BP PLC — Investor Presentation 2008

Jun 6, 2008

BP Strategy Presentation

27 February 2008

Tony Hayward Group Chief Executive

Safety – People – Performance

Cautionary Statement

Forward Looking Statements - Cautionary Statement

This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding oil and gas prices and impact of price changes; global oil demand growth; capital expenditure; capital investments; cost inflation; future production; expected start up and timing of projects and their contribution to resources, production and LNG capacity; expected return to capacity of refineries; refining margins; plans for, and timing of, closing refining & marketing performance gap; delivery of free cash flow; corporate restructuring; impact of restructuring and expected restructuring costs; potential for cost efficiencies; R&D investment; expected expansion in Aromatics & Acetyls; planned investments by TNK-BP and TNK-BP's future production; investment in, and anticipated growth of, alternative energy, including expected growth of solar and wind businesses, developin g biofuels and hydrogen energy business and incubating new businesses in clean coal and carbon capture; gearing; annual charges; level of free cash flow allocated to share buybacks; share buybacks and other distributions to shareholders; divestment activity; financial performance; resources and reserves; and the application of technology and potential impact on resources, reserves an dproduction. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation.

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

Cautionary Note to US Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as "resources" and "non-proved reserves", that the SEC's guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F/A, SEC File No. 1-06262, available from us at 1 St James's Square, London SW1Y 4PD. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

February 2008

Agenda

• •Exploration & Production Andy Inglis
• •TNK-BP
• •Refining & Marketing Iain Conn
• •Alternative Energy Vivienne Cox
• •Financial Framework
• •

Bob Dudley

Byron Grote

Conclusions Tony Hayward

Source: Platts, BP – February 2008 prices; US CPI discounted

US gas prices: disconnected from oil price

Source: Platts, BP; Futures data NYMEX, BP estimates for Residual LSFO 1% futures prices

Industry challenges

Challenges

• •Sector inflation
• •Rising government take
• •Competition for new access

BP's response

• • Increased investment in:
• Exploration
• Access
• Technology
• • Focus on:
• Reciprocity
• Costs
• Developing low-carbon options

Refining margins

Source: Platts, BP

Closing the competitive gap

• •Safe and reliable operations
• •People: building capability
• • Performance:
• Restoring momentum
• Reducing complexity
• •Technology: increased focus
• •Securing the future

Closing the competitive gap Safe and reliable operations

Integrity Management incidents

Closing the competitive gap People: building capability

Operations

• •Major Projects Common Process
• •Operations Academy
• •Operating Management System

Selective recruitment

• •Building technical and functional expertise
• •2,000 additional engineers over two years
• •Increased graduate recruitment to 750

Reward

•Stronger linkage between performance and reward

Closing the competitive gap Performance: restoring momentum

• •Momentum building in 2008
• •Project start-ups
• •Restoring refining availability

Closing the competitive gap Performance: reducing complexity

• • Organizational simplification
• Three segments to two
• Separate Alternative Energy business
• • Delayering
• Reducing corporate overheads by 15-20%
• −Fewer layers of management
• Smaller corporate infrastructure
• • Restructuring
• Overhead headcount reduction of around 5,000
  • Functions 50%: businesses 50%

Closing the competitive gap Technology: increased focus

• •Building leadership positions
• •Implementation at scale
• •Long-term commitment to research
• • Sustained increase in technology investment
• −\$2.9bn over the last three years
• \$1.1bn in 2007
• ~ \$1.3bn in 2008

Closing the competitive gap Securing the future

Exploration & Production

• • New resource access and continued exploration success
• Net resource additions of 1 billion boe in 2007
• 14th consecutive year of reporting >100% reserves replacement*
• • Production
• Growth to 4.3 mmboed at \$60/bbl in 2012
• − Sustainable above 4 mmboed at \$60/bbl at least to 2020 – without assuming any future exploration success or new access

Refining & Marketing

•Closing the performance gap

Alternative Energy

•Low-carbon growth options

* On a combined basis of subsidiaries and equity-accounted entities, excluding acquisitions and divestments

Andy Inglis

Chief Executive, Exploration & Production

Access: Canadian oil sands

Regional oil sands leases

• •Expected to be sanctioned in 2008
• •Joint investment to 2012 estimated at around \$3 billion
• •First production expected in 2012
• •Building to expected 200+ mboed gross by end of the next decade
• •Projected 40-year production plateau
• •Sunrise developed using steam assisted gravity drainage (SAGD)
• •BP subsurface expertise adds value and accelerates learning

Resources and reserves growing

* Non-conventional

Resources at end 2007 on a combined basis of subsidiaries and equity-accounted entities

Incumbent resource positions

Technology focus areas Converting resources to reserves

Each has potential to deliver >1bn boe increase in reserves

1.North America Unconventional Gas

Prove 12 tcf tight gas resources via fracture sweet spot identification and technical limit drilling and completion

2.Alaska Heavy Oil

Progress 2bn boe heavy oil resources

3.Gulf of Mexico Palaeogene

Progress 2bn boe via sustained high pressure well tests

4.Advanced Seismic Imaging

Locate and enable access to new resources

5.Beyond Sand Control

Develop reliable small and large bore sand control to deliver capex saving and incremental production / resources

6.Pushing Reservoir Limits

Advanced gas injection and water flood technologies to enhance oil recovery

7.Subsea Reserves Parity

Improve subsea recovery factors

8.FieldoftheFutureTM

Real-time reservoir, wells and facilities mgmt to deliver incremental 100 mboed production

9.Inherently Reliable Facilities

Monitor, analyze, predict and manage corrosion to increase operating efficiency and economic life

10.Effective Reservoir Access

Four-fold increase in reservoir contact area per well

Growing production: 2008–2012

• 2009Above 4.0 mmboed*
• 2012Around 4.3 mmboed*

* Projections based on current portfolio at \$60/bbl

Potential PSC impacts versus \$60/bbl

Key project start-ups

9on stream in development under appraisal

Kammenoye

Trinidad Northern FieldsTrinidad Compression Verkhnechonskoye

Isabela

Securing the future

• • Our current resource base is capable of sustaining production above 4mmboed to 2020*
• Without assuming any future exploration success
• Without assuming any new access
• • An increasing proportion of projects are expected to develop unconventional resources which have long, sustained profiles

* Based on current portfolio at \$60/bbl

Sustaining production through 2020

Conventional oil

Foinaven P2SNWADClair Ridge Valhall Redevelopment

Conventional gas

SNS Compression Harding Area Gas SkarvIn SalahGas compression

Heavy / viscous oil* SunriseAlaskaWRDx

Conventional oilLiberty

Alaska Gas

Tight gas* WamsutterCanada Noel

Coal bed methane*San Juan

Deepwater oil

Atlantis / North Flank King Subsea Pump King South Thunder HorseDoradoGreat WhiteHorn Mountain NWFXGreater PumaTubular BellsUrsa Waterflood

Conventional gas

Mango CashimaSavonetteTrinidad North Fields

Conventional oilSaqqara

Deepwater gas Egypt Gas

Heavy / viscous oil * Russkoye Conventional oil/gas ACG Phase 3Shah Deniz Phase 2UvatVerkhnechonskoye Rospan Bolshekhetskiy Kammenoye Talinskoye

Tight gas* Oman

Deepwater oil

RosaGreater PlutonioKizomba A Phase 2Kizomba CCLOVBlock 31NEBlock 31SEBlock 31 WestBlock 18 WestPazflorKizomba Satellites

LNG*

Tangguh BrowseAustralia LNG Train 5Angel North Rankin BIo/Jansz Angola LNG

Alaska

Our assets

Unlocking heavy oil

2007 Production and Capex

• •Safe and reliable operations
• • Sustain business to 2050+ by:
• Managing light oil decline
• Accelerating infrastructure renewal
• Unlocking heavy oil and gas resources
• • Leverage large resources and extensive infrastructure through technology

North America Gas

Our assets

Unconventional gas leadership

2007 Production and Capex

• •Safe and reliable operations
• • Sustain low-risk long life production and cash flow in stable environment
• • Provide access to significant resources through large incumbent position
• • Maintain industry leadership in 'unconventional gas' technology and capability

North Sea

2007 Production and Capex

• •Safe and reliable operations
• • Sustain margins and free cash flow
• • Active cost management and focus on efficiency
• • Application of technologies to convert resources to reserves

Gulf of Mexico

Our assets

Technology application – King Subsea Pump

2007 Production and Capex

• •Safe and reliable operations
• • Increase near-term production and free cash flow
• •Renew lease position
• • Advance deepwater subsea and subsalt technologies

Trinidad & Tobago

Our assets

Standardizing the concept

2007 Production and Capex

• •Safe and reliable operations
• • Sustain long-term dependable gas supply and stable cash generation
• • Efficient development of new fields

Angola

Our assets

2007 Production and Capex

• •Safe and reliable operations
• • Grow production and deliver significant earnings growth
• • Ramp-up near-term production in Greater Plutonio and maximize resource capture in Block 31
• • Optimization of cost and cycle time by adopting a standardized approach in Block 18 and 31

Azerbaijan

Our assets

2007 Production and Capex

• •Safe and reliable operations
• • Sustain material, high margin business
• •Build gas business
• • Technology
• Advanced imaging
• Beyond Sand Control

Egypt

2007 Production and Capex

• •Safe and reliable operations
• • A growing gas business supporting both domestic and export gas markets
• • Application of seismic and subsea technologies

LNG growth

BP projections for 2008 and beyond

BP LNG portfolio

Growing investment 2006–2008

Organic capex above excludes Rosneft in 2006, swaps with Occidental in 2007 and accounting treatment related to joint ventures with Husky Energy in 2008 2006 and 2007 includes capex previously reported in the GP&R Segment BP projections for 2008 TNK-BP and PAE are self-funding

A sustainable future

• • Continued success in focused exploration and access strategy
• Resource base continues to grow: increasing by 1 billion boe in 2007
• 14 year track record of reporting 100%+ reserves replacement*
• • Sustainable production out to 2020
• Application of technology to move resources to reserves
• −Excellence in project delivery
• •Upside from exploration and new access
• •Near-term production growth

* On a combined basis of subsidiaries and equity-accounted entities, excluding acquisitions and divestments.

Bob Dudley Bob Dudley

President and CEO TNKPresident and CEO TNK-BP

Delivery on promises Delivery on promises

• •The four promises made in February 2003:
• • Production growth
• –6.5% per annum since 2003
• • Technology transfer
• –3D Seismic, Samotlor and waterflood
• • Corporate governance
• Minority shareholder, internal processes and transparency
• • Good corporate citizen of Russia

• \$68bn in taxes / export duties to Russia

Environmental challenges and Environmental challenges and responses responses

C h l l a e n g e s	R e s p o n s e s
P d i h t t r o c o n g r o u w	/ T h l i i t t e c n o o g o p e r a n g p r a c c e s y
S i t t a e c o m p a n e s	C / i i t t o o p e r a o n p a r n e r n g -
O i i l b i l i t t r g a n z a o n a c a p a y	T i i d i i t r a n n g a n n n o v a o n
L l f l i e e s o c o m p a n c e v	G d t o e r n a n c e a n r a n s p a r e n c v y
f T i d i l i t a r e g m e a n n a o n x	I d d h l t t t n e s m e n a o c a c a n e c n o o g v v y y

Samotlor 4Samotlor 4-Way closures Way closures Status and plans Status and plans

Current Status

• •100% discovery success (7 for 7)
• •60mmboe reserves
• •30mboed current production

2008+ Plans

• •Four new closures (24 wells)
• • 4,000 metres departure technology will allow additional 2008 options
• •Nine additional closures identified

TNK-BP recovery factors BP recovery factors

Top five fields have 55% of proven reserves

	( ) 1 O O I P	R f t R f t e c o v e r y a c o r s e c o e r a c o r s v y
T f i T N K B P o p v e - f i l d e s	b b n o e	U t p o d 2 0 0 7 e n	( ) 2 2 0 0 4 T P ( ) S 3 P R M	( ) 2 2 0 0 T P 7 ( ) S 3 P R M
S ( S ) l h t t a m o o r o u	4 3 5	3 8 %	4 2 %	4 4 %
S l ( N h ) t t a m o o r o r	9 3	2 2 %	2 7 %	3 4 %
K h k h k k o r s o s o e y v y	2	1 % 7	3 2 %	2 9 %
Y Y k e m e g o s o e v y -	6 4	3 %	1 2 %	1 2 %
T l i k a n s o e y	1 2 3	7 %	1 1 %	1 1 %
T f i o p e v	5 3 7	2 % 7	3 2 %	3 5 %

1% improvement in recovery factor = ~750mmboe increase in total proved reserves

• (1) Original Oil In Place
• (2) Total proved reserves
• (3) Reserves defined by PRMS (formerly SPE) basis and base on YE 2007 D&M audit results

Technology: Russkoye Technology: Russkoye

• •Estimated resources > 2bnboe
• • Piloting alternative technologies with encouraging results
• •Infrastructure synergy available

TNK-BP: an integrated company BP: an integrated company

UvatVerkhnechonskoye Rospan Bolshekhetskiy Russkoye Talinskoye

Kammenoye

Van Yogan PK1/2

SamotlorNyagan Orenburg NovosibirskNizhnevartovsk

Ryazan SaratovLisichanskKrasnoleninskNizhnevartovskLINOS

MoscowUkraineSt. Petersburg Ryazan SaratovTulaKievRostov-on-Don Gas

SIBUR JVRospan Niz GRES3

TNK-BP production and capex BP production and capex 2003-2008

TNK-BP projections for 2008

TNK-BP Projects BP Projects

TNK-BP in Russia

• •Greater integration and engagement key for long-term success
• • TNK-BP – a venture between BP and Russia
• Technology / operations
• Participant in global markets
• •Russia will continue to provide ample opportunities

Iain Conn

Chief Executive, Refining & Marketing

Closing the performance gap

• •Performance versus competitors
• •Closing the performance gap
• •Portfolio and future prospects

Competitive performance

(1) BP and Competitor data adjusted to comparable basis

(2) Competitor set comprises R&M segments: ExxonMobil, Royal Dutch Shell, Chevron, ConocoPhillips, Total

Performance gap at \$7.50/bbl refining margin(1)

Pre-tax earnings

(1) BP Global Indicator Margin (GIM)

Relative areas in pie charts based on Average Operating Capital Employed (pre-tax)

Closing the performance gap

• 1.Safety and operations
• 2.Fundamental shift in behaviours
• 1. Restoring missing revenues and earnings momentum
• Texas City, Whiting; improved refining availability
• 1. Business simplification
• Integration, channel strategy, focused marketing footprint
• 1. Repositioning our cost efficiency
• Performance units, business services, overhead, procurement

Closing the performance gap Sources and phasing

Repositioning cost efficiency

Business services and overheads•

Simplification

Fuels Value Chains, marketing operations Portfolio – consolidation and focus of footprint ••

Restoring revenues

•Refining performance

2	2	2	2
0	0	0	0
0	0	1	1
8	9	0	1
B P j i t p r o e c o n s

Restoring missing revenues Refining availability

(1) BP Global Indicator Margin (GIM) BP projections for 2008 and 2009

Business simplification Fuels value chains

Business simplification Marketing participation strategy

• • Retail channel strategy
• US convenience: de-capitalize and move to franchise offer
• Rest of World: hurdle rate returns
• • Focused marketing footprint
• Lubricants: reducing direct presence in ~20 countries
• Aviation: maintain global network exiting ~20 countries

Repositioning our cost efficiency

• •Fewer performance units
• •Consolidate and standardize business service provision
• • Reduce overheads
• Minimize central activity
• Fewer layers
• • Third-party spend
• Leverage procurement

Future prospects Bias to manufacturing

Future prospects Upgrading and expanding in manufacturing

United States

• Northern tier refineries to Canadian heavy oil

Petrochemicals plant

Refinery

Heavy oil supply

Europe – upgrading and expansion

• • Rotterdam reconfiguration and potential hydrocracker
• •Castellon coker
• •PTA expansion: Geel

Asia – accessing growth markets

• •PTA expansion: Zhuhai
• • Acetic acid expansion: Nanjing, Chongqing
• • Potential olefins expansion: SECCO

What to expect

By end 2011, we aim to:

• •Close the performance gap
• •Deliver material free cash flow

Actions underway:

• •Restoring missing revenues
• •Business simplification
• •Repositioning our cost efficiency

Shifts in emphasis:

• •Manufacturing
• •Integration

Opportunities for long-term growth

Vivienne Cox

Executive Vice President, Alternative Energy

Alternative Energy: objective

• • Developing material growth options for BP in low-carbon technologies
• • Building a portfolio of operating businesses and ventures Three stages of development
• Growing: Wind, solar and gas-fired power
• Developing: Biofuels and Hydrogen Energy
• Incubator: Carbon capture and storage, clean coal, distributed energy and venturing
• •Focus on equity value growth as the performance measure
• •Independent management, culture and advisory board

Alternative Energy: the market today

Sources: Primary energy based on IEA WEO reference scenario. Renewables based on New Energy Finance

Grossed-up estimate based on disclosed deals. New investment only. Source: New Energy Finance

• •Fastest growing sector of the global energy market
• •Investment now exceeds \$100bn p.a.

Alternative Energy: future market drivers

Sources: Primary energy based on IEA WEO 2007 reference scenario. Renewables based on New Energy Finance

Global new investment in Clean Tech forecast

Source: New Energy Finance, Nov 2007

• •Strong future growth
• •Total investment in Clean Tech expected to reach \$2-3 trillion by 2030

Alternative Energy: solar market

• •BP Solar investment was ~\$150m in 2007 and will double in 2008
• •BP Solar is expected to grow faster than the market

Alternative Energy: wind market

Sources: BP projections

Source: American Wind Energy Association

• •~\$0.8bn invested so far, 2008 investment ~\$0.6bn
• •BP wind business expected to grow faster than the market
• •BP development pipeline of 15GW
• •BP a differentiated player with scale and geographical diversification

Alternative Energy: equity valuation

Gas fired-power valuation of \$1.2bn based on DCF

Valuation as of February 2008

Alternative Energy: forward priorities

BP's investment in Alternative Energy since launch is \$1.5bn and planned investment for 2008 is \$1.5bn

Wind

•Install 3GW gross capacity by end 2010

Solar

•Manufacturing expansion and ~800MW sales in 2010

Biofuels, Hydrogen Energy and CCS

• Deployment of major Biofuels, Hydrogen Energy and carbon capture and storage projects

Incubators

•Launch a winning incubator business

BP projections

Byron Grote

Chief Financial Officer

Organization simplification Re-segmentation and 2008 reporting change

• •Two operating segments: Exploration & Production, Refining & Marketing
• • Gas, Power & Renewables segment eliminated
• NGLs, LNG, gas & power marketing and trading businesses incorporated into Exploration & Production
• Alternative Energy established as a separate unit
• • Other Businesses & Corporate (OB&C) redefined
• Alternative Energy
• Corporate activities
• Other businesses (e.g. aluminium, shipping)
• • 2008 OB&C: expected annual charge of \$1.5bn ±\$200m
• •Five year restated historical data published

Investment guidance

\$ b n	2 0 0 6	2 0 0 7	2 0 0 8
& E l i P d i t t p o r a o n r o c o n x u	2 2 1	3 1 7	0 1 5 ~
f & R i i M k i t e n n g a r e n g	3 1	4 4	5 0 ~
O h ( i l d i A l i E ) t t t e r n c u n g e r n a v e n e r g y	0 6	1 1	1 5 ~
O i i l d i t t r g a n c c a p a e x p e n u r e	9 1 5	9 2 1	2 2 2 1 -
D i t t v e s m e n s	6 3	3 4	0 1 ~

2006 excludes \$1bn investment in Rosneft IPO 2008 excludes accounting treatment related to joint ventures with Husky Energy BP projections for 2008

Financial Framework: 2001-2007

• •2001-2007 total shareholder distribution of \$91bn
• •12% CAGR in dividend over period 2001-2007
• •\$46bn share buybacks, majority of which funded by divestments
• •Gearing range 20-30%

Financial Framework

Changed context

• •Confidence in stronger trading environment
• •Revenue restoration on track
• •Reduced shares outstanding by 16% since the end of 2000

Response

• •Increased capex to support growth
• •Target gearing band unchanged at 20-30%
• • Rebalance proportion of free cash flow distributed via dividends and buybacks

Balancing sources and uses of cash

Tony Hayward Group Chief Executive

Safety – People – Performance

•Strategy evolving

Conclusions

• •Long-term planning assumption \$60/bbl
• • Closing the competitive gap:
• Safety : People : Performance
• • Securing the future
• Exploration & Production: sustainable long term
• Refining & Marketing: closing the performance gap
• −Alternative Energy: a valuable option for the future
• •Financial framework

Questions & answers