BP p.l.c.

Good morning and welcome to BP's second quarter results and strategy live presentation. I'm Craig Marshall, BP's Senior Vice President Investor Relations. You may have seen from this morning's announcements this call is going to be a bit different today. We have a full agenda and do expect to take a little longer than advertised. We will cover our second quarter results but we intend to use most of this time to take you through our new strategy that we announced today. For this reason I'm joined today by Helga Lund, BP Chairman, as well as Bernard Looney, Chief Executive, Mori Okonklos, Chief Financial Officer, and we're also joined today by our Executive Vice President, Strategy and Sustainability, Julia Kierkea. As usual we'll have time for Q&A at the end of the presentation and we hope to finish around 11.30am UK time. Before I hand over to our Chairman, I do need to draw your attention to our usual cautionary statement. During today's presentation we will make forward looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors we note on this slide and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website. I'll now hand over to Helga.

Thank you Craig and let me add my own welcome to everyone on our webcast and thank you for joining us. As Chairman of BP's Board I would not usually join our results call, normally they are led by our Executive Team. But today we are making an exception. This morning we outlined a set of results that were delivered during a uniquely challenging period. At the same time we made announcements on three strategically important decisions. First, a new company strategy to meet the ambition and aims we set out in February. Second a new and resilient financial frame, including a clear approach to how we allocate capital. And third a new investor proposition that includes a new distribution policy. We believe these three elements will benefit our many stakeholders including our investors. So before Bernard Murray and Julia explain the key details I want to briefly outline the judgements the Board has made in reaching these decisions and the process we have followed. Starting with our judgements and our first judgment simply recognizes a stark truth. The world is on an unsustainable path, its carbon budget is running out. Our second judgment is that in response to that stark truth energy markets have begun a process of fundamental lasting change, shifting increasingly towards low carbon and renewables. Oil and gas produced safely and efficiently will, we believe, continue to perform a vital role for the world and in our business. But and this is our third judgment over the longer term the demand for both oil and gas will be increasingly challenged. Finally our fourth judgment is that BP alongside many others can make a contribution to the We have the skills, the energy market experience, the resources and the global relationships. In applying these four judgments to our decision making the Board has been actively engaged with the leadership team in a process that began long before Bernard became CEO this year but which has accelerated since. From the beginning of 2019 we made our strategy the central focus of every Board meeting. This year we have worked closely with Bernard and his team and we have in certain periods increased the frequency of our meetings to weekly recognizing the scale of the shift our company needs to make. And the strategy we announced today has benefited from extensive dialogue with our shareholders. It will change BP from an international oil company to an integrated energy company focused on delivering solutions for our customers. A major necessary step in support of BP's purpose and ambition. To deliver this strategy the Board has agreed a new financial frame for BP. It provides a stable foundation for our company, strengthens our balance sheet, provides a And the new strategy is designed to provide a sustainable value for our investors. Usually through our disciplined approach to investment creates the opportunity for us to significantly increase our investment in low carbon activities in this decade while at the same time operating a high quality based business. Together our new strategy and financial frame create our investor proposition which is designed to reward our investors through committed distributions and profitable growth while generating sustainable value as we invest into the energy transition. Bernard Murray and Julia will shortly explain the details more fully. But I will close for now by thanking them and their entire team for their leadership of BP during this extraordinary period. They could hardly have had the more challenging first few months. There will undoubtedly be further challenges along the way and through this transition I know we are going to learn a lot. Yet there's a lot this company already understands about rising to those challenges when they come, about energy and about the opportunity we have to reimagine energy for people and our planet. Bernard and his team had the Board's full support and I'm very pleased to join them in announcing these big steps for BP this morning. Thank you.

Well thank you Helga and welcome to everyone joining us today. I really appreciate you all taking the time and apologies that we're going to run over a little bit but we have a lot that we want to share with you. First of all if I may I want to start by thanking my BP colleagues and our BP colleagues for the amazing job that they're doing right now as we all deal with the impacts of the COVID-19 pandemic. As well as taking care of their families and supporting the communities in which they work, they have continued to help deliver the energy that the world needs and what has arguably been the most challenging quarter in the history of the industry. Those working on the front line deserve particular recognition. Many have made great sacrifices and dealt face to face literally in some cases with the risk in order to keep our operations running and our retail sites open. Equally those working from home have had to deal with unique challenges, disruption and inevitable anxiety and they're all doing a great job and if you're listening this morning thank you. I and we are enormously grateful. As Helga says we're moving earlier than we thought on our strategy. We're moving faster, we're moving further and we're moving more decisively. The world is in a different place because of COVID-19 and so are we. And the more we understand about the consequences for the global economy and the inevitable uncertainty that it brings, the more convinced we are that the ambition and the direction that we laid out on the 12th of February is taking us in the right direction for BP. It's right for our employees, it is right for our shareholders and it is right for society. Within a decade BP intends to be a very different kind of energy company. We're transforming from an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers from IOC to IEC and this is a truly transformational step as we seek to become a net zero company by 2050 or sooner. Today is about a new strategy, a new financial framework and a new investor proposition. Three things. And as part of that proposition we have announced a new distribution policy which will support us in facing an increasingly uncertain world, allow us to strengthen our balance sheet and invest adequately in the energy transition. The policy combines two things, a reset and a resilient dividend intended to remain fixed at 5.25 cents per ordinary share per quarter subject to the board's discretion and a commitment to return at least 60% of surplus cash to shareholders through share buybacks once our net debt target has been reached and subject to maintaining a strong investment grade credit rating. And while this approach has been informed by the extensive engagement we have had with our shareholders I do want to acknowledge the impact it will have on many whether an individual retail investor or a large holder. However it is a decision that we wholeheartedly believe is in the long-term interest of all of our stakeholders. And any such decision must be put in context and that's why we've accelerated our strategy presentation to today so that you can hear a coherent story of how all this fits and comes together and we'll come back to talk about this in more detail later but let me firstly turn firstly to recap on what has been a very busy few months and as you can see from the slide we have been busy and I'd like to think we'd say we've been really busy since committing to reinvent BP on the 12th of February and our actions have included action to make BP leaner and fitter, updating our long-term price assumptions, strengthening our balance sheet, reshaping our portfolio notably with the divestments of our petrochemicals and Alaska businesses. Importantly all part of a single coherent plan, all part of that same journey and the new strategy we're sharing with you today is the next big step on the journey and I hope puts many of those steps in context and you will of course hear a lot more detail at our BP week in the middle of September. Before I hand over to Murray to go through our two Q results I want to emphasise two things. Firstly safety, our commitment to safety remains consistent and unwavering throughout our transformation process. It is and it will continue to be our core value and while it may not show up on every single slide I can assure you it permeates everything that we do. Fundamentally it's about care, it's about caring about people, it's about caring about our company and it's about caring about the communities where we operate. It's about ensuring everyone goes home safely every day and in the second quarter 32 people were hurt in our operations, fewer than in previous quarters but still 32 too many. We had four process safety tier one events and 19 tier two events and we will not rest until we get those to zero and we are transforming the culture of BP and at the end of the day as we all know it's all about people and that begins with leadership. We have now selected the next level of leadership in BP cutting the number of roles in half from 240 to 120 at the very top, taking out a layer of management with more layers to come out so we create a more agile organisation, one that is more connected to the front line and to help give you a sense of the type of BP we're trying to create maybe just a few words on the attributes we use to select those top 120 leaders. We search for leaders who clearly have a track record of delivery, we search for leaders who are curious, open minded, who are purpose driven not ego driven, who lead through our values especially safety and importantly leaders who are empathetic but who are also prepared to hold people to account and it's what we call empathetic edge. 40% of this team is women and about one third ethnically diverse. Good but not good enough. As a leadership we are not fully reflective yet of BP as a whole or the communities in which we operate and as I set out in my note in the days immediately after the killing of George Floyd we will get there and we are in action and you'll hear more about this in the weeks ahead. So at this point I'm going to pause now and hand over to Murray and Murray will run through our second quarter results and then we will get onto our new strategy. Murray.