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 March, 31, 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.

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.

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333-131584) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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 MARCH 31, 2006

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

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BP p.l.c. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

GROUP RESULTS JANUARY – MARCH 2006

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
Sales and other operating revenues from continuing operations (a)		65,057		52,346
Profit from continuing operations (a)		5,797		6,359
Profit for the period		5,694		6,663
Profit for the period attributable to BP shareholders		5,623		6,602
Profit attributable to BP shareholders per ordinary share – cents		27.40		30.79
Dividends payable per ordinary share – cents		9.375		8.50

(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 January 1, 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 were 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 first quarter 2006 trading environment was generally stronger than a year ago with higher oil and gas realizations and similar overall marketing margins, but with slightly lower realized refining margins.  For the three months ended March 31, 2006 the Brent oil price increased $14.17 per barrel, the Henry Hub gas price was up $2.74 per mmbtu and the refining Global Indicator Margin increased $0.34 per barrel compared with a year ago.

The decrease in profit for the period attributable to BP shareholders compared with the first quarter of 2005 is largely due to lower gains on disposal, lower inventory holding gains and the closure of the Texas City refinery.

Sales and other operating revenues from continuing operations for the three months ended March 31, 2006 were $65 billion, compared with $52 billion for the equivalent period in 2005.  The increase in sales and other operating revenues for the first quarter (before the elimination of sales between businesses) reflects approximately $16 million from higher prices and around $0.5 billion related to higher volumes of marketing and other sales (spot and term contracts, oil and gas realizations and other sales). This was partly offset by a decrease of $1 billion from foreign exchange movements due to sales in local currencies being translated into the US dollar and a decrease of around $0.5 billion related to lower production volumes of subsidiaries.

Profit attributable to BP shareholders for the three months ended March 31, 2006 was $5,623 million, including inventory holding gains of $358 million.  Profit for the three months ended March 31, 2005 was $6,602 million, including inventory holding gains of $1,111 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.

The profit attributable to BP shareholders for the three months ended March 31, 2006 includes losses from Innovene operations of $103 million.  The loss for the three months includes losses on re-measurement to fair value of Innovene operations of $96 million. The profit attributable to BP shareholders for the three months ended March 31, 2005 includes profits from Innovene operations of $304 million. Note 3 provides further financial information for Innovene.

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Profit attributable to BP shareholders for the three months ended March 31, 2006:

·                       includes net gains on disposal of $9 million and is after net fair value losses of $395 million on embedded derivatives relating to historical long-term 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 on disposal of $564 million in Refining and Marketing;

·                       is after net fair value losses on embedded derivatives of $55 million in the Gas, Power and Renewables segment; and

·                       includes a gain on disposal of $1 million and net fair value gains on embedded derivatives of $8 million in Other businesses and corporate.

Profit attributable to BP shareholders for the three months ended March 31, 2005:

·                        includes gains of $1,070 million on the sale of assets, primarily from our interest in the Ormen Lange field, and is after an impairment charge of $130 million relating to fields in the UK North Sea and fair value losses of $160 million on embedded derivatives in certain long-term gas contracts in Exploration and Production;

·                        includes a gain of $14 million relating to the sale of marketing assets and an impairment charge of $41 million in Refining and Marketing;

·                        includes a gain of $63 million on the disposal of BP’s interest in Interconnector UK Ltd and net fair value gains on embedded derivatives of $42 million in Gas, Power and Renewables;

·                        and is after a charge of $43 million in respect of the separation of the olefins and derivatives business and net fair value losses on embedded derivatives of $4 million in Other businesses and corporate.

Finance costs for continuing operations for the three months ended March 31, 2006 was $191 million, compared with $172 million in the same period of 2005. The increase for the three months ended March 31, 2006 primarily reflects higher interest costs partially offset by an increase in capitalized interest.  These factors more than offset the absence of costs that were incurred in the first quarter of 2005 in respect of the early redemption of finance leases.

Other finance income and expense for continuing operations for the three month ended March 31, 2006 was a credit of $48 million, compared with a charge of $30 million in the same period of 2005.  The decrease for the three months ended March 31, 2006 primarily reflects a reduction in net pension finance costs.

Net taxation for continuing operations, other than production taxes, charged for the three months ended March 31, 2006 was $2,929 million, compared with $2,479 million in the equivalent period last year.  The effective tax rate was 34% for the three months ended March 31, 2006, compared with 28% for the equivalent period of 2005.  The increase in the rate reflects the higher level of provision write-backs in 2005.

In addition to the factors above, the decrease in profit for the period attributable to BP shareholders for the first quarter of 2006 reflects the hurricane impact on volumes within Exploration and Production, the impact of the Texas City refinery closure, although this was partly offset by improved supply optimization and business improvements elsewhere within Refining and Marketing, adverse impacts from IFRS accounting effects, slightly lower realized refining margins, lower contributions from the gas trading and marketing business and similar marketing margins, partially offset by higher oil and gas realizations.

Capital expenditure and acquisitions in the first quarter of 2006 was $3.3 billion.  There were no significant acquisitions.  Capital expenditure and acquisitions for the first quarter of 2005 was $2.8 billion.  Disposal proceeds in the first quarter of 2006 were $0.7 billion and were $1.3 billion in the first quarter of 2005.

Net cash provided by operating activities for the three months ended March 31, 2006 was $8.9 billion compared with $9.4 billion for the equivalent period of 2005, reflecting higher income taxes paid and lower net cash provided by operating activities of Innovene operations, partly offset by lower working capital requirements, higher dividends from jointly controlled entities and associates a lower net credit for impairment and gain / loss on sale of businesses and fixed assets.  Net cash used in by investing activities was $2.7 billion compared with $1.6 billion for the equivalent period of 2005, reflecting higher capital expenditure and lower proceeds from the sale of fixed assets and businesses.

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Net debt at March 31, 2006 was $15.7 billion compared with $16.2 billion at December 31, 2005.  The ratio of net debt to net debt plus equity was 16% at March 31, 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 April 25, BP announced a quarterly dividend of 9.375 cents per ordinary share which was paid on June 5, 2006 to shareholders on the register on May 12, 2006.  Holders of ordinary shares received 5.251 pence per share and holders of American Depositary Receipts (ADRs) $0.5625 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 June 5, 2006.  The Company repurchased 349 million of its own shares during the quarter, at a cost of $4 billion.

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DETAILED REVIEW OF BUSINESSES

EXPLORATION AND PRODUCTION

				Three months ended March 31
				(Unaudited)
				2006		2005
Sale and other operating revenues from continuing operations		- $m		13,918		10,186
Profit before interest and tax from continuing operations(a)		- $m		6,816		6,489
Results include:
Exploration expense		- $m		189		160
Of which: Exploration expenditure written off		- $m		114		84
Key Statistics:
Crude oil
-Average prices realized by BP		- $/bbl		58.25		43.37
- Production for subsidiaries		- mb/d		1,234		1,318
- Production for equity-accounted entities		- mb/d		1,126		1,087
Natural gas liquids
- Average prices realized by BP		- $/bbl		35.47		28.14
- Production for subsidiaries		- mb/d		169		184
- Production for equity-accounted entities		- mb/d		4		4
Total liquids(b)
- Average prices realized by BP		- $/bbl		55.88		41.74
- Production for subsidiaries		- mb/d		1,403		1,502
- Production for equity-accounted entities		- mb/d		1,130		1,091
Natural gas
- Average prices realized by BP		- $/mcf		5.54		4.26
- Production for subsidiaries		- mmcf/d		7,622		7,721
- Production for equity-accounted entities		- mmcf/d		1,091		1,024
Total hydrocarbons(c)
- Average prices realized by BP		- $/boe		44.20		33.60
- Production for subsidiaries		- mboe/d		2,717		2,833
- Production for equity-accounted entities		- mboe/d		1,318		1,268
Brent oil price		- $/bbl		61.79		47.62
West Texas Intermediate oil price		- $/bbl		63.29		49.88
Alaska North Slope US West Coast oil price		- $/bbl		60.89		45.07
Henry Hub gas price (d)		- $/mmbtu		9.01		6.27
UK Gas – National Balancing Point		- p/therm		70.00		37.96

(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.

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Sales and other operating revenues for the three months ended March 31, 2006 were $14 billion, compared with $10 billion in the corresponding period in 2005, primarily reflecting an increase of around $4 billion related to higher liquids and gas realizations partly offset by a decrease of around $0.5 billion due to lower volumes of subsidiaries.

Profit before interest and tax for the three months ended March 31, 2006 was $6,816 million, including net gains on disposal of $9 million, and is after inventory holding losses of $7 million and net fair value losses of $395 million on embedded derivatives relating to historical long-term North Sea gas contracts where the contract price is tied to oil and electricity prices rather than indexed to the gas price.  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 March 31, 2005 was $6,489 million, including inventory holding gains of $5 million and gains of $1,070 million on the sales of assets, primarily from our interest in the Ormen Lange field, and is after an impairment charge of $130 million relating to fields in the UK North Sea and fair value losses of $160 million on embedded derivatives in certain long-term gas contracts.

In addition to the factors above, the primary reasons for the increase in profit for the three months ended March 31, 2006 compared with the three months ended March 31, 2005 are higher liquids and gas realizations contributing around $2,600 million, partially offset by the impact of lower volumes of approximately $650 million as a consequence of residual hurricane impacts, primarily at Mars in the Gulf of Mexico.

Production for the first quarter of 2006 was 2,717 mboe/d for subsidiaries and 1,318 mboe/d for equity-accounted entities compared with 2,833 mboe/d and 1,268 mboe/d respectively, a year ago. For subsidiaries, the decrease primarily reflects the effects of severe weather disruptions.  For equity-accounted entities, the increase primarily reflects increased production from TNK-BP.

Projects in our New Profit Centres are progressing well. In Trinidad, the first cargo of LNG from the Atlantic LNG Train 4 plant was loaded in January for delivery in the UK, and the Cannonball gas development project started production in mid March.  In Azerbaijan, good progress was made on the filling and commissioning of the BTC pipeline, with the first lifting at Ceyhan in Turkey occurring in June 2006.

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.

During the first quarter, we were the highest bidder on 73 blocks in the Central Gulf of Mexico lease sale and we were awarded three new exploration blocks in offshore Pakistan, subject to government approval.

We reached agreement for the sale 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.  Completion of these sales occured in the second quarter.  On April 19, it was announced that we had reached agreement with Apache to sell our remaining Gulf of Mexico Shelf assets, with reserves of 59 million barrels of oil equivalent and average daily production of 27 mboe, for $1.3 billion.  Completion took place in the second quarter of 2006.  Certain participants in the fields exercised their right of pre-emption, and completion of these transactions is expected in the third quarter of 2006.

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.  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 150,000 barrels of oil and natural gas liquids per day (BP has a 26% interest in the Prudhoe Bay field).  Production from the eastern area 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.

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REFINING AND MARKETING

				Three months ended March 31
				(Unaudited)
				2006		2005
Sales and other operating revenues from continuing operations		- $m		55,880		46,009
Profit (loss) before interest and tax from continuing operations(a)		- $m		2,038		2,353
Key statistics:
Refinery throughputs		- mb/d		2,022		2,510
Refining availability(b)		- %		79.9		95.2
Global Indicator Refining Margin(c)		- $/bbl		6.28		5.94

 

(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 quarter 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 explained in more detail below:

				Three months ended March 31
				(Unaudited)
				2006		2005
Sale of crude oil through spot and term contracts		- $m		11,247		6,683
Marketing, spot and term sales of refined products		- $m		40,053		34,275
Other sales including non-oil and to other segments		- $m		4,580		5,051
				55,880		46,009
Sale of crude oil through spot term contracts		- mb/d		2,731		2,504
Marketing, spot and term sales of refined products		- mb/d		6,030		6,126

Sales and other operating revenues for the three months ended March 31, 2006 were $56 billion, compared with $46 billion for the same period in the prior year.  Marketing, spot and term sales of refined products increased by around $6 billion due to higher prices of around $7 billion partly offset by a negative foreign exchange impact due to a stronger dollar of $1 billion.  Sales of crude oil through spot and term contracts increased by around $5 billion primarily due to higher prices of around $4 billion and higher volumes of around $1 billion.  Other sales remained relatively flat.

Profit before interest and tax for the three months ended March 31, 2006 was $2,038 million, including inventory holding gains of $426 million and net gains of $564 million primarily in respect of the divestments described on the following page.  Profit before interest and tax for the three months ended March 31, 2005 was $2,353 million, including inventory holding gains of $942 million and a gain of $14 million relating to the sale of marketing assets, and is after an impairment charge of $41 million.

The primary additional factors reflected in the decrease in profit before interest and tax for the three months ended March 31, 2006 compared with the three months ended March 31, 2005 are a reduction of around $650 million in respect of the Texas City refinery closure, including the impact on associated businesses, an adverse impact of around $120 million due to IFRS accounting effects (see paragraph below) and an impact of around $70 million due to slightly lower realized refining margins. This was partially offset by improved supply optimization and business improvements contributing approximately $430 million.  Overall marketing margins were similar to those of the first quarter of 2005.

Where derivative instruments are used to manage certain economic exposures that cannot themselves be fair valued or accounted for as hedges, timing differences in relation to the recognition of gains and losses occur.  Gains and losses on derivative commodity contracts are recognized immediately through the income statement whilst gains and losses on the related physical transaction are recognized when the commodity is sold. These

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economic exposures primarily relate to inventories held in excess of normal operating requirements that are not designated as held for trading and fair valued, and forecast transactions to replenish inventory.

Additionally, IFRS requires that inventory designated as held for trading is fair valued using period end spot prices whilst the related derivative instruments are valued using forward prices consistent with the contract maturity. Depending on market conditions, these forward prices can be either higher or lower than spot prices resulting in quarterly timing differences.

Refining throughputs for the quarter were 2,022 mb/d compared with 2,510 mb/d in the first quarter of 2005.  The reduction in throughputs was mainly due to the continued shutdown of the 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 first quarter of 2006 was 96.0%.  Marketing volumes of 3,826 mb/d in the first quarter compared with 3,930 mb/d for the corresponding period in 2005 reflecting divestment activities.

During the first quarter of 2006, we completed the disposal of our shareholding in Zhenhai Refining and Chemicals Company to Sinopec and completed the sale of our Czech Republic retail network to Österreichische Mineralöl Verwaltung Aktiengesellschaft (OMV).

Also during the quarter, BP sold its shareholding in Eiffage, the French based construction company, and completed a restructuring of Olympic Pipeline which reduced our interest from 100% to 35%.

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GAS, POWER AND RENEWABLES

				Three months ended March 31
				(Unaudited)
				2006		2005
Sales and other operating revenues from continuing operations		- $m		6,979		6,461
Profit before interest and tax from continuing operations(a)		- $m		238		426

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

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

				Three months ended March 31
				(Unaudited)
				2006		2005
Gas marketing sales		- $m		3,799		3,921
Other sales (including NGL marketing)		- $m		3,181		2,540
				6,979		6,461
Gas marketing sales volumes		(mb/d)		4,685		6,123
Natural gas sales by Exploration and Production		(mb/d)		4,988		4,545

Sales and other operating revenues for the three months ended March 31, 2006 were $7 billion, compared with $6.5 billion for the same period in 2005.  Gas marketing sales decreased by $0.1 as price increases of $0.8 billion were more than offset lower volumes of $0.9 billion.  Other sales (including NGL marketing) increased by around $0.6 billion reflecting $0.3 billion related to higher prices and $0.3 billion related to lower volumes.

Profit before interest and tax for the three months ended March 31, 2006 was $238 million is after inventory holding losses of $63 million and net fair value losses on embedded derivatives of $55 million.  Profit before interest and tax for the three months ended March 31, 2005 was $426 million, including inventory holding gains of $14 million, a gain of $63 million on the disposal of BP’s interest in Interconnector UK Ltd and fair value gains of $42 million on embedded derivatives.

The primary additional factors reflected in profit before interest and tax for the three months ended March 31, 2006 compared with the equivalent period in 2005 are a higher contribution from marketing and trading of around $180 million partially offset by IFRS fair value accounting charges of around $70 million.

In February, BP announced plans to build a 500 MW $1 billion hydrogen-fuelled power plant alongside BP’s Carson refinery near Los Angeles. The plant is expected to generate enough low carbon power to serve 325,000 homes in South California.

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OTHER BUSINESSES AND CORPORATE

				Three months ended March 31
				(Unaudited)
				2006		2005
Sales and other operating revenues from continuing operations		- $m		206		172
Profit (loss) before interest and tax from continuing operations(a)		- $m		(215	)	(171	)

(a)     Includes profit 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 March 31, 2006 was $215 million, including inventory holding gains of $2 million, a gain on disposal of $1 million and net fair value gains on embedded derivatives of $8 million. The loss before interest and tax for the three months ended March 31, 2005 was $171 million and is after a charge of $43 million in respect of the separation of the olefins and derivatives business and net fair value losses on embedded derivatives of $4 million.

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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 increased recently but 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 near 80 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 near the second quarter average.  The US driving season and the transition to ULSD are likely to support the refining environment over the near term.

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, a further rise in wholesale gasoline and crude prices is evident; 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.

12

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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 April 25, 2006, BP p.l.c. announced a quarterly dividend of 9.375 cents per ordinary share of 25 cents (ordinary shares) to be paid in June, representing $0.5625 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 May 12, 2006, and payment was made on June 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 June 5, 2006.

13

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BP p.l.c. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million, except per share amounts)
Sales and other operating revenues (Note 4)		65,057		52,346
Earnings from jointly controlled entities – after interest and tax (Note 17)		573		486
Earnings from associates – after interest and tax (Note 17)		115		114
Interest and other revenues		198		166
Total revenues		65,943		53,112
Gains on sale of businesses and fixed assets		597		1,162
Total revenues and other income		66,540		54,274
Purchases		45,588		34,044
Production and manufacturing expenses		5,217		4,702
Production and similar taxes (Note 5)		932		649
Depreciation, depletion and amortization		2,184		2,147
Impairment and losses on sale of businesses and fixed assets		23		186
Exploration expense (Note 5)		189		160
Distribution and administration expenses		3,096		3,224
Fair value (gain) loss on embedded derivatives		442		122
Profit before interest and taxation from continuing operations		8,869		9,040
Finance costs (Note 6)		191		172
Other finance (income) expense (Note 7)		(48	)	30
Profit before taxation from continuing operations		8,726		8,838
Taxation		2,929		2,479
Profit from continuing operations		5,797		6,359
Profit (loss) from Innovene operations (Note 3)		(103	)	304
Profit for the period (a)		5,694		6,663
Attributable to:
BP shareholders		5,623		6,602
Minority interest		71		61
		5,694		6,663
Earnings per ordinary share – cents (a) (Note 12)
Profit attributable to BP shareholders
Basic		27.40		30.79
Diluted		27.13		30.36
Profit from continuing operations attributable to BP shareholders
Basic		27.90		29.37
Diluted		27.63		28.97
Earnings per American Depositary share – cents (a)
Profit attributable to BP shareholders
Basic		164.40		184.74
Diluted		162.78		182.16

(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.

14

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BP p.l.c. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

		March 31, 2006		December 31, 2005
		(Unaudited)		(Unaudited)
		($ million)
Noncurrent assets
Property, plant and equipment		85,487		85,947
Goodwill		10,322		10,371
Other intangible assets		4,887		4,772
Investments in jointly controlled entities		15,007		13,556
Investments in associates		5,371		6,217
Other investments		700		967
Fixed assets		121,774		121,830
Loans		849		821
Other receivables		875		770
Derivative financial instruments		3,278		3,652
Prepayments and accrued income		1,524		1,269
Defined benefit pension plan surplus		3,469		3,282
		131,769		131,624
Current assets
Loans		125		132
Inventories		18,823		19,760
Trade and other receivables		39,757		40,902
Derivative financial instruments		8,381		9,726
Prepayments and accrued income		3,918		1,598
Current tax receivable		222		212
Cash and cash equivalents		2,939		2,960
		74,165		75,290
Assets classified as held for sale		1,160		—
Total assets		207,094		206,914
Current liabilities
Trade and other payables		42,712		42,136
Derivative financial instruments		7,553		9,083
Accruals and deferred income		6,852		5,970
Finance debt		9,222		8,932
Current tax payable		3,909		4,274
Provisions		1,597		1,602
		71,845		71,997
Noncurrent liabilities
Other payables		1,812		1,935
Derivative financial instruments		3,159		3,696
Accruals and deferred income		4,112		3,164
Finance debt		9,457		10,230
Deferred tax liabilities		16,881		16,258
Provisions		9,527		9,954
Defined benefit pension plan and other postretirement benefit plan deficits		9,336		9,230
		54,284		54,467
Liabilities directly associated with the assets classified as held for sale		399		—
Total liabilities		126,528		126,464
Net assets		80,566		80,450
Equity
Capital shares
Preference		21		21
Ordinary		5,085		5,164
Paid-in surplus		8,307		8,120
Merger reserve		27,195		27,190
Other reserves		11		16
Shares held by ESOP trusts		(142	)	(140	)
Available-for-sale investments		260		385
Cash flow hedges		(144	)	(234	)
Foreign currency translation reserve		3,193		2,943
Treasury shares		(14,474	)	(10,598	)
Retained earnings		50,521		46,794
BP shareholders’ equity (a)		79,833		79,661
Minority interest		733		789
Total equity		80,566		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.

15

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BP p.l.c. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

					Three months ended March 31
					(Unaudited)
					2006				2005
					($ million)
Operating activities
Profit before taxation from continuing operations					8,726				8,838
Adjustments to reconcile profits before tax to net cash provided by operating activities:
Exploration expenditure written off					114				84
Depreciation, depletion and amortization					2,183				2,147
Impairment and (gain) loss on sale of businesses and fixed assets					(574		)		(976	)
Earnings from jointly controlled entities and associates					(688		)		(600	)
Dividends received from jointly controlled entities and associates					1,011				355
Working capital and other movements					(1,849		)		(886	)
Net cash provided by operating activities of continuing operations					8,923				8,962
Net cash provided by operating activities of Innovene operations					—				412
Net cash provided by operating activities					8,923				9,374
Investing activities
Capital expenditures					(3,295		)		(2,825	)
Investment in jointly controlled entities					—				(15	)
Investment in associates					(157		)		(99	)
Proceeds from disposal of fixed assets					484				1,327
Proceeds from disposal of businesses					166				—
Proceeds from loan repayments					72				32
Net cash provided by (used in) investing activities					(2,730		)		(1,580	)
Financing activities
Net repurchase of shares					(3,861		)		(1,933	)
Proceeds from long-term financing					396				811
Repayments of long-term financing					(65		)		(2,192	)
Net increase (decrease) in short-term debt					(710		)		(2,166	)
Dividends paid	-  BP shareholders			(1,922		)		(1,823		)
	-  Minority interest			(66		)		(320		)
Net cash used in financing activities					(6,228		)		(7,623	)
Currency translation differences relating to cash and cash equivalents					14				(9	)
Increase (decrease) in cash and cash equivalents					(21		)		162
Cash and cash equivalents at beginning of period					2,960				1,359
Cash and cash equivalents at end of period					2,939				1,521

16

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		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
Profit before taxation from continuing operations		8,726		8,838
Working capital and other movements
Interest receivable		(130	)	(63	)
Interest received		146		34
Finance costs		191		172
Interest paid		(310	)	(332	)
Other finance expense		(48	)	30
Share-based payments		83		77
Net operating charge for pensions and other postretirement benefits, less contributions		(50	)	(10	)
Net charge for provisions, less payments		(207	)	(63	)
(Increase) decrease in inventories		1,008		(797	)
(Increase) decrease in other current and noncurrent receivables		335		(1,317	)
Increase (decrease) in other current and noncurrent payables		(106	)	2,367
Income taxes paid		(2,761	)	(984	)
		(1,849	)	(886	)

CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSE

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
Currency translation differences		153		(752	)
Available–for–sale investments marked to market		197		2
Available–for–sale investments – recycled to the income statement		(346	)	(43	)
Cash flow hedges marked to market		57		(60	)
Cash flow hedges – recycled to the income statement		57		(7	)
Taxation		61		56
Net income recognized directly in equity		179		(804	)
Profit for the period		5,694		6,663
Total recognized income and expense relating to the period		5,873		5,859
Attributable to:
BP shareholders		5,802		5,798
Minority interest		71		61
		5,873		5,859
Change in accounting policy – adoption of IAS 32 and 39 on January 1, 2005 (wholly attributable to BP shareholders)		—		(243	)

 

17

BP p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of preparation and impact of new International Financial Reporting Standards

BP prepares its Annual Report and Accounts on the basis of International Financial Reporting Standards (IFRS) as adopted for use by the European Union (EU).  The financial information presented herein has been prepared in accordance with the accounting policies used in preparing Annual Report and Accounts 2005 as revised for the following amendments to IFRSs which have been adopted by the Group with effect from January 1, 2006.

This form 6-K has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’.

The following pronouncements from the IASB are effective for the Group’s 2006 financial reporting.

‘IAS 21 Amendment – Net Investment in a Foreign Operation’ was issued in December 2005.  The amendment clarifies the requirements of IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’ regarding an entity’s investment in foreign operations.  This amendment was adopted by the European Union (EU) in May 2006.  There was no material impact on the Group’s reported income or net assets as a result of adoption of this amendment.

The IASB issued an amendment to the fair value option in IAS 39 ‘Financial Instruments: Recognition and Measurement’ in June 2005.  The option to irrevocably designate, on initial recognition, any financial instruments as ones to be measured at fair value with gains and losses recognized in profit and loss has now been restricted to those financial instruments meeting certain criteria.  The criteria are where such designation eliminates or significantly reduces an accounting mismatch, when a group of financial assets, financial liabilities or both are managed and their performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy, and when an instrument contains an embedded derivative that meets particular conditions.  The Group has not designated any financial instruments as being at-fair-value-through-profit-and-loss, thus there was no effect on the Group’s reported income or net assets as a result of adoption of this amendment.

In August 2005, the IASB issued amendments to IAS 39 ‘Financial Instruments: Recognition and Measurement’ and IFRS 4 ‘Insurance Contracts regarding Financial Guarantee Contracts’.  These amendments require the issuer of financial guarantee contracts to account for them under IAS 39 as opposed to IFRS 4 unless an issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts.  In these instances the issuer may elect to apply either IAS 39 or IFRS 4.  Under the amended IAS 39, a financial guarantee contract is initially recognized at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ and (b) the amount initially recognized, less, when appropriate, cumulative amortization recognized in accordance with IAS 18 “Revenue”.  This standard impacts guarantees given by Group companies in respect of associates and joint ventures as well as in respect of other third parties; these are recorded in the Group’s financial statements at fair value.

In addition, in 2006 BP has adopted International Financial Reporting Interpretations Committee (IFRIC) 5 ‘Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds’ and IFRIC 6 ‘Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment’ and has decided to early adopt IFRIC 7 ‘Applying IAS 29 for the First Time’. There were no changes in accounting policy and no restatement of financial information consequent upon adoption of these Interpretations.

The following pronouncements from the IASB will become effective for future financial reporting periods.

In August 2005, the IASB issued IFRS 7 ‘Financial Instruments – Disclosures’ which is effective for annual periods beginning on or after January 1, 2007, with earlier adoption encouraged.  Upon adoption, the Group will disclose additional information about its financial instruments, their significance and the nature and extent of risks to which they give rise.  More specifically, the Group will be required to disclose the fair value of its financial instruments and its risk exposure in greater detail.  There will be no effect on reported income or net assets.  The Group has not yet decided whether to early adopt this standard for 2006 annual reporting.

Also in August 2005, ‘IAS 1 Amendment – Presentation of Financial Statements: Capital Disclosures’ was issued by the IASB, which requires disclosures of an entity’s objectives, policies and processes for managing capital, quantitative data about what the entity regards as capital, whether the entity has complied with any capital requirements, and the consequences of any non-compliance.  This is effective for annual periods beginning on or after January 1, 2007.  There will be no effect on the Group’s reported income or net assets.

18

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Note 2 – Resegmentation and other changes to comparatives

 

With effect from January 1, 2006 the following changes to the business segment boundaries have been implemented:

(a)                                  Following the sale of Innovene to INEOS in December 2005, the transfer of three equity-accounted entities (Shanghai SECCO Petrochemical Company Limited in China and Polyethylene Malaysia Sdn Bhd (PEMSB) and Ethylene Malaysia Sdn Bhd (EMSB), both in Malaysia), previously reported in Other businesses and corporate, to Refining and Marketing.

(b)                                 The formation of BP Alternative Energy in November 2005 has resulted in the transfer of certain mid-stream assets and activities to Gas, Power and Renewables:

·                     South Houston Green Power (SHGP) co-generation facility (in Texas City refinery) from Refining and Marketing.

·                     Watson Cogeneration (in Carson City refinery) from Refining and Marketing.

·                     Phu My Phase 3 CCGT plant in Vietnam from Exploration and Production.

(c)                                  The transfer of Hydrogen for Transport activities from Gas, Power and Renewables to Refining and Marketing.

Comparative financial data is shown after resegmentation.

		Restated				Reported
		Three months ended
		December 31, 2005		March 31, 2005		December 31, 2005		March 31, 2005
		(Unaudited)
		$ million
Sales and other operating revenues
Exploration and Production		14,769		10,186		14,769		10,186
Refining and Marketing		52,873		46,009		52,883		46,049
Gas, Power and Renewables		6,795		6,461		6,785		6,421
Other businesses and corporate		161		172		161		172
Sales by continuing operations		74,598		62,828		74,598		62,828
Less:  sales between businesses		10,595		8,369		10,595		8,369
sales to continuing operations		1,593		2,113		1,593		2,113
Third party sales of continuing operations		62,410		52,346		62,410		52,346
Profit before interest and tax
Exploration and Production		6,574		6,489		6,575		6,491
Refining and Marketing		(1,573	)	2,353		(1,568	)	2,363
Gas, Power and Renewables		126		426		114		418
Other businesses and corporate		(409	)	(171	)	(403	)	(175	)
		4,718		9,097		4,718		9,097
Unrealized profit in inventory		234		(153	)	234		(153	)
Net profit on transactions between continuing and Innovene operations		128		96		128		96
Profit before interest and tax from continuing operations		5,080		9,040		5,080		9,040

 

19

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Note 3 – Sale of Olefins and Derivatives business

The sale of Innovene, BP’s olefins, derivatives and refining group, to INEOS, was completed on December 16, 2005.

The Innovene operations represented a separate major line of business for BP. As a result of the sale, these operations were treated as discontinued operations for the year ended December 31, 2005. A single amount was shown on the face of the income statement comprising the post-tax result of discontinued operations and the post-tax loss recognized on the remeasurement to fair value less costs to sell of the discontinued operation. That is, the income and expenses of Innovene were reported separately from the continuing operations of the BP group. The table below provides further detail of the amount shown on the income statement.

In the cash flow statement the cash provided by the operating activities of Innovene in 2005 has been separated from that of the rest of the group and reported as a single line item.

First quarter 2006 includes a loss of $96 million related mainly to post-closing working capital adjustments.  We anticipate further adjustments during 2006.

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
Profit before tax from Innovene operations		—		532
Net profit on transactions between continuing and Innovene operations		—		(96	)
Profit before interest and taxation		—		436
Other finance income (expense)		—		1
(Loss) gain recognized on the remeasurement to fair value		(96	)	—
		(96	)	437
Taxation
Related to profit before tax		—		(133	)
Related to remeasurement to fair value		(7	)	—
Profit (loss) from Innovene operations		(103	)	304
Earnings (loss) per share from Innovene operations – cents
Basic		(0.50	)	1.42
Diluted		(0.50	)	1.39
The net cash flows of Innovene operations are presented below
Net cash used in operating activities		—		412
Net cash used in investing activities		—		(159	)
Net cash provided by financing activities		—		253

20

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Note 4 - Sales and other operating revenues

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
By business
Exploration and Production		13,918		10,186
Refining and Marketing		55,880		46,009
Gas, Power and Renewables		6,979		6,461
Other businesses and corporate		206		172
Sales by continuing operations		76,983		62,828
Less:  sales between businesses		11,926		8,369
sales to Innovene operations		—		2,113
Third party sales of continuing operations		65,057		52,346
Innovene sales		—		5,343
Less:  sales to continuing operations		—		1,534
Third party sales of Innovene operations		—		3,809
Total third party sales		65,057		56,155
By geographical area
UK		27,865		18,808
Rest of Europe		18,374		15,824
USA		23,703		22,011
Rest of World		18,375		12,725
Sales by continuing operations		88,317		69,368
Less:  sales between areas		23,260		14,909
sales to Innovene operations		—		2,113
		65,057		52,346

21

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Note 5 - Profits before interest and taxation is after charging:

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million, except per share amounts)
Exploration expense
UK		7		5
Rest of Europe		—		1
USA		66		103
Rest of World		116		51
		189		160
Production and similar taxes
UK		235		114
Overseas		697		535
		932		649

 

Note 6 – Finance costs

 

Interest payable		293		191
Capitalized		(102	)	(76	)
		191		115
Early redemption of finance leases		—		57
		191		172

 

Note 7 - Other finance (income) expense

 

Interest on pension and other postretirement benefit plan liabilities		471		514
Expected return on pension and other postretirement benefit plan assets		(582	)	(547	)
Interest net of expected return on plan assets		(111	)	(33
Unwinding of discount on provisions		54		45
Unwinding of discount on deferred consideration for acquisition of investment in TNK-BP		9		17
		(48	)	29
Innovene operations		—		1
Continuing operations		(48	)	30

 

Note 8 - Dividends paid

Dividends per ordinary share

 

Cents		9.375		8.50
Pence		5.288		4.522
Dividends per ADS (cents)		56.25		51.0

22

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Note 9 - Business and geographical analysis

By business		Exploration and Production		Refining and Marketing		Gas, Power and Renewables		Other businesses and corporate		Consolidation adjustment and eliminations		Total Group		Innovene		Consolidation adjustment and eliminations		Total continuing operations
		(Unaudited)
		($ million)
Three months ended March 31, 2006
Sales and other operating revenues
-  segment revenues		13,918		55,880		6,979		206		(11,926	)	65,057		—		—		65,057
Less sales between businesses		(9,140	)	(1,511	)	(1,275	)	—		11,926		—		—		—		—
Third party sales		4,778		54,369		5,704		206		—		65,057		—		—		65,057
Equity-accounted income		597		72		21		(2	)	—		688		—		—		688
Profit (loss) before interest and tax		6,816		2,038		238		(311	)	(8	)	8,773		(96	)	—		8,869
Capital expenditure and acquisitions		2,700		491		40		27		—		3,258		—		—		3,258
Three months ended March 31, 2005
Sales and other  operating revenues
-  segment revenues		10,186		46,009		6,461		5,515		(12,016	)	56,155		5,343		(1,534	)	52,346
Less: sales between businesses		(7,696	)	(2,107	)	(679	)	(1,534	)	12,016		—		(1,534	)	1,534		—
Third party sales		2,490		43,902		5,782		3,981		—		56,155		3,809		—		52,346
Equity-accounted income		552		45		3		—		—		600		—		—		600
Profit (loss) before interest and tax		6,489		2,353		426		361		(153	)	9,476		532		(96	)	9,040
Capital expenditure  and acquisitions		2,301		346		21		160		—		2,828		129		—		2,699

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										Eliminations
By geographical area		UK		Rest of Europe		USA		Rest of World		Sales between areas		Sales to Innovene		Total
		(Unaudited)
		($ million)
Three months ended March 31, 2006
Sales and other operating revenues		27,865		18,374		23,703		18,375		(23,260	)	—		65,057
Equity-accounted income
- continuing operations		(5	)	2		17		674		—		—		688
- Innovene operations		—		—		—		—		—		—		—
		(5	)	2		17		674		—		—		688
Profit (loss) before interest and tax
- continuing operations		772		995		3,245		3,857		—		—		8,869
- Innovene operations		(55	)	(21	)	7		(27	)	—		—		(96	)
		717		974		3,252		3,830		—		—		8,773
Capital expenditure and acquisitions		263		139		1,307		1,549		—		—		3,258
Three months ended March 31, 2005
Sales and other operating revenues		18,808		15,824		22,011		12,725		(14,909	)	(2,113	)	52,346
Equity-accounted income
- continuing operations		15		2		16		567		—		—		600
- Innovene operations		—		—		—		—		—		—		—
		15		2		16		567		—		—		600
Profit (loss) before interest and tax
- continuing operations		605		2,246		3,464		2,725		—		—		9,040
- Innovene operations		35		293		112		(4	)	—		—		436
		640		2,539		3,576		2,721		—		—		9,476
Capital expenditure and acquisitions		295		119		1,264		1,150		—		—		2,828

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Note 10 - Analysis of changes in net debt

		Three months ended March 31
		(Unaudited)
		2006		2005
		($ million)
Opening balance
Finance debt		19,162		23,091
Less: Cash and cash equivalents		2,960		1,359
Opening net debt		16,202		21,732
Closing balance
Finance debt		18,679		19,564
Less: Cash and cash equivalents		2,939		1,521
Closing net debt		15,740		18,043
Decrease (increase) in net debt		462		3,689
Movement in cash and cash equivalents (excluding exchange adjustments)		(35	)	171
Net cash outflow (inflow) from financing (excluding share capital)		379		3,547
Adoption of IAS 39		—		(147	)
Fair value hedge adjustment		82		98
Other movements		32		49
Movement in net debt before exchange effects		458		3,718
Exchange adjustments		4		(29	)
Decrease (increase) in net debt		462		3,689

Note 11 – Movement in BP shareholders’ equity

				(Unaudited)
				($ million)
At 31 December 2005				79,976
Profit for the period				5,623
Distribution to shareholders				(1,922	)
Currency translation differences (net of tax)				251
Repurchase of ordinary share capital				(3,999	)
Issue of ordinary share capital for employee share schemes				228
Purchase of shares by ESOP trusts				(90	)
Share–based payments (net of tax)				118
Available–for–sale investments (net of tax)				(126	)
Cash flow hedges (net of tax)				89
At 31 March 2006				80,148

 

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Note 12 - Earnings per share

Basic earnings per ordinary share amounts are calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The average number of shares outstanding excludes treasury shares and the shares held by the Employee Share Ownership Plans.

For the diluted earnings per share calculation, the profit attributable to ordinary shareholders is adjusted for the unwinding of the discount on the deferred consideration for the acquisition of our interest in TNK-BP. The weighted average number of shares outstanding during the period is adjusted for the number of shares to be issued for the deferred consideration for the acquisition of our interest in TNK-BP and the number of shares that would be issued on conversion of outstanding share options into ordinary shares using the treasury stock method.

 

		Three months ended March 31 (Unaudited)
		2006		2005
		($ million)
Profit for the year attributable to BP shareholders
Continuing operations		5,726		6,298
Discontinued operations		(103	)	304
		5,623		6,602
Unwinding of discount on deferred consideration for acquisition of investment in TNK-BP (net of tax)		6		12
Diluted profit for the year attributable to BP shareholders		5,629		6,614

 

		(shares thousands)
Weighted average number of ordinary shares		20,521,872		21,441,285
Ordinary shares issuable under employee share schemes		113,637		81,096
Ordinary shares issuable as consideration for BP’s interest in the TNK-BP joint venture		112,838		261,603
		20,748,347		21,783,984

Earnings (loss) per share for the discontinued operations is derived from the net profit (loss) attributable to ordinary shareholders from discontinued operations of $103 million loss for the three months ended March 31, 2006 and $304 million profit for the three months ended March 31, 2005, divided by the weighted average number of ordinary shares for both basic and diluted amounts as shown above.

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Note 13 - Provisions

		Decommissioning		Environmental		Litigation and other		Total
		(Unaudited)
		($ million)
At January 1, 2006		6,450		2,311		2,795		11,556
Exchange adjustments		3		4		6		13
New provisions		121		—		33		154
Write-back of unused provisions		—		—		(3	)	(3	)
Unwinding of discount		34		10		11		55
Utilization and deletions		(32	)	(57	)	(163	)	(252	)
Reclassified as held for sale		(399	)	—		—		(399	)
At March 31, 2006		6,177		2,268		2,679		11,124
Of which
Expected to be incurred within 1 year		292		453		852		1,597
Expected to be incurred in more than 1 year		5,885		1,815		1,827		9,527
At January 1, 2005		5,572		2,457		1,570		9,599
Exchange adjustments		2		(9	)	(7	)	(14	)
New provisions		38		2		38		78
Write-back of unused provisions		—		(1	)	(14	)	(15	)
Unwinding of discount		28		12		4		44
Utilization and deletions		(54	)	(51	)	(42	)	(147	)
At March 31, 2005		5,586		2,410		1,549		9,545
Of which
Expected to be incurred within 1 year		111		534		197		842
Expected to be incurred in more than 1 year		5,475		1,876		1,352		8,703

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Note 14 - Pension and other postretirement benefits

		Three months ended March 31, 2006
		(Unaudited)
		UK		US		Other		Total
		($ million)
Current service cost		103		65		33		201
Past service cost		—		—		—		—
Settlement, curtailment and special termination benefits		10		—		3		13
Payments to defined contribution plans		—		53		5		58
Total operating charge		113		118		41		272
Innovene operations		—		—		—		—
Continuing operations		113		118		41		272
Expected return on plan assets		(408	)	(141	)	(33	)	(582	)
Interest on plan liabilities		240		152		79		471
Other finance (income) expense		(168	)	11		46		(111	)
Innovene operations		—		—		—		—
Continuing operations		(168	)	11		46		(111	)

 

		Three months ended March 31, 2005
		(Unaudited)
		UK		US		Other		Total
		($ million)
Current service cost		99		65		32		196
Past service cost		4		—		1		5
Settlement, curtailment and special termination benefits		5		—		2		7
Payments to defined contribution plans		—		51		3		54
Total operating charge		108		116		38		262
Innovene operations		(9	)	(6	)	(6	)	(21	)
Continuing operations		99		110		32		241
Expected return on plan assets		(379	)	(139	)	(29	)	(547	)
Interest on plan liabilities		261		161		92		514
Other finance (income) expense		(118	)	22		63		(33	)
Innovene operations		4		1		(4	)	1
Continuing operations		(114	)	23		59		(32	)

 

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