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

Hello and welcome to BP's Fourth Quarter and Full Year 2012 Results Webcast and Conference Call. I'm Jessica Mitchell, BP's Head of Investor Relations and joining me today are Bob Dudley, our Group Chief Executive and Brian Gilvary, our Chief Financial Officer. Before we start, I'd like to draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors that we note on this slide and in our U.K. and SEC filings. Please refer to our Annual Report, Stock Exchange Announcement, and SEC filings for more details. These documents are available on our website. Thank you and now over to Bob.

Thank you, Jess and good afternoon or good morning everyone, depending on where you are in the world. As you all know, the last few weeks have been a very traumatic time for us following the atrocity of the Amenas joint venture in Algeria. It is also been a terrible blow for our partners in the joint venture; Statoil and Sonatrach and for the contracting companies involved. Of the people who lost their lives; four BP employees and five Statoil employees lost their lives along with contractors and partners; many of them close colleagues and friends. BP is a large, but tightly knit company. People were murdered in what should have been an ordinary day of work and we feel the loss deeply. The shockwaves have been felt not only within the companies involved, but around the industry as a whole. The event was a painful and tragic reminder of the importance of what we do. Our industry has a high profile. We operate at many different countries and cultures. We work in challenging physical environments and we deal with multiple hazards. This event has highlighted the risk that we face from time to time and as an industry, we must learn from it. I would like to thank governments and companies for the close cooperation during the incident. BP is a company that has been tested to the utmost, but we have resilient committed people. I believe we are equal to the test we face in this event that will simply underscore our determination to run our operations that are safe, secure, enabled to delivery energy for customers and value for shareholders. I think today’s presentation will show some of the drivers of work in our business to achieve this outcome. So turning to our full-year results, today you…

Thank you, Bob. I will start with an overview of the fourth quarter financial performance. BP’s fourth quarter underlying replacement cost profit was $4 billion down 20% on the same period a year ago and 23% lower than the third quarter. Compared to the fourth quarter of 2011, the result reflected lower production due to divestments, production sharing agreements impacts, a natural field decline, probably offset by major project delivery. A lower contribution from TNK-BP as it became an asset held for sale following the agreement with Rosneft, meaning only 21 days of underlying income was recognized. A $430 million negative consolidation adjustment to eliminate unrealized profit in inventory, partly offset by the positive impact of stronger refining margins. As a reminder, the consolidation adjustment relates to the unrealized profit from upstream equity crude that is held in our refinery inventories with the volumes held in the fourth quarter increasing significantly compared to the third quarter. Fourth quarter operating cash flow was $6.3 billion, which included the final payments of $860 million into the Gulf of Mexico trust fund. And as Bob mentioned moments ago, full year 2012 underlying replacement cost profit was $17.6 billion, down 19% on 2011. This included a record contribution from the downstream of $6.4 billion pre-tax with another year of underlying profit growth from that business. The fourth quarter dividend payable in the first quarter of 2013 is $0.09 per ordinary share, an increase of 12.5% year-on-year. Turning to the highlights at the segment level; for the upstream, the underlying fourth quarter replacement cost profit before interest and tax was $4.4 billion compared with $5.9 billion a year ago and $4.4 billion in the third quarter. The result versus a year ago largely reflects a decrease in production of around 7%, primarily due to divestments…

Thank you, Brian. Turning to safety and risk management, some say we are now too attentive to this, but let me be clear, this is good business, both for the near-term and the years ahead. Our approach brings together our operating management system or OMS and our BP values; safety, respect, excellence, courage, and one team. The first defines what we do, to set global standards that we expect across all of our operations. And the second set defines how we do it; together, they are the way we work in every BP operation around the world. We then look to three specific principles to guide us, the first is strong leadership, individuals within our businesses and operations to shape and grow a safe operating culture and who are supported by a highly capable workforce. The second is to insist upon globally consistent use of our OMS. This involves applying safety and operating procedures and rigorously assessing and managing risks, and it means always seeking to strengthen the safety and reliability of our operations through the improvement of planned people and process. And finally, we have strong self and independent assurance to confirm that we are compliant with our systems and processes. So that’s the approach, but how does this show up in our safety performance. These charts show some of our safety statistics, across the trend shown here only one lines of safety performance, and we know there is always more to do however, I do take some encouragement from these metrics. The first is losses of primary containment shown on the right slide. These records losses down to very small releases, 2012 showed the 19% reduction on 2011 continuing in multi-year improvement. also on the right slide, we track process safety events, the American Petroleum Institute or API…

(Operator Instructions)

. .: . Alejandro A. Demichelis – Exane Ltd.: Good afternoon gentlemen and a couple of questions from me. Well you’ve said that you remain prepared to settle the civil claims and the reasonable terms, that which the discussions are still on going, or if you’re just waiting for the start of the trial at this point. The second question is on the pension situation maybe to Brian, with $260 million impact on a quarterly basis over the growth higher, would you be able to bridge the gap between the labyrinth of the assets or do you need to think that we need to extend that into 2014 as well?

Thanks Alejandro. On your question about the trial which is starting, it’s really 20 days away right now, so our teams are working very hard to prepare for the trial and I think that’s probably all I can say, right now, I think we had numerous settlements over the last two years with our partners, with the Plaintiffs’ Target Steering Committee, and the Department of Justice and the SEC in December. And I think we’re now heading right down to the trial for the civil proceedings and our team is very, very prepared.

Yes, so Alejandro and the question you are asking, I presume this is around IAS 19 which is a new accounting standard that we’d be adopting through 2013. It won’t impact our funding plans. We’ll continue to invest in the fund’s around about $1.3 billion per annum, what it does is effectively reduce the discount rates, it is a classic example of what the accounting treatment is come into use of discount rates rather than return on equity is based on our bond rate, and on that basis we will be discounting something like 4.4% to the UK scheme, 3.2% for the U.S. scheme. It does have an impact in terms of how we report earnings. It has no impact in terms of how we fund the plans. And I think the key here is it’s a classic accounting rule that has no economic sense or resembling for sense but nevertheless we are introducing that as one of the accounting standards, but it will have no cash impact. And I think given the Company is very much focused on cash; this will have no impact on cash going forward. Alejandro A. Demichelis – Exane Ltd.: Okay that’s very clear. Thank you.

Right. The next question is from Doug Terreson from ISI. Go ahead, Doug. Doug Terreson – ISI: Good afternoon everybody and congratulations on your results.

Thank you Doug. Doug Terreson – ISI: Bob, you have extensive experience in the integration process, some major strategic activities in this industry, and obviously the record of value creation at TMK-BP speaks for itself. And so, while you highlighted the fast forward for Rosneft, my question regards to level of involvement that yourself and some of the other senior leaders of BP are likely to have in the areas that will drive the growth in return to profile at the new Russian company.

Yes Doug thanks. So we are in the approval processes right now. We are working our way through a couple of government approval, so but all those seem to be on track right now. I have been asked to be part of an integration steering committee with Rosneft along with Igor Sechin and there will be some others who joining I have no doubt that there will be a number of very well known consulting firms that also have experience in merger integration are beginning to work on pieces of this, there will be this work underway on the downstream, there’s work underway on the upstream, and I think right now, the emphasis on the integration is to get the companies ready for day one, which means being able to merge the books, close the books, control the assets, and then building organizational structure. So while a lot of that is quietly going on, of course, it’s very much going on, and I think we do have experience in that. We know that TNK-BP company and assets so we’ll have, I would say a small, but very experienced group of people that are working on this now. And then as we go forward, after the closing and depending on the structures of where the assets are grouped, I have no doubt, with some of that experience of being able to identify where the real talent in TNK-BP is and things like waterflooding, artificial lift work, and sort of a focused exploration program will happen. And I think I would just like to say everyone stay tuned. Doug Terreson – ISI: Okay, good. And then also Brian highlighted of around $5 billion of lost profits related to the upstream divestitures, and on this point, I want to see where do you have the similar figure for the downstream and specifically any inside on the profit reduction from the divestitures in U.S. downstream last year?

Yeah, Doug. And I think it’s the other course is always a function of what the refining margin environment looked like, it was quite attractive at least fourth quarter and the third quarter, and the $5 billion figure that we gave you is really a group figure, it's not specific to the upstream.. Doug Terreson – ISI: Okay

We talked about volumes but at the end of the day, I think it's good to get these two refineries behind us, we wouldn't have seen them as strategic assets to invest in, and actually in terms of Texas City the cash flow out of those negligible for the year. So I think this is a good thing to have behind us in terms of rather disposables and the proceeds came in last week. Doug Terreson – ISI: So $5 billion did include downstream.

It did that's correct. Doug Terreson – ISI: Okay thanks a lot.

The next question comes from Jason Gammel of Macquarie. Jason D. Gammel – Macquarie Capital: Yes, thank you Rob. My question comes back to the expectations for the cash flow accretion over the next two years, and how that will actually affect the shareholder Bob, you referenced with the dividend rate that was announced last year, rewarding would have been very patient shareholders, when you look at the cash flow growth, how do you now expect to divide that up between increased capital investment, which you provide us in detail on today, and what cash actually goes back to the shareholders versus strengthening the balance sheet?

Brian and I would just going through this, I'm going to ask Brian to tackle that and I will come back at the end with a few points.

Yes thanks Jason, the background to this is when we laid the target in the 10-point plan in October of 2011, we started with a base of $22 billion of operating cash and we said that that would grow by 50%, so it takes you to $33 billion in the original 10-point plan and we said 50% to that would go into capital, and we will held that number around about $24 billion, $25 billion with the base in capital is $19 billion, so that would increase by 50%. And we said the remaining $5 billion to $5.5 billion would be available for other purposes, now since that was out there, the revised figures are now $30 billion to $31 billion, (inaudible) says that there is still cash available for the purposes, which will underpin the dividend in terms of future and the rest of dividend policy. The difference in the $33 billion to $31 billion and $30 billion to $31 billion is basically the fact that we swapped the dividend out of TNK-BP for dividend in Rosneft, effectively we have accelerated six to seven to eight years worth of dividends out of TNK-BP’s product transaction, which is $12.3 billion of cash we will receive on the close of that transaction, and also this flexibility inside those numbers around and they help natural gas prices, and so the figure now so its actually there is still surplus cash available for growth in other purpose of distribution, and also of course we have had since then the criminal settlement with the DoJ and that has a payment schedule over the next five years that sits inside the $30 billion to $31 billion.

And Jason I would just add, we have more projects than we can do over the next 15 years and so what we have signaled with our levels of capital investment, we do need to reinvest in the upstream most certainly, but we want to signal a lot of discipline framework there that paces that capital spending, so that we can be sure that we do have incremental free cash flow for our shareholders. The other thing that will be part of this in terms of shareholders as we have said after the closing of Rosneft transaction that we will ensure that the shareholders have not been diluted by the transaction, and after the closing we will lay out steps that will take, which should be certainly before the middle of the year. Jason D. Gammel – Macquarie Capital: And if I can just follow very quickly then, outside of the potentially anti-diluted measures related to the TNK transaction, will the dividend be the primary focus for returning cash to the shareholders or would you be considering repurchases at this point?

Well, I think we are considering both actually and I think a special dividend is unlikely given the progressive nature we want to manage with the cash, but I think you would see us considering both. Jason D. Gammel – Macquarie Capital: Very clear thanks.

Okay. Jason, good job on CNBC today, I saw you talking about the industry.

All right. The next question comes from Oswald Clint of Sanford Bernstein. Oswald C. Clint – Sanford C. Bernstein: Good afternoon thank you. Could I maybe just focus on the reserve replacement number, I know it’s a point in time, but just one thing to know if that’s mostly a low number on the back of low U.S. gas this year, but also maybe think about this year, if you’re starting to drill at your Utica position in terms drilling inventory, would you expect to be able to book any of that at the end of 2013. And then secondly maybe just a question on – down in Iraq with some of the recent news article et cetera talking about various companies thinking about their projections and targets, is there anything we should be aware of in terms of your project there, thank you.

Okay thank you, Oswald. Let me start from the back and move up with Iraq. We continue to move the production up the Ramayla field; it’s between 1.4 million and 1.5 million barrels a day today. As other companies have, we have been in discussions with the Iraqi Federal authorities about – we’ve given them as many as four different options in terms of plateau rates and enhanced development in the field and those talks are ongoing in a very sensible way. So I wouldn’t expect any news right away on that, and I think that relates to the export assets in the country and what they are capable of debottlenecking in time and that’s probably what’s happening all across the south here. On reserve replacements this year, we’ve said that we will announce the details of that with our annual report, our 20-F to be published in early March. We expect our reserve replacement ratio to be in the range of 75% to 85% excluding acquisitions and divestments. We will do that – we're going to look at that on a combined basis of all the subsidiaries and equity accounting entities. We think the number will be below 100% most likely, main reason for that is in 2012, we FID’ed only three projects and we expect to on average over the last five years, we have FID’ed about eight projects. During 2013, we should be up to the 5 to 6 range. The three that we did this year were not what we would call megaprojects. So that's been an impact for us in 2012. We've had a reserve replacement ratio of over 100% for the last 10 years, actually 20 years and so this is a trend, we will expect to get back to our trend here in 2013 and beyond. And on the Utica, we do have about 86,000 square acres in the Utica. We are appraising it right now and I think it's possible we might be able to book some of the Utica shale gas or shale liquids reserves in 2013, but that will be in time. We will see how the year goes. Oswald C. Clint – Sanford C. Bernstein: That's great, Bob. Thank you.

Okay, thanks Oswald.

Over to the U.S., Robert Kessler from Tudor, Pickering. Do you want to go ahead Robert? Robert Kessler – Tudor, Pickering, Holt: Yeah sure. I just wanted to go back to follow-up on the cash balances for 2014, make sure we’ve got the numbers right. If I look at your cash flow guidance, okay let’s take the high-end of the range there, 31, and low-end if your CapEx guidance at 24, just to get to the current dividend payment, and I know you’ve got a big slug of cash coming of course, with TMK-BP and some other ongoing asset sale proceeds of $2 billion or $3 billion a year, but are we to assume that you’re going to use that to support the dividend growth and if so where do you see your new target? I mean, I know you’ve got the band of 10% to 20%, but are we likely to see you hover at the higher-end of that gearing range going forward to support this distribution strategy?

Yeah, so I think – Bob, I think I’ll take them. So I think the key is first of all cash break-even, that we’re cash break-even the $80 to $100 a barrel fully loaded with the disposal proceeds going forward over this period of time. So the dividend is more than covered by the cash flow within the existing financial frame. I think what we have here is flexibility around what we do with cash in 2014 and I think rarely we need to give a clear picture of what happens beyond 2014 in terms of free cash flow generation, but after 2014 existing dividend is underpinned. We can be progressive with that going forward, but that’s really a matter for the Board and with the context of the environment that we’re in at the time. It’s that something which is considered by the Board around the results. And so I think the key is as you said, you saw the $2 billion to $3 billion of disposal proceeds. We have a script dividend, which is typically round about 20% take-up, so the cash dividend is about 80% of what we actually declare as a dividend. And I think there is still flexibility out in 2014 around surplus cash and I think Bob has said already that we’ll have the issue in the first half of this year around the cash proceeds that come into TNK transaction will be an opportunity for us to look at the options as Bob described around progressive dividend and potentially shrinking the share base which thereby of course also impacts the overall cash dividend at the company. Robert Kessler – Tudor, Pickering, Holt: And thoughts on whether you might get the high-end of the gearing band in 2014?

Right now based on where the oil price is in terms of our plan assumptions, we will continue to see the gearing drift down probably towards the top end to the lower half range. So it will be in the top end of the 10% to 15% range, would be in these existing plants that we have today. Robert Kessler – Tudor, Pickering, Holt: And one last one, what oil price are you using for that?

$100 a barrel. Robert Kessler – Tudor, Pickering, Holt: Okay, thank you.

In longer term, we will continue to re-assess that gearing range of 10 to 20 up in time when we go through this period of transition, we might move that out.

I am going to come back and try Hootan again; I think he is back on the line. Hootan, are you there? Hootan Yazhari – Bank of America Merrill Lynch: Hello.

Hello. Hootan Yazhari – Bank of America Merrill Lynch: Am I coming through or not?

Yes, you are coming through. Go ahead. Hootan Yazhari – Bank of America Merrill Lynch: Good, all right. Sorry about that, phone issues, but here we go. Just coming back to disposals, your $2 billion to $3 billion run rate has guided going forward from here. It’s sort of you’re also indicating that you might have too much on your plate in terms of investing. What sort of scope is there for that $2 billion to $3 billion run rate to increase in the coming years, especially given the very attractive realizations you’ve made on asset disposals? And then going back to the civil case, which is coming up on 25th of February, I just wanted to see in terms of underlying negotiations, whether we should see some sort of a split negotiation going on? First that you would reach a resolution on the Clean Water Act separately from what’s going on with the natural resources thus, and their respective states that you’re going to port with? Thank you.

Okay Hootan, thank you. We were worried about you for a while there. On the disposal of the $2 billion to $3 billion, I mean that’s not an insignificant set of disposals going forward. We will continue to work through that in time. Right now, we do have a lot in our play, but we also think we have paced them out and separated them out and there are things out later in the decade that I think we could consider, but we are right now not – I don’t think we have too much on our plate. I think we have balanced it well, with capability and the projects identified, but we may divest projects at different points in their life cycle coming up, but they are not in our plans right now. On the trial in the 25 of February, obviously it’s nothing we can talk about in terms of settlement discussions at all. I just note that they are 20 days to go and that’s not very long and our efforts are really focused on getting ready for the trial. So I think anything is possible but I can’t give you any real sufficient light on your questions, as you’d expect right now, but thanks for your time. Hootan Yazhari – Bank of America Merrill Lynch: Understood, thank you.

Right, so turning now to Jon Rigby from UBS. Jon Rigby – UBS: Yes, hi. Two questions please. The first one just going back to I think on the first questions around TNK-BP and Rosneft. Correct me if I am wrong, but it seems to me that the great sort of distinguishing feature of TNK-BP within Russia was the people and the processes that were taking place there. I mean you always spoke about how that organization kept motoring on even when the management problems were happening. And I’m just wondering as you step back from it, how you ensure that those good people and good processes continue into the combined Rosneft group, because it would seem, I guess to loose that and also I would – thought that applying those people and processes to the combined base would be where you get the vast proportion of your merger synergies from. I think that’s in the context of your relationship with ARR, of course leaving completely. The second question just is a confirmation and you talked about the $1 billion of cash flow benefit from the Whiting modernization project. Can you just remind me what macro functions you’re making around the spreads between crude oil prices to the basis of that $1 billion? Thanks.

So John thanks. Both good questions and I'll ask Brian answer the one on the Whiting refinery. Your spot on TNK-BP, when you benchmark the Russian oil industry and I have lots of discussions with Rosneft about that. TNK-BP benchmark is very well in terms of efficiency. And what has been able to do in terms of ringing out additional reserve additions to the oilfields in Russia as well as very tight controlled centralized exploration processes and accounting processes that allowed the venture really to keep up and close IFRS books at the same pace as with BP. So being able to retain both the business processes and the people who know how to run them is very important. And clearly when time of a merger as with any company and probably most of you all know this, in times of merger there is a lot of uncertainty. But there is a lot of discussion about just exactly what you describe, how do we maintain some of the business processes that drive a lot of efficiency and be able to make a merger happen simply. And then secondly identifying good people, best people to be able to work in new organization, so that the assets certainly are just not left alone. And I am confident that that’s not going to happen and that many of those really world class, as good as any business processes will remain. But like in any merger there will be less stories and lots of headlines I suspect, but actually it’s been the approach path has been remarkably smooth so far. And Brian you might…

Jon Rigby – UBS: If it was just looking back at sort of historical trends at or around the points which you FID’ed the project in the first place that you’re guiding to, is that the kind of background that you're looking at?

Yeah, we've done that because actually the assumption we made is that the pipelines will be built, therefore that light, heavy spread would narrow over time. So we’re confident that the $1 dollars will be there based on the historicals that we've looked out in the name build of that number. And I will actually also say it's probably worth counting of course with the heavy oil position in Canada, effectively between the two positions, we pretty much know how a hedge or if you like that the value can now move between the two assets as that light heavy moves out and comes back in again. Jon Rigby – UBS: Thanks.

The next question comes from Theepan Jothilingam from Nomura. Go ahead Theepan. Theepan Jothilingam – Nomura International Plc: Yeah, thanks, Jess. Good afternoon, couple of questions. Firstly, sort of come back to that point on gearing, to be clear are you saying that it’s beyond let’s say the cash in for Russia, a potential settlement in the U.S., then you sort of anticipate that gearing low moving back sort of towards the high-end of the 10% to 20% and then if that is the case, is that a mix of a higher organic spend, potential use of M&A to both sort of portfolio or is that cash return back to investors? The second question sort of link to that I guess is the position in the U.S. and in unconventionals, could you talk about how much investment BP would be willing to pay into that business? What sort of growth we expect both sort of the 2013, and then over the next few years and whether you need to add on the liquid acreage side? Thank you.

Theepan, I’ll just give you a quick introduction on the gearing and then Brian follow it up and then I’ll come back on the unconventionals. But I will say on the gearing my comment was many of our shareholders have said as you move through a period of transition is 10% to 20%, the most efficient range you should be and would you be open to increasing that range from 20% to 30%. And what we have said is that for now, 10% to 20% is the range, but as we move through this period, which I would say is through 2014, then we will reconsider that range, because I think it’s a question about, is that the most efficient range for us. So, Brian?

Yeah. And I think Theepan, the context here is of course historically the range that varies upright within financial frame for the best part of a decade. Prior to the first quarter 2010 it was a gearing range of 20% to 30%. We directionally move that to 10% to 20% while we have major uncertainties around cash outflows in the United States, of course, a lot of those uncertainties have now been resolved, not withstanding the coal case which is due to 25 of February. So I think what Bob is alerting you to is that, once we get all uncertainties resolved, there is a formal useful use of cash, gearing is netted as a way to do that. So I wouldn’t read too much into that, in some of the existing plants we have today post the closure of Rosneft, the gearing will track naturally down like 2014 into 10% to 15% range. And of course that just means that we have a very strong balance sheet which gives us a huge amount of flexibility going forward. And I think with the economic outlook that we see today that’s actually a very good thing to have in your armory.

Theepan on unconventionals in the U.S., it’s interesting to note that in the second quarter of last year, gas prices were $1.90 roughly and now they are up to $3.30, but for BP which has a very large gas position in North America, we have reduced the number of operating rigs that we’ve had from 24 in 2010, down to 12 in 2011 and at the year end of 2012, now, we are only down to five rigs. We have reduced our activity to zero rigs and then drive gas basins and we have changed our portfolio by moving out of the mature basins, [Hugoton], and the Jonah and the Anadarko gas plants for example, and we’ve been moving into the liquid rich areas of the Eagle Ford in Texas and Utica in Ohio and we will further continue to shift our investments to the liquid rich areas. We will retain the optionality on the dry gas acreage and I think for BP right now, it’s a question mark, what will happen is a lot of gas in the U.S., it’s still a question mark, I think the U.S. were to eliminate, to a degree export it, but we are adjusting both the portfolio in the investment levels to suit what we see there and the gas markets now are very regional around the world. Theepan, is that…. Theepan Jothilingam – Nomura International Plc: Yeah, that’s helpful. But I was just wondering on the – I mean do you have any sort of poll it numbers in terms of what you are thinking of the production for this year and then beyond that?

Well, we’ve been careful not to give specific base introduction. I think you overall – you’re talking about the overall of the unconventionals. Theepan Jothilingam – Nomura International Plc: Yeah, just unconventionals on the U.S. liquid site in the U.S., just trying to get a sense of what it may contribute to underlying growth this year, and beyond.

It’s not significant in the Utica, most certainly in the Eagle Ford we got a healthy production there, but I don’t have the exact figure with me right now, and that may be just candid. We got to be careful about giving out the basin numbers, but in terms of a significant boost in the underlying increase in production for in the U.S., in the unconventional it’s not really material. Theepan Jothilingam – Nomura International Plc: Okay, thanks helpful. I’ll follow-up with Jess.

Yeah.

Thanks Theepan. Can we turn on to Lydia Rainforth at Barclays. Lydia R. Rainforth – Barclays Capital Securities Ltd: Thanks Jess, and good afternoon. A couple of questions, if I could please. Firstly can you just talk about the outlook for the Gulf of Mexico for the next year and what you’re seeing there? And then secondly and probably on the cost side, it does appear that certainly the cost per barrel have risen throughout the last couple of years, but there has been a lot of maintenance going on. Can you just talk to how much of that increase you think is related to maintenance and how much is actually BP doing things differently? Thank you.

Well, on an underlying basis, we are going to be flat in 2012 to 2013 in terms of our Gulf of Mexico production. We have divested roughly $50,000 barrels a day in 2012 in the Gulf of Mexico, and then we expect the production to begin to rise consistently up of to 2013 into 2014, 2015 and 2016. Our increase in spending is going to driven by what is now, last year, year ago we have five rigs running now, we are going to have seven. We're going to be moving into development drilling wells in Thunder Horse in Atlantis, water injection at Thunder Horse. We’ve got project start ups on Na Kika Phase 3. In Atlantis, the project called Atlantis 2A. And then beyond 2015, our spending will really be driven by the Thunder Horse expansion and then we've got projects start up after that Atlantis 2B, and the second phase of Mad Dog. We see oil field inflation, sector inflation running 5% to 10% broadly around the world, but very, very different depending on where you are. And I think the cost increases in the Gulf of Mexico clearly at the higher end and in some categories even higher than that. We have been doing period of plug and abandon network, it's called Idle Iron projects in the Gulf of Mexico. We will be moving now into right now where our spending is in development and injection work, injector wells and then appraisal, exploration appraisal work going forward. I think we have passed the high point, point when I look at in terms of our maintenance spending in the U.S., a number of turnarounds are going down next year. I can give you some maybe to much over the call, but some of the activities on what we are doing in terms of Atlantis, Mad Dog and Na Kika and Thunder Horse going forward, but I think what I would just say is, those are our four big hubs, we've got work to do on all of them that will continue to drive production starting in 2014 over about 2013. But still very optimistic about the Gulf of Mexico what we need to do. I will say that broadly I know this is not just BP, but the more rigs you have running, the more time and care is being taken in our industry and blow-out preventers around the world, and the downtime, not just for BP, but every operator I talk to is quite significant still in terms of blow-out testing and the time taken to drill wells. And we've got to go through a period here, where the industry goes through that phase and that's obviously affecting us in terms of rig days, but it's not just us. I could go into specifics, but probably not on the call. Does that get at your question Lydia? Lydia R. Rainforth – Barclays Capital Securities Ltd.: Yes, thank you.

Yeah, okay.

All right thank you, can we go now to Elliston Simon with Citi? Go ahead Elliston. Elliston Simon – Citi: My questions are a lot very similar to the second part of Lydia’s. It was about the production cost, about the trend you’re seeing in cash costs in the upstream side in 2012 in terms of year-on-year inflation, and how you think that play's out in '13 as you have greater efficiency when you’re purchasing asset?

Yeah, it's very, very similar, 5% to 10% depending on which basin you are in. It's clearly is driving cost there for all the companies. In our case as we get back to work and we are moving up to the 15% to 25% range of number of exploration wells that we're drilling. The building of technical and engineering capabilities would work towards these 15 major projects now. It has been an increasing scope for us. Then everyone in the industry knows that the skill labor continues to be a key driver of industry cost and inflation. Our turnover of personnel is down. We hired 2000 people last year with experienced upstream people. I think we’ve passed that period now. So we do expect to remain competitive and performance through the work that we do selecting the right activities, planning it well, having effective procurement and then executing it efficiently and our eyes on that now solidly and has been now for the last year as we moved out of the basically the response on safety and reliability is as detailed priority and now we’re doing both that and the execution of projects. So I see our cost is being competitive going forward. Elliston Simon – Citi: And can you just clarify the $31 billion target in 2014, it still works with inflation in production costs, it doesn’t imply a reduced cost base as efficiency improves?

Well, we have cost efficiencies built into that target. We base that $30 billion to $31 billion based on $100 oil. So we think that is very much on track for 2014 at $100 oil and we’re not going to rebase the target. And if the costs are up because of higher oil prices, we still think we will be able to normalize back today, targeted at $100. Elliston Simon – Citi: Okay. Thank you.

All right. Moving on to Irene Himona at SocGen. Go ahead, Irene. Irene Himona – Société Générale: Yes. Good afternoon, thank you. I have three questions please. So first can you remind us of the asset disposals that you have announced, excluding TNK-BP, how much cash remains to be received in 2013? Secondly, on the U.S. unconventionals, could you give us a sense of the size of that business either on your balance sheet or production, please? And then finally on the EPA development, is it possible to discuss some of the conditions that actually need to be fulfilled for that to be lifted? Thank you.

Yeah. So Brian, on the first one.

Yeah, Irene on the first question, the disposal proceeds still yet to be received this year and of course Texas City we had proceeds coming last week, but for this year in total, we still have about $5 billion of proceeds to come in from what we announced last year, of which $1.5 billion arrived last Friday from Texas City.

Okay. Irene, your second question was on U.S. unconventionals and it cut out for a minute on the balance sheet. Irene Himona – Société Générale: It’s just the size of the business I was saying, either on your balance sheet or in terms of current production?

Yeah, we will get back to you on U.S. production, I don’t know where…. Irene Himona – Société Générale: Okay.

With that out separately, but on the size of the balance sheet, what I would say is it’s under IFRS. We have continually adjusted our and impaired the assets down with the oil price. And we did that in the second quarter of last year and then I would say, if we were to look at the oil prices today that we would some of that might come back on, but I think our balance sheet is sort of being continually adjusted under the IFRS rules. On the EPA debarment and the conditions, it has to do with sort of technicalities of the plea agreement that was reached that I think has been made public. I am going to be careful just in case it hasn’t, but certainly the outline of the plea agreement, it has something to – things to do with ensuring safety, monitoring of our operations and beyond that it’s a very, very complicated legal process that we’re involved in, and I can’t tell you exactly what the conditions would be for that. But we are going to meet our obligations, we’re going to work with the EPA which is sort of a focal point for lots of different agencies in the U.S., and I can’t tell you how long it takes, I just know it’s a very complicated process. And as I mentioned earlier, it doesn’t effect our existing operations, permitting processes in the Gulf of Mexico primarily has to do with future release sales or sales of fuel to the US government. Irene Himona – Société Générale: Okay. Thank you very much.

Yeah.

Right, the next question comes from Martin Rats of Morgan Stanley. Martin Rats – Morgan Stanley: Hi, hello. I want to ask you about two things; in the beginning you referenced the BP energy outlook 2030, which goes for quite structural energy demand over the next 20 to 30 years. But over the short and medium term, it actually goes for rather a rapid build and span capacity and a rather large reduction in the coal in OPEC. And the oil markets over the last couple of weeks, clearly has no sort of concern, feasible in the oil price. But in the scenario where that happens, and oil comes down, what’s the sort of scope for BP to respond, and I was wondering if the scenario is slowly but surely also making it’s way into your strategic planning around the CapEx and things like that. The second question, I wanted to ask revolves around legal spending, besides the sort of settlements that you’ve announced over the last 12 months, I can imagine it’s also actually the cost of running the process has been rather large and I was hoping if you could sort of give a sort of indication of the order of magnitude over that in case that sort of unwinds over the next year or two?

Martin, all good questions. I’ll take the first set and then Brian can comment here. I would say that, the energy outlook for 2030, I mean there is the fundamentals of what’s in storage today and the possibility of potential production, surplus of demand, I’d note that Saudi Arabia has produced itself production by about a 1 million barrels a day in the last quarter, and I think OPEC does continue to adjust based on these what this outlook what they see as well. We do evaluate our projects on $80 a barrel, I’ll let Brian comment on the strength of the Company should the oil price fall, which we obviously do always brace ourselves for that, and I always have, so once you comment on that, and then I’ll come back to the legal costs.

Yeah Martin in terms of stress testing, we do one stress test, and one of the stress test we run is a prolonged two year period at $80 a barrel, and we have various scenarios in place to how we would manage that around being able to make sure, we could fund the balance sheet, and manage the financial framework. I’d also comment that that’s far more comfortable from where we sit today, with our gearing today the lowest it’s being certainly since pre-Macondo, so actually the balance sheet has strengthened up over the last two or three years even with all the outgoings that we’ve seen so we are in a far more robust position today to withstand $80 a barrel, we do have various scenarios we run and we do have a whole activity plan that we have in place, but we see able to withstand that for a period of up to two years. Martin Rats – Morgan Stanley: And including the dividend absolutely.

When you say underpinning the dividend at those prices…

It’s very hard to quantify, but I think the world continues to see sort of underlying geopolitical tensions and uncertainties and that’s clearly hard to measure in the oil price, but it also seems to be a big chronic. The other thing, I would add to your question around the legal costs, I just say they are very high, it’s a very expensive system to work within to meet the obligations that we had to work through the processes, it’s very complicated, it’s very expensive. I’m looking here to see if we can say anything about it all. Yeah, so Jess has reminded me, we do have legal cost in the provisions that are there, the settlements that we have done with Plaintiffs’ attorneys have a very large legal administrative fee it goes along with those, and I would hope that in time that we could begin to see those things unwind in time as we move through the process, certainly I think I should stop there.

Well, Martin I would comment that of course, we do have the criminal and SEC settlements behind those and now agreed to of course all of the external counsel we are using in that particular space has clearly been closed down with no run rate associated with those. Martin Rats – Morgan Stanley: All right, okay. Thanks very much.

Okay Martin. We do have a very high quality legal team that are helping us through this process, I will say that for sure. Okay, Martin, thanks. Martin Rats – Morgan Stanley: Okay.

Okay, Lucas Herrmann from Deutsche, are you there Lucas? Lucas O. Herrmann – Deutsche Bank: Yeah, Jess, thanks very much. Gentlemen, can you hear me?

Perfectly Lucas. Lucas O. Herrmann – Deutsche Bank: Two or three if I might. I just want to start and forgive my ignorance, the operating cash flow guidance, $30 billion to $31 billion, how do you or within that how do you think about the provision that still fizzing on balance sheet, and potentially may flow associated with the Deepwater Horizon trial and in short, if were to reach an agreement and it was within the amount you provided, are those something included in $30 billion to $31 billion or would they be additional? Secondly, just whether you can give us some ideas of what the contribution from divested activities was in the fourth quarter i.e., what the profit for them in UK and U.S. businesses also will not be ongoing in Q1? And thirdly, if I might, could you just walk through the Whiting process and the steps associated with actually bringing that facility in the second half, that mean huge detail, I just want how much capacity in essence to that and when would you be in a position to capture full margin?

Okay. And Lucas, good questions, I’m going to let Brian on the operating cash flow guidance and contribution of the divestments?

Yes on the first question Lucas, clearly in the $30 billion to $31 billion that’s already net off anything that we’ve laid in place of the payment schedule round of the DoJ and the SEC payments are already inside that number, and of course, that number still has, if you go back to this 50% of additional cash flows at 2011 of which half is the capital half, other purposes. I think we have this on the call that we talked about the 3Q that of course, that’s the purposes can be satisfied for that, and there’s about $3 billion available, that would look to be able to cover any range of uncertainties out there including progressive dividend, and the things where we are today. So everything, which is inside the number on 2014 include anything which you’ve settled already of course the existing outgoings associated with the trial in place of course is not inside that number today. Lucas O. Herrmann – Deutsche Bank: Okay. So just to be absolute clear, maybe which I’ll agree something the $3.5 billion provision for example, you got sitting on balance sheet for Clean Water and that would be expensed over three years starting 2014, that would eat into that $30 billion to $31 billion?

That’s a hypothetical question. Lucas O. Herrmann – Deutsche Bank: Not hypothetical question.

So let me be really absolute clear, inside the $30 billion to $31 billion, there is no cash outflow associated with Clean Water Act fines and penalties. Lucas O. Herrmann – Deutsche Bank: Lovely thank you.

Lucas, your contribution of the divestments in the U.S.

Yeah, sorry Lucas, the biggest piece of course, is TNK-BP that we’re adding up 31 days of earnings, it’s a bit too lumpy to give the exact figures, because of course the assets went down to different points during the fourth quarter, we can come back to you with a sort of broad figure on what that looks like in terms of earnings, but it’s the Gulf of Mexico went out from memory half through the quarter, and then all assets spin out towards the back-end of the quarter, so it’s a bit pretty difficult to actually give you a point in time excellent to fourth quarter. Lucas O. Herrmann – Deutsche Bank: Okay.

But Lucas the fourth production impact so in the fourth quarter over 2011 was 116,000 barrels a day, so significant overall. On the Whiting project so this is a project again just this is a structurally advantage project to process Canadian heavy crudes, with a lot of flexibility there, the site construction as of this week, so it was 84% complete at the end of the year. It’s now continuous through to move through and well above 85% complete, the commissioning is on scheduled in the second half of the year and the major crude unit outage started on schedule in early November, and that will continue to be out until the middle of 2013, and I think for us the whole commissioning process will take roughly 6 to 9 months with three of the major units starting up in the sequence there. So we do anticipate that 2014 will be the first year that we get the full benefits of it, as these operations continue on in the middle of the year. I think around the middle of the year, that’s when you will see us start getting very precise about this as these units come up and on. Lucas O. Herrmann – Deutsche Bank: Okay, gentlemen thanks very much.

Okay, thanks Lucas.

And next question come from (inaudible) of Raymond James.

Yes, thank you Jessica. Two question if I may, can we expect in 2013, BP to launch of the sanction some major project you only sanctioned three projects now in 2012, you had mentioned a possible five in 2013, and can we expect as the likes of Shah Deniz or your also I’d say big opportunity to be sanctioned in 2013. And the second question is how critical would it be to BP exploration portfolio in to Gulf of Mexico, BP would not be able to participate in next March round lease in the central part of the Gulf of Mexico. Thank you.

Thanks [Batron] you are right we had three sanctions this year none of which were mega projects. We do see five sanctions in our FIDs during 2013. We normally don't lay out the FID point some sales, and I would note that some of our partners don't necessarily consider an FID as the defined gate, but we've got our eye on five projects of which four of those are very large, I will name the ones that we are clearly have been talking about, externally one is the Tangguh Train 3, and Tangguh expansion is a big one. Shah Deniz we were working through now the economics of those complicated pipelines that are so critical to the economics of that project. We're looking at Angola, Greater Plutonio Phase 3, we're looking forward to and we'll know more about India here in about a month or so. So we have got a good healthy list that I think will get us back in terms of looking at reserve additions as well as we go forward. In terms of exploration in the Gulf of Mexico today we are the largest lease holder in the Gulf, somewhere between 700 and 750 leases. It is a lot on our plate so we haven't made a decision and we haven't actually been told we cannot bid on the March lease sales, but if we don’t, it’s okay.

Okay, thank you.

Okay.

And next question from Peter Hutton at RBC. Peter Hutton – RBC Capital Markets: Good afternoon and thanks for all the details this afternoon. I was actually following on from the similar question on FID, the three that you took in 2012 to low than ‘10 rate, what (inaudible) doing, was it just sort of a kink in the pipeline of future projects or is it that BP see itself is fully loaded and enough on its plate? An then second one is, thanks for guidance on the gearing and 10% to 20% moving to 20% to 30%, but with respect to significant shareholders in Rosneft with 20%, where would BP in that division, see an appropriate gearing level for them given their risk and obligations?

Peter, first, do you think it was a kink in the pipeline. If you look historically, we have sanctioned five to eight projects a year for a decade. I think if I look back and we have been looking back very carefully of our exploration record and our exploration spending and 2009-2010 even going back a little bit before that, the amount of acreage that we were adding, and the amount of exploration drilling we do, really did dipped down, and there is always a consequence of that, and I think that’s what we were beginning to see with the kink in the pipeline, which I think is the good way to describe it. It’s not a sustained kink. I am looking at five plus sanctions in 2013 and even more in 2014 so that’s not, and there is no assumptions in there at all for exploration success as well. Gearing level, I would say it’s not guidance, it’s something we have been talking with shareholders about, and I don’t mean to give guidance, so we will as soon as possible.

The third question, I think around Rosneft and what a suitable gearing is for that business is really a question for the final structure of Rosneft, that’s not available to purchase? Peter Hutton – RBC Capital Markets: With this 20% holders, would you presumably, you would have a view, but you’ve expressed that directly to Rosneft not through to all that on list.

Yeah, that’s right. I mean, we haven’t, we don’t have the insight into the Rosneft processes yet and their Board and it wouldn’t be appropriate for us to comment on that, obviously they are taking on, everyone knows they are taking on debt for the TNK-BP transaction, but I also know these oil prices that they are capable of generating cash flow to certainly handle that in a healthy way, and also using other means of raising debts such as crude oil, trade sales, which is another way of doing it. So it’s way too early for us to comment on that. Peter Hutton – RBC Capital Markets: Okay, thank you.

Okay. And the final question then from Jason Kenney in Santander. Jason S. Kenney – Banco Santander SA: Thank you very much. So as it relate to the quarter, I can only apologize if you don’t see that a couple of these points, you’re probably announcing my first one anyway. So but I’ll give a short...

Settlement, right? Jason S. Kenney – Banco Santander SA: Yeah. So you could have viewed or what a reasonable settlement figure for the U.S. litigation would probably be, I’m just wondering if you’ve undertaken a thorough poll of what investors in BP might think a reasonable figure is, I know you’re not going to tell me either number, but are you at least able to say those two numbers are in the same ballpark or not? And the second question, a bit more traditional I suppose on North Africa, again, Canadian projects you said to me earlier on this, but what is the impact of Algeria outage and do you see any pressure for your activities in North Africa, particularly Libya near-term?

Jason, so that I can satisfy your question, because I won’t start with the settlements and the numbers, I’ll talk about North Africa and then we’ll come back on the settlement. I mean North Africa inter-maintenance was around 70,000 barrels a day for us. So you think about that with the 2.3 million barrels a day company was a good return project for us, but not significant in terms of volume terms. we do remain committed to Algeria, we’re working in In Salah as well; these are good projects for us. We are going to be very, very careful. We’re going to work closely with Sonatrach and the government along with Statoil and our contractors to make sure, conditions are right from when we go back to work in Algeria. In Libya, we have no production, we have no facilities there. We have two exploration acreages, one offshore, where our planning work continues, and then onshore, we’re down to get on the space of near the Algerian border, not too far away from where (inaudible) was. So certainly for the time being, I would say it’s in hibernation, but we also remain committed to doing business in Libya, and as an oil company, we frequently and often take on projects as does our industry in tough places around the world, and I think it’s cautioning some in the media, just not to overreact too quickly and draw conclusions after an event like that, I think that’s the mode we’re in certainly on high alert and looking at all of our facilities. We have had a healthy number of questions on settlements and numbers earlier in the call, Jason and I think we’d probably going to give you about as most satisfaction as we gave everyone else, which is really something, we can’t talk about, but I would know with the trial coming up in 20 days, we are sort of in the shoot to get ready for the trial. Jason S. Kenney – Banco Santander SA: Okay, many thanks.

Yeah.

And well, thank you everybody.

I think that is the last set of questions. I think as BP began 2013, it began to feel like we were back to a normal corporate rhythm of getting ready for the year, starting up two projects in December, getting the redevelopment of all going in January; these are all important milestones for us, we’re laying on our plans. We did get a bit of jolt with what’s happened in Algeria, the company itself as I have said is a very tight knit company, it’s big company that’s very tight knit and people knew many of the people impacted on it. But as we move that, we will go on, we will keep going on. We have got some many exciting things happening this year in terms of new projects, the Rosneft transaction is moving along, I think that’s been a problem turned into an opportunity for BP and of course the legal processes in the U.S. are quite mindboggling and it’s hard for us to say exactly where that heads, but it just feels very different than it is in 2011. It feels better than it did in 2012, I think if the company continues to move through the transition. And thank you all for your attention and questions.