* We made good progress towards our net debt target, including the contribution from high grading our portfolio and USD6.6 billion of divestment and other proceeds received during the year.

* New oil and gas production came on from four major projects« - in India, Oman, the UK and the US.

* Natural gas from the Shah Deniz field in the Caspian Sea arrived in Italy following final completion of the historic Southern Gas Corridor project.

* And we doubled our retail network in growth markets to around 2,700 retail sites, plus the addition of around 300 strategic convenience sites.

Reinventing bp

This performance is even more remarkable given that we have been carrying out the most extensive reorganization in bp's 112-year history. We have retired the upstream/downstream business model that has served bp very well. In its place we have introduced a leaner, flatter structure, stripping away tiers of management and lowering the workforce towards a target of around 10,000 fewer jobs. My role is now five layers at most away from more than half of our employees. That means people's ideas and voices can be more easily heard - and decisions taken much faster.

We are now more centralized, more agile, and better integrated. This enables us to maximize value creation in a rapidly evolving market through economies of scale, and by exploiting synergies and driving continuous improvement in operational performance.

We are now organized around four business groups.

* Production & operations is the operating heart of the company - and is focusing our resilient hydrocarbons portfolio on value.

* Customers & products is growing our convenience and mobility offers for an increasing number of customers.

* Gas & low carbon energy is growing to help meet rapidly increasing clean energy demand.

* Innovation & engineering acts as a catalyst, opening up new and disruptive business models and driving our digital transformation.

And our trading & shipping business and regions, cities & solutions team knit together the offers of our four core groups to drive greater value creation.

Reimagining energy

Completing our transformation to a net zero Integrated Energy Company will take time. But we are led by our purpose - to reimagine energy for people and our planet - and motivated by the opportunity we see in the energy transition. Trillions of dollars of investment will be needed over the next 30 years in replumbing and rewiring the global energy system.

We now have offshore wind partnerships in the US with Equinor and in the UK with EnBW - two of the best regions globally for the world's fastest-growing source of energy. Our solar development joint venture«, Lightsource bp, is growing prolifically. We are working with Ørsted to develop green hydrogen for our Lingen refinery. We have joined forces with the mobility platform DiDi to build a network of electric vehicle chargers in China, by far the world's biggest market for EVs. And we have a growing list of low carbon partnerships with cities such as Aberdeen and Houston and some of the world's leading companies, including Amazon, Microsoft, Qantas and Uber.

A compelling investor proposition

We are fully focused at all times on the bottom line of the business - on executing our strategy while operating safely, reliably and with discipline. We continue to build resilience and strength in the balance sheet as conditions remain challenging and uncertain while vaccines

roll out, the pandemic recedes, and economies look to recover. At the same time, we are transforming to create value from the energy transition over the long term.

We see tremendous business opportunity in providing people with the reliable, affordable, clean energy they want and need. Our net zero ambition is clearly the right thing for society, but we know it does not give us a free pass in a fast-changing world. We have to show you the evidence that we can compete fiercely and add value - in service of the compelling investor proposition we believe we offer:

* Committed distributions - including the dividend as the number one priority;

* Profitable growth; and

* Sustainable value.

This is all in service of growing long-term shareholder value, that is our job. And I promise to keep you well informed as we execute our plans. As ever, thank you for your continued support - I will never take that for granted. And I look forward to any feedback you might have.

Thank you.

Bernard Looney

Chief executive officer

22 March 2021 3. Extracted in full and unedited text from "Group performance", bp Annual Report and Form 20-F 2020, pages 42-47:

Financial and operating performance 


                                                                                             USD million except per share 
                                                                                                                amounts 
                                                                                               2020      2019      2018 
Sales and other operating revenues                                                        180,366   278,397   298,756 
Profit before interest and taxation                                                      (21,740)    11,706    19,378 
Finance costs and net finance expense relating to pensions and other post-retirement 
benefits                                                                                  (3,148)   (3,552)   (2,655) 
Taxation                                                                                    4,159   (3,964)   (7,145) 
Non-controlling interests                                                                     424     (164)     (195) 
Profit (loss) for the year attributable to bp shareholders                               (20,305)     4,026     9,383 
Inventory holding (gains) losses, before tax                                                2,868     (667)       801 
Taxation charge (credit) on inventory holding gains and losses                              (667)       156     (198) 
RC profit (loss) for the year attributable to bp shareholders                            (18,104)     3,515     9,986 
Net (favourable) adverse impact of non-operating items and fair value accounting 
effects before tax                                                                         16,649     8,263     3,380 
Taxation charge (credit) on non-operating items and fair value accounting effects         (4,235)   (1,788)     (643) 
Underlying RC profit (loss) for the year attributable to bp shareholders                  (5,690)     9,990    12,723 
Dividends paid per share - cents                                                             31.5      41.0      40.5 
- pence                                                                                    24.458    31.977    30.568

Results The loss for the year ended 31 December 2020 attributable to bp shareholders was USD20.3 billion, compared with a profit of USD4.0 billion in 2019. Adjusting for inventory holding losses, replacement cost (RC) loss was USD18.1 billion, compared with a profit of USD3.5 billion in 2019.

After adjusting RC loss for a net charge for non-operating items of USD12.2 billion and net adverse fair value accounting effects of USD0.2 billion (both on a post-tax basis), underlying RC loss for the year ended 31 December 2020 was USD5.7 billion. The result reflected lower oil and gas prices, significant exploration write-offs and lower refining margins and depressed demand.

The profit for the year ended 31 December 2019 attributable to bp shareholders was USD4.0 billion, excluding inventory holding gains, RC profit was USD3.5 billion. After adjusting RC profit for a net charge for non-operating items of USD7.2 billion and net favourable fair value accounting effects of USD0.7 billion (both on a post-tax basis), underlying RC profit for the year ended 31 December 2019 was USD10.0 billion, a decrease of USD2.7 billion compared with 2018. The decrease was predominantly due to lower oil and gas prices in the Upstream segment and a significantly weaker environment in the Downstream segment.

Non-operating items In 2020 the net charge for non-operating items was USD12.2 billion, mainly related to impairment charges, a gain on the disposal of our petrochemicals business, certain exploration write-offs (reported within the 'other' category), and restructuring costs associated with the reinvent bp programme. The impairment charges mainly relate to producing assets and principally arose as a result of changes to the group's oil and gas price assumptions. Impairment charges also include amounts relating to the disposal of the group's interests in its Alaska business.

In 2019 the net charge was USD7.2 billion, mainly related to impairment charges, principally resulting from the announcements to dispose of certain assets in the US and reclassification of accumulated foreign exchange losses from reserves to the income statement on the formation of the bp Bunge Bioenergia joint venture.

See pages 304 and 305 for more information on non-operating items and fair value accounting effects.

Taxation The credit for corporate income taxes was USD4,159 million in 2020 compared with a charge of USD3,964 million in 2019. The decrease mainly reflects the loss in 2020. The effective tax rate (ETR) on the loss for the year in 2020 was impacted by the impairment charges and exploration write-offs. The ETRs for 2020 and 2019 were also impacted by various other one-off items.

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