BP : 2Q 2020 slides

Second quarter 2020 financial results and strategy presentation

1

Craig Marshall

SVP Investor Relations

2

Cautionary statement

Forward-looking statements - cautionary statement

In order to utilize the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995 (the 'PSLRA') and the general doctrine of cautionary statements, BP is providing the following cautionary statement: The discussion in this results announcement contains certain forecasts, projections and forward-looking statements - that is, statements related to future, not past events and circumstances - with respect to the financial condition, results of operations and businesses of BP and certain of the plans and objectives of BP with respect to these items. These statements may generally, but not always, be identified by the use of words such as 'will', 'expects', 'is expected to', 'aims', 'should', 'may', 'objective', 'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we see', 'focus on' or similar expressions.

In particular, the following, among other statements, are all forward looking in nature: expectations regarding price assumptions, including lowering Brent to an average of around $55 per barrel and Henry Hub to an average of $2.90 per million BTU, in 2020 real terms, and increasing BP's carbon price; expectations regarding Upstream reported and underlying production in the third quarter and full year 2020; expectations regarding demand for BP's products in the Upstream and Downstream; expectations regarding global GDP and oil and gas demand; expectations regarding the Downstream refining margins and utilisation; expectations regarding BP's organic capital expenditure, DD&A, organic free cash flow and operating cash flow, underlying production in 2025, Rosneft contribution and Gulf of Mexico oil spill payments; plans and expectation regarding the reduction of around 10,000 jobs and the amount and timing of associated restructuring charges; expectations regarding 2020 major project start-ups, including for Ghazeer project to start up in 2020; BP's coherent approach to capital allocation, including statements regarding funding a resilient dividend, strengthening the balance sheet, deleveraging to $35 billion net debt and maintaining a strong investment grade credit rating, allocating sufficient capital to advance the energy transition strategy, investing in the resilient hydrocarbons business to generate sustainable cash flow, committing to return at least 60% of surplus cash as buybacks after having reached $35 billion net debt and subject to maintaining a strong investment grade credit rating, keeping the cash cover ratio within a 30-40% range across the cycle, rebalancing sources and uses of cash, on average over 2021-2025 to a balance point of around $40/bbl Brent, $3/mmBTU Henry Hub and $11/bbl BP refining marker margin, targeting $25 billion of divestment proceeds between the second half of 2020 and 2025 (including proceeds from the $5 billion petrochemicals divestment), evolving the long-term capital structure and hurdle rates; BP's 2021-25 business plan, including statements regarding maintaining strict discipline on capital spending in a range of $14-16 billion to 2025 and within $13-15 billion range until net debt has been reduced to $35 billion (including $9 billion allocated to resilient and focused hydrocarbons and $4-5 billion rising to $5-7 billion on low carbon electricity, energy, convenience and mobility), delivering $2.5 billion of cash cost reductions by end of 2021 and $3-4 billion of total cash cost reductions by 2023; BP's plans to scale the low-carbon electricity and energy businesses, including statements regarding developing around 20GW of renewables capacity by 2025 and 50GW by 2030, the strategic partnership with Lightsource BP developing 10GW of renewables capacity by 2023, the existing U.S. onshore wind portfolio, having 350TWh of traded electricity by 2025 and 500TWh by 2030, growing the LNG portfolio by almost 70% to 25Mtpa by 2025 and to around 30Mtpa by 2030 with 25Mtpa of LNG sales by 2030 and increasing bioenergy production to 50,000 b/d by 2025 and 100,000 b/d by 2030, increasing to 10% hydrogen share in core markets by 2030, to progress the hydrogen business in Australia and for CCUS to enable industrial decarbonisation; BP's plans to transform the convenience and mobility offer, including statements regarding earnings and growth, aiming to increase customer touchpoints to more than 15 million by 2025 and to more than 20 million by 2030, growing the network of BP-branded retail sites in growth markets to more than 7,000 by 2025 and more than 8,000 by 2030, growing Castrol revenue globally to $7.5 billion in 2025 and more than 130 million end-users by 2030, growing the network of strategic convenience sites to 2,300 by 2025 and more than 3,000 by 2030, expanding the existing EV network to more than 25,000 charge points by 2025 and more than 70,000 by 2030 and growing the share of margin from convenience and electrification to around 35% by 2025 and 50% by 2030; BP's plans to focus and maximise value from resilient and focused hydrocarbons, including statements regarding reaching 900mboed of production by end-2021,start-up of major projects through 2023+, maintaining flat underlying production and lowering headline Upstream production to around 2mmboed by 2025 and around 1.5mmboed by 2030, lowering unit production costs to around $6/boe by 2025, increasing BP operated plant reliability to 96% by 2025 and 2030, lower refining throughput to less than 1.5mmbl/d by 2025 and less than 1.2mmbl/d by 2030, increasing BP operated refining availability to 96% by 2025 and lowering capital expenditure to around $9 billion by 2025; BP's 2021-25 business plan outcomes, including statements regarding delivering 5-6% annual EBIDA growth and 7-9% in EBIDA per share growth reflecting portfolio high-grading and share buybacks, improving ROACE to 12-14% in 2025 and ROACE ranges by 2030; BP's beliefs on the energy transition, including statements regarding the trend towards renewables, customers redefining mobility and convenience, oil and gas as part of the energy mix, development of energy systems, energy solutions of countries, cities and industries, and digital and innovation; and BP's new ambition to be a net zero company by 2050 or sooner including statements regarding its aims by 2030 for emissions reductions across operations, emissions from the carbon content of its oil and gas production, a 15% cut in the carbon intensity of products BP sells, methane measurement at major oil and gas processing sites by 2023 and subsequent reduction of methane intensity of operations, and aims to increase the proportion and amount of investment into non-oil and gas businesses over time; and expectations regarding shifts in energy markets.

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 and are outside the control of BP. Actual results may differ materially from those expressed in such statements, depending on a variety of factors, including: the extent and duration of the impact of current market conditions including the significant drop in the oil price, the impact of COVID-19, overall global economic and business conditions impacting our business and demand for our products as well as the specific factors identified in the discussions accompanying such forward-looking statements; changes in consumer preferences and societal expectations; the pace of development and adoption of alternative energy solutions; the receipt of relevant third party and/or regulatory approvals; the timing and level of maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new fields onstream; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing, including supply growth in North America; OPEC quota restrictions; PSA and TSC effects; operational and safety problems; potential lapses in product quality; economic and financial market conditions generally or in various countries and regions; 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 or imposed; the actions of prosecutors, regulatory authorities and courts; delays in the processes for resolving claims; amounts ultimately payable and timing of payments relating to the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; our access to future credit resources; business disruption and crisis management; the impact on our reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; decisions by Rosneft's management and board of directors; the actions of contractors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other factors discussed elsewhere in this report, and under "Risk factors" in BP Annual Report and Form 20-F 2019 as filed with the US Securities and Exchange Commission.

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.

Tables and projections in this presentation are BP projections unless otherwise stated.

August 2020	3

Helge Lund

Chairman

4

Bernard Looney

CEO

6

What we've announced - Feb 12

Purpose		Trade
	association
		review
Ambition	Aims	Pandemic
	response

	What's to come - bp week	Strategic
	deepdives
		Reinventing
		bp
What we've done since		Sustainability
		framework
	Petrochemicals	Energy
	divestment	outlook
Long-term	announced
price
assumptions	Alaska
	upstream

Biodiversity	Human	divestment
closed
rights policy
position
	Hybrid
	Organisational	bond
	change

8

Murray Auchincloss

CFO

11

Environment

Commodity prices $/bbl / $/mmbtu

Brent		Brent1		RMM2		Henry Hub1
80

60

40

20

0

Jan

Feb

Mar

Apr

May

Jun

Jul

RMM /
Henry Hub21	▪ 2Q average Brent oil price
		40% lower than 1Q
18

15 ▪ BP's 2Q average RMM 33% lower than 1Q

12

9	▪ 2Q US refinery utilisation
~70%, ~19% lower y-o-y

6

• 2Q average Henry Hub gas

3 price lowest in 25 years

0

(1)	Source: Platts	All data 1 January 2020 to 31 July 2020	12
(2)	Refining Marker Margin (RMM) based on BP's portfolio

Long-term price assumptions and exploration review

80	Brent assumption $/bbl real(2020)
60

40

20

0

2020

2030

2040

2050

4Henry Hub assumption $/mmbtu real(2020)

3

2

1

0

2020

2030

2040

2050

1. Impairment charges exclusive of equity accounted assets

Impact on 2Q 2020 results

• $16.8bn reported loss
• • $6.7bn on an underlying RC basis
• $11.8bn net impairment1 charges, $8.5bn post tax
• • $11.1bn in Upstream1
  • $0.7bn in Downstream
• $9.6bn pre-tax exploration write offs, $8.1bn post tax
• • $7.7bn is reflected in the underlying result, $6.5bn post tax

13

2Q 2020 underlying results summary

$bn		2Q19	1Q20	2Q20
Underlying replacement cost profit	2.8	0.8	(6.7)
Underlying operating cash flow1	8.2	1.2	4.8
Underlying RCPBIT2
Upstream	3.4	1.9	(8.5)
Downstream	1.4	0.9	1.4
Rosneft3	0.6	(0.0)	(0.1)
Other businesses and corporate	(0.3)	(0.6)	(0.3)
Underlying earnings per share (cents)	13.8	3.9	(33.0)
Dividend paid per share (cents)	10.25	10.50	10.50
Dividend declared per share (cents)	10.25	10.50	5.25

2Q 2020 vs 1Q 2020

• $6.5bn post-tax exploration write-offs
• Lower oil and gas realisations
• Weaker refining margins
• Demand destruction in Downstream
• Partially offset by exceptionally strong oil trading

1. Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments
2. Replacement cost profit before interest and tax (RCPBIT), adjusted for non-operating items and fair value accounting effects

(3)

BP estimate of Rosneft earnings after interest, tax and minority interest

14

Cash flow and balance sheet

1H 2020 cash inflows/outflows $bn

16

Share buybacks

Lease payments4

12

Working capital build	Capex

8

Disposals2

4

Dividends3

Underlying operating

cash flow1

Gulf of Mexico oil spill

0

• Cash outflow5 of $6.5bn
• ~$12bn hybrid bond issue
• Net Debt falls to $40.9bn
• Gearing6 falls to 37.7%

1. Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments

(2)	Divestments and other proceeds	(3) Cash dividends paid	(4) Lease liability payments
(5)	Cash outflow = underlying operating cash flow plus disposal proceeds less Gulf of Mexico oil spill payments, dividend payments, capex, lease payments and share buybacks	15
(6)	Gearing including leases

2020 guidance

Third quarter

Upstream

Lower reported production expected, reflecting:

▪ Divestment of the Alaska business

▪ Price impacts on entitlement volumes

Downstream ▪ Higher product demand, albeit still significantly

below last year's levels

▪ Continued significant pressure on industry

refining margins

(1) Underlying production. The actual reported number will depend on divestments, OPEC quotas, and other factors

	Full year
	Upstream production	Lower
	excluding Rosneft	than 20191
	Organic capital	~$12bn
	expenditure
	DD&A	~10% lower
	than 2019
	Gulf of Mexico oil	~$1.5bn
	spill payments
	OB&C2 underlying	~$350m
	quarterly charge
(2) OB&C: Other businesses and corporate	16

Bernard Looney

CEO

17

Our purpose

Our ambition

Our aims

by 2050 or sooner and to help the world reach that goal

Five aims to help the world meet net zero

Aim

10

Aim

9

Aim

8

Aim

7

Aim

6

Aim

1

Aim

2

Aim

3

Aim

5Aim

4

Five aims to become a net zero company

18

an international oil company producing resources

an integrated energy company

delivering solutions for customers

19

Our strategy - an IEC delivering solutions for customers

Low carbon	Convenience	Resilient
electricity	and mobility	and focused
hydrocarbons
and energy

Integrating energy systems

Partnering with countries, cities and industries

Driving digital and innovation

A sustainability frame linking our purpose and

…will create a very different company in 2030

							Aims
2.5GW / 250TWh	Developed renewables and traded electricity1	50GW developed / 500TWh traded
22Kbd	Bioenergy	>100Kbd developed / 20% biojet market share
0.6 Mte in our operations	Hydrogen		10% share in core markets
10m	Customer touchpoints per day		>20m
>7,500				EV charging points		>70,000
~2.6mmboed	Oil and gas production		~1.5mmboed
~360Mte	Aim 2 emissions		~235Mte
0					Partnerships with cities and industry		10-15 city partners 3 industry sectors
8.9%					ROACE2		12-14%

(1)	Traded electricity may include electricity sourced from the grid	21
(2)	ROACE: return on average capital employed as defined in bp's 2019 annual report

We are building off a rich heritage…

1921 - 1922

1922 - 1930

1930 - 1947

1947 - 1958

1958 - 1989

1989 - 1998

1998 - 2000

2000+

22

…and we are not starting from scratch…

	SmartLog
Hydrogen export
project, Australia H2
Low carbon electricity	Convenience
and energy businesses	and mobility offer

US onshore wind

Traded electricity

rides per year

coffees per year

Lightsource bp

presence in

energy management

services to

in the US

…underpinned by a coherent approach to capital allocation

1

2

3

4

5

Clear priorities

Resilient dividend

Strong balance

sheet

Investing at scale in the

energy transition

Investing to maximise

value in resilient

hydrocarbons

Buyback commitment1

(1) Buyback commitment: once net debt is reduced to $35bn and subject to maintaining a strong investment grade credit rating

28

Getting to net zero by 2050 or sooner….

			2025	2030	2050, or sooner
				Targets	Aims	Aims
Aim
1			20%	30-35%	100%1
Aim
2			20%	35-40%	100%2
Aim
3			5%	>15%	50%

Emissions reductions

Aim								Timeline to achieve
4							Measurements in	50%
						50% reduction to
						place by 2023
								follow
Aim
5							$3-4bn	~$5bn
(1)	Net zero, gross operated	(2) Net zero,		bp net equity, excludes Rosneft
(3)	Includes: low carbon electricity, bio-energy, electrification, future mobility solutions, CCUS, Hydrogen (incl. mobility) & trading (low carbon)

Low carbon

spend3

29

…and delivering on our new investor proposition

Resilient dividend

Share buybacks

EBIDA¹ per share growth

Growing returns

Investment in transition

Committed

distributions

Profitable

growth

Sustainable

value

1. EBIDA: Underlying replacement cost profit before interest and tax, add back depreciation, depletion and amortization and exploration expenditure written-off (net of non-operating items),

less taxation on an underlying RC basis

30

All anchored in a coherent frame

New strategy

and sustainability

frame

Purpose and core beliefs

Resilient financial

frame

for all stakeholders

Compelling

investor

proposition

31

Giulia Chierchia

EVP, strategy and sustainability

32

Anchored in a coherent frame

Purpose and core beliefs

New strategy

and sustainability

frame

for all stakeholders

Compelling

investor

proposition

Resilient financial

frame

33

Informed by energy transition scenarios

Share of primary energy demand

	Non-fossil fuel	Fossil fuel
Business-as-usual	Rapid		Net Zero
Continuing recent trends	Broadly consistent with 'Well below 2oC'	Broadly consistent with '1.5oC'

Absolute growth	Absolute growth	Absolute growth
vs. 2019	vs. 2019	vs. 2019

Source: 2050 scenarios - bp 2020 Energy Outlook (provisional)	34

Our beliefs on the energy transition

The world will electrify, with renewables

a clear winner

Energy systems will become increasingly multi-technology,integrated and local

Customers. will

redefine mobility and convenience, driven by electrification, digital and fleets

Customers -

countries, cities,

industries and

corporates - will demand bespoke energy solutions

Oil and gas challenged;

but will remain part

of the energy mix

for decades

Driving digital and innovation

Source: 2050 scenarios - bp 2020 Energy Outlook (provisional)	35

Our strategy - an IEC delivering solutions for customers

	Low carbon		Convenience	Resilient and focused
electricity and energy		and mobility		hydrocarbons
▪	Low carbon electricity	▪	Advancing growth	▪ Continued rigour in safety
▪	Integrated gas		markets		and operations
▪	Redefining convenience	▪	Driving emissions down
▪	Bio-energy
▪	Next-gen mobility	▪	Focused upstream and
▪	Hydrogen and CCUS				refining portfolio

Integrating energy systems

Partnering with countries, cities and industries

Driving digital and innovation

A sustainability frame linking our purpose and

bp 2030 aims - low carbon electricity and energy

Low carbon

electricity

• 50GW developed renewables
• Position across generation and customers

▪ 500TWh traded1

Hydrogen

and CCUS

• 10% hydrogen share in core markets

Integrated gas

• 25Mtpa customer sales
• >30Mtpa LNG portfolio

Bioenergy

▪	>100Kbd produced
	and integrated across value
	chain
▪ 20% biojet market share
▪	Cost advantaged platforms

▪ Net Zero Teesside

Integrated low carbon portfolio

across Brazil

1. Traded electricity may include electricity sourced from the grid

37

bp 2030 aims - convenience and mobility

Advancing growth markets

>8,000 sites in growth markets

• Differentiated fuels and Castrol lubricants
• Leverage >130m Castrol end users
• Enable transition to low carbon mobility

	Redefining		Next-gen
	convenience		mobility
	50% margin from convenience and electrification1
>3,000 strategic convenience sites	Differentiated customer offers
▪ Market leading food service offers	▪	>70,000 EV charging points
▪	Delivered convenience	▪	Consumer and fleet solutions
▪	Last-mile logistics	▪	>50 hydrogen refuelling sites

Customer experience and loyalty enhanced by integrated fuels value chains and digital

(1) As a ratio of total consumer energy (retail fuels and electrification) and convenience margin (excludes equity accounted entities)	38

bp 2030 aims - resilient and focused hydrocarbons

Continued rigour in

safety and operations

• Capital discipline and project delivery
• Operating efficiency
• >96% upstream plant reliability1 and refining availability1

Driving emissions

down

▪ >15Mte reduction in Aim 1 ▪ >125Mte reduction in Aim 2

▪ Reductions from electrification, energy efficiency, reduced flaring and portfolio

• Methane measurement by 2023 per

Aim 4

Focused upstream and refining portfolio

• Divest non-core assets
• ~1.5mmboed2 oil and gas production in the highest quality basins
• Strong platform in Russia through Rosneft
• ~1.2mmbbl/d refining throughput
• Top quartile refining margins

Unchanged HSSE goals: No accidents, no harm to people, no damage to the environment

(1) bp-operated

(2) bp net, excludes Rosneft

39

Our distinctive sources of value creation

Integrating energy

systems

• Integration along value chains
• Integration across value chains
• • Physical and virtual
• Develop integrated offers for customers

	Partnering with countries,		Driving digital
	cities and industries		and innovation
▪	Focus on 10-15 cities and 3	▪	Transform core operations, enabling
	industries		material efficiency improvements
▪	Transition pathways and jointly	▪	Extend customer access to energy,
	developed, bespoke solutions with		mobility and convenience
	partners	▪	Reduce carbon footprint in operations and
▪	Dedicated origination team		products

▪ Drive adjacencies via bp Ventures and

Launchpad

40

Financial outcomes from new strategy

Resilient hydrocarbons

Equity oil

Equity gas

Refining

Trading (oil and gas)

Low carbon electricity and energy

Low carbon electricity Integrated gas and power Bioenergy

CCUS Hydrogen Trading (low carbon)

Convenience and mobility

Fuels Convenience Lubes Electrification

Future mobility solutions Hydrogen (for mobility)

Other

Ventures

Launchpad

Annual capital expenditure $bn

Capital employed1

$bn

2030 ROACE2

15 14-16

12-14%

8-10%

15-20%

(1)	Excludes Rosneft and other centrally held group items	41
(2)	ROACE as defined in BP Annual Report 2019 and as applied to each strategic focus area, the aggregation of which may not be the same as average ROACE for the bp group

Transition to an integrated energy company

Resilient base

Equity oil

Equity gas

Refining

Fuels

Lubes

Trading (oil, gas)

Transition

Low carbon

Low carbon electricity Bio-energy Electrification

Future mobility solutions

CCUS

Hydrogen (incl. mobility) Trading (low carbon)

Other transition Convenience Integrated gas and power Ventures

Launchpad

Annual capital expenditure $bn

Capital employed1

$bn

15 14-16

(1) Excludes Rosneft and other centrally held group items	42

Murray Auchincloss

CFO

43

Anchored in a coherent frame

New strategy

and sustainability

frame

Purpose and core beliefs

Resilient financial

frame

for all stakeholders

Compelling

investor

proposition

44

Coherent approach to capital allocation

Clear priorities

Phase 1		Phase 2

1

2

3

4

5

Resilient dividend

of 5.25 cents per share1

per quarter

De-lever to $35bn

Low carbon2 and

convenience and mobility spend ~$4-6bn per year

Resilient hydrocarbons spend ~$9bn per year

Resilient dividend

of 5.25 cents per share1

per quarter

Strong investment grade

credit rating

Low carbon2 and

convenience and mobility spend ~$5-7bn per year

Resilient hydrocarbons spend ~$9bn per year

At least 60% of

surplus3 as buybacks4

(1) Intended to remain fixed at this level, subject to board discretion each quarter	(2) Low carbon electricity and energy	(3)	Surplus refers to surplus of sources of cash
including operating cash flow, JV loan repayments and divestment proceeds, over uses, including leases, Gulf of Mexico oil spill payments, hybrid servicing costs, dividend payments and
cash capital expenditure	(4)	At least 60% of surplus cash as buyback once net debt has reduced to $35bn and subject to maintaining a strong investment grade credit rating, as	45
defined in bp's Press Release dated 4th August 2020

Maintaining a strong investment grade credit rating

Clear objectives1

Net Debt $bnCash cover2

						Strong progress
		$12bn hybrid			30-40% across	▪	~$12bn hybrid bond issue
					the cycle
			$35bn target	▪	$1.8bn 1H20 divestment proceeds
						Delivery underpinned
						▪ 2021-25 cash balance point~$40/bbl3
						▪ $25bn 2H20-2025 divestment proceeds
				2022
(1) Chart presented at $50/bbl Brent (2020 real) and bp planning assumptions
(2) Cash cover ratio: funds from operating activities over expanded debt, including leases, Gulf of Mexico oil spill liabilities and decommissioning liabilities
(3) Operating cash flow excluding post-tax DWH payments, adding JV loan repayments, deducting lease payments, organic and inorganic cash capex at the low end of the $14-	46
	16bn capital frame, dividend and hybrid coupon. Assuming an average of around $11/bbl RMM and $3.00/mmBtu Henry Hub (2020 real)

Brent price $/bbl

Committed distributions

Clear policy

Per share2 distributions

▪ Resilient dividend intended to stay fixed at

c/share

Dividend Buybacks

• 5.25 cents per share per quarter1

• Commitment to return at least 60% of surplus3

42c/share

cash flow via buybacks

• • once net debt target achieved; and
  • subject to maintaining a strong investment grade credit rating
• Remainder of surplus at board discretion

(1) Intended to remain fixed at this level, subject to board discretion each quarter

1. Per share distributions: dividend per share plus total buyback expenditure divided by projected share count
2. Surplus refers to surplus of sources of cash including operating cash flow, JV loan repayments and divestment proceeds, over uses, including leases, Gulf of

Mexico oil spill payments, hybrid servicing costs, dividend payments and cash capital expenditure, as defined in bp's Press Release dated 4th August 2020

47

Investment allocation drives value growth

Investment criteria

• Strategic alignment
• Returns
• Volatility / ratability
• Integration
• Sustainability
• Risk

Disciplined process

• Boundaries set by capital frame and the 10 aims
• Central allocation across individual business units
• Stringent, differentiated hurdle rates
• More agile decision-making and reallocation

Sustainable value growth

• Optimising returns and net asset value, balancing:
• • short-termfree cash flow
  • medium-termgrowth
  • long-termsustainable value

48

Performing while transforming - 2021-25 business plan

Disciplined expenditure

$14-16bn per year1 investment including inorganics

Active portfolio management

Includes $5-7bn per year² investment	$2.5bn cash cost reductions by
in low carbon electricity and energy	end 2021³ on track. Ambition of
and convenience and mobility	$3-4bn reductions by 2023

$25bn 2H20-2025 divestment	2020 and 2021 proceeds well	Executing on an identified hopper
programme4	underpinned by transactions	of assets to high-grade our
		announced or in-progress	portfolio
Relentless execution
Scaling our low carbon electricity	Expanding our convenience	Maximising value from resilient
and energy	and mobility offer	and focused hydrocarbons

	Strong growth in EBIDA4			Strong and	Investing at scale in the
	per share		improving ROACE5		energy transition
(1)	$13-15bn per annum until reaching net debt target of $35bn	(2)	$4-6bn per annum until reaching net debt target of $35bn	(3) Relative to 2019
(4)	Divestment programme refers to divestment proceeds received in the period	(5) EBIDA: Underlying replacement cost profit before interest and tax, add back depreciation,
depletion and amortization and exploration expenditure written-off (net of non-operating items), less taxation on an underlying replacement cost basis	(6) ROACE: return on average	49
capital employed as defined in bp's 2019 annual report

Scaling our low carbon electricity and energy businesses

SmartLog

		Developed
2.5	20
	renewables (GW)

250			350
	Traded electricity1 (TWh)

14.9			25
	LNG portfolio (Mtpa)

wind

222			50
	Bioenergy (Kbd)

Growing to achieve material scale by 2025

(1)	Traded electricity may include electricity sourced from the grid	50
(2)	Includes bp's 2019 net equity ethanol equivalent production for sugarcane ethanol & biopower production and bp's 2019 refining bio co-processing production

Expanding our convenience and mobility offer

>10m

1,270

$6.5bn

>1,600

>7,500

~25%

Customer touchpoints per day

bp retail sites in growth markets

Castrol revenues

Strategic convenience sites

EV charge points

Margin from convenience and electrification1

>15m

7,000

$7.5bn

>2,300

>25,000

~35%

Customer centric growth with robust returns

(1) As a ratio of total consumer energy (retail fuels and electrification) and convenience margin (excludes equity accounted entities)	51

Maximising value from resilient and focused hydrocarbons

Track record of major project delivery

24			Delivering			Delivering
Major Projects			700mboed		900mboed
online			developed			by end-2021
2020	2021		2022				2023+
▪ Atlantis Ph3	▪ KG D6 Satellites	▪ Mad Dog Ph2	▪ ACE
▪ KG D6 R-Series	▪ Thunder Horse S.	▪ Herschel		▪ GTA Ph1
▪ Vorlich	Exp Ph2	▪ KG D6 MJ		▪ Cypre
▪ Raven	▪ Manuel	▪ Matapal			▪ Seagull
▪ Khazzan Ph2	▪ Zinia 2	▪ Platina
				▪ Tangguh Expansion
				▪ Cassia Compression
Advantaged refining portfolio
4			~1bn				>50%
Refineries delivered	underlying earnings		delivered by
>96% average			growth in 2018-		2019
availability in 2018-19	2025

1. This and all other 2025 metrics are stated after expected impact of divestments
2. Upstream unit metrics exclude production from equity accounted entities
3. bp-operatedupstream plant reliability
4. bp-operatedrefining availability

2.6		Upstream production1 (mmboed)			~2
~7		Unit production costs2 ($/boe)			~6
94%		Plant reliability3			96%
1.7		Refining throughput (mmbbl/d)			<1.5
~95%		Refining availability4			96%
~13		Capex ($bn)					~9

Providing a solid foundation

52

2021-25 business plan outcomes

Underlying1 EBIDA2 growth	EBIDA2 per share growth3	Strong and growing
		ROACE5
$bn	c/share	%

2H19-1H20	2025	2H19-1H20	2025	2019	2025
$51	$50-60	$51	$50-60	$64	$50-60

	▪ 5-6% underlying	▪ 7-9% per share EBIDA2	▪ 12-14% group ROACE⁵ in
	EBIDA2 CAGR4	per share CAGR4	2025
(1)	Underlying: Before impact of planned divestments
(2)	EBIDA: Underlying replacement cost profit before interest and tax, add back depreciation, depletion and amortization and exploration expenditure written-off (net of non-operating
	items), less taxation on an underlying replacement cost basis
(3)	Buyback modelled across a range of share prices; EBIDA after impact of planned divestments
(4)	CAGR: compound annual growth rate		53
(5) ROACE: return on average capital employed as defined in bp's 2019 annual report

Clear priorities for uses of cash

2021-25 sources of cash¹

Resilient dividend	5.25 c/share2
per quarter

Deleverage

Investment3

Buybacks

Surplus after buybacks

To $35bn net debt

Phase 1 ~$13-15bn per year Phase 2 ~$14-16bn per year

At least 60% of surplus4

1. Sources of cash includes Operating cash flow at $50-60/bbl Brent (2020 real) and bp planning assumptions plus JV loan repayments and divestment proceeds, deducting

leases, Gulf of Mexico oil spill payments and hybrid servicing costs	(2) Dividend per quarter, intended to remain fixed at this level, subject to board discretion each
quarter	(3) Investment refers to organic and inorganic capital expenditure	(4)	At least 60% of surplus cash as buyback after having reached $35bn Net Debt and	54
subject to maintaining a strong investment grade credit rating, as defined in bp's Press Release dated 4th August 2020

Our new investor proposition

Resilient dividend of 5.25 cents per share per quarter

>60% surplus cash as share buybacks¹

7-9% EBIDA² per share CAGR³

Growing ROACE to 12-14%⁴

Committed

distributions

Profitable

growth

>20% capital employed in transition⁵

Sustainable

value

1. At least 60% of surplus cash as buyback after having reached $35bn Net Debt and subject to maintaining a strong investment grade credit rating, as defined in bp's Press Release dated

4th August 2020	(2) EBIDA: Underlying replacement cost profit before interest and tax, add back depreciation, depletion and amortization and exploration expenditure written-off (net
of non-operating items), less taxation on an underlying RC basis	(3)	2H19/1H20-2025,$50-60/bbl Brent (2020 real), at bp planning assumptions	(4) ROACE: return on average	55
capital employed as defined in bp's 2019 annual report, by 2025, $50-60/bbl (2020 real), at bp planning assumptions	(5) By 2025

Bernard Looney

CEO

56

to low carbon energy and customer focus

An integrated energy company delivering solutionsfor customers

our net zero

ambition

	long-term
resilient hydrocarbon	value for
business on value	shareholders

57

The team		David Eyton		Geoff Morrell
		EVP, innovation	Emma Delaney
		EVP, communications
	Giulia Chierchia	& engineering	Murray Auchincloss
	EVP, customers	& advocacy
	EVP, strategy &		& products		Chief financial officer
William Lin	sustainability				Eric Nitcher
EVP, regions,
				EVP, Legal
cities &
solutions

Carol Howle		Dev Sanyal	Kerry Dryburgh
EVP, trading	Gordon Birrell	EVP, people & culture
EVP, gas & low
& shipping	Bernard Looney
EVP, production	carbon energy
	& operations		Chief executive officer

Q&A

Bernard Looney	Murray Auchincloss	Giulia Chierchia
EVP, Strategy and
CEO	CFO
Sustainability

Appendix

60

Emissions pathways with 2019 baseline

	2019			2025	2030	2050, or sooner
					Baseline	Targets	Aims	Aims
Aim
1					54			20%	30-35%	100%1
						Mte
Aim
2					360			20%	35-40%	100%2
						Mte								Emissions
														reductions
Aim
3					79.7			5%	>15%	50%
						gCO2e/MJ
Aim								Timeline to
4					0.2%			Measurements in	50%
						achieve 50%
					proxy		place by 2023	reduction to follow
Aim		$500m		$3-4bn	~$5bn
						spend3
5
														Low carbon
(1)	Net zero, gross operated (2) Net zero,		bp net equity, excludes Rosneft
								61
(3)	Includes: low carbon electricity, bio-energy, electrification, future mobility solutions, CCUS, Hydrogen (incl. mobility) & trading (low carbon)

2Q 2020 summary

$bn		2Q19	1Q20	2Q20		% Y-o-Y	% Q-o-Q
Upstream	3.4	1.9	(8.5)
Downstream	1.4	0.9	1.4
Other businesses and corporate	(0.3)	(0.6)	(0.3)
Underlying business RCPBIT1	4.5	2.2	-7.3	(264%)	(429%)
Rosneft2	0.6	(0.0)	(0.1)
Consolidation adjustment - unrealised profit in inventory	0.0	0.2	(0.0)
Underlying RCPBIT1	5.2	2.4	-7.4	(244%)	(411%)
Finance costs3	(0.8)	(0.7)	(0.7)
Tax	(1.5)	(1.0)	0.8
Minority interest	(0.1)	0.0	0.7
Underlying replacement cost profit	2.8	0.8	-6.7	(338%)	(945%)
Underlying effective tax rate4	34%	55%	9%
Underlying operating cash flow5	8.2	1.2	4.8	(41%)	292%
Underlying earnings per share (cents)	13.8	3.9	-33.0	(339%)	(943%)
Dividend paid per share (cents)	10.25	10.50	10.50	2%	0%
Dividend declared per share (cents)	10.25	10.50	5.25	(49%)	(50%)

1. Replacement cost profit before interest and tax (RCPBIT), adjusted for non-operating items and fair value accounting effects
2. BP estimate of Rosneft earnings after interest, tax and minority interest

(3)	Finance costs and net finance income or expense relating to pensions and other post-retirement benefits
(4)	Underlying effective tax rate on replacement cost profit adjusted to remove the effects of non-operating items and fair value accounting effects	62
(5)	Underlying operating cash flow is net cash provided by/(used in) operating activities excluding post-tax Gulf of Mexico oil spill payments

Upstream

		Volume mboed								Underlying RCPBIT3 $bn
4000			1			3.4		Non-US		US		Total
Group production			4.0				2.1	2.7	1.9
3500						2.0
3000	Upstream production			0.0
		(2.0)
	excluding Rosneft
			(4.0)
2500
2000						(6.0)																(8.5)
					(8.0)
1500						(10.0)	2Q19		3Q19		4Q19		1Q20	2Q20
2Q19	3Q19	4Q19	1Q20	2Q20

Realisations2 2Q19 1Q20 2Q20		2Q 2020 vs 1Q 2020
Liquids ($/bbl)	63	47	23		▪	Impact of writing down $7.7bn from certain
Gas ($/mcf)	3.4	2.8	2.5			exploration intangible carrying values in 2Q,
					▪	Lower liquids and gas realisations

(1)	Group reported oil and gas production including Rosneft
(2)	Realisations based on sales of consolidated subsidiaries only, excluding equity-accounted entities	63
(3)	Replacement cost profit before interest and tax (RCPBIT), adjusted for non-operating items and fair value accounting effects

Downstream

96%

Refining

Underlying RCPBIT2

$bn

2Q19

1Q20

2Q20

Fuels

Lubricants

Petrochemicals

Total

environment

Refining availability1

2.0

1.9

RMM ($/bbl)

15.2

8.8

5.9

1Q20: 96%

1.5

1.4

1.4

1.4

2Q 2020 vs 1Q 2020

0.9

▪

Weaker industry refining margins

and

1.0

narrower North American heavy crude oil

discounts;

0.5

▪ Significantly lower marketing volumes and

lower refining utilisation, driven by the impact

of COVID-19

0.0

More than offset by

2Q19

3Q19

4Q19

1Q20

2Q20

▪ An exceptionally strong contribution from

supply and trading

(1) BP-operated refining availability

64

(2)

Replacement cost profit before interest and tax (RCPBIT), adjusted for non-operating items and fair value accounting effects

Rosneft

BP share of underlying net income1 $bn

1.0

0.8

0.6

0.4

0.2

0.0

2Q19 3Q19 4Q19 1Q20 2Q20

-0.2

BP share of Rosneft dividend2 $bn

	Dividend paid		Half yearly dividend

1.0

0.8

0.6

0.4

0.2

0.0

2018

2019

2020

1.1mmboed

BP share of Rosneft production3

1. On a replacement cost basis and adjusted for non-operating items; 2Q20 represents BP estimate

(2)	From 2018, represents BP's share of 50% of Rosneft's IFRS net profit, 2H 2019 paid in July 2020	65
(3)	Average daily production for 2Q20