First quarter 2011 results

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First quarter 2011

	First quarter 2011	Fourth quarter 2010	First quarter 2010
$ million
Profit for the period^(a)	7,124	5,567	6,079
Inventory holding (gains) losses, net of tax	(1,643)	(953)	(481)
Replacement cost profit	5,481	4,614	5,598

-per ordinary share (cents)	29.13	24.55	29.82
-per ADS (dollars)	1.75	1.47	1.79

BP's first-quarter replacement cost profit was $5,481 million, compared with $5,598 million a year ago. The group income statement for the first quarter reflects a pre-tax charge of $0.4 billion related to the Gulf of Mexico oil spill. All charges relating to the incident have been treated as non-operating items. For further information on the Gulf of Mexico oil spill and its consequences see pages 2 - 3, Note 2 on pages 21 - 26 and Legal proceedings on pages 31 - 37. Non-operating items (including amounts relating to the Gulf of Mexico oil spill) and fair value accounting effects for the first quarter, on a post-tax basis, had a net favourable impact of $107 million compared with a net unfavourable impact of $49 million in the first quarter of 2010. See pages 4, 18 and 19 for further details. Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $239 million for the first quarter, compared with $228 million for the same period last year. The effective tax rate on replacement cost profit for the first quarter was 37% compared with 34% a year ago. For the full year, our expectation is that the effective tax rate will be around 32-34%, in line with previous guidance. Excluding the impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary charge on UK oil and gas production, the effective tax rate for the first quarter was 30%. The UK government has also announced its intention to restrict the tax relief available on decommissioning expenditure to 50% in 2012. This change is not yet substantively enacted but would be likely to give rise to an additional tax charge in 2012 in the order of $0.4 billion. Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the first quarter was $2.4 billion, compared with $7.7 billion in the same period of last year. The amounts for the first quarter of 2011 included a net cash outflow of $2.8 billion relating to the Gulf of Mexico oil spill and also included the impact of increases in working capital as a consequence of higher oil prices. Net debt at the end of the quarter was $27.5 billion, compared with $25.2 billion a year ago. The ratio of net debt to net debt plus equity was 21% compared with 19% a year ago. Total capital expenditure for the first quarter was $4.0 billion, all of which was organic ^(b). Disposal proceeds were $1.0 billion for the quarter. The quarterly dividend expected to be paid on 28 June 2011 is 7 cents per share ($0.42 per ADS). The corresponding amount in sterling will be announced on 14 June 2011. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the scrip dividend programme are available at www.bp.com/scrip. On 14 April, BP announced that, as a result of the continuing interim injunction prohibiting completion, it had agreed with Rosneft to extend the deadline for completing their previously announced share swap agreement until 16 May 2011. This is to allow more time for the arbitration process that was convened to resolve issues raised by Alfa Petroleum Holdings Limited and OGIP Ventures Limited and to determine whether or not the interim injunction prohibiting completion should remain in effect. See Legal proceedings on page 37 for further information. ^(a) Profit attributable to BP shareholders. ^(b) Organic capital expenditure excludes acquisitions and asset exchanges (see page 16).

Forward Looking Statements - Cautionary Statement:
This presentation and the associated slides and discussion contain forward-looking statements particularly those regarding the expected total effective tax rate for 2011 and the impact in 2012 of an announced change in UK tax relief available on decommissioning expenditure; the quarterly dividend payment; the completion of the decontamination of the vessels involved in the response to the Gulf of Mexico oil spill; the timing of seabed and seismic surveys of the area affected by the Gulf of Mexico oil spill; the magnitude and timing of remaining remediation costs related to the Gulf of Mexico oil spill; the factors that could affect the magnitude of BP’s ultimate exposure and the cost to BP in relation to the spill and any potential mitigation resulting from BP’s partners or others involved in the spill; the potential liabilities resulting from pending and future legal proceedings and potential investigations and civil or criminal actions that US state and/or local governments could seek to take against BP as a result of the spill.

The timing of claims and litigation outcomes and of payment of legal costs; the anticipated timing for completion of the disposition of certain BP assets; contributions to and payments from the trust fund and the setting aside of assets while the fund is building; the expected impact on second quarter production from acquisitions and divestments, lower production in the Gulf of Mexico, and seasonal increase in turnaround activity; expectations for second quarter refining margins and for the petrochemicals environment; expectations for refinery turnaround activities; the supply and trading contribution and WTI differentials in the second quarter; compliance with sanctions in relation to Libya; exploration activity in four deepwater offshore blocks off of Australia; continuing requests for cost reimbursement from the US Coast Guard and other governmental authorities; the timing for publication of investigation reports; the impact of BP’s potential liabilities relating to the Gulf of Mexico oil spill on the group, including its business, results and financial condition; and BP’s anticipated response to potential future claims against Alyeska and Atlantic Richfield; and completion of a share swap agreement entered into with Rosneft.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors including the timing of bringing new fields onstream; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought; the impact on our reputation following the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners, creditors, rating agencies and others; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism or sabotage; and other factors discussed under “Risk factors” in our Annual Report and Form 20-F 2010 as filed with the US Securities and Exchange Commission (SEC).

Reconciliations to GAAP:
This presentation also contains financial information which is not presented in accordance with generally accepted accounting principles (GAAP). A quantitative reconciliation of this information to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found on our website at www.bp.com

Cautionary Note to US investors:
We use certain terms in this presentation, such as "resources” and “non-proved resources", that the SEC’s rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov. Tables and projections in this presentation are BP projections unless otherwise stated.

First quarter 2011

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