Independent auditor s reports Group income statement Group statement of comprehensive income

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1 Finncil sttements 116 Consolidted finncil sttements of the BP group Independent uditor s reports Group income sttement Group sttement of comprehensive income Group sttement of chnges in equity Group blnce sheet Group csh flow sttement Notes on finncil sttements Significnt ccounting policies Significnt event Gulf of Mexico oil spill Disposls nd impirment Segmentl nlysis Income sttement nlysis Explortion expenditure Txtion Dividends Ernings per shre Property, plnt nd equipment Cpitl commitments Goodwill Intngible ssets Investments in joint ventures Investments in ssocites Other investments Inventories Trde nd other receivbles Vlution nd qulifying ccounts Trde nd other pybles Provisions Pensions nd other postretirement benefits Csh nd csh equivlents Finnce debt Cpitl disclosures nd nlysis of chnges in net debt Operting leses Finncil instruments nd finncil risk fctors Derivtive finncil instruments Clled-up shre cpitl Cpitl nd reserves Contingent libilities Remunertion of senior mngement nd nonexecutive directors Employee costs nd numbers Auditor s remunertion Subsidiries, joint rrngements nd ssocites Condensed consolidting informtion on certin US subsidiries Finncil sttements 191 Supplementry informtion on oil nd nturl gs (unudited) Oil nd nturl gs explortion nd production ctivities Movements in estimted net proved reserves Stndrdized mesure of discounted future net csh flows nd chnges therein relting to proved oil nd gs reserves Opertionl nd sttisticl informtion Prent compny finncil sttements of BP p.l.c. Compny blnce sheet Compny sttement of chnges in equity Notes on finncil sttements Significnt ccounting policies Investments Receivbles Pensions Pybles Txtion Clled-up shre cpitl Cpitl nd reserves Finncil gurntees Shre-bsed pyments Auditor s remunertion Directors remunertion Employee costs nd numbers Relted undertkings BP Annul Report nd Form 20-F

2 Consolidted finncil sttements of the BP group Independent uditor s report on the Annul Report nd Accounts to the members of BP p.l.c. Opinion In our opinion: the finncil sttements give true nd fir view of the stte of the group s nd of the prent compny s ffirs s t 31 December 2017 nd of the group s profit for the yer then ended; the group finncil sttements hve been properly prepred in ccordnce with IFRS s dopted by the Europen Union; the prent compny finncil sttements hve been properly prepred in ccordnce with United Kingdom generlly ccepted ccounting prctice including FRS 101 Reduced Disclosure Frmework ; nd the finncil sttements hve been prepred in ccordnce with the requirements of the Compnies Act 2006 nd, s regrds the group finncil sttements, Article 4 of the IAS Regultion. Seprte opinion in reltion to IFRS s issued by the Interntionl Accounting Stndrds Bord As explined in Note 1 to the consolidted finncil sttements, the group in ddition to pplying IFRS s dopted by the Europen Union, hs lso pplied IFRS s issued by the Interntionl Accounting Stndrds Bord (IASB). In our opinion the consolidted finncil sttements comply with IFRS s issued by the IASB. Wht we hve udited We hve udited the finncil sttements of BP p.l.c. which comprise: Group Prent compny Group blnce sheet s t 31 December Blnce sheet s t 31 December Group income sttement for the yer then ended. Sttement of chnges in equity for the yer then ended. Group sttement of comprehensive income for the yer then ended. Relted Notes 1 to 14 to the finncil sttements, including summry of significnt ccounting policies. Group sttement of chnges in equity for the yer then ended. Group csh flow sttement for the yer then ended. Relted Notes 1 to 36 to the finncil sttements, including summry of significnt ccounting policies. The finncil reporting frmework tht hs been pplied in the preprtion of the group finncil sttements is pplicble lw nd Interntionl Finncil Reporting Stndrds (IFRS) s dopted by the Europen Union. The finncil reporting frmework tht hs been pplied in the preprtion of the prent compny finncil sttements is pplicble lw nd United Kingdom ccounting stndrds including FRS 101 (United Kingdom generlly ccepted ccounting prctice). Bsis for opinion We conducted our udit in ccordnce with Interntionl Stndrds on Auditing (UK) (ISAs (UK)) nd pplicble lw. Our responsibilities under those stndrds re further described in the Auditor s responsibilities for the udit of the finncil sttements section of our report below. We re independent of the group nd prent compny in ccordnce with the ethicl requirements tht re relevnt to our udit of the finncil sttements in the UK, including the FRC s Ethicl Stndrd s pplied to listed public interest entities, nd we hve fulfilled our other ethicl responsibilities in ccordnce with these requirements. We believe tht the udit evidence we hve obtined is sufficient nd pproprite to provide bsis for our opinion. Use of our report This report is mde solely to the compny s members, s body, in ccordnce with Chpter 3 of Prt 16 of the Compnies Act Our udit work hs been undertken so tht we might stte to the compny s members those mtters we re required to stte to them in n uditor s report nd for no other purpose. To the fullest extent permitted by lw, we do not ccept or ssume responsibility to nyone other thn the compny nd the compny s members s body, for our udit work, for this report, or for the opinions we hve formed. Conclusions relting to principl risks, going concern nd vibility sttement We hve nothing to report in respect of the following informtion in the nnul report, in reltion to which the ISAs (UK) require us to report to you whether we hve nything mteril to dd or drw ttention to: the disclosures in the nnul report set out on pge 57 tht describe the principl risks nd explin how they re being mnged or mitigted; the directors confirmtion set out on pge 113 in the nnul report tht they hve crried out robust ssessment of the principl risks fcing the entity, including those tht would threten its business model, future performnce, solvency or liquidity; the directors sttement set out on pge 114 in the nnul report bout whether they considered it pproprite to dopt the going concern bsis of ccounting in prepring the finncil sttements, nd their identifiction of ny mteril uncertinties to the entity s bility to continue to do so over period of t lest twelve months from the dte of pprovl of the finncil sttements; whether the directors sttement in reltion to going concern required under the Listing Rules in ccordnce with Listing Rule 9.8.6R(3) is mterilly inconsistent with our knowledge obtined in the udit; or the directors explntion set out on pge 114 in the nnul report s to how they hve ssessed the prospects of the entity, over wht period they hve done so nd why they consider tht period to be pproprite, nd their sttement s to whether they hve resonble expecttion tht the entity will be ble to continue in opertion nd meet its libilities s they fll due over the period of their ssessment, including ny relted disclosures drwing ttention to ny necessry qulifictions or ssumptions. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. 116 BP Annul Report nd Form 20-F 2017

3 Key udit mtters Key udit mtters re those mtters tht, in our professionl judgement, were of most significnce in our udit of the finncil sttements of the current period nd include the most significnt ssessed risks of mteril missttement (whether or not due to frud) tht we identified. These mtters included those which hd the gretest effect on the overll udit strtegy, the lloction of resources in the udit nd in directing the efforts of the enggement tem. These mtters were ddressed in the context of our udit of the finncil sttements s whole, nd in our opinion thereon, nd we do not provide seprte opinion on these mtters. Risk The determintion of the libilities, contingent libilities nd disclosures rising from the Gulf of Mexico oil spill (s described on pge 79 of the report of the udit committee nd Note 2 of the finncil sttements). There is prticulr uncertinty round estimting nd vluing the remining outstnding business economic loss clims. The determintion of the libility is subject to judgement s to the mount tht ech remining clim will be settled t. The totl mount recognized s n increse in provisions in reltion to the Gulf of Mexico oil spill during the yer ws $2,647 million relting to business economic loss ( BEL ) nd other clims ssocited with the Court Supervised Settlement Progrm ('CSSP'). The increse is predominntly result of significntly higher verge BEL clims determintions issued by the CSSP during the fourth qurter nd the continuing effect rising from the Policy 495 ruling. The remining provision s t 31 December 2017 ws $2,580 million. Our response to the risk For the libilities nd contingent libilities relted to the Gulf of Mexico oil spill the primry udit enggement tem performed the following udit procedures. We wlked through nd tested the controls designed nd operted by the group relting to the provisions nd pybles for the Gulf of Mexico oil spill. We met with the group s legl tem to understnd developments cross key remining Gulf of Mexico oil spill mtters nd their sttus. We reviewed udit enquiry response letters from externl legl counsel nd red determintions nd judgements mde by the courts. In respect of the provision for the outstnding business economic loss clims: We compred the key ssumptions tht hve been used in the determintion of the yer end provision, to historicl experience. We reconciled the number of undetermined clims to third prty clims mngement dt. We performed detiled review of the sttus nd expected outcome of the significnt clims within ppels, which included discussion with the group generl counsel. We performed sensitivity nlyses over verge cost per clim ssumptions nd ssessed the potentil effect on the provision. We considered events tht took plce fter the blnce sheet dte nd before the issunce of this report nd ensured these were reflected ppropritely. We ssessed the remining economic loss nd property dmge clims from individuls nd businesses tht either opted out of the Plintiffs Steering Committee ('PSC') settlement nd/or were excluded from tht settlement. We vlidted smple of clims to third prty dt, ssessing the yer end closing pyble ws pproprite. We considered the ccounting tretment of the libilities, contingent libilities nd disclosures under IFRS criteri, to conclude whether these were pproprite in ll circumstnces. Key observtions communicted to the Audit Committee There remins uncertinty round the BEL provision, in prticulr the unresolved clims nd clims under ppel, s the mounts pyble my differ from those provided. Bsed on our procedures we re stisfied tht the mounts provided in the finncil sttements, s disclosed in Note 2 of the finncil sttements, re supported by clims experience. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. BP Annul Report nd Form 20-F

4 Risk The estimte of oil nd gs reserves nd resources hs significnt impct on the finncil sttements, prticulrly impirment testing nd deprecition, depletion nd mortiztion ( DD&A ) chrges (s described on pge 80 of the report of the udit committee nd Note 1 of the finncil sttements). The estimtion of oil nd nturl gs reserves nd resources is significnt re of judgement due to the technicl uncertinty in ssessing quntities nd complex contrctul rrngements dictting the group s shre of reportble volumes. Reserves nd resources re lso fundmentl indictor of the future potentil of the group s performnce. Unuthorized trding ctivity within the integrted supply nd trding function hs the potentil to impct revenue nd profits (s described within the group's principl risks on pge 58 nd Note 1 of the finncil sttements). Unuthorized trding ctivity is frud risk ssocited with potentil deliberte missttement of the group s trding positions or mis-mrking of positions with n intention to: Minimize trding losses. Mximize trding profits. Understte profits or move profits to subsequent periods when bonus ceilings hve lredy been reched, to mximize individul bonuses cross finncil yers. These cts would led to missttement of the group s revenue nd profits. Our response to the risk Our procedures were performed by tem members with significnt experience of the process of estimting oil nd gs reserves nd resources, including the primry udit enggement tem nd component tems t 9 Upstrem components. We confirmed our understnding nd tested key mngement controls relted to the reserves nd resources estimtion process. This included mngement's review nd pprovl of estimted volumes. We tested the controls over the group's certifiction process for internl technicl nd commercil experts who re responsible for reserves nd resources estimtion. We ssessed the competence nd objectivity of the group s internl nd externl experts, to stisfy ourselves tht these prties re pproprite in their roles within the estimtion process. We confirmed tht significnt chnges in reserves nd resources were mde in the pproprite period, nd were in complince with BP's discovered resources mngement policy ( DRM ) nd SEC regultions. Where reserve nd resources volumes hve mteril impct on the finncil sttements, we vlidted these volumes nd ssumptions ginst underlying informtion nd documenttion s required by the DRM. We vlidted tht the updted reserves nd resources estimtes were included ppropritely in the group s considertion of oil nd gs sset impirment vlutions nd in ccounting for DD&A. Audit procedures on trding ctivities were performed by component tems nd the primry enggement tem t 7 components cross the UK, US nd Singpore. We wlked through nd tested the controls designed nd operted by the group over unuthorized trding ctivity. We identified trdes with the highest risk of unuthorized ctivity so s to focus our testing on these trdes. We performed existence nd completeness testing by independently confirming smple of trdes with third prties. We verified the fir vlue of smple of derivtives using contrct nd externl mrket prices. For derivtive instruments where observble mrket dt is not vilble we hve independently vlidted the internl vlution models mngement used to determine fir vlue. We tested the completeness of the mounts recorded in the finncil sttements through performing procedures to detect unrecorded libilities s well s detiled cut-off procedures round sles, purchses, trde receivbles nd trde pybles. Key observtions communicted to the Audit Committee Bsed on our procedures we consider tht the reserves estimtions re resonble for use in the impirment testing nd clcultion of DD&A. Bsed on our procedures we identified no mtters to report to the Audit Committee. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. 118 BP Annul Report nd Form 20-F 2017

5 Risk US Tx Reform (s described on pge 81 of the report of the Audit committee nd Note 1 of the finncil sttements). On 22 December 2017, the US Tx Cuts nd Jobs Act ( TCJA ) ws signed into lw, encting widespred chnges to US fiscl lw. The group recognized one-off txtion chrge of $0.9 billion for the yer ended 31 December 2017, in respect of the remesurement of deferred tx blnces s result of the reduction in the US federl corporte income tx rte from 35% to 21%. We focused on this re due to the complexity nd extent of the US tx reform pckge, the requirement for the group to determine nd ccount for the effects of the chnge close to its yer end nd the mteril impct on the group s profit for the yer. Our response to the risk Audit procedures were performed by tem members nd EY tx experts with significnt experience of the US corporte tx system. We verified tht the internl controls over finncil reporting were designed ppropritely to enble the ccounting implictions of US tx reform to be ccurtely recorded in the finncil sttements. We ssessed the tx ccounting implictions on existing deferred tx ssets nd libilities bsed on the encted 21% corporte rte. We tested nd confirmed tht the methodology used by mngement to clculte the estimted libility ws bsed on n cceptble interprettion of the TCJA legisltion. We verified the nlysis performed by mngement to determine the pproprite presenttion, in ccordnce with IAS 12, of the impct of tx chnges recorded through the income sttement nd sttement of other comprehensive income. We performed procedures to evlute mngement s ssessment of other key US tx reform chnges which my ffect the group s 2017 income tx position, including the one-time trnsition tx, nti-bse erosion mesures nd expected reliztion of foreign tx credits. Key observtions communicted to the Audit Committee Bsed on the udit procedures specificlly designed nd performed to respond to the impct of US tx reform on the group, we concluded tht mngement s computtion of the tx ccounting ssessments nd djustments is clculted in complince with IAS 12. The pproprite presenttion nd disclosures re mde in the finncil sttements t 31 December Due to the nture nd circumstnces round US tx reform, the presenttion of the $0.9 billion chrge s nonoperting item is ppropritely disclosed. Chnges from the prior yer Our risk ssessment nd udit pproch evolve s circumstnces which impct the group s business or finncil sttements chnge. In the prior yer, our uditor s report included key udit mtter in reltion to the mcroeconomic environment t the time which hd the potentil to mterilly impct the crrying vlue of the Group Upstrem s non-current ssets. This risk hs been downgrded in In our view, the mcroeconomic environment no longer represents significnt risk for our udit, given the fct tht the impirment indictors identified in 2016 hve subsided through 2017, minly s result of sustined increses in oil prices. In the current yer, our uditor s report includes key udit mtter in reltion to US Tx Reform due to the mtters set out bove. An overview of the scope of our udit Tiloring the scope Our ssessment of udit risk, our evlution of mterility nd our lloction of performnce mterility determine our udit scope for ech entity within the group. Tken together, this enbles us to form n opinion on the consolidted finncil sttements. We tke into ccount size, risk profile, the orgniztion of the group nd effectiveness of group-wide controls, chnges in the business environment nd other fctors such s recent internl udit results when ssessing the level of work to be performed t ech component. In scoping the udit we reflect the group s structure (Upstrem, Downstrem, Rosneft nd Other businesses nd corporte), plus the group s functions. In ssessing the risk of mteril missttement to the group finncil sttements, nd to ensure we hd dequte quntittive coverge of significnt ccounts in the finncil sttements, we performed full or specific scope udit procedures over 55 components covering the UK, US, Abu Dhbi, Angol, Azerbijn, Brzil, Egypt, Germny, Indi, Russi, Singpore, Trinidd nd Tobgo nd the group functions, representing the principl business units within the group. Of the 55 components selected, we performed n udit of the complete finncil informtion of 9 components ( full scope components ) which were selected bsed on their size or risk chrcteristics. For the remining 46 components ( specific scope components ), we performed udit procedures on specific ccounts within tht component tht we considered hd the potentil for the gretest impct on the significnt ccounts in the finncil sttements either becuse of the size of these ccounts or their risk profile. For the current yer, the full scope components contributed 30% of the group s profit before tx ( %), 42% of the group s revenue ( %) nd 10% of the group s property, plnt nd equipment ( %). The specific scope components contributed 32% of the group s profit before tx ( %), 30% of the group s revenue ( %) nd 52% of the group s property, plnt nd equipment ( %). The udit scope of the specific scope components my not hve included testing of ll significnt ccounts of the component but will hve contributed to the coverge of significnt ccounts tested for the group. Of the 46 specific scope components, we instructed 14 of these loctions to perform specified procedures over goodwill, intngible ssets, the crrying vlue of certin investments held by the group, gin on sle of businesses nd fixed ssets, interest nd other income, explortion expenses, sles nd other operting revenues nd production txes. The remining components not subject to full or specific group scoping re not significnt individully or in the ggregte. They include mny smll, low risk components nd blnces; ech remining component represents n verge of 0.13% of the totl group profit before tx nd 0.13% of totl group revenue. For these components, we performed other procedures, including evluting nd testing mngement s group wide controls cross rnge of geogrphies nd segments, specificlly testing the oversight nd review controls tht mngement hs in plce to ensure there re no mteril missttements in these loctions. We performed nlyticl nd enquiry procedures to ddress the risk of residul missttement on segment-wide nd component bsis. We tested consolidtion journls to identify the existence of ny further risks of missttement tht could hve been mteril to the group finncil sttements. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. BP Annul Report nd Form 20-F

6 Involvement with component tems In estblishing our overll pproch to the group udit, we determined the type of work tht needed to be undertken t ech of the components by us, s the primry udit enggement tem, or by component uditors from other EY globl network firms operting under our instruction. Of the 9 full scope components, udit procedures were performed on 5 of these directly by the primry udit enggement tem. For the 46 specific scope components, udit procedures were performed on 24 of these directly by the primry udit enggement tem. Testing of mngement s group wide controls ws performed by component uditors. Where work ws performed by component uditors, we determined the pproprite level of involvement to enble us to determine tht sufficient udit evidence hd been obtined s bsis for our opinion on the group s whole. The group udit tem continued to follow progrmme of plnned visits designed to ensure tht the Senior Sttutory Auditor or his designte visits significnt loctions to ensure the udit is executed nd delivered in ccordnce with the plnned pproch nd to confirm the qulity of the udit work undertken. During the current yer s udit cycle, visits were undertken by the primry udit enggement tem to the component tems in Abu Dhbi, Azerbijn, Egypt, Germny, Indi, Russi, Singpore, the UK nd the US. Prt of the purpose of these visits is to confirm tht pproprite procedures hve been performed by the uditors of the components nd tht the significnt udit res were covered s communicted in the detiled udit instructions, including the risks of mteril missttement s outlined bove. The primry udit enggement tem review included exmining key working ppers nd conclusions where these relted to res of mngement nd uditor judgement with specific focus on the risks detiled bove. The primry udit enggement tem lso prticipted in the component tems plnning, during visits mde erlier in the udit period. Telephone nd video meetings were held with the uditors t loctions which the primry udit enggement tem did not visit in person. This, together with dditionl procedures performed t group level, gve us pproprite evidence for our opinion on the group finncil sttements. One of the significnt loctions is Russi, which includes Rosneft, mteril ssocite not controlled by BP. We were provided with pproprite ccess to Rosneft s uditor in order to ensure they hd completed the procedures required by ISA (UK) 600 on the finncil sttements of Rosneft, used s the bsis for BP s equity ccounting. Our ppliction of mterility We pply the concept of mterility in plnning nd performing the udit, in evluting the effect of identified missttements on the udit nd in forming our udit opinion. Mterility The mgnitude of n omission or missttement tht, individully or in the ggregte, could resonbly be expected to influence the economic decisions of the users of the finncil sttements. Mterility provides bsis for determining the nture nd extent of our udit procedures. We determined mterility for the group to be $0.5 billion (2016 $0.5 billion). For the 2017 udit, we deemed it pproprite to determine our mterility bsed on 5% of the group's underlying replcement cost profit (s defined on pge 293) before interest nd txtion for Due to the recovery nd stbility in oil nd gs prices through 2017 we no longer view it s necessry to determine mterility bsed on normlizing current yer expected underlying replcement cost profit before interest nd txtion nd how those results would look if oil nd gs prices forecst by the compny for 2018 nd 2019 hd previled in the yer. Underlying replcement cost profit before interest nd txtion remins the most pproprite mesure upon which to clculte mterility, due to the fct it excludes the impct of chnges in crude oil, gs nd product prices nd items disclosed s non-operting items, which cn significntly distort the group s results in given period. For detils of non-operting items plese see pge 250 of the Annul Report nd Form 20-F We determined mterility for our udit of the stndlone prent compny finncil sttements to be $1,300 million (2016 $1,300 million), which is 1% (2016 1%) of equity. The mterility determined for the stndlone prent compny finncil sttements exceeds the group mterility s it is determined on different bsis given the nture of the opertions. For the purposes of the udit of the group finncil sttements, our procedures, including those on blnces in the prent compny, re undertken with reference to the group mterility nd performnce mterility set out in this report. During the course of our udit, we re-ssessed initil mterility in the context of the group s performnce nd forwrd expecttions nd this resulted in no chnge from our originl ssessment of mterility. Performnce mterility The ppliction of mterility t the individul ccount or blnce level. It is set t n mount to reduce to n ppropritely low level the probbility tht the ggregte of uncorrected nd undetected missttements exceeds mterility. On the bsis of our risk ssessments, together with our ssessment of the group s overll control environment, our judgement ws tht performnce mterility ws 75% ( %) of our mterility, nmely $375 million (2016 $375 million). We hve set performnce mterility t this percentge to reduce to n ppropritely low level the probbility tht the ggregte of uncorrected nd undetected missttements exceeds mterility. Audit work t component loctions for the purpose of obtining udit coverge over significnt finncil sttement ccounts is undertken bsed on percentge of totl performnce mterility. The performnce mterility set for ech component is bsed on the reltive scle nd risk of the component to the group s whole nd our ssessment of the risk of missttement t tht component. In the current yer, the rnge of performnce mterility llocted to components ws $75 million to $300 million (2016 $75 million to $281 million). Reporting threshold An mount below which identified missttements re considered s being clerly trivil. We greed with the udit committee tht we would report to them ll uncorrected udit differences in excess of $25 million (2016 $25 million), which is set t 5% of mterility, s well s differences below tht threshold tht, in our view, wrrnted reporting on qulittive grounds. We evlute ny uncorrected missttements ginst both the quntittive mesures of mterility discussed bove nd in light of other relevnt qulittive considertions in forming our opinion. Other informtion The other informtion comprises the informtion included in the Annul Report other thn the finncil sttements nd our uditor s report thereon. The directors re responsible for the other informtion. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. 120 BP Annul Report nd Form 20-F 2017

7 Our opinion on the finncil sttements does not cover the other informtion nd, except to the extent otherwise explicitly stted in this report, we do not express ny form of ssurnce conclusion thereon. In connection with our udit of the finncil sttements, our responsibility is to red the other informtion nd, in doing so, consider whether the other informtion is mterilly inconsistent with the finncil sttements or our knowledge obtined in the udit, or otherwise ppers to be mterilly misstted. If we identify such mteril inconsistencies or pprent mteril missttements, we re required to determine whether there is mteril missttement in the finncil sttements or mteril missttement of the other informtion. If, bsed on the work we hve performed, we conclude tht there is mteril missttement of the other informtion, we re required to report tht fct. We hve nothing to report in this regrd. In this context, we lso hve nothing to report in regrd to our responsibility to specificlly ddress the following items in the other informtion nd to report s uncorrected mteril missttements of the other informtion where we conclude tht those items meet the following conditions: Fir, blnced nd understndble set out on pge 114 the sttement given by the directors tht they consider the nnul report nd finncil sttements tken s whole is fir, blnced nd understndble nd provides the informtion necessry for shreholders to ssess the group s performnce, business model nd strtegy, is mterilly inconsistent with our knowledge obtined in the udit; or Audit committee reporting set out on pges the section describing the work of the udit committee does not ppropritely ddress mtters communicted by us to the udit committee; or Directors sttement of complince with the UK Corporte Governnce Code set out on pge 113 the prts of the directors sttement required under the Listing Rules relting to the compny s complince with the UK Corporte Governnce Code contining provisions specified for review by the uditor in ccordnce with Listing Rule R(2) do not properly disclose deprture from relevnt provision of the UK Corporte Governnce Code. Opinions on other mtters prescribed by the Compnies Act 2006 In our opinion, the prt of the Directors remunertion report to be udited hs been properly prepred in ccordnce with the Compnies Act In our opinion, bsed on the work undertken in the course of the udit: the informtion given in the Strtegic report nd the Directors report for the finncil yer for which the finncil sttements re prepred is consistent with the finncil sttements; nd the Strtegic report nd the Directors' report hve been prepred in ccordnce with pplicble legl requirements. Mtters on which we re required to report by exception In light of the knowledge nd understnding of the group nd the prent compny nd its environment obtined in the course of the udit, we hve not identified mteril missttements in the Strtegic report or the Directors report. We hve nothing to report in respect of the following mtters in reltion to which the Compnies Act 2006 requires us to report to you if, in our opinion: dequte ccounting records hve not been kept by the prent compny, or returns dequte for our udit hve not been received from brnches not visited by us; or the prent compny finncil sttements nd the prt of the Directors remunertion report to be udited re not in greement with the ccounting records nd returns; or certin disclosures of directors remunertion specified by lw re not mde; or we hve not received ll the informtion nd explntions we require for our udit. Responsibilities of directors As explined more fully in the Sttement of directors responsibilities set out on pge 113, the directors re responsible for the preprtion of the finncil sttements nd for being stisfied tht they give true nd fir view, nd for such internl control s the directors determine is necessry to enble the preprtion of finncil sttements tht re free from mteril missttement, whether due to frud or error. In prepring the finncil sttements, the directors re responsible for ssessing the group nd prent compny s bility to continue s going concern, disclosing, s pplicble, mtters relted to going concern nd using the going concern bsis of ccounting unless the directors either intend to liquidte the group or the prent compny or to cese opertions, or hve no relistic lterntive but to do so. Auditor s responsibilities for the udit of the finncil sttements Our objectives re to obtin resonble ssurnce bout whether the finncil sttements s whole re free from mteril missttement, whether due to frud or error, nd to issue n uditor s report tht includes our opinion. Resonble ssurnce is high level of ssurnce, but is not gurntee tht n udit conducted in ccordnce with ISAs (UK) will lwys detect mteril missttement when it exists. Missttements cn rise from frud or error nd re considered mteril if, individully or in the ggregte, they could resonbly be expected to influence the economic decisions of users tken on the bsis of these finncil sttements. Explntion s to wht extent the udit ws considered cpble of detecting irregulrities, including frud The objectives of our udit, in respect to frud, re; to identify nd ssess the risks of mteril missttement of the finncil sttements due to frud; to obtin sufficient pproprite udit evidence regrding the ssessed risks of mteril missttement due to frud, through designing nd implementing pproprite responses; nd to respond ppropritely to frud or suspected frud identified during the udit. However, the primry responsibility for the prevention nd detection of frud rests with both those chrged with governnce of the entity nd mngement. Our pproch ws s follows: We obtined n understnding of the legl nd regultory frmeworks tht re pplicble to the group nd determined tht the most significnt re those tht relte to the reporting frmework (IFRS, FRS 101, the Compnies Act 2006, UK Corporte Governnce Code nd US Securities Exchnge Act of 1934) nd the relevnt tx complince regultions in the jurisdictions in which the group opertes. In ddition, we concluded tht there re certin significnt lws nd regultions which my hve n effect on the determintion of the This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. BP Annul Report nd Form 20-F

8 mounts nd disclosures in the finncil sttements being the Listing Rules of the UK Listing Authority, nd those lws nd regultions s disclosed within Regultion of the group s business on pges nd Interntionl trde snctions on pges We understood how the group is complying with those frmeworks by mking enquiries of mngement, internl udit, those responsible for legl nd complince procedures nd the group generl counsel. We corroborted our enquiries through the ttendnce t meetings held by the udit, disclosure nd sfety, ethics nd environment ssurnce committees. We designed our udit procedures to identify non-complince with such lws nd regultions identified in the prgrph bove. As well s enquiry nd ttendnce t meetings, our procedures involved review of the reporting to the bove committees nd review of bord meetings nd other committee minutes to identify ny non-complince with lws nd regultions. We ssessed the susceptibility of the group s finncil sttements to mteril missttement, including how frud might occur by meeting with mngement to understnd where they considered there ws susceptibility to frud. We lso considered performnce trgets nd their propensity to influence mngement to mnge ernings nd revenue by overriding internl controls. We considered the controls tht the group hs estblished to ddress risks identified, or tht otherwise prevent, deter nd detect frud; nd how senior mngement monitors those controls. We performed specific procedures to respond to the frud risk of unuthorized trding s referred to in the key udit mtters section bove. Our procedures lso included testing risk-bsed smple of mnul journls tht my hve been posted with the intention of overriding internl controls to mnipulte ernings. These procedures were designed to provide resonble ssurnce tht the finncil sttements were free from frud or error. The group opertes in the oil nd gs industry which is highly regulted environment. As such the Senior Sttutory Auditor reviewed the experience nd expertise of the enggement tem to ensure tht the tem hd the pproprite competence nd cpbilities, which included the use of n expert where pproprite. A further description of our responsibilities for the udit of the finncil sttements is locted on the Finncil Reporting Council s website t This description forms prt of our uditor s report. Other mtters we re required to ddress We were ppointed by the compny on 17 My 2017 to udit the finncil sttements for the yer ended 31 December The period of totl uninterrupted enggement including previous renewls nd reppointments is over 100 yers, covering the yer ended 1909 to the yer ended 31 December The non-udit services prohibited by the FRC s Ethicl Stndrd were not provided to the group or the prent compny nd we remin independent of the group nd the prent compny in conducting the udit. The udit opinion is consistent with the dditionl report to the udit committee. John C. Flherty (Senior Sttutory Auditor) for nd on behlf of Ernst & Young LLP, Sttutory Auditor London 29 Mrch The mintennce nd integrity of the BP p.l.c. web site is the responsibility of BP p.l.c.; the work crried out by the uditors does not involve considertion of these mtters nd, ccordingly, the uditors ccept no responsibility for ny chnges tht my hve occurred to the finncil sttements since they were initilly presented on the web site. 2. Legisltion in the United Kingdom governing the preprtion nd dissemintion of finncil sttements my differ from legisltion in other jurisdictions. This pge does not form prt of BP's Annul Report on Form 20-F s filed with the SEC. 122 BP Annul Report nd Form 20-F 2017

9 Consolidted finncil sttements of the BP group Report of Independent Registered Public Accounting Firm To the shreholders nd bord of directors of BP p.l.c. Opinion on the finncil sttements We hve udited the ccompnying group blnce sheets of BP p.l.c. (the Compny) s of 31 December 2017 nd 2016, nd the relted group income sttement, group sttement of comprehensive income, group sttement of chnges in equity nd group csh flow sttement for ech of the three yers in the period ended 31 December 2017, nd the relted notes (collectively referred to s the "group finncil sttements"). In our opinion, the group finncil sttements present firly, in ll mteril respects, the finncil position of BP p.l.c. t 31 December 2017 nd 2016 nd the results of its opertions nd its csh flows for ech of the three yers in the period ended 31 December 2017, in conformity with Interntionl Finncil Reporting Stndrds ("IFRS") s dopted by the Europen Union nd IFRS s issued by the Interntionl Accounting Stndrds Bord. We lso hve udited, in ccordnce with the stndrds of the Public Compny Accounting Oversight Bord (United Sttes) (PCAOB), BP p.l.c. s internl control over finncil reporting s of 31 December 2017, bsed on criteri estblished in the UK Finncil Reporting Council s Guidnce on Risk Mngement, Internl Control nd Relted Finncil nd Business Reporting nd our report dted 29 Mrch 2018 expressed n unqulified opinion thereon. Bsis for opinion These finncil sttements re the responsibility of BP p.l.c.'s mngement. Our responsibility is to express n opinion on these finncil sttements bsed on our udits. We re public ccounting firm registered with the PCAOB nd re required to be independent with respect to BP p.l.c. in ccordnce with the U.S. federl securities lws nd the pplicble rules nd regultions of the Securities nd Exchnge Commission nd the PCAOB. We conducted our udits in ccordnce with the stndrds of the PCAOB. Those stndrds require tht we pln nd perform the udit to obtin resonble ssurnce bout whether the finncil sttements re free of mteril missttement, whether due to error or frud. Our udits included performing procedures to ssess the risks of mteril missttement of the finncil sttements, whether due to error or frud, nd performing procedures tht respond to those risks. Such procedures included exmining, on test bsis, evidence regrding the mounts nd disclosures in the finncil sttements. Our udits lso included evluting the ccounting principles used nd significnt estimtes mde by mngement, s well s evluting the overll presenttion of the finncil sttements. We believe tht our udits provide resonble bsis for our opinion. /s/ Ernst & Young LLP We hve served s the Compny's uditor since London, United Kingdom 29 Mrch The mintennce nd integrity of the BP p.l.c. web site is the responsibility of BP p.l.c.; the work crried out by the uditors does not involve considertion of these mtters nd, ccordingly, the uditors ccept no responsibility for ny chnges tht my hve occurred to the finncil sttements since they were initilly presented on the web site. 2. Legisltion in the United Kingdom governing the preprtion nd dissemintion of finncil sttements my differ from legisltion in other jurisdictions. BP Annul Report nd Form 20-F

10 Consolidted finncil sttements of the BP group Report of Independent Registered Public Accounting Firm To the shreholders nd bord of directors of BP p.l.c. Opinion on internl control over finncil reporting We hve udited BP p.l.c. s internl control over finncil reporting s of 31 December 2017, bsed on criteri estblished in the UK Finncil Reporting Council s Guidnce on Risk Mngement, Internl Control nd Relted Finncil nd Business Reporting. In our opinion, BP p.l.c. mintined, in ll mteril respects, effective internl control over finncil reporting s of 31 December 2017, bsed on the UK Finncil Reporting Council s Guidnce. We lso hve udited, in ccordnce with the stndrds of the Public Compny Accounting Oversight Bord (United Sttes) (PCAOB), the group blnce sheets of BP p.l.c. s of 31 December 2017 nd 2016, the relted group income sttement, group sttement of comprehensive income, group sttement of chnges in equity nd group csh flow sttement for ech of the three yers in the period ended 31 December 2017, nd our report dted 29 Mrch 2018 expressed n unqulified opinion thereon. Bsis for opinion BP p.l.c. s mngement is responsible for mintining effective internl control over finncil reporting nd for its ssessment of the effectiveness of internl control over finncil reporting included in the ccompnying Mngement s report on internl control over finncil reporting on pge 275. Our responsibility is to express n opinion on the compny s internl control over finncil reporting bsed on our udit. We re public ccounting firm registered with the PCAOB nd re required to be independent with respect to the compny in ccordnce with the U.S. federl securities lws nd the pplicble rules nd regultions of the Securities nd Exchnge Commission nd the PCAOB. We conducted our udit in ccordnce with the stndrds of the PCAOB. Those stndrds require tht we pln nd perform the udit to obtin resonble ssurnce bout whether effective internl control over finncil reporting ws mintined in ll mteril respects. Our udit included obtining n understnding of internl control over finncil reporting, ssessing the risk tht mteril wekness exists, testing nd evluting the design nd operting effectiveness of internl control bsed on the ssessed risk, nd performing such other procedures s we considered necessry in the circumstnces. We believe tht our udit provides resonble bsis for our opinion. Definition nd limittions of internl control over finncil reporting A compny s internl control over finncil reporting is process designed to provide resonble ssurnce regrding the relibility of finncil reporting nd the preprtion of finncil sttements for externl purposes in ccordnce with generlly ccepted ccounting principles. A compny s internl control over finncil reporting includes those policies nd procedures tht (1) pertin to the mintennce of records tht, in resonble detil, ccurtely nd firly reflect the trnsctions nd dispositions of the ssets of the compny; (2) provide resonble ssurnce tht trnsctions re recorded s necessry to permit preprtion of finncil sttements in ccordnce with generlly ccepted ccounting principles, nd tht receipts nd expenditures of the compny re being mde only in ccordnce with uthoriztions of mngement nd directors of the compny; nd (3) provide resonble ssurnce regrding prevention or timely detection of unuthorized cquisition, use, or disposition of the compny s ssets tht could hve mteril effect on the finncil sttements. Becuse of its inherent limittions, internl control over finncil reporting my not prevent or detect missttements. Also, projections of ny evlution of effectiveness to future periods re subject to the risk tht controls my become indequte becuse of chnges in conditions, or tht the degree of complince with the policies or procedures my deteriorte. /s/ Ernst & Young LLP London, United Kingdom 29 Mrch 2018 Consent of independent registered public ccounting firm We consent to the incorportion by reference of our reports dted 29 Mrch 2018, with respect to the group finncil sttements of BP p.l.c., nd the effectiveness of internl control over finncil reporting of BP p.l.c., included in this Annul Report nd Form 20-F for the yer ended 31 December 2017 in the following Registrtion Sttements: Registrtion Sttements on Form F-3 (File Nos nd ) of BP p.l.c. nd BP Cpitl Mrkets p.l.c.; nd Registrtion Sttements on Form S-8 (File Nos , , , , , , , , , , , , , , , , , , , , , nd ) of BP p.l.c. /s/ Ernst & Young LLP London, United Kingdom 29 Mrch The mintennce nd integrity of the BP p.l.c. web site is the responsibility of BP p.l.c.; the work crried out by the uditors does not involve considertion of these mtters nd, ccordingly, the uditors ccept no responsibility for ny chnges tht my hve occurred to the finncil sttements since they were initilly presented on the web site. 2. Legisltion in the United Kingdom governing the preprtion nd dissemintion of finncil sttements my differ from legisltion in other jurisdictions. 124 BP Annul Report nd Form 20-F 2017

11 Group income sttement For the yer ended 31 December Note Sles nd other operting revenues 4 240, , ,894 Ernings from joint ventures fter interest nd tx 14 1, (28) Ernings from ssocites fter interest nd tx 15 1, ,839 Interest nd other income Gins on sle of businesses nd fixed ssets 3 1,210 1, Totl revenues nd other income 244, , ,982 Purchses , , ,790 Production nd mnufcturing expenses 24,229 29,077 37,040 Production nd similr txes 4 1, ,036 Deprecition, depletion nd mortiztion 4 15,584 14,505 15,219 Impirment nd losses on sle of businesses nd fixed ssets 3 1,216 (1,664) 1,909 Explortion expense 6 2,080 1,721 2,353 Distribution nd dministrtion expenses 10,508 10,495 11,553 Profit (loss) before interest nd txtion 9,474 (430) (7,918) Finnce costs 5 2,074 1,675 1,347 Net finnce expense relting to pensions nd other post-retirement benefits Profit (loss) before txtion 7,180 (2,295) (9,571) Txtion 7 3,712 (2,467) (3,171) Profit (loss) for the yer 3, (6,400) Attributble to BP shreholders 3, (6,482) Non-controlling interests , (6,400) Ernings per shre Profit (loss) for the yer ttributble to BP shreholders Per ordinry shre (cents) Bsic (35.39) Diluted (35.39) Per ADS (dollrs) Bsic (2.12) Diluted (2.12) See Note 2 for informtion on the impct of the Gulf of Mexico oil spill on these income sttement line items. BP Annul Report nd Form 20-F

12 Group sttement of comprehensive income For the yer ended 31 December Note Profit (loss) for the yer 3, (6,400) Other comprehensive income Items tht my be reclssified subsequently to profit or loss Currency trnsltion differences 1, (4,119) Exchnge (gins) losses on trnsltion of foreign opertions reclssified to gin or loss on sle of businesses nd fixed ssets (120) Avilble-for-sle investments Csh flow hedges mrked to mrket (639) (178) Csh flow hedges reclssified to the income sttement Csh flow hedges reclssified to the blnce sheet Shre of items relting to equity-ccounted entities, net of tx 14, (814) Income tx relting to items tht my be reclssified 7 (196) , (4,559) Items tht will not be reclssified to profit or loss Remesurements of the net pension nd other post-retirement benefit libility or sset 22 3,646 (2,496) 4,139 Shre of items relting to equity-ccounted entities, net of tx 14, 15 (1) Income tx relting to items tht will not be reclssified 7 (1,303) 739 (1,397) 2,343 (1,757) 2,741 Other comprehensive income 5,016 (988) (1,818) Totl comprehensive income 8,484 (816) (8,218) Attributble to BP shreholders 8,353 (846) (8,259) Non-controlling interests ,484 (816) (8,218) See Note 30 for further informtion. 126 BP Annul Report nd Form 20-F 2017

13 Group sttement of chnges in equity Shre cpitl nd cpitl reserves Tresury shres Foreign currency trnsltion reserve Fir vlue reserves Profit nd loss ccount BP shreholders' equity Noncontrolling interests Totl equity At 1 Jnury ,122 (18,443) (6,878) (1,153) 75,638 95,286 1,557 96,843 Profit (loss) for the yer 3,389 3, ,468 Other comprehensive income 1, ,832 4, ,016 Totl comprehensive income 1, ,221 8, ,484 Dividends b (6,153) (6,153) (141) (6,294) Repurchse of ordinry shre cpitl (343) (343) (343) Shre-bsed pyments, net of tx 1,485 (798) Shre of equity-ccounted entities chnges in equity, net of tx Trnsctions involving non-controlling interests, net of tx At 31 December ,122 (16,958) (5,156) (743) 75,226 98,491 1, ,404 At 1 Jnury ,902 (19,964) (7,267) (823) 81,368 97,216 1,171 98,387 Profit (loss) for the yer Other comprehensive income 389 (330) (1,020) (961) (27) (988) Totl comprehensive income 389 (330) (905) (846) 30 (816) Dividends b (4,611) (4,611) (107) (4,718) Shre-bsed pyments, net of tx 2,220 1,521 (750) 2,991 2,991 Shre of equity-ccounted entities chnges in equity, net of tx Trnsctions involving non-controlling interests, net of tx At 31 December ,122 (18,443) (6,878) (1,153) 75,638 95,286 1,557 96,843 At 1 Jnury ,902 (20,719) (3,409) (897) 92, ,441 1, ,642 Profit (loss) for the yer (6,482) (6,482) 82 (6,400) Other comprehensive income (3,858) 74 2,007 (1,777) (41) (1,818) Totl comprehensive income (3,858) 74 (4,475) (8,259) 41 (8,218) Dividends b (6,659) (6,659) (91) (6,750) Shre-bsed pyments, net of tx 755 (99) Shre of equity-ccounted entities chnges in equity, net of tx Trnsctions involving non-controlling interests, net of tx (3) (3) At 31 December ,902 (19,964) (7,267) (823) 81,368 97,216 1,171 98,387 See Note 30 for further informtion. b See Note 8 for further informtion. BP Annul Report nd Form 20-F