SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    Form 6-K

                            Report of Foreign Issuer

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


                       for the period ended March 31, 2003


                                    BP p.l.c.
                 (Translation of registrant's name into English)


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


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


              Form 20-F        |X|           Form 40-F
                         -----------------             -----------------


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


                    Yes                             No        |X|
                         -----------------             -----------------


THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE  INCORPORATED  BY REFERENCE IN THE
PROSPECTUS  INCLUDED  IN THE  REGISTRATION  STATEMENT  ON  FORM  F-3  (FILE  NO.
333-9790) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON
FORM F-3 (FILE NO.  333-65996)  OF BP p.l.c.,  THE  PROSPECTUS  INCLUDED  IN THE
REGISTRATION  STATEMENT ON FORM F-3 (FILE NO. 333-83180) OF BP AUSTRALIA CAPITAL
MARKETS  LIMITED,  BP CANADA FINANCE  COMPANY,  BP CAPITAL  MARKETS  p.l.c.,  BP
CAPITAL MARKETS AMERICA INC. AND BP p.l.c.,  THE REGISTRATION  STATEMENT ON FORM
S-8 (FILE NO.  33-21868) OF BP p.l.c.,  THE  REGISTRATION  STATEMENT ON FORM S-8
(FILE NO. 333-9020) OF BP p.l.c.,  THE REGISTRATION  STATEMENT ON FORM S-8 (FILE
NO.  333-9798) OF BP p.l.c.,  THE  REGISTRATION  STATEMENT ON FORM S-8 (FILE NO.
333-79399)  OF BP  p.l.c.,  THE  REGISTRATION  STATEMENT  ON FORM S-8  (FILE NO.
333-34968)  OF BP  p.l.c.,  THE  REGISTRATION  STATEMENT  ON FORM S-8  (FILE NO.
333-67206)  OF BP  p.l.c.,  THE  REGISTRATION  STATEMENT  ON FORM S-8  (FILE NO.
333-74414)  OF BP  p.l.c.,  THE  REGISTRATION  STATEMENT  ON FORM S-8  (FILE NO.
333-103924)  OF BP  p.l.c.,  THE  REGISTRATION  STATEMENT  ON FORM S-8 (FILE NO.
333-102583) OF BP p.l.c.  AND THE  REGISTRATION  STATEMENT ON FORM S-8 (FILE NO.
333-103923)  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.

Page 1

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

GROUP RESULTS JANUARY - MARCH 2003

                                                          Three months ended
                                                               March 31
                                                             (Unaudited)
                                                        2003               2002
                                                      ------             ------
                                                             ($ million)
Turnover                                              63,788             36,290
                                                      ======             ======

Profit for the period                                  4,267              1,296
Exceptional items, net of tax                           (340)                70
                                                      ------             ------
Profit before exceptional items                        3,927              1,366
                                                      ======             ======

Per Ordinary Share - cents
     Profit for the period                             19.11               5.78
                                                      ======             ======
Dividends per Ordinary Share - cents                    6.25               5.75
                                                      ======             ======

The following  discussion  should be read in conjunction  with the  consolidated
financial  statements and the related notes provided  elsewhere in this Form 6-K
and with the information,  including the consolidated  financial  statements and
related notes, for the year ended December 31, 2002 in BP p.l.c.'s Annual Report
on Form 20-F for the year ended December 31, 2002.

The first quarter trading  environment was significantly  more favourable than a
year ago for both  Exploration  and Production  and Refining and Marketing.  The
Brent oil price  increased more than $10.00 per barrel;  the Henry Hub gas price
and the refining  Global  Indicator  Margin were more than double the level of a
year ago.

Turnover for the three months ended March 31, 2003 was $63,788 million  compared
with $36,290  million for 2002.  The increase in turnover for the first  quarter
reflects higher oil, natural gas and product prices,  higher production,  higher
sales volumes and a stronger Euro.

Profit for the three  months ended March 31, 2003 was $4,267  million,  compared
with $1,296 million in the same period of 2002.

Exceptional  items  are  gains  and  losses  on the  sale of  fixed  assets  and
businesses or  terminations of operations.  Net  exceptional  gains in the first
quarter of 2003 were $394  million  ($340  million  after  tax) and  principally
relate to net gains from the sale of certain upstream interests. Net exceptional
losses in the first  quarter of 2002 were $109 million  ($70 million  after tax)
and included the loss on closure of certain polypropylene facilities in Texas.

Profit before  exceptional  items was $3,927  million for the three months ended
March 31, 2003,  compared with $1,366 million for the equivalent period of 2002.
BP  average  liquids  and  natural  gas  realizations  were up by more than half
compared with a year ago, with  significant  improvement in refining margins and
US retail margins. Improved volumes and cost efficiencies were also reflected in
the first quarter results.

For the three months ended March 31, 2003 and 2002, inventory holding gains were
$799 million and $473 million,  respectively.  Inventory holding gains or losses
represent  the  difference  between  the  replacement  cost  of  sales  and  the
historical cost of sales calculated using the first-in first-out method.

Profit  before  exceptional  items for the three  months ended March 31, 2003 is
after charging impairment of $103 million related to the Yacheng field in China,
costs of $90 million in respect of our restructuring activities in North America
and the UK and a $49 million  write-down of the Viscount  asset in the North Sea
in Exploration and Production;  $18 million Veba  integration  costs in Refining
and Marketing and includes a $130 million  credit  related to tax  restructuring
benefits.  Profit before  exceptional items for the three months ended March 31,
2002  is  after  charging   severance  costs  of  $72  million   resulting  from
restructuring  in North  America and the North Sea and  litigation  costs of $55
million in Exploration and Production;  Veba integration costs of $26 million in
Refining  and  Marketing,  and  costs  of $32  million  related  to  major  site
restructuring and Solvay and Erdolchemie integration in Chemicals.

Page 2

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

Interest  expense for the three  months  ended  March 31, 2003 was $220  million
compared with $333 million in the same period of 2002,  reflecting lower average
debt and lower interest rates.

Net taxation,  other than production  taxes,  charged for the three months ended
March 31, 2003 was $1,805  million  compared with $753 million in the equivalent
period last year. The tax on exceptional  items was $54 million  compared with a
credit of $39 million for the first quarter of 2002.  The effective tax rate was
30% for the  three  months  ended  March  31,  2003,  compared  with 36% for the
equivalent  period of 2002.  The  reduction in the rate  reflects  increased tax
restructuring benefits, higher inventory holding gains (which are not taxable in
certain jurisdictions), a rateably lower impact of goodwill amortization and the
depreciation  charge on uplifted  asset  values (for which no tax  deduction  is
available),  and nil tax  charge  on  certain  upstream  disposals  in the first
quarter of 2003.

Capital expenditure in the first quarter of 2003 was $2.9 billion; there were no
acquisitions  during the quarter.  Capital  expenditure and acquisitions for the
first  quarter  of  2002  was  $5.7  billion,  including  $2.6  billion  for the
acquisition of 51% of Veba Oil; excluding  acquisitions  capital expenditure was
$3.1 billion.  Disposal  proceeds in the first quarter of 2003 were $2.5 billion
compared with $0.3 billion for the equivalent period in 2002.

Net cash inflow for the three  months  ended  March 31,  2003 was $3.2  billion,
compared  with an outflow of $2.4  billion  for the  equivalent  period of 2002,
reflecting  higher  operating  cash flow,  higher  disposal  proceeds  and lower
acquisition spending. Net cash inflow from operating activities was $6.0 billion
for the three  months ended March 31,  2003,  compared  with $3.6 billion in the
equivalent  period in 2002,  reflecting  higher profit and  depreciation  partly
offset by a higher requirement for working capital.

Net debt at March 31,  2003 was $17.7  billion  compared  with $20.3  billion at
December  31,  2002.  The ratio of net debt to net debt plus  equity  was 20% at
March 31, 2003  compared  with 22% at December  31,  2002.  This ratio shows the
proportion  of debt and equity used to finance our  operations,  and can also be
used to measure  borrowing  capacity.  In  addition to  reported  debt,  BP uses
conventional  off balance sheet sources of finance such as operating  leases and
joint venture and associated undertaking borrowings.

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

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

The return on average  capital  employed  was 19% for the first  quarter of 2003
compared with 7% for the same period in 2002. Return on average capital employed
is the ratio of profit including minority  shareholders'  interest and excluding
post-tax  interest on finance debt to average  capital  employed for the period.
Capital   employed  is  the  total  of  BP  shareholders'   interest,   minority
shareholders'  interest and finance debt. This performance measure is useful for
shareholders  and management as an indication of capital  productivity  over the
long term.  For further  information on the return on average  capital  employed
calculation see page 51 of this report.

BP  announced a first  quarterly  dividend  for 2003 of 6.25 cents per  ordinary
share. Holders of ordinary shares will receive 3.947 pence per share and holders
of American  Depositary  Receipts (ADRs) $0.375 per ADS. The dividend is payable
on June 9, 2003 to shareholders on the register on May 16, 2003. Participants in
the Dividend  Reinvestment Plan or the dividend  reinvestment facility in the US
Direct Access Plan will receive the dividend in the form of shares, also on June
9, 2003. The company  repurchased for cancellation 155 million of its own shares
during the quarter, at a cost of $999 million.

Page 3

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

DETAILED REVIEW OF BUSINESSES (EXCLUDING EXCEPTIONAL ITEMS)

EXPLORATION AND PRODUCTION



                                                                               Three months ended
                                                                                    March 31
                                                                                  (Unaudited)
                                                                             2003              2002
                                                                           ------            ------
                                                                                 ($ million)
                                                                                     
Turnover                                                    - $m            9,068             5,638
Total operating profit                                      - $m            4,332             1,931
Results include:
Exploration expense                                         - $m              112               124
Of which: Exploration expenditure written off               - $m               50                59

Key Statistics:
Liquids(a)               Average prices realized by BP      - $/bbl         29.82             18.77
                         Production                         - mb/d          2,063             1,989
Natural gas              Average prices realized by BP      - $/mcf          3.87              2.27
                         Production                         - mmcf/d        9,017             8,746

Brent oil price                                             - $/bbl         31.47             21.13
West Texas Intermediate oil price                           - $/bbl         34.00             21.54
Alaska North Slope US West Coast                            - $/bbl         33.16             19.76
Henry Hub gas price (b)                                     - $/mmBtu        6.53              2.35
UK Gas - National Balancing Point                           - p/therm       21.28             19.22

---------------

(a)  Crude oil and natural gas liquids

(b)  Henry Hub First of the Month Index

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

Turnover for the three months ended March 31, 2003 was $9,068  million  compared
with  $5,638  million in the  corresponding  period in 2002,  reflecting  higher
liquids and natural gas realizations as well as increased production.

Operating  profit for the three months  ended March 31, 2003 was $4,332  million
compared with $1,931 million for the  equivalent  period in 2002. The result for
the first quarter 2003 is after charging  impairment of $103 million  related to
the Yacheng  field in China,  costs of $90  million in respect of  restructuring
activities  in North  America  and the UK and a $49  million  write-down  of the
Viscount  asset in the North Sea.  The  result for the first  quarter of 2002 is
after charging  severance costs of $72 million  resulting from  restructuring in
North America and the North Sea and litigation costs of $55 million.

The result for the quarter benefited from strong  realizations,  with liquids up
$11.05/bbl and natural gas up $1.60/mcf on a year ago.  North  American  natural
gas  realizations  lagged the  increase  in the Henry Hub marker  price,  as the
effects of cold weather and low inventories were partly offset by an increase in
regional differentials caused by pipeline constraints. The improved realizations
were partly  offset by a charge of $125 million for  Unrealized  Profit in Stock
(UPIS) to remove the  additional  upstream  margin from  downstream  inventories
following  an increase in the Alaska North Slope oil price.  This  compares to a
charge of $56 million in the equivalent quarter last year.

First  quarter  production  was a record,  increasing by over 3% to 3,618 mboe/d
compared  with a year  ago as a  result  of the  ramp  up of  production  in the
Deepwater Gulf of Mexico and Trinidad as new projects  continue to be added, and
the impact of our  increased  interest in Sidanco,  partly offset by declines in
mature areas.  The impact of acquisition  and divestment  activity over the past
year has had a broadly neutral effect on the quarter on quarter comparison.

On April 1, 2003 two new  discoveries  were  announced in Angola's deep offshore
Block  17:  Acacia-1  and  Hortensia-1.  During  the  quarter  we  approved  the
development of the Shah Deniz project in Azerbaijan,  Greater Plutonio and Dalia
in Angola and Rhum in the North Sea.

Page 4

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


EXPLORATION AND PRODUCTION (concluded)

We  completed  in the quarter  the  divestment  of shallow  water Gulf of Mexico
assets to Apache and the  exchange of our interest in Block A-18 in the Malaysia
Thailand Joint  Development  Area for Amerada Hess's  interests in Colombia.  In
addition,  we  completed  the  sale of  other US  assets.  On  April 2,  2003 we
completed  the sale of the  Forties  oil field in the North  Sea to  Apache.  In
February,  we announced  agreements  with Perenco to sell a package of North Sea
gas production  assets and interests in Boqueron and Desarrollo  Zuli Occidental
(DZO) in Venezuela.

In February, we called for redemption our $420 million Exchangeable Bonds, which
were  exchangeable  for Lukoil  ADSs.  Bondholders  converted to ADSs before the
redemption date. This transaction completed the monetization of our stake in the
Russian  oil  company  Lukoil.  The stake in Lukoil  was  obtained  through  the
acquisition of ARCO.

Repsol  exercised  their  option in  January  to  acquire  a further  20% of our
upstream  interests in  Trinidad.  Our interest in BP Trinidad and Tobago LLC is
now 70% and the transaction  provides further leverage to access the gas markets
and growth  opportunities in Spain. We also sold 12.5% of the Tangguh  liquefied
natural gas project to China  National  Offshore Oil  Corporation as part of our
strategy to serve gas markets in Southern China.

Page 5

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

GAS, POWER AND RENEWABLES

                                                           Three months ended
                                                                March 31
                                                              (Unaudited)
                                                         2003              2002
                                                       ------            ------
                                                             ($ million)
Turnover                                - $m           17,998             7,768
Total operating profit                  - $m              221               115

Turnover for the three months ended March 31, 2003 was $17,998 million, compared
with $7,768  million for the same period in 2002.  The  increase for the quarter
reflects higher natural gas prices and sales volumes.

Operating  profit for the three  months  ended March 31,  2003 was $221  million
compared  with $115  million  for the same period in 2002.  The result  reflects
improved  marketing  and trading and  natural  gas liquids  performance,  partly
offset by the absence of a contribution from Ruhrgas.

Marketing  margins  were up  significantly  in  North  America  as a  result  of
prolonged  cold weather in the  northeast  and midwest  markets and an unusually
large draw-down of gas in storage. In addition,  North American gas volumes were
35% above the same period last year.  The global LNG business  continued to grow
profitably as supply and shipping  flexibility allowed the capture of additional
business in Asia and the USA. In Spain, the Bilbao electricity  generation plant
(BP 25%) was  commissioned  as part of our gas to power  strategy.  The LNG ship
British Innovator was delivered on March 29, 2003.

The first quarter natural gas liquids result was up due to higher liquids prices
and improved  margins on winter  propane  sales,  partly  offset by the negative
processing  margins that resulted from gas prices  increasing  more than liquids
prices.

In Renewables,  our solar business launched a new branded offer in California in
the USA.

Page 6

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


REFINING AND MARKETING
                                                           Three months ended
                                                                March 31
                                                              (Unaudited)
                                                         2003              2002
                                                       ------            ------
                                                             ($ million)
Turnover                                - $m           41,435            24,889
Total operating profit                  - $m            1,251               563
Total refined product sales             - mb/d          6,804             6,500
Refinery throughputs                    - mb/d          3,024             2,994
Global Indicator Refining Margin (a)    - $/bbl          4.52              1.64

---------------

(a)  The Global Indicator Refining Margin (GIM) is the average of seven regional
     indicator margins weighted for BP's crude refining capacity in each region.
     Each regional  indicator margin is based on a single  representative  crude
     with  product  yields  characteristic  of the  typical  level of  upgrading
     complexity.

Turnover for the three months ended March 31, 2003 was $41,435 million  compared
with  $24,889  million for the same period in the prior  year.  The  increase in
turnover for the first quarter is  principally  due to a stronger  Euro,  higher
product prices and an additional month of contribution from Veba.

Operating  profit for the three months  ended March 31, 2003 was $1,251  million
compared with $563 million for the corresponding  period of 2002. The result for
the first quarter of 2003 includes  inventory  holding gains of $620 million and
is after  charging  Veba  integration  costs of $18 million.  The result for the
first quarter of 2002 includes  inventory  holding gains of $495 million and was
after charging Veba integration costs of $26 million.

The increase in the result reflects improved  worldwide  refining margins,  with
some offset from higher utility  costs.  Refining  throughputs  increased by 1%.
During the quarter, BP commissioned three new clean fuels units.

The marketing  environment  reflected  margins at normal levels,  with US retail
margins  significantly  up from the  depressed  levels of a year ago.  Marketing
volumes were flat compared with a year ago.

During the quarter,  an additional 600 sites were  reimaged,  bringing the total
number of sites with the BP Helios to some 11,000 worldwide.

Page 7

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


CHEMICALS

                                                             Three months ended
                                                                  March 31
                                                                 (Unaudited)
                                                            2003           2002
                                                          ------         ------
                                                             ($ million)
Turnover                                - $m               3,938          2,642
Total operating profit                  - $m                 285             47
Production (a)                          - kte              6,980          6,611
Chemicals Indicator Margin (b)          - $/te                90(c)          80

--------------

(a)  Includes  BP share of joint  ventures,  associated  undertakings  and other
     interests in production.

(b)  The Chemicals  Indicator  Margin (CIM) is a weighted  average of externally
     based  product  margins.  It is based on market  data  collected  by Nexant
     (formerly Chem Systems) in their quarterly market  analyses,  then weighted
     based  on BP's  product  portfolio.  While  it does not  cover  our  entire
     portfolio,  it includes a broad range of  products.  Among the products and
     businesses  covered  in the  CIM  are  the  olefins  and  derivatives,  the
     aromatics and derivatives,  linear alpha-olefins (LAOs), acetic acid, vinyl
     acetate monomers and nitriles. Not included are fabrics and fibres, plastic
     fabrications,    poly   alpha-olefins   (PAOs),   anhydrides,    speciality
     intermediates,  and  the  remaining  parts  of  the  solvents  and  acetyls
     businesses.

(c)  Provisional. The data for the fourth quarter is based on two months' actual
     and one month of provisional data.

Turnover for the three months ended March 31, 2003 was $3,938  million  compared
with $2,642 million for the equivalent  period in 2002. The increase in turnover
for the first quarter primarily  reflects increased prices and higher production
as a result of improved plant utilization and organic growth.

Operating  profit for the three months ended March 31, 2003,  was $285  million,
compared with $47 million for the equivalent  period in 2002. The result for the
first quarter of 2003  includes  inventory  holding  gains of $146 million;  the
result for the first quarter of 2002 is after charging  inventory holding losses
of $29 million and costs of $32 million related to major site  restructuring and
Solvay  and  Erdolchemie  integration.  In the first  quarter of 2003 there were
better margins,  increased  production and improved unit costs compared with the
corresponding period in 2002.

Chemicals  production of 6,980 thousand tonnes in the first quarter was a record
and 369 thousand tonnes above a year ago. Higher  production was due to improved
plant utilization and organic growth,  including one of our new Asian PTA plants
coming on stream.

During  the  quarter,  we  continued  to reduce  cash  fixed  costs per tonne of
capacity through planned cost reductions.

As  part  of the  ongoing  restructuring  of our  portfolio,  we  completed  the
divestment of the two remaining  Burmah  Castrol  chemicals  businesses,  Fosroc
Mining and Sericol.  We also  announced our  intention to divest our  speciality
intermediates business (trimellitic  anhydride,  purified isophthalic acid (PIA)
and maleic  anhydride)  based in Joliet,  Illinois in the USA, plus the economic
interest in our European PIA  business.  PT Petrokimia  Nusantara  Interindo (BP
75%),  which  operates  a  stand-alone   polyethylene   manufacturing  plant  in
Indonesia, was sold to Indika Group on April 25, 2003.

Page 8

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

OTHER BUSINESSES AND CORPORATE

                                                           Three months ended
                                                               March 31
                                                              (Unaudited)
                                                         2003              2002
                                                        -----             -----
                                                              ($ million)
Turnover                                    - $m          111               135
Operating (loss)                            - $m         (165)             (125)

Other  businesses and corporate  comprises  Finance,  the Group's coal asset and
aluminium asset, its investments in PetroChina and Sinopec,  interest income and
costs relating to corporate activities.

EXCEPTIONAL ITEMS
                                                           Three months ended
                                                               March 31
                                                              (Unaudited)
                                                         2003              2002
                                                        -----             -----
                                                              ($ million)
Profit (loss) on sale of fixed assets and
businesses or termination of operations     - $m          394              (109)
Taxation credit (charge)                    - $m          (54)               39
                                                        -----             -----
Exceptional items after taxation            - $m          340               (70)
                                                        -----             -----

Exceptional items for the first quarter principally relate to net gains from the
sale of certain upstream interests.

OUTLOOK

World  economic  activity  has remained  weak during the first  quarter with few
signs of an imminent  recovery.  Confidence has declined in the USA,  Europe and
more  recently  in  parts of  Asia.  OECD  industrial  production  has  remained
essentially flat.

Oil  markets  have been driven by the impact of war in Iraq,  together  with the
loss of  Venezuelan  and  Nigerian  exports  and a cold  winter in the  northern
hemisphere.   Dated  Brent  averaged  $31.47/bbl  in  the  first  quarter.  OECD
commercial  oil  inventories  declined  to record  lows in  February in terms of
forward  days'  cover,  but  appear to have  stabilized  recently.  Rising  OPEC
production  from the  middle of the first  quarter  compensated  for the loss of
Iraqi  exports.  Crude  prices  have since  fallen back to around  $25/bbl.  Oil
supplies have proven adequate even without the release of strategic stocks.  The
prospect for prices  depends  upon a  particularly  wide range of  uncertainties
which  include  the timing and level of the return of Iraqi oil  exports and the
extent to which OPEC's earlier production increases are reversed.

US natural gas prices have fallen back from the high levels of the first quarter
(Henry Hub first of month  index  average of  $6.53/mmbtu)  after the end of the
winter  heating  season.  Prices  remain  above  fuel oil  parity in face of the
challenge  to refill gas in storage  while  production  continues  to fall.  The
opening  of new  pipeline  infrastructure  later in the second  quarter  has the
potential to narrow differentials in the Rockies.

Refining  margins have begun the second  quarter  somewhat below the average for
the first  quarter  (BP GIM  $4.52/bbl)  but remain firm in most  regions.  OECD
commercial  product  inventories  are at five  year  lows  and may  continue  to
underpin refining  fundamentals in the short term.  Retail margins  strengthened
towards the end of the first  quarter,  although  prices to the consumer are now
falling in line with product prices.

Chemicals  margins  have been sharply  lower than in the fourth  quarter of last
year, due to feedstock costs rising more rapidly than prices for the majority of
petrochemical  products.  Recent  declines  in oil prices  have begun to restore
margins although weak demand conditions persist.

Consistent with our financial framework and plan for the year, we expect capital
investment  to be in the range of $14 to 14.5 billion,  excluding  acquisitions.
This  excludes  the  initial  cash  payment  due on  completion  of  the  TNK-BP
transaction,  expected to complete in the summer. We expect gearing to return to
the lower half of our 21 to 30% target range following this transaction.

Page 9

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - concluded


FORWARD-LOOKING STATEMENTS

In order to utilize the 'Safe Harbor'  provisions  of the United States  Private
Securities  Litigation  Reform  Act  of  1995,  BP is  providing  the  following
cautionary  statement.  The foregoing  discussion,  in particular,  although not
limited to, the  statements  under  `Group  Results'  and the  statements  under
`Outlook',  with regard to hydrocarbon  production growth, the economic outlook,
trends in the trading  environment,  the timing of acquisitions and divestments,
the timing of new projects,  oil and gas prices and margins,  refining  margins,
retail margins,  realizations on gas sales,  inventory and product stock levels,
capacity  utilization,  capital  expenditure trends,  gearing,  working capital,
profitability,  results of  operation,  dividend  payments,  long term  purchase
commitments  and  liquidity or financial  position  are all  forward-looking  in
nature.  Forward-looking  statements  are also  identified  by such  phrases  as
`will',  `expects', `is expected to', `should', `may', `is likely to', `intends'
and `believes'.  By their nature,  forward-looking  statements  involve risk and
uncertainty  because they relate to events and depend on circumstances that will
occur in the future and are outside the control of BP. Actual results may differ
materially  from those expressed in such  statements,  depending on a variety of
factors,   including  the  specific   factors   identified  in  the  discussions
accompanying such forward-looking statements,  future levels of industry product
supply,  the  timing of  bringing  new  fields  onstream,  demand  and  pricing,
operational problems,  political stability and economic growth in relevant areas
of the world, development and use of new technology,  successful partnering, the
actions of  competitors,  the actions of third party suppliers of facilities and
services, natural disasters and other changes to business conditions,  prolonged
adverse weather  conditions,  wars and acts of terrorism or sabotage,  and other
factors  discussed  elsewhere in this report.  These and other factors may cause
actual results and  developments  to differ  materially  from those expressed or
implied by these forward-looking statements.  Additional information,  including
information  on factors  which may affect BP's  business,  is  contained in BP's
Annual  Report and Annual  Accounts for 2002 and the Annual  Report on Form 20-F
for 2002 filed with the US Securities and Exchange Commission.

2003 DIVIDENDS

On April 29, 2003, BP p.l.c.  announced a first  quarterly  dividend for 2003 of
6.25 cents per ordinary share of 25 cents (ordinary shares), representing $0.375
per American  Depositary  Share (ADS) amounting to $1,386 million in total.  The
record date for qualifying US resident holders of American  Depositary Shares as
well as holders of ordinary  shares is May 16, 2003,  with payment to be made on
June 9, 2003.

Under the former  US-UK  Income Tax Treaty,  dividends  paid to  qualifying  ADS
holders  entitled  them to a refund of a deemed UK tax credit  equal to 1/9th of
the announced  dividend.  This credit was exactly  offset by an amount deemed by
the former  US-UK Income Tax Treaty to be a UK  withholding  tax. The net effect
for  ADS  holders  was a cash  payment  equal  to the  amount  of the  announced
dividend,  a  potential  foreign  tax  credit  equal to  1/9th of the  announced
dividend,  and a gross dividend equal to the sum of those two amounts. Under the
new US-UK Tax Treaty, this deemed tax credit is no longer available on dividends
paid to qualifying ADS shareholders, beginning with the first quarterly dividend
for 2003.

A dividend  reinvestment  facility  is  available  for  holders of ADSs  through
JPMorgan  Chase  Bank  (formerly   known  as  Morgan  Guaranty  Trust  Company).
Participants  in the dividend  reinvestment  facility  included in the US Direct
Access Plan will receive the dividend in the form of shares on June 9, 2003.

Page 10

                           BP p.l.c. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME




                                                                         Three months ended
                                                                              March 31
                                                                             (Unaudited)
                                                                      2003                 2002
                                                                   -------              -------
                                                                           ($ million)
                                                                                   

Turnover - Note 2                                                   64,186               36,569
Less: joint ventures                                                   398                  279
                                                                   -------              -------
Group turnover                                                      63,788               36,290

Cost of sales                                                       54,439               31,078
Production taxes - Note 3                                              504                  247
                                                                   -------              -------
Gross profit                                                         8,845                4,965
Distribution and administration expenses                             3,244                 2,691
Exploration expense - Note 4                                           112                  124
                                                                   -------              -------
                                                                     5,489                2,150
Other income                                                           131                  125
                                                                   -------              -------
Group operating profit                                               5,620                2,275
Share of profits of joint ventures                                     118                   70
Share of profits of associated undertakings                            186                  186
                                                                   -------              -------
Total operating profit                                               5,924                2,531
Profit (loss) on sale of fixed assets and businesses
or termination of operations - Note 5                                  394                 (109)
                                                                   -------              -------
Profit before interest and tax                                       6,318                2,422
Interest expense - Note 6                                              220                  333
                                                                   -------              -------
Profit before taxation                                               6,098                2,089
Taxation - Note 7                                                    1,805                  753
                                                                   -------              -------
Profit after taxation                                                4,293                1,336
Minority shareholders' interest                                         26                   40
                                                                   -------              -------
Profit for the period (a)                                            4,267                1,296
                                                                   =======              =======
Earnings per ordinary share - cents (a)
     Basic                                                           19.11                 5.78
     Diluted                                                         19.05                 5.75
                                                                   -------              -------
Earnings per American depositary share - cents (a)
     Basic                                                          114.66                34.68
     Diluted                                                        114.30                34.50
                                                                ----------           ----------

Average number of outstanding ordinary shares (thousands)       22,326,486           22,402,868
                                                                ==========           ==========

---------------

(a)  A summary of the material  adjustments to profit for the period which would
     be required  if  generally  accepted  accounting  principles  in the United
     States had been applied instead of those  generally  accepted in the United
     Kingdom is given in Note 13.

Page 11

                           BP p.l.c. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET




                                                      March 31, 2003                        December 31, 2002
                                                        (Unaudited)
                                                  -----------------------                 -----------------------
                                                                           ($ million)
Fixed assets
                                                                                             
   Intangible assets                                             14,190                                  15,566
   Tangible assets                                               88,223                                  87,682
   Investments                                                   10,248                                  10,811
                                                               --------                                --------
                                                                112,661                                 114,059
Current assets
   Inventories                                       9,874                                   10,181
   Receivables                                      39,058                                   33,150
   Investments                                         228                                      215
   Cash at bank and in hand                          1,151                                    1,520
                                                  --------                                ---------
                                                    50,311                                   45,066
                                                  --------                                ---------

Current liabilities - falling due within one year
   Finance debt                                      6,400                                   10,086
   Accounts payable and accrued liabilities         40,614                                   36,215
                                                  --------                                ---------
                                                    47,014                                   46,301
                                                  --------                                ---------

Net current liabilities                                           3,297                                  (1,235)
                                                               --------                                --------
Total assets less current liabilities                           115,958                                 112,824

Noncurrent liabilities
   Finance debt                                     12,642                                   11,922
   Accounts payable and accrued liabilities          3,411                                    3,455
   Provisions for liabilities and charges
      Deferred tax                                  13,686                                   13,514
      Other                                         14,096                                   13,886
                                                  --------                                ---------
                                                                 43,835                                  42,777
                                                               --------                                --------
Net assets                                                       72,123                                  70,047
Minority shareholders' interest - equity                          1,047                                     638
                                                               --------                                --------

BP shareholders' interest (a) - Note 10                          71,076                                  69,409
                                                               ========                                ========

Represented by:
Capital shares
   Preference                                                        21                                      21
   Ordinary                                                       5,560                                   5,595
Paid-in surplus                                                   4,345                                   4,243
Merger reserve                                                   27,050                                  27,033
Retained earnings                                                33,944                                  32,344
Other reserves                                                      156                                     173
                                                               --------                                --------
                                                                 71,076                                  69,409
                                                               ========                                ========


---------------

(a)  A summary of the material  adjustments to BP  shareholders'  interest which
     would be required if generally accepted accounting principles in the United
     States had been applied instead of those  generally  accepted in the United
     Kingdom is given in Note 13.

Page 12

                           BP p.l.c. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS




                                                                           Three months ended
                                                                                March 31
                                                                              (Unaudited)
                                                                          2003              2002
                                                                        ------            ------
                                                                              ($ million)
                                                                                     
Net cash inflow from operating activities                                5,961             3,636
                                                                        ------            ------
Dividends from joint ventures                                               13                83
                                                                        ------            ------
Dividends from associated undertakings                                      55                53
                                                                        ------            ------
Servicing of finance and returns on investments
Interest received                                                           31                48
Interest paid                                                             (207)             (309)
Dividends received                                                           6                 2
Dividends paid to minority shareholders                                     (2)              (13)
                                                                        ------            ------
Net cash outflow from servicing of finance
and returns on investments                                                (172)             (272)
                                                                        ------            ------
Taxation
UK corporation tax                                                        (312)             (187)
Overseas tax                                                              (320)             (258)
                                                                        ------            ------
Tax paid                                                                  (632)             (445)
                                                                        ------            ------

Capital expenditure and financial investment
Payments for fixed assets                                               (2,877)           (2,799)
Proceeds from the sale of fixed assets                                   2,317               317
                                                                        ------            ------
Net cash outflow for capital expenditure and financial investment         (560)           (2,482)
                                                                        ------            ------

Acquisitions and disposals
Investments in associated undertakings                                    (186)             (143)
Acquisitions, net of cash acquired                                           -            (1,550)
Net investment in joint ventures                                           (14)              (46)
Proceeds from the sale of businesses                                       160                31
                                                                        ------            ------
Net cash outflow for acquisitions and disposals                            (40)           (1,708)
                                                                        ------            ------
Equity dividends paid                                                   (1,397)           (1,288)
                                                                        ------            ------
Net cash inflow (outflow)                                                3,228            (2,423)
                                                                        ======            ======

Financing                                                                3,593            (2,283)
Management of liquid resources                                              13              (165)
(Decrease) increase in cash                                               (378)               25
                                                                        ------            ------
                                                                         3,228            (2,423)
                                                                        ======            ======


---------------

(a)  This cash flow  statement has been  prepared in accordance  with UK GAAP. A
     cash flow statement presented on a SFAS 95 format is included in Note 13.

Page 13

                           BP p.l.c. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS - concluded




                                                                              Three months ended
                                                                                    March 31
                                                                                  (Unaudited)
                                                                            2003              2002
                                                                          ------            ------
                                                                                ($ million)
                                                                                       
Reconciliation of profit before interest
and tax to net cash inflow from operating activities
Profit before interest and tax                                             6,318             2,422
Depreciation and amounts provided                                          2,709             2,153
Exploration expenditure written off                                           50                59
Share of profits of joint ventures and associated undertakings              (304)             (256)
Interest and other income                                                    (48)              (63)
(Profit) loss on sale of fixed assets and businesses                        (394)              109
Charge for provisions                                                        202               169
Utilization of provisions                                                   (228)             (238)
Decrease (increase) in inventories                                           376              (496)
Increase in debtors                                                       (6,935)             (410)
Increase in creditors                                                      4,215               187
                                                                          ------            ------
Net cash inflow from operating activities                                  5,961             3,636
                                                                          ======            ======

Financing
Long-term borrowing                                                       (1,015)           (1,746)
Repayments of long-term borrowing                                            403               234
Short-term borrowing                                                        (626)           (3,499)
Repayments of short-term borrowing                                         3,899             2,819
                                                                          ------            ------
                                                                           2,661            (2,192)

Issue of ordinary share capital for employee share schemes                   (67)              (91)
Repurchase of ordinary share capital                                         999                 -
                                                                          ------            ------
Net cash inflow (outflow) from financing                                   3,593            (2,283)
                                                                          ======            ======


---------------

(a)  This cash flow  statement has been  prepared in accordance  with UK GAAP. A
     cash flow statement presented on a SFAS 95 format is included in Note 13.

Page 14

                           BP p.l.c. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   The  results for the interim  periods are  unaudited  and in the opinion of
     management include all adjustments necessary for a fair presentation of the
     results for the periods  presented.  The interim  financial  statements and
     notes  included  in this  Report  should  be read in  conjunction  with the
     consolidated  financial  statements  and  related  notes for the year ended
     December  31, 2002  included in BP's Annual  Report on Form 20-F filed with
     the Securities and Exchange Commission.



                                                                Three months ended
                                                                     March 31
                                                                   (Unaudited)
                                                              2003              2002
                                                           -------           -------
                                                                  ($ million)
                                                                         
2.   Turnover
     By business
     Exploration and Production                              9,068             5,638
     Gas, Power and Renewables                              17,998             7,768
     Refining and Marketing                                 41,435            24,889
     Chemicals                                               3,938             2,642
     Other businesses and corporate                            111               135
                                                           -------           -------
                                                            72,550            41,072
     Less: sales between businesses                          8,762             4,782
                                                           -------           -------
     Group excluding joint ventures                         63,788            36,290
     Share of sales by joint ventures                          398               279
                                                           -------           -------
                                                            64,186            36,569
                                                           =======           =======

     By geographical area
     Group excluding joint ventures
     UK                                                     15,427            10,995
     Rest of Europe                                         13,022             9,119
     USA                                                    31,098            15,265
     Rest of World                                          13,736             6,984
                                                           -------           -------
                                                            73,283            42,363
     Less: sales between areas                               9,495             6,073
                                                           -------           -------
                                                            63,788            36,290
                                                           =======           =======
3.   Production taxes
     UK petroleum revenue tax                                  133                63
     Overseas production taxes                                 371               184
                                                           -------           -------
                                                               504               247
                                                           =======           =======
4.   Exploration expense
     Exploration and Production
         UK                                                      3                 6
         Rest of Europe                                          4                23
         USA                                                    37                42
         Rest of World                                          68                53
                                                           -------           -------
                                                               112               124
                                                           =======           =======


Page 15

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued




                                                                           Three months ended
                                                                                March 31
                                                                              (Unaudited)
                                                                         2003              2002
                                                                      -------           -------
                                                                             ($ million)
                                                                                        
5.   Analysis of exceptional items Profit (loss) on sale of
     fixed assets and businesses or termination of operations
     Exploration and Production                                           433                 5
     Gas, Power and Renewables                                              -                 -
     Refining and Marketing                                               (52)              (45)
     Chemicals                                                              7               (60)
     Other businesses and corporate                                         6                (9)
                                                                      -------           -------
     Exceptional items before taxation                                    394              (109)
     Taxation (charge) credit                                             (54)               39
                                                                      -------           -------
     Exceptional items after taxation                                     340               (70)
                                                                      =======           =======

6.   Interest expense
     Group interest payable                                               187               267
     Capitalized                                                          (34)              (15)
                                                                      -------           -------
                                                                          153               252
     Joint ventures                                                        13                14
     Associated undertakings                                               10                24
     Unwinding of discount on provisions                                   44                43
                                                                      -------           -------
                                                                          220               333
                                                                      =======           =======

7.   Charge for taxation
     Current                                                            1,581               533
     Deferred                                                             224               220
                                                                      -------           -------
                                                                        1,805               753
                                                                      =======           =======

     United Kingdom                                                       485               189
     Overseas                                                           1,320               564
                                                                      -------           -------
                                                                        1,805               753
                                                                      =======           =======


Page 16

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


8.   Business and geographical analysis



                                                          Gas,                               Other
                                      Exploration        Power    Refining              businesses
By business                                   and          and         and                     and
                                       Production   Renewables   Marketing   Chemicals   corporate   Eliminations   Total
                                      -----------   ----------   ---------   ---------  ----------   ------------  ------
                                                                       ($ million)
                                                                                               
Three months
ended March 31, 2003

Group turnover
-  third parties                            2,031       17,449      40,380       3,817         111             -   63,788
-  sales between businesses                 7,037          549       1,055         121           -        (8,762)       -
                                     ------------------------------------------------------------------------------------
                                            9,068       17,998      41,435       3,938         111        (8,762)  63,788
                                     ------------------------------------------------------------------------------------

Share of sales by joint ventures              181            -         100         117           -             -      398
                                     ------------------------------------------------------------------------------------
Equity accounted income                       234           (1)         37          25           9             -      304
                                     ------------------------------------------------------------------------------------

Total operating profit (loss)               4,332          221       1,251         285        (165)            -    5,924
Exceptional items                             433            -         (52)          7           6             -      394
                                     ------------------------------------------------------------------------------------
Profit (loss) before interest and tax       4,765          221       1,199         292        (159)            -    6,318
                                     ------------------------------------------------------------------------------------
Capital expenditure and acquisitions        2,137           68         537          96          36             -    2,874

Three months
ended March 31, 2002

Group turnover
-  third parties                            2,091         7,313     24,221       2,530         135             -   36,290
-  sales between businesses                 3,547           455        668         112           -        (4,782)       -
                                     ------------------------------------------------------------------------------------
                                            5,638         7,768     24,889       2,642         135        (4,782)  36,290
                                     ------------------------------------------------------------------------------------

Share of sales by joint ventures               95             -         77         107           -             -      279
                                     ------------------------------------------------------------------------------------
Equity accounted income                       125            54         51           9          17             -      256
                                     ------------------------------------------------------------------------------------

Total operating profit (loss)               1,931           115        563          47        (125)            -    2,531
Exceptional items                               5             -        (45)        (60)         (9)            -     (109)
                                     ------------------------------------------------------------------------------------
Profit (loss) before interest and tax       1,936           115        518         (13)       (134)            -    2,422
                                     ------------------------------------------------------------------------------------
Capital expenditure and acquisitions        2,313            46      3,137         188          52             -    5,736




Page 17

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

8.   Business and geographical analysis - continued





                                                               Rest of              Rest of
By geographical area                                      UK    Europe        USA     World     Eliminations      Total
                                                     -------  --------    -------   -------     ------------    -------
                                                                               ($ million)
                                                                                               
Three months ended March 31, 2003

Group turnover - third parties                        11,214    10,762     30,612    11,200                -     63,788
               - sales between areas                   4,213     2,260        486     2,536           (9,495)         -
                                                     ------------------------------------------------------------------
                                                      15,427    13,022     31,098    13,736           (9,495)    63,788
                                                     ------------------------------------------------------------------

Share of sales by joint ventures                          28        89         42       239                -        398
                                                     ------------------------------------------------------------------
Equity accounted income                                   (1)       (3)        35       273                -        304
                                                     ------------------------------------------------------------------

Total operating profit                                 1,118       690      2,489     1,627                -      5,924
Exceptional items                                        (12)      (41)      (146)      593                -        394
                                                     ------------------------------------------------------------------
Profit before interest and tax                         1,106       649      2,343     2,220                -      6,318
                                                     ------------------------------------------------------------------

Capital expenditure and acquisitions                     301       202      1,396       975                -      2,874


Three months ended March 31, 2002

Group turnover - third parties                         8,412     7,318     14,998     5,562                -     36,290
               - sales between areas                   2,583     1,801        267     1,422           (6,073)         -
                                                     ------------------------------------------------------------------
                                                      10,995     9,119     15,265     6,984           (6,073)    36,290
                                                     ------------------------------------------------------------------

Share of sales by joint ventures                          32        56         43       148                -        279
                                                     ------------------------------------------------------------------
Equity accounted income                                   (2)       61         55       142                -        256
                                                     ------------------------------------------------------------------

Total operating profit                                   576       498        442     1,015                -      2,531
Exceptional items                                         (9)       10       (109)       (1)               -       (109)
                                                     ------------------------------------------------------------------
Profit before interest and tax                           567       508        333     1,014                -      2,422
                                                     ------------------------------------------------------------------

Capital expenditure and acquisitions                     409     2,852      1,531       944                -      5,736






                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
9. Analysis of changes in net debt
   Opening balance
   Finance debt                                            22,008        21,417
   Less: Cash                                               1,520         1,358
         Current asset investments                            215           450
                                                           ------        ------
   Opening net debt                                        20,273        19,609
                                                           ------        ------
   Closing balance
   Finance debt                                            19,042        24,531
   Less: Cash                                               1,151         1,379
         Current asset investments                            228           286
                                                           ------        ------
   Closing net debt                                        17,663        22,866
                                                           ------        ------
   Decrease (increase) in net debt                          2,610        (3,257)
                                                           ======        ======

   Movement in cash/bank overdrafts                          (378)           25
   Increase (decrease) in current asset investments            13          (165)
   Net cash outflow (inflow) from financing
     (excluding share capital)                              2,661        (2,192)
   Exchange of Exchangeable Bonds for Lukoil
     Amercian Depositary Shares                               420             -
   Other movements                                             64            25
   Debt acquired                                                -          (999)
                                                           ------        ------
   Movements in net debt before exchange effects            2,780        (3,306)
   Exchange adjustments                                      (170)           49
                                                           ------        ------
   Decrease (increase) in net debt                          2,610        (3,257)
                                                           ======        ======

10.Movement in BP shareholders' interest                        $ million

   Balance at December 31, 2002                                    69,409

   Profit for the period                                            4,267
   Distribution to shareholders                                    (1,386)
   Currency translation differences (net of tax)                     (282)
   Issue of ordinary share capital for employee share schemes          67
   Repurchase of ordinary share capital                              (999)
                                                                  -------
   Balance at March 31, 2003                                       71,076
                                                                  =======


Page 19

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


11.  Earnings per share

     Basic earnings per share excludes the dilutive effects of options, warrants
     and  convertible  securities.  Diluted  earnings  per  share  reflects  the
     potential  dilution  that could occur if options,  warrants or  convertible
     securities  were exercised or converted into ordinary shares that shared in
     the earnings of the Group. The dilutive effect of outstanding share options
     is as follows:

                                                           Three months ended
                                                                March 31
                                                               (Unaudited)
                                                            2003         2002
                                                         ----------------------
                                                           (shares thousands)
    Weighted average number of ordinary shares        22,326,486   22,402,868
    Ordinary  shares issuable under employee
      share schemes                                       68,313      117,560
                                                      ----------   ----------
                                                      22,394,799   22,520,428
                                                      ==========   ==========

12.  Share-based compensation

     BP   accounts   for  share   options   granted  to   employees   using  the
     intrinsic-value  method.  If the  fair  value  of  options  granted  in any
     particular  year is  estimated  and this value  amortized  over the vesting
     period of the options,  an  indication  of the cost of granting  options to
     employees can be made. The fair value of each share option granted has been
     estimated using a Black-Scholes option pricing model.

     The following  table  illustrates the effect on net income and earnings per
     share if the Company had applied the fair value  recognition  provisions of
     FASB Statement No. 123, `Accounting for Stock-Based Compensation', to share
     based employee compensation.

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
   Profit for the period applicable to ordinary shares,
     as reported                                            4,267         1,296
   Deduct: Total stock-based employee compensation
     expense determined under fair value based method
     for all awards, net of related tax effects               (24)          (26)
                                                          -------       -------
   Pro forma net income                                     4,243         1,270
                                                          =======       =======

                                                                 (cents)
   Earnings per share
     Basic - as reported                                    19.11          5.78
     Basic - pro forma                                      19.00          5.67

     Diluted - as reported                                  19.05          5.75
     Diluted - pro forma                                    18.95          5.64



Page 20

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles

     The  consolidated  financial  statements  of the BP Group are  prepared  in
     accordance with UK GAAP which differs in certain respects from US GAAP. The
     principal  differences  between US GAAP and UK GAAP for BP Group  reporting
     relate to the following:

     (i)  Group consolidation

          Where the Group conducts  activities  through a joint arrangement that
          is not  carrying on a trade or  business  in its own right,  the Group
          accounts  for  its own  assets,  liabilities  and  cash  flows  of the
          activity measured  according to the terms of the arrangement.  For the
          Group this method of accounting applies to certain oil and natural gas
          activities and undivided interests in pipelines. US GAAP permits these
          activities to be accounted for by proportional consolidation, which is
          equivalent to UK GAAP.

          Joint  ventures and associated  undertakings  are accounted for by the
          equity method. UK GAAP requires the consolidated  financial statements
          to show separately the Group  proportion of operating  profit or loss,
          exceptional items, inventory holding gains or losses, interest expense
          and  taxation  of  joint  ventures  and  associated  undertakings.  In
          addition  the Group's  share of turnover of joint  ventures  should be
          disclosed. For US GAAP the after tax profits or losses (i.e. operating
          results after  exceptional  items,  inventory holding gains or losses,
          interest expense and taxation) are included in the income statement as
          a single line item.

          UK GAAP  requires  the  Group's  share of the gross  assets  and gross
          liabilities  of joint  ventures to be shown on the face of the balance
          sheet whereas under US GAAP the net investment is included as a single
          line item.

          The following summarizes the  reclassifications for joint ventures and
          associated undertakings necessary to accord with US GAAP.



                                                                 Three months ended March 31, 2003
                                                                            (Unaudited)
                                                        ------------------------------------------------
                                                              As                                 US GAAP
          Increase (decrease) in caption heading        Reported    Reclassification        Presentation
                                                        ------------------------------------------------
                                                                           ($ million)
                                                                                            
          Consolidated statement of income
          Other income                                       131                 216                 347
          Share of profits of JVs and                        304                (304)                  -
            associated undertakings
          Exceptional items before taxation                  394                   -                 394
          Interest expense                                   220                 (23)                197
          Taxation                                         1,805                 (65)              1,740
          Profit for the period                            4,267                   -               4,267





                                                                 Three months ended March 31, 2002
                                                                           (Unaudited)
                                                        ------------------------------------------------
                                                              As                                 US GAAP
          Increase (decrease) in caption heading        Reported    Reclassification        Presentation
                                                        ------------------------------------------------
                                                                           ($ million)
                                                                                            
          Consolidated statement of income
          Other income                                       125                 153                278
          Share of profits of JVs and                        256                (256)                 -
            associated undertakings
          Exceptional items before taxation                 (109)                  -               (109)
          Interest expense                                   333                 (38)               295
          Taxation                                           753                 (65)               688
          Profit for the period                            1,296                   -              1,296




Page 21

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (ii) Exceptional items

          Under UK GAAP certain  exceptional  items are shown  separately on the
          face of the income statement after operating  profit.  These items are
          profits  or  losses  on the sale of fixed  assets  and  businesses  or
          termination of operations and fundamental restructuring charges. Under
          US GAAP these items are classified as operating income or expenses.

     (iii)Deferred taxation/business combinations

          US GAAP requires the  recognition of a deferred tax asset or liability
          for the tax effects of differences between the assigned values and the
          tax bases of assets  acquired  and  liabilities  assumed in a purchase
          business combination, whereas under UK GAAP no such deferred tax asset
          or  liability is  recognized.  Under US GAAP the deferred tax asset or
          liability  is  amortized  over  the  same  period  as the  assets  and
          liabilities to which it relates.

          The  adjustments  to profit  for the  period  and to BP  shareholders'
          interest to accord with US GAAP are summarized below.


                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                           692           151
      Taxation                                               (728)          (94)
      Profit for the period                                    36           (57)
                                                          =======       =======



                                                            At              At
                                                      March 31, 2003   December 31,
                                                       (Unaudited)         2002
                                                      --------------   ------------
                                                               ($ million)
                                                                      
      Tangible assets                                       6,749         7,408
      Deferred taxation                                     6,794         7,486
      BP shareholders' interest                               (45)          (78)
                                                          =======       =======




Page 22

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (iv)  Provisions

          UK  GAAP  requires  provisions  for   decommissioning,   environmental
          liabilities  and onerous  contracts to be  determined  on a discounted
          basis if the  effect  of the time  value  of  money is  material.  The
          provisions  for  decommissioning  and  environmental  liabilities  are
          estimated  using costs based on current  prices and  discounted  using
          real  discount  rates.  Unwinding  of the discount and the effect of a
          change in the  discount  rate is included  in interest  expense in the
          period.  When a decommissioning  provision is set up, a tangible fixed
          asset  of the  same  amount  is also  recognized  and is  subsequently
          depreciated as part of the capital costs of the facilities.

          On January 1, 2003 the Group adopted Statement of Financial Accounting
          Standards No. 143 'Accounting for Asset Retirement  Obligations' (SFAS
          143). SFAS 143 requires  companies to record  liabilities equal to the
          fair  value  of  their  asset  retirement  obligations  when  they are
          incurred  (typically  when the asset is  installed  at the  production
          location).  When  the  liability  is  initially  recorded,   companies
          capitalize an equivalent amount as part of the cost of the asset. Over
          time the  liability  is accreted  for the change in its present  value
          each period, and the initial  capitalized cost is depreciated over the
          useful life of the related asset.

          The  provisions  for  decommissioning  under  SFAS 143 are set up on a
          similar  basis to UK GAAP except that  estimated  future cash outflows
          are discounted  using a  credit-adjusted  risk-free rate rather than a
          real discount rate.

          The cumulative effect of adopting SFAS 143 at January 1, 2003 resulted
          in an after tax credit to income,  as adjusted to accord with US GAAP,
          of $1,002 million. The effect of adoption also included an increase in
          total assets,  as adjusted to accord with US GAAP, of $687 million and
          a reduction in total liabilities,  as adjusted to accord with US GAAP,
          of $315  million.  The effect of  adoption on the three  months  ended
          March 31, 2003 was to decrease profit for the period before cumulative
          effect of  accounting  changes as  adjusted  to accord with US GAAP by
          $23 million.

          Under US GAAP environmental  liabilities are discounted only where the
          timing and amounts of payments are fixed and reliably determinable.

          The  adjustments  to profit  for the  period  and to BP  shareholders'
          interest to accord with US GAAP are summarized below.

                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                           (34)           77
      Interest expense                                          6           (43)
      Taxation                                                  2            (8)
      Profit for the period before cumulative effect
        of accounting changes                                  26           (26)
      Cumulative effect of accounting changes               1,002             -
      Profit for the period                                 1,028           (26)
                                                          =======       =======



                                                             At              At
                                                       March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                    
      Tangible assets                                         (601)       (1,297)
      Provisions                                              (533)          412
      Deferred taxation                                         (5)         (621)
      BP shareholders' interest                                (63)       (1,088)
                                                           =======       =======





Page 23

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (iv) Provisions (concluded)

          The following pro forma data  summarize the results of operations  for
          the three months ended March 31, 2003 and 2002  assuming  SFAS 143 was
          applied retroactively with effect from January 1, 2002.



                                                                                            Three months ended
                                                                                                 March 31
                                                                                               (Unaudited)
                                                                                           2003          2002
                                                                                        -------       -------
                                                                                               ($ million)
                                                                                                  
          Profit for the period applicable to ordinary shares
          as adjusted to accord with US GAAP, as reported

          As reported                                                                     4,734         2,051
          Pro forma                                                                       4,734         2,072

          Per ordinary share - cents

            Basic - as reported                                                           21.20          9.16
            Basic - pro forma                                                             21.20          9.25

            Diluted - as reported                                                         21.14          9.11
            Diluted - pro forma                                                           21.14          9.20

          Per American Depositary Share - cents

            Basic - as reported                                                          127.20         54.96
            Basic - pro forma                                                            127.20         55.50

            Diluted - as reported                                                        126.84         54.66
            Diluted - pro forma                                                          126.84         55.20



          The pro forma  asset  retirement  obligation  at  January  1, 2002 and
          December 31, 2002,  assuming SFAS 143 was applied  retroactively  with
          effect  from  January 1, 2002,  amounts to $3,268  million  and $3,469
          million, respectively.

     (v)  Sale and leaseback

          The sale and leaseback of an office  building in Chicago,  Illinois in
          1998  was  treated  as a sale for UK GAAP  whereas  for US GAAP it was
          treated  as a  financing  transaction  under  US GAAP.  The  remaining
          interest in this building was sold in January 2003.

          Provisions were recognized under UK GAAP in 1999 and 2002 to cover the
          likely  shortfall on rental income from  subletting the Chicago office
          building. As the original sale and leaseback was not treated as a sale
          for US GAAP the  provision  was  reversed for US GAAP.  Following  the
          disposal of the building a provision  has now been  recognized  for US
          GAAP.

          Under UK GAAP the profit  arising on the sale and operating  leaseback
          of certain railcars in 1999 was taken to income in the period in which
          the transaction occurred. Under US GAAP this profit was not recognized
          immediately but amortized over the term of the operating lease.


Page 24

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (v) Sale and leaseback (concluded)

          The adjustments to profit for the period and BP shareholders' interest
          to accord with US GAAP are summarized below.

                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                          (108)            5
      Taxation                                                 37            (1)
      Profit for the period                                    71            (4)
                                                          =======       =======



                                                             At              At
                                                       March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Tangible assets                                            -          161
      Other accounts payable and accrued liabilities            26           27
      Provisions                                                29         (117)
      Finance debt                                               -          413
      Deferred taxation                                        (19)         (56)
      BP shareholders' interest                                (36)        (106)
                                                           =======      =======


     (vi) Goodwill and intangible assets

          Various  differences in the basis for determining  goodwill between UK
          and US GAAP result in goodwill for US GAAP  reporting  differing  from
          the amount recognized under UK GAAP.

          On January 1, 2002 the Group adopted Statement of Financial Accounting
          Standards No. 142 `Goodwill  and Other  Intangible  Assets' (SFAS 142)
          for US GAAP  reporting.  This standard  eliminates the  requirement to
          amortize goodwill and indefinite lived intangible assets. Rather, such
          assets are subject to periodic impairment  testing.  Intangible assets
          that  are not  deemed  to  have  an  indefinite  life  continue  to be
          amortized over their estimated useful lives.  Amortization of goodwill
          charged to income under UK GAAP has been reversed for US GAAP.

          The  adjustments  to profit  for the  period  and to BP  shareholders'
          interest to accord with US GAAP are summarized below.


                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                          (342)         (321)
      Profit for the period                                   342           321
                                                          =======       =======



                                                             At              At
                                                       March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Intangible assets                                        245          (84)
      BP shareholders' interest                                245          (84)
                                                           =======      =======



Page 25

                           BP p.l.c. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (vi) Goodwill and intangible assets (concluded)

          Changes to  exploration  expenditure,  goodwill  and other  intangible
          assets,  as adjusted to accord with US GAAP,  during the three  months
          ended March 31, 2003 are shown below.

                                  Exploration                    Other
                                  expenditure   Goodwill   intangibles    Total
                                  ---------------------------------------------
                                               ($ million)
          Net book amount
          At January 1, 2003            4,944     10,354           488   15,786
          Amortization expense            (50)         -           (13)     (63)
          Acquisitions                      -          -             -        -
          Other movements                (639)      (263)            9     (893)
                                  ---------------------------------------------
          At March 31, 2003             4,255     10,091           484   14,830
                                  =============================================

          Amortization  expense relating to other  intangibles is expected to be
          in the range $100-$200 million in each of the succeeding five years.

          During  the  second  quarter  of 2002 the Group  completed  a goodwill
          impairment  review using the two-step process  prescribed in SFAS 142.
          The first step  includes a comparison of the fair value of a reporting
          unit to its carrying  value,  including  goodwill.  Where the carrying
          value exceeds the fair value,  the goodwill of the  reporting  unit is
          potentially impaired and the second step is then completed in order to
          measure the  impairment  loss, if any. No impairment  charge  resulted
          from this review.

    (vii) Derivative financial instruments and hedging activities

          SFAS  133   `Accounting   for  Derivative   Instruments   and  Hedging
          Activities'  requires that all  derivative  instruments be recorded on
          the balance  sheet at their fair  value.  Changes in the fair value of
          derivatives  are  recorded  each  period in current  earnings or other
          comprehensive income,  depending on whether a derivative is designated
          as  part of a hedge  transaction  and,  if it is,  the  type of  hedge
          transaction.  To the extent that certain  criteria  are met,  SFAS 133
          permits, but does not require, hedge accounting.

          In the normal  course of business  the Group is a party to  derivative
          financial instruments with off-balance sheet risk, primarily to manage
          its exposure to  fluctuations in foreign  currency  exchange rates and
          interest rates,  including  management of the balance between floating
          rate and fixed  rate  debt.  The Group  also  manages  certain  of its
          exposures to movements in oil and natural gas prices. In addition, the
          Group trades  derivatives  in conjunction  with these risk  management
          activities.

          All oil price  derivatives  and all  derivatives  held for trading are
          carried on the  Group's  balance  sheet at fair value with  changes in
          that value  recognized  in  earnings  of the period for both UK and US
          GAAP.  Certain  financial  derivatives used to manage foreign currency
          and interest rate risk that qualify for hedge accounting under UK GAAP
          are marked to market under SFAS 133.  Under US GAAP the fair values of
          derivative  financial  instruments  are shown as  current  assets  and
          liabilities as appropriate.

          The Group has a number of long-term  natural gas contracts  which have
          been in  place  for  many  years.  The  pricing  structure  for  those
          contracts is not  directly  related to the market price of natural gas
          but to the price of other commodities or indices,  such as fuel oil or
          consumer price indices. On the basis of SFAS 133 Implementation  Issue
          C11, these  contracts have been marked to market with effect from July
          1, 2001.


Page 26

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

    (vii) Derivative financial instruments and hedging activities (concluded)

          In October 2002, the FASB Emerging  Issues Task Force (EITF) reached a
          consensus  which  rescinded  EITF  Issue No.  98-10,  'Accounting  for
          Contracts  Involved in Energy Trading and Risk Management  Activities'
          (EITF  98-10).  As a result  of this  consensus,  all  energy-related,
          non-derivative  contracts (such as transportation,  storage,  tolling,
          and  requirements  contracts  that do not  meet  the  definition  of a
          derivative)  and trading  inventories  that are  accounted for at fair
          value  pursuant to EITF 98-10 will no longer be accounted  for at fair
          value upon application of the consensus.  Rather,  such contracts will
          be accounted for as executory contracts on an accruals basis.

          The consensus is applicable  for all contracts  executed after October
          25, 2002.  Application of the consensus to contracts existing prior to
          October  26,  2002 is required  to be  accounted  for as a  cumulative
          effect of a change  in  accounting  principle  effective  for  periods
          beginning after December 15, 2002.

          For  BP's  reporting  under  UK  GAAP,  energy-related  non-derivative
          contracts associated with trading activities are marked to market with
          gains and losses recognized in the income statement.

          The  cumulative  effect of adopting  the  consensus at January 1, 2003
          resulted in an after tax credit to income,  as adjusted to accord with
          US GAAP, of $50 million.

          Also in October  2002,  the FASB  Emerging  Issues  Task Force  (EITF)
          reached a  consensus  with  regards  to EITF Issue No.  02-3,  `Issues
          Involved  in  Accounting  for  Contracts  Under EITF  Issue No.  98-10
          "Accounting  for  Contracts   Involved  in  Energy  Trading  and  Risk
          Management  Activities"'  (EITF 02-3).  Under this  consensus  trading
          inventories  should be  recorded on the  balance  sheet at  historical
          cost.  The Group marks  trading  inventories  to market at the balance
          sheet date.  Thus a UK/US GAAP  difference  arises which  impacts both
          profit  for  the  year  and  BP  shareholders'  interest  due  to  the
          difference in inventory valuations.

          The  adjustments  to profit  for the  period  and to BP  shareholders'
          interest to accord with US GAAP are summarized below.

                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                            12          (804)
      Taxation                                                 (4)          281
      Profit for the period before cumulative
        effect of accounting changes                           (8)          523
      Cumulative effect of accounting changes                  50             -
      Profit for the period                                    42           523
                                                          =======       =======



                                                             At              At
                                                       March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Inventories                                            (148)         (209)
      Accounts payable and accrued liabilities                (17)          (13)
      Deferred taxation                                       (39)          (61)
      BP shareholders' interest                               (92)         (135)
                                                          =======       =======



Page 27

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

    (viii)Gain arising on asset exchange

          For UK GAAP the transaction with Solvay in the fourth quarter of 2001,
          which led to the  exchange  of  businesses  for an interest in a joint
          venture and an  associated  undertaking,  has been treated as an asset
          swap  which  does not give  rise to a gain or loss.  Under US GAAP the
          transaction  has been  treated as a disposal and  acquisition  at fair
          value which gives rise to a pre-tax  gain on disposal of $242  million
          ($157 million after tax).

          The  adjustments  to profit  for the  period  and to BP  shareholders'
          interest to accord with US GAAP are summarized below.

                                                             Three months ended
                                                                   March 31
      Increase (decrease) in caption heading                     (Unaudited)
                                                             2003          2002
                                                          -------       -------
                                                                ($ million)
      Cost of sales                                             5             9
      Taxation                                                 (2)           (4)
      Profit for the period                                    (3)           (5)
                                                          =======       =======



                                                             At              At
                                                       March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Intangible assets                                       163           167
      Accounts payable and accrued liabilities                (50)          (52)
      Deferred taxation                                        75            77
      BP shareholders' interest                               138           142
                                                          =======       =======


    (ix)  Ordinary shares held for future awards to employees

          Under UK GAAP, Company shares held by an Employee Share Ownership Plan
          to meet future  requirements of employee share schemes are recorded in
          the balance sheet as Fixed assets -- investments.  Under US GAAP, such
          shares  are   recorded  in  the  balance   sheet  as  a  reduction  of
          shareholders' interest.

          The adjustment to BP shareholders'  interest to accord with US GAAP is
          shown below.



                                                             At              At
      Increase (decrease) in caption heading           March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Fixed assets - Investments                             (117)         (159)
      BP shareholders' interest                              (117)         (159)
                                                          =======       =======




Page 28

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     (x)  Dividends

          Under UK GAAP,  dividends  are  recorded  in the  period in respect of
          which they are  announced or declared by the board of directors to the
          shareholders.  Under US GAAP,  dividends are recorded in the period in
          which dividends are declared.

          The adjustment to BP shareholders'  interest to accord with US GAAP is
          shown below.



                                                             At              At
      Increase (decrease) in caption heading           March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Other accounts payable and accrued liabilities        (1,386)      (1,398)
      BP shareholders' interest                             (1,386)      (1,398)
                                                            =======     =======


     (xi)Investments

          Under UK GAAP certain of the Group's equity  investments  are reported
          as either fixed asset or current asset  investments and carried on the
          balance  sheet at cost subject to review for  impairment.  For US GAAP
          these  investments  are classified as  available-for-sale  securities.
          Consequently they are reported at fair value, with unrealized  holding
          gains  and  losses,   net  of  tax,   reported  in  accumulated  other
          comprehensive  income. If a decline in fair value below cost is 'other
          than  temporary'  the  unrealized  loss is accounted for as a realized
          loss and charged against income.

          The adjustment to BP shareholders'  interest to accord with US GAAP is
          shown below.



                                                             At              At
      Increase (decrease) in caption heading           March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                       
      Fixed assets - Investments                               11            52
      Deferred taxation                                         4            18
      BP shareholders' interest                                 7            34
                                                          =======       =======


    (xii) Additional minimum pension liability

          Where a pension plan has an unfunded  accumulated  benefit obligation,
          US GAAP  requires  such amount to be  recognized as a liability in the
          balance sheet.  The adjustment  resulting from the  recognition of any
          such  minimum   liability,   including  the   elimination  of  amounts
          previously  recognized  as a prepaid  benefit  cost, is reported as an
          intangible asset to the extent of unrecognized prior service cost with
          the remaining amount reported in comprehensive income.

          The  adjustments to BP  shareholders'  interest to accord with US GAAP
          are summarized below.



                                                             At              At
      Increase (decrease) in caption heading           March 31, 2003   December 31,
                                                        (Unaudited)         2002
                                                      --------------   ------------
                                                                ($ million)
                                                                      
      Intangible assets                                       137           137
      Other receivables falling due after more
        than one year                                      (1,211)       (1,211)
      Noncurrent liabilities - accounts payable
        accrued liabilities                                 2,459         2,459
      Deferred taxation                                    (1,247)       (1,247)
      BP shareholders' interest                            (2,286)       (2,286)
                                                          =======       =======


          The following is a summary of the adjustments to profit for the period
          and to BP shareholders'  interest which would be required if generally
          accepted  accounting  principles in the USA (US GAAP) had been applied
          instead of those generally accepted in the United Kingdom (UK GAAP).


Page 29

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

    (xii) Additional minimum pension liability (concluded)

          These  results  are  stated  using the  first-in  first-out  method of
          inventory valuation.



          Profit for the period                                       Three months ended
                                                                           March 31
                                                                         (Unaudited)
                                                                      2003          2002 (a)
                                                                      -------------------
                                                                          ($ million)
                                                                           
   Profit as reported in the consolidated
     statement of income                                              4,267        1,296

   Adjustments:
   Deferred taxation/business combinations (iii)                         36          (57)
   Provisions (iv)                                                       26          (26)
   Sale and leaseback (v)                                                71           (4)
   Goodwill (vi)                                                        342          321
   Derivative financial instruments (vii)                               (8)          523
   Gain arising on asset exchange (viii)                                (3)           (5)
   Other                                                                 3             3
                                                                   -------       -------
                                                                       467           755
                                                                   -------       -------
   Profit (loss) for the period as adjusted to
   accord with US GAAP before cumulative effect
   of accounting changes                                             4,734         2,051
      Cumulative effect of accounting changes:
         Provisions                                                  1,002             -
         Derivative financial instruments                               50             -
                                                                   -------       -------
   Profit for the period as adjusted to accord with US GAAP          5,786         2,051
                                                                   =======       =======

   Profit for the period as adjusted:
   Per ordinary share - cents
      Basic - before cumulative effect of accounting changes         21.20          9.16
      Cumulative effect of accounting changes
         Provisions                                                   4.49             -
         Derivative financial instruments                             0.23             -
                                                                   -------       -------
                                                                     25.92          9.16
                                                                   =======       =======
      Diluted - before cumulative effect of accounting changes       21.14          9.11
      Cumulative effect of accounting changes
         Provisions                                                   4.49             -
         Derivative financial instruments                             0.22             -
                                                                   -------       -------
                                                                     25.84          9.11
                                                                   =======       =======
   Per American Depositary Share - cents (b)
      Basic - before cumulative effect of accounting changes        127.20         54.96
      Cumulative effect of accounting changes
         Provisions                                                  26.94             -
         Derivative financial instruments                             1.38             -
                                                                   -------       -------
                                                                    155.52         54.96
                                                                   =======       =======
      Diluted -  before cumulative effect of accounting changes     126.84         54.66
      Cumulative effect of accounting changes
         Provisions                                                  26.88             -
         Derivative financial instruments                             1.32             -
                                                                   -------       -------
                                                                    155.04         54.66
                                                                   =======       =======



Page 30

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued




   BP shareholders' interest                       March 31, 2003
                                                     (Unaudited)     December 31, 2002
                                                   -----------------------------------
                                                              ($ million)
                                                                         
   BP shareholders' interest as reported
   in the consolidated balance sheet                     71,076                 69,409

   Adjustments:
                                                       --------               --------
     Deferred taxation/business combinations                (45)                   (78)
     Provisions (iv)                                        (63)                (1,088)
     Sale and leaseback (v)                                 (36)                  (106)
     Goodwill (vi)                                          245                    (84)
     Derivative financial instruments (vii)                 (92)                  (135)
     Gain arising on asset exchange (viii)                  138                    142
     Ordinary shares held for future
       awards to employees (ix)                            (117)                  (159)
     Dividends (x)                                        1,386                  1,398
     Investments (xi)                                         7                     34
     Additional minimum pension liability (xii)          (2,286)                (2,286)
     Other                                                  (47)                   (48)
                                                       --------               --------
                                                           (910)                (2,410)
                                                       --------               --------
   BP shareholders' interest as adjusted
   to accord with US GAAP                                70,166                 66,999
                                                       ========               ========


   ---------------

(a)One American Depositary Share is equivalent to six ordinary shares.

   Comprehensive income

   The components of comprehensive income, net of related tax are as follows:

                                                             Three months ended
                                                                  March 31
                                                                (Unaudited)
                                                             2003          2002
                                                         --------      --------
                                                               ($ million)
   Profit for the period as adjusted to accord
     with US GAAP                                          5,786          2,051
   Currency translation differences                         (282)          (356)
   Derivative financial instruments                           43              -
   Net unrealized gain (loss) on investments                 (27)           161
   Additional minimum pension liability                        -              -
                                                        --------       --------
   Comprehensive income                                    5,520          1,856
                                                        ========       ========

   Accumulated other comprehensive income at March 31, 2003 and December 31,
   2002 comprised losses of $3,975 million and $3,709 million, respectively.


Page 31

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     Consolidated statement of cash flows

     The Group's financial  statements include a consolidated  statement of cash
     flows in accordance with the revised UK Financial  Reporting Standard No. 1
     (FRS 1). The statement prepared under FRS 1 presents substantially the same
     information as that required  under FASB Statement of Financial  Accounting
     Standards No. 95 'Statement of Cash Flows' (SFAS 95).

     Under FRS 1 cash flows are  presented for (i)  operating  activities;  (ii)
     dividends   from  joint   ventures;   (iii)   dividends   from   associated
     undertakings;  (iv)  servicing of finance and returns on  investments;  (v)
     taxation;   (vi)  capital  expenditure  and  financial  investment;   (vii)
     acquisitions  and disposals;  (viii)  dividends;  (ix)  financing;  and (x)
     management of liquid resources.  SFAS 95 only requires presentation of cash
     flows from operating, investing and financing activities.

     Cash flows  under FRS 1 in respect of  dividends  from joint  ventures  and
     associated  undertakings,  taxation and servicing of finance and returns on
     investments  are  included  within  operating  activities  under  SFAS  95.
     Interest paid includes payments in respect of capitalized  interest,  which
     under  SFAS  95  are  included  in  capital   expenditure  under  investing
     activities.  Cash flows under FRS 1 in respect of capital  expenditure  and
     acquisitions and disposals are included in investing  activities under SFAS
     95. Dividends paid are included within financing activities. All short-term
     investments  are  regarded  as liquid  resources  for FRS 1.  Under SFAS 95
     short-term investments with original maturities of three months or less are
     classified as cash  equivalents  and aggregated  with cash in the cash flow
     statement.  Cash flows in respect of short-term  investments  with original
     maturities exceeding three months are included in operating activities.



Page 32

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13. US generally accepted accounting principles - continued

   The consolidated statement of cash flows presented in accordance with SFAS 95
   is as follows:
                                                             Three months ended
                                                                  March 31
                                                                (Unaudited)
                                                             2003          2002
                                                         --------      --------
                                                               ($ million)
   Operating activities
   Profit after taxation                                    4,293         1,336
   Adjustments to reconcile profits after tax to
     net cash provided by operating activities
   Depreciation and amounts provided                        2,709         2,153
   Exploration expenditure written off                         50            59
   Share of profits of joint ventures and associated
     undertakings less dividends received                    (148)          (17)
   (Profit) loss on sale of businesses and fixed assets      (394)          109
   Working capital movement (a)                            (1,475)         (669)
   Deferred taxation                                          224           220
   Other                                                        2          (108)
                                                         --------      --------
   Net cash provided by operating activities                5,261         3,083
                                                         ========      ========
   Investing activities
   Capital expenditures                                    (2,911)       (2,814)
   Acquisitions, net of cash acquired                           -        (1,550)
   Investment in associated undertakings                     (186)         (143)
   Net investment in joint ventures                           (14)          (46)
   Proceeds from disposal of assets                         2,477           348
                                                         --------      --------
   Net cash used in investing activities                     (634)       (4,205)
                                                         --------      --------

   Financing activities
   Proceeds from shares issued (repurchased)                 (932)           91
   Proceeds from long-term financing                        1,015         1,746
   Repayments of long-term financing                         (403)         (234)
   Net decrease (increase) in short-term debt              (3,273)          680
   Dividends paid - BP Shareholders                        (1,397)       (1,288)
                  -  Minority shareholders                     (2)          (13)
                                                         --------      --------
   Net cash used in financing activities                   (4,992)          982
                                                         --------      --------
   Currency translation differences relating to cash
     and cash equivalents                                       9            (3)
                                                         --------      --------
   Increase (decrease) in cash and cash equivalents          (356)         (143)
   Cash and cash equivalents at beginning of period         1,735         1,808
                                                         --------      --------
   Cash and cash equivalents at end of period               1,379         1,665
                                                         ========      ========

   (a)  Working capital:
   Inventories (increase) decrease                            376          (496)
   Receivables (increase) decrease                         (6,946)         (443)
   Current liabilities - excluding finance debt
     increase (decrease)                                    5,095           270
                                                         --------      --------
                                                           (1,475)         (669)
                                                         ========      ========



Page 33

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - continued

     Impact of new US accounting standards

     Costs associated with exit or disposal  activities:  In June 2002, the FASB
     issued Statement of Financial  Accounting Standards No. 146 'Accounting for
     Costs  Associated  with Exit or Disposal  Activities'  (SFAS 146). SFAS 146
     requires  that a liability  for costs  associated  with an exit or disposal
     activity be recognized only when the liability is incurred,  rather than at
     the date of an entity's  commitment to an exit plan. SFAS 146 requires that
     the  liability be initially  measured at fair value.  SFAS 146 is effective
     for exit or disposal activities that are initiated after December 31, 2002.

     Stock-based  compensation:  In December 2002, the FASB issued  Statement of
     Financial   Accounting   Standards  No.  148  "Accounting  for  Stock-Based
     Compensation - Transition and Disclosure"  (SFAS 148). SFAS 148 amends SFAS
     123 to permit  alternative  methods of transition for adopting a fair value
     based  method of  accounting  for  stock-based  employee  compensation.  As
     required by UK GAAP,  the Group uses the intrinsic  value method to account
     for stock-based employee compensation.

     Guarantees:  In November 2002, the FASB issued FASB  Interpretation  No. 45
     "Guarantor's   Accounting  and  Disclosure   Requirements  for  Guarantees,
     Including  Indirect  Guarantees of Indebtedness of Others"  (Interpretation
     45).  Interpretation 45 elaborates on existing disclosure  requirements for
     guarantees and clarifies that a guarantor is required to recognize,  at the
     inception of a guarantee,  a liability for the fair value of the obligation
     undertaken  in  issuing  the  guarantee.   The  initial   recognition   and
     measurement provisions of Interpretation 45 apply on a prospective basis to
     guarantees issued or modified after December 31, 2002.

     Consolidation:  In January 2003, the FASB issued FASB Interpretation No. 46
     "Consolidation  of  Variable  Interest   Entities"   (Interpretation   46).
     Interpretation  46  clarifies  the  application  of existing  consolidation
     requirements to entities where a controlling financial interest is achieved
     through   arrangements  that  do  not  involve  voting   interests.   Under
     Interpretation  46, a variable interest entity is consolidated if a company
     is  subject to a majority  of the risk of loss from the  variable  interest
     entity's  activities  or  entitled  to receive a majority  of the  entity's
     residual  returns.  Interpretation 46 applies to variable interest entities
     created or acquired after January 31, 2003. For variable  interest entities
     existing at January 31, 2003, Interpretation 46 is effective for accounting
     periods beginning after June 15, 2003.

     The Company is  currently  carrying  out the  analysis  necessary  to adopt
     Interpretation 46 in the third quarter of 2003 for existing  entities.  The
     Company does not expect that the adoption of  Interpretation 46 will have a
     significant  effect on profit,  as adjusted  to accord with US GAAP,  or BP
     shareholders' interest, as adjusted to accord with US GAAP.



Page 34

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

13.  US generally accepted accounting principles - concluded

     Impact of new UK accounting standards

     Retirement  benefits:  In December 2000, the UK Accounting  Standards Board
     issued Financial Reporting Standard No. 17 `Retirement  Benefits' (FRS 17).
     This standard was to be fully effective for accounting periods ending on or
     after June 22, 2003 with certain of the disclosure  requirements  effective
     for  periods  prior to 2003.  FRS 17  requires  that  financial  statements
     reflect at fair value the assets and liabilities arising from an employer's
     retirement benefit obligations and any related funding. The operating costs
     of providing retirement benefits are recognized in the period in which they
     are earned together with any related finance costs and changes in the value
     of related assets and liabilities.

     In November 2002, the UK Accounting  Standards Board issued an amendment to
     FRS 17, which defers full adoption until January 1, 2005.

     Impact of International accounting standards

     In June 2002, the European Union Council of Ministers  adopted a Regulation
     which would require the Group to prepare its primary consolidated financial
     statements in accordance  with  International  Accounting  Standards  (IAS)
     beginning January 1, 2005, with restatement of prior periods presented. IAS
     differ in several  respects from UK and US GAAP.  In addition,  significant
     revisions to IAS are currently being  contemplated  and other revisions may
     be  adopted  prior to January 1,  2005.  The Group has not  determined  the
     effects of adopting IAS.

14.  Condensed consolidating information

     The following  information  is presented in  accordance  with the financial
     reporting rules of the Securities and Exchange Commission regarding issuers
     and guarantors of guaranteed securities.

     BP p.l.c. fully and  unconditionally  guarantees the payment obligations of
     its 100% owned  subsidiary BP  Exploration  (Alaska) Inc. under the Prudhoe
     Bay Royalty  Trust.

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


Page 35



                           BP p.l.c. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14. Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Income statement                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  

Three months ended March 31, 2003

Turnover                                             880             -            64,186                  (880)    64,186

Less: Joint ventures                                   -             -               398                     -        398
                                            -----------------------------------------------------------------------------

Group turnover                                       880             -            63,788                  (880)    63,788

Cost of sales                                        400             -            54,995                  (956)    54,439

Production taxes                                      68             -               436                     -        504
                                            -----------------------------------------------------------------------------

Gross profit                                         412             -             8,357                    76      8,845

Distribution and administration expenses               -            64             3,180                     -      3,244

Exploration expense                                    1             -               111                     -        112
                                            -----------------------------------------------------------------------------

                                                     411           (64)            5,066                    76      5,489

Other income                                           6           147               129                  (151)       131
                                            -----------------------------------------------------------------------------

Group operating profit                               417            83             5,195                   (75)     5,620

Share of profits of joint ventures                     -             -               118                     -        118

Share of profits of associated undertakings            -             -               186                     -        186

Equity accounted income of subsidiaries              125         5,890                 -                (6,015)         -
                                            -----------------------------------------------------------------------------

Total operating profit                               542         5,973             5,499                (6,090)     5,924

Profit (loss) on sale of fixed assets
  and businesses or termination of operations         (1)          394               395                  (394)       394
                                            -----------------------------------------------------------------------------

Profit before interest and tax                       541         6,367             5,894                (6,484)     6,318

Interest expense                                      68           295               238                  (381)       220
                                            -----------------------------------------------------------------------------

Profit before taxation                               473         6,072             5,656                (6,103)     6,098

Taxation                                             211         1,805             1,640                (1,851)     1,805
                                            -----------------------------------------------------------------------------

Profit after taxation                                262         4,267             4,016                (4,252)     4,293

Minority shareholders' interest                        -             -                26                     -         26
                                            -----------------------------------------------------------------------------

Profit for the period                                262         4,267             3,990                (4,252)     4,267
                                            =============================================================================




Page 36

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

14.  Condensed consolidating information - continued

     Income statement (continued)

     The following is a summary of the  adjustments to the profit for the period
     which would be required if generally accepted accounting  principles in the
     United  States  (US  GAAP)  had been  applied  instead  of those  generally
     accepted in the United Kingdom.



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  

Three months ended March 31, 2003

Profit as reported                                   262         4,267            3,990                (4,252)      4,267

Adjustments:

  Deferred taxation/business combinations             (3)           36               39                   (36)         36

  Provisions                                          (4)           26               25                   (21)         26

  Sale and leaseback                                   -            71               71                   (71)         71

  Goodwill                                             -           342              342                  (342)        342

  Derivative financial instruments                     -            (8)              (8)                    8          (8)

  Gain arising on asset exchange                       -            (3)              (3)                    3          (3)

  Other                                               16             3                3                   (19)          3
                                            -----------------------------------------------------------------------------
Profit for the period before cumulative
effect of accounting change as adjusted
to accord with US GAAP                               271         4,734            4,459                (4,730)      4,734

Cumulative effect of accounting change:

  Provisions                                         214         1,002              788                (1,002)      1,002

  Derivative financial instruments                     -            50               50                   (50)         50
                                            -----------------------------------------------------------------------------
Profit for the period as adjusted to
accord with US GAAP                                  485         5,786            5,297                 (5,782)     5,786
                                            =============================================================================



Page 37



                           BP p.l.c. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14. Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Income statement (continued)                 Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  

Three months ended March 31, 2002

Turnover                                             506             -            36,569                  (506)    36,569

Less: Joint ventures                                   -             -               279                     -        279
                                            -----------------------------------------------------------------------------

Group turnover                                       506             -            36,290                  (506)    36,290

Cost of sales                                        319             -            31,273                  (514)    31,078

Production taxes                                      44             -               203                     -        247
                                            -----------------------------------------------------------------------------

Gross profit                                         143             -             4,814                     8      4,965

Distribution and administration expenses               -            54             2,637                     -      2,691

Exploration expense                                    6             -               118                     -        124
                                            -----------------------------------------------------------------------------

                                                     137           (54)            2,059                     8      2,150

Other income                                          15           153                56                   (99)       125
                                            -----------------------------------------------------------------------------

Group operating profit                               152            99             2,115                   (91)     2,275

Share of profits of joint ventures                     -             -                70                     -         70

Share of profits of associated undertakings            -             -               186                     -        186

Equity accounted income of subsidiaries               49         2,483                 -                (2,532)         -

                                            -----------------------------------------------------------------------------

Total operating profit                               201         2,582             2,371                (2,623)     2,531

Profit (loss) on sale of fixed assets
  and businesses or termination of operations          -          (109)             (109)                  109       (109)
                                            -----------------------------------------------------------------------------
Profit before interest and tax                       201         2,473             2,262                (2,514)     2,422

Interest expense                                      13           424               393                  (497)       333
                                            -----------------------------------------------------------------------------

Profit before taxation                               188         2,049             1,869                (2,017)     2,089

Taxation                                              82           753               686                  (768)       753
                                            -----------------------------------------------------------------------------

Profit after taxation                                106         1,296             1,183                (1,249)     1,336

Minority shareholders' interest                        -             -                40                     -         40
                                            -----------------------------------------------------------------------------

Profit for the period                                106         1,296             1,143                (1,249)    1,296
                                            =============================================================================




Page 38

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14.  Condensed consolidating information - continued

     Income statement (concluded)

     The following is a summary of the  adjustments to the profit for the period
     which would be required if generally accepted accounting  principles in the
     United  States  (US  GAAP)  had been  applied  instead  of those  generally
     accepted  in  the  United  Kingdom.



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Three months ended March 31, 2002

Profit as reported                                   106         1,296             1,143                (1,249)     1,296

Adjustments:

  Deferred taxation/business combinations            (33)          (57)              (36)                   69        (57)

  Provisions                                           -           (26)              (25)                   25        (26)

  Sale and leaseback                                   -            (4)               (4)                    4         (4)

  Goodwill                                             -           321               321                  (321)       321

  Derivative financial instruments                     -           523               523                  (523)       523

  Gain arising on asset exchange                       -            (5)               (5)                    5         (5)

  Other                                                -             3                 3                    (3)         3
                                            -----------------------------------------------------------------------------
Profit for the period as adjusted to
  accord with US GAAP                                 73         2,051             1,920                (1,993)     2,051
                                            =============================================================================






Page 39



                           BP p.l.c. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14.  Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Balance sheet                                Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  

At March 31, 2003

Fixed assets

Intangible assets                                     430             -           13,760                     -     14,190

Tangible assets                                     6,386             -           81,837                     -     88,223

Investments

  Subsidiaries - equity accounted basis             2,629         95,864               -               (98,493)         -

  Other                                                 -            120          10,128                     -     10,248
                                            -----------------------------------------------------------------------------
                                                    2,629         95,984          10,128               (98,493)    10,248
                                            -----------------------------------------------------------------------------
Total fixed assets                                  9,445         95,984         105,725               (98,493)   112,661
                                            -----------------------------------------------------------------------------

Current assets

Inventories                                            78              -           9,796                     -      9,874

Receivables                                        18,411          12,770         59,419               (51,542)    39,058

Investments                                             -               -            228                     -        228

Cash at bank and in hand                              (10)            (11)         1,172                     -      1,151
                                            -----------------------------------------------------------------------------
                                                   18,479          12,759         70,615               (51,542)    50,311
                                            -----------------------------------------------------------------------------

Current liabilities - falling due within one year

Finance debt                                        7,386               -          6,345                (7,331)     6,400

Accounts payable and accrued liabilities              621          11,366         40,030               (11,403)    40,614
                                            -----------------------------------------------------------------------------
Net current assets (liabilities)                   10,472           1,393         24,240               (32,808)     3,297
                                            -----------------------------------------------------------------------------

Total assets less current liabilities              19,917          97,377        129,965              (131,301)   115,958

Noncurrent liabilities

Finance debt                                            -               -         12,642                     -     12,642

Accounts payable and accrued liabilities            5,480              49         30,690               (32,808)     3,411

Provisions for liabilities and charges

Deferred taxation                                   1,698               -         11,988                     -     13,686

Other provisions                                      495             125         13,476                     -     14,096
                                            -----------------------------------------------------------------------------
Net assets                                         12,244          97,203         61,169               (98,493)    72,123

Minority shareholders' interest - equity                -               -          1,047                     -      1,047
                                            -----------------------------------------------------------------------------
BP shareholders' interest                          12,244          97,203         60,122               (98,493)    71,076
                                            =============================================================================




Page 40

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

14.  Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Balance sheet (continued)                    Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
At March 31, 2003

Capital and reserves

Capital shares                                     1,903          5,581                -                (1,903)     5,581

Paid-in surplus                                    3,145          4,345                -                (3,145)     4,345

Merger reserve                                         -         26,353              697                     -     27,050

Other reserves                                         -            156                -                     -        156

Retained earnings                                  7,196         60,768           59,425               (93,445)    33,944
                                            -----------------------------------------------------------------------------
                                                  12,244         97,203           60,122               (98,493)    71,076
                                            =============================================================================


     The following is a summary of the adjustments to BP shareholders'  interest
     which would be required if generally accepted accounting  principles in the
     United  States  (US  GAAP)  had been  applied  instead  of those  generally
     accepted in the United Kingdom.



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  

Shareholders' interest as reported                12,244         97,203           60,122               (98,493)    71,076

Adjustments:

  Deferred taxation/business combinations             71            (45)            (116)                   45        (45)

  Provisions                                          24            (63)             (87)                   63        (63)

  Sale and leaseback                                   -            (36)             (36)                   36        (36)

  Goodwill                                             -            245              245                  (245)       245

  Derivative financial instruments                     -            (92)             (92)                   92        (92)

  Gain arising on asset exchange                       -            138              138                  (138)       138

  Ordinary shares held for future
    awards to employees                                -           (117)               -                     -       (117)

  Quarterly dividend                                   -          1,386                -                     -      1,386

  Investments                                          -              7                7                    (7)         7

  Additional minimum pension liability                 -         (2,286)          (2,286)                2,286     (2,286)

  Other                                              (34)           (47)             (47)                   81        (47)
                                            -----------------------------------------------------------------------------
Shareholders' interest as adjusted
  to accord with US GAAP                          12,305         96,293           57,848               (96,280)    70,166
                                            =============================================================================




Page 41

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

14.  Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Balance sheet (continued)                    Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
At December 31, 2002

Fixed assets

Intangible assets                                    427             -            15,139                     -     15,566

Tangible assets                                    6,405             -            81,277                     -     87,682

Investments

  Subsidiaries - equity accounted basis            2,561         91,939                -               (94,500)         -

  Other                                                -            162           10,649                     -     10,811
                                            -----------------------------------------------------------------------------
                                                   2,561         92,101           10,649               (94,500)    10,811
                                            -----------------------------------------------------------------------------
Total fixed assets                                 9,393         92,101          107,065               (94,500)   114,059
                                            -----------------------------------------------------------------------------
Current assets

Inventories                                          102              -           10,079                     -     10,181

Receivables                                       18,169         13,581           51,022               (49,622)    33,150

Investments                                            -              -              215                     -        215

Cash at bank and in hand                             (11)             1            1,530                     -      1,520
                                            -----------------------------------------------------------------------------
                                                  18,260         13,582           62,846               (49,622)    45,066
                                            -----------------------------------------------------------------------------
Current liabilities - falling
  due within one year

Finance debt                                       1,768              -           10,031                (1,713)    10,086

Accounts payable and accrued liabilities           1,129          9,906           35,369               (10,189)    36,215
                                            -----------------------------------------------------------------------------
Net current assets (liabilities)                  15,363          3,676           17,446               (37,720)    (1,235)
                                            -----------------------------------------------------------------------------
Total assets less current liabilities             24,756         95,777          124,511              (132,220)   112,824

Noncurrent liabilities

Finance debt                                           -              -           11,922                     -     11,922

Accounts payable and accrued liabilities          10,586             98           30,491               (37,720)     3,455

Provisions for liabilities and charges

Deferred taxation                                  1,686              -           11,828                     -     13,514

Other provisions                                     489            142           13,255                     -     13,886
                                            -----------------------------------------------------------------------------
Net assets                                        11,995         95,537           57,015               (94,500)    70,047

Minority shareholders' interest - equity               -              -              638                     -        638
                                            -----------------------------------------------------------------------------

BP shareholders' interest                         11,995         95,537           56,377               (94,500)    69,409
                                            =============================================================================




Page 42



                           BP p.l.c. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14. Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Balance sheet (concluded)                    Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
At December 31, 2002

Capital and reserves

Capital shares                                     1,903         5,616                 -                (1,903)     5,616

Paid-in surplus                                    3,145         4,243                 -                (3,145)     4,243

Merger reserve                                         -        26,336               697                     -     27,033

Other reserves                                         -           173                 -                     -        173

Retained earnings                                  6,947        59,169            55,680               (89,452)    32,344
                                            -----------------------------------------------------------------------------
                                                  11,995        95,537            56,377               (94,500)    69,409
                                            =============================================================================



     The following is a summary of the adjustments to BP shareholders'  interest
     which would be required if generally accepted accounting  principles in the
     United  States  (US  GAAP)  had been  applied  instead  of those  generally
     accepted in the United Kingdom.



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Shareholders' interest as reported                11,995        95,537            56,377               (94,500)    69,409

Adjustments:

  Deferred taxation/business combinations             74           (78)             (152)                   78        (78)

  Provisions                                        (190)       (1,088)             (902)                1,092     (1,088)

  Sale and leaseback                                   -          (106)             (106)                  106       (106)

  Goodwill                                             -           (84)              (84)                   84        (84)

  Derivative financial instruments                    50          (135)             (135)                   85       (135)

  Gain arising on asset exchange                       -           142               142                  (142)       142

  Ordinary shares held for future
    awards to employees                                -          (159)                -                     -       (159)

  Quarterly dividend                                   -         1,398                 -                     -      1,398

  Investments                                          -            34                34                   (34)        34

  Additional minimum pension liability                 -        (2,286)           (2,286)                2,286     (2,286)

  Other                                                -           (48)              (48)                   48        (48)
                                            -----------------------------------------------------------------------------
Shareholders' interest as adjusted
  to accord with US GAAP                          11,929        93,127            52,840               (90,897)    66,999
                                            =============================================================================





Page 43

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


14.  Condensed consolidating information - continued



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Cash flow statement                          Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Three months ended March 31, 2003

Net cash inflow (outflow) from
  operating activities                               518         2,253             3,163                    27      5,961

Dividends from joint ventures                          -             -                13                     -         13

Dividends from associated undertakings                 -             -                55                     -         55

Dividends from subsidiaries                           10             -                 -                   (10)         -

Net cash inflow (outflow) from servicing
  of finance and returns on investments              (22)           27              (150)                  (27)      (172)

Tax paid                                               -             -              (632)                    -       (632)

Net cash inflow (outflow) for capital
  expenditure and financial investment               (97)           36              (499)                    -       (560)

Net cash inflow (outflow) for acquisitions
  and disposals                                        6             -               (46)                    -        (40)

Equity dividends paid                                  -        (1,397)              (10)                   10     (1,397)
                                            -----------------------------------------------------------------------------
Net cash inflow (outflow)                            415           919             1,894                     -      3,228
                                            =============================================================================

Financing                                            414           931             2,248                     -      3,593

Management of liquid resources                         -             -                13                     -         13

Increase (decrease) in cash                            1           (12)             (367)                    -       (378)
                                            -----------------------------------------------------------------------------
                                                     415           919             1,894                     -      3,228
                                            =============================================================================


     The consolidated  statement of cash flows presented in accordance with SFAS
     95 is as follows:



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Net cash provided by (used in)
  operating activities                               534         2,280             2,449                    (2)     5,261

Net cash provided by (used in)
  investing activities                               (97)           36              (545)                  (28)      (634)

Net cash provided by (used in)
  financing activities                              (436)       (2,328)           (2,258)                   30     (4,992)

Currency translation differences
  relating to cash and cash equivalents                -             -                 9                     -          9
                                            -----------------------------------------------------------------------------
Increase (decrease) in cash
  and cash equivalents                                 1           (12)             (345)                    -       (356)

Cash and cash equivalents at
  beginning of period                                (11)            1             1,745                     -      1,735
                                            -----------------------------------------------------------------------------
Cash and cash equivalents at
  end of period                                      (10)          (11)            1,400                     -      1,379
                                            =============================================================================




Page 44

                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - concluded

14.  Condensed consolidating information - concluded



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
Cash flow statement (concluded)              Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Three months ended March 31, 2002

Net cash inflow (outflow) from
  operating activities                               367         1,051             2,119                    99      3,636

Dividends from joint ventures                          -             -                83                     -         83

Dividends from associated undertakings                 -             -                53                     -         53

Dividends from subsidiaries                           15             -                 -                   (15)         -

Net cash inflow (outflow) from servicing
  of finance and returns on investments                -            65              (337)                    -       (272)

Tax paid                                               -             -              (445)                    -       (445)

Net cash inflow (outflow) for capital
  expenditure and financial investments             (150)          (17)           (2,315)                    -     (2,482)

Net cash inflow (outflow) for acquisitions
  and disposals                                        -            99            (1,708)                  (99)    (1,708)

Equity dividends paid                                  -        (1,288)              (15)                   15     (1,288)
                                            -----------------------------------------------------------------------------
Net cash inflow (outflow)                            232           (90)           (2,565)                    -     (2,423)
                                            =============================================================================

Financing                                            214           (90)           (2,407)                    -     (2,283)

Management of liquid resources                         -             -              (165)                    -       (165)

Increase (decrease) in cash                           18             -                 7                     -         25
                                            -----------------------------------------------------------------------------
                                                     232           (90)           (2,565)                    -     (2,423)
                                            =============================================================================


     The consolidated  statement of cash flows presented in accordance with SFAS
     95 is as follows:



                                                  Issuer      Guarantor
                                             --------------------------
                                                      BP                                          Eliminations
                                             Exploration                           Other                   and         BP
                                            (Alaska) Inc.     BP p.l.c.     subsidiaries     reclassifications      Group
                                            -----------------------------------------------------------------------------
                                                                             ($ million)
                                                                                                  
Net cash provided by (used in)
  operating activities                               382         1,116             1,488                    97      3,083

Net cash provided by (used in)
  investing activities                              (150)           83            (4,038)                 (100)    (4,205)

Net cash provided by (used in)
  financing activities                              (214)       (1,199)            2,392                     3        982

Currency translation differences
  relating to cash and cash equivalents                -             -                (3)                    -         (3)
                                            -----------------------------------------------------------------------------
Increase (decrease) in cash
  and cash equivalents                                18             -              (161)                    -       (143)

Cash and cash equivalents at
  beginning of period                                (29)            3             1,834                     -      1,808
                                            -----------------------------------------------------------------------------
Cash and cash equivalents at
  end of period                                      (11)            3             1,673                     -      1,665
                                            =============================================================================





Page 45

                           BP p.l.c. AND SUBSIDIARIES
                            ENVIRONMENTAL INDICATORS


                                                       Three months ended
                                                             March 31
                                                           (Unaudited)
                                                       2003          2002
                                                     ------        ------
Average oil realizations (a) - $/bbl
   UK                                                 30.67         20.67
   USA                                                29.36         17.26
   Rest of World                                      29.48         18.63
   BP average                                         29.82         18.77

   Brent oil price                                    31.47         21.13
   West Texas Intermediate oil price                  34.00         21.54
   Alaska North Slope US West Coast                   33.16         19.76
Average natural gas realizations - $/mcf
   UK                                                  3.32          3.12
   USA                                                 5.27          2.13
   Rest of World                                       2.70          1.93
   BP average                                          3.87          2.27

Henry Hub gas price (b) ($/mmBtu)                      6.53          2.35
UK Gas - National Balancing point (p/therm)           21.28         19.22

Global Indicator Refining Margins (c) - $/bbl
   Northwest Europe                                    3.70          0.09
   US Gulf Coast                                       6.14          2.04
   Midwest                                             4.14          2.06
   US West Coast                                       6.77          5.43
   Singapore                                           2.98          0.21
   BP average                                          4.52          1.64

Chemicals Indicator Margin (d) - $/te                    90(e)         80

---------------

(a)  Crude oil and natural gas liquids.
(b)  Henry Hub First of Month Index.
(c)  The Global Indicator Refining Margin (GIM) is the average of seven regional
     indicator margins weighted for BP's crude refining capacity in each region.
     Each regional indicator margin is based on a single representative crude
     with product yields characteristic of the typical level of upgrading
     complexity.
(d)  The Chemicals  Indicator  Margin (CIM) is a weighted  average of externally
     based  product  margins.  It is based on market  data  collected  by Nexant
     (formerly Chem Systems) in their quarterly market  analyses,  then weighted
     based  on BP's  product  portfolio.  While  it does not  cover  our  entire
     portfolio,  it includes a broad range of  products.  Among the products and
     businesses  covered  in the  CIM  are  the  olefins  and  derivatives,  the
     aromatics and derivatives,  linear alpha-olefins (LAOs), acetic acid, vinyl
     acetate monomers and nitriles. Not included are fabrics and fibres, plastic
     fabrications,    poly   alpha-olefins   (PAOs),   anhydrides,    speciality
     intermediates,  and  the  remaining  parts  of  the  solvents  and  acetyls
     businesses.
(e)  Provisional. The data for the fourth quarter is based on two months' actual
     and one month of provisional data.


                                                       Three months ended
                                                             March 31
                                                           (Unaudited)
US dollar/sterling exchange rates                      2003          2002
                                                     ------        ------
Average rate for the period                            1.60          1.43
Period-end rate                                        1.57          1.42


Page 46

                           BP p.l.c. AND SUBSIDIARIES
                              OPERATING INFORMATION

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
Crude oil and natural gas liquids production
(thousand barrels per day) (net of royalties)
   UK                                                         471           482
   Rest of Europe                                              95           104
   USA                                                        773           760
   Rest of World                                              724           643
                                                           ------        ------
Total crude oil and liquids production                      2,063         1,989
                                                           ======        ======

Natural gas production (million cubic feet per day)
(net of royalties)
   UK                                                       1,798         1,628
   Rest of Europe                                             131           162
   USA                                                      3,437         3,561
   Rest of World                                            3,651         3,395
                                                           ------        ------
Total natural gas production                                9,017         8,746
                                                           ======        ======

Total production (a)
(thousand barrels of oil equivalent per day)
(net of royalties)
   UK                                                         781           763
   Rest of Europe                                             118           132
   USA                                                      1,366         1,374
   Rest of World                                            1,353         1,228
                                                           ------        ------
Total production                                            3,618         3,497
                                                           ======        ======

Natural gas sales volumes (million cubic feet per day)
   UK                                                       3,215         2,619
   Rest of Europe                                             473           413
   USA                                                     11,734         8,733
   Rest of World                                           11,553         9,289
                                                           ------        ------
Total natural gas sales volumes (b)                        26,975        21,054
                                                           ======        ======

NGL sales volumes (thousand barrels per day)
   UK                                                           -             -
   Rest of Europe                                               -             -
   USA                                                        126           153
   Rest of World                                              232           231
                                                           ------        ------
Total NGL sales volumes                                       358           384
                                                           ======        ======


---------------

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

(b)  Encompasses  sales  by  Exploration  and  Production  and  Gas,  Power  and
     Renewables, including marketing, trading and supply sales.



Page 47

                           BP p.l.c. AND SUBSIDIARIES
                        OPERATING INFORMATION - concluded


                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
Oil sales volumes (thousand barrels per day)
Refined products
   UK                                                         279           256
   Rest of Europe                                           1,318         1,275
   USA                                                      1,751         1,834
   Rest of World                                              645           600
                                                           ------        ------
   Total marketing sales                                    3,993         3,965
   Trading/supply sales                                     2,811         2,535
                                                           ------        ------
   Total refined product sales                              6,804         6,500
Crude oil                                                   4,529         4,809
                                                           ------        ------
Total oil sales                                            11,333        11,309
                                                           ======        ======

Refinery throughputs (thousand barrels per day)
   UK                                                         377           392
   Rest of Europe                                             954           833
   USA                                                      1,302         1,394
   Rest of World                                              391           375
                                                           ------        ------
Total throughput                                            3,024         2,994
                                                           ======        ======

Chemicals production (thousand tonnes)
   UK                                                         869           829
   Rest of Europe                                           2,763         2,583
   USA                                                      2,536         2,489
   Rest of World                                              812           710
                                                           ------        ------
Total production                                            6,980         6,611
                                                           ======        ======


Page 48

                           BP p.l.c. AND SUBSIDIARIES
                              TOTAL OPERATING PROFIT

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
By business
Exploration and Production
UK                                                          1,134           727
Rest of Europe                                                193           152
USA                                                         1,811           325
Rest of World                                               1,194           727
                                                           ------        ------
                                                            4,332         1,931
                                                           ------        ------
Gas, Power and Renewables
UK                                                              3             2
Rest of Europe                                                 (8)           47
USA                                                            41           (24)
Rest of World                                                 185            90
                                                           ------        ------
                                                              221           115
                                                           ------        ------
Refining and Marketing
UK                                                             68           (73)
Rest of Europe                                                407           270
USA                                                           596           205
Rest of World                                                 180           161
                                                           ------        ------
                                                            1,251           563
                                                           ------        ------
Chemicals
UK                                                            (11)          (50)
Rest of Europe                                                105            41
USA                                                           139            19
Rest of World                                                  52            37
                                                           ------        ------
                                                              285            47
                                                           ------        ------
Other businesses and corporate                               (165)         (125)
                                                           ------        ------
                                                            5,924         2,531
                                                           ======        ======
By geographical area
UK                                                          1,118           576
Rest of Europe                                                690           498
USA                                                         2,489           442
Rest of World                                               1,627         1,015
                                                           ------        ------
                                                            5,924         2,531
                                                           ======        ======


Page 49

                           BP p.l.c. AND SUBSIDIARIES
                      CAPITAL EXPENDITURE AND ACQUISITIONS

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
By business

Exploration and Production
   UK                                                         196           261
   Rest of Europe                                              51            71
   USA                                                        966         1,167
   Rest of World                                              924           814
                                                           ------        ------
                                                            2,137         2,313
                                                           ------        ------
Gas, Power and Renewables
   UK                                                           8            16
   Rest of Europe                                              15             4
   USA                                                         38            16
   Rest of World                                                7            10
                                                           ------        ------
                                                               68            46
                                                           ------        ------
Refining and Marketing
   UK                                                          73            76
   Rest of Europe (a)                                         104         2,732
   USA                                                        336           303
   Rest of World                                               24            26
                                                           ------        ------
                                                              537         3,137
                                                           ------        ------
Chemicals
   UK                                                           -            8
   Rest of Europe                                              31           45
   USA                                                         46           42
   Rest of World                                               19           93
                                                           ------        ------
                                                               96          188
                                                           ------        ------

Other businesses and corporate                                 36            52
                                                           ------        ------
                                                            2,874         5,736
                                                           ======        ======
By geographical area
   UK                                                         301           409
   Rest of Europe                                             202         2,852
   USA                                                      1,396         1,531
   Rest of World                                              975           944
                                                           ------        ------
                                                            2,874         5,736
                                                           ======        ======

------------

(a) Three months ended March 31, 2003 included the acquisition of 51% of Veba.



Page 50

                           BP p.l.c. AND SUBSIDIARIES
                       RETURN ON AVERAGE CAPITAL EMPLOYED

                                                             Three months ended
                                                                   March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
Profit for the period                                       4,267         1,296
Interest (a)                                                   99           164
Minority shareholders' interest                                26            40
                                                           ------        ------
Adjusted profit                                             4,392         1,500
                                                           ======        ======
Capital employed at beginning of period:
  BP shareholders' interest                                69,409        65,161
  Minority shareholders' interest                             638           598
  Finance debt                                             22,008        21,417
                                                           ------        ------
  Capital employed                                         92,055        87,176
                                                           ======        ======
Capital employed at end of period:
  BP shareholders' interest                                71,076        64,902
  Minority shareholders' interest                           1,047         2,579
  Finance debt                                             19,042        24,531
                                                           ------        ------
  Capital employed                                         91,165        92,012
                                                           ======        ======

Average capital employed                                   91,610        92,012
                                                           ======        ======
ROACE                                                        19.2%          6.7%

------------

(a)   Excludes interest on joint venture and associated undertakings debt as
      well as unwinding of discount on provisions and effect of change in
      discount rate on provisions, and is on a post-tax basis, using a deemed
      tax rate equal to the US statutory tax rate.




Page 51

                           BP p.l.c. AND SUBSIDIARIES
                                 NET DEBT RATIO

                                                                At March 31
                                                                 (Unaudited)
                                                             2003          2002
                                                           ------        ------
                                                                ($ million)
Net debt ratio - net debt: net debt + equity
Gross finance debt                                         19,042        24,531
Cash and current asset investments                          1,379         1,665
                                                           ------        ------
Net debt                                                   17,663        22,866
                                                           ------        ------
Equity                                                     72,123        67,481
Net debt ratio                                                 20%           25%
                                                           ------        ------
Acquisition adjustment (a)                                 15,208        18,297
                                                           ------        ------
Net debt ratio - pro forma basis (b)                           24%           32%
                                                           ======        ======

---------------

(a)  Acquisition adjustment refers to the fixed asset revaluation adjustments
     and goodwill consequent upon the ARCO and Burmah Castrol acquisitions.

(b)  Based on equity excluding the fixed asset revaluation adjustment and
     goodwill resulting from the ARCO and Burmah Castrol acquisitions.




Page 52




                                   SIGNATURES





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



                                    BP p.l.c.
                                  (Registrant)





Dated: May 1, 2003                     /s/ D. J. Pearl
                                       .........................................
                                       D. J. PEARL
                                       Deputy Company Secretary


Page 53