Welcome to the BP Presentation to the Financial Community Webcast and Conference Call. I now hand over to Jessica Mitchell, Head of Investor Relations.

Hello, and welcome, everyone. This is BP's Fourth Quarter and Full Year 2013 Results Webcast and Conference Call. I'm Jess Mitchell, BP's Head of Investor Relations, and I'm here with our Group Chief Executive, Bob Dudley; and our Chief Financial Officer, Brian Gilvary. Before we start, I need to draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors that we note on this slide and in our U.K. and SEC filings. Please refer to our Annual Report, stock exchange announcement and SEC filings for more details. These documents are available on our website. Thank you. And now, over to Bob.

Thank you, Jess and welcome everyone wherever you are in the world. Thanks for joining us today. We are here to look back at 2013. It was a busy year and also a successful one. We accomplished a number of important things. We improved our safety record. We had a very good year for exploration, in fact, our best in 10 years. We started up a series of major new projects, both in the upstream and the downstream. In Russia, we created a new future for BP. And at the same time we released some of the considerable value we generated with our former joint venture TNK-BP. A large part of that is currently used for buybacks, a good outcome all around. We also announced some significant new investments for the future that we believe will create value for BP for decades to come. In particular, these included a huge Shah Deniz 2 natural gas project in Azerbaijan with the associated pipelines stretching well into Europe and also the giant Khazzan project in Oman. We also increased the dividend by 11% in dollars compared to 2012. We are not complacent but we are pleased with the progress. These are all important milestones on the way to delivering our 10 point plan. And these will all contribute to sustainable growth and free cash flow in the years ahead. What you can see now is a company that has a more focused and stronger portfolio, leading positions in exploration, deepwater and giant fields and a quality downstream business. And we will continue to play to these strengths. We will do this through disciplined capital investment in high quality upstream project pipeline and the downstream that is a strong generator of cash for the group. And we will do all this while maintaining…

Thanks, Bob. BP’s fourth-quarter underlying replacement cost profit was $2.8 billion, down 27% on the same period a year ago and 24% lower than the third quarter. Compared to the fourth quarter of 2012, the result reflected higher non-cash costs, including exploration write-offs and DD&A, a significantly weaker refining environment and significant divestment impacts, partly offset by improved underlying upstream production in high-margin regions and stronger earnings from Rosneft compared to TNK-BP in the same period in 2012. Fourth-quarter operating cash flow was $5.4 billion. The fourth-quarter dividend payable in the first quarter of 2014 is $0.095 per ordinary share, up 5.6% compared to the same period last year. Turning to the highlights at the segment level. The upstream underlying fourth-quarter replacement cost profit before interest and tax of $3.9 billion compared to $4.4 billion a year ago and $4.4 billion in the third quarter of 2013. Compared to fourth-quarter 2012, the result reflects higher non-cash costs, including exploration write-offs associated with increased exploration activity and high DD&A along with some sector inflation, lower production due to previously announced divestments primarily in the North Sea and the Gulf of Mexico and lower liquid realizations partly offset by improved underlying volumes in high-margin regions, a one-off benefit to production taxes, stronger gas marketing and trading results and higher gas realizations. Fourth-quarter reported production, excluding Russia, was 1.9% lower than a year ago, primarily due to the impacts of divestments. On an underlying basis, after adjusting for divestments and entitlement effects, production increased by 3.7%, partly reflecting new major project volumes in the North Sea, Angola and the Gulf of Mexico. Compared to the third quarter, the result reflects higher costs partly due to the exploration write-offs, absence of the one-off benefit in the third quarter related to the Trans Alaska Pipeline…

Thank you, Brian. So now, I want to walk you through some of the important details of our 2013 performance and I will start with safety. These charts show an encouraging trend what I believe reflects the disciplined approach we are taking to our operations around the globe. Looking first at losses of primary containment, which records even very small releases, 2013 showed a 4% reduction in 2012 when adjusted for divestments, continuing a multiyear improvement. We also track process safety events. The American Petroleum Institute recommended industry metric. In 2013, we saw a 47% reduction in the most serious incidents known as Tier 1 events versus 2012, again, adjusted for divestments. We also continued to focus on personal safety and our recordable injury frequency rate remains at levels comparable to or better than industry benchmarks. Safety is at the heart of BP and it is good business. We're pleased with this progress, but by no means do we take it for granted. Let's move on to our investment in Russia. Rosneft has now completed the initial integration of TNK-BP and laid out its strategy for the enlarged company, identifying significant synergies and benefits. Momentum continues to build across Rosneft generally. In 2013, they signed a number of binding agreements for joint ventures and projects with IOC partners. These included unconventional development projects and also Arctic exploration. JV operating companies were established in significant quantities of 2D and 3D seismic were acquired. Rosneft also continued its program of modernization in its downstream business, including upgrades at a number of refineries, enabling them to produce premium grade fuels. Rosneft continued to deliver on their gas strategies as Russia's regulatory and fiscal landscape evolves. This has included the removal of Gazprom’s official monopoly on LNG exports. In this area, Rosneft made a…

(Operator Instructions) The first question then comes from Oswald Clint at Sanford Bernstein.

First question, Bob, I was looking at the [U.S. arcop] per barrel and how it has stepped up the past two quarters, so into mid-teens per barrel, obviously the businesses had quite a range of [arcop] per barrel, I wanted to get some thoughts on where you think that number might actually get to or whether that's 12 months and obviously the next couple of years please. And then, secondly, as interested in your comments on the most successful exploration here in a decade, is there anything that you can point to that may have help deliver that success and is it possible to give any sense of materiality or [some volume] around the discover you had last year? Thank you.

I'll comment on the -- for barrel numbers and then Brian can add a little bit more to it. And then some comments on exploration. Clearly, it's getting back to work in the Gulf of Mexico for us with 10 rigs running, we're not getting the exact figures, but we did produce more 200,000 barrels a day during the quarter and an exit rate as well $200,000 in the fourth quarter. So we've got that, we've got improved natural gas prices as well that have affected the industry both being mix. Do you want to add?

Yeah. No. I think that's the big positive, Bob, and it's actually around on the balance of Gulf of Mexico barrels coming in, Atlantis major project coming online and turnaround around Thunder Horse and it's actually lower oil realizations versus higher gas realizations. So they are the big drivers. And as more gun barrels come on with the lower production taxes, hence you will start that numbers to get through.

Yeah. We expect that out of these four big hubs, out into the decade. On exploration success, I think it has been a really good year. The three wells there just at very end of the year, the Lontra well in Angola did drill some tests in December, a lot of these we can't really comment on materiality or size because we have partners and governments and regulators that we need to work through. But I'm very encouraged about Angola and we are drilling another well in the block, in fact it's going down now. And in India, I think the size of those, India is a country that needs every molecule of gas they can get, one of the discoveries was underneath the D6 field, down deep, that looks sizable, facility is there, so that's good. And in Brazil, I think the most significant thing in the P2 well in Brazil is it's proved up the equatorial margin, a whole new basin in area, so that's got some really good significance. And Gila discovery in the Gulf of Mexico that's another one in the Paleogene formation looks very, very promising, some 4,900 feet of water and drilled at 29,000 feet one of our deepest wells. And then Egypt as well is a country who has been exporting gas, needs all the gas they can get and the Salamat well which is 100% BP has won, that looks promising and then we've drilled -- drilling another one now with BG that looks promising. So I can't give you the numbers, I know you'd like the figures, but there's just some color around that.

That's helpful. Thank you very much.

Right. Next question from Alejandro Demichelis with Exane.

Yes. Good afternoon, gentlemen, and Jessica. Couple of questions from my side, in terms of the new startup for 2014, plus the Whiting Refinery how much cash flow do you think you can generate from those new projects, in order to get, you should need $30 billion, $31 billion target on cash flow. That's the first question. Second question is Bob, you mentioned the Gulf of Mexico having a very good exit rate for this year, what do you think you can get over the next couple of years in the Gulf of Mexico?

Okay. Alejandro, I'll start with the last one first, I mean overtime, we expect to get over 300,000 barrels a day in the Gulf of Mexico. In terms of so where it's going to be this year, next year depends on the state of turnarounds and we do have some turnarounds coming up. We've got three of them in the Gulf. So but very optimistic about where we're heading in the Gulf with those four big hubs. Roughly 80% of our reserve base that we have in the -- resource base around in the Gulf is around those four big hubs. So, obviously, a great area of focus for us. On the amount of cash flow contributed by the four startups in 2014, we're not going to give you a number on that but the confidence you come with the fact that we've started out four major projects in 2013. So we'll get the run rates through into '14 on that and we've got two projects we started up this week, with the Chirag Oil platform and the Mars B oil project in the Gulf of Mexico and oil really is the high-margin commodity here that we have more and more coming on so. Brian, do you have anything?

Yeah. I think, Bob, that's the bulk of it and then Brazil is the mix of barrels as we move more high-margin barrels in the base come through that will also help support the $30 billion to $31 billion this year.

And in terms of Whiting?

Yeah. Whiting right now all the units commissioned and we're ramping up, so we'll continue to ramp up. I mean it's a lot, you think it is peak, it can run up to 380,000 barrels a day of heavy crude, that's going to take some time to ramp up as we bring all of those units on, so we'll give you more updates on that as the year progresses.

Perfect. Thank you.

Thanks, Alejandro.

Okay. Over to the U.S., so we'll take a question from Blake Fernandez at Howard Weil.

Hi, folks. Good afternoon. I have two questions for you, for one on the downstream, the results were a little below what we would have thought. I know you mentioned higher DD&A and you give us guidance of an incremental $1 billion of DD&A into '14? I was hoping maybe you could give us some color around how much of that is associated with the upstream and the downstream? And then the second question is back on Lontra, I know the fiscal terms do not accommodate for gas sales and from what I understand there is a gas component to that discovery also and can you may give us an update of negotiations with the government to renegotiate the terms there, thanks.

Okay, Brian may be you can accompany -- come on the detail there and I’ll come back to it long through.

Yeah, we don’t normally give the sales on DD&A by the segments, waiting will be modest increase in DD&A and as we depreciate that as that every time as being commissioned and I think that the depreciation status of my 30 years of what we recruit so we now have a huge impact, but nonetheless with this impactful cues we commissioned the asset. Some other costs that came through 4Q in the (inaudible) restructuring charges rapids effectively which conceals normal charge and so that we’re looking for businesses on more broadly and also we had a weak supply and trading quarter although we had a good supply and trading year both in our oil and gas for 2013, it was actually weak for 4Q fuel and oil trading and supply business that would probably -- they are the biggest components of the mess .

And the Upstream DD&A is also due to the new projects that are happened Upstream, we had a number of the big ones come on in 2013 and on Lontra our partners there are Cobalt so really they are discussing and negotiating with the country. I’ll just note -- I’ll just give you color and then specifics on this, you’re right the gases under the contract in Angola are property of the government however this is a very promising oil, gas condensate field that it's not too far from the shore and Angola needs power, they need electric power and their discussions about for this field of the economically viable, the government I believe once it's done and discussions are related to increasing power with a flood of the power in Angola (inaudible) burned more by fuel oil. So this is quite significant for the country and but I think it would be best asking Cobalt about it but I’m encouraged.

Thank you very much.

Next question comes from Thomas Adolf at CSFB, go-ahead Thomas.

Graf known thanks for taking my questions of course two, one on India and one on US downstream. First we have in the other price hike looks to be given now from April but how should we think it now production and the development in the near to medium term if you asked to (inaudible) there and secondly on the US downstream I believe you know still on that long trends, so I was wondering if you can quantify the net benefits from when this do at 2013 and how we should we think about it going to 2014, thank you.

Okay, Thomas I’ll comment on India and will describe on wins. So you’re right, the government confirmed that actually the first quarter in April the gas price above and a formula, it’s a positive step, we estimate $8 and MCF, it will be just about depending on benchmark prices, this is very good, this is what we always said that we expected to happen. It has taken a longer over the past two years to get certain approvals on some of the other things that the R-Series redevelopment plan has been submitted for approval, we think that would be the gross resource base recoverable there is about 1.3 tcf like we just adopted in 2017. The D6 satellites and something called NEC-25 with all the plans for that, that’s about and 1.5 to 2 tcf pieces potential. Managing declines out of the D1, D4 base their new compression comes online in early 2015 and that you know that will be a challenge and then this discovery we had the MJ-1 which is the jurassic reservoir below the D6 fields, I don’t think it’s been given a name D55, we think that significant and so that’ll take some time to develop but it’s right on the facilities, that’s great news. And then an exploration further out in the Cauvery Basin down towards Sri Lanka, we’ve had another discovery and it’s called D56. So themselves specifics and production we’re not going to let that out just yet but I think all the pieces are finally coming together after what has been -- there was a delay there I think everybody knows that and kind of getting decisions made not just for us but India and I can sort of feel that logs in and breaking in energy.

On the rinse question, you’re right that we’re long rinse since our marks didn’t get a volumes dynamic see it how refine recruit both with the repositioning in the US (inaudible) refineries. The -- what that means in terms of overall results for last year is pretty modest. It’s not a huge number in terms of the financials that came through. While it gives an apparent of expansion in our refining market margin, you lose a lot of that around the cost of compliance with the standards. So it doesn’t have a huge impact on the overall financials and is somewhat modest, but we don’t normally give that number out to the market.

Terrific. Thank you very much.

Next question from Jon Rigby at UBS.

Yeah. Thanks, Jesse. Three questions actually, very quickly, hopefully, you can deal with this. The first is on Whiting. Can you just tell me how much if any, heavy crude you were processing fourth quarter? I’m just trying to get an idea about where it was operational versus where the potentially is as its ramp up through the first half of this year? The second is just on the Macondo. What does the cash within the PSC on pay? I think you referenced $6 billion or so. What does that relate to? It’s obviously allocated but not yet paid. Can you just sort of run through what that is? And then very quickly just lastly, on the gearing, the range I guess is, you see is appropriate given the uncertainties around Macondo. What is your attitude about it? Is that 10% to 20%, something that is probably suitable for the long-term and you go out of it, but say to extinguish the liabilities or would you as that risk falls way, look to see gearing for the corporate start to rise somewhere higher in that range that you got now? Thanks.

On Whiting, Jon, I think, we probably not going to give those figures out there, it’s sort of trading sensitive information. But we were running some heavy crude during the end of the year there. Minimal amounts as we were commissioning them and now we’re working through that sort of post start-up vessel testing set of activities that are going on now.

So would it fair to say that there is a little benefit in the fourth quarter for the work that’s been done up here?

Yeah.

If anything, Jon, there is probably a minor disbenefit as we were operationally bringing the units on. So, I think, there was certainly no upside coming through in 4Q.

Yeah. And there were some of that really severe cold weather.

Yeah.

Yeah. Some of it down as well. But that ramp-up and vessel testing activities and switching over is occurring now on Macondo.

Yeah, so Jon, the specific Macondo question, of the $20 billion fund, we got $13.3 million in cash have being paid out, balance of $6.7 million. There is 1.2 frozen at the moment around the fisheries fund. If you recall the fisheries, it was a cap number of $2.3 billion of which from memory $1.1 billion was paid out. There was $1.2 billion sitting in the front but that given the issues that we have now listened. And the litigation, we’ve initiated on the civil side around the loss claims on the fisheries side, that is now as I understand is suspended in terms of payment on the balance. But right now, there is still $6.7 billion within the fund that can be distributed through various things that natural resource damages, Plaintiffs’ Steering Committee settlements, state economic claims and so.

And on the gearing levels, if you recall it was March this year, when we completed the Rosneft transaction, the gearing levels drop from over 20% down to 11% and the Board has discussed, what's the right gearing band. For now, we’re doing the share buyback program, which has lifted it up to 15%, 16% now. For the moment of time being, we like a gearing band. We think its prudent 10% to 20%. The board Continues to review it and discuss it but I think for the foreseeable future, we like being right in the middle and around. We’ve got plenty of capacity to go up to 20%, so no real change, Jon.

Okay. Great. Thank you.

Back to the U.S. and Robert Kessler of Tudor, Pickering.

Hi. I’m hoping you can help me help me kind of bridge your cash flows from the actual in the fourth quarter to your outlook for 2014. Of course, a number of moving parts you’ve talked about in bits and pieces. Whiting is a big one. Working capital swinging the other ways is a big one. The extra margins from the upstream is another one, but now that you’ve got a bigger asset sale program, I’m wondering if some of that kind of carves out of the cash flow for next year. Just see if you can just provide some kind of waterfall, some bigger numbers you can think through to go from 4Q to next year?

Yes. And Robert, I think that you've highlighted all the big moving parts. So you’ve kind of underlying improvements we are seeing coming through in the mix of the upstream barrels. And we saw underlying growth year-on-year of about 3.7% at 4Q to 4Q. So that’s the first sort of dynamic and you will see that continue to come through and a high-margin barrels coming through. You’ve got the new projects at Whiting that Bob talked about. You’ve also got a working capital build that we saw through the end of 3Q and we said that we expect two thirds of that to reverse out. We did see a chuck of it reverse out in the last quarter, but you didn't see it came through the numbers, because at the end of each year, we have this around $2 billion of working capital goes out door for the German (inaudible) comes back in. It started to come back in already through the first six weeks of the year. So if you look at the 5.4, you take count of that $2 billion that goes out, it gets you to something more looking like a run rate that you can start to sort of see it breach through to 30s and maybe that will help a little bit. With some working capital that we built last year and various across various pieces, there are some operational components. So as always things gets moved out through this year, then I think we are still comfortable that the $30 billion to $31 billion target is achievable.

As far as the incremental cash flows from the upstream, you of course give us an outlook for production, you gave us an outlook for Gulf of Mexico margins in U.S. and margins, but what about total upstream unit cash flow? Can you give us some kind of guidance for a way to improvement relative to say grand prices?

Yeah, Robert. We talked about all the new barrels coming on the screen, how we doubled the margin of the average portfolio and we are seeing barrels come through actually on a EBITDA basis, you can see those in 3Q, you start to see those ratios on the portfolio come through. So, we have never given a specific trajectory, but you certainly know you can build various models into your sort of full projects that would see those big margin barrels taking and you saw that in the fourth quarter as Gulf of Mexico now getting better by $10,000 a day. And you see that those -- the margin of those barrels is significantly impacts the overall portfolio. So you'll see more of these ramp up with the projects.

Excellent. Last one from me, couple of just small items, the one, obviously mentioned in the upstream, the benefit of lower production taxes with the recoveries past cost and then the stronger gas marketing and trading referenced in the results?

That's correct, yeah. Both those same to be in 4Q for taxes in the U.S. and a good quarter for the gas trading and the gas realizations outside the United States and actually inside the United States.

Any quantification of those two factors?

No, we don't give any of them, so Robert, we don't give specific guidance this specific numbers.

Thank you. Next, Alastair Syme from Citi.

Yeah. Good afternoon. Three quick questions I think. Just picking up on Robert's point about the cash flow target. Can I -- sort of the pre-working capital cash flow is also going to be up within that range. It's sort of a little bit confused about the point you are making on working capital moves. Secondly, it's -- I guess, since we last spoke, you've sanctioned Shah Deniz and Khazzan. I wonder if you could just talk about sort of the relative economics of those projects within the portfolio. And lastly, you have ramp up for Atlantics north and North ranking two this year. It just seems like just that gives yourself whether you are classed those projects within the base. In other words, do we still consider there is a 3% base decline if those projects are including those projects? Thank you.

Mr. Alastair, maybe I take the first question. No, no on the operating cash flow, because it picks up from how it's lasting. We'll see through the portfolio makes and through the new projects and so for example PSVM is now for -- you'll start to see the end line operating cash flow effective with the earnings of those assets, but conclude in 2014, so that's obviously all part of bridging for $30 to $31 billion dollars of operating cash, excluding all the working capital.

And the two big projects you mentioned Shah Deniz, the second phase of Shah Deniz, this is the largest gas condensate field that BP is found and it's the highest rate wells in our portfolio today form a second stage expansion, 16 bcma taking into Turkey and then later on up into Europe, over to Italy with 125, 000 barrels a day to compensate with it. We're not going to give out the exact production agreements 16 bcma we sold to Turkey, the economics on this projects are long life and they are attractive. And we who manage what I think is the largest single off-shore complex in the world with ACG and in the Shah Deniz projects you really do need to look at it as a system for us and the economics are attractive. On Khazzan, we have signed what is one of the longest life projects I have ever seen. We are going to drill 300 wells over time to produce gas in Oman, which is becoming a gas shore region. The economics on that are attractive for us and we won’t give you the exact numbers on here. But the gas price, which is also not a public number, may not be as high as what people might look at and draw a conclusion from it. But I will note that in that project the gas gathering facilities and the central processing plants are being built by the government itself. We have a 60% stake in that and Oman Oil has a 40% stake in that. I am very enthusiastic about that. We have signed a Memorandum of Understanding to use our SaaBre technology that can use the gas and get to potentially acetic acid and what could be a revolutionary process there as well, which of course we did not include that in the economics of decision on Khazzan. So I think it’s got additional phases for development as well down the road and it’s also got some condensate. So 300 wells over the first 15 years, many more years after that I believe. So, Alastair, does that answer your question?

Yeah. That’s perfect. It’s especially which is the one remaining on Atlantis and North Rankin sort of about whether this is growth base?

Brian and I are looking to -- Brian and I are looking at each other quizzically because it’s a fair question, I am not sure. And let’s see if, Jess, can find something. Tell you what let’s come back, Alistair, and we will see if we can find the data out of that because it’s fairly detailed question and …

I see. So they are both…

They are both growth.

Yeah.

Both of them from ’13 into ’14, yeah.

Yeah. We don’t give the specific numbers by project as you know, Alistair, but they are both, I would say in the growth category.

Yeah. Definitely looking at the numbers.

Okay. Thank you.

Good. Thank you. And we will take the next question from Irene Himona at SocGen.

Thank you. I had two questions please. So, firstly, you indicated the current $9.2 billion provision for the Plaint, is at least $1 billion too low and probably, more given unsettled claims sort of going to the system? There used to be a deadline and I believe it was April ’14 for filing such claims for economic losses. Is that deadline still legally valid? And my second question going back to Whiting, if I may ask, when do you actually expect the unit to be fully up and running, so to ramp up to plateau as it were and is it at that point that the 1 billion cash flow contribution becomes relevant and is that likely to happen this year basically? Thank you.

So, Brian, on the claims?

Yeah. On the claims, Irene, basically well we started with the PSC settlement but originate did various calculations what we believed the costs would be and then provision for those costs and that was a $7.8 billion. You probably recall that that number then went to $9.6 billion around the fourth quarter of last year and then we reversed that out that to $9.2, so lots of moving parts. There isn’t -- I think what we have said is, there were two substantive issues that we raised a year ago around the way in which the agreement was being interpreted by the court and we appealed those decisions. One of which we have received a favorable ruling on from the Fifth Circuit Court of Appeals on the matching of revenues and expenses. So that won’t resolve and now the court is looking to have that getsapplied around those matching of revenues and expenses. And there is still a separate issue which is sitting with the Fifth Circuit around causation, that is to say that we put the agreements in place to ensure those people damaged by this bill were compensated. However, it appeared that there being a de-linking of causation in the interpretation of the agreement that one we still have there. So until that issue gets resolved and we have a framework for matching of revenues and expenses, we can’t determine what the future provision might be around business economic loss claims. So I certainly can’t say at this point that we are underprovided by a $1 billion as you have just suggested. I think there is a $1 billion of determinations setting inside the fund. They may well, the majority of which weighing well need to be re-determined throughout of the matching process or depending on what happens around course action.

And the April deadline?

Oh the April deadline, so the dead line is actually set as the earlier -- later of it would’ve been April 14 which is a sunset floors and it’s actually 12 months after dated which the fairness appeal was ruled on the fairness of the settlement agreement but now it was really -- we had it couple of weeks ago. We still working through what that actually means but typically the 12 months after that through all the final plans to coming.

In our rewriting we are ramping it up now and yes we are projecting $1billion of incremental cash flow this year for the year, obviously there is some environmental assumptions around that at the current environmental -- you know the current environment that supports that $1 billion forecast we are going to progressively ramp it up. We can’t be specific on the pace because we are going to fine tune it as we go and of course is a trading sensitive number so we’re not going to comment on the pace of fine tuning the ramp up.

I think that really -- Bob makes really important point figuring the light how these spreads stays out where it is today was $19 that’s clearly upside in those numbers as you get to four ramps. So there will be -- to the degree it ramps up early, delay having spread as low compensates for taking little bit longer but we don’t know and I like having spread which is bigger. So right now $19, $1 billion is comfortably independent $19 spread.

Thank you.

Thank you Irene, next from Doug Terreson at ISI.

Good morning and congratulations on positive execution everybody. ISI: Good morning and congratulations on positive execution everybody.

Thanks Doug.

Bob returns on capital were under pressure for the super measures during the past three years and on this point thus your environment comments underscored the company’s commitment capital discipline today and the spending profile is supported too. So my question is and I have two questions, first given the more challenging environment for returns but also the desire for growth how did BP ensure that it sustained its discipline if there is corporate planning process given recent replenishment of the portfolio but also the more challenging environment for returns, and then second some of your competitors are increasing emphasis on returns on capital so once if we can get update on the message that you got is the most important, was they are changing and specifically how ROC plays into the banking?

Yeah Doug I think this is kind of the horde of the sector which is sort of out of favor to a degree and I think what I’d say as return on capital employed (inaudible) I’m sure you go through history and when it’s suits companies talk about turn on capital employed and then when it doesn’t seems on so don’t. But I’m -- and I’m going to fall back a little bit on BP in the sense that we divested $40 billion of assets which had more than 50% return on their capital employed. So by definition our overall capital employed is going to take a notch down, we think that’s absolutely the right thing to do but the kinds of things that we will if it is a little patience that we are on March 4 going to go and talk about this quite a bit more but I do believe here it sort of fundamentals. We’ve said $24 billion to $27 billion for the rest of the decade, we are going to have the discipline, we are going to invest in carefully and what we think are good margin projects we will taste those in time so that we can make sure we can generate sufficient operating cash flow to have some distributions back to shareholders, make sure we can have a sustainable dividend policy through the decade and there are differences in the portfolios of different companies and you have heard us say many times we have a biased oil, we like oil its high margin products and then selectively in gas. So that’s kind of we’ve been in a nutshell but remember that $40 billion out at 50% returns has kind of shape some of the fundamentals of the company.

Sure, sure okay thanks a lot.

Moving now to -- moving now to Theepan Jothilingam at Nomura.

Good afternoon and thanks Jeff, few questions please just firstly Bob you mentioned Russia in your remark so just wondering are there any specific mask trends that we should look for over the 12 months (inaudible) how much more can BP to contribute on integrations that, secondly Brian, just come back to modeling in the upstream, I think you’ve talked about the margin mix and then I just want to clarify just on unit OpEx on the base portfolio for this share and you said going out flat or down and so that the latter being that you’re benefiting of more barrels at the fixed cost and then just lastly on the Paleogene Gila. How much further prospectivity do you see there in the Paleogene and sort of what are the next steps in terms of price of oil and drilling? Thank you.

Okay, on Russia. So taking these two large oil companies, Rossneft and TNK-BP merged them together. And I would say that integration moved pretty fast, about 800 to top 1,100 in TNK-BP people came across into Rosneft and you're really do have a mixture of business processes. And I can see it and I can see it in the pace of which many things are happening there. Both companies have got a lot of professionals. The milestones I would expect you to see from BP, in addition to the kinds of things that we push at the Board processes in terms of governance and your planning processes in capital allocation. But I would expect you to see and hear about expertise and experts from BP going and working in with Rosneft on specific issues, problems, projects, water flooding, artificial lifts, seismic interpretation, corrosion expertise, pipelines and environmental work. That would be one thing that we think is important. So I would look at that. We -- I believe a lot of really good Arctic acreage is taken. That's fine, because we effectively own nearly 20% of that and carried explorations. So we like that. So I look at the exploration results coming forward as milestones or success of the company itself, Rosneft. And then for us, I know we have expertise and we're looking for carefully selected opportunities onshore. It might be unconventionals in oil, it might be some of the heavy or tougher oil developments that we can work on together in joint ventures. There is no rush. This is going to be a multi-decade relationship. Those are sort of things I would look at in the next year. And then depend -- on the Paleogene, we're going to continue the appraisals of Tiber, Kaskida, the Chevron operated markets and projects which we're in there together. We know there are further opportunities out there. We have a large acreage position and so we're going to selectively look at what we -- we want to drill for exploration. It's a large province. We might do things with other companies as well and then of course in December, the big Gila discovery just further reinforce the importance. And it's a longer term province, Gila. We'll look for technology that can keep up. So we're not going to rush and get out in front of the technology, the 20-K technology we're working on with Kaskida right now. It's going to be a big play. And I think, I don't know if the potential is for it to go down in the Mexico as well, but there are other things in the Gulf by the way in Mexico that the industry will certainly be interested in. This is a play for the next decade that's I think is a fair comment.

Theepan and then on the cost question…

Yeah.

The internal performance metric we look at around cash costs in the upstream decreased '13 versus 2012. Now primarily these divestments as we take some assets out. On a unit production cost basis, it increased by about 5% and that again reflects the volume that we've divested. So it's pretty hard to sort of see through in terms of -- they both are going on an underlying basis. And if you look at over the last five years, unit production costs for the sector have grown about 6% to 15% over that time period. We're kind of in the pack of that. And we did see some increase on a unit basis. But going forward, we would expect to remain comparative within the sector. And of course, we’re also ramping up exploration activity in all the new projects that are coming on stream as well. So you'll start to see this sort of smooth out overtime, but it’s something you have to look at on a long run of course it's not in any specific long quarter or one year.

Okay. So there is no particular sort of leverage to let's say the gun barrels is coming back this year against the fixed costs just on a unit basis?

It will hard for you to say, if you'll see all the new gun barrels, new projects come on stream, very clearly you see the Abu Dhabi concession volumes come out. So it's going to be hard for you to sort of see through that, but we're trying to give much as guidance as we can as the year progresses.

Great. Thanks Brian.

We'll take the next question from Lydia Rainforth at Barclays.

Thanks. And yeah, actually just one question from me. You've made a considerable efforts in the last couple of years to improve the efficiency and availability of assets in the upstream. I was just wondering if you can give us an indication of where we stand now on reliability and availability index compared to where we were two years ago and how much we’d see that improved going forward and [what an] optimal level would be?

Yes, good question and really important point. I mean we’ve got our upstream availability now running 88% reliability which is -- this has continually improved over time, each 1% reliability is worth between 150 million and 200 million a year. This has been a very good year, the number of turnarounds are down and of course we can keep this reliability up. That’s how the operating cash flow stays up. And this sort of virtuous circle of safe reliable operations is good business because we have such state running. And having made a considerable investment in turnarounds now this is part of the story of why we see improvements this year and we will see more improvements next year. We’ve had those increased operating efficiencies and this year in the Gulf of Mexico most certainly, Alaska's new well work, the North Sea still has some improvements that yet need to be but they are coming as well. It is a really important point. And that’s why we’ve highlighted that 88% operational efficiency this time in our numbers.

Thank you. Question now from Martijn Rats of Morgan Stanley.

I have two, I will try and keep it short. First of all, it’s a matter of detail, in the $30 billion to $31 billion for next year in terms of operating cash flow, what is the assumption embedded in there for Gulf of Mexico, was there a related payments? And secondly, I wanted to ask you about this point that you just made about the bias towards oil. (Inaudible) rule, and when he presented your energy outlook for 2015, I thought he made a very strong case for the opportunity that consists in gas. And also looking at some of the biggest project managements you made last year, (inaudible) the project in Southern Asia and, they have a gas bias it looks lately and I was wondering when the underlying perhaps this bias towards oil might be steepening at all. I was wondering if you could…

Well, Brian, on the assumption on the Gulf of Mexico.

Martijn, I mean anything we can let you know about is the things which are in the public domain. That will be the recall the criminal settlement that we had last year around back to 2000, late 2012 around the DOJ and the SEC. So there will be payments going out associated with those this year, that was a schedule that was set up over five years in the case of the DOJ criminal settlement and three years for the SEC settlement. That will go out this year that part of the plan. And then there is ongoing litigation costs which are built into the plans and the ongoing cost of what is now a much smaller organization associated around the Gulf of Coast restoration organizations. So that may be only the things out there but they have led into the plans, so to figure that we can see what we think those costs are going to look like they’re led in already.

Okay, and Martijn, really interesting point of our gas and oil and for those of you haven’t had a chance to look at, I think everybody might find it interesting this energy outlook of 2035 which you can download off of our website. And gas is a growing share of the market going forward, but all of them are growing. So while the share of the coal may come down, natural gas will go up, we sort of think by 2035 about, I mean I call it the rule of 27, so I can remember it. But 27% of the market share of energy will be oil, 27% natural gas, 27% coal by 2035. But to get to that, you’re going to need -- if this forecast turns out to be right another 19 million barrels of oil per day to get there by 2035, even though its market share is lower because the demand for energy just keeps growing, which is the equivalent of another United States and another Saudi Arabia all coming out there in terms of being able to supply that. So oil, we think, is going to be continually valuable, 90% of transport fuel in 2035 will be oil based or liquids based. So gas is different, it’s regional. So you’ve got the price of gas in North America, it’s three times that much in Europe and it’s five times that much in Asia. So we want to be very selective about where we develop gas. And there is good economics probably all three of those but those two projects you mentioned are very economic, but they are not in North America.

All right. Thank you.

Moving now to Stephen Simko of Morningstar in the U.S.

Hi. Good afternoon, everybody. I have two quick questions and the first one will be highlighting this regional gas comments you just made, Bob. In terms of North American dry gas, is there anything from here that can be done in the portfolio beyond divestments in terms of just getting cost down or improving performance, I know, Q1 obviously, going to be best quarter in some time. But just some commentary there on what can be done to improve the results? And then I don’t think this has been touched on, but in terms of Gulf of Mexico pricing, any idea of just kind of the light crude glut in the Gulf Coast that might develop in the near-term. Would -- as far as Gulf of Mexico production, what is BP’s exposure to light versus medium output in the Gulf of Mexico? That’s it for me. Thanks.

Yeah. Okay, Stephen, both good questions. I mean, we were running our gas business in U.S. try to make it breakeven around $4 in Mcf. So right now, of course, with cold weather prices are up close to the $5. But dry gas is very challenged in the U.S. and so we are not running any rigs in dry gas, we, of course, hold our production resources there, so we are focusing on liquids-rich gases as much as possible and that I think is what you find most people’s strategy to be. I think for BP going into things like gas to liquids, if you are thinking that far out, I think that requires a lot of capital, a lot of infrastructure, I think we are focusing on that. So we want to run a tight efficient gas business in North America. We’ve got a lot of work going on to further improve that efficiency. In a way the Gulf of Mexico, turning to that for a minute, that crude, extra crude that we do see in the Gulf of Mexico and some way is almost a natural hedge between that and Whiting for us. But in terms of the specifics, Brian, you have worked and run trading for awhile.

Yeah. I mean, they have to hand the extra mix of the light versus the medium in terms of Gulf of Mexico, but you all have seen that grids like Mars have been discounted quite heavily to Brent and actually the de-linked from the Brent price now, actually you’ve seen the domestic crude rebalanced in the United States. So there is some impact on realizations and you will see that come through in future quarters. But the market ultimately return what those balance price are, I think, the last time I look Mars is discounted round about $14 to Brent which follows the pattern that we’ve seen at WTI given the oversupply of crude oil as the oil shale grow in the United States.

And I think with these lower realizations, I think is worth noting for us, the cash impact for us in 2014 is positive. It's not anyway because we increase in production more than off-setting that lower realization. Is it okay, Stephen?

Yeah. Very helpful. Thank you very much.

Next question comes from Colin Smith of VTB.

Yeah. Hi. Thanks for taking my question. Just a follow-up on the realizations, one, as you noted, Brian, realizations or rather market prices fell quite a low for Gulf of Mexico crude but that wasn’t really visible in your realizations which held up very well for the U.S. and I just wondered if you comment about? And the second, I think was you noted that the trading performance in downstream have been pretty weak and I just wondered if that was in anyway connected with anything to do with (inaudible) or EMEA what you think those issues might mean for you in terms of the ongoing profit from that business? Thank you.

So, specifically the question around supply and trading is a 4Q issue in terms of being weak in the fourth quarter. The actually year result for supply and trading both in oil and gas is a good year. So we do have very good start to the year. So in first half of the year the 4Q was a weak quarter for the supply and trading business for the oil side. It was actually driven by some positions actually de-linked back to the domestic position in United States, but frankly, I wouldn’t -- we don’t normally typically go into the specific of those. And then in terms of realizations, a lot of our barrels do price of Brent related prices you see come through. To degree Gulf of Mexico barrel stay disconnected and de-linked from Brent, we may start to have some impact on realizations going forward, as Bob said. We are comfortably seeing production growth in the Gulf of Mexico where it was more offsetting that.

The U.S. realizations quite a bit of that is actually linked to Brent, is that right?

Well, typically, Gulf of Mexico barrels are priced of Brent, so because ultimately there is international trade forward. What you’ve seen happen in the last quarter and last six months is a de-linking now that link back to Brent. So actually now there is thousand at pricing off of local prices which were low marked WTI.

Right. But you didn’t really see that in the 4Q to 3Q change in realizations for your U.S. barrels, that was really my question?

Yeah I think you’ve got a whole -- you have a whole mix of things going on with the gas realization being stronger than the liquids realization going through the fourth quarter as well. So I think you will see some of these things clean out as the year progress this year.

Okay. And they are MiFID in MENA?

No. We’ve done everything we need to have in place around the new MiFID regulations and indeed the Dodd-Frank Regulations. So we comfortably have structured things as we need them to be able to continue to participate in the market but none of those had any impact on 4Q.

Thank you very much.

We’ll take the last question from Fred Lucas at JP Morgan. Go ahead Fred.

Hello. Thanks Jess. Thanks guys. A few questions, firstly which upstream projects that you think is operating to sanction in 2014. My second question is it was a great year for exploration. It’s also a burdensome year for exploration expenses. I wonder going forward to the two go hand-in-hand? And my third question is around portfolio positioning in the Middle East North Africa region. BP clearly had a breakthrough in Oman and that’s why we’ve had some exploration success in Egypt. We also lost the concession in Abu Dhabi. You’ve excluded Jordan, the unconventional play there hasn’t worked. This got to be a question mark over what happens going forward in Libya. I just wonder if you could share some comments about BP’s portfolio positioning in the MENA region and perhaps where next and if Iran is on your radar screen? Thanks.

Okay. Thanks. Thanks Fred. First on 2014, right now, we're expecting around five FIDs to occur in the variety of different geographies, in the U.S. and Africa and South Asia .So we've got a list of five. We’re not going to lay those out just yet. We’ve got partners that we need to get the approvals with. Your -- you asked a second question, while I was looking up something on MENA. But what was your second question?

Yes. It’s around (inaudible). Yeah, you’re right, Fred, to the degree that we ramp up the exploration spend, assuming you have the similar success rates that you had previously. Clearly, the more dry holes leads to more write-downs. So you have two things who go hand in hand. But as Bob said, it was almost successful year in quite a long time, certainly over a decade, last year in terms of the exploration and the commercial viability of some of the finds. But yes, last year those -- we did get a lot of exploration write-offs coming through in the 4Q that is linked to the higher exploration spend.

Yeah. And I think that exploration write-off is not steady. It’s lumpy depending on individual wells. 4Q seemed higher than what I would expect going forward. On MENA, MENA is interesting because it is an important area of the world for us. You're right. In Jordan, we tried the unconventional gas. It wasn't there. We gave a good effort at it. It’s unfortunate because Jordan is a country that has no energy really and needs it but that one was step away from Iraq where we managed a 1.4 million barrel a day oil field with -- called Rumaila, one of the second largest field now in the world operating. It provides probably half money from energy into the treasury of the country of Iraq. I think that's going extremely well. In Algeria, we continued our work and operate in In Amenas and In Salah concessions and we’re back to work now in Algeria particularly In Salah now with more work on both of those projects for expansions probably in 2015 now. We do have large exploration areas in Libya. I would describe it as being in hibernation and I am glad we don't have production today. But the prospects still remain there both offshore and onshore Libya and offshore is of course the most perspective for us. Abu Dhabi, the concession was not renewed for anyone. The big -- we still operate there on the Marine concession which is still a very significant concession but we and I think Total, Shell, and Exxon each step down 140,000 barrels a day on the offshore along with the one Portuguese company. And they'll make a decision at some point down the road here. We still have offices in the Emirates where were we manage a number of our Middle East activities and of course, Oman is a very, very big action. So in Egypt, we’ve been operating in Egypt since the 1960s. We’ve had no disruptions from the oil production in the Gulf of Suez of the gas production minimal maybe, but primarily gas production has continued in the North. We remain committed to working in Egypt and so, I think we have actually a fairly sizeable leaner position with the potential to grow.

What do you think of Iran, Bob?

Iran, we have not had meetings on Iran with government. Somebody said, I had a meeting with the government of Iran. Well, the head of -- Iranian President came to Dallas and spoke to a lot of people. So that’s the only meeting we’ve had which is I wouldn’t count as a meeting. Until laws are clear and sanctions are clear, we are not going to drift out of anything around those laws until we have a clear signal that that’s an appropriate thing to do.

Got it. Thank you very much.

So if I could ask you -- thank you very much for everyone. Really, really, good questions, everyone of them. As we head towards 2014 and beyond, we look forward to seeing you on the 4th of March. We will do that through webcast. It will be Brian, myself, Head of the Upstream, Head of the Downstream, and then we will have some teams at Travel after that. It will be live. It won’t be a recorded webcast. So you will be able to participate. And again if I could just say, with the kinds of things you are going to hear is about the capital discipline we put in place. We realize we work for our shareholders. We want to be shareholder-friendly. We don’t want to fall into the trap of generating lot of cash and then bring it back into projects not returning some of those distributions to shareholders. We treat our portfolio as it is something to manage. We’ve lost some of the emotional hold on assets through this difficult three years and we look forward to telling you more about it in early March. So with that, again, Happy Chinese New Year to everyone on the line and we look forward to being in touch. Thank you.