SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

for the period ended June 30, 2006

BP p.l.c.

(Translation of registrant’s name into English)

1 ST JAMES’S SQUARE, LONDON, SW1Y 4PD, ENGLAND

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F         x

Form 40-F         o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes         o

No         x

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO.  333-9790) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-65996), THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO.  333-83180) OF BP AUSTRALIA CAPITAL MARKETS LIMITED, BP CANADA FINANCE COMPANY, BP CAPITAL MARKETS p.l.c., BP CAPITAL MARKETS AMERICA INC.  AND BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 33-21868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.  333-9020) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-9798) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.  333-79399) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.  333-34968) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.  333-74414) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.  333-102583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103923) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-119934) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123483) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131583) OF BP p.l.c. AND THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

BP p.l.c. AND SUBSIDIARIES
FORM 6-K FOR THE PERIOD ENDED JUNE 30, 2006

1.	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period January-June 2006
2.	Consolidated Financial Statements including Notes to Consolidated Financial Statements for the period January-June 2006.
3.	Environmental, Operating and Other Information
4.	Signatures
5.	Exhibit 1: Computation of Ratio of Earnings to Fixed Charges

 

2

BP p.l.c. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

GROUP RESULTS JANUARY – JUNE 2006

		Three months ended June 30				Six months ended June 30
		(Unaudited)				(Unaudited)
		2006		2005		2006		2005
		($ million)
Sales and other operating revenues from continuing operations (a)		72,428		58,320		137,485		110,666
Profit from continuing operations (a)		7,580		5,556		13,377		11,915
Profit for the period		7,658		5,660		13,352		12,323
Profit for the period attributable to BP shareholders		7,581		5,591		13,204		12,193
Profit attributable to BP shareholders per ordinary share – cents		37.49		26.30		64.89		57.09
Dividends payable per ordinary share – cents		9.825		8.925		19.20		17.425

(a)               Excludes Innovene which was treated as a discontinued operation in accordance with IFRS 5 ‘Non Current Assets Held for Sale and Discontinued Operations’.  See Note 3 for further details.

The financial information for 2005 has been restated to reflect the following, all with effect from 1 January 2006: (a) the transfer of three equity-accounted entities from Other businesses and corporate to Refining and Marketing following the sale of Innovene; (b) the transfer of certain mid-stream assets and activities from Refining and Marketing and Exploration and Production to Gas, Power and Renewables; and (c) the transfer of Hydrogen for Transport activities from Gas, Power and Renewables to Refining and Marketing.  See Note 2 for further details.

BP sold its Innovene operations in December 2005.  In the circumstances of discontinued operations, IFRSs require that the profits earned by the discontinued operations, in this case the Innovene operations, on sales to the continuing operations be eliminated on consolidation from the discontinued operations, and attributed to the continuing operations and vice versa.  This adjustment has two offsetting elements: the net margin on crude refined by Innovene as substantially all crude for their refineries was supplied by BP and most of the refined products manufactured are taken by BP; and the margin on sales of feedstock from BP’s US refineries to Innovene’s manufacturing plants. The profits attributable to individual segments were not affected by this adjustment.  Neither does this representation indicate the profits earned by continuing or Innovene operations, as if they were stand-alone entities, for past periods or likely to be earned in future periods.  Under US GAAP, Innovene operations would not be classified as discontinued operations due to BP’s continuing customer / supplier arrangements with Innovene.

The second quarter and first half trading environment was generally stronger than a year ago with higher oil and gas realizations and higher refining margins, but with lower overall marketing margins.  For the three months ended June 30, 2006 the Brent oil price increased $17.96 per barrel, the Henry Hub gas price was up $0.06 per mmbtu and the refining Global Indicator Margin increased $4.17 per barrel compared with a year ago.  For the half year, the Brent oil price was $16.07 per barrel higher, the Henry Hub gas price was $1.39 per mmbtu higher and the refining Global Indicator Margin was up $2.25 per barrel compared with a year ago.

Sales and other operating revenues from continuing operations for the three months ended June 30, 2006 were $72 billion compared with $58 billion for the equivalent period in 2005.  The increase in sales and other operating revenues (before the elimination of sales between businesses) for the second quarter reflects approximately $18 billion from higher prices related to marketing and other sales (spot and term contracts, oil and gas realizations and other sales), partially offset by a net decrease of approximately $4.5 billion from lower volumes of marketing and other sales and a decrease of around $0.5 billion related to lower production volumes of subsidiaries.

Sales and other operating revenues from continuing operations for the six months ended June 30, 2006 were $137 billion compared with $111 billion for the equivalent period in 2005.  The increase in sales and other operating revenues from continuing operations (before the elimination of sales between businesses) for the half year reflects approximately $34 billion from higher prices related to marketing and other sales (spot and term contracts, oil and gas realizations and other sales), partially offset by a net decrease of approximately $4 billion from lower volumes of marketing and other sales, a decrease of around $1 billion from foreign exchange movements due to sales in local currencies being translated into the US dollar and a decrease of around $1 billion related to lower production volumes of subsidiaries.

3

---

Profit attributable to BP shareholders for the three months ended June 30, 2006 was $7,581 million, including inventory holding gains of $1,148 million.  Profit for the three months ended June 30, 2005 was $5,591 million, including inventory holding gains of $610 million.  Inventory holding gains or losses represent the difference between the cost of sales calculated using the average cost of supplies incurred during the period and the cost of sales calculated using the first-in first-out method. Profit attributable to BP shareholders for the six months ended June 30, 2006 was $13,204 million, including inventory holding gains of $1,506 million.  Profit attributable to BP shareholders for the six months ended June 30, 2005 was $12,193 million, including inventory holding gains of $1,721 million.

The profit attributable to BP shareholders for the three months and six months ended June 30, 2006 includes a profit of $78 million and a loss of $25 million from Innovene operations, respectively.  The profit and loss for the three months and six months includes losses on re-measurement to fair value of Innovene operations of $88 million and $184 million respectively. The profit attributable to BP shareholders for the three months and six months ended June 30, 2005 includes profits of $104 million and $408 million from Innovene operations, respectively. Note 3 provides further financial information for Innovene.

Profit attributable to BP shareholders for the three months ended June 30, 2006:

·                       includes net gains on sales of assets of $330 million, primarily from interests in the North Sea and the Gulf of Mexico shelf assets in the USA, and fair value gains of $149 million on embedded derivatives relating to North Sea gas contracts (these embedded derivatives are fair valued at each period end with the resulting gains or losses taken to the income statement) in Exploration and Production;

·                       includes net gains of $147 million on disposals, and is after an impairment charge of $35 million and a charge of $76 million in respect of a donation to the BP Foundation in Refining and Marketing;

·                       includes net fair value gains on embedded derivatives of $107 million and is after a net loss on disposal of $1 million in the Gas, Power and Renewables segment; and

·                       includes a gain on disposal of $21 million and net fair value gains on embedded derivatives of $5 million in Other businesses and corporate.

Profit attributable to BP shareholders for the three months ended June 30, 2005:

·                       is after a net loss on disposal of $3 million and net fair value losses of $674 million on embedded derivatives in certain long-term gas contracts (these embedded derivatives are fair valued at each period end with the resulting gains or losses taken to the income statement) in Exploration and Production;

·                       includes a net gain of $75 million on the disposal of retail assets, and is after a charge of $700 million in respect of all fatality and personal injury compensation claims associated with the incident at the Texas City refinery in March 2005 and a charge of $33 million for the impairment of an equity-accounted entity in Refining and Marketing;

·                       includes net fair value gains on embedded derivatives of $67 million and a gain of $20 million on the disposal of an NGL plant in the US in Gas, Power and Renewables;

·                       includes gains on disposal of businesses and fixed assets of $34 million and a credit of $22 million relating to the reversal of environmental provisions no longer required, and is after a charge of $28 million relating to the separation of the olefins and derivative and net fair value losses on embedded derivatives of $14 million in Other businesses and corporate.

Profit attributable to BP shareholders for the six months ended June 30, 2006:

·                       includes net gains on sales of assets of $339 million, primarily from interests in the North Sea and the Gulf of Mexico shelf assets in the USA, and is after fair value losses of $246 million on embedded derivatives relating to North Sea gas contracts in Exploration and Production;

·                       includes net gains on disposals of $711 million and is after a charge of $76 million in respect of a donation to the BP Foundation and an impairment charge of $35 million in Refining and Marketing;

4

---

·                       includes net fair value gains on embedded derivatives of $52 million and is after a net loss on disposal of $1 million in the Gas, Power and Renewables segment; and

·                       includes a gain on disposal of $22 million and net fair value gains on embedded derivatives of $13 million in Other businesses and corporate.

Profit attributable to BP shareholders for the six months ended June 30, 2005:

·                       includes gains of $1,067 million on the sales of assets, primarily from our interest in the Ormen Lange field, and is after charges for impairment of $130 million relating to fields in the UK North Sea and net fair value losses of $834 million on embedded derivatives in Exploration and Production;

·                       includes net gains of $89 million on the sale of retail and marketing assets, and is after a charge of $700 million in respect of all fatality and personal injury compensation claims associated with the incident at the Texas City refinery on March 23, 2005, an impairment charge of $41 million and a further charge of $33 million for the impairment of an equity-accounted entity;

·                       includes a net gain of $63 million on disposal of BP’s interest in Interconnector UK Ltd., a gain of $20 million on the disposal of an NGL plant in the US and net fair value gains of $109 million on embedded derivatives in the Gas, Power and Renewables segment; and

·                       includes net gains on disposal of businesses and fixed assets of $34 million and a credit of $22 million relating to the reversal of environmental provisions no longer required, and is after a charge of $71 million relating to the separation of the olefins and derivatives business and net fair value losses of $18 million on embedded derivatives in Other businesses and corporate.

Finance cost for continuing operations for the three months and six months ended June 30, 2006 was $153 million and $344 million respectively, compared with $128 million and $300 million in the same periods of 2005. The increase for the three months ended June 30, 2006 primarily reflects higher interest costs partially offset by an increase in capitalized interest. The increase for the six months ended June 30, 2006 reflects higher interest rates and costs, partially offset by an increase in capitalized interest.  These factors more than offset the absence of costs that were incurred in the first half of 2005 in respect of the early redemption of finance leases.

Other finance income and expense for continuing operations for the three month and six months ended June 30, 2006 was a credit of $46 million and $94 million respectively, compared with charges of $35 million and $65 million in the same periods of 2005.  The decreases for the three months and six months ended June 30, 2006 primarily reflect a reduction in net pension finance costs.

Net taxation for continuing operations, other than production taxes, charged for the three months and six months ended June 30, 2006 was $3,626 million and $6,555 million respectively, compared with $2,291 million and $4,770 million in the equivalent periods last year.  The effective tax rate for three months and six months ended June 30, 2006 was 32% and 33% respectively, compared with 29% for the equivalent periods of 2005.  The increase in the rate in both periods reflects the higher level of provision write-backs in 2005.

In addition to the factors above, the increase in profit for the period attributable to BP shareholders for the second quarter reflects higher oil realizations, marginally higher gas realizations, higher refining margins, supply optimization benefits, increased contributions from the trading and marketing business and better operational performance in the natural gas liquids business, partially offset by the impact of reduced throughputs at the Texas City refinery, lower overall marketing margins, higher costs and adverse impacts from IFRS fair value accounting.

The primary additional factors contributing to the increase in profit for the period attributable to BP shareholders for the six months ended June 30, 2006 are higher oil and gas realizations, higher refining margins, supply optimization benefits and higher contributions from the operating businesses in the Gas, Power and Renewables segment, partially offset by lower production volumes, the impact of reduced throughputs at the Texas City refinery, lower overall marketing margins, higher costs and adverse impacts from IFRS fair value accounting.

Capital expenditure and acquisitions in the second quarter and half year 2006 was $3.7 billion and $7.0 billion respectively.  There were no significant acquisitions.  Capital expenditure and acquisitions for the second quarter and half year 2005 was $3.3 billion and $6.1 billion respectively.  Disposal proceeds in the second quarter and half year 2006 were $2.0 billion and $2.6 billion respectively and in the second quarter and half year 2005 disposal proceeds were $0.4 billion and $1.8 billion respectively.

5

---

Net cash provided by operating activities for the three months ended June 30, 2006 was $9.1billion compared with $6.7 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations, lower working capital requirements and the absence of a net cash outflow from Innovene operations, partially offset by lower dividends from jointly controlled entities and associates, higher earnings from jointly controlled entities and associates, a lower net credit for provisions, less payments, and higher interest paid.  Net cash used in investing activities was $1.5 billion compared with $2.7 billion for the equivalent period of 2005, reflecting higher proceeds from the sale of fixed assets, partially offset by higher capital expenditure.

Net cash provided by operating activities for the six months ended June 30, 2006 was $18.1 billion compared with $16.1 billion for the equivalent period of 2005, reflecting higher profit before taxation from continuing operations and lower working capital requirements, partially offset by higher taxes paid, a lower net credit for provisions, less payments, and higher interest paid.  Net cash used in investing activities was $4.3 billion compared with $4.2 billion for the equivalent period of 2005, reflecting higher proceeds from the disposal of businesses and fixed assets almost fully offset by higher capital expenditure.

Net debt at June 30, 2006 was $14.4 billion compared with $16.2 billion at December 31, 2005.  The ratio of net debt to net debt plus equity was 15% at June 30, 2006 compared with 17% at December 31, 2005. This ratio shows the proportion of debt and equity used to finance our operations, and can also be used to measure borrowing capacity.  In addition to reported debt, BP uses conventional off balance sheet sources of finance such as operating leases and joint venture and associate borrowings.

The Group has access to other sources of liquidity in the form of committed facilities and other funding through the capital markets.  BP believes that, taking into account the substantial amounts of undrawn borrowing facilities available, the Group has sufficient working capital for foreseeable requirements.

In the normal course of business the Group has entered into certain long-term purchase commitments principally relating to take or pay contracts for the purchase of natural gas, crude oil and chemicals feedstocks and throughput arrangements for pipelines.  The Group expects to fulfil its obligations under these arrangements with no adverse consequences to the Group’s results of operations or financial condition.

On July 25, BP announced a quarterly dividend of 9.825 cents per ordinary share, which was paid on September 5, 2006 to shareholders on the register on August 11, 2006.  Holders of ordinary shares received 5.324 pence per share and holders of American Depositary Receipts (ADRs) $0.5895 per ADS.  Participants in the Dividend Reinvestment Plan or the dividend reinvestment plan facility in the US Direct Access Plan received the dividend in the form of shares, also on September 5, 2006.  The Company repurchased 376 million of its own shares during the quarter, at a cost of $4.5 billion. During the half year, 725 million shares were repurchased and at a cost of $8.5 billion.

6

---

DETAILED REVIEW OF BUSINESSES

EXPLORATION AND PRODUCTION

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Sale and other operating revenues from continuing operations		- $m		13,495		10,934		27,413		21,120
Profit before interest and tax from continuing operations(a)		- $m		7,827		5,904		14,643		12,393
Results include:
Exploration expense		- $m		97		139		286		299
Of which: Exploration expenditure written off		- $m		13		47		127		131
Key Statistics:
Crude oil
- Average prices realized by BP		- $/bbl		65.96		47.79		62.08		45.60
- Production for subsidiaries		- mb/d		1,203		1,320		1,217		1,316
- Production for equity-accounted entities		- mb/d		1,152		1,117		1,141		1,105
Natural gas liquids
- Average prices realized by BP		- $/bbl		37.80		29.86		36.66		28.99
- Production for subsidiaries		- mb/d		170		176		169		180
- Production for equity-accounted entities		- mb/d		6		6		5		5
Total liquids(b)
- Average prices realized by BP		- $/bbl		62.86		45.95		59.36		43.85
- Production for subsidiaries		- mb/d		1,373		1,496		1,386		1,496
- Production for equity-accounted entities		- mb/d		1,158		1,123		1,146		1,110
Natural gas
- Average prices realized by BP		- $/mcf		4.44		4.38		4.99		4.32
- Production for subsidiaries		- mmcf/d		7,620		7,813		7,660		7,820
- Production for equity-accounted entities		- mmcf/d		1,004		848		1,008		883
Total hydrocarbons(c)
- Average prices realized by BP		- $/boe		44.58		36.11		44.39		34.86
- Production for subsidiaries		- mboe/d		2,686		2,843		2,706		2,844
- Production for equity-accounted entities		- mboe/d		1,332		1,269		1,320		1,263
Brent oil price		- $/bbl		69.59		51.63		65.71		49.64
West Texas Intermediate oil price		- $/bbl		70.46		53.08		66.89		51.52
Alaska North Slope US West Coast oil price		- $/bbl		68.84		50.10		64.89		47.64
Henry Hub gas price (d)		- $/mmbtu		6.80		6.74		7.90		6.51
UK Gas – National Balancing Point		- p/therm		34.55		30.15		52.70		34.02

 (a)    Includes profit after interest and tax of equity-accounted entities.

 (b)    Crude oil and natural gas liquids.

 (c)    Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels.

 (d)    Henry Hub First of the Month Index.

7

---

Sales and other operating revenues for the three months ended June 30, 2006 were $13 billion, compared with $11 billion in the corresponding period in 2005, primarily reflecting an increase of around $3 billion related to higher liquids and gas realizations partly offset by a decrease of around $0.5 billion due to lower volumes of subsidiaries.

Sales and other operating revenues for the six months ended June 30, 2006 were $27 billion, compared with $21 billion in the corresponding period in 2005, primarily reflecting an increase of around $7 billion related to higher liquids and gas realizations partly offset by a decrease of around $1 billion due to lower volumes of subsidiaries.

Profit before interest and tax for the three months ended June 30, 2006 was $7,827 million, including inventory holding gains of $1 million, net gains on disposal of $330 million (primarily from interests in the North Sea and the Gulf of Mexico shelf assets in the USA) and fair value gains of $149 million on embedded derivatives relating to North Sea gas contracts.  These embedded derivatives are fair valued at each period end with the resulting gains or losses taken to the income statement.  Profit before interest and tax for the three months ended June 30, 2005 was $5,904 million, including inventory holding gains of $3 million, and is after net fair value losses of $674 million on embedded derivatives relating to North Sea gas contracts and net losses on disposal of $3 million.

In addition to the factors above, the primary reasons for the increase in profit for the three months ended June 30, 2006 compared with the three months ended June 30, 2005 are higher liquid realizations and marginally higher gas realizations contributing around $2,300 million, partially offset by the impact of lower volumes of around $950 million due to change in production mix and divestments and higher costs of approximately $350 million reflecting the impact of sector-specific inflation, increased integrity spend, repairs and revenue investment.

Profit before interest and tax for the six months ended June 30, 2006 was $14,643 million, including net gains on sales of assets of $339 million (primarily from interests in the North Sea and the Gulf of Mexico shelf assets in the USA) and is after inventory holding losses of $6 million and fair value losses of $246 million on embedded derivatives relating to North Sea gas contracts.  Profit before interest and tax for the six months ended June 30, 2005 was $12,393 million, including inventory holding gains of $8 million and gains of $1,067 million on the sales of assets, primarily from our interest in the Ormen Lange field, and is after charges for impairment of $130 million relating to fields in the UK North Sea and net fair value losses of $834 million on embedded derivatives.

In addition to the factors above, the primary reasons for the increase in profit before interest and tax for the six months ended June 30, 2006 compared with the six months ended June 30, 2005 are higher realizations contributing around $4,900 million partially offset by the impact of lower volumes of around $1,600 million and higher costs of around $550 million reflecting sector-specific inflation, increased integrity spend, repairs and revenue investment.

Production for the second quarter of 2006 was 2,686 mboe/d for subsidiaries and 1,332 mboe/d for equity-accounted entities compared with 2,843 mboe/d and 1,269 mboe/d respectively, a year ago. For subsidiaries, the decrease primarily reflects the effect of disposals, with growth in the new profit centres being offset by decline in existing profit centres. For equity-accounted entities, the increase primarily reflects increased production from TNK-BP, partially offset by the effect of disposals.

Three new projects started up in the second quarter of 2006.  In Azerbaijan, the BTC pipeline was successfully completed, with the first lifting from Ceyhan in Turkey in June.  In Algeria, first gas was produced from our In Amenas project in June.  In Egypt the Temsah redevelopment project started production in April, ahead of schedule.  Additionally, in June we signed a framework agreement for the development of a new LNG plant – Damietta 2.

Offshore repair work on Thunder Horse is proceeding and we anticipate having approval to introduce hydrocarbons to the facilities in the third quarter.  Recent work has focused on testing of the subsea equipment in readiness for start-up. However, during a routine hydrotest we experienced two leaks in a subsea manifold. We are taking a precautionary approach and are fully investigating the events before starting up the platform. Subject to a satisfactory outcome of these investigations our current plan anticipates replacing just the damaged subsea equipment. Depending upon weather, this would enable a start-up of production in early 2007.

We had further exploration success in Angola with the Urano oil discovery in ultra-deepwater Block 31, bringing the number of successful discoveries that BP has drilled in the Block to ten.

8

---

During the quarter, we completed the sale of our Gulf of Mexico Shelf assets to Apache.  Certain participants in these fields exercised their right of pre-emption, and completion of these transactions is expected in the third quarter of 2006.  We also completed the sales of our 4.84% interest in the Statfjord oil and gas field and of our interest in the Luva gas discovery, both in the North Sea.  In May, we announced our intention to sell our exploration and production and gas infrastructure business in the Netherlands.  In June, TNK-BP announced that it had reached agreement to sell its Urdmurtneft assets to Sinopec.  Since the end of the quarter we have announced the sale of our 28% interest in the Shenzi discovery in the Gulf of Mexico to Repsol for $2,145 million.

On August 7, 2006 we announced that we had begun an orderly and phased shut down of the Prudhoe Bay field in Alaska following discovery of corrosion in the oil transit pipelines on the eastern side of the field. It was a precautionary move made in order to ensure that we did not take unacceptable risks regarding the safety of our operation and protection of the natural environment. On August 11, we announced that we will continue production from the western side of the field after close consultation with federal and state regulatory agencies and review of inspections data. BP has shut down the transit lines from the eastern areas of the field and is working closely with the US Department of Transportation and the Alaska Department of Environmental Conservation, among others to restore production safely and as quickly as possible. Current production from Prudhoe Bay is around 200,000 barrels of oil and natural gas liquids per day (BP has a 26% interest in the Prudhoe Bay field). Production from the eastern area (which is still shut-in) was approximately 180,000 barrels per day prior to the shut-in.

BP will replace the main oil transit lines (16 miles) in both the Eastern and Western Operating Areas of Prudhoe Bay and expects to complete this early next year. BP’s West Coast refining and marketing system remains adequately supplied in the short term and no disruptions of crude or fuel supplies are expected at this time. BP has been purchasing crude oil on the global market to help cover the shortfall in Prudhoe Bay output.

9

---

REFINING AND MARKETING

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Sales and other operating revenues from continuing operations		- $m		64,025		53,164		119,905		99,173
Profit before interest and tax from continuing operations(a)		- $m		3,492		1,932		5,530		4,285
Key statistics:
Refinery throughputs		- mb/d		2,289		2,536		2,156		2,523
Refining availability(b)		- %		86.4		93.1		83.1		94.1
Global Indicator Refining Margin(c)		- $/bbl		12.59		8.42		9.44		7.19

(a)                       Includes profit after interest and tax of equity-accounted entities.

(b)                      Refining availability is defined as the ratio of units which are available for processing, regardless of whether they are actually being used, to total capacity.  Where there is planned maintenance, such capacity is not regarded as being available.  During the first half of 2006, there was planned maintenance of a substantial part of the Texas City refinery.

(c)                       The Global Indicator Refining Margin (GIM) is the average of regional indicator margins weighted for BP’s crude refining capacity in each region. Each regional indicator margin is based on a single representative crude with product yields characteristic of the typical level of upgrading complexity. The regional indicator margins may not be representative of the margins achieved by BP in any period because of BP’s particular refinery configurations and crude and product slate.

The changes in sales and other operating revenues are described in more detail below:

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Sale of crude oil through spot and term contracts		- $m		11,665		8,157		22,912		14,840
Marketing, spot and term sales of refined products		- $m		48,108		38,602		88,161		72,877
Other sales including non-oil and to other segments		- $m		4,252		6,405		8,832		11,456
				64,025		53,164		119,905		99,173
Sale of crude oil through spot term contracts		- mb/d		2,473		2,446		2,602		2,475
Marketing, spot and term sales of refined products		- mb/d		5,558		6,091		5,794		6,109

Sales and other operating revenues for the three months ended June 30, 2006 were $64 billion compared with $53 billion for the same period in the prior year.  Marketing, spot and term sales of refined products increased by $9 billion due to higher prices of around $12 billion partly offset by lower volumes of $3 billion.  Sales of crude oil through spot and term contracts increased by $4 billion due to higher prices of $3 billion and higher volumes of $1 billion.  Other sales decreased by $2 billion primarily due to lower volumes.

Sales and other operating revenues for the six months ended June 30, 2006 were $120 billion compared with $99 billion for the same period in the prior year.  Marketing, spot and term sales of refined products increased by $15 billion due to higher prices of $19 billion partly offset by lower volumes of around $3 billion and a negative foreign exchange impact due to a stronger dollar of $1 billion.  Sales of crude oil through spot and term contracts increased by $9 billion primarily due to higher prices of $7 billion and higher volumes of $2 billion. Other sales decreased by around $2 billion primarily due to lower volumes.

Profit before interest and tax for the three months ended June 30, 2006 was $3,492 million, including inventory holding gains of $1,136 million and net gains of $147 million on disposal, and is after an impairment charge of $35 million and a charge of $76 million in respect of a donation to the BP Foundation.

10

---

Profit before interest and tax for the three months ended June 30, 2005 was $1,932 million, including inventory holding gains of $659 million and a net gain of $75 million on the disposal of retail assets, and is after a charge of $33 million for the impairment of an equity-accounted entity and a charge of $700 million in respect of fatality and personal injury compensation claims associated with the incident at the Texas City refinery in March 2005.  A further $500 million was charged in the three months ended December 31, 2005.

The primary additional reasons for the increase in profit before interest and tax for the three months ended June 30, 2006 compared with the three months ended June 30, 2005 are higher refining margins contributing around $900 million and supply optimization benefits of around $300 million, partially offset by a reduction of around $460 million in respect of reduced throughputs at the Texas City refinery, including the impact on associated businesses, and a reduction of around $430 million due to lower overall marketing margins.

Profit before interest and tax for the six months ended June 30, 2006 was $5,530 million, including inventory holding gains of $1,562 million and net gains on disposals of $711 million (related primarily to the disposal of BP’s shareholding in Zhenhai Refining and Chemicals Company to Sinopec, the sale of BP’s Czech Republic retail network to Österreichische Mineralöl Verwaitung Aktiengesellschaft (OMV), and the sale of BP’s shareholding in Eiffage, the French based construction company), and is after an impairment charge of $35 million and a charge of $76 million in respect of a donation to the BP Foundation.

Profit before interest and tax for the six months ended June 30, 2005 was $4,285 million, including inventory holding gains of $1,601 million and net gains of $89 million on the sale of retail and marketing assets, and is after a charge of $700 million in respect of fatality and personal injury compensation claims associated with the incident at the Texas City refinery in March 2005, an impairment charge of $41 million and a further charge of $33 million for the impairment of an equity-accounted entity.

The primary additional factors reflected in the increase in profit before interest and tax for the six months ended June 30, 2006, compared with the six months ended June 30, 2005 were higher refining margins contributing approximately $830 million and supply optimization benefits of around $580 million.  These were offset by a reduction of around $1,110 million in respect of reduced throughputs at the Texas City refinery, including the impact on associated businesses, and a reduction of around $410 million due to lower overall marketing margins.

Refining throughputs for the quarter and first half were 2,289 mb/d and 2,156 mb/d respectively, lower than last year mainly due to the phased start-up of production at our Texas City refinery. Recommissioning of the site began at the end of March, with current throughput of 200 mb/d. Our focus is to continue re-commissioning the site safely and to bring it back onstream in a phased manner. The site will not be fully operational until 2007.  Excluding the Texas City refinery, refining availability for the second quarter of 2006 was 95.7%, slightly ahead of the second quarter of 2005.

Marketing volumes were 3,876 mb/d in the second quarter and 3,851 mb/d for the first half of the year, slightly lower than the comparative periods in the previous year mainly due to divestments.

BP announced plans to invest $500 million over the next ten years to establish a dedicated bioscience research laboratory.  The BP Energy Biosciences Institute (EBI) is planned to be the first of its kind in the world and to be attached to a major academic centre.  During the quarter, BP and DuPont announced the creation of a partnership to develop, produce and market a next generation of biofuels. The companies’ joint strategy is to deliver advanced biofuels that will provide improved options for expanding energy supplies and accelerate the move to renewable transportation fuels which lower overall greenhouse gas emissions. The first product to market is expected to be biobutanol, which will be introduced in the United Kingdom as a gasoline bio-component.

Also during the quarter, BP announced its intention to sell its Coryton Refinery in Essex, UK which processes 172,000 barrels of crude oil a day. BP is in initial discussions with a number of potential buyers.

In addition to the TET physical propane case referred to in BP’s Annual Report on Form 20-F/A for 2005, the Commodity Futures Trading Commission (CFTC) is currently investigating various aspects of BP’s crude oil trading and storage activities in the US since 2003 and has made various formal and informal requests for information.  BP has provided, and continues to provide, responsive data and other information to these requests. The CFTC is also conducting an investigation into BP’s trading of unleaded gasoline futures contracts in 2002.  BP has provided responsive documents and witness testimony.  BP understands that the U.S.  Attorney for the Northern District of Illinois will also be conducting an investigation into BP’s gasoline trading. In addition, BP has initiated a review by independant external auditors of the compliance systems in its US trading business.

11

---

GAS, POWER AND RENEWABLES

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Sales and other operating revenues from continuing operations		- $m		5,735		5,817		12,714		12,278
Profit before interest and tax from continuing operations(a)		- $m		463		175		701		601

(a)     Includes profit after interest and tax of equity-accounted entities.

The changes in sales and other operating revenues are explained below in more detail:

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Gas marketing sales		- $m		3,151		3,949		6,950		7,870
Other sales (including NGL marketing)		- $m		2,584		1,868		5,764		4,408
				5,735		5,817		12,714		12,278
Gas marketing sales volumes		- mb/d		5,092		5,933		4,889		6,028
Natural gas sales by Exploration and Production		- mb/d		4,813		4,496		4,899		4,520

Sales and other operating revenues for the three months ended June 30, 2006 were $5.7 billion compared with $5.8 billion for the same period in 2005.  Gas marketing sales decreased by $0.8 reflecting price decreases of $0.2 and lower volumes of $0.6 billion.  Other sales (including NGL marketing) increased by $0.7 billion reflecting $0.5 billion related to higher prices and $0.2 billion related to higher volumes.

Sales and other operating revenues for the six months ended June 30, 2006 were $12.7 billion compared with $12.3 billion for the same period in 2005.  Gas marketing sales decreased by $0.9 billion as price increases of $0.6 billion were more than offset by lower volumes of $1.5 billion.  Other sales (including NGL marketing) increased by $1.3 billion reflecting $0.8 billion related to higher prices and $0.5 billion related to higher volumes.

Profit before interest and tax for the three months ended June 30, 2006 was $463 million including inventory holding gains of $10 million and net fair value gains on embedded derivatives of $107 million.  Profit before interest and tax for the three months ended June 30, 2005 was $175 million, including net fair value gains on embedded derivatives of $67 million and a gain of $20 million on the disposal of an NGL plant in the US, and is after inventory holding losses of $14 million.

The primary additional factors reflected in the increase in profit before interest and tax for the three months ended June 30, 2006 compared with the equivalent period in 2005 are increased contributions from the gas trading and marketing business of around $220 million and better operational performance in the natural gas liquids business of around $80 million. This was partly offset by a negative impact from IFRS fair value accounting charges of around $80 million.

Profit before interest and tax for the six months ended June 30, 2006 was $701 million, including net fair value gains of $52 million on embedded derivatives, and is after inventory holding losses of $53 million. Profit before interest and tax for the six months ended June 30, 2005 was $601 million, including a gain of $63 million on the disposal of BP’s interest in Interconnector UK Ltd., a gain of $20 million on the disposal of an NGL plant in the US and net fair value gains of $109 million on embedded derivatives.  There were no inventory holding gains or losses.

The primary additional factors contributing to the increase in profit before interest and tax for the six months ended June 30, 2006 are higher contributions from the operating businesses of around $450 million, partially offset by higher IFRS fair value accounting charges of $150 million.

In June, operations started at China’s first liquefied natural gas (LNG) import and re-gasification terminal at Shengzhen, Guangdong province (BP share 30%) with an initial cargo of LNG from the North West Shelf Venture in Australia in which BP is also a partner.  As part of BP Alternative Energy’s strategy, we entered into a strategic alliance with Clipper Windpower plc and signed an agreement with GE to jointly develop and deploy hydrogen power projects.

12

---

BP announced on August 15, that it had purchased Greenlight Energy, Inc., a US-based developer of wind power generation projects, for a consideration of some $98 million, excluding working capital and tax adjustments. The purchase will allow BP to accelerate its plans to develop a leading wind power business in North America.

OTHER BUSINESSES AND CORPORATE

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
Sales and other operating revenues from continuing operations		- $m		252		174		458		346
Profit (loss) before interest and tax from continuing operations(a)		- $m		(192	)	(156	)	(407	)	(327	)

(a)     Includes profit (loss) after interest and tax of equity-accounted entities.

Other businesses and corporate comprises Finance, the Group’s aluminium asset, interest income and costs relating to corporate activities.

The loss before interest and tax for the three months ended June 30, 2006 was $192 million, including inventory holding gains of $1 million, a gain on disposal of $21 million and net fair value gains on embedded derivatives of $5 million. The loss before interest and tax for the three months ended June 30, 2005 was $156 million, including gains on disposal of businesses and fixed assets of $34 million and a credit of $22 million relating to the reversal of environmental provisions no longer required, and is after net fair value losses on embedded derivatives of $14 million and a charge of $28 million in respect of the separation of the olefins and derivatives businesses.

The loss before interest and tax for the six months ended June 30, 2006 was $407 million, including inventory holding gains of $3 million, a net gain on disposal of $22 million and net fair value gains on embedded derivatives of $13 million. The loss before interest and tax for the six months ended June 30, 2005 was $327 million, including net gains on disposal of businesses and fixed assets of $34 million and a credit of $22 million relating to the reversal of environmental provisions no longer required, and is after net fair value losses on embedded derivatives of $18 million and a charge of $71 million in respect of the separation of the olefins and derivatives businesses.

13

---

OUTLOOK STATEMENT

World economic growth has been sustained. US economic growth appears to have slowed compared to the first quarter, but Europe appears to have grown faster; growth in other regions has been sustained. The near-term global outlook appears resilient.

Crude oil prices averaged $69.59 per barrel (Dated Brent) in the second quarter of 2006, an increase of nearly $8 per barrel from the first quarter and $18 per barrel above the same period last year. Prices rose in face of heightened geopolitical concerns. Demand is growing strongly in China and the Middle East, offsetting weakness in the US and Europe. Ample inventories and increased spare OPEC production capacity have failed to stem the increase. Oil prices are expected to remain strong.

US natural gas prices averaged $6.80/mmbtu (Henry Hub First of Month Index) in the second quarter, $2.21/mmbtu below the first quarter. Gas prices traded below parity with residual fuel oil during the quarter.  Onshore gas supplies and net imports have grown; recovery of hurricane-affected production has continued. Working gas inventories at the end of June were 29% above the five-year average. US gas prices have generally remained below resid parity so far in the third quarter.

UK gas prices (NBP day-ahead) fell in the second quarter to average 34.6 pence per therm, compared to 70 pence per therm in the first quarter, but 15% higher than in the second quarter of 2005. The Rough storage facility has re-opened and inventories are expected to reach normal levels by October, but concerns over winter supply have led NBP futures to remain above 75 pence per therm.

Global average refining margins rose sharply to $12.59/bbl in the second quarter of 2006 compared with $6.28/bbl in the first quarter. A heavy US refinery maintenance programme extended into the second quarter and coincided with the switch from MTBE to ethanol for reformulated gasolines. Margins increased strongly to encourage sufficient product imports from abroad. So far in the third quarter, margins have remained strong but have now begun to weaken following the end of the summer driving season.

Although retail margins deteriorated in April they recovered in May and June on the back of movements in the cost of product.  This has resulted in overall second quarter retail margins being slightly ahead of the first quarter. So far in the third quarter, following a small further rise in July, wholesale gasoline prices have been falling given the high inventory levels and the low threat of supply disruptions from hurricanes; marketing margins are therefore expected to remain volatile.

The UK Government’s announced increase in the North Sea supplemental tax rate has been enacted. This increase will have two effects; first to create a one-time deferred tax charge and second to increase current tax to reflect the 2006 impact of the proposed higher rate, which is retroactive to the start of the year. The full year aggregate effective tax rate is expected to be around 39%.

We have 16 major projects currently under development scheduled to start up in the 2007-9 period, and a further 11 under appraisal. Beyond 2009 we now see a further 26 major projects which are expected to be developed.

Our previous guidance was that full year 2006 production would be between 2.8 and 2.85 mmboe/d for subsidiaries and between 1.3 and 1.35 mmboe/d for equity-accounted entities, after adjusting for divestments and the impact of higher prices on entitlements under production sharing contracts. On the basis of divestments announced in 2006 to date, and assuming that oil prices remain at around $70/barrel, the adjustment for divestments is expected to amount to around 41 mboe/d and 24 mboe/d for subsidiaries and equity-accounted entities respectively, this year, and the adjustment for price impact is expected to amount to around 45 mboe/d for subsidiaries this year. At this time it is uncertain what impact the shutdown of the Eastern Operating Area of Prudhoe Bay will have on 2006 production.

Capital expenditure excluding acquisitions is expected to be between $15.5 billion and $16 billion for the year, greater than previously estimated as a result of higher sector-specific inflation, driven by high oil prices. Divestment proceeds are also expected to be significantly higher than previously estimated at more than $6 billion.

14

---

FORWARD-LOOKING STATEMENTS

In order to utilize the ‘Safe Harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995, BP is providing the following cautionary statement. The foregoing discussion, in particular, although not limited to, the statements under ‘Group Results’, ‘Exploration and Production’, ‘Refining and Marketing’, and ‘Outlook’, with regard to BP’s capital expenditure costs, demand, growth and other trend projections, future performance margins, prices, production, including full year production, the timing of new fields to start production and the timing of production from the Thunder Horse platform, the timings for the bringing on stream of units at the Texas City refinery and the expected timing for that site to be fully operational, the expected timing for the replacement of the main oil transit lines from Prudhoe Bay, expectations regarding supply to BP’s West Coast refining and marketing systems, working capital, fulfilment of contract obligations and timing for completion of transactions are all forward-looking in nature. Forward-looking statements are also identified by such phrases as ‘will’, ‘expects’, ‘is expected to’, ‘should’, ‘may’, ‘is likely to’, ‘intends’, ‘plans’, ‘appears’ and ‘believes’. 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 specific factors identified in the discussions accompanying such forward-looking statements; future levels of industry product supply, demand and pricing; the timing of bringing new fields onstream; exchange rate fluctuations; operational problems; general economic conditions, including inflationary pressure, political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; successful partnering; the actions of competitors; the actions of competitors and third party suppliers of facilities and services; natural disasters and prolonged adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this report. These and other factors may cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Additional information, including information on factors which may affect BP’s business, is contained in BP’s Annual Report and Annual Accounts for 2005 and the Annual Report on Form 20-F/A for 2005 filed with the US Securities and Exchange Commission.

DIVIDENDS PAYABLE

On July 25, 2006, BP p.l.c. announced a quarterly dividend of 9.825 cents per ordinary share of 25 cents (ordinary shares) to be paid in September, representing $0.5895 per American Depositary Share (ADS).  The record date for qualifying US resident holders of American Depositary Shares as well as holders of ordinary shares was August 11, 2006, and payment was made on September 5, 2006.

A dividend reinvestment facility is available for holders of ADSs through JPMorgan Chase Bank.  Participants in the dividend reinvestment facility included in the US Direct Access Plan received the dividend in the form of shares on September 5, 2006.

15

BP p.l.c. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

		Three months ended June 30				Six months ended June 30
		(Unaudited)				(Unaudited)
		2006		2005		2006		2005
		($ million, except per share amounts)
Sales and other operating revenues (Note 4)		72,428		58,320		137,485		110,666
Earnings from jointly controlled entities – after interest and tax (Note 17)		818		742		1,391		1,228
Earnings from associates – after interest and tax (Note 17)		114		101		229		215
Interest and other revenues		106		105		304		271
Total revenues		73,466		59,268		139,409		112,380
Gains on sale of businesses and fixed assets		541		136		1,138		1,298
Total revenues and other income		74,007		59,404		140,547		113,678
Purchases		50,723		38,988		96,311		73,032
Production and manufacturing expenses		5,376		5,682		10,593		10,384
Production and similar taxes (Note 5)		855		697		1,787		1,346
Depreciation, depletion and amortization		2,308		2,232		4,492		4,379
Impairment and losses on sale of businesses and fixed assets		80		10		103		196
Exploration expense (Note 5)		97		139		286		299
Distribution and administration expenses		3,516		3,025		6,612		6,249
Fair value (gain) loss on embedded derivatives		(261	)	621		181		743
Profit before interest and taxation from continuing operations		11,313		8,010		20,182		17,050
Finance costs (Note 6)		153		128		344		300
Other finance (income) expense (Note 7)		(46	)	35		(94	)	65
Profit before taxation from continuing operations		11,206		7,847		19,932		16,685
Taxation		3,626		2,291		6,555		4,770
Profit from continuing operations		7,580		5,556		13,377		11,915
Profit (loss) from Innovene operations (Note 3)		78		104		(25	)	408
Profit for the period (a)		7,658		5,660		13,352		12,323
Attributable to:
BP shareholders		7,581		5,591		13,204		12,193
Minority interest		77		69		148		130
		7,658		5,660		13,352		12,323
Earnings per ordinary share – cents (a) (Note 12)
Profit attributable to BP shareholders
Basic		37.49		26.30		64.89		57.09
Diluted		37.12		25.94		64.25		56.30
Profit from continuing operations attributable to BP shareholders
Basic		37.12		25.81		65.02		55.18
Diluted		36.74		25.45		64.37		54.42
Earnings per American Depositary share – cents (a)
Profit attributable to BP shareholders
Basic		224.94		157.80		389.34		342.54
Diluted		222.72		155.64		385.50		337.80

(a)               A summary of the material adjustments to profit for the period which would be required if generally accepted accounting principles in the United States had been applied instead of International Financial Reporting Standards is given in Note 15.

16

---

BP p.l.c. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

		June 30, 2006		December 31, 2005
		(Unaudited)		(Unaudited)
		($ million)
Noncurrent assets
Property, plant and equipment		85,953		85,947
Goodwill		10,413		10,371
Other intangible assets		5,251		4,772
Investments in jointly controlled entities		15,711		13,556
Investments in associates		5,736		6,217
Other investments		592		967
Fixed assets		123,656		121,830
Loans		854		821
Other receivables		842		770
Derivative financial instruments		3,789		3,652
Prepayments and accrued income		1,399		1,269
Defined benefit pension plan surplus		3,757		3,282
		134,297		131,624
Current assets
Loans		118		132
Inventories		20,727		19,760
Trade and other receivables		38,639		40,902
Derivative financial instruments		9,103		9,726
Prepayments and accrued income		2,604		1,598
Current tax receivable		218		212
Cash and cash equivalents		4,852		2,960
		76,261		75,290
Assets classified as held for sale		1,409		—
Total assets		211,967		206,914
Current liabilities
Trade and other payables		43,323		42,136
Derivative financial instruments		8,538		9,083
Accruals and deferred income		6,149		5,970
Finance debt		9,648		8,932
Current tax payable		5,043		4,274
Provisions		1,282		1,602
		73,983		71,997
Noncurrent liabilities
Other payables		1,783		1,935
Derivative financial instruments		3,634		3,696
Accruals and deferred income		3,957		3,164
Finance debt		9,638		10,230
Deferred tax liabilities		16,703		16,258
Provisions		10,395		9,954
Defined benefit pension plan and other postretirement benefit plan deficits		9,476		9,230
		55,586		54,467
Liabilities directly associated with the assets classified as held for sale		42		—
Total liabilities		129,611		126,464
Net assets		82,356		80,450
Equity
Capital shares
Preference		21		21
Ordinary		4,998		5,164
Paid-in surplus		8,480		8,120
Merger reserve		27,199		27,190
Other reserves		7		16
Shares held by ESOP trusts		(228	)	(140	)
Available-for-sale investments		188		385
Cash flow hedges		48		(234	)
Foreign currency translation reserve		3,434		2,943
Treasury shares		(18,852	)	(10,598	)
Retained earnings		56,291		46,794
BP shareholders’ equity (a)		81,586		79,661
Minority interest		770		789
Total equity		82,356		80,450

(a)          A summary of the material adjustments to BP shareholders’ equity which would be required if generally accepted accounting principles in the United States had been applied instead of International Financial Reporting Standards is given in Note 15.

17

---

BP p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

				Three months ended June 30				Six months ended June 30
				(Unaudited)				(Unaudited)
				2006		2005		2006		2005
				($ million)
Operating activities
Profit before taxation from continuing operations				11,206		7,847		19,932		16,685
Adjustments to reconcile profits before tax to net cash provided by operating activities:
Exploration expenditure written off				13		47		127		131
Depreciation, depletion and amortization				2,308		2,232		4,492		4,379
Impairment and (gain) loss on sale of businesses and fixed assets				(461	)	(126	)	(1,035	)	(1,102	)
Earnings from jointly controlled entities and associates				(932	)	(843	)	(1,620	)	(1,443	)
Dividends received from jointly controlled entities and associates				268		741		1,279		1,096
Working capital and other movements				(3,253	)	(2,691	)	(5,103	)	(3,577	)
Net cash provided by operating activities of continuing operations				9,149		7,207		18,072		16,169
Net cash used in operating activities of Innovene operations				—		(470	)	—		(58	)
Net cash provided by operating activities				9,149		6,737		18,072		16,111
Investing activities
Capital expenditures				(3,412	)	(2,911	)	(6,707	)	(5,736	)
Investment in jointly controlled entities				(26	)	(36	)	(26	)	(51	)
Investment in associates				(151	)	(186	)	(308	)	(285	)
Proceeds from disposal of fixed assets				1,899		425		2,383		1,752
Proceeds from disposal of businesses				90		—		256		—
Proceeds from loan repayments				58		48		130		80
Net cash used in investing activities				(1,542	)	(2,660	)	(4,272	)	(4,240	)
Financing activities
Net repurchase of shares				(4,411	)	(2,034	)	(8,272	)	(3,967	)
Proceeds from long-term financing				514		482		910		1,293
Repayments of long-term financing				(720	)	(1,011	)	(785	)	(3,203	)
Net increase (decrease) in short-term debt				941		149		231		(2,017	)
Dividends paid	-	BP shareholders		(1,894	)	(1,809	)	(3,816	)	(3,632	)
	-	Minority interest		(88	)	(15	)	(154	)	(335	)
Net cash used in financing activities				(5,658	)	(4,238	)	(11,886	)	(11,861	)
Currency translation differences relating to cash and cash equivalents				(36	)	—		(22	)	(9	)
Increase (decrease) in cash and cash equivalents				2,913		(161	)	1,892		1
Cash and cash equivalents at beginning of period				1,939		1,521		2,960		1,359
Cash and cash equivalents at end of period				4,852		1,360		4,852		1,360

18

---

 

		Three months ended June 30				Six months ended June 30
		(Unaudited)				(Unaudited)
		2006		2005		2006		2005
		($ million)
Working capital and other movements
Interest receivable		(122	)	(102	)	(252	)	(165	)
Interest received		145		78		291		112
Finance costs		153		128		344		300
Interest paid		(351	)	(119	)	(661	)	(451	)
Other finance (income) expense		(46	)	35		(94	)	65
Share-based payments		122		79		205		156
Net operating charge for pensions and other postretirement benefits, less contributions		(47	)	(6	)	(97	)	(16	)
Net charge for provisions, less payments		(284	)	507		(491	)	444
(Increase) decrease in inventories		(2,351	)	(1,786	)	(1,343	)	(2,583	)
(Increase) decrease in other current and noncurrent assets		2,008		(4,608	)	2,343		(5,925	)
Increase (decrease) in other current and noncurrent liabilities		135		5,536		28		7,903
Income taxes paid		(2,615	)	(2,433	)	(5,376	)	(3,417	)
		(3,253	)	(2,691	)	(5,103	)	(3,577	)

CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSE

		Three months ended June 30				Six months ended June 30
		(Unaudited)				(Unaudited)
		2006		2005		2006		2005
		($ million)
Currency translation differences		309		(1,646	)	462		(2,398	)
Available–for–sale investments marked to market		(44	)	20		153		22
Available–for–sale investments – recycled to the income statement		(79	)	—		(425	)	(43	)
Cash flow hedges marked to market		230		(89	)	287		(149	)
Cash flow hedges – recycled to the income statement		19		(4	)	76		(11	)
Taxation		(15	)	(3	)	46		53
Net income (expense) recognized directly in equity		420		(1,722	)	599		(2,526	)
Profit for the period		7,658		5,660		13,352		12,323
Total recognized income and expense relating to the period		8,078		3,938		13,951		9,797
Attributable to:
BP shareholders		8,001		3,869		13,803		9,667
Minority interest		77		69		148		130
		8,078		3,938		13,951		9,797
Change in accounting policy – adoption of IAS 32 and 39 on January 1, 2005 (wholly attributable to BP shareholders)		—		—		—		(243	)

 

19