BP PLC [BP] Filings

20-F 1 bp-20231231.htm 20-F bp-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)


☐			REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended 31 December 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-06262

BP p.l.c.

(Exact name of Registrant as specified in its charter)

England and Wales

(Jurisdiction of incorporation or organization)

1 St James’s Square, London SW1Y 4PD

United Kingdom

(Address of principal executive offices)

Kate Thomson

BP p.l.c.

1 St James’s Square, London SW1Y 4PD

United Kingdom

Tel +44 (0) 20 7496 4000

Fax +44 (0) 20 7496 4630

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares	BP	New York Stock Exchange
Ordinary Shares of 25c each		New York Stock Exchange	*
3.796% Guaranteed Notes due 2025	BP/25A	New York Stock Exchange
3.119% Guaranteed Notes due 2026	BP/26A	New York Stock Exchange
3.410% Guaranteed Notes due 2026	BP/26C	New York Stock Exchange
3.017% Guaranteed Notes due 2027	BP/27D	New York Stock Exchange
3.279% Guaranteed Notes due 2027	BP/27B	New York Stock Exchange
3.543% Guaranteed Notes due 2027	BP/27E	New York Stock Exchange
3.588% Guaranteed Notes due 2027	BP/27A BP/27C	New York Stock Exchange
3.723% Guaranteed Notes due 2028	BP/28	New York Stock Exchange
3.937% Guaranteed Notes due 2028	BP/28A	New York Stock Exchange
4.234% Guaranteed Notes due 2028	BP/28B	New York Stock Exchange
4.699% Guaranteed Notes due 2029	BP/29	New York Stock Exchange
1.749% Guaranteed Notes due 2030	BP/30A	New York Stock Exchange
3.633% Guaranteed Notes due 2030	BP/30	New York Stock Exchange
2.721% Guaranteed Notes due 2032	BP/32A	New York Stock Exchange
4.812% Guaranteed Notes due 2033	BP/33	New York Stock Exchange
4.893% Guaranteed Notes due 2033	BP/33A	New York Stock Exchange
4.989% Guaranteed Notes due 2034	BP/34	New York Stock Exchange
3.060% Guaranteed Notes due 2041	BP/41	New York Stock Exchange
2.772% Guaranteed Notes due 2050	BP/50B	New York Stock Exchange
3.000% Guaranteed Notes due 2050	BP/50A	New York Stock Exchange
3.067% Guaranteed Notes due 2050	BP/50	New York Stock Exchange
2.939% Guaranteed Notes due 2051	BP/51	New York Stock Exchange
3.001% Guaranteed Notes due 2052	BP/52	New York Stock Exchange
3.379% Guaranteed Notes due 2061	BP/61	New York Stock Exchange
4.375% Perpetual Subordinated Non-Call 5.25 Fixed Rate Reset Notes	BP/P1	New York Stock Exchange
4.875% Perpetual Subordinated Non-Call 10 Fixed Rate Reset Notes	BP/P2	New York Stock Exchange
6.450% Perpetual Subordinated Fixed Rate Reset Notes	BP/P3	New York Stock Exchange


*			Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.



Ordinary Shares of 25c each			17,900,800,485
Cumulative First Preference Shares of £1 each			7,232,838
Cumulative Second Preference Shares of £1 each			5,473,414

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued

by the International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

From IOC to IEC International Oil Company to Integrated Energy Company bp Annual Report and Form 20-F 2023

Sustainability Integration Transition growth engines Convenience and mobility Bioenergya Hydrogen Renewables & power Convenience EV charging Oil and gas Refining Retail fuels Castrol, aviation, B2B/midstream Low carbon energy Resilient hydrocarbons Online quick read A concise summary of the bp Annual Report and Form 20-F 2023, highlighting strategy, performance and sustainability information. bp.com/annualreport Online reporting centre All our bp corporate reports, including the Sustainability Report, the Net Zero Ambition Progress Update and the bp Energy Outlook. bp.com/reportingcentre Navigating this report More information Read more on another page of this report Read more online Glossary Words and terms marked with are defined in the glossary on page 373 Task Force on Climate-related Financial Disclosures (TCFD) Information that supports TCFD Recommendations and Recommended Disclosures in relation to Metrics and Targets is indicated with . a Bioenergy includes customer-facing and midstream biofuels activities that form part of convenience and mobility. Our strategy Our strategy is focused on three key areas of activity, which include our five transition growth engines. Our sustainability frame and the power of integration underpins and connects it all. Our destination is unchanged – we are transforming from an international oil company to an integrated energy company. Investing in today’s energy system, while helping build out tomorrow’s – all in service of growing the value of bp. We are confident in our strategy and plan to deliver this as a simpler, more focused and higher value company. Growing the value of bp Our strategy, page 12

1bp Annual Report and Form 20-F 2023 Strategic report Scale Performance Safety and sustainability 2023 at a glance As at 31 December 2023 87,800b employees (2022 67,600) $15.2bn profit for the year attributable to bp shareholders (2022 loss $(2.5)bn) 39 tier 1 and 2 process safety events (2022 50) 95.0% bp-operated upstream plant reliability (2022 96.0%) 2,850 strategic convenience sites (2022 2,400) $5.78/boe upstream unit production costs (2022 $6.07/boe) 2.3 million barrels of oil equivalent – upstream production (2022 2.3mmboe/d) 21,100 retail sites (2022 20,650) 61 countries of operation (2022 62) $13.8bn underlying replacement cost (RC) profit (2022 $27.7bn) 0.9 million tonnes of CO2 equivalent – sustainable GHG emissions reductions (2022 1.5MtCO2e) 96.1% bp-operated refining availability (2022 94.5%) 6.2GW developed renewables to FID (net) (2022 5.8GW) >29,000 electric vehicle charge points (2022 ~22,000) Strategic report 2023 at a glance 1 About bp 2 Chair’s letter 4 Chief executive officer’s letter 6 The operating environment 8 Energy outlook 10 Our strategy in action 12 Consistency with the Paris goals 14 Our business model 16 Progress against our strategy 18 Key performance indicators 24 Our financial frame 28 Our investment process 30 Group performance 35 Gas & low carbon energy 39 Oil production & operations 42 Customers & products 44 Other businesses & corporate 46 Sustainability 48 Climate-related financial disclosures (TCFD) 55 How we manage risk 73 Risk factors 77 Compliance information 80 Non-financial and sustainability information statement 80 Section 172 statement 80 Corporate governance Introduction from the chair 82 Board of directors 83 Leadership team 86 Governance framework 88 Decision making by the board 89 Board activities 90 Our stakeholders 92 People and governance committee 94 Audit committee 98 Safety and sustainability committee 103 Remuneration committee 105 Directors’ remuneration report 105 Other disclosures 133 Financial statements Consolidated financial statements of the bp group 137 Notes on the financial statements 169 Supplementary information on oil and natural gas (unaudited) 247 Additional disclosures 335 Shareholder information 363 Glossary 373 Non-IFRS measure reconciliations 382 Signatures 385 Cross-reference to Form 20-F 386 Information about this report 387 Exhibits 387 Key Performance against our strategy, page 13 Key performance indicator, page 24 b This figure reflects new acquisitions including TravelCenters of America.

2 bp Annual Report and Form 20-F 2023 About bp We deliver energy products and services to our customers around the world, and we plan to do so increasingly in ways that we believe will help drive the transition to a lower carbon future. We have operations in Europe, North and South America, Australasia, Asia and Africa. Financial reporting segment performance At 31 December 2023, the group’s reportable segments were gas & low carbon energy, oil production & operations and customers & products. Each is managed separately, with decisions taken for the segment as a whole, and represents a single operating segment that does not result from aggregating two or more segments (see Financial statements – Note 5).Our purpose Our purpose is reimagining energy for people and our planet. We want to help the world reach net zero and improve people’s lives. Who we are ‘Who we are’ defines what we stand for at bp, building on our best qualities and those things that are most important to us. It comprises three simple beliefs that can inspire each of us at bp to be our best every day. Gas & low carbon energya Comprises our gas & low carbon energy businesses. Our gas business includes regions with upstream activities that predominantly produce natural gas, integrated gas and power, and gas trading. Our low carbon business includes solar, offshore and onshore wind, hydrogen and carbon capture and storage (CCS), and power trading. Power trading includes trading of both renewable and non-renewable power. $14.1bn replacement cost (RC) profit before interest and taxb (2022 $14.7bn) $8.7bn underlying RC profit before interest and tax (2022 $16.1bn) Segment performance, page 39 a The Azerbaijan-Georgia-Türkiye and Middle East regions have been further subdivided by asset. b IFRS requires that the measure of profit or loss disclosed for each operating segment is the measure that is provided regularly to the chief operating decision maker. For bp, this measure of profit or loss is replacement cost profit before interest and tax, which reflects the replacement cost of inventories sold in the period and is arrived at by excluding inventory holding gains and losses from profit before interest and tax. Replacement cost profit for the group is not a recognized measure under IFRS. For further information see Financial statements – Note 5. Our people at bp’s Sunbury campus in Surrey, UK Seagull oil and gas field in the UK North Sea Resilient hydrocarbons, page 19Our people, page 70 Live our purpose Play to win Care for others

3bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 Oil production & operationsa Comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. $11.2bn RC profit before interest and taxb (2022 $19.7bn) $12.8bn underlying RC profit before interest and tax (2022 $20.2bn) Segment performance, page 42 Customers & products Comprises customer-focused businesses, which include convenience and retail fuels, EV charging, as well as Castrol, aviation and B2B and midstream. It also includes our products businesses, refining & oil trading, as well as our bioenergy businesses. $4.2bn RC profit before interest and taxb (2022 $8.9bn) $6.4bn underlying RC profit before interest and tax (2022 $10.8bn) Segment performance, page 44 Other businesses & corporate Comprises innovation & engineering; bp ventures; launchpad; regions, corporates & solutions; our corporate activities and functions; and any residual costs of the Gulf of Mexico oil spill. It also includes Rosneft results up to 27 February 2022. $(0.9)bn RC loss before interest and taxb (2022 loss $(26.7)bn) $(0.9)bn underlying RC loss before interest and tax (2022 loss $(1.2)bn) Segment performance, page 46 Reconciling strategic pillars to our reportable segments At 31 December 2023 the group’s reportable segments were gas & low carbon energy, oil production & operations, and customers & products. We reconcile these to our business activities and strategic pillars in the table below. c Includes customer-facing and midstream biofuels activities that form part of the bioenergy transition growth engine. Construction of Peacock Solar in Texas, US The Gigahub at the NEC campus in Birmingham, UK Low carbon energy, page 22Convenience and mobility, page 21 Denotes transition growth engine. 2023 progress against our strategy, pages 18-23 Financial segment performance in 2023, pages 35-47 Strategic pillars Gas & low carbon energy Oil production & operations Customers & products Resilient hydrocarbons Gas regions Gas marketing and trading Oil regions Refining and oil trading Bioenergyc Convenience and mobility Convenience Fuels EV charging Castrol, aviation, B2B/midstream Low carbon energy Renewables & power Hydrogen

4 bp Annual Report and Form 20-F 2023 Chair’s letter Dear fellow shareholders, The past year has been positive in many respects, but it has been challenging too. From the ongoing complexity of the energy transition to economic uncertainty and market volatility. Add to that, across the world conflict has continued to touch many lives – and our thoughts are with all those who have been affected. I will start with safety – both physical and psychological – because it always comes first at bp and is fundamental in the board’s discussions and decision making. On behalf of the board, I would like to recognize the work by bp’s teams on operational safety – especially in achieving a reduction in the number of our most serious process safety incidents (page 24). However, three people died while working for bp and this is unacceptable. Chief executive transition If bp made progress on safety and had a strong operational and financial performance in 2023, there were challenges too, including the change in CEO in September. However, for me and for the board, the positive here was the effectiveness of our emergency succession planning, which allowed us to appoint Murray Auchincloss immediately as interim leader, and avoid a leadership vacuum. The robust and competitive recruitment process that followed, and his performance in that process, led the board to appoint him as CEO on a permanent basis at the beginning of 2024. The board was in full agreement that Murray was the best candidate – but this was not just our view. We sought feedback from many stakeholders including our shareholders. It was very important to have this dialogue with so many of you and I want to thank you for your advice and support. Murray has been at bp for more than two decades and he is deeply committed to the company and its people. He has a track record of performance, he knows how to bring out the best in a team, he was one of the chief architects of the strategy – and he knows the industry inside out. I say more about this transition on page 82. I am grateful to my fellow board members for their support in this process. Their constructive scrutiny of candidates allowed us to make a decision that, we believe, is right for bp. Murray’s strategic vision and focus on performance will help bp to unlock even more of our potential to compete, win and grow the value of bp. With her strong finance leadership experience, the subsequent appointment of Kate Thomson as chief financial officer in February gives the board great confidence in what can be achieved in 2024 and beyond. bp had a strong operational performance in 2023 and its strategy remains well suited to the energy transition as it unfolds.

5bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 Strategic direction This leadership transition marks a new chapter for the company, but not a new strategic direction. This year, it has become even clearer that the world needs a better, more balanced energy system. One that is secure, affordable and lower carbon. bp’s strategy to go from an international oil company to an integrated energy company is designed both to help build a better system and to create value for shareholders while doing so. bp had a strong operational performance in 2023 and its strategy remains well suited to the energy transition as it unfolds. The global move to a lower carbon energy system is not straightforward and presents both challenges and opportunities for an energy company like bp. With global markets remaining unpredictable, flexibility will be important and the strategy allows for this. Role of culture As bp’s business activities evolve, the strength of its culture is paramount. It builds trust within bp’s teams, encourages better performance and helps bp to attract and keep the best talent. A key aspect of this is its speak-up culture. bp encourages everyone to raise any concerns they have, including when they see something they think is inconsistent with the code of conduct or is unsafe or unlawful. bp tools allow them to do this safely, securely, in confidence and without fear of retaliation (see page 72). Closing thanks Every day, bp teams continue to go to work on rigs, in our refineries, in offices, at sea, at our retail sites and at our solar and wind installations – to mention just some of bp’s many areas of operation. I want to thank them all for the considerable progress bp made in 2023. I also want to thank Paula Rosput Reynolds and Sir John Sawers for their distinguished service. Over almost nine years, Paula has been a valued member of the board, including roles as chair of the remuneration committee (Remco) and senior independent director (SID). I am pleased that Amanda Blanc will take on the role of SID and, for an interim period, Tushar Morzaria the role of Remco chair, both with effect from the end of our annual general meeting in April 2024. Sir John’s considerable work since 2015 includes supporting our safety and sustainability committee and our people and governance committee – and he has been highly regarded as chair of our geopolitical advisory council. Both will step down at the end of our annual general meeting in April 2024. I will close with a final thank you. As I look back at this year, one of the highlights for me personally has been my meetings with you, my fellow shareholders – this year more than ever. In a time of internal change and external uncertainty, I want to thank you for your advice, your belief in bp – and for your trust and support throughout. Helge Lund Chair 8 March 2024 $6.5bn share buybacks announced from our 2023 surplus cash flow $4.8bn total dividends distributed to bp shareholders

6 bp Annual Report and Form 20-F 2023 Chief executive officer’s letter Dear fellow shareholders, Thank you for your support over the last year, especially during the period of leadership transition. It is an honour to lead your company as CEO. Our destination is unchanged. We’re moving from an international oil company to an integrated energy company – IOC to IEC. We’re investing in today’s energy system, which is mainly oil and gas, while building out tomorrow’s. And we are focused on growing the value of bp. Safety first Safety always comes first in everything we do. In 2023 three people lost their lives while working for bp – a contractor at bpx energy and two colleagues at our newly acquired TravelCenters of America business. We will never accept this as part of doing business. Our goal is the elimination of all fatalities, life-changing injuries and the most serious process safety incidents. In 2023 we continued to make progress on process safety, but there is always more to do. We need to constantly reinforce and build on our operating culture across the business, rigorously applying our Operating Management System (OMS), embedding the Lifesaving Rules and living our Safety Leadership Principles. We are determined to keep building a safer bp. A year of delivery In 2023 we delivered a resilient operational and financial performance, with earnings (adjusted EBITDA ) of $43.7 billiona and operating cash flow of $32.0 billion. This contributed to: • Profit for the year attributable to bp shareholders of $15.2 billion. • Underlying replacement cost profit of $13.8 billion. • Return on average capital employed (ROACE) of 18.1%b. • Net debt reduced to $20.9 billionc – its lowest in a decade. In turn this has allowed us to deliver competitive distributions to our shareholders: • A 10% increase in the dividend per ordinary share (compared with the fourth quarter of 2022). • $6.5 billion in share buybacks from our 2023 surplus cash flow . • 17% reduction in issued share capital between the end of the first quarter of 2021 and 31 December 2023. We continue to maintain a disciplined financial frame. The strength of our underlying financial performance, the disciplined approach to strengthening the balance sheet over the last few years, and our confidence in our drive towards 2025 gave us the capacity to update the financial frame earlier this year. As we announced in February 2024, we have tightened our capital expenditure guidance and enhanced our share buyback guidance, all while continuing to prioritize a strong balance sheet and strong investment grade credit rating. Strategic progress We are four years into our journey from IOC to IEC. Our strategy is based on the judgement that oil and gas will be needed for decades, but that a global shift to lower carbon energy is well underway. Since the pace of that shift is uncertain we will continue to be flexible and pragmatic, responding to changing demand and societal need, as we did in February 2023. Our strategic progress in 2023 included: • Oil and gas production growth of 2.6%, underpinned by strong growth from bpx energy and good management of our base business. • Strong underlying year-on-year growth in our convenience gross margin . • EV charge points up 35% globally, energy sold up 150%. • Biogas supply volumes up 80%, biofuels production up 18%. • 21.1GW net growth in our renewables pipeline. • 1.1mtpa net growth in our hydrogen pipeline . • Completed the planned implementation of methane measurement approach across our operated upstream oil and gas assets. a Adjusted EBITDA for the group is a non-IFRS measure and its nearest IFRS-equivalent measure is profit for the year 2023. b ROACE is a non-IFRS measure and its nearest IFRS measures of numerator and denominator are profit for the year 2023 attributable to bp shareholders of $15.2 billion and total equity at the end of 2023 of $85.5 billion respectively. c Net debt is a non-IFRS measure and its nearest IFRS-equivalent measure is finance debt at the end of 2023. Nearest IFRS-equivalent measures $15.9bn profit for the year 2023a 17.8% profit for the year 2023 attributable to bp shareholders divided by total equity at 31 December 2023b $52.0bn finance debt at the end of 2023c

7bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 As we drive to 2025, we will focus on executing to deliver value. Growing the value of bp The last few years were about generating options. As we drive to 2025, we will focus on executing to deliver value. To guide that effort, we’ve set out six near-term priorities for bp. These are: to keep improving safety and reducing emissions. To make the company simpler and more focused. To become more efficient by putting technology and digitization at the heart of what we do. To progress our growth projects. To invest to maximize returns. All while maintaining our commitment to shareholder distributions. bp is a great company. We have high-quality resources, outstanding science and engineering, strong partnerships, a world-class trading capability, and above all great people. Six priorities to grow the value of bp 1. Improve safety and reduce emissions. 2. Drive a focus in the business on activities that create the most value. 3. Deliver the next wave of efficiency – including technology and global capability hubs. 4. Deliver the next set of growth projects that provide growth through to 2030 and beyond. 5. Optimize ROACE through disciplined investment allocation. 6. Grow shareholder returns. Read more: page 29 I believe very few companies can deliver what we offer. It’s why I’ve never been more confident that we can win in this transition as a simpler, more focused and higher value bp. Last but not least, thank you for your continued support, and a big thank you to the whole bp team for working incredibly hard in what was at times an uncertain year. Murray Auchincloss Chief executive officer 8 March 2024

8 bp Annual Report and Form 20-F 2023 The operating environment Energy markets Through 2023 energy markets and prices were volatile as demand and supply flows continued to adjust to post-COVID-19 recoveries in demand and disruptions caused by the Russia-Ukraine war. Concerns about energy security and emissions continued to boost renewables as the world transitions towards a lower carbon future. Economic growth was uneven across regions, as past increases in energy prices and steep rises in interest rates had varying effects in different countries. Inflation rates fell significantly as the effects of past increases in food and energy prices on annual inflation eased. However, inflation across much of the world remained above central banks’ targets, and a combination of squeezed incomes and the sharp tightening in monetary policy contributed to a below-average growth rate of around 3% for the global economy in 2023. Growth in advanced economies was 1.5%a, with weakness in the euro area contrasting with continued robust growth in the US. Emerging economies grew by around 4%a, with China experiencing a rebound in growth to 5.2%a as it emerged from COVID-19 lockdowns. Expansion of other emerging economies was dampened by higher interest rates and weak demand for their exports. Oil Oil prices were elevated across much of 2023, supported by a combination of robust oil demand growth and OPEC production cuts. Brent averaged $83/bbl in 2023, down from $101/bbl in the previous year. Global oil demand grew by 2.3mmb/d to 101.7mmb/d in 2023b. The structural post-COVID-19 rebound of mobility ( jet and gasoline), including a significant increase in Chinese oil demand of 1.7mmb/db, supported the well-above-trend growth. A combination of official and voluntary cuts caused OPEC+ production to fall by 390kb/db in 2023, led by Saudi Arabia, which accounted for a 900kb/d contraction versus 2022b. However, these reductions were offset by strong growth in non-OPEC+ supplies, which increased by 2.3mmb/d in 2023b, with the US accounting for two-thirds of that increaseb. Natural gas A combination of a relatively warm European winter in 2022-23 and muted European gas demand caused European and Asian natural gas prices to fall early in 2023. Even so, European gas prices in 2023 were still double their 2015-2019 average levelc following the loss of the majority of Russian pipeline gas supply to the EU in 2022. Asian liquefied natural gas (LNG) prices followed European gas prices lower in 2023, and moved back to trading predominantly at a premium to European prices in a reversal of the trend seen in 2022. The increased demand for LNG cargoes following the loss of Russian gas pipeline supply to the EU, combined with below-average growth in new LNG supply capacity in 2023, meant the global LNG market remained sensitive to supply risks, for example reacting strongly to potential outages in Australia. In the US, Henry Hub (HH) gas prices averaged 61%d lower than in 2022 as the growth in dry natural gas production outpaced demand. Lower HH prices incentivized coal-to-gas switching in the power sector, and heightened demand for cooling during summer heatwaves helped to avoid storage congestion. US gas storage stocks were 13%e above historical average levels at the end of 2023. In response to the lower prices, the number of US gas rigs operating declined by a third from its peak in 2022f. Refining marker margin We use a global refining marker margin (RMM) to track the refining margin environment. Global RMM fell from the record highs reached in 2022, when Russia’s invasion of Ukraine caused significant disruption to refining operations and established trade flows. RMM values averaged $25.8/bbl, $7.3/bbl lower than in 2022g, mainly due to elevated refinery output, including as a result of new capacity additions. Power and renewables Total solar and wind capacity additions in 2023 were expected to have reached around 380GW (on alternating current basis), a record increase historically, and more than 100GW higher than in 2022h, with the increase driven mainly by China and solar photovoltaic (PV) deployment. The ongoing effects of the Russia-Ukraine war have increased countries’ focus on their energy security, supporting greater deployment of renewable energy capacity. Higher commodity prices, rises in interest rates and continued supply chain bottlenecks led to some increases in costs for solar and wind power in several countries. The offshore wind sector was particularly affected, and some projects were cancelled as their economic viability was eroded. However, we saw governments in many key offshore wind markets remain committed to achieving their offshore wind targets and developing their domestic offshore supply chains, providing continued support to the sector. bp operates across volatile energy markets. Here we discuss broader economic trends we have observed that influence our sector as a whole. a IMF World Economic Outlook, October 2023 update. b IEA Oil Market Report, January 2024. c Platts Dutch TTF Day Ahead price. d Platts Henry Hub cash price. e Weekly Natural Gas Storage Report, EIA. f Baker Hughes Rig Count. g The RMM may not be representative of the margin achieved by bp in any period because of bp’s particular refinery configurations and crude and product slates. In addition, the RMM does not include estimates of energy or other variable costs. h IEA Renewables 2023 report; PV capacity additions converted from DC to AC basis by dividing by 1.25.

9bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 Hydrogen and carbon capture and storage There continues to be widespread recognition of the need to use low carbon hydrogen and hydrogen-based fuels to help decarbonize harder-to-abate sectors of the global economy. However, high costs and the slow pace of enabling policy have caused increased challenges for the sector. While the sector-wide project pipeline for production of low-emissions hydrogen operational by 2030 has grown significantly, only a very small amount is either currently operational or under construction. Green hydrogen costs have increased significantly, driven by higher renewable costs, elevated interest rates and competition for renewable electricity. Blue hydrogen costs, while also impacted by high inflation, are primarily driven by natural gas costs, which have subsided since the end of 2022. Blue hydrogen costs are expected to be lower than green hydrogen costs in many countries through the rest of this decade and beyond. More subsidies are needed to close the gap between the higher costs of green hydrogen and customers’ willingness to pay to switch away from incumbent fuels. The global pipeline of carbon capture and storage (CCS) projectsi continued to grow in 2023. But only a relatively small number of projects are actually operating or under construction and, based on past relatively low project completion rates, the current project pipeline appears insufficient to meet the CCS deployment rates consistent with Paris- consistent scenariosi. 2.3% year-on-year increase in global oil consumption in 2023b 0.2% estimated increase in global gas consumption in 2023c 45% expected year-on-year increase in annual solar and wind capacity additions in 2023h Market activity 2023 2022 Global oil consumptionb 101.7mmb/d 99.5mmb/d Global oil productionb 102.0mmb/d 100.1mmb/d Natural gas consumptionj 4,071bcm 4,061bcm Natural gas productionj 4,081bcm 4,094bcm Dated Brent averagek $82.64/bbl $101.32/bbl West Texas Intermediate (WTI) averagel $77.67/bbl $94.58/bbl Urals averagem $61.79/bbl $74.16/bbl Henry Hub averaged $2.53/mmBtu $6.41/mmBtu Dutch Title Transfer Facility (TTF) averagec 40.5 euros per MWh ($12.8/mmBtu) 123.1 euros per MWh ($37.7/mmBtu) Japan-Korea (Asian) LNG averagen $13.8/mmBtu $34.0/mmBtu Refining marker marging $25.8/bbl $33.1/bblo i Projects include capture projects either on a standalone basis or as part of a hub (sharing transport and storage facilities). j IEA Medium Term Gas Report 2023. k Refinitiv Data Service (Dated Brent spot price). l Refinitiv Data Service (West Texas Intermediate). m Refinitiv Data Service (Urals CIF Rotterdam). n Platts JKM spot price. o The 2022 RMM reflects changes in bp’s portfolio.

Carbon emissions Gt of CO2ea 10 bp Annual Report and Form 20-F 2023 Energy outlook Energy markets continued The bp Energy Outlook 2023 explored the trends and uncertainties surrounding the energy transition out to 2050. The Outlook helps inform bp’s core beliefs about the energy transition. The scenarios within it explore the possible implications of different judgements and assumptions concerning the nature of the energy transition. The uncertainty associated with the transition is substantial, and these scenarios are not predictions of what is likely to happen or what bp would like to see happen. We use the output from these scenarios to inform our strategic thinking. a Carbon emissions include CO2 emissions from energy use, industrial processes, natural gas flaring and methane emissions from energy production. b For more information on Paris-consistent pathways, see page 14. New momentum New momentum captures the broad trajectory of the current global energy system. It places weight on the marked increase in global ambition for decarbonization in recent years, as well as on the manner and speed of decarbonization seen over the recent past. CO2-equivalent (CO2e) emissions from energy and industrial processes peak in the 2020s, and by 2050 are around 30% below 2019 levels. This scenario is not considered to be a Paris-consistent pathwayb. Net zero This scenario represents a shift in societal behaviour and preferences which drive gains in energy efficiency and the adoption of low carbon energy, such that global energy system CO2e emissions fall by around 95% by 2050 relative to 2019 levels. This scenario is considered consistent with the Paris goals, broadly aligning with pathways maintaining global temperature rises below 1.5°C. Accelerated Accelerated explores how the energy system might change if the world collectively takes action for CO2e emissions to fall by around 75% by 2050 relative to 2019 levels. This scenario is considered consistent with the Paris goals, broadly aligning with well-below-2°C pathways. Three scenarios to explore the energy transition

11bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 bp Energy Outlook 2023 updates In January 2023 we published the bp Energy Outlook 2023 (2023 Outlook). This was updated from the 2022 Outlook to consider two major developments: the Russia-Ukraine war and the passing of the US Inflation Reduction Act (IRA). The Russia-Ukraine war was judged likely to have a persistent effect on the future path of the global energy system, causing a change in the composition of global energy supplies, reducing economic growth, and increasing countries’ focus on energy security. Also modelled was the IRA, which included a package of largely supply-side measures supporting low carbon energy sources and decarbonization technologies in the US. In July 2023 we released an additional chapter of the bp Energy Outlook, ‘How energy is used’, which considers the outlook for the end uses of energy over the next 30 years. This chapter discusses energy use in the transport, industry and buildings sectors of the global economy. It showed that, in all three scenarios outlined on page 10, electricity increasingly replaces oil as the main energy carrier for light road vehicles in the transport sector. Heavier vehicles also electrify, although hydrogen and biomethane also play a role in some applications. Industry also gradually electrifies, but at a slower rate than transport due to the difficulties of electrifying high-temperature heat, with heavy industry also making use of low carbon hydrogen and bioenergy. In the buildings sector, growth in overall energy demand slows as space heating and cooking appliances become more efficient and energy conservation increases. The share of electricity in the energy used by buildings rises as fossil fuel boilers are replaced by heat pumps and emerging economies phase out traditional biomass. We plan to continue to update the bp Energy Outlook in response to new developments in the energy transition. bp.com/energyoutlook Scenarios for strategic decision making We use scenarios to inform strategy, manage risk, and improve decision making. Some scenarios start from today and project forward over a timeframe in which the current structure of the energy system helps to inform the pace and nature of the transition path. Others start in the future, breaking free from the inherent inertia in the energy system, and look back to the present from that new perspective. In thinking about appropriate scenarios to inform our strategy, we used both approaches. How scenarios inform our strategy The use of scenarios described in the 2023 Outlook, and those from other organizations, aids our understanding of the energy transition and helps us to think about how different outcomes might impact our strategy. The use of a broad range of scenarios to inform our strategy supports our efforts to make it robust and resilient to the range of uncertainty we face. By considering various time horizons, we can identify key milestones or signposts which might emerge over the next five, 10 or 30 years and inform our view of the key sources of uncertainty affecting the global energy system. We actively monitor for changes in the external environment and refresh or review the scenarios as needed in response to these signals, as we did with the Russia-Ukraine war and the impact of the IRA in the 2023 Outlook. For the purposes of testing the resilience of our strategy to the range of uncertainty in the energy transition, we have used scenarios drawn from other credible sources such as the World Business Council for Sustainable Development (WBCSD) ‘Climate Scenario Analysis Reference Approach for Companies in the Energy System’, the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). Read more on our resilience analysis and the outcome of that work on page 64 How we create scenarios We quantify a range of scenarios in the 2023 Outlook using our global energy modelling system. This comprises a suite of models to help us understand the supply and demand dynamics of the global energy system. The modelling framework uses historical data based on the Energy Institute’s Statistical Review of World Energyc, the IEA’s data and a range of other data sets. Each scenario is determined by a set of key assumptions, including population and economic growth, pace of technological change, resource constraints and government policies. These are informed by expert views from external organizations including the United Nations, Oxford Economics and Rystad Energy. We benchmark our scenarios against external organizations including the IEA, the IPCC, IHS Markit and the Network for Greening the Financial System (NGFS). The modelling techniques used vary by sector and include a combination of econometric modelling, least-cost optimization, adoption curves and consumer choice modelling. c Production of the Statistical Review of World Energy passed from bp to the Energy Institute in 2023. It is available online energyinst.org/statistical-review

12 bp Annual Report and Form 20-F 2023 Transforming to an integrated energy company Our strategy in action We are investing in today’s energy system – while helping build out tomorrow’s. All in service of growing the value of bp. a Bioenergy includes customer-facing and midstream biofuels activities that form part of convenience and mobility. Sustainability Embedded across our strategy is our sustainability frame, which sets out our aims for getting to net zero, improving people’s lives and caring for our planet. Integration Our trading and shipping business continues to be at the core of integrating and optimizing across integrated value chains. Key Denotes transition growth engine TCFD Recommendations and Recommended Disclosures Examples of progress against our strategy in 2023, pages 18-23 Sustainability at bp, page 48 Convenience EV charging Sustainability Integration Transition growth engines Bioenergya Hydrogen Renewables & power Three strategic pillars Our strategy is focused on three key areas of activity. Oil and gas Refining Retail fuels Castrol, aviation, B2B/midstream Convenience and mobility Low carbon energy Resilient hydrocarbons

13bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 d Relative to 2019, we expect our hydrocarbon production to be around 25% lower by 2030 reflecting active management and high-grading of the portfolio, including divestment of non-core assets. e 2022 excludes Archaea Energy. f Reported to the nearest 50. Performance against our strategy These are strategic targets and aims we have set against our strategic pillars out to 2025 and 2030. Metrics 2023 performance 2025 target 2030 aim Resilient hydrocarbons Upstream productiond 2.3mmboe/d 2022 2.3mmboe/d ~2.3mmboe/d ~2mmboe/d bp-operated upstream plant reliability 95.0% 2022 96% 96% >96% Upstream unit production costs $5.78/boe 2022 $6.07/boe ~$6/boe – bp-operated refining availability 96.1% 2022 94.5% ~96% >96% Biofuels production 32kb/d 2022 27kb/d ~50kb/d ~100kb/d Biogas supply volumes 22mboe/d 2022 12mboe/de ~40mboe/d ~70mboe/d LNG portfolio 23Mtpa 2022 19Mtpa 25Mtpa 30Mtpa Convenience and mobility Strategic convenience sitesf 2,850 2022 2,400 ~3,000 ~3,500 Customer touchpoints per day >12 million 2022 ~12 million >15 million >20 million Electric vehicle charge points >29,000 2022 ~22,000 >40,000 >100,000 Low carbon energy Hydrogen production (net) – – 0.5-0.7Mtpa Developed renewables to final investment decision (net) 6.2GW 2022 5.8GW 20GW 50GW Installed renewables capacity (net) 2.7GW 2022 2.2GW – ~10GW

14 bp Annual Report and Form 20-F 2023 Pursuing a strategy that is consistent with the Paris goals Consistency with the Paris goals What we mean by Paris-consistent The 2019 CA100+ resolution requires us to disclose the strategy that the board considers in good faith to be consistent with the Paris goals. When we refer to ‘consistency with Paris’ we consider this to mean consistency with the world meeting the temperature goal set out in Articles 2.1(a) and 4.1 of the Paris Agreement on Climate Change . The Paris goals, which we support, were reaffirmed under the UAE Consensus at COP28 in December 2023, by the Sharm el-Sheikh Implementation Plan agreed by the Parties at COP27 in November 2022, and the Glasgow Climate Pact agreed by the Parties at COP26 in November 2021. We believe the world is on an unsustainable path, and the carbon budget to meet the Paris goals is running out. bp’s strategy is informed by these considerations. It is designed to create long-term value for shareholders, while enabling delivery of our net zero ambition – to become a net zero company by 2050 or sooner, and to help the world get to net zero. It is designed to be resilient to the uncertainty of the energy transition across many different potential pathways, including various Paris-consistent pathways. In the bp Annual Report and Form 20-F 2021 we set out, based on three key principles, why the board considers our strategy to be consistent with the Paris goals. Here we set out, on the same three grounds, why the board continues to consider this to be the case. Informed by Paris-consistent energy transition scenarios The speed and nature of the energy transition is uncertain, and so we consider a range of scenarios from multiple sources including the bp Energy Outlook to inform our beliefs about the energy transition and to develop and test our strategic thinking. This helps to reinforce our confidence in the robustness and resilience of our strategy to the range of uncertainty we face. We are confident that our approach is science- based. We see the Intergovernmental Panel on Climate Change (IPCC) as the most authoritative source of information on the science of climate change, and we use it and other sources to inform our strategy. The IPCC highlights that there are a range of global pathways by which the world can meet the Paris goals, with differing implications for regions, industry sectors and sources of energy. The bp Energy Outlook 2023 updated the 2022 Outlook to reflect the significant developments in global energy markets over the preceding year, including the possible impact of the Russia-Ukraine war on the pace of the energy transition. It includes three main scenarios – two of which we regard as Paris-consistent (Accelerated and Net Zero) – that we use to inform our strategy. Energy outlook page 10 and bp.com/energyoutlook Strategic resilience We believe our strategy positions bp for success and resilience in a Paris-consistent world – a world that is progressing on one of the many global trajectories considered to be Paris-consistent, and ultimately meets the Paris goals. The strategy diversifies bp’s portfolio and business interests, reducing the risk that challenges facing a single business area might adversely affect bp’s strategic resilience. In addition, within the inevitable constraints associated with factors such as long-term capital investments, contractual commitments and organizational capabilities at any given time, bp’s ability to maintain its strategic resilience rests, in part, on the governance used to keep the strategy and associated targets and aims under review in light of new information and changes in circumstances. In our climate-related financial disclosures on page 63, we describe how we have conducted an analysis to test our view of the resilience of our strategy to different climate-related scenarios, using the update on strategic progress presented in February 2023. This includes scenarios that are classified by the World Business Council for Sustainable Development (WBCSD) to be consistent with well-below 2°C and 1.5°C outcomesa. As further explained on page 64, while the results of any such analysis must be treated with caution overall, this resilience test again reinforced our confidence in the continued resilience of our strategy to a wide range of ways in which the energy system could evolve throughout this decade, including in scenarios consistent with limiting temperature rise to 1.5°C. The analysis also again highlighted that, while WBCSD data may point towards a broad directional correlation between oil price and the temperature goal with which scenarios are associated, there is considerable uncertainty as to the extent of this correlation. This is demonstrated by the range within, and overlap between, the prices indicated for each scenario family. In the version of the WBCSD catalogue used for the analysis, the lowest oil price is associated with a 1.5°C scenario; however a number of the 1.5°C and well-below 2°C scenarios have oil prices in 2030 that are substantially higher. And when compared to bp’s own central oil price case planning assumption for 2030, the oil price in a number of the well-below 2°C scenarios is also higher, supporting our view that our oil price planning assumption is broadly consistent with Paris-consistent scenarios. a Our 2023 analysis used data from the WBCSD Climate Scenario Catalogue version 2.0, published on 31 March 2023 and downloaded on 1 February 2024, which includes scenarios considered to be consistent with well-below 2°C and 1.5°C outcomes.

15bp Annual Report and Form 20-F 2023 Strategic report See glossary on page 373 Contributes to net zero We believe that our strategy enables bp to make a positive contribution to the world achieving net zero greenhouse gas (GHG) emissions and meeting the Paris goals – outcomes which we believe to be in the best interests of bp as well as beneficial to society generally. We see huge opportunity in the energy transition – the transformation of the energy system that we believe to be a necessary feature of the world’s efforts to meet the Paris goals. There are many ways a company at the heart of the energy sector can make a meaningful contribution to the world getting to net zero. In addition to investing in and scaling our own lower carbon businesses, these include: policy advocacy and seeking to use the company’s influence with trade associations that conduct climate-related advocacy; low carbon collaboration and support for others in their own decarbonization efforts (such as cities and corporates); and making venturing investments in promising new businesses and technologies that have the potential to contribute to the energy transition. bp seeks to advance these areas through our aims in support of our net zero ambition, including aims 6-10 which are focused on activities which can help the world get to net zero, see page 50. And, as we pursue our strategy, our diversification and the growth of our low carbon businesses may also contribute to helping the world get to net zero. Some ways of contributing are more readily measured by quantitative metrics than others – but all can be important, whether or not they translate into GHG reductions for bp. For example, in Teesside in the UK, we continue to w

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