BP PLC

Non-IFRS measure. It is calculated as decreases in underlying operating

expenditure« (as defined below) as a result of operational efficiencies,

divestments, workforce reductions and other cost saving measures that are

expected to be sustainable compared with 2023 levels. The total change

between periods in underlying operating expenditure will reflect both

structural cost reductions and other changes in spend, including market

factors, such as inflation and foreign exchange impacts, as well as changes

in activity levels and costs associated with new operations. Estimates of

cumulative annual structural cost reduction may be revised depending on

whether cost reductions realized in prior periods are determined to be

sustainable compared with 2023 levels. Structural cost reductions are

stewarded internally to support management’s oversight of spending over

time.

bp believes this performance measure is useful in demonstrating how

management drives cost discipline across the entire organization,

simplifying our processes and portfolio and streamlining the way we work.

The nearest IFRS measures are production and manufacturing expenses

and distributions and administration expenses. A reconciliation of

production and manufacturing expenses plus distribution and

administration expenses to underlying operating expenditure is provided on

page 363.

We are unable to present forward-looking information of the nearest IFRS

measures, because without unreasonable efforts, we are unable to forecast

accurately certain adjusting items required to calculate a meaningful

comparable IFRS forward-looking financial measure.