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

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 þ      Form 40-F o

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):

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

Yes o       No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-157906) OF BP CAPITAL MARKETS p.l.c. AND BP p.l.c.; THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-155798) 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. 333-67206) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-103924) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-102583) OF BP p.l.c., THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-123482) 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. 333-149778) OF BP p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

BP p.l.c. AND SUBSIDIARIES
FORM 6-K FOR THE PERIOD ENDED 31 MARCH 2010(a)

				Page
1.		Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period January-March 2010(b)			3-10, 17-19
2.		Consolidated Financial Statements including Notes to Consolidated Financial Statements for the period January-March 2010			11-16, 20-24
3.		Signatures			25
4.		Exhibit 99.1: Computation of Ratio of Earnings to Fixed Charges			26
		Exhibit 99.2: Capitalization and Indebtedness			27
(a)		In this Form 6-K, references to the first quarter 2010 and first quarter 2009 refer to the three-month periods ended 31 March  2010 and 31 March 2009 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 2009.
EX-99.1
EX-99.2

BP p.l.c.
Group results
First quarter 2010

London 29 April 2010

		First quarter
										2010 vs
		2010				2009				2009
$ million
Profit for the period(a)			6,079				2,562				137	%
Inventory holding (gains) losses, net of tax			(481	)			(175	)
Replacement cost profit(b)			5,598				2,387				135	%
— Profit per ordinary share (cents)			32.39				13.69				137	%
— Profit per ADS (dollars)			1.94				0.82
— Replacement cost profit per ordinary share (cents)			29.82				12.75				134	%
— Replacement cost profit per ADS (dollars)			1.79				0.77

•

BP’s first-quarter replacement cost profit was $5,598 million, compared with $2,387 million a year ago, an increase of 135%. Replacement cost profit for the group is a non-GAAP measure. For further information see pages 4 and 16. BP’s profit for the first quarter was $6,079 million, compared with $2,562 million a year ago.

•

Non-operating items and fair value accounting effects for the first quarter had a net $49 million unfavourable impact compared with a net $194 million unfavourable impact in the first quarter of 2009. Information on fair value accounting effects is non-GAAP and further details are provided on page 18.

•

Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $228 million for the first quarter, compared with $368 million for the same period last year.

•

The effective tax rate on replacement cost profit for the first quarter was 34%, compared with 37.5% a year ago. The effective tax rate on profit for the first quarter was 34%, compared with 37.1% a year ago.

•

Net cash provided by operating activities for the first quarter was $7.7 billion, compared with $5.6 billion a year ago.

•

Net debt at the end of the first quarter was $25.2 billion. The ratio of net debt to net debt plus equity was 19% compared with 23% a year ago. Net debt information is non-GAAP and is defined on page 5. Gross finance debt at the end of the quarter was $32.2 billion compared to $34.7 billion a year ago. The ratio of gross debt to gross debt plus equity was 23%, compared with 28% a year ago.

•

Total capital expenditure, including acquisitions and asset exchanges, for the first quarter was $4.7 billion. Organic capital expenditure(c) in the first quarter was $3.8 billion. Disposal proceeds were $0.1 billion for the first quarter. For 2010 as a whole, we continue to expect organic capital expenditure of around $20 billion and disposal proceeds of $2-3 billion.

•		The quarterly dividend, to be paid on 21 June 2010, is 14 cents per share ($0.84 per ADS), the same as a year ago. The corresponding amount in sterling will be announced on 8 June 2010. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the scrip dividend programme are available at www.bp.com/scrip.
(a)		Profit attributable to BP shareholders.
(b)		Replacement cost profit reflects the replacement cost of supplies and is the measure of profit or loss for each operating segment that is required to be disclosed under International Financial Reporting Standards, as explained in more detail on page 16. The replacement cost profit for the period is arrived at by excluding from profit inventory holding gains and losses and their associated tax effect. Replacement cost profit for the group is not a recognized GAAP measure.
		Management believes this information is useful to illustrate to investors the fact that crude oil and product prices can vary significantly from period to period and that the impact on our reported result under IFRS can be significant. Inventory holding gains and losses vary from period to period due principally to changes in oil prices as well as changes to underlying inventory levels. In order for investors to understand the operating performance of the group excluding the impact of oil price changes on the replacement of inventories, and to make comparisons of operating performance between reporting periods, BP’s management believes it is helpful to disclose this information.
(c)		Organic capital expenditure excludes acquisitions and asset exchanges and the accounting for our transaction with Value Creation Inc. (see page 15).

 

The commentaries above and following should be read in conjunction with the cautionary statement on page 10.

 

Analysis of replacement cost profit before interest and tax and
reconciliation to profit for the period

		First quarter
		2010				2009
$ million
Exploration and Production			8,292				4,320
Refining and Marketing			729				1,090
Other businesses and corporate			(328	)			(761	)
Consolidation adjustment			208				(405	)
RC profit before interest and tax(a)			8,901				4,244
Finance costs and net finance income or expense relating to pensions and other post-retirement benefits			(228	)			(368	)
Taxation on a replacement cost basis			(2,966	)			(1,454	)
Minority interest			(109	)			(35	)
Replacement cost profit attributable to BP shareholders			5,598				2,387
Inventory holding gains (losses)			705				254
Taxation (charge) credit on inventory holding gains and losses			(224	)			(79	)
Profit for the period attributable to BP shareholders			6,079				2,562

Total of non-operating items and fair value accounting effects_(a)(b)

		First quarter
		2010				2009
$ million
Exploration and Production			104				469
Refining and Marketing			(60	)			(459	)
Other businesses and corporate			(118	)			(321	)
			(74	)			(311	)
Taxation credit (charge)(c)			25				117
			(49	)			(194	)

Per share amounts

		First quarter
		2010				2009
Per ordinary share (cents)(a)
Profit for the period			32.39				13.69
RC profit for the period			29.82				12.75
Per ADS (dollars)(a)
Profit for the period			1.94				0.82
RC profit for the period			1.79				0.77

Net debt ratio — net debt: net debt + equity

		First quarter
		2010				2009
$ million
Gross debt			32,153				34,698
Less: fair value asset (liability) of hedges related to finance debt			152				(323	)
			32,001				35,021
Cash and cash equivalents			6,841				8,360
Net debt			25,160				26,661
Equity			104,978				91,179
Net debt ratio			19%				23%

Net debt and net debt ratio are non-GAAP measures. Net debt includes the fair value of associated derivative financial instruments that are used to hedge foreign exchange and interest rate risks relating to finance debt, for which hedge accounting is claimed. The derivatives are reported on the balance sheet within the headings ‘Derivative financial instruments’. We believe that net debt and net debt ratio provide useful information to investors. Net debt enables investors to see the economic effect of gross debt, related hedges and cash and cash equivalents in total. The net debt ratio enables investors to see how significant net debt is relative to equity from shareholders.

Dividends

Dividends Payable

BP has announced a dividend of 14 cents per ordinary share to be paid in June. The corresponding amount in sterling will be announced on 8 June 2010, and calculated from the average of the market exchange rates for the four dealing days commencing on 2 June 2010. Holders of American Depositary Shares (ADSs) will receive $0.84 per ADS. The dividend is payable on 21 June 2010 to shareholders and ADS holders on the register on 7 May 2010. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the scrip dividend programme including the first quarter interim dividend and timetable are available at www.bp.com/scrip.

		First quarter
Dividends Paid		2010				2009
Dividends paid per ordinary share
cents			14.000				14.000
pence			8.679				9.818
Dividends paid per ADS (cents)			84.00				84.00

Exploration and Production

		First quarter
		2010				2009
$ million
Profit before interest and tax(a)			8,316				4,286
Inventory holding (gains) losses			(24	)			34
Replacement cost profit before interest and tax(b)			8,292				4,320
By region
US			2,762				1,143
Non-US			5,530				3,177
			8,292				4,320

The replacement cost profit before interest and tax for the first quarter was $8,292 million, an increase of 92% compared with the first quarter of 2009. This increase was primarily due to higher realizations and higher earnings from equity-accounted entities (mainly TNK-BP), partly offset by a lower contribution from the gas marketing and trading business, higher production taxes and higher depreciation. Unit production costs were 3% lower than a year ago after adjusting for restructuring costs, and were 3% higher than a year ago including restructuring costs. Unit production costs after adjusting for restructuring costs is a non-GAAP measure – see page 19 for details.

The net non-operating gain of $41 million in the first quarter primarily relates to fair value gains on embedded derivatives, partly offset by restructuring costs. The corresponding quarter in 2009 included a net non-operating gain of $311 million. Additionally, in the first quarter, fair value accounting effects had a favourable impact of $63 million compared with a favourable impact of $158 million a year ago.

Production for the quarter was 4,010mboe/d, broadly flat with the first quarter of 2009 reflecting continued strong operational performance. After adjusting for entitlement impacts in our production-sharing agreements (PSAs) production was 1% higher. As previously indicated, we expect production in 2010 to be slightly lower than in 2009. The actual outcome will depend on a number of factors including the oil price and its impact on PSAs and OPEC quota restrictions. In the second quarter, we expect a normal seasonal turnaround effect of around 100mboe/d. These turnaround activities are planned for some of our higher-margin areas including the North Sea and the Gulf of Mexico, where activity is currently under way at Thunder Horse. This will impact costs and margins as well as volumes.

Two major projects started up during the first quarter. In the ultra-deepwater Gulf of Mexico, first oil was achieved from the Great White field (BP 33.3%). In Canada, the Noel major project commenced exporting and selling gas.

During the quarter, we announced that BP will pay Devon Energy $7.0 billion for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. These include ten exploration blocks in Brazil; a major portfolio of deepwater exploration acreage and prospects in the US Gulf of Mexico; and an interest in the ACG development in the Caspian Sea. Completion of certain of these transfers is subject to regulatory approvals and other third-party consents. In addition, BP will sell to Devon Energy a 50% stake in our Kirby oil sands interests in Alberta, Canada, for $500 million. The parties have agreed to form a 50:50 joint venture, operated by Devon, to pursue the development of Kirby. Devon will commit to fund an additional $150 million of capital costs on BP’s behalf.

Also during the quarter, BP and Value Creation Inc. (VCI) of Calgary agreed to form a partnership to explore and develop the Terre de Grace oil sands acreage, in the Athabasca region of Alberta, Canada, using in-situ techniques. BP will hold a 75% interest and VCI a 25% interest in a newly formed partnership. BP has agreed to pay $900 million for the interest with $500 million paid in cash at closing.

Furthermore, on behalf of our partners, BP announced the first major contracts to support the expansion of production from the Rumaila field in southern Iraq (BP has a 38% working interest).

After the end of the quarter, BP agreed with Total to acquire its 15.7% interest in Valhall and its 25% interest in Hod, both fields located in the southern part of the Norwegian continental shelf, for the sum of $991 million to be paid in cash. The agreement will deepen BP’s position as operator by giving BP a 43.8% interest in Valhall and 50% in Hod, subject to third-party consents and government approval. The deal has an effective date of 1 January 2010.

On 20 April 2010, the semi-submersible drilling rig Deepwater Horizon owned and operated by Transocean Limited caught fire in the US Gulf of Mexico and subsequently sank. The rig was drilling an exploration well (Mississippi Canyon 252) in which BP has a 65% interest. As operator under the MC 252 lease, BP is committed to doing everything in its power to contain the environmental consequences of the incident. BP is currently ramping up preparations for a major cleaning effort on the shorelines of Louisiana, Mississippi, Alabama and Florida. Efforts continue to stem the flow of oil from the well, currently estimated at up to 5,000 barrels a day. Preliminary estimates indicate that current efforts to contain the spill and secure the well are costing the MC 252 owners about $6 million per day. This figure is expected to rise as activity increases. It is too early to quantify other potential costs and liabilities associated with the incident.

Exploration and Production

		First quarter
		2010				2009
$ million
Non-operating items
US			(62	)			71
Non-US			103				240
			41				311
Fair value accounting effects(a)
US			81				208
Non-US			(18	)			(50	)
			63				158
Exploration expense
US			69				44
Non-US			51				75
			120				119
Production (net of royalties)(b)
Liquids (mb/d) (net of royalties)(c)
US			665				643
Europe			215				212
Russia			849				822
Rest of World			798				827
			2,527				2,504
Of which equity-accounted entities			1,132				1,116
Natural gas (mmcf/d) (net of royalties)
US			2,221				2,335
Europe			599				838
Russia			673				642
Rest of World			5,107				4,952
			8,600				8,767
Of which equity-accounted entities			1,093				1,072
Total hydrocarbons (mboe/d)(d)
US			1,048				1,046
Europe			318				357
Russia			965				933
Rest of World			1,679				1,680
			4,010				4,016
Of which equity-accounted entities			1,320				1,301
Average realizations(e)
Total liquids ($/bbl)			71.86				41.26
Natural gas ($/mcf)			4.26				3.63
Total hydrocarbons ($/boe)			49.16				31.40

Because of rounding, some totals may not agree exactly with the sum of their component parts.

Refining and Marketing

		First quarter
		2010				2009
$ million
Profit before interest and tax(a)			1,408				1,417
Inventory holding (gains) losses			(679	)			(327	)
Replacement cost profit before interest and tax(b)			729				1,090
By region
US			(63	)			308
Non-US			792				782
			729				1,090

The replacement cost profit before interest and tax for the first quarter was $729 million, compared with $1,090 million for the same period last year.

The first quarter’s result included a net non-operating charge of $70 million compared with a net charge of $350 million a year ago. Fair value accounting effects had a favourable impact of $10 million in the first quarter compared with an unfavourable impact of $109 million in the first quarter of 2009.

Compared with a year ago, the result reflected a significantly weaker supply and trading contribution in contrast to the particularly strong contribution in the first quarter of last year. The result was also impacted by a weaker refining environment, with the indicator margin at around half the level of the same period in 2009, and marketing margins for some products compressed by rising crude prices. These factors were partially offset by operational improvements and further cost efficiencies in the fuels value chains, and continued strong performance in the international businesses. In addition, BP’s actual refining margins fell by less than the indicator would suggest as a result of BP’s highly upgraded refining portfolio.

In the fuels value chains, Solomon refining availability was up by three percentage points year on year to 95.3%, the highest level since 2004. Refining throughput increased by over 8% compared with the same quarter last year and by over 5% compared with the previous quarter, principally driven by increased throughputs in our US refineries.

In the international businesses, our petrochemicals business had a particularly strong quarter with production volumes up almost 40% compared with the same period last year and 12% on the previous quarter.

In February, BP announced that it had received an offer from Delek Europe B.V. for the retail fuels and convenience business and selected fuels terminals in France. As a result, BP has agreed a period of exclusivity with Delek Europe B.V. to negotiate the terms for the sale and to allow consultation with the relevant works councils. Any transaction will be subject to regulatory approval and is expected to include a BP brand licence agreement.

In March, BP announced that in sub-Saharan Africa it intends to sell its marketing businesses in Namibia, Malawi, Tanzania, Zambia and Botswana and focus its fuel marketing activities on South Africa and Mozambique.

There has been some improvement in refining margins in the early part of the second quarter although we expect opportunities for further improvement to be limited. BP’s refinery turnaround activities are expected to be higher in the second quarter than in the first. Continued low market volatility would limit the supply and trading contribution in the quarter. In the international businesses, we expect the current petrochemicals margins to come under some pressure as new capacity comes onstream.

Refining and Marketing

		First quarter
		2010				2009
$ million
Non-operating items
US			(3	)			(134	)
Non-US			(67	)			(216	)
			(70	)			(350	)
Fair value accounting effects(a)
US			16				65
Non-US			(6	)			(174	)
			10				(109	)
Refinery throughputs (mb/d)
US			1,366				1,164
Europe			780				783
Rest of World			282				299
Total throughput			2,428				2,246
Refining availability (%)(b)			95.3				92.3
Sales volumes (mb/d)(c)
Marketing sales by region
US			1,418				1,402
Europe			1,428				1,529
Rest of World			629				617
Total marketing sales			3,475				3,548
Trading/supply sales			2,622				2,312
Total refined product sales			6,097				5,860
Global Indicator Refining Margin (GIM) ($/bbl)(d)
US Gulf Coast			3.50				6.69
US Midwest			1.86				7.03
US West Coast			3.32				9.96
North West Europe			4.29				4.67
Mediterranean			3.11				3.56
Singapore			0.97				2.51
BP Average GIM			3.08				6.20
Chemicals production (kte)
US			940				713
Europe			981				788
Rest of World			1,887				1,244
Total production			3,808				2,745

Other businesses and corporate

		First quarter
		2010				2009
$ million
Profit (loss) before interest and tax(a)			(326	)			(800	)
Inventory holding (gains) losses			(2	)			39
Replacement cost profit (loss) before interest and tax(b)			(328	)			(761	)
By region
US			(231	)			(279	)
Non-US			(97	)			(482	)
			(328	)			(761	)
Results include
Non-operating items
US			(106	)			(116	)
Non-US			(12	)			(205	)
			(118	)			(321	)

Other businesses and corporate comprises the Alternative Energy business, Shipping, the group’s aluminium asset, Treasury (which includes interest income on the group’s cash and cash equivalents), and corporate activities worldwide.

The replacement cost loss before interest and tax for the first quarter was $328 million, compared with a loss of $761 million a year ago. The net non-operating charge for the first quarter was $118 million, compared with a net charge of $321 million a year ago. In addition, there were favourable foreign exchange effects and lower costs, and improved margins in Alternative Energy.

In Alternative Energy, our solar business achieved sales of 54MW in the first quarter. In March, BP Solar announced the closure of manufacturing at its Frederick facility, in Maryland, US, as it moves its manufacturing to lower-cost locations. BP Solar will maintain its US presence in sales and marketing, research and technology, project development, and key business support activities.

In our US wind business, construction has commenced at the 125MW Goshen North wind farm (BP 50%) in Bonneville County, Idaho. BP’s net wind generation capacity_(c) at the end of the first quarter was 711MW (1,237MW gross), compared with 678MW (1,113MW gross) at the end of the same period a year ago.

Group income statement

		First quarter
		2010				2009
$ million
Sales and other operating revenues (Note 2)			73,071				47,296
Earnings from jointly controlled entities — after interest and tax			403				220
Earnings from associates — after interest and tax			763				285
Interest and other income			142				203
Gains on sale of businesses and fixed assets			38				81
Total revenues and other income			74,417				48,085
Purchases			51,641				30,777
Production and manufacturing expenses (Note 3)			5,740				5,894
Production and similar taxes (Note 3)			1,276				674
Depreciation, depletion and amortization			2,996				2,823
Impairment and losses on sale of businesses and fixed assets			164				137
Exploration expense			120				119
Distribution and administration expenses			3,020				3,349
Fair value (gain) loss on embedded derivatives			(146	)			(186	)
Profit before interest and taxation			9,606				4,498
Finance costs			238				318
Net finance (income) expense relating to pensions and other post-retirement benefits			(10	)			50
Profit before taxation			9,378				4,130
Taxation			3,190				1,533
Profit for the period			6,188				2,597
Attributable to
BP shareholders			6,079				2,562
Minority interest			109				35
			6,188				2,597
Earnings per share — cents (Note 4)
Profit for the period attributable to BP shareholders
Basic			32.39				13.69
Diluted			31.99				13.54

Group statement of comprehensive income

		First quarter
		2010				2009
$ million
Profit for the period			6,188				2,597
Currency translation differences			(526	)			(1,011	)
Available-for-sale investments marked to market			(93	)			74
Available-for-sale investments – recycled to the income statement			—				2
Cash flow hedges marked to market			(162	)			(211	)
Cash flow hedges – recycled to the income statement			(94	)			239
Cash flow hedges – recycled to the balance sheet			13				71
Taxation			(119	)			(82	)
Other comprehensive income			(981	)			(918	)
Total comprehensive income			5,207				1,679
Attributable to
BP shareholders			5,105				1,668
Minority interest			102				11
			5,207				1,679

Group statement of changes in equity

		BP
		shareholders’				Minority				Total
		equity				interest				equity
$ million
At 31 December 2009			101,613				500				102,113
Total comprehensive income			5,105				102				5,207
Dividends			(2,626	)			(3	)			(2,629	)
Share-based payments (net of tax)			(13	)			—				(13	)
Transactions involving minority interests			—				300				300
At 31 March 2010			104,079				899				104,978

		BP
		shareholders’				Minority				Total
		equity				interest				equity
$ million
At 31 December 2008			91,303				806				92,109
Total comprehensive income			1,668				11				1,679
Dividends			(2,619	)			(111	)			(2,730	)
Share-based payments (net of tax)			121				—				121
At 31 March 2009			90,473				706				91,179

Group balance sheet

		31 March				31 December
		2010				2009
$ million
Non-current assets
Property, plant and equipment			108,232				108,275
Goodwill			8,409				8,620
Intangible assets			12,675				11,548
Investments in jointly controlled entities			15,484				15,296
Investments in associates			13,396				12,963
Other investments			1,459				1,567
Fixed assets			159,655				158,269
Loans			982				1,039
Other receivables			2,216				1,729
Derivative financial instruments			4,770				3,965
Prepayments			1,359				1,407
Deferred tax assets			464				516
Defined benefit pension plan surpluses			1,494				1,390
			170,940				168,315
Current assets
Loans			236				249
Inventories			23,221				22,605
Trade and other receivables			31,159				29,531
Derivative financial instruments			5,355				4,967
Prepayments			2,647				1,753
Current tax receivable			238				209
Cash and cash equivalents			6,841				8,339
			69,697				67,653
Total assets			240,637				235,968
Current liabilities
Trade and other payables			38,146				35,204
Derivative financial instruments			5,530				4,681
Accruals			5,482				6,202
Finance debt			8,356				9,109
Current tax payable			2,624				2,464
Provisions			1,646				1,660
			61,784				59,320
Non-current liabilities
Other payables			3,206				3,198
Derivative financial instruments			3,899				3,474
Accruals			656				703
Finance debt			23,797				25,518
Deferred tax liabilities			20,156				18,662
Provisions			12,752				12,970
Defined benefit pension plan and other post-retirement benefit plan deficits			9,409				10,010
			73,875				74,535
Total liabilities			135,659				133,855
Net assets			104,978				102,113
Equity
BP shareholders’ equity			104,079				101,613
Minority interest			899				500
			104,978				102,113

Condensed group cash flow statement

		First quarter
		2010				2009
$ million
Operating activities
Profit before taxation			9,378				4,130
Adjustments to reconcile profit before taxation to net cash provided by operating activities
Depreciation, depletion and amortization and exploration expenditure written off			3,017				2,849
Impairment and (gain) loss on sale of businesses and fixed assets			126				56
Earnings from equity-accounted entities, less dividends received			(669	)			(252	)
Net charge for interest and other finance expense, less net interest paid			46				89
Share-based payments			(146	)			86
Net operating charge for pensions and other post-retirement benefits, less contributions and benefit payments for unfunded plans			(490	)			26
Net charge for provisions, less payments			(48	)			281
Movements in inventories and other current and non-current assets and liabilities(a)			(1,940	)			32
Income taxes paid			(1,581	)			(1,725	)
Net cash provided by operating activities			7,693				5,572
Investing activities
Capital expenditure			(4,289	)			(4,817	)
Acquisitions, net of cash acquired			—				—
Investment in jointly controlled entities			(82	)			(103	)
Investment in associates			(6	)			(47	)
Proceeds from disposal of fixed assets			108				311
Proceeds from disposal of businesses, net of cash disposed			—				—
Proceeds from loan repayments			56				117
Other			—				47
Net cash used in investing activities			(4,213	)			(4,492	)
Financing activities
Net issue of shares			128				35
Proceeds from long-term financing			342				4,619
Repayments of long-term financing			(2,495	)			(2,580	)
Net decrease in short-term debt			(247	)			(182	)
Dividends paid – BP shareholders			(2,626	)			(2,619	)
– Minority interest			(3	)			(111	)
Net cash used in financing activities			(4,901	)			(838	)
Currency translation differences relating to cash and cash equivalents			(77	)			(79	)
Increase (decrease) in cash and cash equivalents			(1,498	)			163
Cash and cash equivalents at beginning of period			8,339				8,197
Cash and cash equivalents at end of period			6,841				8,360

(a)     Includes
Inventory holding (gains) losses			(705	)			(254	)
Fair value (gain) loss on embedded derivatives			(146	)			(186	)
Inventory holding gains and losses and fair value gains and losses on embedded derivatives are also included within profit before taxation.

Capital expenditure and acquisitions

		First quarter
		2010				2009
$ million
By business
Exploration and Production
US			1,133				1,670
Non-US(a)			2,815				2,035
			3,948				3,705
Refining and Marketing
US			528				567
Non-US			144				226
			672				793
Other businesses and corporate
US			28				56
Non-US			39				41
			67				97
			4,687				4,595
By geographical area
US			1,689				2,293
Non-US(a)			2,998				2,302
			4,687				4,595
Included above:
Acquisitions and asset exchanges			—				—

Exchange rates

		First quarter
		2010				2009
US dollar/sterling average rate for the period			1.56				1.43
US dollar/sterling period-end rate			1.51				1.42
US dollar/euro average rate for the period			1.38				1.30
US dollar/euro period-end rate			1.34				1.32

Analysis of replacement cost profit before interest and tax and reconciliation to profit before taxation_(a)

		First quarter
		2010				2009
$ million
By business
Exploration and Production
US			2,762				1,143
Non-US			5,530				3,177
			8,292				4,320
Refining and Marketing
US			(63	)			308
Non-US			792				782
			729				1,090
Other businesses and corporate
US			(231	)			(279	)
Non-US			(97	)			(482	)
			(328	)			(761	)
			8,693				4,649
Consolidation adjustment			208				(405	)
Replacement cost profit before interest and tax(b)			8,901				4,244
Inventory holding gains (losses)(c)
Exploration and Production			24				(34	)
Refining and Marketing			679				327
Other businesses and corporate			2				(39	)
Profit before interest and tax			9,606				4,498
Finance costs			238				318
Net finance (income) expense relating to pensions and other post-retirement benefits			(10	)			50
Profit before taxation			9,378				4,130
Replacement cost profit (loss) before interest and tax
By geographical area
US			2,590				854
Non-US			6,311				3,390
			8,901				4,244

Non-operating items_(a)

		First quarter
		2010				2009
$ million
Exploration and Production
Impairment and gain (loss) on sale of businesses and fixed assets			(13	)			73
Environmental and other provisions			—				—
Restructuring, integration and rationalization costs			(104	)			(1	)
Fair value gain (loss) on embedded derivatives			146				243
Other			12				(4	)
			41				311
Refining and Marketing
Impairment and gain (loss) on sale of businesses and fixed assets			(45	)			(21	)
Environmental and other provisions			—				—
Restructuring, integration and rationalization costs			12				(263	)
Fair value gain (loss) on embedded derivatives			—				(57	)
Other			(37	)			(9	)
			(70	)			(350	)
Other businesses and corporate
Impairment and gain (loss) on sale of businesses and fixed assets			(68	)			(108	)
Environmental and other provisions			—				(75	)
Restructuring, integration and rationalization costs			(38	)			(71	)
Fair value gain (loss) on embedded derivatives			—				—
Other			(12	)			(67	)
			(118	)			(321	)
Total before taxation			(147	)			(360	)
Taxation credit (charge)(b)			50				135
Total after taxation for period			(97	)			(225	)

Non-operating items are charges and credits arising in consolidated entities that BP discloses separately because it considers such disclosures to be meaningful and relevant to investors. These disclosures are provided in order to enable investors better to understand and evaluate the group’s financial performance.

Non-GAAP information on fair value accounting effects

		First quarter
		2010				2009
$ million
Favourable (unfavourable) impact relative to management’s measure of performance
Exploration and Production			63				158
Refining and Marketing			10				(109	)
			73				49
Taxation charge(a)			(25	)			(18	)
			48				31

BP uses derivative instruments to manage the economic exposure relating to inventories above normal operating requirements of crude oil, natural gas and petroleum products as well as certain contracts to supply physical volumes at future dates. Under IFRS, these inventories and contracts are recorded at historic cost and on an accruals basis respectively. The related derivative instruments, however, are required to be recorded at fair value with gains and losses recognized in income because hedge accounting is either not permitted or not followed, principally due to the impracticality of effectiveness testing requirements. Therefore, measurement differences in relation to recognition of gains and losses occur. Gains and losses on these inventories and contracts are not recognized until the commodity is sold in a subsequent accounting period. Gains and losses on the related derivative commodity contracts are recognized in the income statement from the time the derivative commodity contract is entered into on a fair value basis using forward prices consistent with the contract maturity.

IFRS requires that inventory held for trading be recorded at its fair value using period end spot prices whereas any related derivative commodity instruments are required to be recorded at values based on forward prices consistent with the contract maturity. Depending on market conditions, these forward prices can be either higher or lower than spot prices resulting in measurement differences.

BP enters into contracts for pipelines and storage capacity that, under IFRS, are recorded on an accruals basis. These contracts are risk-managed using a variety of derivative instruments which are fair valued under IFRS. This results in measurement differences in relation to recognition of gains and losses.

The way that BP manages the economic exposures described above, and measures performance internally, differs from the way these activities are measured under IFRS. BP calculates this difference for consolidated entities by comparing the IFRS result with management’s internal measure of performance, under which the inventory and the supply and capacity contracts in question are valued based on fair value using relevant forward prices prevailing at the end of the period. We believe that disclosing management’s estimate of this difference provides useful information for investors because it enables investors to see the economic effect of these activities as a whole. The impacts of fair value accounting effects, relative to management’s internal measure of performance, are shown in the table above. A reconciliation to GAAP information is set out below.

Reconciliation of non-GAAP information

		First quarter
		2010				2009
$ million
Exploration and Production
Replacement cost profit before interest and tax adjusted for fair value accounting effects			8,229				4,162
Impact of fair value accounting effects			63				158
Replacement cost profit before interest and tax			8,292				4,320
Refining and Marketing
Replacement cost profit before interest and tax adjusted for fair value accounting effects			719				1,199
Impact of fair value accounting effects			10				(109	)
Replacement cost profit before interest and tax			729				1,090
Total group
Profit before interest and tax adjusted for fair value accounting effects			9,533				4,449
Impact of fair value accounting effects			73				49
Profit before interest and tax			9,606				4,498

Realizations and marker prices

		First quarter
		2010				2009
Average realizations(a)
Liquids ($/bbl)(b)
US			69.77				39.47
Europe			75.71				47.59
Rest of World			72.94				40.89
BP Average			71.86				41.26
Natural gas ($/mcf)
US			4.84				3.38
Europe			4.91				5.56
Rest of World			3.90				3.41
BP Average			4.26				3.63
Total hydrocarbons ($/boe)
US			54.54				31.83
Europe			60.39				41.36
Rest of World			42.20				28.35
BP Average			49.16				31.40
Average oil marker prices ($/bbl)
Brent			76.36				44.46
West Texas Intermediate			78.84				43.20
Alaska North Slope			79.14				45.40
Mars			75.85				43.83
Urals (NWE– cif)			75.31				43.65
Russian domestic oil			35.52				19.52
Average natural gas marker prices
Henry Hub gas price ($/mmBtu)(c)			5.30				4.91
UK Gas – National Balancing Point (p/therm)			35.65				46.80

Non-GAAP information on unit production costs adjusted for restructuring costs_(a)

		First quarter
		2010				2009
$ million
Production costs			1,524				1,499
Restructuring costs included in production costs			(86	)			–
Production costs adjusted for restructuring costs			1,438				1,499
Production (net of royalties)(b)
Total hydrocarbons (mboe/d)(c)			2,690				2,715
Unit production costs adjusted for restructuring costs ($/boe)(d)			5.94				6.13

Notes

1.		Basis of preparation
		The interim financial information included in this report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’.
		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 the periods presented. 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 2009 included in BP Annual Report and Accounts 2009 and in BP Annual Report on Form 20-F 2009.
		BP prepares its consolidated financial statements included within its Annual Report and Accounts on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB, however, 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 the Annual Report and Accounts and the Annual Report on Form 20-F for 2010, which do not differ significantly from those used in the BP Annual Report and Accounts 2009 or in BP Annual Report on Form 20-F 2009.
		BP has adopted the revised version of IFRS 3 ‘Business Combinations’, with effect from 1 January 2010. The revised standard still requires the purchase method of accounting to be applied to business combinations but introduces some changes to the accounting treatment. Assets and liabilities arising from business combinations that occurred before 1 January 2010 were not required to be restated and thus there was no effect on the group’s reported income or net assets on adoption.
		In addition, BP has adopted the amended version of IAS 27, ‘Consolidated and Separate Financial Statements’, also with effect from 1 January 2010. This requires the effects of all transactions with minority interests to be recorded in equity if there is no change in control. When control is lost, any remaining interest in the entity is remeasured to fair value and a gain or loss recognized in profit or loss. There was no effect on the group’s reported income or net assets on adoption.

Notes

2.

Sales and other operating revenues

		First quarter
		2010				2009
$ million
By business
Exploration and Production			18,080				12,343
Refining and Marketing			64,286				40,573
Other businesses and corporate			790				584
			83,156				53,500
Less: sales between businesses
Exploration and Production			9,746				5,800
Refining and Marketing			135				111
Other businesses and corporate			204				293
			10,085				6,204
Third party sales and other operating revenues
Exploration and Production			8,334				6,543
Refining and Marketing			64,151				40,462
Other businesses and corporate			586				291
Total third party sales and other operating revenues			73,071				47,296
By geographical area
US			26,108				17,580
Non-US			54,009				33,586
			80,117				51,166
Less: sales between areas			7,046				3,870
			73,071				47,296