Slides
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2025 capital markets update 1 A reset bp February 2025 Growing shareholder value Capital markets update
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2025 capital markets update 2 Craig Marshall SVP investor relations
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2025 capital markets update 3 2025 capital markets update 3 Growing shareholder value Cautionary statement In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement: The discussion in this presentation contains certain forecasts, projections and forward-looking statements - that is, statements related to future, not past events and circumstances - with respect to the financial condition, results of operations and businesses of bp and certain of the plans and objectives of bp with respect to these items. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’, ‘focus on’ or similar expressions. In particular, the following, among other statements, are all forward looking in nature: plans, expectations and assumptions regarding demand, supply, prices and margins; plans and expectations regarding bp’s performance, including earnings, earnings growth, cash flow, adjusted free cash flow, post-tax operating cashflow, balance sheet, capital expenditure (including transition capex), net debt, returns, return on average capital employed, capital investment, breakeven point, internal rates of return and portfolio-level returns, structural cost reductions, refining availability and growth in bp’s customers business; plans and expectations related to demand for bioenergy, electricity, oil and gas, wind and solar; plans and expectations regarding bp’s strategy, portfolio reshaping and high-grading, capital frame and four primary targets; plans and expectations regarding operational safety, turnaround efficiencies and reliability; plans and expectations regarding the amount and timing of dividends and share buybacks including the allocation of operating cash flow to the same; plans and expectations relating to bp’s strategy and investments, including capital and cost efficiency gains; plans and expectations relating to Castrol; plans and expectations regarding the timing, quantum, nature and impact of certain acquisitions and divestments; plans regarding refinancing needs and use of proceeds; plans and expectations regarding bp’s projects, ventures and platforms, including its project hopper and project delivery; plans and expectations regarding bp’s partnerships and agreements with commercial entities and other third party partners; plans and expectations regarding bp’s trading, mobility and convenience businesses; plans and expectations relating to bp’s operations, oil and gas supply and production, including volume growth, unit cash margins and reserves replacement ratio; plans and expectations regarding resource recovery and potential resource discoveries, including exploration spend and planned wells; plans and expectations regarding plant reliability; plans and expectations regarding upstream and downstream activities, including new sources of LNG offtake; plans and expectations relating to bp’s net zero ambitions, emissions reductions, methane recovery and sustainability aims; plans and expectations regarding renewables, including divestment of bp’s onshore wind business and further development of Lightsource bp, as well as plans and expectations regarding investments in biogas, biofuels, carbon capture, hydrogen and EV charging; plans and expectations related to strategic partnerships and external financing; and plans and expectations regarding the simplification of bp’s organizational structure, digital and marketing strategy, expansion of automation, and use of AI. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of bp. Actual results or outcomes may differ materially from those expressed in such statements, depending on a variety of factors, including: the extent and duration of the impact of current market conditions including the volatility of oil prices, the effects of bp’s plan to exit its shareholding in Rosneft and other investments in Russia, overall global economic and business conditions impacting bp’s business and demand for bp’s products as well as the specific factors identified in the discussions accompanying such forward-looking statements; changes in consumer preferences and societal expectations; the pace of development and adoption of alternative energy solutions; developments in policy, law, regulation, technology and markets, including societal and investor sentiment related to the issue of climate change; the receipt of relevant third party and/or regulatory approvals including ongoing approvals required for the continued developments of approved projects; the timing and level of maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new fields onstream; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing, including supply growth in North America and continued base oil and additive supply shortages; OPEC+ quota restrictions; PSA and TSC effects; operational and safety problems; potential lapses in product quality; economic and financial market conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations and policies, including related to climate change; changes in social attitudes and customer preferences; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought or imposed; the actions of prosecutors, regulatory authorities and courts; delays in the processes for resolving claims; amounts ultimately payable and timing of payments relating to the Gulf of America oil spill; exchange rate fluctuations; development and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; bp’s access to future credit resources; business disruption and crisis management; the impact on bp’s reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; the possibility that international sanctions or other steps taken by governmental or any other relevant persons may impact bp’s ability to sell its interests in Rosneft, or the price for which bp could sell such interests; the actions of contractors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and those factors discussed under “Principal risks and uncertainties” in bp’s Report on Form 6-K regarding results for the six-month period ended 30 June 2024 as filed with the US Securities and Exchange Commission (the “SEC”) as well as those factors discussed under “Risk factors” in bp’s Annual Report and Form 20-F for fiscal year 2023 as filed with the SEC. Reconciliations to IFRS - This presentation also contains financial information which is not presented in accordance with International Financial reporting Standards (IFRS). A quantitative reconciliation of this information to the most directly comparable financial measure calculated and presented in accordance with IFRS can be found on our website at www.bp.com. This presentation contains references to non-proved resources and production outlooks based on non-proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. Tables and projections in this presentation are bp projections unless otherwise stated. February 2025
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2025 capital markets update 4 Growing shareholder value Agenda 13:00 – Strategy update Group strategy Financial frame and targets Murray Auchincloss Chief executive officer Kate Thomson Chief financial officer 13:55 – Business deep dives 15:15 – Q&A – 60mins 13:40 – Break – 15mins Gordon Birrell William Lin William LinEmma Delaney 16:15 – Close Oil & gas Customers & products Low carbon energy Supply, trading & shipping, and biogas Carol Howle
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2025 capital markets update 5 Murray Auchincloss Chief executive officer
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Introduction
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2025 capital markets update 7 2025 capital markets update 7 Growing shareholder value Growing shareholder value Reallocating capital Resilient distributions Stronger balance sheet Lower emissions Driving performance Resetting strategy Compelling FCF* growth Strong returns growth
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2025 capital markets update 8 2025 capital markets update 8 Growing shareholder value Learnings – informing our strategy Adaptable and moving at pace with society Importance of process safety remains core Safety Focus on fewer and higher returning growth opportunities Capital allocation Invest in our core business as we grow the new Preserve core strengths
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2025 capital markets update 9 2025 capital markets update 9 Growing shareholder value Top tier oil and gas operator Leading positions in GoA, Middle East, Indonesia and Azerbaijan A leading unconventional operator (bpx and Oman) Expertise in finding, developing and operating giant fields #1 US biogas producer Integrated businesses with leading positions and brands Top tier US and EU refineries and midstream Advantaged fuels and convenience and leading EV charging Global aviation business 650 airports Top tier solar developer globally1 Top 3 in global lubricants Underpinned by Supply, trading & shipping Technology Partnerships Seismic imaging and simulation Drilling and rig automation AI and advanced analytics Offshore wind JV* JERA Nex bp A distinctive and advantaged integrated energy company… Distinctive capabilities Diverse global portfolio Deeply integrated (1) Excluding China
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2025 capital markets update 10 2025 capital markets update 10 Growing shareholder value Global energy consumption Growing energy demand – conviction in our key markets (1) 2023 and 2035 bars based on the Current Trajectory scenario from bp’s Energy Outlook 2024 (2) Represents crude oil and gas derived products sold to end-customers such as diesel, gasoline, asphalt (3) Non-bp energy vectors: coal, nuclear, hydroelectric, geothermal, biomass, grey hydrogen* (4) Revenues from energy trading not included in TAM calculation ~$5tn Oil & gas2 Electricity Bioenergy Low carbon hydrogen Non-bp energy vectors3 Estimated total addressable market ($)4 11 Exajoules (EJ) 0 100 200 300 400 500 600 1970 1990 2010 2023 2035
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2025 capital markets update 11 2025 capital markets update 11 Growing shareholder value ...with more to comeLaying a strong foundation in 2024... Materially reshaping our portfolio Building on $22bn divestment track record 2020 – 2024 (1) Announced February 2025 (2) Announcement to bring a strategic partner into LSbp (3) Includes announced and not yet completed US onshore wind Trinidad mature gas bp bioenergy Trans Adriatic Pipeline Apollo partnership ONGC TSP for Mumbai High field1 ADNOC Ruwais LNG development bp Egypt ADNOC JV* (gas) Kirkuk oil field redevelopment1 Lightsource bp Retail markets (NL, TR) SAPREF assets Gelsenkirchen refinery1 Offshore wind JERA Nex bp Advantaged access3 JV & partnership3 Acquisitions Divestments3 Strengthening balance sheet Potential proceeds from any transactions related to Castrol and LSbp2 allocated to reduce net debt* $20bn divestments Including announced Castrol strategic review, LSbp2 and portfolio high-grading expected to 2027
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Growing shareholder value Our strategy
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2025 capital markets update 13 A reset bp 2025 capital markets update Growing shareholder value 13 Disciplined investment in transition Resetting strategy Growing upstream* Focusing downstream 2025 capital markets update
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2025 capital markets update 14 2025 capital markets update 14 Growing shareholder value Return on average capital employed* 2024 at $81 2024 at $70 2027 at $74.4 Adjusted free cash flow* 2024 at $81 2024 at $70 2027 at $74.4 $10.3bn 2 2 (1) Compound annual growth rate from 2024 to 2027 (2) For price assumptions, see appendix Growing cash flow and returns 2 2 ~$8bn ~12% 14% >20% CAGR1 2024 – 2027 >16%
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2025 capital markets update 15 2025 capital markets update 15 Growing shareholder value Reallocating capex Note: All capex figures on the chart are per annum (1) Previous guidance of $14 – 18bn p.a. 2025 to 2030 versus current guidance of ~$15bn in 2025 and $13 –15bn in 2026 – 2027 (2) Excludes deferred consideration for the 2024 acquisition of bp bioenergy in 2025 Previous guidance New guidance 20252 – 2027 ~$7bn $1.5 – 2.0bn ~$8.5bn ~$10bn Oil & gas Transition businesses* …and reallocating…Reducing capex* by $1 – 3bn p.a. to 20271… …to the highest return opportunities Disciplined investment in transition – Capital-light partnerships – Focusing on fewer and higher returning projects – Leveraging integrated positions to increase returns Increasing investment in oil & gas – Growing production – More major projects* with higher returns – Increasing exploration to strengthen reserves Previous guidance New guidance 2025 – 2027
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2025 capital markets update 16 2025 capital markets update 16 Growing shareholder value Maintaining safe and efficient operations – ~96% plant reliability*1 – ~$6/boe unit production costs*1,2 – ~$1.5bn structural cost reductions* Increasing investment in oil & gas – ~$10bn average capex* p.a. 2025 – 2027 – 10 major project* start-ups 2025 – 20273 – >15% expected returns4 Strengthening the portfolio – Discovered resource access – Reloading the exploration hopper – Disciplined biogas growth <$500m p.a. capex 2025 – 2027 Growing upstream (1) 2025-2027 average (2) Includes fuel gas (3) Includes first LNG export from GTA Ph1 (4) Further details will be available in the 2024 bp annual report 20-F form 'Our investment process (5) Excludes future potential divestments (6) Excludes in-year acquisitions and divestments (7) Excludes divestments. For price assumptions, see appendix Growing production, reserves and cash flow Production (mmboed)5 2.3 – 2.5 in 2030 Reserves replacement ratio*6 ~100% by end 2027 Upstream operating cash flow*7 ~$2bn 2024 – 2027 growth
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2025 capital markets update 17 2025 capital markets update 17 Growing shareholder value Improving performance – Lower realised refining breakeven by $3/bbl: 96% refining availability*, structural cost reductions* >$500m, commercial optimisation – Customers structural cost reductions: ~$1.5bn1 – Drive value and growth from prior acquisitions TA and bp bioenergy Reshaping our portfolio – Announced strategic review of Castrol – Repositioning refining - intention to sell Gelsenkirchen – Focused customers growth on our most advantaged assets while high-grading sites and regions – Selective investments in EV charging and biofuels Focusing downstream (1) 2027 versus 2024 (2) For price assumptions, see appendix (3) Excludes divestments (4) 2025 capex will include deferred consideration for the 2024 acquisition of bp bioenergy (5) Further details will be available in the 2024 bp annual report 20-F form 'Our investment process’ Optimising integrated positions Higher, more resilient cash flows and strong returns Downstream operating cash flow*2,3 $3.5 – 4.0bn 2024 – 2027 growth Focused capex* ~$3bn p.a. by 20274 Expected returns5 >15%
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2025 capital markets update 18 2025 capital markets update 18 Growing shareholder value Focused on biogas, biofuels and EV charging Capital-light in low carbon energy Disciplined investment in transition Biogas – High-grading projects – Standardised modular design Biofuels – Integrating bioethanol acquisition – Capital-light co-processing – Potential for 1 bio-plant FID1 EV charging – Focusing on 4 key markets – Integration with convenience Renewables – Two platforms – in solar and offshore wind – Leveraging external capital ([1) By end 2027] (2) Further details will be available in the 2024 bp annual report 20-F form 'Our investment process’ (3) Point forward, low carbon energy projects are H2 and CCS. Returns include leverage, farmdown and integration. Expected returns in offshore wind and solar as defined by JERA Nex bp and LSbp respectively (4) Excludes deferred consideration for the 2024 acquisition of bp bioenergy in 2025 H2/CCS – 5 – 7 projects – Includes 4 FIDs taken in 2024 Mid-teens expected returns3>15% expected returns2 $1.5-2.0bn capex* per year to 20274 Enhanced value through trading >$500m structural cost reductions*
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2025 capital markets update 19 2025 capital markets update 19 Growing shareholder value Building on our strong progress, embedding into our business Focusing on 5 sustainability aims Net zero operations* Net zero sales* People Biodiversity Water Carbon intensity gCO2e/MJScope 1 and 2 emissions1 MtCO2e Net zero* by 2050 or sooner 0 20 40 60 2019 2024 2030 aim 0 20 40 60 80 2019 2024 2030 aim 38%2 45 – 50% 8 – 10% 6%2 (1) Scope 1 and 2 emissions reductions includes portfolio/divestments (2) 2024 data is provisional
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2025 capital markets update 20 Growing shareholder value Summary Resetting strategy Reallocating capital Driving performance Growing shareholder value
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2025 capital markets update 21 Kate Thomson Chief financial officer
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2025 capital markets update 22 Growing shareholder value Reallocating capital and driving performance Stronger balance sheet Growing cash flow and returns Resilient distributions Reducing and reallocating capex* Reducing cost Simplifying targets
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2025 capital markets update 23 2025 capital markets update 23 Growing shareholder value Reducing and reallocating capex (1) All capex figures on the chart are per annum (2) Upstream capex includes biogas. Previous oil & gas capex guidance was $8.5bn from the Investor update 2023 (October 2023), ~$9bn includes biogas (3) Based on midpoint of capex guidance range (4) No previous capex guidance for customers & products Convenience and mobility 2025 capex guidance was $2-3bn for 2025, 2030 aim was $3-4bn (5) 2025 capex will include deferred consideration for the 2024 acquisition of bp bioenergy Reducing capex* Previous guidance 2025-2030 2025 guidance 2026-2027 guidance Group cash capex, including inorganic* $bn $14 – 18bn ~$15bn $13 – 15bn Previous guidance 2025 – 2030 2025 guidance 2026 – 2027 guidance Reallocating capex1 2026 – 2027 guidance Previous guidance 0% 20% 40% 80% 100%60% $3 - 5bn <$800m ~$9bn2 ~$10.5bn2 ~$3bn4 Upstream* Low carbon energy OB&CCustomers & products – Increasing upstream2 to ~75%3 of group capex, of which ~70% oil & ~30% gas on average – C&P capex focused to ~$3bn p.a. by 20275 – LCE capex average <$800m p.a. through 2027
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2025 capital markets update 24 2025 capital markets update 24 Growing shareholder value Group ROACE* % 0% 5% 10% 15% 2024 actual Disciplined investments driving higher returns 2024 at $704 2027 at $74.44 >16% ROACE in 20274 (1) Refer to bp annual report and Form 20-F ‘Our investment process’ (2) Based on midpoint of capex* guidance range (3) Point forward, low carbon energy projects are H2 and CCS. Returns include leverage, farmdown and integration. Expected returns in offshore wind and solar as defined by JERA Nex bp and LSbp respectively (4) For price assumptions, see appendix All investment cases are considered against a set of balanced investment criteria Trading uplift of ~4% to group ROACE over last five years on average Expected returns1Investments Capex allocation2 ~75% ~20% <5% >15% >15% Mid-teens3 Upstream* (includes biogas) Downstream (includes EV charging and biofuels) Low carbon energy
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2025 capital markets update 25 2025 capital markets update 25 Growing shareholder value Cost reduction momentum (1) Versus 2023 baseline of underlying operating expenditure (2) Excludes any potential transactions relating to announced Castrol strategic review and Gelsenkirchen 2023 underlying operating expenditure Supply chain Organisation transformation Portfolio Growth $22.6bn 2 ‐ Reducing contractors, >2,600 already left bp ‐ Cross industry sharing (logistics) ‐ Partnering with top suppliers to develop cost intervention plans ‐ Industry standards and value engineering to design out costs ‐ Scaling up BTC across all major businesses & functions ‐ Right sizing to a more focused portfolio, e.g. hydrogen ‐ Reducing interfaces and eliminating duplication ‐ ~1/3 announced or completed – including offshore and onshore wind ‐ High-grading C&P and oil & gas ‐ Growth: increased costs related to acquired business and growth in our existing activities (excludes environment) Underpinned by technology $4 – 5bn structural cost reductions* by end 20271 *
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2025 capital markets update 26 2025 capital markets update 26 Growing shareholder value Growing free cash flow (1) For price assumptions, see appendix (2) Excludes any potential transactions relating to announced Castrol strategic review and Gelsenkirchen (3) Including biogas 2024 at $81 2024 at $701 2027 at $74.41 >20% CAGR adjusted free cash flow*1 growth $10.3bn ~$8bn ‐ Capex* reduction flexibility ‐ Disciplined focus on value ‐ Group function structural cost reduction* ‐ Focused customers growth and cost programme ‐ Lowering refining cash breakeven ‐ Portfolio high- grading ‐ 10 major project* start-ups 2025 – 2027 ‐ Higher unit cash margins ‐ Expected divestments Divestments2 Upstream*3 Downstream LCE and others Capex* 2024 – 2027 drivers
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2025 capital markets update 27 2025 capital markets update 27 Growing shareholder value Upstream – growing cash flow with improved margins (1) Excludes divestments. For price assumptions, see appendix Upstream operating cash flow* 2024 at $701 Biogas Oil & gas ‐ Higher margin major project* start-ups ‐ Renegotiated commercial terms ‐ Structural cost reductions* ~$1.5bn ‐ Price inflation ‐ Increased production from modular plants brought online ‐ Reduced costs + ~$2bn 2027 at $74.41
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2025 capital markets update 28 2025 capital markets update 28 Growing shareholder value Downstream – improved performance driving cash flow growth Downstream operating cash flow* ‐ bp bioenergy acquisition‐ Structural cost reductions* ~$1.5bn ‐ TA growth and environment ‐ Integrated mobility1 and other growth ‐ Turnaround phasing ‐ Value chain optimisation, including trading ‐ Refining margin inflation Earnings may move along the value chain based on market conditions (1) Fuels retail and convenience, EV charging (2) Excludes any potential transactions relating to announced Castrol strategic review and Gelsenkirchen. For price assumptions, see appendix 2 + $3.5 – 4.0bn Products (~50%)Customers (~50%) ‐ Improved availability (Whiting) ‐ Safely reducing structural cost (>$500m) and commercial performance 2 TAR and other 2024 2027 ~2/3 ~1/3 Prior inorganics* Organic ~2/3 ~1/3Refining improvement
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2025 capital markets update 29 2025 capital markets update 29 Growing shareholder value Resilient and stronger balance sheet 26 35 37 43 45 51 39 31 21 21 23 2015 2016 2017 2018 2019 1Q20 2020 2021 2022 2023 2024 Net debt* $bn1 (1) At end of year, except 1Q20 (2) 2015-2018 pre-IFRS 16 reporting represent the present value of operating and finance lease commitments (3) Potential proceeds from any transactions related to Castrol strategic review and announcement to bring a strategic partner into LSbp will be allocated to reduce net debt 10 11 10 9 10 9 9 9 11 11 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Lease liabilities $bn2 2 2 2 2 $12bn hybrids issued June 2020 Strong investment grade credit rating Net debt* Hybrids Leases – Option to retire up to 25% – Not increasing portfolio – Managed for flexibility and optionality to meet business needs – Target to reduce to $14 – 18bn by end 2027, including potential proceeds from any transactions related to Castrol and LSbp3
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2025 capital markets update 30 2025 capital markets update 30 Growing shareholder value Capital allocation – our financial frame (1) Potential proceeds from any transactions related to Castrol strategic review and announcement to bring a strategic partner into LSbp will be allocated to reduce net debt (2) Subject to board discretion each quarter taking into account factors including outlook for cash flow, share count reduction from buybacks and maintaining ‘A’ range credit metrics (3) Includes offsetting any dilution from employee share schemes over time $[15 – 20]bn Net debt target in [20XX] ‘A’ range credit metrics through cycle Capital expenditure*Shareholder distributions 30 – 40% of operating cash flow* as dividends and share buybacks2,3 Share buybacks Balance sheet Resilient dividend Expect annual increase of the dividend per ordinary share of at least 4%2 Excess cash shared through buybacks over time 1Q 2025 expected to be $750m – 1bn $14 – 18bn Net debt* target by end 20271 ‘A’ range credit metrics through cycle Disciplined investment allocation ~$15bn in 2025 ~$13 – 15bn in 2026 – 2027
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2025 capital markets update 31 2025 capital markets update 31 Growing shareholder value Our primary targets Beyond the primary targets shown on this slide, all other presented financial and operating metrics are used internally to manage delivery of bp’s plans, but are not targets. (1) For price assumptions, see appendix (2) Potential proceeds from any transactions related to Castrol strategic review and announcement to bring a strategic partner into LSbp will be allocated to reduce net debt >20% 1 CAGR from 2024 – 2027 Adjusted free cash flow* growth $4 – 5bn by end 2027 Structural cost reduction* $14 – 18bn 2 by end 2027 >16% 1 in 2027 Net debt* target Group ROACE*
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Summary
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2025 capital markets update 33 Murray Auchincloss Chief executive officer
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2025 capital markets update 34 2025 capital markets update 34 Growing shareholder value A fundamental reset – what’s changed Adjusted FCF* Compelling growth Net debt* Stronger balance sheet Distributions From excess cash Capex* Reduced and reallocated to higher returning businesses Costs Increased reduction target Portfolio Castrol and Lightsource bp Upstream* Growing production and reserves Downstream Reshaping portfolio and improving performance Transition Focused and capital-light Simplified reporting and targets
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2025 capital markets update 35 2025 capital markets update 35 Growing shareholder value Growing shareholder value (1) Group adjusted free cash flow CAGR from 2024 to 2027 (2) For price assumptions, see appendix (3) Includes offsetting any dilution from employee share schemes over time, and subject to maintaining strong investment grade credit rating (4) Potential proceeds from any transactions related to Castrol strategic review and announcement to bring a strategic partner into LSbp will be allocated to reduce net debt (5) vs 2019 Reallocating capital Driving performanceResetting strategy – Reallocating and reducing capex* – Significant divestment program – Improving downstream – Cost efficiency – Growing upstream* – Disciplined transition investment Resilient distributions Stronger balance sheet Lower emissions 45 – 50% reduction across Scope 1 & 2 by 20305 $14 – 18bn net debt* target by end 20274 30 – 40% total distribution of OCF2,3 Compelling FCF* growth >20% CAGR to 20271,2 Strong returns growth >16% ROACE*2 in 2027
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Appendix
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2025 capital markets update 37 2025 capital markets update 37 Growing shareholder value Price assumptions 2025 rule-of-thumb impact on pre-tax replacement cost operating profit2 – Oil price Brent +/- $1/bbl is ~$340m – Natural gas price Henry Hub +/- $0.10/mmbtu is $40m – Refining marker margin* +/- $1/bbl is $400m Marker prices 2024 Actual 20241 2025 2026 2027 Brent ($/bbl) 80.8 70 71.5 72.9 74.4 Henry Hub ($/mmbtu) 2.3 4.0 4.1 4.2 4.3 Refining marker margin ($/bbl) 17.7 17.0 17.4 17.8 18.1 (1) Reference year 2024 , assumes inflation ~2% (2) See Trading conditions update | Investors | Home for explanation These prices are not intended to reflect management’s forecasts for future prices.
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2025 capital markets update 38 2025 capital markets update 38 Growing shareholder value Adjusted free cash flow reconciliation Adjusted free cash flow Non-IFRS measure. It is defined as adjusted operating cash flow* less capital expenditure*. bp believes the measure provides useful information to investors. Adjusted free cash flow enables investors to measure our progress towards improving our performance. The nearest IFRS measures are net cash provided by operating activities and total cash capital expenditure. $bn 2024 Net cash provided by operating activities 27.3 Exclude: working capital* release 0.8 Adjusted operating cash flow 26.5 Less: capex (16.2) Adjusted free cash flow* 10.3
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Glossary
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2025 capital markets update 40 2025 capital markets update 40 Growing shareholder value Glossary – abbreviations Barrel (bbl) 159 litres, 42 US gallons. BTC Business technology centres. C&P Customers & products. CAGR Compound annual growth rate. CCS Carbon, capture and storage. EV Electric vehicle. FID Final investment decision. gCO2e/MJ Grams of carbon dioxide equivalent per megajoule of energy. GoA Gulf of America. GSK Gelsenkirchen. GTA Greater Tortue Ahmeyim. H2 Hydrogen. IFRS International Financial Reporting Standards. LCE Low carbon energy. LNG Liquefied natural gas. LSbp Lightsource bp. mmbtu Million British thermal units. mmboed Million barrels of oil equivalent per day. MtCO2e Metric tons of carbon dioxide equivalent. NL Netherlands. OB&C Other businesses and corporate. OCF Operating cash flow. ONGC Oil and Natural Gas Corporation. RC Replacement cost. SVP Senior vice president. TA TravelCenters of America. TAM Total addressable market. TAR Turnaround activity. TR Turkey. TSP Technical service provider.
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2025 capital markets update 41 Growing shareholder value 2025 capital markets update 41 Glossary Adjusted operating cash flow Non-IFRS measure. It is defined as net cash provided by (used in) operating activities as presented in the group cash flow statement, excluding movements in inventories and other current and non-current assets and liabilities as presented in the group cash flow statement, adjusted for inventory holding gains/losses*, fair value accounting effects (FVAEs) relating to subsidiaries and other adjusting items relating to the non-cash movement of US emissions obligations carried as a provision that will be settled by allowances held as inventory. When used in the context of a segment or subset of businesses rather than the group, the terms refer to the segment or business' estimated share thereof. bp-operated plant reliability Calculated taking 100% less the ratio of total unplanned plant deferrals divided by installed production capacity, excluding non-operated assets and bpx energy. Unplanned plant deferrals are associated with the topside plant and where applicable the subsea equipment (excluding wells and reservoir). Unplanned plant deferrals include breakdowns, which does not include Gulf of America weather related downtime. Capital expenditure (capex) Total cash capital expenditure as stated in the condensed group cash flow statement. Capital expenditure for the operating segments, gas & low carbon energy businesses and customers & products businesses is presented on the same basis. Downstream operating cash flow Non-IFRS measure and the customers & products' estimated share of adjusted operating cash flow* for the group as defined. Energy products For the purposes of our 2024 disclosures relating to net zero sales we consider an energy product to be one that is emissive or provides energy in its end use case. For further information on products included in bp’s 2024 net zero sales aim reporting see the Basis of Reporting bp.com/basisofreporting. Adjusted free cash flow (Adjusted FCF, or free cash flow) Adjusted free cash flow is a non-IFRS measure. It is defined as adjusted operating cash flow less capital expenditure. bp believes the measure provides useful information to investors. Adjusted free cash flow enables investors to measure our progress on delivering growth and improving our performance. The nearest IFRS measures are net cash provided by operating activities and total cash capital expenditure. Adjusted free cash flow CAGR Adjusted free cash flow CAGR is a non-IFRS measure. It is annualised growth rate of adjusted free cash flow (defined above) at $70/bbl Brent, $4/mmbtu Henry Hub, and $17/bbl refining marker margin, all 2024 real. bp believes the measure provides useful information to investors. Adjusting free cash flow CAGR enables investors to measure our progress on delivering growth and improving our performance. The nearest IFRS measure is net cash provided by (used in) operating activities. Adjusting items Items that bp discloses separately because it considers such disclosures to be meaningful and relevant to investors. They are items that management considers to be important to period-on-period analysis of the group's results and are disclosed in order to enable investors to better understand and evaluate the group’s reported financial performance. Adjusting items include gains and losses on the sale of businesses and fixed assets, impairments, environmental and related provisions and charges, restructuring, integration and rationalisation costs, fair value accounting effects and costs relating to the Gulf of America oil spill and other items. Adjusting items within equity- accounted earnings are reported net of incremental income tax reported by the equity accounted entity. Adjusting items are used as a reconciling adjustment to derive underlying RC profit or loss and related underlying measures which are non-IFRS measures.
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2025 capital markets update 42 Growing shareholder value 2025 capital markets update 42 Glossary Fair value accounting effects Non-IFRS adjustments to our IFRS profit (loss). They reflect the difference between the way bp manages the economic exposure and internally measures performance of certain activities and the way those activities are measured under IFRS. Fair value accounting effects are included within adjusting items. They relate to certain of the group's commodity, interest rate and currency risk exposures as detailed below. Other than as noted below, the fair value accounting effects described are reported in both the gas & low carbon energy and customers & products segments. Green hydrogen Hydrogen produced by electrolysis of water using renewable power. Grey hydrogen Produced via natural gas or coal without CCUS. Hydrocarbons Liquids and natural gas. Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels. Inorganic capital expenditure (Inorganic) A subset of capital expenditure on a cash basis and a non-IFRS measure. Inorganic capital expenditure comprises consideration in business combinations and certain other significant investments made by the group. It is reported on a cash basis. bp believes that this measure provides useful information as it allows investors to understand how bp’s management invests funds in projects which expand the group’s activities through acquisition. The nearest equivalent measure on an IFRS basis is capital expenditure on a cash basis. Inventory holding gains and losses Inventory holding gains and losses are non-IFRS adjustments to our IFRS profit (loss) and represent: • The difference between the cost of sales calculated using the replacement cost of inventory and the cost of sales calculated on the first-in first-out (FIFO) method after adjusting for any changes in provisions where the net realizable value of the inventory is lower than its cost. Under the FIFO method, which we use for IFRS reporting of inventories other than for trading inventories, the cost of inventory charged to the income statement is based on its historical cost of purchase or manufacture, rather than its replacement cost. In volatile energy markets, this can have a significant distorting effect on reported income. The amounts disclosed as inventory holding gains and losses represent the difference between the charge to the income statement for inventory on a FIFO basis (after adjusting for any related movements in net realizable value provisions) and the charge that would have arisen based on the replacement cost of inventory. For this purpose, the replacement cost of inventory is calculated using data from each operation’s production and manufacturing system, either on a monthly basis, or separately for each transaction where the system allows this approach. • An adjustment relating to certain trading inventories that are not price risk managed which relate to a minimum inventory volume that is required to be held to maintain underlying business activities. This adjustment represents the movement in fair value of the inventories due to prices, on a grade-by-grade basis, during the period. This is calculated from each operation’s inventory management system on a monthly basis using the discrete monthly movement in market prices for these inventories. The amounts disclosed are not separately reflected in the financial statements as a gain or loss. No adjustment is made in respect of the cost of inventories held as part of a trading position and certain other temporary inventory positions that are price risk-managed.
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2025 capital markets update 43 Growing shareholder value 2025 capital markets update 43 Glossary Joint venture (JV) A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Major projects Have a bp net investment of at least $250 million, or are considered to be of strategic importance to bp or of a high degree of complexity. Net debt Non-IFRS measure. Calculated as finance debt, as shown in the balance sheet, plus the fair value of associated derivative financial instruments that are used to hedge foreign currency exchange and interest rate risks relating to finance debt, for which hedge accounting is applied, less cash and cash equivalents. Net debt does not include accrued interest, which is reported within other receivables and other payables on the balance sheet and for which the associated cash flows are presented as operating cash flows in the group cash flow statement. Net zero References to global net zero in the phrase, 'to help the world get to net zero', means achieving '...a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases...on the basis of equity, and in the context of sustainable development and efforts to eradicate poverty', as set out in Article 4(1) of the Paris Agreement. References to net zero for bp in the context of our ambition and net zero operations and net zero sales aims mean achieving a balance between (a) the relevant Scope 1 and 2 emissions (for net zero operations) and product lifecycle emissions (for net zero sales) and (b) the aggregate of applicable deductions from qualifying activities such as sinks under our methodology at the applicable time. Net zero operations bp’s aim to reach net zero operational greenhouse gas (CO2 and methane) emissions by 2050 or sooner, on a gross operational control basis, in accordance with bp’s net zero operations aim, which relates to our reported Scope 1 and 2 emissions. Any interim target or aim in respect of bp’s net zero operations aim is defined in terms of absolute reductions relative to the baseline year of 2019. Net zero sales bp’s aim to reach net zero for the carbon intensity of sold energy products*. Any interim target or aim in respect of bp’s net zero sales aim is defined in terms of reductions in the carbon intensity of the energy products we sell (in grams CO2e/MJ) relative to the baseline year of 2019. Operating cash flow Net cash provided by (used in) operating activities as stated in the group cash flow statement. When used in the context of a segment rather than the group, the terms refer to the segment’s share thereof. Refining availability Represents Solomon Associates’ operational availability for bp-operated refineries, which is defined as the percentage of the year that a unit is available for processing after subtracting the annualised time lost due to turnaround activity and all mechanical, process and regulatory downtime. Refining marker margin (RMM) Average of regional indicator margins weighted for bp’s crude refining capacity in each region. Each regional marker margin is based on product yields and a marker crude oil deemed appropriate for the region. The regional indicator margins may not be representative of the margins achieved by bp in any period because of bp’s particular refinery configurations and crude and product slate. Replacement cost (RC) profit or loss / RC profit or loss attributable to bp shareholders Reflects the replacement cost of inventories sold in the period and is calculated as profit or loss attributable to bp shareholders, adjusting for inventory holding gains and losses (net of tax). RC profit or loss for the group is not a recognised IFRS measure. bp believes this measure 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 to changes in prices as well as changes in underlying inventory levels. In order for investors to understand the operating performance of the group excluding the impact of 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 measure. The nearest equivalent measure on an IFRS basis is profit or loss attributable to bp shareholders.
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2025 capital markets update 44 Growing shareholder value 2025 capital markets update 44 Glossary Reserves replacement ratio The extent to which the year’s production has been replaced by proved reserves added to our reserve base. The ratio is expressed in oil-equivalent terms and includes changes resulting from discoveries, improved recovery and extensions and revisions to previous estimates, but excludes changes resulting from acquisitions and disposals. Return on average capital employed (ROACE) Non-IFRS measure. ROACE is defined as underlying replacement cost profit, which is defined as profit or loss attributable to bp shareholders adjusted for inventory holding gains and losses*, adjusting items and related taxation on inventory holding gains and losses and adjusting items total taxation, after adding back non-controlling interest and interest expense net of tax, divided by the average of the beginning and ending balances of total equity plus finance debt, excluding cash and cash equivalents and goodwill as presented on the group balance sheet over the periods presented. Interest expense before tax is finance costs as presented on the group income statement, excluding lease interest, the unwinding of the discount on provisions and other payables and other adjusting items reported in finance costs. bp believes it is helpful to disclose the ROACE because this measure gives an indication of the company's capital efficiency. The nearest IFRS measures of the numerator and denominator are profit or loss for the period attributable to bp shareholders and total equity respectively. . Sold energy products For the purposes of bp’s net zero sales aim, these represent the energy products* we sell to third parties. For these purposes, intercompany sales (sales between two group subsidiaries) are not included and equity- accounted entities are treated as third parties. Structural cost reduction Non-IFRS measure. Calculated as decreases in underlying operating expenditure as a result of operational efficiencies, divestments, workforce reductions and other cost saving measures that are expected to be sustainable compared with 2023 levels. The total change between periods in underlying operating expenditure will reflect both structural cost reductions and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Estimates of cumulative annual structural cost reduction may be revised depending on whether cost reductions realised in prior periods are determined to be sustainable compared with 2023 levels. Structural cost reductions are stewarded internally to support management’s oversight of spending over time. bp believes this performance measure is useful in demonstrating how management drives cost discipline across the entire organization, simplifying our processes and portfolio and streamlining the way we work. The nearest IFRS measures are production and manufacturing expenses and distributions and administration expenses. We are unable to present forward-looking information of the nearest IFRS measures, because without unreasonable efforts, we are unable to forecast accurately certain adjusting items required to calculate a meaningful comparable IFRS forward-looking financial measure. Transition businesses Business activities including in the areas of biogas, biofuels, EV charging, renewable power generation, hydrogen and carbon capture. Upstream Includes oil and natural gas field development and production within the gas & low carbon energy and oil production & operations segments. References to upstream exclude Rosneft.
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2025 capital markets update 45 Growing shareholder value 2025 capital markets update 45 Glossary Upstream operating cash flow Non-IFRS measure and a subset of businesses' estimated share of adjusted operating cash flow* for the group as defined. Underlying operating expenditure Non-IFRS measure. A subset of production and manufacturing expenses plus distribution and administration expenses and excludes costs that are classified as adjusting items. It represents the majority of the remaining expenses in these line items but excludes certain costs that are variable, primarily with volumes (such as freight costs). Other variable costs are included in purchases in the income statement. Management believes that underlying operating expenditure is a performance measure that provides investors with useful information regarding the company’s financial performance because it considers these expenses to be the principal operating and overhead expenses that are most directly under their control although they also include certain foreign exchange and commodity price effects. The nearest IFRS measures are production and manufacturing expenses and distributions and administration expenses. Underlying replacement cost (RC) profit or loss / underlying RC profit or loss attributable to bp shareholders Non-IFRS measure. RC profit or loss* after excluding net adjusting items and related taxation. Underlying RC profit or loss before interest and tax for the operating segments or customers & products businesses is calculated as RC profit or loss including profit or loss attributable to non-controlling interests before interest and tax for the operating segments and excluding net adjusting items for the respective operating segment or business. Unit production costs Calculated as production cost divided by units of production. Production cost does not include ad valorem and severance taxes. Units of production are barrels for liquids and thousands of cubic feet for gas. Amounts disclosed are for bp subsidiaries only and do not include bp’s share of equity-accounted entities. Working capital Movements in inventories and other current and non-current assets and liabilities as reported in the condensed group cash flow statement. Change in working capital adjusted for inventory holding gains/losses*, fair value accounting effects relating to subsidiaries and other adjusting items is a non-IFRS measure. It is calculated by adjusting for inventory holding gains/losses* reported in the period; fair value accounting effects relating to subsidiaries reported within adjusting items for the period; and other adjusting items relating to the non-cash movement of US emissions obligations carried as a provision that will be settled by allowances held as inventory. This represents what would have been reported as movements in inventories and other current and non-current assets and liabilities, if the starting point in determining net cash provided by operating activities had been underlying replacement cost profit rather than profit for the period. The nearest equivalent measure on an IFRS basis for this is movements in inventories and other current and non-current assets and liabilities. bp utilises various arrangements in order to manage its working capital including discounting of receivables and, in the supply and trading business, the active management of supplier payment terms, inventory and collateral.