Interim Results Part 1 of 2

BP PLC
26 July 2005


BP p.l.c.
Group Results
2nd Quarter and Half Year 2005
                                                        London 26 July 2005

                         FOR IMMEDIATE RELEASE

     RECORD RESULT AND SHAREHOLDER DISTRIBUTIONS FOR THE HALF-YEAR

---------------------------------------------------------------------------

 Second   First  Second
Quarter Quarter Quarter                                       First Half
   2004    2005    2005   $ million                      2005    2004     %

=======================                                ====================

  4,335   6,602   5,591   Profit for the period*       12,193   9,247
                          Inventory holding
   (462) (1,111)   (610)  (gains) losses               (1,721) (1,110)

-----------------------                                --------------------

  3,873   5,491   4,981   Replacement cost profit      10,472   8,137    29

=======================                                ====================

   9.83   13.55   12.67   - per ordinary share (pence)  26.22   20.32
  17.69   25.61   23.42   - per ordinary share (cents)  49.03   36.99    33
   1.06    1.54    1.40   - per ADS (dollar)             2.94    2.22

=======================                                ====================


o    BP's second quarter replacement cost profit was $4,981 million compared
     with $3,873 million a year ago, an increase of 29%. For the half year,
     replacement cost profit was a record $10,472 million compared with
     $8,137 million, up 29%.

o    The second quarter result includes a net non-operating charge of
     $826 millon compared with a net non-operating charge of $198 million in
     the second quarter of 2004, and a net non-operating gain of
     $535 million in the first quarter of 2005. For the half year, the net
     non-operating charge was $291 million compared with a net gain of
     $578 million for the first half of 2004.

o    The second quarter trading environment was generally stronger than a
     year ago with higher oil and gas realizations, higher refining and
     chemicals margins, but with lower retail marketing margins.

o    Net cash provided by operating activities for the quarter and half year
     was $6.7 billion and $16.1 billion, respectively, compared with
     $5.2 billion and $12.2 billion a year ago.

o    The ratio of net debt to net debt plus equity was 18% compared with 20%
     a year ago.

o    The quarterly dividend, to be paid in September, is 8.925 cents per
     share ($0.5355 per ADS) compared with 7.10 cents per share a year ago.
     For the half year, the dividend showed an increase of 26%. In sterling
     terms, the quarterly dividend is 5.119 pence per share, compared with
     3.860 pence per share a year ago; for the half year the increase was
     25%. During the first half, the company repurchased 396 million of its
     own shares at a cost of $4.1 billion.


BP Group Chief Executive, Lord Browne, said:

     'Our record first half financial results could not have been delivered
     without the significant investments made over the last decade. These
     are capturing the benefit of the strong trading environment. Discipline
     in returning capital to shareholders after continuing to invest for the
     future is allowing us to reduce the number of shares outstanding,
     further improving per share performance.'

* Profit attributable to BP shareholders.



                      Summary Quarterly Results


Exploration and Production's second quarter result was up 38% on a year ago
reflecting higher realizations in both liquids and gas and higher volumes,
partially offset by higher operating costs and revenue investments.

The Refining and Marketing result reflects improved refining margins, lower
retail marketing margins and a higher net charge for non-operating items
compared with a year ago.

In Gas, Power and Renewables the result decreased compared with a year ago due
to lower contributions from the gas marketing and natural gas liquids
businesses.

Interest and Other finance expense was $162 million for the quarter compared
with $201 million in the previous quarter. The decrease relates primarily to the
absence in the second quarter of costs associated with the early redemption of
finance leases in the first quarter of 2005.

The effective tax rate on replacement cost profit was 31.5%.

Capital expenditure was $3.3 billion for the quarter. There were no acquisitions
in the quarter. Disposal proceeds were $0.4 billion.

Net debt at the end of the quarter was $17.9 billion. The ratio of net debt to
net debt plus equity was 18%, and was also 18% at the end of the first quarter.

During the second quarter, the company repurchased 203 million of its own
shares, at a cost of $2.1 billion. These shares are held in treasury.

---------

The commentaries above and following are based on replacement cost profit.

TNK-BP operational and financial information has been estimated.

The financial information for 2004 has been restated to reflect the following,
all with effect from 1 January 2005: (a) the adoption by the group of
International Financial Reporting Standards (IFRS) (see Note 1); (b) the
transfer of the aromatics and acetyls operations from the former Petrochemicals
segment to the Refining and Marketing segment; (c) the transfer of the olefins
and derivatives operations from the former Petrochemicals segment to Other
businesses and corporate; (d) the transfer of the Grangemouth and Lavera
refineries from the Refining and Marketing segment to Other businesses and
corporate; (e) the transfer of the Mardi Gras pipeline from the Exploration and
Production segment to the Refining and Marketing segment; and (f) the transfer
of the Hobbs fractionator from the Gas, Power and Renewables segment to Other
businesses and corporate. Note 2 provides further detail of the resegmentation.



                          Non-Operating Items

                                                                Second
                                                               Quarter
$ million                                                         2005
                                                               =======

Exploration and Production                                        (652)
Refining and Marketing                                            (658)
Gas, Power and Renewables                                           87
Other businesses and corporate                                      17

                                                               -------

                                                                (1,206)

Taxation(a)                                                        380

                                                               -------

                                                                  (826)

                                                               =======


(a)  Tax on Non-operating items is calculated using the effective tax
     rate on replacement cost profit.



    Reconciliation of Replacement Cost Profit to Profit for the Period

   Second     First   Second
  Quarter   Quarter   Quarter                                  First Half
     2004      2005      2005  $ million                     2005      2004

=============================                              ================

    4,263     6,486     5,903  Exploration and Production  12,389     8,505
    1,665     1,421     1,286  Refining and Marketing       2,707     2,585
      189       404       174  Gas, Power and Renewables      578       390
                               Other businesses and
     (197)      207       175  corporate                      382       897
      (87)     (153)       (4) Consolidation adjustment      (157)     (153)

-----------------------------                              ----------------

                               RC profit before interest
    5,833     8,365     7,534  and tax                     15,899    12,224

-----------------------------                              ----------------

                               Interest and other
     (171)     (201)     (162) finance expense               (363)     (345)
   (1,747)   (2,612)   (2,322) Taxation                    (4,934)   (3,666)
      (42)      (61)      (69) Minority interest             (130)      (76)

-----------------------------                              ----------------

    3,873     5,491     4,981  RC profit(a)                10,472     8,137

=============================                              ================

                               Inventory holding
      462     1,111       610  gains (losses)               1,721     1,110

-----------------------------                              ----------------

    4,335     6,602     5,591  Profit for the period*      12,193     9,247

=============================                              ================


(a)  Replacement cost profit reflects the current cost of supplies. The
     replacement cost profit for the period is arrived at by excluding from
     profit inventory holding gains and losses. BP uses this measure to
     assist investors to assess BP's performance from period to period.
     Replacement cost profit is not a recognized GAAP measure. Operating
     cash flow is calculated from the starting point of profit before
     taxation which includes inventory holding gains and losses. Operating
     cash flow also reflects working capital movements including
     inventories, trade and other receivables and trade and other payables.
     The carrying value of these working capital items will change for
     various reasons, including movements in oil, gas and products prices.



                              Per Share Amounts


    Second      First     Second
   Quarter    Quarter    Quarter                               First Half
      2004       2005       2005                             2005      2004

================================                       =====================

                                  Results for the
                                  period ($m)
     4,335      6,602      5,591  Profit*                  12,193      9,247
     3,873      5,491      4,981  Replacement cost profit  10,472      8,137

-------------------------------                        --------------------

                                  Shares in issue at
21,789,115 21,367,827 21,174,934  period end (thousand)21,174,934 21,789,115
                                  - ADS equivalent
 3,631,519  3,561,305  3,529,156  (thousand)            3,529,156  3,631,519
                                  Average number of
                                  shares oustanding
21,906,318 21,441,285 21,270,485  (thousand)           21,355,418 21,997,057
                                  - ADS equivalent
 3,651,053  3,573,548  3,545,081  (thousand)            3,559,236  3,666,176

--------------------------------                       ---------------------

                                  Per ordinary share
                                  (cents)
     19.79      30.79      26.30  Profit for the period     57.09      42.03
                                  RC profit
     17.69      25.61      23.42  for the period            49.03      36.99

                                  Per ADS (cents)
    118.74     184.74     157.80  Profit for the period    342.54     252.18
                                  RC profit
    106.14     153.66     140.52  for the period           294.18     221.94

--------------------------------                       ---------------------

*   Profit attributable to BP shareholders.



                        Exploration and Production

   2Q    1Q    2Q                                               First Half
 2004  2005  2005   $ million                                  2005    2004
=================                                            ==============

4,263 6,491 5,906   Profit before interest and tax(a)        12,397   8,513
    -    (5)   (3)  Inventory holding (gains) losses             (8)     (8)

-----------------                                            --------------

                    Replacement cost profit
4,263 6,486 5,903   before interest and tax                  12,389   8,505

=================                                            ==============

                    Results include:
                    Impairment and gain (loss) on sale of
 (274)  940    (3)  businesses and fixed assets                 937    (249)
    -     -     -   Environmental and other provisions            -       -
                    Restructuring, integration and
    -     -     -   rationalization costs                         -       -
                    Fair value gain (loss) on
    -  (160) (674)  embedded derviatives                       (834)      -
    -     -    25   Other                                        25       -

-----------------                                            --------------

 (274)  780  (652)  Total non-operating items                   128    (249)

=================                                            ==============

  108   160   139   Exploration expense                         299     244
                    Of which:
   22    84    47   Exploration expenditure written off         131      89

-----------------                                            --------------

                    Production (Net of Royalties)
2,321 2,405 2,437   Crude oil (mb/d)                          2,421   2,331
  197   188   182   Natural gas liquids (mb/d)                  185     194
2,518 2,593 2,619   Total liquids (mb/d)(b)                   2,606   2,525
8,425 8,745 8,661   Natural gas (mmcf/d)                      8,703   8,512
3,971 4,101 4,112   Total hydrocarbons (mboe/d)(c)            4,107   3,993

=================                                            ==============

                    Average realizations
34.47 43.37 47.79   Crude oil ($/bbl)                         45.60   32.85
23.71 28.14 29.86   Natural gas liquids ($/bbl)               28.99   23.43
33.27 41.74 45.95   Total liquids ($/bbl)                     43.85   31.85
 3.68  4.26  4.38   Natural gas ($/mcf)                        4.32    3.74
27.66 33.60 36.11   Total hydrocarbons ($/bbl)                34.86   27.06

=================                                            ==============

                    Average oil marker prices($/bbl)
35.32 47.62 51.63   Brent                                     49.64   33.67
38.28 49.88 53.08   West Texas Intermediate                   51.52   36.80
36.99 45.07 50.10   Alaska North Slope US West Coast          47.64   35.61

=================                                            ==============

                    Average natural gas marker prices
 6.00  6.27  6.74   Henry Hub gas price ($/mmbtu)(d)           6.51    5.84

                    UK Gas - National
20.70 37.96 30.15   Balancing Point (p/therm)                 34.02   22.64

=================                                            ==============

(a) Includes profit after interest and tax of equity-accounted entities.

(b) Crude oil and natural gas liquids.

(c) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
    1 million barrels.

(d) Henry Hub First of the Month Index.



                        Exploration and Production

The replacement cost profit before interest and tax for the second quarter was
$5,903 million, an increase of 38% over the second quarter of 2004. This result
benefited from higher realizations in both liquids and gas and higher volumes,
partially offset by higher operating costs and revenue investments. Net
non-operating losses for the second quarter total $652 million, primarily
arising from fair value losses on embedded derivatives relating to North Sea gas
contracts. The corresponding quarter in 2004 contained charges for impairment of
$160 million and losses on sales of assets of $114 million.

Production for the quarter at 4,112 mboe/d was over 3.5% higher than the second
quarter of 2004. This reflects production growth from major projects in the new
profit centres and TNK-BP, partly offset by anticipated decline in existing
profit centres.

The replacement cost profit before interest and tax of $12,389 million for the
half year was a record and represented an increase of 46% over the same period
of the previous year. This result also benefited from higher realizations and
volumes partially offset by higher operating costs and revenue investments. The
half year result included net gains on sales of assets of $1,067 million, fair
value losses of $834 million on embedded derivatives and charges for impairments
of $130 million.

In the deepwater Gulf of Mexico, efforts continue in response to the Thunder
Horse platform incident. The facility is now stable and trim; freeboard and
displacement are normal. Work continues to determine the cause. We will not
begin production, originally scheduled for end-2005, until any damage has been
identified and repaired. Elsewhere, projects in the New Profit Centres remain on
track. In Azerbaijan, line-fill of the Baku-Tbilisi-Ceyhan (BTC) oil export
pipeline commenced and the official inauguration ceremony was held on 25 May
2005. In Angola, the Kizomba B development achieved first oil in early July,
ahead of schedule. In Trinidad, both the Cannonball project and the Atlantic LNG
Train 4 remain on course for start-up of production in the second half of the
year. In addition, we approved our investment in a fifth LNG train in the North
West Shelf development in Australia during the second quarter.

Projects in the Existing Profit Centres also remain on track. In Egypt, we
extended two concessions in the Gulf of Suez: the Merged Concession Agreement
(MCA) and South Garib, which will extend the life of the existing oil fields,
increase the recovery of remaining reserves and provide a foundation for growth
through future exploration.

During the quarter, BP Trinidad and Tobago LLC (BP 70%) reached agreement for
the sale of the Teak, Samaan and Poui fields in Trinidad. Completion of the
transaction is expected in the fourth quarter of 2005 subject to regulatory and
other approvals.



                        Customer Facing Segments
                         Refining and Marketing


     2Q      1Q      2Q                                         First Half
   2004    2005    2005  $ million                             2005    2004

=======================                                       =============

  2,070   2,363   1,950  Profit before interest and tax(a)    4,313   3,543
   (405)   (942)   (664) Inventory holding (gains) losses    (1,606)   (958)

-----------------------                                       -------------

                         Replacement cost profit
  1,665   1,421   1,286  before interest and tax              2,707   2,585

=======================                                       =============

                         Results include:
                         Impairment and gain (loss) on sale
     55     (27)     75  of businesses and fixed assets          48    (105)
      -       -       -  Environmental and other provisions       -       -
                         Restructuring, integration and
      -       -       -  rationalization costs                    -       -
                         Fair value gain (loss) on
      -       -       -  embedded derivatives                     -       -
      -       -    (733) Other                                 (733)      -

-----------------------                                       -------------

     55     (27)   (658) Total non-operating items             (685)   (105)

=======================                                       =============

                         Refinery throughputs(b) (kb/d)
    206     164     210  UK                                     187     202
    729     647     671  Rest of Europe                         659     720
  1,370   1,400   1,350  USA                                  1,375   1,317
    377     299     305  Rest of World                          302     388

-----------------------                                       -------------

  2,682   2,510   2,536  Total throughput                     2,523   2,627

=======================                                       =============

   94.9    95.2    93.1  Refining availability (%)             94.1    95.0

=======================                                       =============

                         Oil sales volumes (kb/d)
                         Refined products
    323     338     356  UK                                     347     310
  1,318   1,323   1,346  Rest of Europe                       1,335   1,335
  1,687   1,648   1,656  USA                                  1,652   1,685
    651     621     604  Rest of World                          612     652

-----------------------                                      --------------

  3,979   3,930   3,962  Total marketing sales                3,946   3,982
  2,262   2,196   2,129  Trading/supply sales                 2,163   2,382

-----------------------                                      --------------

  6,241   6,126   6,091  Total refined product sales          6,109   6,364
  3,761   3,635   4,123  Crude oil                            3,879   3,909

-----------------------                                      --------------

 10,002   9,761  10,214  Total oil sales                      9,988  10,273

=======================                                      ==============

                         Global Indicator Refining Margin(c)
                         ($/bbl)
   5.29    2.84    5.68  NWE                                   4.27    4.01
   9.18    7.30    9.37  USGC                                  8.34    8.05
   9.01    3.84    7.45  Midwest                               5.65    6.84
  15.41   12.88   14.53  USWC                                 13.71   11.73
   2.80    4.98    6.30  Singapore                             5.64    3.11
   8.28    5.94    8.42  BP Average                            7.19    6.59

=======================                                      ==============

                         Chemicals production (kte)
    326     317     317  UK                                     634     629
    814     806     735  Rest of Europe                       1,541   1,611
  1,144   1,218   1,107  USA                                  2,325   2,327
    982   1,009     981  Rest of World                        1,990   2,022

-----------------------                                      --------------

  3,266   3,350   3,140  Total production                     6,490   6,589

=======================                                      ==============


(a)  Includes profit after interest and tax of equity-accounted entities.

(b)  Refinery throughputs exclude the Grangemouth and Lavera refineries
     which were transferred to Other businesses and corporate effective
     1 January 2005.

(c)  The Global Indicator Refining Margin (GIM) is the average of six
     regional indicator margins weighted for BP's crude refining capacity in
     each region. Each regional indicator margin is based on a single
     representative crude with product yields characteristic of the typical
     level of upgrading complexity. 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.
     The GIM data shown above excludes the Grangemouth and Lavera
     refineries.



                        Customer Facing Segments
                         Refining and Marketing


The replacement cost profit before interest and tax for the second quarter and
half year was $1,286 million and $2,707 million respectively. This compares with
$1,665 million and $2,585 million respectively, for the equivalent periods in
2004.

The quarter's result includes a net charge of $658 million for non-operating
items. Of this, $700 million is in respect of all fatality and personal injury
compensation claims associated with the incident at the Texas City refinery on
23 March 2005. Non-operating items also include a gain of $75 million on the
disposal of retail assets and a charge of $33 million for the impairment of an
equity-accounted entity.  The total charge for non-operating items for the half
year amounted to $685 million.

The second quarter and half year results, compared with the prior year, reflect
improved refining margins, lower retail marketing margins and a higher net
charge for non-operating items. The average refining Global Indicator Margin
(GIM) for both the second quarter and the first half of 2005 were higher than in
the equivalent periods of 2004 due to product demand strength and the benefits
of heavy/sour crude discounts. The margin realized by BP's refinery system also
reflected the benefits of locational advantages and supply optimization. Retail
marketing margins were lower than last year for both the quarter and half year
as a result of rises in crude and product prices being faster than the increase
in selling prices.

Refining crude oil throughputs for the quarter and first half were 2,536 kb/d
and 2,523 kb/d respectively, lower than last year primarily due to the impact of
disposals. The quarter's refining availability reduced to 93% compared with the
95% we achieved consistently last year and in the first quarter. This reflects
the full quarter impact of the Texas City incident. Marketing sales were 3,962
kb/d in the second quarter and 3,946 kb/d for the half year. The sales were held
at similar levels to both the second quarter and first half of 2004 despite the
significant increase in crude and product prices.



                          Customer Facing Segments
                          Gas, Power and Renewables


     2Q      1Q      2Q                                         First Half
   2004    2005    2005  $ million                             2005    2004

=======================                                       =============

    183     418     160  Profit before interest and tax(a)      578     374
      6     (14)     14  Inventory holding (gains) losses         -      16

-----------------------                                       -------------

                         Replacement cost result
    189     404     174  before interest and tax                578     390

=======================                                       =============

                         Results include:
                         Impairment and gain (loss) on sale
      -      63      20  of businesses and fixed assets          83       -
      -       -       -  Environmental and other provisions       -       -
                         Restructuring, integration and
      -       -       -  rationalization costs                    -       -
                         Fair value gain (loss)
      -      42      67  on embedded derivatives                109       -
      -       -       -  Other                                    -       -

-----------------------                                       -------------

      -     105      87  Total non-operating items              192       -

=======================                                       =============

                         Gas sales volumes (mmcf/d)
 4,489   5,413    4,699   UK                                  5,054   5,409
   266     387      382   Rest of Europe                        385     354
12,477  14,188   14,501   USA                                14,345  13,047
12,079  15,628   14,933   Rest of World                      15,279  12,991

----------------------                                       --------------

29,311  35,616   34,515   Total gas sales volumes            35,063  31,801

=======================                                      ==============

                         NGL sales volumes (mb/d)
     8      10        4   UK                                      7       6
     3      13       12   Rest of Europe                         12       2
   334     371      317   USA                                   344     397
   166     254      162   Rest of World                         208     205

-----------------------                                      --------------

   511     648      495   Total NGL sales volumes               571     610

=======================                                      ==============



(a)  Includes profit after interest and tax of equity-accounted entities.


The replacement cost profit before interest and tax for the second quarter and
half year was $174 million and $578 million respectively, compared with $189
million and $390 million a year ago.

The second quarter result is lower than the same period in 2004 due to lower
contributions from the gas marketing and natural gas liquids businesses. The
first half result is higher than the same period in 2004 reflecting higher gains
from non-operating items and a similar contribution from the operating
businesses. Results reflect changes to fair value accounting following the
introduction of IFRS in 2005 which have created increased volatility in the Gas,
Power and Renewables result, negatively impacting the second quarter and half
year.

Non-operating items in the second quarter include a gain on disposal of an NGL
plant in the US and net fair value gains on embedded derivatives.

In June, BP announced plans for the world's first industrial scale project to
generate electricity from hydrogen while reducing CO2 emissions and enhancing
oil recovery in the North Sea.



                        Other Businesses and Corporate


    2Q      1Q      2Q                                          First Half
  2004    2005    2005   $ million                             2005    2004

======================                                        =============

                         Profit (loss) before
  (134)    357     132   interest and tax(a)                    489   1,057
   (63)   (150)     43   Inventory holding (gains) losses      (107)   (160)

----------------------                                        -------------

                         Replacement cost profit
  (197)    207     175   before interest and tax                382     897

======================                                        =============

                         Results include:
                         Impairment and gain (loss) on sale
   (68)    (24)     34   of business and fixed assets            10   1,189
     -       -      22   Environmental and other provisions      22       -
                         Restructuring, integration and
     -     (43)    (28)  rationalization costs                  (71)      -
                         Fair value gain (loss) on
     -      (4)    (14)  embedded derivatives                   (18)      -
     -       -       3   Other                                    3       -

----------------------                                       --------------

   (68)    (71)     17   Total non-operating items              (54)  1,189

======================                                       ==============

                         Analysis of replacement cost result
                         before interest and tax(a)
   (11)    356     290   Olefins and Derivatives                646    (116)
  (186)   (149)   (115)  Other                                 (264)  1,013

----------------------                                       --------------

  (197)    207     175                                          382     897

======================                                       ==============



(a)  Includes profit after interest and tax of equity-accounted entities.

Other businesses and corporate comprises Olefins and Derivatives, Finance, the
group's aluminium asset, interest income and costs relating to corporate
activities. The group's interests in PetroChina and Sinopec were divested in
early 2004. The second quarter's result includes a net gain of $17 million in
respect of non-operating items. This includes a charge in respect of the
separation of the Olefins and Derivatives business. The Olefins and Derivatives
result showed a marked increase over a year ago primarily as a result of higher
margins and volumes.


                             Dividends Payable

September   June September                                June and September
     2004   2005      2005                                   2005      2004

==========================                                =================

                            Dividends per ordinary share
     7.10   8.50     8.925  cents                          17.425     13.85
    3.860  4.450     5.119  pence                           9.569     7.667

     42.6   51.0     53.55  Dividends per ADS (cents)      104.55      83.1

--------------------------                                 ----------------


BP today announced a dividend of 8.925 cents per ordinary share to be paid in
September. Holders of ordinary shares will receive 5.119 pence per share and
holders of American Depository Receipts (ADRs) $0.5355 per ADS share. The
dividend is payable on 6 September to shareholders on the register on 12 August.
Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP facility in
the US Direct Access Plan will receive the dividend in the form of shares, also
on 6 September.


                                Outlook

BP Group Chief Executive, Lord Browne, concluded:

   'First half world economic growth has been sustained near its 10-year
   average of 3%, and is expected to remain so for the rest of 2005.

   'Oil prices averaged $51.63 per barrel (Dated Brent) in the second
   quarter, around $4.00 per barrel higher than in the first quarter. OECD
   commercial inventories have risen at above normal seasonal rates in the
   second quarter and remain above five-year average levels. Prices remain
   supported by strong world oil consumption growth and limited spare oil
   production capacity.

   'US natural gas prices averaged $6.74/mmbtu (Henry Hub first of month
   index) in the second quarter, up by around $0.50/mmbtu versus the first
   quarter.  Gas inventories remain above year-earlier and five-year average
   levels but the surplus has been declining and the futures market
   continues to signal a supply-constrained market heading into the winter
   heating season.

   'BP's average refining Global Indicator Margin improved by nearly
   $2.50/bbl versus the first quarter to reach $8.42/bbl. So far in the
   third quarter, refining margins remain very firm in all regions, albeit
   below second quarter levels. The outlook for retail margins remains
   uncertain with continuing crude and product price volatility. Rising
   product prices have dampened margins over the past few weeks and have
   contributed to a weak start to the third quarter.

   'Our strategy is unchanged. We continue to execute it with discipline and
   focus. Our ability to capture the benefit of current prices and margin
   strength underpins continued dividend growth and further increases in
   share buybacks which we expect to be at least $6 billion in the second
   half of 2005 subject to market conditions and constraints. Capital
   expenditure is expected to be around $14.5 billion for the year and
   around $15 billion in 2006.'


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     The foregoing discussion, in particular the statements under 'Outlook',
     contains forward looking statements particularly those regarding
     capital expenditure, costs, demand, dividends, future performance,
     growth and other trend projections, margins, prices, production, share
     buybacks, supply and the timing of projects. By their nature, forward
     looking statements involve risks and uncertainties and actual results
     may differ from those expressed in such statements depending on a
     variety of factors including the following: the timing of bringing new
     fields on stream; industry product supply; demand and pricing; currency
     exchange rates; operational problems; general economic conditions
     including inflationary pressures; political stability and economic
     growth in relevant areas of the world; changes in governmental
     regulations; exchange rate fluctuations; development and use of new
     technology and successful commercial relationships; the actions of
     competitors; natural disasters and other changes in business
     conditions; prolonged adverse weather conditions; wars and acts of
     terrorism or sabotage; and other factors discussed in this
     Announcement. For more information you should refer to our  Annual
     Report and Accounts 2004 and our 2004 Annual Report on Form 20-F filed
     with the US Securities and Exchange Commission.

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