for the period attributable to BP shareholders		(3,221	)		6,897
	1		1		Less: preference dividend		1			1

	3,368		(5,824	)	Profit (loss) attributable to BP ordinary shareholders		(3,222	)		6,896


					Number of shares (thousand)^(a)(b)
	18,440,909		18,299,877		Basic weighted average number of shares outstanding		18,287,176			18,460,787
	3,073,484		3,049,979		ADS equivalent		3,047,862			3,076,797


	18,556,789		18,299,877		Weighted average number of shares outstanding used to calculate diluted earnings per share		18,287,176			18,580,165
	3,092,798		3,049,979		ADS equivalent		3,047,862			3,096,694


	18,435,266		18,318,924		Shares in issue at period-end		18,318,924			18,435,266
	3,072,544		3,053,154		ADS equivalent		3,053,154			3,072,544

^(a)	Excludes treasury shares and includes certain shares that will be issued in the future under employee share-based payment plans.

^(b)	If the inclusion of potentially issuable shares would decrease loss per share, the potentially issuable shares are excluded from the weighted average number of shares outstanding used to calculate diluted earnings per share.

7.	Dividends

Dividends payable

BP today announced an interim dividend of 10.00 cents per ordinary share which is expected to be paid on 18 September 2015 to shareholders and American Depositary Share (ADS) holders on the register on 7 August 2015. The corresponding amount in sterling is due to be announced on 8 September 2015, calculated based on the average of the market exchange rates for the four dealing days commencing on 2 September 2015. Holders of ADSs are expected to receive $0.600 per ADS (less applicable fees). A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the second-quarter dividend and timetable are available at bp.com/dividends and details of the scrip dividend programme are available at bp.com/scrip.

Dividends paid

Second
quarter
2014

Second
quarter
2015

First
half
2015

First
half
2014

Dividends paid per ordinary share

9.750

10.000

cents

20.000

19.250

5.807

6.530

pence

13.200

11.514

58.50

60.00

Dividends paid per ADS (cents)

120.00

115.50

Scrip dividends

26.5

18.9

Number of shares issued (millions)

34.6

66.7

225

134

Value of shares issued ($ million)

243

551

Financial statements (continued)

Notes

Net debt*

Net debt ratio*


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
	52,906			57,104		Gross debt		57,104			52,906
	(1,001	)		315		Fair value (asset) liability of hedges related to finance debt^(a)		315			(1,001	)

	51,905			57,419				57,419			51,905
	27,506			32,589		Less: cash and cash equivalents		32,589			27,506

	24,399			24,830		Net debt		24,830			24,399

	132,978			107,351		Equity		107,351			132,978
	15.5	%		18.8	%	Net debt ratio		18.8	%		15.5	%

Analysis of changes in net debt


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Opening balance
	53,249			57,731		Finance debt		52,854			48,192
	(633	)		(174	)	Fair value (asset) liability of hedges related to finance debt^(a)		(445	)		(477	)
	27,358			32,434		Less: cash and cash equivalents		29,763			22,520

	25,258			25,123		Opening net debt		22,646			25,195

						Closing balance
	52,906			57,104		Finance debt		57,104			52,906
	(1,001	)		315		Fair value (asset) liability of hedges related to finance debt^(a)		315			(1,001	)
	27,506			32,589		Less: cash and cash equivalents		32,589			27,506

	24,399			24,830		Closing net debt		24,830			24,399

	859			293		Decrease (increase) in net debt		(2,184	)		796

	99			(131	)	Movement in cash and cash equivalents (excluding exchange adjustments)		3,163			4,982
	921			472		Net cash outflow (inflow) from financing (excluding share capital and dividends)		(5,734	)		(3,898	)
	(276	)		(1	)	Other movements		10			(394	)

	744			340		Movement in net debt before exchange effects		(2,561	)		690
	115			(47	)	Exchange adjustments		377			106

	859			293		Decrease (increase) in net debt		(2,184	)		796

^(a)

Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $1,357 million (second quarter 2014 asset of $1 million) are not included in the calculation of net debt shown above as hedge accounting was not applied for these instruments.

9.	Inventory valuation

A provision of $590 million was held at 30 June 2015 ($468 million at 30 June 2014) to write inventories down to their net realizable value. The net movement credited to the income statement during the second quarter 2015 was $210 million (second quarter 2014 was a charge of $59 million).

10.

Statutory accounts

The financial information shown in this publication, which was approved by the Board of Directors on 27 July 2015, is unaudited and does not constitute statutory financial statements.

Financial statements (continued)

Notes

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., 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 accounted income of subsidiaries is the group’s share of profit 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. The financial information presented in the following tables for BP Exploration (Alaska) Inc. for all years includes equity income arising from subsidiaries of BP Exploration (Alaska) Inc. some of which operate outside of Alaska and excludes the BP group’s midstream operations in Alaska that are reported through different legal entities and that are included within the ‘other subsidiaries’ column in these tables. BP p.l.c. also fully and unconditionally guarantees securities issued by BP Capital Markets p.l.c. and BP Capital Markets America Inc. These companies are 100%- owned finance subsidiaries of BP p.l.c.

Issuer

Guarantor

Income statement

BP
Exploration
(Alaska) Inc.

BP p.l.c.

Other
subsidiaries

Eliminations
and
reclassifications

BP
group

$ million

First half 2015

Sales and other operating revenues

1,918

—

114,832

(1,908

)

114,842

Earnings from joint ventures – after interest and tax

—

260

—

260

Earnings from associates – after interest and tax

—

1,032

—

1,032

Equity-accounted income of subsidiaries – after interest and tax

—

(2,645

)

—

2,645

—

Interest and other income

345

(100

)

315

Gains on sale of businesses and fixed assets

—

271

—

271

Total revenues and other income

1,929

(2,586

)

116,740

637

116,720

Purchases

800

—

83,792

(1,908

)

82,684

Production and manufacturing expenses

670

—

23,515

—

24,185

Production and similar taxes

—

507

—

535

Depreciation, depletion and amortization

219

—

7,382

—

7,601

Impairment and losses on sale of businesses and fixed assets

—

471

—

483

Exploration expense

—

1,074

—

1,074

Distribution and administration expenses

632

5,137

(25

)

5,772

Profit (loss) before interest and taxation

172

(3,218

)

(5,138

)

2,570

(5,614

)

Finance costs

608

(75

)

570

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

—

142

—

152

Profit (loss) before taxation

156

(3,249

)

(5,888

)

2,645

(6,336

)

Taxation

(28

)

(3,204

)

—

(3,204

)

Profit (loss) for the period

128

(3,221

)

(2,684

)

2,645

(3,132

)

Attributable to

BP shareholders

128

(3,221

)

(2,773

)

2,645

(3,221

)

Non-controlling interests

—

128

(3,221

)

(2,684

)

2,645

(3,132

)

Financial statements (continued)

Notes

11.

Condensed consolidating information (continued)


	Issuer		Guarantor
Statement of comprehensive income	BP Exploration (Alaska) Inc.		BP p.l.c.			Other subsidiaries			Eliminations and reclassifications			BP group
$ million
First half 2015
Profit (loss) for the period		128		(3,221	)		(2,684	)		2,645			(3,132	)
Other comprehensive income		—		1,216			(228	)		—			988
Equity-accounted other comprehensive income of subsidiaries		—		(214	)		—			214			—

Total comprehensive income		128		(2,219	)		(2,912	)		2,859			(2,144	)

Attributable to
BP shareholders		128		(2,219	)		(2,987	)		2,859			(2,219	)
Non-controlling interests		—		—			75			—			75

		128		(2,219	)		(2,912	)		2,859			(2,144	)


	Issuer		Guarantor
Income statement	BP Exploration (Alaska) Inc.		BP p.l.c.			Other subsidiaries			Eliminations and reclassifications			BP group
$ million
First half 2014
Sales and other operating revenues		3,545		—			185,667			(3,545	)		185,667
Earnings from joint ventures – after interest and tax		—		—			270			—			270
Earnings from associates – after interest and tax		—		—			2,011			—			2,011
Equity-accounted income of subsidiaries – after interest and tax		—		7,290			—			(7,290	)		—
Interest and other income		1		96			511			(120	)		488
Gains on sale of businesses and fixed assets		—		—			379			—			379

Total revenues and other income		3,546		7,386			188,838			(10,955	)		188,815

Purchases		1,298		—			148,251			(3,545	)		146,004
Production and manufacturing expenses		829		—			12,982			—			13,811
Production and similar taxes		433		—			1,369			—			1,802
Depreciation, depletion and amortization		313		—			7,028			—			7,341
Impairment and losses on sale of businesses and fixed assets		69		—			1,131			—			1,200
Exploration expense		—		—			1,337			—			1,337
Distribution and administration expenses		18		487			5,700			(25	)		6,180

Profit (loss) before interest and taxation		586		6,899			11,040			(7,385	)		11,140
Finance costs		29		12			618			(95	)		564
Net finance expense (income) relating to pensions and other post-retirement benefits		—		(25	)		184			—			159

Profit (loss) before taxation		557		6,912			10,238			(7,290	)		10,417
Taxation		233		15			3,117			—			3,365

Profit (loss) for the period		324		6,897			7,121			(7,290	)		7,052

Attributable to
BP shareholders		324		6,897			6,966			(7,290	)		6,897
Non-controlling interests		—		—			155			—			155

		324		6,897			7,121			(7,290	)		7,052

Financial statements (continued)

Notes

11.

Condensed consolidating information (continued)


	Issuer		Guarantor
Statement of comprehensive income	BP Exploration (Alaska) Inc.		BP p.l.c.			Other subsidiaries		Eliminations and reclassifications			BP group
$ million
First half 2014
Profit (loss) for the period		324		6,897			7,121		(7,290	)		7,052
Other comprehensive income		—		(474	)		93		—			(381	)
Equity-accounted other comprehensive income of subsidiaries		—		86			—		(86	)		—

Total comprehensive income		324		6,509			7,214		(7,376	)		6,671

Attributable to
BP shareholders		324		6,509			7,052		(7,376	)		6,509
Non-controlling interests		—		—			162		—			162

		324		6,509			7,214		(7,376	)		6,671

Financial statements (continued)

Notes

11.

Condensed consolidating information (continued)

Issuer

Guarantor

Balance sheet

BP
Exploration
(Alaska) Inc

BP p.l.c.

Other
subsidiaries

Eliminations
and
reclassifications

BP
group

$ million

At 30 June 2015

Non-current assets

Property, plant and equipment

8,188

—

122,471

—

130,659

Goodwill

—

11,837

—

11,837

Intangible assets

510

—

18,901

—

19,411

Investments in joint ventures

—

9,037

—

9,037

Investments in associates

—

11,338

—

11,340

Other investments

—

1,108

—

1,108

Subsidiaries – equity-accounted basis

—

136,001

—

(136,001

)

—

Fixed assets

8,698

136,003

174,692

(136,001

)

183,392

Loans

—

5,040

(4,464

)

584

Trade and other receivables

—

2,310

—

2,310

Derivative financial instruments

—

3,965

—

3,965

Prepayments

—

992

—

999

Deferred tax assets

—

2,011

—

2,011

Defined benefit pension plan surpluses

—

948

275

—

1,223

8,713

136,951

189,285

(140,465

)

194,484

Current assets

Loans

—

325

—

325

Inventories

355

—

19,679

—

20,034

Trade and other receivables

9,839

3,071

33,845

(15,279

)

31,476

Derivative financial instruments

—

3,599

—

3,599

Prepayments

105

—

1,794

—

1,899

Current tax receivable

—

731

—

731

Other investments

—

294

—

294

Cash and cash equivalents

—

32,585

—

32,589

10,299

3,075

92,852

(15,279

)

90,947

Total assets

19,012

140,026

282,137

(155,744

)

285,431

Current liabilities

Trade and other payables

978

2,539

51,839

(15,279

)

40,077

Derivative financial instruments

—

2,863

—

2,863

Accruals

5,665

—

5,770

Finance debt

—

9,110

—

9,110

Current tax payable

1,781

—

1,881

Provisions

—

5,665

—

5,666

1,158

2,565

76,923

(15,279

)

65,367

Non-current liabilities

Other payables

4,448

2,948

(4,464

)

2,942

Derivative financial instruments

—

3,847

—

3,847

Accruals

—

102

835

—

937

Finance debt

—

47,994

—

47,994

Deferred tax liabilities

1,254

—

8,721

—

9,975

Provisions

2,078

—

34,961

—

37,039

Defined benefit pension plan and other post-retirement benefit plan deficits

—

282

9,697

—

9,979

3,342

4,832

109,003

(4,464

)

112,713

Total liabilities

4,500

7,397

185,926

(19,743

)

178,080

Net assets

14,512

132,629

96,211

(136,001

)

107,351

Equity

BP shareholders’ equity

14,512

132,629

94,979

(136,001

)

106,119

Non-controlling interests

—

1,232

—

1,232

14,512

132,629

96,211

(136,001

)

107,351

Financial statements (continued)

Notes

11.

Condensed consolidating information (continued)


	Issuer		Guarantor
Balance sheet	BP Exploration (Alaska) Inc		BP p.l.c.		Other subsidiaries		Eliminations and reclassifications			BP group
$ million
At 30 June 2014
Non-current assets
Property, plant and equipment		7,393		—		128,461		—			135,854
Goodwill		—		—		12,197		—			12,197
Intangible assets		432		—		21,499		—			21,931
Investments in joint ventures		—		—		9,173		—			9,173
Investments in associates		—		2		17,368		—			17,370
Other investments		—		—		1,270		—			1,270
Subsidiaries – equity-accounted basis		—		154,603		—		(154,603	)		—

Fixed assets		7,825		154,605		189,968		(154,603	)		197,795
Loans		3		—		5,280		(4,602	)		681
Trade and other receivables		—		—		5,782		—			5,782
Derivative financial instruments		—		—		3,609		—			3,609
Prepayments		17		—		966		—			983
Deferred tax assets		—		—		1,308		—			1,308
Defined benefit pension plan surpluses		—		852		126		—			978

		7,845		155,457		207,039		(159,205	)		211,136

Current assets
Loans		—		—		334		—			334
Inventories		466		—		28,976		—			29,442
Trade and other receivables		9,661		13,499		44,917		(28,021	)		40,056
Derivative financial instruments		—		—		2,852		—			2,852
Prepayments		161		—		1,469		—			1,630
Current tax receivable		—		5		643		—			648
Other investments		—		—		376		—			376
Cash and cash equivalents		—		52		27,454		—			27,506

		10,288		13,556		107,021		(28,021	)		102,844

Assets classified as held for sale		1,343		—		132		—			1,475

		11,631		13,556		107,153		(28,021	)		104,319

Total assets		19,476		169,013		314,192		(187,226	)		315,455

Current liabilities
Trade and other payables		1,201		5,122		71,723		(28,021	)		50,025
Derivative financial instruments		—		—		2,323		—			2,323
Accruals		105		551		6,589		—			7,245
Finance debt		—		—		7,570		—			7,570
Current tax payable		210		—		2,176		—			2,386
Provisions		2		—		4,452		—			4,454

		1,518		5,673		94,833		(28,021	)		74,003

Liabilities directly associated with assets classified as held for sale		359		—		69		—			428

		1,877		5,673		94,902		(28,021	)		74,431

Non-current liabilities
Other payables		11		4,590		3,653		(4,602	)		3,652
Derivative financial instruments		—		—		1,765		—			1,765
Accruals		—		91		716		—			807
Finance debt		—		—		45,336		—			45,336
Deferred tax liabilities		1,584		—		16,744		—			18,328
Provisions		1,764		—		26,440		—			28,204
Defined benefit pension plan and other post-retirement benefit plan deficits		—		288		9,666		—			9,954

		3,359		4,969		104,320		(4,602	)		108,046

Total liabilities		5,236		10,642		199,222		(32,623	)		182,477

Net assets		14,240		158,371		114,970		(154,603	)		132,978

Equity
BP shareholders’ equity		14,240		158,371		113,853		(154,603	)		131,861
Non-controlling interests		—		—		1,117		—			1,117

		14,240		158,371		114,970		(154,603	)		132,978

Financial statements (continued)

Notes

11.

Condensed consolidating information (continued)


	Issuer			Guarantor
Cash flow statement	BP Exploration (Alaska) Inc			BP p.l.c.			Other subsidiaries			Eliminations and reclassifications			BP group
$ million
First half 2015
Net cash provided by operating activities		455			3,373			4,319			(3	)		8,144
Net cash used in investing activities		(455	)		—			(6,818	)		—			(7,273	)
Net cash provided by (used in) financing activities		—			(3,400	)		5,689			3			2,292
Currency translation differences relating to cash and cash equivalents		—			—			(337	)		—			(337	)

Increase (decrease) in cash and cash equivalents		—			(27	)		2,853			—			2,826
Cash and cash equivalents at beginning of period		—			31			29,732			—			29,763

Cash and cash equivalents at end of period		—			4			32,585			—			32,589


	Issuer			Guarantor
Cash flow statement	BP Exploration (Alaska) Inc			BP p.l.c.			Other subsidiaries			Eliminations and reclassifications			BP group
$ million
First half 2014
Net cash provided by operating activities		361			10,218			5,535			(6	)		16,108
Net cash used in investing activities		(361	)		(5,000	)		(4,338	)		—			(9,699	)
Net cash provided by (used in) financing activities		—			(5,172	)		3,739			6			(1,427	)
Currency translation differences relating to cash and cash equivalents		—			—			4			—			4

Increase in cash and cash equivalents		—			46			4,940			—			4,986
Cash and cash equivalents at beginning of period		—			6			22,514			—			22,520

Cash and cash equivalents at end of period		—			52			27,454			—			27,506

Additional information

Capital expenditure and acquisitions


Second quarter 2014		Second quarter 2015		$ million	First half 2015		First half 2014
				By segment
				Upstream
	1,435		991	US		2,126		3,133
	3,351		3,112	Non-US^(a)(b)		6,008		7,050

	4,786		4,103			8,134		10,183

				Downstream
	232		190	US		335		438
	378		306	Non-US		505		722

	610		496			840		1,160

				Other businesses and corporate
	13		6	US		22		16
	204		53	Non-US		127		339

	217		59			149		355

	5,613		4,658			9,123		11,698

				By geographical area
	1,680		1,187	US		2,483		3,587
	3,933		3,471	Non-US^(a)(b)		6,640		8,111

	5,613		4,658			9,123		11,698

				Included above:
	10		15	Acquisitions and asset exchanges		43		246
	—		150	Other inorganic capital expenditure^(a)(b)		150		442

^(a)	First half 2014 includes $442 million relating to the purchase of additional 3.3% equity in Shah Deniz, Azerbaijan and the South Caucasus Pipeline.

^(b)	Second quarter and first half 2015 includes a $150-million deposit paid relating to the agreed purchase of a 20% participatory interest in Taas-Yuryakh Neftegazodobycha, a Rosneft subsidiary.

Capital expenditure shown in the table above is presented on an accruals basis.

Additional information (continued)

Non-operating items*


Second quarter 2014			Second quarter 2015			$ million	First half 2015			First half 2014
						Upstream
	(527	)		(194	)	Impairment and gain (loss) on sale of businesses and fixed assets		(307	)		(643	)
	—			—		Environmental and other provisions		11			—
	—			(67	)	Restructuring, integration and rationalization costs		(248	)		—
	32			21		Fair value gain (loss) on embedded derivatives		62			130
	(21	)		4		Other		4			273

	(516	)		(236	)			(478	)		(240	)

						Downstream
	79			68		Impairment and gain (loss) on sale of businesses and fixed assets		134			(176

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