This summary is based on the fourth quarter earnings call conducted by BP Plc. (BP: chart) on February 6, 2007.

Management:

- Group Chief Executive: John Browne
- CEO, Exploration and Production: Tony Hayward
- CE, Refining and Marketing: John Manzoni
- President and Chief Executive, TNK-BP Bob Dudley
- Chief Financial Officer: Byron Grote

Key Investors Issues

- Replacement cost profit was down 12% to $3,895 million or $20.08 share from $4,432 million or $21.34 a share in the prior year..
- Revenues dropped 1.5% to $62.8 billion.
- A total of $23.2 billion was distributed to shareholders.

Fiscal Year 2006 Highlights.

- The firm delivered a replacement cost profit of $22.3 billion or $111.1 a share, up 15% over the prior year showing the additional benefits of share buybacks.
- Revenues increased 11.7% to $274 billion, from $245 billion in the prior year.
- Operating cash flow was $28.2 billion, up 5% and the firm declared a quarterly dividend for March of 10.325 cents per share.
- A total of $23.2 billion was distributed to shareholders, including $15.5 billion in share buybacks, thereby reducing shares in issue by around 6%.

Fourth Quarter Highlights:

Average oil realization declined to $56 per barrel, although it is still 5% higher than the prior year contrast, however, the average gas realization has been relatively at $4.40 per thousand cubic feet.

- Refining indicator margin was $6.30 per barrel, 17% lower than in the prior year.
- Replacement cost profit was $3.9 billion, 12% lower than the prior year amd actual profit, including inventory gains and losses, was $2.9 billion, down 22% compared to last year.
- Operating cash flow of $5 billion was 17% higher than a year earlier and up 24% on a per-share basis reflecting the benefit of share buybacks.
- Revenue decreased 1.5% from $63.8 billion in 2005 to $62.8 billion as a result of weaker margins.

The Sterling dividend is down slightly year-on-year reflecting the sharply weaker dollar.

- Operating cash flow exceeded $28 billion and disposals added more than $6 billion as uses of cash remained consistent with the strategic intent.
- The firm reinvested nearly $16 billion of this cash back into the businesses and also increased total shareholder distributions by 22% to $23 billion.
- The net debt ratio increased to 20%, reflecting normal year-end working capital and tax phasing

Several incidences impacted results including two spills in Alaska, delays in the start-up of the Thunder Horse which had knock-on impact on Atlantis and allegations of improper trading activities in the United States associated with the propane market.

- The firm is now consulting with the Baker Panel on how best to investigate these incidences across all US refineries and how to apply the lessons learned elsewhere in the operations.
- Additionally, the firm has made significant changes to its process safety systems since the accident at Texas City,
- Reserves replacement ratio using reserves was 113% on a combined basis of subsidiaries and equity accounted entities excluding the effects of acquisitions and divestitures.

Segment Highlights:

- Exploration & Production reported a pre-tax profit of $5.1 billion down from $6.6 billion in the prior year reflecting lower gas realizations and lower volumes, the continued impact of sector-specific inflation, greater integrity spend and higher non-cash costs.
- Non-operating charges improved mainly due to the relative change in the valuation of embedded derivatives relating to the North Sea gas contracts.
- The segment reported production of 3.84 million barrels of oil equivalent per day, down 5% from the prior year.
- TNK-BP’s contribution of $180 million was much lower than the prior year, reflecting the absence of last year’s divestment gains and the adverse effect of lagged tax reference prices.

The firm continued its track record with ten discoveries from 17 wells and notable successes included the Kaskida discovery in the Deepwater Gulf of Mexico, and the Titania and Urano discoveries in the ultra-deepwater of Block 31 in Angola.

- In Russia, TNK-BP continued a successful exploration program with a number of significant discoveries in the Uvat area in West Siberia.
- In Oman, the firm recently signed a Production Sharing Agreement to appraise and develop the Khazzan/Makarem fields, a very large tight gas resource, which can be developed using the same technology, as currently deployed at the Wamsutter field in United States.
- In Pakistan, the firm was awarded three offshore exploration licenses covering around 20,000 square kilometers offshore in the Indus Delta and have recently signed the Heads of Agreement for cross assignment into a further two licenses covering another 10,000 square kilometers.

In India, the firm established an initial presence through the Birbhum Coal Bed Methane license in West Bengal and were successful in extending an acreage position in the Deepwater Gulf of Mexico winning over 100 blocks.

- In 2007, the firm expects to invest $750 million in core exploration.
- The BTC pipeline and the East Azeri development came on stream in June and October of last year.
- The ACG fields are currently producing 650,000 barrels of oil equivalent a day on a gross basis and will ramp up to over 750,000 barrels a day by year-end.
- Overall, the combined project started up ahead of schedule, including East Azeri, which came on almost four months ahead of schedule and around six months ahead of a typical industry schedule. - The firm also saw the start-up of In Amenas in Algeria; the Cannonball development in Trinidad; the Temsah development in Egypt; and Dalia, the second hub in Block 17 in Angola, which collectively currently produce around 700,000 barrels of oil equivalent a day net.
- Projects in the pipeline include Greater Plutonio, Rosa and Phase 2 of Kizomba A, in Angola, Atlantis and the King Subsea Project in the Gulf of Mexico, Red Mango in Trinidad and a major expansion of the San Juan Coal Bed Methane Project in North America.

- In Refining & Marketing profits were over $300 million, reflecting higher refining throughput at Texas City and the absence of the significant rationalization costs taken in 2005, along with a smaller charge from IFRS fair value accounting.
- These positive factors were partly offset by higher turnaround costs, greater integrity spend, and lower refining and marketing margins.
- During 2007, the firm plans to restart the refurbished second train of the refinery, bringing the total crude throughput to around 400,000 barrels a day.