BP p.l.c. Group Results Fourth Quarter and Full Year 2007




    LONDON, Feb. 5 /CNW/ --

    (Logo:  http://www.newscom.com/cgi-bin/prnh/20000724/NYM120LOGO

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                      Year
     2006     2007     2007     $ million                 2007     2006     %
     2,880    4,406    4,399   Profit for the period(*)  20,845   22,000
                                Inventory holding
     1,015     (539)  (1,427)   (gains) losses         (3,558)     253
    

    
                                Replacement cost
     3,895    3,867    2,972    profit                 17,287   22,253   (22)
    

    
                                - per ordinary share
     10.37     9.94     7.66    (pence)                 45.10    60.38
                                - per ordinary share
     20.08    20.34    15.69    (cents)                 90.20   111.10   (19)
       1.21     1.22     0.94   - per ADS (dollars)       5.41     6.67
    



    
    -- BP's fourth-quarter replacement cost profit was $2,972 million,
       compared with $3,895 million a year ago, a decrease of 24%. For the
       full year, replacement cost profit was $17,287 million compared with
       $22,253 million, down 22%.
    

    
    -- The fourth-quarter result included a net non-operating charge of
       $1,030 million, including pre-tax charges of $603 million for the
       impairment of US Convenience Retail and $338 million for
       restructuring, integration and rationalization costs associated with
       BP's Forward Agenda. This compares with a net non-operating charge of
       $152 million in the fourth quarter of 2006. For the full year, the net
       non-operating charge was $272 million compared with a net non-
       operating gain of $1,062 million in 2006.
    

    
    -- Net cash provided by operating activities for the quarter and year was
       $4.3 billion and $24.7 billion respectively compared with $5.0 billion
       and $28.2 billion a year ago.
    

    
    -- The effective tax rate on replacement cost profit from continuing
       operations for the fourth quarter was 45% compared with 25% a year
       ago.
       For the year, the rate was 37% compared with 35% a year ago. The
       increased rate in the fourth quarter reflects the effect of inventory
       holding gains and losses, which are eliminated in the replacement cost
       profit, while the tax charge remains unadjusted and includes the tax
       effect on inventory holding gains and losses. If this effect is
       excluded, the rate would have been 38% in the fourth quarter compared
       to 31% a year ago.
    

    
    -- Net debt at the end of the quarter was $27.5 billion. The ratio of net
       debt to net debt plus equity was 23% compared with 20% a year ago.
    

    
    -- Capital expenditure, excluding acquisitions and asset exchanges, was
       $6.6 billion for the quarter and for the year was $19.2 billion. Total
       capital expenditure and acquisitions was $6.6 billion for the quarter
       and $20.6 billion for the year. The year included $1.1 billion in
       respect of the acquisition of Chevron's Netherlands manufacturing
       company. Disposal proceeds were $0.4 billion for the quarter and were
       $4.3 billion for the year.
    

    
    -- The quarterly dividend, to be paid in March, is 13.525 cents per share
       ($0.8115 per ADS) compared with 10.325 cents per share a year ago. For
       the year, the dividend showed an increase of 16%. The dividend
       increase marks a shift in the balance between dividends and share
       buybacks as a means of returning value to shareholders. In sterling
       terms, the quarterly dividend is 6.813 pence per share, compared with
       5.258 pence per share a year ago; for the year the increase was 7%.
       During the quarter, the company repurchased 121 million of its own
       shares for cancellation at a cost of $1.5 billion. For the year, share
       repurchases were 663 million at a cost of $7.5 billion.
    

    
    -- Information on fair value accounting effects in relation to Refining
       and Marketing and Gas, Power and Renewables is set out on page 10.
    

    
    (*)  Profit attributable to BP shareholders.
    
    The commentaries above and following are based on replacement cost profit
and should be read in conjunction with the cautionary statement on page 11.


    Analysis of Replacement Cost Profit and Reconciliation to Profit for the
    Period

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                       Year
     2006     2007     2007    $ million                        2007     2006
      5,063    6,343    7,648  Exploration and Production     26,927   29,647
        312      376   (1,337) Refining and Marketing          2,617    5,283
        470      (57)     219  Gas, Power and Renewables         558    1,376
       (276)    (451)    (373) Other businesses and corporate (1,104)    (947)
       (103)      59     (277) Consolidation adjustments        (204)      52
                               RC profit before interest and
      5,466    6,270    5,880   tax                           28,794   35,411
    

    
                               Finance costs and other
       (149)    (173)    (242)  finance income                  (741)    (516)
     (1,347)  (2,158)  (2,561) Taxation                      (10,442) (12,331)
        (75)     (72)    (105) Minority interest                (324)    (286)
                               RC profit from continuing
                                operations attributable to BP
      3,895    3,867    2,972   shareholders(a)               17,287   22,278
    

    
                               Inventory holding gains
                                (losses) from continuing
     (1,015)     539    1,427   operations                     3,558     (253)
                               Profit for the period from
                                continuing operations
                                attributable to BP
      2,880    4,406    4,399   shareholders                  20,845   22,025
                               Profit (loss) for the period
          -        -        -   from Innovene operations(b)        -      (25)
                               Profit for the period
                                attributable to BP
      2,880    4,406    4,399   shareholders                  20,845   22,000
    

    
                               RC profit from continuing
                                operations attributable to BP
      3,895    3,867    2,972   shareholders                  17,287   22,278
          -        -        -  RC profit (loss) from Innovene
                                operations                         -      (25)
      3,895    3,867    2,972  Replacement cost profit        17,287   22,253
    


    
    (a) Replacement cost profit reflects the current cost of supplies. The
        replacement cost profit for the period is arrived at by excluding from
        profit inventory holding gains and losses. BP uses this measure to
        assist investors to assess BP's performance from period to period.
        Replacement cost profit is not a recognized GAAP measure.
    

    (b) See further detail in Note 2.



    Results include Non-operating Items

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                        Year
     2006     2007     2007   $ million                         2007     2006
    

    
     (177)      22     (616)  Exploration and Production         553    2,382
      (53)    (344)  (1,146)  Refining and Marketing            (952)    (384)
      215       (8)     (62)  Gas, Power and Renewables          (97)     181
     (188)    (205)     (63)  Other businesses and corporate    (227)     (75)
     (203)    (535)  (1,887)                                    (723)   2,104
       51      189      857   Taxation(a)                        451     (851)
     (152)    (346)  (1,030)  Continuing operations             (272)   1,253
    

    
        -        -        -   Innovene operations                  -     (184)
        -        -        -   Taxation                             -       (7)
     (152)    (346)  (1,030)  Total for all operations          (272)   1,062
    

    An analysis of non-operating items by type is provided on page 21.

    
    (a) Tax on non-operating items is calculated using the quarter's effective
        tax rate on replacement cost profit from continuing operations.
    



    Per Share Amounts

    
         Fourth     Third      Fourth
         Quarter    Quarter    Quarter                              Year
          2006       2007       2007                          2007        2006
                                     Results for the period
                                      ($m)
         2,880      4,406      4,399 Profit(a)              20,845      22,000
                                     Replacement cost
         3,895      3,867      2,972  profit                17,287      22,253
    

    
                                     Shares in issue at
                                      period end
    19,510,496 19,019,579 18,922,786  (thousand)(b)     18,922,786  19,510,496
                                     - ADS equivalent
     3,251,749  3,169,930  3,153,798  (thousand)(b)      3,153,798   3,251,749
                                     Average number of
                                      shares outstanding
    19,610,871 19,061,853 18,979,138  (thousand)(b)     19,163,389  20,027,527
                                     - ADS equivalent
     3,268,479  3,176,976  3,163,190  (thousand)(b)      3,193,898   3,337,921
                                     Shares repurchased
                                      in the period
       310,385    128,253    121,175  (thousand)           663,150   1,334,363
    

    
                                     Per ordinary share
                                      (cents)
                                     Profit for the
         15.04      23.18      23.15  period                108.76      109.84
                                     RC profit for the
         20.08      20.34      15.69  period                 90.20      111.10
    

    
                                     Per ADS (cents)
                                     Profit for the
         90.24     139.08     138.90  period                652.56      659.04
                                     RC profit for the
        120.48     122.04      94.14  period                541.20      666.60
    

    
    (a) Profit attributable to BP shareholders.
    (b) Excludes treasury shares.
    



    
                                  Dividends
    Dividends Payable
    
    BP today announced a dividend of 13.525 cents per ordinary share to be
paid in March. Holders of ordinary shares will receive 6.813 pence per share
and holders of American Depository Receipts (ADRs) $0.8115 per ADS. The
dividend is payable on 10 March to shareholders on the register on 22
February. Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP
facility in the US Direct Access Plan will receive the dividend in the form of
shares, also on 10 March.



    Dividends Paid

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                        Year
     2006     2007     2007                                      2007     2006
                              Dividends paid per ordinary share
    9.825   10.825   10.825    Cents                           42.300   38.400
    5.241    5.278    5.308    Pence                           20.995   21.104
    58.95    64.95    64.95   Dividends paid per ADS (cents)   253.80   230.40
    



    Net Debt Ratio - Net Debt: Net Debt + Equity

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                    Year
    
    2006     2007     2007   $ million                     2007      2006   
24,010   25,245   31,045   Gross debt                  31,045    24,010
    2,590    2,410    3,562   Cash and cash equivalents    3,562     2,590   
21,420   22,835   27,483   Net debt                    27,483    21,420   
85,465   91,494   94,652   Equity                      94,652    85,465
    20%      20%      23%  Net debt ratio                  23%       20%



    Exploration and Production

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                       Year
     2006     2007     2007   $ million                        2007      2006
                              Profit before interest and
    5,057    6,347    7,643    tax(a)                        26,938    29,629
                              Inventory holding (gains)
        6       (4)       5    losses                           (11)       18
                              Replacement cost profit before
    5,063    6,343    7,648    interest and tax              26,927    29,647
    

    
                              By region:
    1,534      703      816   UK                              3,694     5,839
      249      221      262   Rest of Europe                  1,386     1,209
      952    1,843    2,213   US                              7,746     9,344
    2,328    3,576    4,357   Rest of World                  14,101    13,255
    5,063    6,343    7,648                                  26,927    29,647
    

    
                              Results include:
                              Non-operating items
      289       33     (538)  UK                               (173)      821
      (13)       7       (3)  Rest of Europe                    535        43
     (269)     (15)     222   US                                376     1,758
     (184)      (3)    (297)  Rest of World                    (185)     (240)
     (177)      22     (616)                                    553     2,382
    

    
                              Exploration expense
        6        2       17   UK                                 46        20
        -        -        -   Rest of Europe                      -         -
      324       60       61   US                                252       633
       78      182      123   Rest of World                     458       392
      408      244      201                                     756     1,045
    

    
                              Production (net of
                               royalties)(b)
                              Liquids (mb/d) (net of
                               royalties)(c)
      239      151      199   UK                                201       253
       57       52       50   Rest of Europe                     51        61
      533      475      523   US                                514       547
    1,587    1,614    1,697   Rest of World                   1,648     1,614
    2,416    2,292    2,469                                   2,414     2,475
    

    
                              Natural gas (mmcf/d)
                               (net of royalties)
      888      582      853   UK                                768       936
       90       26       26   Rest of Europe                     29        92
    2,196    2,186    2,183   US                              2,174     2,376
    5,082    5,085    5,275   Rest of World                   5,172     5,013
    8,256    7,879    8,337                                   8,143     8,417
    

    
                              Total hydrocarbons (mboe/d)(d)
      392      251      346   UK                                333       414
       73       57       55   Rest of Europe                     56        77
      912      851      900   US                                888       957
    2,463    2,492    2,606   Rest of World                   2,541     2,478
    3,840    3,651    3,907                                   3,818     3,926
    

    
                              Average realizations(e)
    54.13    71.12    82.72   Total liquids ($/bbl)           67.45     59.23
     4.38     3.93     4.83   Natural gas ($/mcf)              4.53      4.72
    40.13    46.36    56.03   Total hydrocarbons ($/boe)      47.18     43.60
    

    
    (a) Profit from continuing operations and includes profit after interest
        and tax of equity-accounted entities.
    (b) Includes BP's share of production of equity-accounted entities.
    (c) Crude oil and natural gas liquids.
    (d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
        1 million barrels.
    (e) Based on sales of consolidated subsidiaries only - this excludes
        equity-accounted entities.
    (f) Because of rounding, some totals may not agree exactly with the sum of
        their component parts.
    



    
                          Exploration and Production
    
    The replacement cost profit before interest and tax for the fourth
quarter was $7,648 million, an increase of 51% over the fourth quarter of
2006. This result benefited from higher reported volumes, higher overall
realizations and the favourable effect of lagged tax reference prices in
TNK-BP, partially offset by higher costs reflecting the impacts of
sector-specific inflation, project start-up costs and higher depreciation
charges. Additionally, the fourth-quarter result was impacted by the
retroactive effect of increased production taxes in Alaska, which were
effective mid-year. The net non- operating charge for the quarter was $616
million and included fair value losses of $430 million on embedded derivatives
related to North Sea gas contracts as well as restructuring costs. The fourth
quarter of 2006 included a net charge of $177 million.
    The replacement cost profit before interest and tax of $26,927 million
for the full year represented a decrease of 9% on the previous year. This
result benefited from higher liquids realizations and the favourable effect of
lagged tax reference prices in TNK-BP, but was impacted by lower gas
realizations, lower reported volumes, higher production taxes and higher costs
reflecting the impacts of sector-specific inflation, increased integrity spend
and higher depreciation charges. Additionally, the full-year result was lower
due to the absence of disposal gains in equity-accounted entities in 2006,
primarily the $892 million gain on TNK-BP's disposal of the Udmurtneft assets.
The full-year result included a net non-operating gain of $553 million
compared with a $2,382 million gain in 2006.
    Reported production for the fourth quarter was 3,907mboe/d, 2% higher
than in the fourth quarter of 2006. After adjusting for the effect of
acquisitions and disposals and the impact of lower entitlement in our
production-sharing agreements (PSAs), production was 3% higher than in the
fourth quarter of 2006. Reported production of 3,818mboe/d for the full year
was 3% lower than in 2006 on a reported basis and was flat after adjusting for
the effects of acquisitions, disposals and lower PSA entitlements.
    During the fourth quarter, we started production at five BP-operated
major projects: Mango and Cashima in Trinidad, Atlantis and King Subsea Pump
in the Gulf of Mexico and Greater Plutonio in Angola. Additionally, we had
first production from the Denise field in Egypt, where BP holds a 50% interest
and, shortly after the end of the quarter, we also had first production from
the Mondo field within the Kizomba C development in Angola, where BP holds a
26.67% interest.
    Furthermore, we had further exploration success in Azerbaijan with the
Shah Deniz SDX-04 discovery, in Angola with the Portia discovery and in Egypt
with the Satis and Taurus Deep discoveries.
    In December, we announced an agreement with Husky Energy Inc. to create
an integrated North American oil sands business, by means of two separate
joint ventures. In one, BP will take a 50% interest in Husky Energy's Sunrise
field in Alberta, Canada, while in the other, Husky will take a 50% interest
in BP's Toledo refinery.
    Also in December, the Libyan General People's Committee ratified the
exploration and production agreement between BP and Libya's National Oil
Company, which we announced in May of 2007.
    During 2007, we extended our track record in achieving reported reserves
replacement of more than 100%, excluding acquisitions and disposals, in spite
of significant PSA effects associated with high oil prices.



    Refining and Marketing

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                        Year
     2006     2007     2007   $ million                           2007   2006
     (706)     936       26   Profit before interest and tax(a)  6,072  5,041
    1,018     (560)  (1,363)  Inventory holding (gains) losses  (3,455)   242
                              Replacement cost profit before
      312      376   (1,337)   interest and tax                  2,617  5,283
    

    
                              By region:
      190       22      122   UK                                 1,097    351
      336      492      278   Rest of Europe                     1,652  2,249
     (421)    (527)  (1,811)  US                                (1,252) 1,353
      207      389       74   Rest of World                      1,120  1,330
      312      376   (1,337)                                     2,617  5,283
    

    
                              Results include:
                              Non-operating items
       23       (4)     (10)  UK                                   667     15
      (89)     (16)     (56)  Rest of Europe                      (128)    93
       25     (316)    (977)  US                                (1,181)  (589)
      (12)      (8)    (103)  Rest of World                       (310)    97
      (53)    (344)  (1,146)                                      (952)  (384)
    

    
                              Refinery throughputs (mb/d)
      188        -        -   UK                                    67    165
      660      735      689   Rest of Europe                       691    648
    1,052    1,109      996   US                                 1,064  1,110
      294      304      313   Rest of World                        305    275
    2,194    2,148    1,998   Total throughput                   2,127  2,198
     81.6     83.4     84.0   Refining availability (%)(b)        82.9   82.5
    

    
                              Oil sales volumes (mb/d)
                              Refined products
      354      350      328   UK                                   339    356
    1,368    1,329    1,330   Rest of Europe                     1,294  1,340
    1,541    1,535    1,455   US                                 1,533  1,595
      601      641      680   Rest of World                        640    581
    3,864    3,855    3,793   Total marketing sales              3,806  3,872
    1,920    1,687    1,696   Trading/supply sales               1,818  1,929
    5,784    5,542    5,489   Total refined product sales        5,624  5,801
    1,959    1,709    1,659   Crude oil                          1,885  2,110
    7,743    7,251    7,148   Total oil sales                    7,509  7,911
    

    
                              Global Indicator Refining Margin
                               ($/bbl)(c)
     2.49    3.82      4.84   NWE                                 4.99   3.92
     7.92   12.58      6.82   USGC                               13.48  12.00
     5.42   14.31      3.39   Midwest                            12.81   9.14
    14.59    6.90      8.49   USWC                               15.05  14.84
     2.95    4.52      5.80   Singapore                           5.29   4.22
     6.30    8.05      5.68   BP Average                          9.94   8.39
    

    
                              Chemicals production (kte)
      159     237       228   UK                                   967    990
      797     587       660   Rest of Europe                     2,650  3,156
      976   1,117     1,088   US                                 4,328  3,464
    1,357   1,569     1,497   Rest of World                      6,083  6,454
    3,289   3,510     3,473   Total production                  14,028 14,064
    


    
    (a) Profit from continuing operations and includes profit after interest
        and tax of equity-accounted entities.
    (b) Refining availability is defined as the ratio of units which are
        available for processing, regardless of whether they are actually
        being used, to total capacity. Where there is planned maintenance,
        such capacity is not regarded as being available. During 2006 and
        2007, there was planned maintenance of a substantial part of the Texas
        City refinery.
    (c) The Global Indicator Refining Margin (GIM) is the average of regional
        indicator margins weighted for BP's crude refining capacity in each
        region. Each regional indicator margin is based on a single
        representative crude with product yields characteristic of the typical
        level of upgrading complexity. The regional indicator margins may not
        be representative of the margins achieved by BP in any period because
        of BP's particular refinery configurations and crude and product
        slate.
    



    
                            Refining and Marketing
    
    The replacement cost result before interest and tax was a loss of $1,337
million for the fourth quarter of 2007 and was a profit of $2,617 million for
the full year. This compares with a replacement cost profit before interest
and tax for the fourth quarter and full year of 2006 of $312 million and
$5,283 million respectively. The fourth-quarter result included a net non-
operating charge of $1,146 million, primarily reflecting impairment charges
associated with our exit from the operated Convenience Retail channel in the
US, restructuring costs, and a reassessment of certain provisions. The full-
year result included a charge of $952 million for non-operating items compared
with a charge of $384 million in 2006.
    Compared with a year ago, the fourth-quarter result reflected a lower
refining margin environment, higher refining outages and costs, including
those associated with the repair and recommissioning activities at our Texas
City and Whiting US refineries, and a lower contribution from supply
optimization. The quarter's result also reflected the impact of a major
scheduled turnaround at the Toledo refinery. In addition, the charge for non-
operating items was significantly higher than a year ago. These factors were
partially offset by the effects of continued strong performance from a number
of our marketing businesses. The refining outages outlined above, and the
majority of the non-operating charges, related to our operations in the US,
leading to the fourth-quarter loss of $1,811 million in the US (which included
non-operating charges of $977 million). This compares with a loss of $421
million a year ago, which included a non-operating gain of $25 million.
    The average refining Global Indicator Margin (GIM) and BP's actual
refining margin for the fourth quarter were both lower than those in the
fourth quarter of 2006, mainly due to improved product stock levels and rising
crude prices, most notably in the US.
    During 2007, the segment continued to focus on the restoration of
operations at the Texas City refinery and on investments in integrity
management throughout our refining portfolio. We have also focused on the
repair and recommissioning of the Whiting refinery following the operational
issues in March 2007. In many parts of the refining portfolio and the other
market-facing businesses, we delivered high reliability and improved results
versus 2006. However for the full year, compared with 2006, the impact of the
outages and recommissioning costs at the Texas City and Whiting refineries,
cost inflation, lower results from supply optimization and higher charges in
respect of non-operating items more than offset increased margins in both
refining and marketing.
    Refining throughputs were 1,998mb/d for the quarter, 196mb/d lower than
the fourth quarter of 2006. The reduction was mainly due to the effects of the
Coryton refinery disposal, major scheduled turnarounds at the Rotterdam and
Toledo refineries, as well as the outage at the Whiting refinery; this was
partially offset by improvements in the remainder of the refining portfolio.
For the full year, throughputs were 2,127mb/d, 71mb/d lower than in 2006.
Refining availability for the quarter and full year was 84.0% and 82.9%
respectively, higher than in the corresponding periods of 2006, reflecting the
ongoing progress towards Texas City recommissioning.
    Marketing volumes were 3,793mb/d in the fourth quarter and 3,806mb/d for
the full year, slightly lower than in the equivalent periods last year,
reflecting reduced industry demand in Europe and supply disruptions caused by
the outage at the Whiting refinery.
    By the end of 2007, the Whiting refinery had recommenced sour crude
processing and available distillation capacity exceeded 300,000bpd, in line
with prior guidance. At Texas City, we have successfully recommissioned the
three desulphurisation and upgrading units necessary to allow restart of the
remaining crude distillation capacity. The final sour crude unit is
mechanically complete and is expected to be fully operational during the first
quarter. By mid-2008, we expect most of the economic capability at the Texas
City refinery to have been restored.
    On 15 November 2007, BP announced that it would sell all of its company-
owned and company-operated convenience sites in the US. The majority of sites
will be sold to franchisees with the remaining sites sold to dealers and large
distributors (jobbers).
    On 5 December 2007, BP announced it had agreed to create an integrated
North American oil sands business with Husky Energy Inc., by means of two
separate joint ventures, one associated with BP's Toledo refinery.
    In mid-January 2008, BP and Sinopec signed a memorandum of understanding
to add a new 650,000 tonnes per annum acetic acid plant at their YARACO joint
venture in Chongqing, upstream Yangtze River, south-west China. This world-
scale acetic acid plant, using BP's leading Cativa(R) technology, is expected
to come onstream in 2011.



    Gas, Power and Renewables

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                         Year
     2006     2007     2007   $ million                          2007    2006
      468      (71)     304   Profit before interest and tax(a)   674   1,321
        2       14      (85)  Inventory holding (gains) losses   (116)     55
                              Replacement cost profit (loss)
      470      (57)     219    before interest and tax            558   1,376
    

    
                              By region:
      147      (85)    (103)  UK                                 (178)    217
      143      (37)     (14)  Rest of Europe                      (52)    123
      114      (23)      23   US                                  128     692
       66       88      313   Rest of World                       660     344
      470      (57)     219                                       558   1,376
    

    
                              Results include:
                              Non-operating items
       56      (12)     (31)  UK                                  (74)     88
      189        -      (26)  Rest of Europe                      (26)    189
        -        4       (5)  US                                    1       4
      (30)       -        -   Rest of World                         2    (100)
      215       (8)     (62)                                      (97)    181
    

    
    (a) Profit from continuing operations and includes profit after interest
        and tax of equity-accounted entities.
    
    The replacement cost profit before interest and tax for the fourth
quarter and full year was $219 million and $558 million respectively, compared
with $470 million and $1,376 million a year ago. The net non-operating charge
for the fourth quarter was $62 million, comprising net fair value losses on
embedded derivatives, a provision for restructuring costs, a charge for the
impairment of a solar asset and a net disposal gain. The corresponding quarter
of 2006 included a net non-operating gain of $215 million. For the full year,
the net charge for non-operating items was $97 million compared with a net
gain of $181 million in 2006.
    The fourth-quarter result was lower than the same period in 2006
primarily due to the change in non-operating items, described above, and lower
contributions from the marketing and trading business, partly offset by better
NGL operating performance. The full-year result was also lower than in 2006
reflecting a net charge for non-operating items (compared with a net gain last
year) and lower marketing and trading contributions, partly offset by improved
NGL performance.
    In the fourth quarter of 2007, Alternative Energy commenced full
commercial operations at the 300MW Cedar Creek project in Colorado, US and at
the 40MW Dhule project in India.
    Information on fair value accounting effects is set out on page 10.



    Other Businesses and Corporate

    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                        Year
     2006     2007     2007   $ million                         2007     2006
    

    
                              Profit (loss) before interest
     (265)    (462)    (389)   and tax(a)                     (1,128)    (885)
      (11)      11       16   Inventory holding (gains) losses    24      (62)
                              Replacement cost profit (loss)
     (276)    (451)    (373)   before interest and tax        (1,104)    (947)
    

    
                              By region:
      280      124      (63)  UK                                 (10)    (268)
      (97)     (77)      23   Rest of Europe                     (35)    (137)
     (319)    (359)    (316)  US                                (901)    (425)
     (140)    (139)     (17)  Rest of World                     (158)    (117)
     (276)    (451)    (373)                                  (1,104)    (947)
    

    
                              Results include:
                              Non-operating items
       13        1      (26)  UK                                 (25)     (12)
       (2)     (11)      24   Rest of Europe                      41       (5)
     (199)    (199)     (61)  US                                (247)     (75)
        -        4        -   Rest of World                        4       17
     (188)    (205)     (63)                                    (227)     (75)
    

    
    (a) Profit from continuing operations and includes profit after interest
        and tax of equity-accounted entities.
    
    Other businesses and corporate comprises Treasury (previously referred to
as Finance), the group's aluminium asset, interest income and costs relating
to corporate activities. The fourth quarter's result included a net charge of
$63 million in respect of non-operating items, compared with a net charge of
$188 million a year ago.
    
    Information on fair value accounting effects
    
    BP uses derivative instruments to manage the economic exposure relating
to inventories above normal operating requirements of crude oil, natural gas
and petroleum products as well as certain contracts to supply physical volumes
at future dates. Under IFRS, these inventories and contracts are recorded at
historic cost and on an accruals basis respectively. The related derivative
instruments, however, are required to be recorded at fair value with gains and
losses recognized in income because hedge accounting is either not permitted
or not followed, principally due to the impracticality of effectiveness
testing requirements. Therefore, measurement differences in relation to
recognition of gains and losses occur. Gains and losses on these inventories
and contracts are not recognized until the commodity is sold in a subsequent
accounting period. Gains and losses on the related derivative commodity
contracts are recognized in the income statement from the time the derivative
commodity contract is entered into on a fair value basis using forward prices
consistent with the contract maturity.
    IFRS requires that inventory held for trading be recorded at its fair
value using period end spot prices whereas any related derivative commodity
instruments are required to be recorded at values based on forward prices
consistent with the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices resulting in
measurement differences.
    The Gas, Power and Renewables business enters into contracts for
pipelines and storage capacity which, under IFRS, are recorded on an accruals
basis. These contracts are risk managed using a variety of derivative
instruments which are fair valued under IFRS. This results in measurement
differences in relation to recognition of gains and losses.
    The way that BP manages the economic exposures described above, and
measures performance internally, differs from the way these activities are
measured under IFRS. BP calculates this difference by comparing the IFRS
result with management's internal measure of performance, under which the
inventory and the supply and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end of the
period. We believe that disclosing management's estimate of this difference
provides useful information for investors because it enables investors to see
the economic effect of these activities as a whole. The impacts of fair value
accounting effects, relative to management's internal measure of performance,
are shown in the table below. Information for all quarters of 2005, 2006 and
2007 can be found at www.bp.com/FVAE.



    
    Fourth   Third    Fourth
    Quarter  Quarter  Quarter                                       Year
     2006     2007     2007   $ million                         2007     2006
                              Refining and Marketing
                              Unrecognized gains (losses)
                               brought forward from
     (252)     274      367    previous period                    72      283
                              Unrecognized (gains) losses
      (72)    (367)    (429)   carried forward                  (429)     (72)
                              Favourable/(unfavourable) impact
                               relative to management's measure
     (324)     (93)     (62)   of performance                   (357)     211
    

    
                              Gas, Power and Renewables
                              Unrecognized gains (losses)
                               brought forward from previous
      399      198      234    period                            155      123
                              Unrecognized (gains) losses
     (155)    (234)    (107)   carried forward                  (107)    (155)
                              Favourable/(unfavourable) impact
                               relative to management's measure
      244      (36)     127    of performance                     48      (32)
      (80)    (129)      65                                     (309)     179
       20       46      (29)  Taxation(a)                        105      (96)
      (60)     (83)      36                                     (204)      83
    

    
                              By region
                              Refining and Marketing
      (27)      45        1   UK                                 (52)     109
      (60)       2        5   Rest of Europe                    (110)     101
     (231)    (142)     (32)  US                                (165)      13
       (6)       2      (36)  Rest of World                      (30)     (12)
     (324)     (93)     (62)                                    (357)     211
    

    
                              Gas, Power and Renewables
       75      (22)     (11)  UK                                   1       63
        -        -        -   Rest of Europe                       -        -
      191      (19)      19   US                                 (77)     (59)
      (22)       5      119   Rest of World                      124      (36)
      244      (36)     127                                       48      (32)
    

    
    (a) Tax is calculated using the quarter's effective tax rate on
        replacement cost profit from continuing operations.
    
    Cautionary Statement: The foregoing discussion contains forward looking
statements particularly those regarding refining production and capacity,
disposals, intended expansion and new production capability. By their nature,
forward looking statements involve risk and uncertainty and actual results may
differ from those expressed in such statements depending on a variety of
factors including the following: the timing of bringing new fields on stream;
industry product supply; demand and pricing; operational problems; general
economic conditions (including inflation); political stability and economic
growth in relevant areas of the world; changes in laws and governmental
regulations and quotas; exchange rate fluctuations; development and use of new
technology; the success or otherwise of partnering; the actions of
competitors; 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 in this Announcement. For
more information you should refer to our Annual Report and Accounts 2006 and
our 2006 Annual Report on Form 20-F filed with the US Securities and Exchange
Commission.



    
                            Group Income Statement
    Fourth   Third    Fourth
    

    
    Quarter  Quarter  Quarter                                       Year
     2006     2007     2007                                     2007     2006
            $ million                                            $ million
    
    Sales and other operating    61,946   71,334   79,852    revenues (Note
3)             284,365  265,906
    
                              Earnings from jointly
                               controlled entities - after
      284      900      992    interest and tax                3,135    3,553
                              Earnings from associates -
      125      204      157    after interest and tax            697      442
    
    177      172      221   Interest and other revenues        754      701  
 62,532   72,610   81,222   Total revenues                 288,951  270,602
    
                              Gain on sale of businesses
      300      228      270    and fixed assets                2,487    3,714
    
    Total revenues and other    62,832   72,838   81,492    income           
            291,438  274,316
    44,506   51,810   56,313   Purchases                      200,766 
187,183
    
                              Production and manufacturing
    6,425    6,297    7,590    expenses                       25,915   23,793
                              Production and similar taxes
      632      921    1,518    (Note 4)                        4,013    3,621
                              Depreciation, depletion and
    2,441    2,505    3,020    amortization                   10,579    9,128
                              Impairment and losses on sale
       60      129      872    of businesses and fixed assets  1,679      549
      408      244      201   Exploration expense                756    1,045
                              Distribution and administration
    4,205    4,137    4,212    expenses                       15,371   14,447
                              Fair value (gain) loss on
     (296)     (14)     459    embedded derivatives                7     (608)
                              Profit before interest and
                               taxation from continuing
    4,451    6,809    7,307    operations                     32,352   35,158
      205      262      333   Finance costs (Note 5)           1,110      718
      (56)     (89)     (91)  Other finance income (Note 6)     (369)    (202)
                              Profit before taxation from
    4,302    6,636    7,065    continuing operations          31,611   34,642
                              Taxation (includes overseas
                               taxation for the year of
                               $8,159 million, 2006 $9,174
    1,347    2,158    2,561    million)                       10,442   12,331
                              Profit from continuing
    2,955    4,478    4,504    operations                     21,169   22,311
                              Profit (loss) from Innovene
        -        -        -    operations (Note 2)                 -      (25)
    2,955    4,478    4,504   Profit for the period           21,169   22,286
                              Attributable to:
    2,880    4,406    4,399   BP shareholders                 20,845   22,000
       75       72      105   Minority interest                  324      286
    2,955    4,478    4,504                                   21,169   22,286
                              Earnings per share - cents
                              Profit for the period
                               attributable to BP
                               shareholders
    15.04    23.18    23.15   Basic                           108.76   109.84
    14.88    23.07    22.65   Diluted                         107.84   109.00
                              Profit from continuing
                               operations attributable to
                               BP shareholders
    15.04    23.18    23.15   Basic                           108.76   109.97
    14.88    23.07    22.65   Diluted                         107.84   109.12
    



    Group Balance Sheet

    
                                                     31 December 31 December
                                                            2007        2006
                                                            $ million
    Non-current assets
    

    
    Property, plant and equipment                         97,989      90,999
    Goodwill                                              11,006      10,780
    Intangible assets                                      6,652       5,246
    Investments in jointly controlled
     entities                                             18,113      15,074
    Investments in associates                              4,579       5,975
    Other investments                                      1,830       1,697
    Fixed assets                                         140,169     129,771
    Loans                                                    999         817
    Other receivables                                        968         862
    Derivative financial instruments                       3,741       3,025
    Prepayments and accrued income                         1,083       1,034
    Defined benefit pension plan surplus                   8,914       6,753
                                                         155,874     142,262
    Current assets
    

    
    Loans                                                    165         141
    Inventories                                           26,554      18,915
    Trade and other receivables                           38,020      38,692
    Derivative financial instruments                       6,321      10,373
    Prepayments and accrued income                         3,589       3,006
    Current tax receivable                                   705         544
    Cash and cash equivalents                              3,562       2,590
                                                          78,916      74,261
    Assets classified as held for sale                     1,286       1,078
                                                          80,202      75,339
    Total assets                                         236,076     217,601
    Current liabilities
    

    
    Trade and other payables                              43,152      42,236
    Derivative financial instruments                       6,405       9,424
    Accruals and deferred income                           6,640       6,147
    Finance debt                                          15,394      12,924
    Current tax payable                                    3,282       2,635
    Provisions                                             2,195       1,932
                                                          77,068      75,298
    Liabilities directly associated with the
    

    
     assets classified as held for sale                      163          54
                                                          77,231      75,352
    Non-current liabilities
    

    
    Other payables                                         1,251       1,430
    Derivative financial instruments                       5,002       4,203
    Accruals and deferred income                             959         961
    Finance debt                                          15,651      11,086
    Deferred tax liabilities                              19,215      18,116
    Provisions                                            12,900      11,712
    Defined benefit pension plan and other
    

    
     post-retirement benefit plan deficits                 9,215       9,276
                                                          64,193      56,784
    Total liabilities                                    141,424     132,136
    Net assets                                            94,652      85,465
    Equity
    

    
    BP shareholders' equity                               93,690      84,624
    Minority interest                                        962         841
                                                          94,652      85,465
    

    Group Statement of Recognized Income and Expense


    
    Fourth  Third   Fourth
    Quarter Quarter Quarter                                          Year
    2006    2007    2007                                         2007    2006
          $ million                                               $ million
                          Currency translation
     1,032    788    304   differences                           1,887  2,025
                          Exchange gain on translation of
                           foreign operations
                           transferred to gain on sale
                           of businesses and fixed
         -      -     -    assets                                (147)     -
                          Actuarial gain relating to
                           pensions and other
     2,615      -  1,717   post-retirement benefits             1,717  2,615
                          Available-for-sale investments
       264     78    225   marked to market                       200    561
                          Available-for-sale investments
                           - recycled to the
      (269)   (91)     -   income statement                       (91)  (695)
                          Cash flow hedges marked to
       141    139    (25)  market                                 155    413
                          Cash flow hedges - recycled to
      (143)    (5)    12   the income statement                   (74)   (93)
                          Cash flow hedges - recycled to
       (11)    (2)   (31)  the balance sheet                      (40)    (6)
      (814)    90   (181) Taxation                                (63)  (934)
                          Net income recognized directly
     2,815    997  2,021   in equity                            3,544  3,886
     2,955  4,478  4,504  Profit for the period                21,169 22,286
                          Total recognized income and
                           expense relating to
     5,770  5,475  6,525   the period                          24,713 26,172
                          Attributable to:
     5,646  5,372  6,448   BP shareholders                     24,365 25,837
       124    103     77   Minority interest                      348    335
     5,770  5,475  6,525                                       24,713 26,172
    



    
                     Movement in BP Shareholders' Equity
    $ million
    Movement in BP shareholders' equity
    

    
    At 31 December 2006                                               84,624
    Profit for the period                                             20,845
    Distribution to shareholders                                      (8,106)
    Currency translation differences (net of tax)                      2,002
    Exchange gain on translation of foreign operations
    

    
     transferred to gain on sale (net of tax)                           (147)
    Share-based payments (net of tax)                                  1,017
    Repurchase of ordinary share capital                              (7,997)
    Available-for-sale investments (net of tax)                           95
    Cash flow hedges (net of tax)                                         67
    Actuarial gain on pension and other post-retirement                1,290
    benefit plans (net of tax)
    

    At 31 December 2007                                               93,690


    Group Cash Flow Statement


    
    Fourth  Third   Fourth
    Quarter Quarter Quarter                                          Year
    2006   2007     2007                                         2007    2006
          $ million                                               $ million
                          Operating activities
                          Profit before taxation from          31,611  34,642
    4,302  6,636  7,065   continuing operations
                          Adjustments to reconcile profit
                           before taxation to net
                           cash provided by operating
                           activities
       265    146     86  Exploration expenditure written off     347     624
                          Depreciation, depletion and
     2,441  2,505  3,020   amortization                        10,579   9,128
                          Impairment and (gain) loss on
                           sale of businesses
      (240)   (99)   602   and fixed assets                      (808) (3,165)
                          Earnings from jointly
                           controlled entities and
      (409)(1,104)(1,149)  associates                          (3,832) (3,995)
                          Dividends received from jointly
                           controlled entities
       809  1,060    371   and associates                       2,473   4,495
                          Working capital and other
    (2,198)(2,788)(5,706)  movements                          (15,661)(13,557)
                          Net cash provided by operating
     4,970  6,356  4,289  activities(a)                        24,709  28,172
                          Investing activities
    (4,473)(4,336)(5,515) Capital expenditure                 (17,830)(15,125)
                          Acquisitions, net of cash
      (127)   (27)     -   acquired                            (1,225)   (229)
                          Investment in jointly
       (11)  (122)  (285)  controlled entities                   (428)    (37)
      (103)   (37)   (41) Investment in associates               (187)   (570)
                          Proceeds from disposal of fixed
       918    211    392   assets                               1,749   5,963
                          Proceeds from disposal of
                           businesses, net of cash
      (100)     -      5   disposed                             2,518     291
        26     45     69  Proceeds from loan repayments           192     189
         -      -      -  Other                                   374       -
                          Net cash used in investing
    (3,870)(4,266)(5,375)  activities                         (14,837) (9,518)
                          Financing activities
    (3,449)(1,441)(1,352) Net repurchase of shares             (7,113)(15,151)
                          Proceeds from long-term
     2,215    107  5,131   financing                            8,109   3,831
                          Repayments of long-term
    (1,874)  (369)(1,596)  financing                           (3,192) (3,655)
                          Net increase (decrease) in
     3,348  1,426  2,125   short-term debt                      1,494   3,873
                          Dividends paid - BP
    (1,927)(2,066)(2,056)  shareholders                        (8,106) (7,686)
       (72)   (24)   (68)                - Minority interest     (227)   (283)
                          Net cash used in financing
    (1,759)(2,367) 2,184   activities                          (9,035)(19,071)
                          Currency translation
                           differences relating to cash
        50     44     54   and cash equivalents                   135     47
                          Increase (decrease) in cash and
      (609)  (233) 1,152   cash equivalents                       972   (370)
                          Cash and cash equivalents at
     3,199  2,643  2,410   beginning of period                  2,590  2,960
                          Cash and cash equivalents at
     2,590  2,410  3,562   end of period                        3,562  2,590
    (a) Net cash provided by operating activities is calculated from the
        starting point of profit before taxation which includes inventory
        holding gains and losses. Net cash provided by operating activities
        also reflects working capital movements including inventories, trade
        and other receivables and trade and other payables. The carrying value
        of these working capital items will change for various reasons,
        including movements in oil, gas and product prices.
    


    Group Cash Flow Statement


    
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
                          Working capital and other
                          movements
       (80)  (154)  (147) Interest receivable                    (489)   (473)
        89    152    160  Interest received                       500     500
       205    262    333  Finance costs                         1,110     718
      (314)  (300)  (395) Interest paid                        (1,363) (1,242)
       (56)   (89)   (91) Other finance income                   (369)   (202)
        77    129    109  Share-based payments                    420     416
                          Net operating charge for
                           pensions and other
                           post-retirement benefits,
                           less contributions
                           and benefit payments for
      (128)   (61)  (225)  unfunded plans                        (404)   (261)
                          Net charge for provisions, less
       446    362    (40)  payments                               (92)    340
                          (Increase) decrease in
       861   (803)(5,121)  inventories                         (7,255)    995
                          (Increase) decrease in other
                           current and non-current
     2,869    956  1,736   assets                               5,210   3,596
                          Increase (decrease) in other
                           current and non-current
    (2,476)  (104)   676   liabilities                         (3,857) (4,211)
    (3,691)(3,138)(2,701) Income taxes paid                    (9,072)(13,733)
    (2,198)(2,788)(5,706)                                     (15,661)(13,557)
    



    Capital Expenditure and Acquisitions

    
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
                          By business
    

    
                          Exploration and Production
       309    276    301  UK                                      993    955
        49    122    144  Rest of Europe                          461    244
     1,234  1,133  1,216  US                                    4,852  4,605
     1,905  1,710  2,378  Rest of World(a)                      7,600  7,314
     3,497  3,241  4,039                                       13,906 13,118
    

    
                          Refining and Marketing
       217    137    224  UK                                      528    428
       395    379    683  Rest of Europe(b)                     2,538    710
       540    466    758  US                                    1,873  1,339
       334    155    294  Rest of World                           647    667
     1,486  1,137  1,959                                        5,586  3,144
    

    
                          Gas, Power and Renewables
        43      6     11  UK                                       36     67
        18      8     21  Rest of Europe(b)                        39     37
       268     90    373  US                                      605    507
        35     34    127  Rest of World                           194     77
       364    138    532                                          874    688
    

    
                          Other businesses and corporate
        66     22     37  UK                                      115    137
         -      -      -  Rest of Europe                            2      -
        21     34     45  US                                      157    141
         3      -      1  Rest of World                             1      3
        90     56     83                                          275    281
     5,437  4,572  6,613                                       20,641 17,231
    

    
                          By geographical area
       635    441    573  UK                                    1,672  1,587
       462    509    848  Rest of Europe                        3,040    991
     2,063  1,723  2,392  US                                    7,487  6,592
     2,277  1,899  2,800  Rest of World                         8,442  8,061
     5,437  4,572  6,613                                       20,641 17,231
    

    
                          Included above:
                           Acquisitions and asset
       205      2      -   exchanges(b)                         1,447    321
    (a) Full year 2006 included $1 billion for the purchase of shares in
    Rosneft.
    (b) Full year 2007 included $1,132 million for the acquisition of
        Chevron's Netherlands manufacturing company.
    


    
                          Exchange rates
                          US dollar/sterling average rate
      1.91   2.02   2.05   for the period                         2.00  1.84
                          US dollar/sterling period-end
      1.96   2.02   1.99   rate                                   1.99  1.96
                          US dollar/euro average rate for
      1.29   1.37   1.45   the period                             1.37  1.25
      1.31   1.42   1.47  US dollar/euro period-end rate          1.47  1.31
    


    
                  Analysis of Profit Before Interest and Tax
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
                          By business
    

    
                          Exploration and Production
     1,534    703    816  UK                                    3,694  5,839
       249    221    262  Rest of Europe                        1,386  1,209
       948  1,845  2,212  US                                    7,757  9,327
     2,326  3,578  4,353  Rest of World                        14,101 13,254
     5,057  6,347  7,643                                       26,938 29,629
    

    
                          Refining and Marketing
        28    (10)   153  UK                                    1,107     85
       261    623    786  Rest of Europe                        2,919  2,119
      (951)  (136)(1,221) US                                      563  1,468
       (44)   459    308  Rest of World                         1,483  1,369
      (706)   936     26                                        6,072  5,041
    

    
                          Gas, Power and Renewables
       147    (85)  (103) UK                                     (178)   217
       144    (37)   (14) Rest of Europe                          (51)   134
       116    (26)    61  US                                      183    682
        61     77    360  Rest of World                           720    288
       468    (71)   304                                          674  1,321
    

    
                          Other businesses and corporate
       280    124    (63) UK                                      (10)  (268)
       (98)   (78)    22  Rest of Europe                          (36)  (133)
      (307)  (369)  (331) US                                     (924)  (367)
      (140)  (139)   (17) Rest of World                          (158)  (117)
      (265)  (462)  (389)                                      (1,128)  (885)
     4,554  6,750  7,584                                       32,556 35,106
      (103)    59   (277) Consolidation adjustment               (204)    52
    4,451  6,809  7,307  Total for continuing operations      32,352 35,158
                          Innovene operations
       (40)     -      -  UK                                        -   (185)
        25      -      -  Rest of Europe                            -    (36)
        15      -      -  US                                        -     16
         -      -      -  Rest of World                             -     21
         -      -      -  Total for Innovene operations             -   (184)
     4,451  6,809  7,307  Total for period                     32,352 34,974
    

    
                          By geographical area
     1,988    731    804  UK                                    4,613  5,897
       533    718    988  Rest of Europe                        4,164  3,282
      (289) 1,364    521  US                                    7,439 11,164
     2,219  3,996  4,994  Rest of World                        16,136 14,815
    4,451  6,809  7,307  Total for continuing operations      32,352 35,158
    




    Analysis of Replacement Cost Profit Before Interest and Tax


    
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
                          By business
                          Exploration and Production
     1,534    703    816  UK                                    3,694  5,839
       249    221    262  Rest of Europe                        1,386  1,209
       952  1,843  2,213  US                                    7,746  9,344
     2,328  3,576  4,357  Rest of World                        14,101 13,255
     5,063  6,343  7,648                                       26,927 29,647
                          Refining and Marketing
       190     22    122  UK                                    1,097    351
       336    492    278  Rest of Europe                        1,652  2,249
      (421)  (527)(1,811) US                                   (1,252) 1,353
       207    389     74  Rest of World                         1,120  1,330
       312    376 (1,337)                                       2,617  5,283
                          Gas, Power and Renewables
       147    (85)  (103) UK                                     (178)   217
       143    (37)   (14) Rest of Europe                          (52)   123
       114    (23)    23  US                                      128    692
        66     88    313  Rest of World                           660    344
       470    (57)   219                                          558  1,376
                          Other businesses and corporate
       280    124    (63) UK                                      (10)  (268)
       (97)   (77)    23  Rest of Europe                          (35)  (137)
      (319)  (359)  (316) US                                     (901)  (425)
      (140)  (139)   (17) Rest of World                          (158)  (117)
      (276)  (451)  (373)                                      (1,104)  (947)
     5,569  6,211  6,157                                       28,998 35,359
      (103)    59   (277) Consolidation adjustment               (204)    52
    5,466  6,270  5,880  Total for continuing operations      28,794 35,411
                          Innovene operations
       (40)     -      -  UK                                        -   (185)
        25      -      -  Rest of Europe                            -    (36)
        15      -      -  US                                        -     16
         -      -      -  Rest of World                             -     21
         -      -      -  Total for Innovene operations             -   (184)
     5,466  6,270  5,880  Total for period                     28,794 35,227
                          By geographical area
     2,150    763    773  UK                                    4,603  6,163
       609    590    480  Rest of Europe                        2,897  3,398
       230    983    (91) US                                    5,581 11,017
     2,477  3,934  4,718  Rest of World                        15,713 14,833
    5,466  6,270  5,880  Total for continuing operations      28,794 35,411
    




    Analysis of Non-operating Items


    
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
                          By business
    

    
                          Exploration and Production
                          Impairment and gain (loss) on
                           sale of businesses and
        16      1    148   fixed assets                           852   2,317
                          Environmental and other
         -    (12)     -   provisions                             (12)    (17)
                          Restructuring, integration and
         -      -   (166)  rationalization costs                 (166)      -
                          Fair value gain (loss) on
       240     33   (430)  embedded derivatives                    47     515
      (433)     -   (168) Other                                  (168)   (433)
      (177)    22   (616)                                         553   2,382
                          Refining and Marketing
                          Impairment and gain (loss) on
                           sale of businesses and
        51    105   (728)  fixed assets                           (35)    729
                          Environmental and other
         -   (138)     -   provisions                            (138)    (33)
                          Restructuring, integration and
         -      -   (118)  rationalization costs                 (118)      -
                          Fair value gain (loss) on
         -      -      -   embedded derivatives                     -       -
    

    (104)  (311)  (300) Other                                  (661) (1,080)

    
       (53)  (344)(1,146)                                        (952)   (384)
                          Gas, Power and Renewables
                          Impairment and gain (loss) on
                           sale of businesses and
       159      4    (21)  fixed assets                           (28)     93
                          Environmental and other
         -      -      -   provisions                               -       -
                          Restructuring, integration and
         -      -    (22)  rationalization costs                  (22)      -
                          Fair value gain (loss) on
        56    (12)   (19)  embedded derivatives                   (47)     88
         -      -      -  Other                                     -       -
       215     (8)   (62)                                         (97)    181
                          Other businesses and corporate
                          Impairment and gain (loss) on
                           sale of businesses and
        14    (11)    (1)  fixed assets                            19      26
                          Environmental and other
        (2)   (35)     -   provisions                             (35)     94
                          Restructuring, integration and
         -      -    (32)  rationalization costs                  (32)      -
                          Fair value gain (loss) on
         -     (7)   (10)  embedded derivatives                    (7)      5
      (200)  (152)   (20) Other                                  (172)   (200)
      (188)  (205)   (63)                                        (227)    (75)
                          Total before taxation for
      (203)  (535)(1,887)  continuing operations                 (723)  2,104
        51    189    857  Taxation credit (charge)(a)             451    (851)
                          Total after taxation for
      (152)  (346)(1,030)  continuing operations                 (272)  1,253
                          Innovene operations
                          Total before taxation for
         -      -      -  Innovene operations(b)                    -    (184)
         -      -      -  Taxation credit (charge)                  -      (7)
                          Total after taxation for
         -      -      -  Innovene operations                       -    (191)
      (152)  (346)(1,030) Total after taxation for period        (272)  1,062
    (a) Tax on non-operating items is calculated using the quarter's effective
    tax rate on replacement cost profit from continuing  operations.
    (b) Includes the loss on remeasurement to fair value of $184 million in
    

    2006.


    Realizations and Marker Prices


    
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                          Year
    2006     2007    2007                                         2007    2006
          $ million                                                $ million
    

    
                          Average realizations(a)
                          Liquids ($/bbl)(b)
     56.18  72.99  88.05  UK                                    69.17  61.67
     52.11  67.47  78.28  US                                    64.18  57.25
     54.63  73.56  84.51  Rest of World                         69.56  59.54
     54.13  71.12  82.72  BP Average                            67.45  59.23
                          Natural gas ($/mcf)
      5.61   4.89   7.83  UK                                     6.40   6.33
      5.03   4.64   5.41  US                                     5.43   5.74
      3.70   3.42   3.94  Rest of World                          3.71   3.70
      4.38   3.93   4.83  BP Average                             4.53   4.72
    

    
                          Average oil marker prices ($/bbl)
     59.60  74.74  88.45  Brent                                 72.39  65.14
     59.90  75.24  90.47  West Texas Intermediate               72.20  66.02
     55.47  76.31  88.65  Alaska North Slope US West Coast      71.68  63.57
     53.29  69.37  81.38  Mars                                  66.58  58.90
     56.06  71.98  85.41  Urals (NWE- cif)                      69.16  61.22
     26.33  41.95  48.98  Russian domestic oil                  39.81  34.39
                          Average natural gas marker prices
      6.56   6.16   6.97  Henry Hub gas price ($/mmbtu)(c)       6.86   7.24
                          UK Gas - National Balancing
     29.92  30.58  46.70  Point (p/therm)                       29.95  42.19
    (a) Based on sales of consolidated subsidiaries only - this excludes
    equity-accounted entities.
    (b) Crude oil and natural gas liquids.
    (c) Henry Hub First of the Month Index.
                                    Notes
    1. Basis of preparation
    

    
       BP prepares its Annual Report and Accounts in accordance with
       International Financial Reporting Standards (IFRS) as issued by the
       International Accounting Standards Board (IASB) and IFRS as adopted for
       use by the European Union (EU). IFRS as adopted for use by the EU
       differs in certain respects from IFRS as issued by the IASB, however,
       the differences have no impact on the group's consolidated financial
       statements for the periods presented. The financial information
       presented herein has been prepared in accordance with the accounting
       policies that will be used in preparing the Annual Report and Accounts
       2007 which do not differ significantly from those used for the Annual
       Report and Accounts 2006.
    2. Sale of Olefins and Derivatives business
    

    
       The sale of Innovene, BP's olefins, derivatives and refining group, to
       INEOS, was completed on 16 December 2005. The year ended 31 December
       2006 includes a loss on remeasurement to fair value of $184 million.
    


    
       Fourth   Third   Fourth
       Quarter  Quarter Quarter                                      Year
       2006     2007    2007                                     2007    2006
          $ million                                               $ million
                             Loss recognized on the
         -      -       -     remeasurement to fair value           -    (184)
                             Taxation
         -      -       -    Related to profit before tax           -     166
         -      -       -    Related to remeasurement to fair value -      (7)
         -      -       -    Profit (loss) from Innovene operations -     (25)
                             Earnings (loss) per share
                              from Innovene operations - cents
         -      -       -    Basic                                  -   (0.13)
         -      -       -    Diluted                                -   (0.12)
    3. Sales and other operating revenues
    Fourth   Third   Fourth
     Quarter  Quarter Quarter                                       Year
     2006     2007    2007                                     2007     2006
          $ million                                              $ million
                           By business
    12,255 12,796  16,788  Exploration and Production        54,550   52,600
    

    
    53,776 63,761  70,026  Refining and Marketing           250,866  232,855
    5,224  4,490   5,863  Gas, Power and Renewables         21,369   23,708
    339    238     221  Other businesses and corporate       843    1,009
    

    
    71,594 81,285  92,898                                   327,628  310,172
    9,648  9,951  13,046  Less: sales between businesses    43,263   44,266
    61,946 71,334  79,852  Total third party sales          284,365  265,906
    



    
                           By geographical area
    23,676 25,017  33,015  UK                               109,808  105,518
    18,576 19,817  22,897  Rest of Europe                    78,366   76,768
    23,368 26,409  28,852  US                               105,120   99,935
    16,768 18,374  20,971  Rest of World                     74,462   71,547
    82,388 89,617 105,735                                   367,748  353,768
    20,442 18,283  25,883  Less: sales between areas         83,383   87,862
    61,946 71,334  79,852                                   284,365  265,906
    


    
                                    Notes
    4. Profit before interest and taxation is after charging:
    Fourth   Third   Fourth
     Quarter  Quarter Quarter                                       Year
     2006     2007    2007                                     2007      2006
           $ million                                              $ million
                           Production and similar taxes
      (143)   (34)    164  UK                                    197      260
       775    955   1,354  Overseas                            3,816    3,361
       632    921   1,518                                      4,013    3,621
    


    5. Finance costs

    
     Fourth   Third   Fourth
     Quarter  Quarter Quarter                                       Year
     2006     2007    2007                                     2007      2006
           $ million                                              $ million
       290    348     393  Interest payable                    1,433    1,196
       (85)   (86)    (60) Capitalized                          (323)    (478)
       205    262     333                                      1,110      718
    


    6. Other finance income


    
     Fourth   Third   Fourth
     Quarter  Quarter Quarter                                       Year
     2006     2007    2007                                     2007      2006
           $ million                                              $ million
                           Interest on pension and
                            other post-retirement
    496    555     564   benefit plan liabilities          2,203     1,940
    

    
                           Expected return on pension
                            and other post-retirement
      (619)  (719)   (730)  benefit plan assets              (2,855)   (2,410)
                           Interest net of expected
      (123)  (164)   (166)  return on plan assets              (652)     (470)
                           Unwinding of discount on
        67     75      75   provisions                          283       245
                           Unwinding of discount on
                            deferred consideration
                            for acquisition of
         -      -       -   investment in TNK-BP                  -        23
       (56)   (89)    (91)                                     (369)     (202)
    Notes
    7. Analysis of changes in net debt
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                         Year
    2006     2007    2007                                       2007     2006
          $ million                                               $ million
                           Opening balance
    19,973 23,754  25,245  Finance debt                       24,010   19,162
                           Less: Cash and cash
     3,199  2,643   2,410   equivalents                        2,590    2,960
    16,774 21,111  22,835  Opening net debt                   21,420   16,202
                           Closing balance
    24,010 25,245  31,045  Finance debt                       31,045   24,010
                           Less:  Cash and cash
     2,590  2,410   3,562   equivalents                        3,562    2,590
    21,420 22,835  27,483  Closing net debt                   27,483   21,420
    (4,646)(1,724) (4,648) Decrease (increase) in net debt    (6,063)  (5,218)
                           Movement in cash and cash
                            equivalents (excluding exchange
      (659)  (277)  1,098   adjustments)                         837     (417)
                           Net cash outflow (inflow)
                            from financing
    (3,689)(1,164) (5,660)  (excluding share capital)         (6,411)  (4,049)
    (208)  (261)    (26) Fair value hedge adjustment          (368)    (581)
    

    
       (13)     -       -  Debt acquired                           -      (13)
       (57)   (21)    (89) Other movements                      (134)     (33)
                           Movement in net debt before
    (4,626)(1,723) (4,677)  exchange effects                  (6,076)  (5,093)
       (20)    (1)     29  Exchange adjustments                   13     (125)
    (4,646)(1,724) (4,648) Decrease (increase) in net debt    (6,063)  (5,218)
    Notes
    8. TNK-BP Operational and Financial Information
    Fourth   Third   Fourth
    Quarter  Quarter Quarter                                         Year
    2006     2007    2007                                       2007     2006
          $ million                                               $ million
                           Production (Net of royalties)
                            (BP share)
       837    830     829  Crude oil (mb/d)                      832     876
       602    364     437  Natural gas (mmcf/d)                  451     544
       941    892     904  Total hydrocarbons (mboe/d)(a)        910     970
    

    
           $ million                                             $ million
                           Income statement (BP share)
       359  1,094   1,278  Profit before interest and tax(b)   3,743   4,616
    

    
       (52)   (67)    (71) Interest expense (+)                 (264)   (192)
      (118)  (289)   (413) Taxation                             (993) (1,467)
        (6)   (66)    (42) Minority interest                    (215)   (193)
       183    672     752  Net Income                          2,271   2,764
                           (+) Excludes unwinding of discount
         -      -       -   on consideration                       -      23
                           Cash Flow
       500    800       -  Dividends received(c)               1,300   3,271
    




    
    Balance Sheet
                                                     31 December   31 December
                                                            2007          2006
    Investments in jointly controlled entities             8,817         8,353
    
    (a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
    (b) Full year 2006 included a net gain of $892 million on the disposal of
the Udmurtneft assets.
    (c) Full year 2006 included $771 million declared in fourth quarter 2005.


    9. First quarter 2008 results

    BP's first quarter 2008 results will be announced on 29 April 2008.


    10. Statutory accounts

    
        The financial information shown in this publication, which was
        approved by the Board of Directors on 4 February 2008, is unaudited
        and does not constitute statutory financial statements.  The audited
        2007 BP Annual Report and Accounts will be published on 4 March 2008
        and delivered to the Registrar of Companies in due course.  The 2006
        BP Annual Report and Accounts have been filed with the Registrar of
        Companies; the report of the auditors on those accounts was
        unqualified and did not contain a statement under section 237(2) or
        section 237(3) of the Companies Act 1985.
    




For further information:

For further information: Press Office, London: Roddy Kennedy, 
+44(0)20-7496-4624, United States: Ronnie Chappell, +1-281-366-5174; or
Investor  Relations, London: Fergus MacLeod, +44(0)20-7496-4717; or United
States: Rachael  MacLean, +1-281-366-6766 Web Site: http://www.bp.com        
         http://www.bp.com/investors

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