UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 6-K

Report of Foreign Private Issuer

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

for the period ended 31 December 2020
Commission File Number 1-06262

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 of Form 20-F or Form 40-F:
Form 20-F Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

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 NOS. 333-226485, 333-226485-01 AND 333-226485-02) OF BP p.l.c., BP CAPITAL MARKETS p.l.c. AND BP CAPITAL MARKETS AMERICA INC.; 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. 333-79399) 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. 333-123482) 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., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-131584) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-132619) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146868) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146870) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-146873) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-173136) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-177423) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-179406) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186462) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-186463) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-199015) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200794) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-200795) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207188) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-207189) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210316) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-210318) 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.

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BP p.l.c. and subsidiaries
Form 6-K for the period ended 31 December 2020(a)
Page
1. 3-14, 28-34, 35-38
2. 15-27
3. 35
4. 39
5. 40
6 41
7 41
8 42
(a)In this Form 6-K, references to the full year 2020 and full year 2019 refer to the full-year periods ended 31 December 2020 and 31 December 2019 respectively. References to the fourth quarter 2020 and fourth quarter 2019 refer to the three-month periods ended 31 December 2020 and 31 December 2019 respectively.
(b)This discussion should be read in conjunction with the consolidated financial statements and related notes provided elsewhere in this Form 6-K and with the information, including the consolidated financial statements and related notes, in BP’s Annual Report on Form 20-F for the year ended 31 December 2019.

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Group results fourth quarter and full year 2020
Highlights
Resilient operations and strategic progress in a challenging quarter
Financial results and progress
Profit for the quarter attributable to BP shareholders was $1.4 billion, compared with losses of $0.5 billion for the previous quarter. The result included $2.3 billion gain on disposal from the sale of BP’s petrochemicals business. For the full year, the loss attributable to BP shareholders was $20.3 billion, including significant impairments and exploration write-offs taken in the second quarter, compared with a profit of $4.0 billion in 2019.
Underlying replacement cost profit for the quarter was $0.1 billion, similar to the previous quarter. Performance was significantly impacted by lower marketing performance in the Downstream, with volumes remaining under pressure due to COVID-19 and continuing pressure on refining margins and utilization. In addition, the result was impacted by a significantly weaker result in gas marketing and trading and higher exploration write-offs, partially offset by a higher Rosneft contribution and a lower underlying tax charge. The full-year result was a loss of $5.7 billion compared to $10 billion profit in 2019, driven by lower oil and gas prices, significant exploration write-offs and refining margins and depressed demand.
Operating cash flow for the quarter was $2.3 billion including the impact of Gulf of Mexico oil spill payments on a post-tax basis of $0.1 billion(a). Compared to the third quarter, this reflected the significant impact of lower marketing volumes in the Downstream and a significantly weaker contribution from gas marketing and trading. There was also the absence of the working capital release and other working capital effects, absence of the Rosneft dividend, and severance payments for reinvent bp, partly offset by lower tax payments.
Total proceeds from divestments and other disposals in the quarter were $4.2 billion, including $3.5 billion on completion of the petrochemicals divestment. In February 2021, BP agreed to sell a 20% interest in Oman's Block 61 for $2.6 billion subject to final adjustments. BP has now completed or agreed transactions for over half of its target of $25 billion in proceeds by 2025. BP expects proceeds from divestments and other disposals of $4-6 billion in 2021, weighted toward the second half.
Finance debt at 31 December 2020 was $72.7 billion, compared with $67.7 billion a year ago. At year end net debt was $39 billion, down $1.4 billion over the quarter and $6.5 billion over the full year. Net debt is expected to increase in the first half of 2021, driven by severance payments, the annual Gulf of Mexico oil spill payment and payment following completion of the offshore wind joint venture with Equinor. It is expected to then fall in the second half with growing operating cash flow and the receipt of divestment proceeds. BP continues to expect to reach our $35 billion net debt target around fourth quarter 2021 and first quarter 2022. This assumes oil prices in the range of $45-50 a barrel and BP planning assumptions for RMM and gas prices.
A dividend of 5.25 cents per share was announced for the quarter.
Performing while transforming
Operations were strong in 2020, with full-year BP-operated refining availability of 96% and Upstream plant reliability of 94%. Safety performance was also strong with both tier1/tier2 process safety events and reported recordable injury frequency significantly lower than in 2019. Upstream unit production costs for the year were 6.5% lower than 2019. Full-year Upstream production was 9.9% lower than 2019 primarily due to divestments.
BP continues to make strong progress in reinventing its organization. The new organization was in place at the start of 2021 and over half of the approximately 10,000 people expected to leave BP as a result of the reinvent programme had left by year-end. Around $1.4 billion in people-related costs are expected associated with the reinvent programme, with the majority of the cash outflow incurred in the first half of 2021.
Four new Upstream major projects began production in the year, including three in the fourth quarter – Ghazeer in Oman, Vorlich in the UK and KG D6 R-cluster in India. In the quarter, the Trans Adriatic Pipeline began gas deliveries, completing the Southern Gas Corridor pipeline system.
Demonstrating the resilience of BP's convenience offer, while retail fuel volumes were 14% lower for the full year, BP's convenience gross margin grew by 6%. Through the year, around 300 strategic convenience sites were added to the network.
BP had developed 3.3GW net renewable generating capacity to FID by end-2020, 0.7GW more than a year earlier. In January 2021 BP completed formation of its strategic US offshore wind partnership with Equinor, including the purchase of 50% in the Empire Wind and Beacon Wind projects. The projects were also selected to supply 2.5GW of power to the State of New York, adding to an existing commitment to supply 0.8GW.
Working in partnership with other companies, BP has announced: plans to develop a ‘green’ hydrogen project at its Lingen refinery in Germany with Ørsted; a BP-operated multi-company partnership to develop offshore infrastructure to support planned UK carbon capture, use and storage projects; and agreements to provide additional supplies of renewable energy to Amazon.
(a)     Operating cash flow excluding Gulf of Mexico oil spill payments is a measure used by management and BP believes it is useful as it allows for meaningful comparisons between reporting periods. It is not however disclosed in this SEC filing because SEC regulations do not permit the inclusion of this non-GAAP metric.
Financial summary
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Profit (loss) for the period attributable to BP shareholders 1,358  19  (20,305) 4,026 
Inventory holding (gains) losses, before tax (695) (10) 2,868  (667)
Taxation charge (credit) on inventory holding gains and losses 162  (13) (667) 156 
RC profit (loss) 825  (4) (18,104) 3,515 
Net (favourable) adverse impact of non-operating items and fair value accounting effects, before tax
5  3,282  16,649  8,263 
Taxation charge (credit) on non-operating items and fair value accounting effects
(715) (711) (4,235) (1,788)
Underlying RC profit (loss) 115  2,567  (5,690) 9,990 
Profit (loss) per ordinary share (cents) 6.71  0.09  (100.42) 19.84 
Profit (loss) per ADS (dollars) 0.40  0.01  (6.03) 1.19 
RC profit (loss) per ordinary share (cents) 4.08  (0.02) (89.53) 17.32 
RC profit (loss) per ADS (dollars) 0.24  0.00  (5.37) 1.04 
Underlying RC profit (loss) per ordinary share (cents) 0.57  12.67  (28.14) 49.24 
Underlying RC profit (loss) per ADS (dollars) 0.03  0.76  (1.69) 2.95 
RC profit (loss), underlying RC profit, working capital, organic capital expenditure and net debt are non-GAAP measures. These measures and inventory holding gains and losses, non-operating items, fair value accounting effects, divestment proceeds, RMM, major project, convenience gross margin, Upstream plant reliability, refining availability and divestment proceeds are defined in the Glossary on page 35.
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COVID-19 Update
Strengthening finances:
BP's future financial performance, including cash flows and net debt, will be impacted by the extent and duration of the current market conditions and the effectiveness of the actions that it and others take, including its financial interventions. It is difficult to predict when current supply and demand imbalances will be resolved and what the ultimate impact of COVID-19 will be.
BP has continued to progress its divestment programme towards delivery of $25 billion of proceeds by 2025. The petrochemicals and Alaska midstream disposals both completed in the fourth quarter. Divestment proceeds for the full year were $5.5 billion.
Organic capital expenditure in 2020 was $12.0 billion, in line with the guidance given in April and compared with $15.2 billion in 2019.
Costs that are directly attributable to COVID-19 were around $0.1 billion for the quarter (full year 2020 around $0.4 billion).
At year end net debt was $39 billion, and BP continues to actively manage the profile of its debt portfolio. During the third quarter and January 2021, the group bought back an aggregate of $6 billion of debt. At year-end BP had around $44 billion of liquidity, including cash and undrawn revolving credit facilities.
Net debt is expected to increase in the first half of 2021 before reducing in the second half of the year supported by growing operating cash flow and the receipt of divestment proceeds. BP continues to expect to reach our $35 billion net debt target around fourth quarter 2021 and first quarter 2022. This assumes oil prices in the range of $45-50 a barrel and BP planning assumptions for RMM and gas prices.

Protecting our people and operations:
BP continues to take steps to protect and support its staff through the pandemic. The great majority of BP staff who are able to work from home continue to do so. Precautions in operations and offices include: reduced manning levels, changing working patterns, deploying appropriate personal protective equipment (PPE) and enhanced cleaning and social distancing measures at plants and retail sites. Decisions on working practices are being taken with caution and in compliance with local and national guidelines and regulations.
BP is providing enhanced support and guidance to staff on safety, health and hygiene, homeworking and mental health.
While the pandemic did not result in significant outages in our ongoing operations, it resulted in delays to in-year major projects in the North Sea and India and has impacted development of the Mad Dog 2, Tangguh Expansion, Trinidad Cassia Compression and Greater Tortue Ahmeyin Phase 1 major projects. However production from four major projects commenced during the year.
Refinery utilization for the full year was around 6% lower than 2019 due to the impact of COVID-19 on demand, with refining margins remaining extremely weak. Year on year, demand for retail fuels was lower by 14% and for aviation by 50%. Despite this, convenience gross margin grew by 6% at BP retail sites for the full year.
Despite the challenges of the environment, BP's operations have performed safely and reliably over the course of the year. BP-operated Upstream plant reliability was 94% and BP-operated refining availability was 96% for the year.

Outlook:
From the oil supply side, limited growth from non-OPEC+ countries coupled with active market management from OPEC+ means that for 2021 we anticipate a normalization of the currently high inventory levels.
Oil demand is anticipated to recover in 2021. The speed and degree of the rebound depends on governments’ policies and individuals’ self-imposed actions as vaccine distribution proceeds.
Oil prices have risen since the end of October, supported by vaccine rollout programmes and continued active supply management by OPEC+ countries. Prices are expected to remain subject to the decisions of OPEC+, confidence in efforts to manage the rollout of vaccination and further virus control measures.
We expect the US gas market to tighten in 2021 as supply declines and demand for LNG exports recovers. The current tightness on global LNG markets and higher US gas prices will lift other regional gas prices.
US gas markets are likely to benefit from lower production and a recovery in international LNG demand driven by demand in Asia.
In the first quarter of 2021 we expect material impacts in Downstream as a result of the pandemic, with increased COVID-19 restrictions resulting in lower product demand. We expect industry refining margins and utilization to remain under pressure. In our marketing businesses we expect renewed COVID-19 restrictions to have a greater impact on product demand, with January retail volumes down by around 20% year on year, compared with a decline of 11% in the fourth quarter.
BP will continue to review all actions and respond to any further changes in prevailing market conditions.

The commentary above and following should be read in conjunction with the cautionary statement on page 39.
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Group headlines
Results
Profit or loss for the fourth quarter and full year attributable to BP shareholders was a profit of $1,358 million and a loss of $20,305 million respectively, compared with a profit of $19 million and $4,026 million for the same periods in 2019.
For the full year, replacement cost (RC) loss* was $18,104 million, compared with a profit of $3,515 million in 2019. Underlying RC loss* was $5,690 million, compared with a profit of $9,990 million in 2019. Underlying RC loss is after adjusting RC loss for a net charge for non-operating items* of $12,191 million and net adverse fair value accounting effects* of $223 million (both on a post-tax basis).
For the fourth quarter, RC profit was $825 million, compared with a loss of $4 million in 2019. Underlying RC profit was $115 million, compared with $2,567 million in 2019. Underlying RC profit is after adjusting RC profit for a net gain for non-operating items of $1,166 million and net adverse fair value accounting effects of $456 million (both on a post-tax basis).
See further information on pages 6, 29 and 30.
Depreciation, depletion and amortization
The charge for depreciation, depletion and amortization was $3.4 billion in the quarter and $14.9 billion in the full year, compared with $4.4 billion and $17.8 billion for the same periods in 2019. In 2021, we expect the full-year charge to be similar to the 2020 level.
Effective tax rate
The effective tax rate (ETR) on the profit or loss for the fourth quarter and full year was -36% and 17% respectively, compared with 93% and 49% for the same periods in 2019.
The ETR on RC profit or loss* for the fourth quarter and full year was -141% and 16% respectively, compared with 102% and 51% for the same periods in 2019. Adjusting for non-operating items and fair value accounting effects, the underlying ETR* for the fourth quarter and full year was 40% and -14% respectively, compared with 27% and 36% for the same periods a year ago. The higher underlying ETR for the fourth quarter reflects changes in the mix of profits and losses. The lower underlying ETR for the full year mainly reflects the exploration write-offs with a limited deferred tax benefit and the reassessment of deferred tax asset recognition in the second quarter. The underlying ETR for 2021 is expected to be higher than 40% but is sensitive to the impact that volatility in the current environment may have on the geographical mix of the group’s profits and losses. ETR on RC profit or loss and underlying ETR are non-GAAP measures.
Dividend
BP today announced a quarterly dividend of 5.25 cents per ordinary share ($0.315 per ADS), which is expected to be paid on 26 March 2021. The corresponding amount in sterling is due to be announced on 15 March 2021, calculated based on the average of the market exchange rates for the four dealing days commencing on 9 March 2021. See page 27 for more information.
Share buybacks
BP repurchased 120 million ordinary shares at a cost of $776 million (including fees and stamp duty) in the full year 2020, all of which was completed in the first quarter of 2020. In January 2020, the share dilution buyback programme had fully offset the impact of scrip dilution since the third quarter 2017.
Operating cash flow*
Operating cash flow was $2.3 billion for the fourth quarter and $12.2 billion for the full year, including the impact of Gulf of Mexico oil spill payments on a post-tax basis of $0.1 billion and $1.6 billion respectively, compared with $7.6 billion and $25.8 billion for the same periods in 2019.
Capital expenditure*
Total capital expenditure for the fourth quarter and full year was $3.5 billion and $14.1 billion respectively, compared with $4.1 billion and $19.4 billion for the same periods in 2019.
Organic capital expenditure* for the fourth quarter and full year was $2.9 billion and $12.0 billion respectively, compared with $4.0 billion and $15.2 billion for the same periods in 2019.
Inorganic capital expenditure* for the fourth quarter and full year was $0.5 billion and $2.0 billion respectively, compared with $0.2 billion and $4.2 billion for the same periods in 2019.
Organic capital expenditure and inorganic capital expenditure are non-GAAP measures. See page 28 for further information.
Divestment and other proceeds
Divestment proceeds* for the fourth quarter and full year were $4.0 billion and $5.5 billion respectively, including $3.5 billion and $3.9 billion of proceeds from the petrochemicals divestment respectively. For the same periods in 2019 divestment proceeds were $0.8 billion and $2.2 billion respectively.
In addition, $0.2 billion was received in the fourth quarter in relation to the sale of an interest in BP's New Zealand retail property portfolio. For the full year, $1.1 billion in other proceeds were received including from the TANAP pipeline refinancing and the sale of an interest in BP's UK retail property portfolio. Other proceeds for the fourth quarter and full year in 2019 were $0.6 billion.
Total divestment and other proceeds for the quarter and full year in 2020 were $4.2 billion and $6.6 billion respectively. Total divestment and other proceeds for the fourth quarter and full year in 2019 were $1.4 billion and $2.8 billion respectively.
Debt
Finance debt at 31 December 2020 was $72.7 billion, compared with $67.7 billion a year ago. Finance debt ratio* at 31 December 2020 was 45.9%, compared with 40.2% a year ago. Net debt* at 31 December 2020 was $38.9 billion, compared with $45.4 billion a year ago. Gearing* at 31 December 2020 was 31.3%, compared with 31.1% a year ago. Gearing including leases* at 31 December 2020 was 36.0%, compared with 35.3% a year ago. Net debt, gearing and gearing including leases are non-GAAP measures. See pages 27 and 31 for more information.
Reserves replacement ratio*
The organic reserves replacement ratio on a combined basis of subsidiaries and equity-accounted entities was 78% for the year. Including acquisitions and divestments, the total reserves replacement ratio was -5%.



* For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 35.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
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Analysis of underlying RC profit (loss)* before interest and tax
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Underlying RC profit (loss) before interest and tax
Upstream 697  2,678  (5,041) 11,158 
Downstream 126  1,438  3,088  6,419 
Rosneft 311  412  56  2,419 
Other businesses and corporate (89) (250) (1,040) (1,280)
Consolidation adjustment – UPII* (77) 24  89  75 
Underlying RC profit (loss) before interest and tax 968  4,302  (2,848) 18,791 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
(568) (781) (2,523) (3,041)
Taxation on an underlying RC basis (158) (955) (743) (5,596)
Non-controlling interests (127) 424  (164)
Underlying RC profit (loss) attributable to BP shareholders 115  2,567  (5,690) 9,990 
Reconciliations of underlying RC profit or loss attributable to BP shareholders to the nearest equivalent IFRS measure are provided on page 3 for the group and on pages 9-14 for the segments.
Analysis of RC profit (loss)* before interest and tax and reconciliation to profit (loss) for the period
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
RC profit (loss) before interest and tax
Upstream (592) 614  (21,547) 4,917 
Downstream 1,245  1,433  3,418  6,502 
Rosneft 270  503  (149) 2,316 
Other businesses and corporate 308  (1,432) (683) (2,771)
Consolidation adjustment – UPII (77) 24  89  75 
RC profit (loss) before interest and tax 1,154  1,142  (18,872) 11,039 
Finance costs and net finance expense relating to pensions and other post-retirement benefits
(759) (903) (3,148) (3,552)
Taxation on a RC basis 557  (244) 3,492  (3,808)
Non-controlling interests (127) 424  (164)
RC profit (loss) attributable to BP shareholders 825  (4) (18,104) 3,515 
Inventory holding gains (losses)* 695  10  (2,868) 667 
Taxation (charge) credit on inventory holding gains and losses (162) 13  667  (156)
Profit (loss) for the period attributable to BP shareholders 1,358  19  (20,305) 4,026 




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Operational updates
Upstream
Upstream production, which excludes Rosneft, for the full year averaged 2,375mboe/d, 9.9% lower than for 2019, driven primarily by divestments in BPX Energy and Alaska. Underlying production* for the full year was 3.5% lower than 2019.
For the full year of 2020, BP-operated Upstream plant reliability* was 94.0% and Upstream unit production costs* of $6.39/boe were 6.5% lower than in 2019.
Production from three Upstream major projects started in the quarter – the Ghazeer project in Oman, Vorlich in the UK North Sea and the KG D6 R Cluster project offshore India. This follows the Gulf of Mexico Atlantis Phase 3 project in the previous quarter. The Raven project in Egypt is currently undergoing commissioning. The Trans Adriatic Pipeline began gas deliveries, completing the Southern Gas Corridor pipeline system.
BP reached agreement to sell its interests in the Wamsutter asset in Wyoming to Williams Field Services LLC. In February 2021 BP also agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited.
Downstream
BP-operated refining availability for the full year was 96.0%. In the quarter BP announced plans to cease production at the Kwinana refinery and convert it to an import terminal, helping to secure ongoing fuel supply for Western Australia.
BP continued to make progress in fuels marketing in 2020, expanding its retail network by more than 1,400 to over 20,300 sites worldwide. This includes more than 1,900 strategic convenience sites, around 300 more than a year earlier.
The $5-billion sale of BP's petrochemicals business to INEOS completed on 31 December and BP received the second payment of $3.6 billion, less $0.1 billion of third-party indebtedness. Final payments totalling $1 billion are expected in the first half of 2021.
Through 2020, the number of BP and joint venture operated electric vehicle charging points increased to more than 10,000 worldwide, with growth in the UK, Germany and through the DiDi joint venture in China.
Strategic progress
At the end of 2020, BP had developed 3.3GW net renewable generating capacity to FID, compared with 2.6GW a year earlier.
The formation of BP's strategic partnership with Equinor for offshore wind opportunities in the US was completed in January 2021, including BP's purchase of a 50% interest in the Empire Wind and Beacon Wind projects. Empire Wind 2 and Beacon Wind 1 were selected to provide New York state with additional offshore wind power which, subject to negotiation of a purchase and sale agreement, will bring the total secured by the projects to 3.3GW, 75% of the maximum potential installed capacity across the projects.
In the quarter BP also acquired a majority stake in Finite Carbon, the biggest developer of forest carbon offsets in the US. BP's investment is expected to support the accelerated growth of the business, including international expansion.
Financial framework
Operating cash flow* was $12.2 billion for the full year of 2020, including Gulf of Mexico oil spill payments of $1.6 billion, compared with $25.8 billion for the same period in 2019.
Organic capital expenditure* for the full year of 2020 was $12.0 billion. BP expects total capital expenditure, including inorganic capital expenditure, to be around $13 billion in 2021.
Total divestment and other proceeds were $6.6 billion for the full year of 2020. BP has now completed or agreed transactions for over half of its target of $25 billion in proceeds by 2025. BP expects proceeds from divestments and other disposals of $4-6 billion in 2021, weighted toward the second half.
Gulf of Mexico oil spill payments on a post-tax basis were $1.6 billion in the full year of 2020. Payments for 2021 are expected to be around $1 billion on a post-tax basis.
Gearing* at 31 December 2020 was 31.3%, in part reflecting the hybrid bond issue in the second quarter of 2020. See page 27 for more information.

Operating metrics  Year 2020 Financial metrics  Year 2020
(vs.  Year 2019) (vs.  Year 2019)
Tier 1 and tier 2 process safety events 70
Underlying RC profit (loss)*i
$(5.7)bn
(-28)
(-$15.7bn)
Reported recordable injury frequency*
0.132
Operating cash flow excluding Gulf of Mexico oil spill payments (post-tax)
(b)
(-20.7%)
Group production
3,473mboe/d
Organic capital expenditureii
$12.0bn
(-8.1%) (-$3.2bn)
Upstream production (excludes Rosneft segment)
2,375mboe/d Gulf of Mexico oil spill payments (post-tax) $1.6bn
(-9.9%) (-$0.8bn)
Upstream unit production costs(a)
$6.39/boe Divestment proceeds* $5.5bn
(-6.5%)
(+$3.3bn)
BP-operated Upstream plant reliability
94.0%
Gearingiii
31.3%
(-0.4)
(+0.2)
BP-operated refining availability* 96.0%
Dividend per ordinary share(c)
5.25 cents
(+1.1) (-50.0%)
Return on average capital employed*iv
(3.8)%
(-12.7)
(a)Reflecting lower costs and divestment impacts.
(b)SEC regulations do not permit inclusion of this non-GAAP metric in this SEC filing. Operating cash flow excluding Gulf of Mexico oil spill payments is calculated by excluding post-tax payments relating to the Gulf of Mexico oil spill from net cash provided by operating activities,
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as reported in the condensed group cash flow statement. For the full year, net cash provided by operating activities was $12.2 billion and post-tax Gulf of Mexico oil spill payments were $1.6 billion.
(c)Represents dividend announced in the quarter (vs. prior year quarter).
Nearest GAAP equivalent measures
i (Loss) for the period attributable to BP shareholders : $(20.3)bn
ii Capital expenditure*: $14.1bn
iii Finance debt ratio*: 45.9%
iv Numerator: (Loss) for the period attributable to BP shareholders $(20.3)bn
Denominator: Average capital employed $163.3bn

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
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Upstream
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Profit (loss) before interest and tax (572) 614  (21,530) 4,909 
Inventory holding (gains) losses* (20) —  (17)
RC profit (loss) before interest and tax (592) 614  (21,547) 4,917 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
1,289  2,064  16,506  6,241 
Underlying RC profit (loss) before interest and tax*(a)
697  2,678  (5,041) 11,158 
(a)See page 10 for a reconciliation to segment RC profit before interest and tax by region.

Financial results
The replacement cost loss before interest and tax for the fourth quarter and full year was $592 million and $21,547 million respectively, compared with a profit of $614 million and $4,917 million for the same periods in 2019. The fourth quarter and full year included a net non-operating charge of $612 million and $15,768 million respectively, compared with a net charge of $2,723 million and $6,947 million for the same periods in 2019. The net non-operating charge for the quarter primarily reflects a net impairment charge and a provision for restructuring costs partly offset by disposal gains. The charge for the full year is principally related to impairments associated with revisions to long-term price assumptions. Fair value accounting effects in the fourth quarter and full year had an adverse impact of $677 million and $738 million respectively, compared with a favourable impact of $659 million and $706 million in the same periods of 2019.

After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost result before interest and tax for the fourth quarter and full year was a profit of $697 million and a loss of $5,041 million respectively, compared with a profit of $2,678 million and $11,158 million for the same periods in 2019. The result for the fourth quarter mainly reflects lower liquids and gas realizations, lower production including the impact of divestments, and a significantly weaker gas marketing and trading contribution, partly offset by lower depreciation, depletion and amortization. The result for the full year mainly reflects lower liquids and gas realizations and the impact of writing down certain exploration intangible carrying values.
Production
Production for the quarter was 2,155mboe/d, 20.1% lower than the fourth quarter of 2019. This includes the impact of divestments mainly in BPX Energy and Alaska. Underlying production* for the quarter decreased by 11.1% mainly due to impacts from reduced capital investment levels and decline, significant weather impacts from hurricanes in the higher-margin US Gulf of Mexico and maintenance activity.
For the full year, production was 2,375mboe/d, 9.9% lower than the full year of 2019 mainly due to the impact of divestments in BPX Energy and Alaska. Underlying production for the full year decreased by 3.5% mainly due to impacts from reduced capital investment levels and decline, and significant weather impacts from hurricanes in the US Gulf of Mexico.

Key events
On 26 October, BP announced the start of production from the Qattameya field in the North Damietta concession, located offshore Egypt (BP operator 100%).
On 29 October, BP confirmed oil discoveries at the Cappahayden and Cambriol prospects in the Flemish Pass basin, offshore Newfoundland, Canada (Equinor operator 60%, BP 40%).
On 15 November, the Trans Adriatic Pipeline (TAP), an 878-km gas transportation system crossing Greece, Albania, the Adriatic Sea and Italy, became operational (BP 20%, SOCAR 20%, Snam 20%, Fluxys 19%, Enagás 16% and Axpo 5%), with first gas exports from Azerbaijan to Europe commencing in December.
On 26 November, BP announced the start of production from the Vorlich field in the UK North Sea (BP 66%, Ithaca Energy operator 34%).
On 15 December, BP signed an agreement to sell its interest in the Wamsutter asset, located in the Greater Green River Basin, Wyoming, US, to Williams Field Services LLC. Subject to approvals, the transaction is expected to complete in first quarter 2021.
On 18 December, BP and Reliance Industries Limited (RIL) announced the start of production from the R Cluster ultra-deep-water gas field in block KG D6 off the east coast of India. (RIL operator 66.67%, BP 33.33%).
On 1 February 2021, BP announced it has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited (PTTEP). Subject to approvals, the transaction is expected to complete in 2021 and following which the participating interests in Block 61 will be: BP operator 40%, OQ 30%, PTTEP 20%, and PETRONAS 10%.

Outlook
We expect full-year 2021 underlying production to be slightly higher than 2020 due to the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets. We expect reported production to be lower due to the impact of the ongoing divestment programme.
We expect first-quarter 2021 reported production to be slightly higher than fourth-quarter 2020.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.

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Upstream (continued)
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Underlying RC profit (loss) before interest and tax
US (100) 645  (2,396) 2,670 
Non-US 797  2,033  (2,645) 8,488 
697  2,678  (5,041) 11,158 
Non-operating items(a)(b)
US (101) (2,451) (2,969) (6,265)
Non-US (511) (272) (12,799) (682)
(612) (2,723) (15,768) (6,947)
Fair value accounting effects
US 104  120  198  (179)
Non-US (781) 539  (936) 885 
(677) 659  (738) 706 
RC profit (loss) before interest and tax
US (97) (1,686) (5,167) (3,774)
Non-US (495) 2,300  (16,380) 8,691 
(592) 614  (21,547) 4,917 
Exploration expense
US 104  86  2,724  233 
Non-US 110  180  7,556  731 
214  266  10,280  964 
Of which: Exploration expenditure written off(b)
154  155  9,920  631 
Production (net of royalties)(c)(d)
Liquids* (mb/d)
US 359  517  424  482 
Europe 160  149  154  141 
Rest of World 600  662  651  666 
1,119  1,328  1,229  1,288 
Of which equity-accounted entities 148  147  146  138 
Natural gas (mmcf/d)
US 1,232  2,317  1,561  2,358 
Europe 320  275  282  185 
Rest of World 4,459  5,354  4,800  5,279 
6,011  7,945  6,643  7,823 
Of which equity-accounted entities 474  448  480  457 
Total hydrocarbons* (mboe/d)
US 571  916  694  888 
Europe 215  196  202  173 
Rest of World 1,369  1,585  1,479  1,576 
2,155  2,698  2,375  2,637 
Of which equity-accounted entities 230  224  228  216 
Average realizations*(e)
Total liquids(f) ($/bbl)
38.42  55.90  36.16  57.73 
Natural gas ($/mcf) 3.10  3.12  2.75  3.39 
Total hydrocarbons ($/boe)
28.48  36.42  26.31  38.00 
(a)Full year 2020 principally relates to impairments in a number of our businesses resulting from the revisions to BP’s long-term price assumptions. Full year 2020 also includes impairment charges related to the disposal of our Alaska business. Fourth quarter and full year 2019 include impairment charges related to the disposal of heritage BPX Energy assets, Alaska and GUPCO divestment. See Note 3 for further information.
(b)Full year 2020 includes the write-off of $1,974 million relating to value ascribed to certain licences as part of the accounting for the acquisition of upstream assets in Brazil, India and the Gulf of Mexico and the impairment of certain intangible assets in Mauritania and Senegal. This has been classified within the ‘other’ category of non-operating items. See Note 4 for further information.
(c)Includes BP’s share of production of equity-accounted entities in the Upstream segment.
(d)Because of rounding, some totals may not agree exactly with the sum of their component parts.
(e)Realizations are based on sales by consolidated subsidiaries only – this excludes equity-accounted entities.
(f)Includes condensate, natural gas liquids and bitumen.


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Downstream
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Profit before interest and tax 1,895  1,412  622  7,187 
Inventory holding (gains) losses* (650) 21  2,796  (685)
RC profit before interest and tax 1,245  1,433  3,418  6,502 
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
(1,119) (330) (83)
Underlying RC profit before interest and tax*(a)
126  1,438  3,088  6,419 
(a)See page 12 for a reconciliation to segment RC profit before interest and tax by region and by business.

Financial results
The replacement cost profit before interest and tax for the fourth quarter and full year was $1,245 million and $3,418 million respectively, compared with $1,433 million and $6,502 million for the same periods in 2019.
The fourth quarter and full year include a net non-operating gain of $1,403 million and $479 million respectively, compared with a charge of $28 million and $77 million for the same periods in 2019. The gain for the quarter and full year reflects a profit of $2.3 billion on the sale of our petrochemicals business, which is partially offset by restructuring costs and impairments. Fair value accounting effects in the fourth quarter and full year had an adverse impact of $284 million and $149 million respectively, compared with a favourable impact of $23 million and $160 million in the same periods in 2019.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost profit before interest and tax for the fourth quarter and full year was $126 million and $3,088 million respectively, compared with $1,438 million and $6,419 million for the same periods in 2019.
Replacement cost profit before interest and tax for the fuels, lubricants and petrochemicals businesses is set out on page 12.
Fuels
The fuels business reported an underlying replacement cost loss before interest and tax of $169 million for the fourth quarter and a profit of $2,037 million for the full year, compared with a profit of $1,068 million and $4,759 million for the same periods in 2019.
The result for the quarter and full year reflected an exceptionally weak refining environment, with COVID-19 restrictions impacting refining utilization and fuel volumes. The result for the full year also reflected a higher contribution from supply and trading.
Fuels marketing demonstrated continued resilience, delivering significant profit for the quarter and full year, despite COVID-19 which adversely impacted retail fuel and aviation volumes by 14% and 50% respectively for the full year.
The refining loss for the quarter and full year reflects the continued impact of historically low industry margins. For the full year, although availability was strong at 96%, utilization was around 6% lower than 2019 due to the impact of COVID-19 on demand. These factors were partially offset by a lower level of turnaround activity and lower costs. The result for the quarter was also impacted by narrower heavy crude oil discounts compared with the same period in 2019.
In the quarter we announced our plans to cease production at our Kwinana refinery and convert it to an import terminal, helping to secure ongoing fuel supply for Western Australia.
During the year we continued to progress our agenda to redefine convenience, delivering a 6% growth in convenience gross margin* for the full year, and we expanded our retail network by over 1,400 sites, to a total of 20,300, which now includes more than 1,900 strategic convenience sites.
We also progressed our electrification agenda, growing our network to more than 10,000 BP and joint venture operated EV charging points. This included rolling out ultra-fast chargers at retail sites in the UK and Germany, and the continued expansion of our electrification joint venture with DiDi in China.
Lubricants
The lubricants business reported an underlying replacement cost profit before interest and tax of $262 million for the fourth quarter and $818 million for the full year, compared with $333 million and $1,258 million for the same periods in 2019. The result for the quarter and full year reflects significant demand impacts, with volumes lower than the prior quarter and 15% lower for the full year. In the second half of the year we have seen volumes in growth markets recover to 2019 levels as COVID-19 restrictions eased during that period.
In 2020 we continued to expand our service offer, growing the number of Castrol branded independent workshops by more than 4,000 to over 28,000 globally. We also continued to establish strong partnerships with OEMs, with BMW selecting Castrol to be its exclusive supplier of lubricants to all BMW and MINI authorized dealers across the US, Canada and Mexico.
Petrochemicals
The petrochemicals business reported an underlying replacement cost profit before interest and tax of $33 million for the fourth quarter and $233 million for the full year, compared with $37 million and $402 million for the same periods in 2019. The result for the full year reflects the impact of COVID-19 on demand, and a significantly weaker margin environment.
In December we completed the divestment of BP’s petrochemicals business to INEOS for a total consideration of $5 billion. Final payments, totalling $1 billion are expected to be received in the first half of 2021.
Outlook
Looking to the first quarter of 2021, we expect industry refining margins and utilization to remain under pressure. In our marketing businesses we expect renewed COVID-19 restrictions to have a greater impact on product demand, with January retail volumes down by around 20% year on year, compared with a decline of 11% in the fourth quarter.

The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
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Downstream (continued)
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Underlying RC profit before interest and tax - by region
US (231) 556  1,141  2,190 
Non-US 357  882  1,947  4,229 
126  1,438  3,088  6,419 
Non-operating items
US 890  (40) 800  (42)
Non-US 513  12  (321) (35)
1,403  (28) 479  (77)
Fair value accounting effects(a)
US (125) (37) 27  148 
Non-US (159) 60  (176) 12 
(284) 23  (149) 160 
RC profit before interest and tax
US 534  479  1,968  2,296 
Non-US 711  954  1,450  4,206 
1,245  1,433  3,418  6,502 
Underlying RC profit before interest and tax - by business(b)(c)
Fuels (169) 1,068  2,037  4,759 
Lubricants 262  333  818  1,258 
Petrochemicals 33  37  233  402 
126  1,438  3,088  6,419 
Non-operating items and fair value accounting effects(a)
Fuels (1,037) (41) (1,754) 32 
Lubricants (121) 39  (179) 57 
Petrochemicals 2,277  (3) 2,263  (6)
1,119  (5) 330  83 
RC profit before interest and tax(b)(c)
Fuels (1,206) 1,027  283  4,791 
Lubricants 141  372  639  1,315 
Petrochemicals 2,310  34  2,496  396 
1,245  1,433  3,418  6,502 
BP average refining marker margin (RMM)* ($/bbl)
5.9  12.4  6.7  13.2 
Refinery throughputs (mb/d)
US 708  761  693  737 
Europe 720  848  742  787 
Rest of World 200  238  192  225 
1,628  1,847  1,627  1,749 
BP-operated refining availability* (%)
96.1  95.7  96.0  94.9 
Marketing sales of refined products (mb/d)
US 1,055  1,156  1,011  1,145 
Europe 801  1,051  823  1,073 
Rest of World 457  537  441  509 
2,313  2,744  2,275  2,727 
Trading/supply sales of refined products 2,942  3,519  3,026  3,268 
Total sales volumes of refined products 5,255  6,263  5,301  5,995 
Petrochemicals production (kte)
US 640  518  2,201  2,267 
Europe 1,241  1,141  5,183  4,714 
Rest of World 1,261  1,353  4,896  5,133 
3,142  3,012  12,280  12,114 
(a)For Downstream, fair value accounting effects arise solely in the fuels business. See page 30 for further information.
(b)Segment-level overhead expenses are included in the fuels business result.
(c)Results from petrochemicals at our Gelsenkirchen and Mülheim sites in Germany are reported in the fuels business.

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Rosneft
Fourth Fourth
quarter quarter Year Year
$ million
2020(a)
2019
2020(a)
2019
Profit (loss) before interest and tax(b)(c)
295  534  (238) 2,306 
Inventory holding (gains) losses* (25) (31) 89  10 
RC profit (loss) before interest and tax 270  503  (149) 2,316 
Net charge (credit) for non-operating items* 41  (91) 205  103 
Underlying RC profit (loss) before interest and tax* 311  412  56  2,419 

Financial results
Replacement cost (RC) profit before interest and tax for the fourth quarter was $270 million and RC loss for the full year was $149 million, compared with a profit of $503 million and $2,316 million for the same periods in 2019.
After adjusting for non-operating items, the underlying RC profit before interest and tax for the fourth quarter and full year was $311 million and $56 million respectively, compared with a profit of $412 million and $2,419 million for the same periods in 2019.
Compared with the same period in 2019, the result for the fourth quarter primarily reflects lower oil prices partially offset by favourable foreign exchange effects. Compared with the same period in 2019, the result for the full year primarily reflects lower oil prices, unfavourable foreign exchange and adverse duty lag effects.
Key events
On 28 December, Rosneft announced completion of the acquisition of 100% stakes in JSC Taimyrneftegaz and LLC Taimyrburservis, and the sale of a 10% interest in LLC Vostok Oil.
Fourth Fourth
quarter quarter Year Year
2020(a)
2019
2020(a)
2019
Production (net of royalties) (BP share)
Liquids* (mb/d) 876  923  877  923 
Natural gas (mmcf/d) 1,360  1,306  1,286  1,279 
Total hydrocarbons* (mboe/d) 1,111  1,148  1,098  1,144 
(a)The operational and financial information of the Rosneft segment for the fourth quarter and full year is based on preliminary operational and financial results of Rosneft for the three months and full year ended 31 December 2020. Actual results may differ from these amounts. Amounts reported for the fourth quarter are based on BP’s 22.01% average economic interest for the quarter (fourth quarter 2019 19.75%). A preliminary assessment of the fair values of the assets and liabilities acquired and the consideration transferred in respect of the acquisitions announced by Rosneft on 28 December is being undertaken and the impact, if any, on BP’s accounting for its equity-accounted investment in Rosneft will be updated once this has been completed.
(b)The Rosneft segment result includes equity-accounted earnings arising from BP’s economic interest in Rosneft as adjusted for accounting required under IFRS relating to BP’s purchase of its interest in Rosneft, and the amortization of the deferred gain relating to the divestment of BP’s interest in TNK-BP.
(c)BP’s adjusted share of Rosneft’s earnings after Rosneft's own finance costs, taxation and non-controlling interests is included in the BP group income statement within profit before interest and taxation. For each year-to-date period it is calculated by translating the amounts reported in Russian roubles into US dollars using the average exchange rate for the year to date.

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Other businesses and corporate
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Profit (loss) before interest and tax 308  (1,432) (683) (2,771)
Inventory holding (gains) losses*   —    — 
RC profit (loss) before interest and tax 308  (1,432) (683) (2,771)
Net (favourable) adverse impact of non-operating items* and fair value accounting effects*
(397) 1,182  (357) 1,491 
Underlying RC profit (loss) before interest and tax* (89) (250) (1,040) (1,280)
Underlying RC profit (loss) before interest and tax
US (135) (85) (453) (713)
Non-US 46  (165) (587) (567)
(89) (250) (1,040) (1,280)
Non-operating items
US (303) (268) (475) (559)
Non-US 250  (914) 157  (932)
(53) (1,182) (318) (1,491)
Fair value accounting effects
US   —    — 
Non-US 450  —  675  — 
450  —  675  — 
RC profit (loss) before interest and tax
US (438) (353) (928) (1,272)
Non-US 746  (1,079) 245  (1,499)
308  (1,432) (683) (2,771)
Other businesses and corporate comprises our alternative energy business, shipping, treasury, BP ventures and corporate activities including centralized functions, and any residual costs of the Gulf of Mexico oil spill.
Financial results
The replacement cost result before interest and tax for the fourth quarter and full year was a profit of $308 million and a loss of $683 million respectively, compared with a loss of $1,432 million and $2,771 million for the same periods in 2019.
The results include a net non-operating charge of $53 million for the fourth quarter and $318 million for the full year, compared with a charge of $1,182 million and $1,491 million for the same periods in 2019. Fair value accounting effects in the fourth quarter and full year had a favourable impact of $450 million and $675 million respectively. See page 30 for further information.
After adjusting for non-operating items and fair value accounting effects, the underlying replacement cost loss before interest and tax for the fourth quarter and full year was $89 million and $1,040 million respectively, compared with $250 million and $1,280 million for the same periods in 2019. The results include an uplift in valuation of a venture investment of $229 million for the fourth quarter and $284 million for the full year.
Alternative Energy
BP's net ethanol-equivalent production* for the fourth quarter and full year averaged 14.9kb/d and 20.3kb/d respectively, compared with 11.6kb/d and 13.7kb/d for the 100% BP-owned business for the same periods in 2019.
Net wind generation capacity* was 1,071MW at 31 December 2020, compared with 926MW at 31 December 2019. BP’s net share of wind generation for the fourth quarter and full year was 902GWh and 2,806GWh respectively, compared with 785GWh and 2,752GWh for the same periods in 2019.
In December Lightsource BP developed to FID the 163MW Elm Branch and 153MW Briar Creek projects in the US, 50MW South Lowfield and 21MW Thornham projects in the UK, taking their overall total capacity developed to FID to 1,403MW for the full year.
In January 2021 BP and Equinor formed a strategic partnership to initially develop four projects in two existing leases located offshore New York and Massachusetts which together are expected to have a total generating capacity of 4.4GW. Early in January Empire Wind 2 and Beacon Wind 1 projects were selected to provide New York State with an additional 2.5GW of power and subject to negotiation of a purchase and sale agreement will take total secured power offtake agreements on the projects to 3.3GW which represents a material de-risking of the overall project. Beyond these initial projects, the strategic partnership expects to participate in future offshore wind developments in the US.
In December, BP finalized its investment in India’s Green Growth Equity Fund (GGEF) with an initial investment of $30 million and a total commitment of $70 million to the fund. The fund itself was established in 2018 and is focused on identifying, investing in and supporting growth in clean energy projects in India and is managed by Lightsource BP and Everstone Capital.
We continue to progress our aim to build material renewable energy businesses by having developed 20GW of net renewable generating capacity to FID by 2025. Overall we have developed a total of 3.3GW of net renewable generating capacity to FID by 31 December 2020 across our businesses and are progressing a development pipeline with projects across nine countries totalling 11GW net BP. In addition our development teams are further evaluating potential options totalling over 20GW.
Outlook
Other businesses and corporate charges for 2021, excluding non-operating items, fair value accounting effects and foreign exchange volatility impact, are expected to be $1.2-1.4 billion although the quarterly charge may vary quarter to quarter.
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary statement on page 39.
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Financial statements
Group income statement
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Sales and other operating revenues (Note 6) 44,789  71,109  180,366  278,397 
Earnings from joint ventures – after interest and tax 214  163  (302) 576 
Earnings from associates – after interest and tax 575  640  (101) 2,681 
Interest and other income 233  210  663  769 
Gains on sale of businesses and fixed assets 2,757  48  2,874  193 
Total revenues and other income 48,568  72,170  183,500  282,616 
Purchases 32,803  53,444  132,104  209,672 
Production and manufacturing expenses 6,111  5,809  22,494  21,815 
Production and similar taxes (Note 8) 228  412  695  1,547 
Depreciation, depletion and amortization (Note 7) 3,426  4,434  14,889  17,780 
Impairment and losses on sale of businesses and fixed assets (Note 3) 1,168  3,657  14,381  8,075 
Exploration expense (Note 4) 214  266  10,280  964 
Distribution and administration expenses 2,769  2,996  10,397  11,057 
Profit (loss) before interest and taxation 1,849  1,152  (21,740) 11,706 
Finance costs 749  886  3,115  3,489 
Net finance expense relating to pensions and other post-retirement benefits 10  17  33  63 
Profit (loss) before taxation 1,090  249  (24,888) 8,154 
Taxation (395) 231  (4,159) 3,964 
Profit (loss) for the period 1,485  18  (20,729) 4,190 
Attributable to
BP shareholders
1,358  19  (20,305) 4,026 
Non-controlling interests
127  (1) (424) 164 
1,485  18  (20,729) 4,190 
Earnings per share (Note 9)
Profit (loss) for the period attributable to BP shareholders
Per ordinary share (cents)
Basic 6.71  0.09  (100.42) 19.84 
Diluted 6.68  0.09  (100.42) 19.73 
Per ADS (dollars)
Basic 0.40  0.01  (6.03) 1.19 
Diluted 0.40  0.01  (6.03) 1.18 



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Condensed group statement of comprehensive income
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Profit (loss) for the period 1,485  18  (20,729) 4,190 
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Currency translation differences 1,594  1,404  (1,843) 1,538 
Exchange (gains) losses on translation of foreign operations reclassified to gain or loss on sale of businesses and fixed assets
(357) 880  (353) 880 
Cash flow hedges and costs of hedging 42  (76) 105  59 
Share of items relating to equity-accounted entities, net of tax (105) 43  312  82 
Income tax relating to items that may be reclassified 2  (39) 66  (70)
1,176  2,212  (1,713) 2,489 
Items that will not be reclassified to profit or loss
Remeasurements of the net pension and other post-retirement benefit liability or asset(a)
333  1,480  170  328 
Cash flow hedges that will subsequently be transferred to the balance sheet
9  7  (3)
Income tax relating to items that will not be reclassified (89) (459) (105) (157)
253  1,027  72  168 
Other comprehensive income 1,429  3,239  (1,641) 2,657 
Total comprehensive income 2,914  3,257  (22,370) 6,847 
Attributable to
BP shareholders 2,740  3,240  (21,983) 6,674 
Non-controlling interests 174  17  (387) 173 
2,914  3,257  (22,370) 6,847 
(a)See Note 1 - Pensions and other post retirement benefits for further information.

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Condensed group statement of changes in equity
BP shareholders’ Non-controlling interests Total
$ million equity Hybrid bonds Other interest equity
At 1 January 2020 98,412    2,296  100,708 
Total comprehensive income (21,983) 256  (643) (22,370)
Dividends (6,367)   (238) (6,605)
Cash flow hedges transferred to the balance sheet, net of tax
6      6 
Repurchase of ordinary share capital (776)     (776)
Share-based payments, net of tax 726      726 
Share of equity-accounted entities’ changes in equity, net of tax(a)
1,341      1,341 
Issue of perpetual hybrid bonds (48) 11,909    11,861 
Payments on perpetual hybrid bonds   (89)   (89)
Tax on issue of perpetual hybrid bonds 3      3 
Transactions involving non-controlling interests, net of tax
(64)   827  763 
At 31 December 2020 71,250  12,076  2,242  85,568 
BP shareholders’ Non-controlling interests Total
$ million equity Hybrid bonds Other interest equity
At 31 December 2018 99,444  —  2,104  101,548 
Adjustment on adoption of IFRS 16, net of tax(b)
(329) —  (1) (330)
At 1 January 2019 99,115  —  2,103  101,218 
Total comprehensive income 6,674  —  173  6,847 
Dividends (6,929) —  (213) (7,142)
Cash flow hedges transferred to the balance sheet, net of tax
23  —  —  23 
Repurchase of ordinary share capital (1,511) —  —  (1,511)
Share-based payments, net of tax 719  —  —  719 
Share of equity-accounted entities’ changes in equity, net of tax
—  — 
Transactions involving non-controlling interests, net of tax 316  233  549 
At 31 December 2019 98,412  —  2,296  100,708 
    (a) Principally relates to a non-controlling interest transaction entered into by Rosneft.
(b) See Note 1 in BP Annual Report and Form 20-F 2019 for further information.


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Group balance sheet
31 December 31 December
$ million 2020 2019
Non-current assets
Property, plant and equipment 114,836  132,642 
Goodwill 12,480  11,868 
Intangible assets 6,093  15,539 
Investments in joint ventures 8,362  9,991 
Investments in associates 18,975  20,334 
Other investments 2,746  1,276 
Fixed assets 163,492  191,650 
Loans 840  630 
Trade and other receivables 4,351  2,147 
Derivative financial instruments 9,755  6,314 
Prepayments 533  781 
Deferred tax assets 7,744  4,560 
Defined benefit pension plan surpluses 7,957  7,053 
194,672  213,135 
Current assets
Loans 458  339 
Inventories 16,873  20,880 
Trade and other receivables 17,948  24,442 
Derivative financial instruments 2,992  4,153 
Prepayments 1,269  857 
Current tax receivable 672  1,282 
Other investments 333  169 
Cash and cash equivalents 31,111  22,472 
71,656  74,594 
Assets classified as held for sale (Note 2) 1,326  7,465 
72,982  82,059 
Total assets 267,654  295,194 
Current liabilities
Trade and other payables 36,014  46,829 
Derivative financial instruments 2,998  3,261 
Accruals 4,650  5,066 
Lease liabilities 1,933  2,067 
Finance debt 9,359  10,487 
Current tax payable 1,038  2,039 
Provisions 3,761  2,453 
59,753  72,202 
Liabilities directly associated with assets classified as held for sale (Note 2) 46  1,393 
59,799  73,595 
Non-current liabilities
Other payables 12,112  12,626 
Derivative financial instruments 5,404  5,537 
Accruals 852  996 
Lease liabilities 7,329  7,655 
Finance debt 63,305  57,237 
Deferred tax liabilities 6,831  9,750 
Provisions 17,200  18,498 
Defined benefit pension plan and other post-retirement benefit plan deficits 9,254  8,592 
122,287  120,891 
Total liabilities 182,086  194,486 
Net assets 85,568  100,708 
Equity
BP shareholders’ equity 71,250  98,412 
Non-controlling interests 14,318  2,296 
Total equity 85,568  100,708 


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Condensed group cash flow statement
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Operating activities
Profit (loss) before taxation 1,090  249  (24,888) 8,154 
Adjustments to reconcile profit (loss) before taxation to net cash provided by operating activities
Depreciation, depletion and amortization and exploration expenditure written off
3,580  4,589  24,809  18,411 
Impairment and (gain) loss on sale of businesses and fixed assets
(1,589) 3,609  11,507  7,882 
Earnings from equity-accounted entities, less dividends received
(538) (75) 1,845  (1,295)
Net charge for interest and other finance expense, less net interest paid
22  250  236  657 
Share-based payments
179  167  723  730 
Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans
(182) (43) (282) (238)
Net charge for provisions, less payments
866  270  735  (176)
Movements in inventories and other current and non-current assets and liabilities
(715) (306) (85) (2,918)
Income taxes paid
(444) (1,107) (2,438) (5,437)
Net cash provided by operating activities 2,269  7,603  12,162  25,770 
Investing activities
Expenditure on property, plant and equipment, intangible and other assets (2,922) (3,936) (12,306) (15,418)
Acquisitions, net of cash acquired (17) (33) (44) (3,562)
Investment in joint ventures (529) (57) (567) (137)
Investment in associates (23) (83) (1,138) (304)
Total cash capital expenditure (3,491) (4,109) (14,055) (19,421)
Proceeds from disposal of fixed assets 439  24  491  500 
Proceeds from disposal of businesses, net of cash disposed 3,564  792  4,989  1,701 
Proceeds from loan repayments 61  64  717  246 
Net cash used in investing activities 573  (3,229) (7,858) (16,974)
Financing activities
Net issue (repurchase) of shares (Note 9)   (1,171) (776) (1,511)
Lease liability payments (631) (566) (2,442) (2,372)
Proceeds from long-term financing 2,619  1,879  14,736  8,597 
Repayments of long-term financing (3,191) (360) (12,179) (7,118)
Net increase (decrease) in short-term debt (906) 62  (1,234) 180 
Issue of perpetual hybrid bonds   —  11,861  — 
Payments on perpetual hybrid bonds (62) —  (89) — 
Payments relating to transactions involving non-controlling interests (other)   —  (8) — 
Receipts relating to transactions involving non-controlling interests (other) 173  566  665  566 
Dividends paid - BP shareholders (1,059) (2,076) (6,340) (6,946)
 - non-controlling interests
(75) (47) (238) (213)
Net cash provided by (used in) financing activities (3,132) (1,713) 3,956  (8,817)
Currency translation differences relating to cash and cash equivalents 336  119  379  25 
Increase (decrease) in cash and cash equivalents 46  2,780  8,639 
Cash and cash equivalents at beginning of period 31,065  19,692  22,472  22,468 
Cash and cash equivalents at end of period 31,111  22,472  31,111  22,472 




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Notes
Note 1. Basis of preparation
The results for the interim periods are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and related notes for the year ended 31 December 2019 included in BP Annual Report and Form 20-F 2019.
The directors consider it appropriate to adopt the going concern basis of accounting in preparing the annual financial statements. The impact of COVID-19 and the current economic environment has been considered as part of the going concern assessment. Forecast liquidity has been assessed under a number of stressed scenarios performed to support this assertion. Reverse stress tests performed indicated that the group will continue to operate as a going concern for at least 12 months from the balance sheet date even if the Brent price fell to zero.
BP prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006 as applicable to companies reporting under international accounting standards. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the periods presented.
The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing BP Annual Report and Form 20-F 2020 which are the same as those used in preparing BP Annual Report and Form 20-F 2019 with the exception of the changes described in the 'Updates to significant accounting policies' section below. There are no other new or amended standards or interpretations adopted from 1 January 2020 onwards that have a significant impact on the financial information.
Considerations in respect of COVID-19 and the current economic environment
BP's significant accounting judgements and estimates were disclosed in BP Annual Report and Form 20-F 2019. These have been subsequently reviewed at the end of each quarter to determine if any changes were required to those judgements and estimates as a result of current market conditions. The valuation of certain assets and liabilities is subject to a greater level of uncertainty than when reported in BP Annual Report and Form 20-F 2019, including those set out below.
Impairment testing assumptions
BP sees the prospect of an enduring impact on the global economy as a result of the COVID-19 pandemic, with the potential for weaker demand for energy for a sustained period. BP’s management also expects that the aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy and energy system as countries seek to ‘build back better’ so that their economies will be more resilient in the future. As a result of all the above, during the second quarter, BP revised its price assumptions for value-in-use impairment testing, lowering them and extending the period covered to 2050. A summary of the group’s revised price assumptions, in real 2020 terms, is provided below:
2021 2025 2030 2040 2050
Brent oil ($/bbl) 50  50  60  60  50 
Henry Hub gas ($/mmBtu) 3.00 3.00 3.00 3.00 2.75
As disclosed in BP Annual Report and Form 20-F 2019 - Note 1, the majority of BP’s reserves and resources that support the carrying amount of the group’s Upstream oil and gas properties are expected to be produced over the next ten years. The revised assumptions for Brent oil and Henry Hub gas for the next 10 years are lower by approximately 29% and 17%, respectively than the average prices used to estimate cash flows over this period as disclosed in BP Annual Report and Form 20-F 2019 - Note 1. The revised impairment testing price assumptions are lower, on average, by approximately 27% and 31% respectively for the period from 2021 to 2050, than the prices referenced in BP Annual Report and Form 20-F 2019 - Note 1.
The group has identified Upstream oil and gas properties with carrying amounts totalling approximately $45 billion where the headroom, based on the most recent impairment tests performed, was less than or equal to 20% of the carrying value. A change in price or other assumptions within the next financial year may result in a recoverable amount of one or more of these assets above or below the current carrying amount and therefore there is a significant risk of impairment reversals or charges in that period.
The discount rates used in value-in-use impairment testing were also formally reassessed in the fourth quarter. Despite changing economic and geopolitical outlooks, as the discount rates are set using a number of parameters that are applicable to longer-term assets, the post-tax discount rate, as disclosed in BP Annual Report and Form 20-F 2019, remains unchanged. Pre-tax discount rates typically ranged from 7% to 15% (2019 7% to 13%). Post-tax premiums for certain higher-risk countries are 1% to 3% (2019 1% to 4%). The revisions to these rates did not have a material impact.

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Note 1. Basis of preparation (continued)
Provisions
The nominal risk-free discount rate applied to provisions is reviewed on a quarterly basis. Recent changes in long-dated US government bond yields have not affected the group's overall assessment of the discount rate applied to the group's provisions and therefore the rate, as disclosed in BP Annual Report and Form 20-F 2019, remains unchanged. The timing and amount of cash flows relating to the group's existing provisions were reviewed during the fourth quarter and did not change significantly compared to the provisions balance reported as at 31 December 2019.
Pensions and other post-retirement benefits
The group's defined benefit pension plans are reviewed quarterly to determine any changes to the fair value of the plan assets or present value of the defined benefit obligations. As a result of the review during the fourth quarter of 2020, the group's total net defined benefit pension plan deficit as at 31 December 2020 is $1.3 billion, a reduction in the deficit of $0.2 billion from 31 December 2019. This reduction in deficit and the overall actuarial gains of $0.3 billion during 4Q were predominantly driven by the adoption of approved assumption changes. The impact of further decreases in the UK, US and Eurozone discount rates were largely offset by asset performance and reduction in inflation rates. The current environment is likely to continue to affect the values of the plan assets and obligations resulting in potential volatility in the amount of the net defined benefit pension plan surplus/deficit recognized.
Impairment of financial assets measured at amortized cost
The estimate of the loss allowance recognized on financial assets measured at amortized cost using an expected credit loss approach was determined not to be a significant accounting estimate in preparing BP Annual Report and Form 20-F 2019. Expected credit loss allowances are, however, reviewed and updated quarterly. Allowances are recognized on assets where there is evidence that the asset is credit-impaired and on a forward-looking expected credit loss basis for assets that are not credit-impaired. The current economic environment and future credit risk outlook have been considered in updating the estimate of loss allowances although the full economic impact of COVID-19 on the forward-looking expected credit loss is subject to significant uncertainty due to the limited forward-looking information currently available.
Whilst credit risk has increased since 31 December 2019, there has also been a significant reduction in the group's trade and other receivables balance. Therefore, the total expected credit loss allowances recognized as at 31 December 2020 have not significantly increased from the amounts disclosed in BP Annual Report and Form 20-F 2019 - Financial statements - Note 21 Valuation and qualifying accounts.
The group continues to believe that the calculation of expected credit loss allowances is not a significant accounting estimate. The group continues to apply its credit policy as disclosed in BP Annual Report and Form 20-F 2019 - Financial statements - Note 29 Financial instruments and financial risk factors - credit risk.
Income taxes
None of the group's deferred tax assets in BP Annual Report and Form 20-F 2019 were determined to be a significant accounting estimate. The carrying amounts are, however, reviewed and updated quarterly to the extent that there are changes in the probability of sufficient taxable profits being available to utilize the reported deferred tax assets. The group has recognized deferred tax assets as at 31 December 2020 of $7.7 billion, an increase of $3.1 billion from 31 December 2019. The group continues to believe that the measurement of its deferred tax assets is not a significant accounting estimate.
Other accounting judgements and estimates
All other significant accounting judgements and estimates disclosed in BP Annual Report and Form 20-F 2019 remain applicable and no new significant accounting judgements or estimates have been identified specifically arising from the impact of COVID-19.
Updates to significant accounting policies
Hybrid bond issuance
On 17 June 2020, a group subsidiary issued perpetual subordinated hybrid bonds in EUR, GBP and USD for a US dollar equivalent amount of $11.9 billion. As the group has the unconditional right to avoid transferring cash or another financial asset in relation to these hybrid bonds, they are classified as equity instruments and reported within non-controlling interests in the condensed consolidated financial statements. The contractual terms of these instruments allow the group to defer coupon payments and the repayment of principal indefinitely, however their terms and conditions stipulate that any deferred payments must be made in the event of an announcement of an ordinary share or parity equity dividend distribution or certain share repurchases or redemptions.
Change in accounting policy - Interest Rate Benchmark Reform: Amendments to IFRS 9 'Financial instruments'
Financial authorities in the US, UK, EU and other territories are currently undertaking reviews of key interest rate benchmarks such as the London Inter-bank Offered Rate (LIBOR) with a view to replacing them with alternative benchmarks. Uncertainty around the method and timing of transition from Inter-bank Offered Rates (IBORs) to alternative risk-free rates (RfRs) may impact the assessment of whether hedge accounting can be applied to certain hedging relationships.
BP is significantly exposed to benchmark interest rate components e.g. USD LIBOR, GBP LIBOR, EURIBOR and CHF LIBOR. All of the group's existing fair value hedge relationships are directly affected by interest rate benchmark reform as they all manage interest rate risk. Further information about the group’s fair value hedges is included in BP Annual Report and Form 20-F 2019 - Financial statements - Note 30 Derivative financial instruments - Fair value hedges.
BP adopted the amendments to IFRS 9 and IFRS 7 ‘Financial Instruments: Disclosures’ relating to interest rate benchmark reform with effect from 1 January 2020. This first phase of amendments provides temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by interest rate benchmark reforms.

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Note 1. Basis of preparation (continued)
The reliefs provided by the amendments allow BP, in the event that significant uncertainty around the reforms arises, to assume that:
the interest rate benchmark component of fair value hedges only needs to be assessed as separately identifiable at initial designation; and
the interest rate benchmark is not altered for the purposes of assessing the economic relationship between the hedged item and the hedging instrument for fair value hedges.
In accordance with the transition provisions, the amendments have been adopted retrospectively to hedging relationships that existed at the start of the current reporting period and will be applied to new hedging relationships designated after that date.
The reliefs have meant that the uncertainty over the interest rate benchmark reforms has not resulted in discontinuation of hedge accounting for any of BP’s fair value hedges.
The second phase of IFRS amendments were issued by the IASB in August 2020 to address the financial reporting impacts of transitioning from IBORs to RfRs. These amendments will be effective for BP from 1 January 2021.The amendments have been endorsed by the EU and the UK. BP has an internal working group to monitor and manage the transition to alternative benchmark rates and are currently assessing the impact on contracts and arrangements that are linked to existing interest rate benchmarks, for example, borrowings, leases and derivative contracts. BP is also participating on external committees and task forces dedicated to interest rate benchmark reform.
Change in accounting policy - physically settled derivative contracts
In March 2019, the IFRS Interpretations Committee (“IFRIC”) issued an agenda decision on the application of IFRS 9 to the physical settlement of contracts to buy or sell a non-financial item, such as commodities, that are not accounted for as 'own-use' contracts. IFRIC concluded that such contracts are settled by the delivery or receipt of a non-financial item in exchange for both cash and the settlement of the derivative asset or liability.
BP routinely enters into forward sale and purchase contracts. As described in the group's accounting policy for revenue in BP Annual Report and Form 20-F 2019, revenue recognized at the time such contracts were physically settled was measured at the contractual transaction price and was presented together with revenue from contracts with customers in those financial statements.
BP changed its accounting policy for these contracts, in accordance with the conclusions included in the agenda decision, with effect from 1 April 2020, as follows:
Revenues and purchases from such contracts are measured at the contractual transaction price plus the carrying amount of the related derivative at the date of settlement. Realized derivative gains and losses on physically settled derivative contracts are included in other revenues.
There is no significant effect on current period or comparative information for ‘Sales and other operating revenues’ and ‘Purchases’ as presented in the group income statement, therefore no comparative information has been restated.
There is no significant effect on net assets or on comparative information for ‘Profit before taxation’ or ‘Profit after taxation’ as presented in the group income statement, therefore no comparative information has been restated.
In addition, BP chose to change its presentation of revenues from physically settled derivative sales contracts from 1 January 2020. Revenues from physically settled derivative sales contracts are no longer presented together with revenue from contracts with customers. They are now presented as other revenues. Comparative information in Note 6 for revenue from contracts with customers and other revenues have been re-presented to align with the current period.
Voluntary changes to significant accounting policies - not yet adopted
Net presentation of revenues and purchases relating to physically settled derivative contracts from 1 January 2021
As described above, BP routinely enters into transactions for the sale and purchase of commodities that are physically settled and meet the definition of a derivative financial instrument. These contracts are within the scope of IFRS 9 and as such, prior to settlement, changes in the fair value of these derivative contracts are presented as gains and losses within other operating revenues. The group has presented revenues and purchases for such contracts on a gross basis in the income statement upon physical settlement. These transactions have historically represented a substantial portion of the revenues and purchases reported in the group’s financial statements.
The group has determined that revenues and purchases relating to such transactions should, in future, be presented as a net gain or loss within other operating revenues. This will provide reliable and more relevant information for users of the accounts as the group’s revenue recognition will be more closely aligned with its assessment of ‘Scope 3’ emissions from its products, its ‘Net Zero’ ambition and how management monitors and manages performance of such contracts. In the group’s 2021 financial statements, comparative information for Sales and other operating revenues and Purchases in the consolidated income statements for 2019 and 2020 will be restated.
Change in segmentation for 2021 financial reporting
The group's reportable segments are expected to change for 2021 financial reporting consistent with a change in the way that resources will be allocated and performance assessed by the chief operating decision maker, who for BP is the chief executive officer. The group's reportable segments are expected to be Customers and products, Gas and low carbon energy, Oil production and operations and Rosneft. These are also expected to be the group's operating segments. At 31 December 2020, the group's reportable segments were Upstream, Downstream and Rosneft.
Customers and products is expected to comprise the group's convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants; and refining, supply and trading. The petrochemicals business will also be reported in restated comparative information as part of the customers and products segment up to its sale in December 2020. The customers and products segment is expected, therefore, to be substantially unchanged from the former Downstream segment with the exception of the Petrochemicals disposal.

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Note 1. Basis of preparation (continued)
Gas and low carbon energy is expected to comprise regions with upstream businesses that predominantly produce natural gas, gas trading activities and the group's renewables businesses, including biofuels, solar and wind. In the group's financial reporting for 2020, gas producing regions are part of the Upstream segment and the group's renewables businesses are part of 'Other businesses and corporate'.
Oil production and operations is expected to comprise regions with upstream activities that predominantly produce crude oil. In the group's financial reporting for 2020, these activities are part of the Upstream segment.
The Rosneft segment is expected to continue to include equity-accounted earnings from the group's investment in Rosneft.
Segmental information presented in these financial statements is based on the segment structure as at 31 December 2020.
In the group's financial reporting for 2021, comparative information for 2019 and 2020 will be restated to reflect the changes in reportable segments. It is expected that reporting under the new segment structure will begin with the first quarter 2021 interim financial statements.

Note 2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 31 December 2020 is $1,326 million, with associated liabilities of $46 million.
The balance consists primarily of a 20% participating interest from BP’s 60% participating interest in Block 61 in Oman. As announced on 1 February 2021, BP has agreed to sell this interest to PTT Exploration and Production Public Company Limited of Thailand for a total consideration of up to $2.6 billion, subject to final adjustments. Under the terms of the agreement, BP will receive $2,450 million on completion, with up to an additional $140 million receivable contingent on pre-agreed future conditions. Subject to approvals, the transaction is expected to complete during 2021. Assets of $1,298 million and associated liabilities of $10 million have been classified as held for sale in the group balance sheet at 31 December 2020.
Transactions that have been classified as held for sale during 2020, but have now completed, are described below.
Upstream segment
On 27 August 2019, BP announced that it had agreed to sell its Alaska operations and interests to Hilcorp Energy for up to $5.6 billion, subject to customary closing adjustments. The sale included BP’s upstream and midstream business in the state, including BP Exploration (Alaska) Inc., which owned BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.’s 49% interest in the Trans Alaska Pipeline System (TAPS). These assets and associated liabilities were classified as held for sale in the 31 December 2019 group balance sheet. The disposal of BP Exploration (Alaska) Inc. completed on 30 June 2020. The disposal of BP's interest in TAPS and other midstream assets completed on 18 December 2020. BP retained the decommissioning liability relating to its interest in TAPS, which will be partially offset by a 30% cost reimbursement from Hilcorp.
Downstream segment
On 29 June 2020 BP announced that it had agreed to sell its global petrochemicals business to INEOS for a total consideration of $5 billion, subject to customary closing adjustments. The assets and liabilities of the business were classified as held for sale from that date until the disposal completed on 31 December 2020. Under the terms of the agreement, INEOS paid BP a deposit of $400 million and a further $3.6 billion on completion, less $0.1 billion of third-party indebtedness remaining in petrochemicals on completion. The remaining $1 billion is payable in instalments of $100 million in each of March, April and May 2021 and $700 million by the end of June 2021 at the latest. The business had interests in manufacturing plants in Asia, Europe and the US, including interests held in equity-accounted entities. A gain on disposal of $2,270 million was recognised in the fourth quarter 2020, which included a $340 million gain relating to the reclassification of accumulated foreign exchange from reserves.

Note 3. Impairment and losses on sale of businesses and fixed assets
Impairment and losses on sale of businesses and fixed assets for the fourth quarter and full year 2020 were $1,168 million and $14,381 million and include net impairment charges of $777 million and $13,700 million respectively. Impairment charges also arose in certain equity-accounted entities in the full year. The BP shares of these charges, amounting to $847 million for the full year, are reported in the line items 'Earnings from joint ventures' and 'Earnings from associates' in the group income statement.
Upstream segment
Net impairment charges in the Upstream segment were $674 million and $12,831 million for the fourth quarter and full year respectively.
Impairment charges for the full year mainly relate to producing assets and principally arose as a result of changes to the group’s oil and gas price assumptions. They include amounts in Azerbaijan, BPX Energy, Canada, India, Mauritania & Senegal, the North Sea, and Trinidad. The recoverable amounts of the cash generating units within these businesses were based on value-in-use calculations.
Impairment charges for the full year also include amounts relating to the disposal of the group’s interests in its Alaska business.
The BP share of impairment charges arising in equity-accounted entities reported in the Upstream segment in the full year was $545 million.
Downstream segment
Net impairment charges in the Downstream segment were $104 million and $840 million for the fourth quarter and full year respectively. These principally relate to portfolio changes in the fuels business, including the conversion of Kwinana refinery to an import terminal.
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Note 4. Exploration expense
Exploration expense in the fourth quarter and full year was $214 million and $10,280 million and includes exploration expenditure write-offs of $154 million and $9,920 million respectively. All exploration expenditure is recorded within the Upstream segment.
The exploration write-offs principally arose following management's re-assessment of expectations to extract value from certain exploration prospects as a result of a review of the group's long-term strategic plan and changes in the group's price assumptions. The exploration write-offs for the full year principally arose in Angola, Brazil, Canada, Egypt, the Gulf of Mexico and India.

Note 5. Analysis of replacement cost profit (loss) before interest and tax and reconciliation to profit (loss) before taxation
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Upstream (592) 614  (21,547) 4,917 
Downstream 1,245  1,433  3,418  6,502 
Rosneft 270  503  (149) 2,316 
Other businesses and corporate 308  (1,432) (683) (2,771)
1,231  1,118  (18,961) 10,964 
Consolidation adjustment – UPII* (77) 24  89  75 
RC profit (loss) before interest and tax* 1,154  1,142  (18,872) 11,039 
Inventory holding gains (losses)*
Upstream 20  —  17  (8)
Downstream 650  (21) (2,796) 685 
Rosneft (net of tax) 25  31  (89) (10)
Profit (loss) before interest and tax 1,849  1,152  (21,740) 11,706 
Finance costs 749  886  3,115  3,489 
Net finance expense relating to pensions and other post-retirement benefits 10  17  33  63 
Profit (loss) before taxation 1,090  249  (24,888) 8,154 
RC profit (loss) before interest and tax*
US (21) (1,603) (4,016) (2,759)
Non-US 1,175  2,745  (14,856) 13,798 
1,154  1,142  (18,872) 11,039 

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Note 6. Sales and other operating revenues
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
By segment
Upstream 7,742  13,955  34,197  54,501 
Downstream 41,513  64,251  162,974  250,897 
Other businesses and corporate 422  538  1,716  1,788 
49,677  78,744  198,887  307,186 
Less: sales and other operating revenues between segments
Upstream 3,963  6,823  17,130  27,034 
Downstream 486  384  158  973 
Other businesses and corporate 439  428  1,233  782 
4,888  7,635  18,521  28,789 
Third party sales and other operating revenues
Upstream 3,779  7,132  17,067  27,467 
Downstream 41,027  63,867  162,816  249,924 
Other businesses and corporate (17) 110  483  1,006 
Total sales and other operating revenues 44,789  71,109  180,366  278,397 
By geographical area
US 15,980  24,148  63,829  95,495 
Non-US 33,886  54,450  134,945  208,031 
49,866  78,598  198,774  303,526 
Less: sales and other operating revenues between areas 5,077  7,489  18,408  25,129 
44,789  71,109  180,366  278,397 
Revenues from contracts with customers(a)
Sales and other operating revenues include the following in relation to revenues from contracts with customers:
Crude oil 1,185  1,880  5,048  9,141 
Oil products 16,216  25,946  63,564  102,408 
Natural gas, LNG and NGLs 3,252  4,871  12,726  18,909 
Non-oil products and other revenues from contracts with customers 2,608  2,878  9,840  12,169 
Revenue from contracts with customers 23,261  35,575  91,178  142,627 
Other operating revenues(b)
21,528  35,534  89,188  135,770 
Total sales and other operating revenues 44,789  71,109  180,366  278,397 
(a)    Amounts shown for revenue from contracts with customers and other operating revenues for fourth quarter and full year 2019 have been represented to align with the current period. See Note 1 Change in accounting policy - physically settled derivative contracts for further information.
(b)    Principally relates to physically settled derivative sales contracts.

Note 7. Depreciation, depletion and amortization
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Upstream
US 818  1,150  3,772  4,672 
Non-US 1,679  2,371  7,447  9,560 
2,497  3,521  11,219  14,232 
Downstream
US 337  343  1,359  1,335 
Non-US 411  417  1,631  1,586 
748  760  2,990  2,921 
Other businesses and corporate
US 19  14  63  55 
Non-US 162  139  617  572 
181  153  680  627 
Total group 3,426  4,434  14,889  17,780 
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Note 8. Production and similar taxes
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
US 17  89  57  315 
Non-US 211  323  638  1,232 
228  412  695  1,547 

Note 9. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit (loss) for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. No share buybacks were carried out during the quarter. A total of 120 million ordinary shares were repurchased for cancellation in the full year, as part of the share buyback programme announced on 31 October 2017. The shares had a total cost of $776 million, including transaction costs of $4 million. The number of shares in issue is reduced when shares are repurchased.
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury stock method.
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Results for the period
Profit (loss) for the period attributable to BP shareholders 1,358  19  (20,305) 4,026 
Less: preference dividend   —  1 
Profit (loss) attributable to BP ordinary shareholders 1,358  19  (20,306) 4,025 
Number of shares (thousand)(a)(b)
Basic weighted average number of shares outstanding 20,233,240  20,254,234  20,221,514  20,284,859 
ADS equivalent 3,372,206  3,375,705  3,370,252  3,380,809 
Weighted average number of shares outstanding used to calculate diluted earnings per share
20,329,326  20,351,808  20,221,514  20,399,670 
ADS equivalent 3,388,221  3,391,968  3,370,252  3,399,945 
Shares in issue at period-end 20,264,027  20,241,170  20,264,027  20,241,170 
ADS equivalent 3,377,337  3,373,528  3,377,337  3,373,528 
(a)Excludes treasury shares and includes certain shares that will be issued in the future under employee share-based payment plans.
(b)If the inclusion of potentially issuable shares would decrease loss per share, the potentially issuable shares are excluded from the weighted average number of shares outstanding used to calculate diluted earnings per share. The numbers of potentially issuable shares that have been excluded from the calculation for the full year 2020 are 101,450 thousand (ADS equivalent 16,908 thousand).

Issued ordinary share capital as at 31 December 2020 comprised 20,344,625,660 ordinary shares (31 December 2019 20,372,762,750 ordinary shares). This includes shares held in trust to settle future employee share plan obligations and excludes 1,105,156,692 ordinary shares which have been bought back and are held in treasury by BP (31 December 2019 1,163,077,064 ordinary shares).
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Note 10. Dividends
Dividends payable
BP today announced an interim dividend of 5.25 cents per ordinary share which is expected to be paid on 26 March 2021 to ordinary shareholders and American Depositary Share (ADS) holders on the register on 19 February 2021. The ex-dividend date will be 18 February 2021. The corresponding amount in sterling is due to be announced on 15 March 2021, calculated based on the average of the market exchange rates for the four dealing days commencing on 9 March 2021. Holders of ADSs are expected to receive $0.315 per ADS (less applicable fees). The board has decided not to offer a scrip dividend alternative in respect of the fourth quarter 2020 dividend. Ordinary shareholders and ADS holders (subject to certain exceptions) will be able to participate in a dividend reinvestment programme. Details of the fourth quarter dividend and timetable are available at bp.com/dividends and further details of the dividend reinvestment programmes are available at bp.com/drip.
Fourth Fourth
quarter quarter Year Year
2020 2019 2020 2019
Dividends paid per ordinary share
cents 5.250  10.250  31.500  41.000 
pence 3.917  7.825  24.458  31.977 
Dividends paid per ADS (cents) 31.50  61.50  189.00  246.00 
Scrip dividends
Number of shares issued (millions)   —    208.9 
Value of shares issued ($ million)   —    1,387 

Note 11. Net debt
Net debt* Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Finance debt(a)
72,664  67,724  72,664  67,724 
Fair value (asset) liability of hedges related to finance debt(b)
(2,612) 190  (2,612) 190 
70,052  67,914  70,052  67,914 
Less: cash and cash equivalents 31,111  22,472  31,111  22,472 
Net debt 38,941  45,442  38,941  45,442 
Total equity 85,568  100,708  85,568  100,708 
Gearing* 31.3% 31.1% 31.3  % 31.1  %
(a)The fair value of finance debt at 31 December 2020 was $76,092 million (31 December 2019 $69,376 million).
(b)Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $236 million (fourth quarter 2019 liability of $601 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments.

As part of actively managing its debt portfolio, on 18 December 2020 BP exercised its option to redeem finance debt with an outstanding aggregate principal amount of $2.0 billion on 22 January 2021. In addition, in the third quarter, the group bought back $4.0 billion equivalent of euro and sterling bonds and terminated derivatives associated with the debt bought back. These transactions have no significant impact on net debt or gearing.
On 17 June 2020 the group issued perpetual hybrid bonds with a US dollar equivalent value of $11.9 billion. See Note 1 for further information.

Note 12. Inventory valuation
A provision of $216 million was held against hydrocarbon inventories at 31 December 2020 ($290 million at 31 December 2019) to write them down to their net realizable value.

Note 13. Statutory accounts
The financial information shown in this publication, which was approved by the Board of Directors on 1 February 2021, is unaudited and does not constitute statutory financial statements. Audited financial information will be published in BP Annual Report and Form 20-F 2020.


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Additional information
Capital expenditure*
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Capital expenditure on a cash basis
Organic capital expenditure* 2,949  3,958  12,034  15,238 
Inorganic capital expenditure*(a)(b)
542  151  2,021  4,183 
3,491  4,109  14,055  19,421 
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Organic capital expenditure by segment
Upstream
US
566  1,029  3,341  4,019 
Non-US
1,463  2,029  6,009  7,885 
2,029  3,058  9,350  11,904 
Downstream
US
237  258  632  913 
Non-US
527  522  1,698  2,084 
764  780  2,330  2,997 
Other businesses and corporate
US
14  15  80  47 
Non-US
142  105  274  290 
156  120  354  337 
2,949  3,958  12,034  15,238 
Organic capital expenditure by geographical area
US
817  1,302  4,053  4,979 
Non-US
2,132  2,656  7,981  10,259 
2,949  3,958  12,034  15,238 
(a)On 31 October 2018, BP acquired from BHP Billiton Petroleum (North America) Inc. 100% of the issued share capital of Petrohawk Energy Corporation, a wholly owned subsidiary of BHP that holds a portfolio of unconventional onshore US oil and gas assets. The entire consideration payable of $10,268 million, after customary closing adjustments, was paid in instalments between July 2018 and April 2019. The amounts presented as inorganic capital expenditure include $3,480 million for the full year 2019 relating to this transaction.
(b)Fourth quarter and full year 2020 includes a $500 million deposit in respect of the strategic partnership with Equinor. Full year 2020 includes $1 billion relating to an investment in a 49% interest in the group's Indian fuels and mobility venture with Reliance industries. Full year 2020 and 2019 also include amounts relating to the 25-year extension to our ACG production-sharing agreement* in Azerbaijan.



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Non-operating items*
Fourth Fourth
quarter quarter Year Year
$ million 2020 2019 2020 2019
Upstream
Gains on sale of businesses and fixed assets 256