SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    Form 6-K

                            Report of Foreign Issuer

                      Pursuant to Rule 13a-16 or 15d-16 of
                       the Securities Exchange Act of 1934


                     for the period ended December 31, 2001


                                    BP p.l.c.
                 (Translation of registrant's name into English)


          BRITANNIC HOUSE, 1 FINSBURY CIRCUS, LONDON, EC2M 7BA, ENGLAND
                    (Address of principal executive offices)


     Indicate  by check mark  whether the  registrant  files or will file annual
     reports under cover Form 20-F or Form 40-F.


            Form 20-F    |X|                 Form 40-F
                     -----------------                -----------------


     Indicate by check mark whether the registrant by furnishing the information
     contained in this Form is also thereby  furnishing  the  information to the
     Commission  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
     1934.


                 Yes                               No      |X|
                     -----------------                -----------------


THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE  INCORPORATED  BY REFERENCE IN THE
PROSPECTUS  INCLUDED  IN THE  REGISTRATION  STATEMENT  ON  FORM  F-3  (FILE  NO.
333-9790) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON
FORM F-3 (FILE NO.  333-65996)  OF BP p.l.c.,  THE  PROSPECTUS  INCLUDED  IN THE
REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 33-39075) OF BP AMERICA INC. AND BP
p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION  STATEMENT ON FORM F-3 (FILE
NO. 33-20338) OF BP AMERICA INC. AND BP p.l.c.,  THE PROSPECTUS  INCLUDED IN THE
REGISTRATION  STATEMENT  ON FORM F-3 (FILE NO.  33-29102)  OF THE  STANDARD  OIL
COMPANY AND BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION  STATEMENT ON
FORM S-8 (FILE NO.  33-21868)  OF BP  p.l.c.,  THE  PROSPECTUS  INCLUDED  IN THE
REGISTRATION  STATEMENT  ON FORM S-8  (FILE  NO.  333-9020)  OF BP  p.l.c.,  THE
PROSPECTUS  INCLUDED  IN THE  REGISTRATION  STATEMENT  ON  FORM  S-8  (FILE  NO.
333-9798) OF BP p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON
FORM S-8 (FILE NO. 333-79399) OF BP p.l.c.,  AND THE PROSPECTUS  INCLUDED IN THE
REGISTRATION  STATEMENT ON FORM S-8 (FILE NO.  333-34968) OF BP p.l.c.,  AND THE
PROSPECTUS  INCLUDED  IN THE  REGISTRATION  STATEMENT  ON  FORM  S-8  (FILE  NO.
333-67206)  OF BP p.l.c.,  AND TO BE A PART  THEREOF FROM THE DATE ON WHICH THIS
REPORT IS  FURNISHED,  TO THE  EXTENT NOT  SUPERSEDED  BY  DOCUMENTS  OR REPORTS
SUBSEQUENTLY FILED OR FURNISHED.



Page 2
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

GROUP RESULTS JANUARY - DECEMBER 2001


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                                 - $m     36,817        44,562       174,218       148,062
  Total replacement cost operating profit  - $m      1,907         4,763        16,135        17,756
  Replacement cost profit before
    exceptional items                      - $m      1,056         2,799         9,880        11,214
  Replacement cost profit for the period   - $m        892         2,971         9,910        11,142
  Historical cost profit for the period    - $m       (405)        2,410         8,010        11,870
  Profit per Ordinary Share                - cents   (1.78)        10.53         35.70         54.85
  Dividends per Ordinary Share             - cents    5.75          5.25          22.0          20.5


(a)  For further  information on replacement  cost profit see Note 6 of Notes to
     Consolidated Financial Statements

The following  discussion  should be read in conjunction  with the  consolidated
financial   statements  provided  elsewhere  in  this  Form  6-K  and  with  the
consolidated  financial statements and related notes for the year ended December
31, 2000  included in BP p.l.c.'s  Annual Report on Form 20-F for the year ended
December 31,  2000.  Comparative  figures for year ended  December 31, 2000 have
been  restated to reflect the transfer of BP's North  American NGL business from
Refining and Marketing to Gas and Power.

The changes in turnover for the fourth  quarter  primarily  reflect  significant
decreases in oil and gas prices in Exploration and Production,  as well as lower
retail and  wholesale  fuel prices in Refining and  Marketing.  Turnover for the
year  also  reflects  the  inclusion  of ARCO for the whole of the year in 2001,
compared to around  nine months  (from  April 14) in 2000,  the  acquisition  of
Burmah  Castrol from July 7, 2000 and the  consolidation  of the European  fuels
business with effect from August 1, 2000, which more than offset lower prices.

Replacement  cost profit  before  exceptional  items (which  excludes  inventory
holding gains and losses) was $1,056 million for the three months ended December
31, 2001,  compared with $2,799 million for the equivalent period of 2000. These
results are after  charging  special  items of $714 million  ($571 million after
tax) for the three months  ended  December  31,  2001,  and $962  million  ($693
million after tax) for the equivalent  period of 2000. The results for the three
months  ended  December  31, 2001 and 2000 are also after  charging  acquisition
amortization  of  $577  million  and  $598  million,  respectively.  Acquisition
amortization  refers to  depreciation  relating to the fixed  asset  revaluation
adjustment  and  amortization  of goodwill  consequent  upon the ARCO and Burmah
Castrol  acquisitions.  The special  charges for the three months ended December
31, 2001 comprised additional  severance charges,  mainly related to former ARCO
employees, Grangemouth, Scotland restructuring charges, an impairment charge for
our partner operated Lake Maracaibo operations in Venezuela, Castrol, Solvay and
Erdolchemie   integration  costs  and  a  litigation   charge.   Those  for  the
corresponding  period of 2000  related to ARCO,  Vastar and Castrol  integration
costs, rationalization costs post the BP/Amoco merger, environmental charges and
asset writedowns.

For the year ended  December  31,  2001,  the  replacement  cost  profit  before
exceptional  items was $9,880  million,  down from $11,214  million in 2000. The
results  for 2001 are  after  charging  special  items of $1,058  million  ($821
million after tax) and acquisition  amortization of $2,477 million.  The results
for 2000 include  special  charges of $1,994 million ($1,454 million after tax),
and acquisition amortization of $1,535 million.

The  historical  cost loss for the three months ended December 31, 2001 was $405
million after  inventory  holding losses of $1,297  million and net  exceptional
losses of $38 million  ($164  million after tax) in respect of net losses on the
sale of fixed assets and  businesses  and  termination  of  operations.  For the
equivalent  period of 2000 there was a profit of $2,410 million after  inventory
holding  losses of $561  million,  and including  net  exceptional  gains of $78
million  ($172  million loss after tax) in respect of net profits on the sale of
fixed assets and businesses and termination of operations.

For the year ended  December 31,  2001,  the  historical  cost profit was $8,010
million,  after  inventory  holding  losses of $1,900  million and including net
exceptional  gains of $535  million  ($30  million  after tax) in respect of net
profits on sale of fixed assets and businesses and  terminations  of operations.
For the year ended  December 31, 2000,  the  historical  cost profit was $11,870
million,  including  inventory holding gains of $728 million and net exceptional
gains of $220  million ($72 million loss after tax) in respect of net profits on
sale of fixed assets and businesses and terminations of operations.


Page 3
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

Net taxation,  other than production  taxes,  charged for the three months ended
December  31,  2001  was  $537  million  compared  with  $1,242  million  in the
equivalent  period last year.  The fourth  quarter 2001 included a tax charge of
$126 million in respect of  exceptional  items compared with a tax credit of $94
million for the fourth  quarter of 2000.  The effective tax rate on  replacement
cost profit before exceptional items was 28% for the three months ended December
31,  2001 and 31% for the  year,  compared  with 32% and 29% for the  equivalent
period of 2000.  The rate reduction for the fourth quarter was due to tax relief
on  inventory  holding  losses,  which  more than  offset  the  impact of higher
acquisition  amortization.  The higher  rate for the year was largely due to the
increase in acquisition amortization, which is not tax deductible.

Interest  expense for the three months ended  December 31, 2001 was $414 million
compared with $611 million (including $111 million relating to a bond redemption
charge) in the equivalent  period of 2000 reflecting  lower interest rates.  For
the year ended December 31, 2001,  interest  expense was $1,670 million compared
to  $1,770  million  a  year  ago  (including  $62  million  and  $111  million,
respectively,  relating to bond redemption charges). Lower interest rates during
2001 were  partly  offset by higher  average  debt and the  impact of  revaluing
environmental and other provisions at a lower interest rate.

Net cash outflow for the three months ended  December 31, 2001 was $1.0 billion,
compared with $1.6 billion for the  equivalent  period of 2000.  Operating  cash
flow was similar in both periods, with higher tax payments in the fourth quarter
of 2000. For the year 2001, net cash inflow was $1.0 billion compared with a net
cash  inflow of $3.7  billion  in the same  period in 2000.  For the year  ended
December 31, 2001 the overall  decreased cash flow is primarily driven by higher
capital  expenditure and  significantly  lower  divestment  proceeds (the second
quarter of 2000 included the proceeds from the sale of the ARCO Alaska assets).

Capital expenditure and acquisitions in the fourth quarter and year of 2001 were
$4.4  billion and $14.1  billion,  respectively.  Expenditure  for the year 2001
included  the  acquisition  of  Bayer's  50%  interest  in  Erdolchemie  and the
formation  of the joint  venture with Solvay.  Excluding  acquisitions,  capital
expenditure  for the fourth  quarter  and year 2001 was $4.0  billion  and $13.2
billion.  For the  three  months  and  year  ended  December  31,  2000  capital
expenditure and acquisitions were $5.0 billion and $47.6 billion,  respectively.
Expenditure  for the year ended  December 31, 2000 included the  acquisition  of
ARCO,  Burmah  Castrol,  the Mobil share of the European  Joint  Venture and the
minority interest in Vastar, a 2.2% interest in PetroChina, and Exxon's aviation
lubricants  business.  Excluding  the  effect  of  these  acquisitions,  capital
expenditure  for the fourth  quarter  and year 2000 was $3.4  billion  and $11.2
billion, respectively.

Net debt at December  31, 2001 was $19.6  billion.  The ratio of net debt to net
debt plus equity was 21% compared to the 19% rate at September  30, 2001 and 21%
at December 31, 2000. After adjusting for the fixed asset revaluation adjustment
and goodwill consequent upon the ARCO and Burmah Castrol acquisitions, the ratio
of net debt to net debt plus equity was 26% at December 31, 2001  compared  with
24% at September  30, 2000 and 27% at December 31, 2000. In addition to reported
debt,  BP uses  conventional  off  balance  sheet  sources  of  finance  such as
operating leases and associate and joint venture borrowing.

The  group  has  access  to  significant  sources  of  liquidity  in the form of
committed  facilities and other funding through the capital markets. At December
31, 2001 the group had available undrawn  committed  facilities of $3.4 billion.
These  committed  facilities,  which are mainly  with a number of  international
banks,  expire  in 2002 and we  expect  to renew  tham on an  annual  basis.  BP
believes that, taking into account the substantial  amounts of undrawn borrowing
facilities  available,  the Group has sufficient working capital for foreseeable
requirements.

The return on average capital employed on a replacement cost basis for the three
months  ended  December  31,  2001 was 6% compared  with 15% for the  equivalent
period of 2000.  For the year ended  December  31,  2001,  the return on average
capital  employed  was 12%.  For  further  information  on the return on average
capital  employed  calculation  see Note 12 of Notes to  Consolidated  Financial
Statements.

BP purchased for cancellation  approximately 14 million of its own shares during
the fourth quarter of 2001 at a cost of $99 million.  Total share purchases over
the year to December 31, 2001 amounted to approximately 154 million at a cost of
$1,281 million.

BP  announced a fourth  quarterly  dividend  for 2001 of 5.75 cents per ordinary
share. Holders of ordinary shares will receive 4.055 pence per share and holders
of American Depositary Receipts (ADRs) $0.345 per ADS. The dividend for the year
was 22.00 cents per share, up 7%, which is equivalent to 15.436 pence per share,
up 12% over last year. The dividend is payable on March 18, 2002 to shareholders
on the register on February 22, 2002.  Participants in the Dividend Reinvestment
Plan or the  dividend  reinvestment  facility in the US Direct  Access Plan will
receive the dividend in the form of shares on March 18, 2002.

[BP  intends to  continue  to pay  dividends  in the future of around 50% of its
replacement  cost profit before  exceptional  items after  adjusting for special
items and acquisition amortization,  adjusted to mid-cycle operating conditions.
Mid-cycle  conditions are our best estimate of likely average prices and margins
over the long term.]


Page 4

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


Owing to the  significant  acquisitions  that took place in 2000, in addition to
its reported  results,  BP is presenting pro forma results  adjusted for special
items in order to enable  shareholders  to  assess  current  performance  in the
context of BP's past  performance and against that of its  competitors.  The pro
forma result is  replacement  cost profit  before  exceptional  items  excluding
acquisition amortization as defined in footnote (a) below. The pro forma result,
adjusted  for  special  items,  has been  derived  from BP's UK GAAP  accounting
information but is not in itself a recognized UK or US GAAP measure.



                                                                           
                                                                                           Pro forma
Reconciliation of reported                                                                    result
profit (loss) to pro forma result                      Acquisition      Special         adjusted for
adjusted for special items               Reported     amortization(a)     items(b)     special items
                                        ---------     ------------      -------        -------------
                                                           ($ million)
Three months ended December 31, 2001
Exploration and Production                  1,655              397          322                2,374
Gas and Power                                 106                -            -                  106
Refining and Marketing                        392              180          213                  785
Chemicals                                     (67)               -          106                   39
Other businesses and corporate               (179)               -           73                 (106)
                                        ---------       ----------    ---------            ---------
Replacement cost operating profit           1,907              577          714                3,198
Interest expense                             (414)               -            -                 (414)
Taxation                                     (411)               -         (143)                (544)
Minority shareholders' interest               (26)               -            -                  (26)
                                        ---------       ----------    ---------            ---------
Replacement cost profit before
  exceptional items                         1,056              577          571                2,204
                                        ---------        =========    =========            ---------
  per ordinary share (cents)                 4.73                                               9.85
                                        =========                                          =========

Three months ended December 31, 2000
Exploration and Production                  4,238              413           49                4,700
Gas and Power                                 183                -            -                  183
Refining and Marketing                        792              185          344                1,231
Chemicals                                     (82)               -          222                  140
Other businesses and corporate               (368)               -          236                 (132)
                                        ---------       ----------    ---------            ---------
Replacement cost operating profit           4,763              598          851                6,212
Interest expense                             (611)               -          111                 (500)
Taxation                                   (1,336)               -         (269)              (1,605)
Minority shareholders' interest               (17)               -            -                  (17)
                                        ---------       ----------    ---------            ---------
Replacement cost profit before
  exceptional items                         2,799              598          693                4,090
                                        ---------        =========    =========            ---------
   per ordinary share (cents)               12.40                                              18.25
                                        =========                                          =========



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

(a)  Acquisition amortization refers to depreciation relating to the fixed asset
     revaluation  adjustment and  amortization  of goodwill  consequent upon the
     ARCO and Burmah Castrol acquisitions in 2000.

(b)  The special items refer to non-recurring  charges and credits.  The special
     items for the fourth quarter 2001 comprise  additional  severance  charges,
     mainly  related to former  ARCO  employees,  an  impairment  charge for our
     partner operated Venezuelan Lake Maracaibo operations,  Castrol, Solvay and
     Erdolchemie  integration  costs,  Grangemouth  restructuring and litigation
     costs.  The special items for the fourth quarter 2000 comprise  principally
     ARCO, Vasta and Burmah Castrol  integration  costs,  rationalization  costs
     post the BP Amoco merger, environmental charges and asset writedowns.


Page 5

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued



                                                                           
                                                                                           Pro forma
Reconciliation of reported                                                                    result
profit (loss) to pro forma result                      Acquisition      Special         adjusted for
adjusted for special items               Reported     amortization(a)     items(b)     special items
                                        ---------     ------------      -------        -------------
                                                           ($ million)
Year ended December 31, 2001
Exploration and Production                 12,417           1,759           322               14,498
Gas and Power                                 521               -             -                  521
Refining and Marketing                      3,625             718           487                4,830
Chemicals                                     128               -           114                  242
Other businesses and corporate               (556)              -            73                 (483)
                                        ---------       ----------    ---------            ---------
Replacement cost operating profit          16,135           2,477           996               19,608
Interest expense                           (1,670)              -            62               (1,608)
Taxation                                   (4,512)              -          (237)              (4,749)
Minority shareholders' interest               (73)              -             -                  (73)
                                        ---------       ----------    ---------            ---------
Replacement cost profit before
  exceptional items                         9,880           2,477           821               13,178
                                        ---------       =========     =========            ---------
   per ordinary share (cents)               44.03                                              58.73
                                        =========                                          =========

Year ended December 31, 2000
Exploration and Production                 14,012           1,174           524               15,710
Gas and Power                                 571               -             -                  571
Refining and Marketing                      3,523             440           595                4,558
Chemicals                                     760               -           276                1,036
Other businesses and corporate             (1,110)              -           488                 (622)
                                        ---------       ----------    ---------            ---------
Replacement cost operating profit          17,756           1,614         1,883               21,253
Interest expense                           (1,770)              -           111               (1,659)
Taxation                                   (4,680)              -          (540)              (5,220)
Minority shareholders' interest               (92)            (79)            -                 (171)
                                        ---------       ----------    ---------            ---------
Replacement cost profit before
  exceptional items                        11,214           1,535         1,454               14,203
                                        ---------       =========     =========            ---------
   per ordinary share (cents)               51.82                                              65.63
                                        =========                                          =========



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

(a)  Acquisition amortization refers to depreciation relating to the fixed asset
     revaluation  adjustment and  amortization  of goodwill  consequent upon the
     ARCO and Burmah Castrol acquisitions in 2000.

(b)  The special items refer to non-recurring  charges and credits.  The special
     items for 2001 comprise  additional  severance  charges,  mainly related to
     former ARCO  employees,  rationalization  costs in the European  downstream
     commercial  business,   an  impairment  charge  for  our  partner  operated
     Venezuelan  Lake  Maracaibo  operations,  Castrol,  Solvay and  Erdolchemie
     integration  costs,  Grangemouth  restructuring  and litigation  costs. The
     special items for 2000 comprise principally ARCO, Vastar and Burmah Castrol
     integration  costs,   rationalization  costs  post  the  BP  Amoco  merger,
     environmental charges and asset writedowns.


Page 6
                                 BP p.l.c. AND SUBSIDIARIES
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


OPERATING INFORMATION


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
Crude oil and natural gas liquids production
(thousand barrels per day), (net of royalties)
   UK                                                  500          514            485           534
   Rest of Europe                                      116           92            100            90
   USA                                                 772          725            744           729
   Rest of World                                       629          600            602           575
                                                   -------      -------        -------       -------
Total crude oil and liquids production               2,017        1,931          1,931         1,928
                                                   =======      =======        =======       =======

Natural gas production (million cubic feet per day),
(net of royalties)
   UK                                                1,715        1,893          1,713         1,652
   Rest of Europe                                      160          156            147           136
   USA                                               3,621        3,403          3,554         3,054
   Rest of World                                     3,268        3,169          3,218         2,767
                                                   -------      -------        -------       -------
Total natural gas production                         8,764        8,621          8,632         7,609
                                                   =======      =======        =======       =======

Total production (a)
(thousand barrels of oil equivalent per day),
(net of royalties)
   UK                                                  796          840            780           819
   Rest of Europe                                      144          119            125           113
   USA                                               1,396        1,312          1,357         1,256
   Rest of World                                     1,192        1,146          1,157         1,052
                                                   -------      -------        -------       -------
Total production                                     3,528        3,417          3,419         3,240
                                                   =======      =======        =======       =======

Natural gas sales volumes
(million cubic feet per day)
   UK                                                2,534        3,019          2,641         2,526
   Rest of Europe                                      232          224            213           178
   USA                                               8,094        8,206          8,327         6,525
   Rest of World                                     8,867        6,007          7,613         5,243
                                                   -------      -------        -------       -------
Total natural gas sales volumes (b)                 19,727       17,456         18,794        14,471
                                                   =======      =======        =======       =======

NGL sales volumes (thousand barrels per day)
   UK                                                    -            -              -             -
   Rest of Europe                                        -            -              -             -
   USA                                                 226          169            221           154
   Rest of World                                       215          241            189           195
                                                   -------      -------        -------       -------
Total NGL sales volumes                                441          410            410           349
                                                   =======      =======        =======       =======


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

(a)  Expressed in thousand  barrels of oil equivalent per day (mboe/d).  Natural
     gas is converted  to oil  equivalent  at 5.8 billion  cubic feet: 1 million
     barrels.  (b)  Encompasses  sales by Exploration and Production and Gas and
     Power, including marketing, trading and supply sales.



Page 7
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


OPERATING INFORMATION


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
Oil sales volumes (thousand barrels per day)
Refined products
   UK                                                  268          295            266           256
   Rest of Europe                                    1,084        1,077          1,062           901
   USA                                               1,773        1,974          1,866         1,783
   Rest of World                                       612          539            603           480
                                                   -------      -------        -------       -------
   Total marketing sales                             3,737        3,885          3,797         3,420
   Trading/supply sales                              2,710        2,878          2,409         2,103
                                                   -------      -------        -------       -------
   Total refined product sales                       6,447        6,763          6,206         5,523
Crude oil                                            4,599        5,442          4,473         5,984
                                                   -------      -------        -------       -------
Total oil sales                                     11,046       12,205         10,679        11,507
                                                   =======      =======        =======       =======

Refinery throughputs (thousand barrels per day)
   UK                                                  415          391            364           324
   Rest of Europe                                      692          727            663           602
   USA                                               1,371        1,584          1,526         1,625
   Rest of World                                       369          383            376           365
                                                   -------      -------        -------       -------
Total throughput                                     2,847        3,085          2,929         2,916
                                                   =======      =======        =======       =======

Chemicals production (thousand tonnes)
   UK                                                  792          833          3,126         3,137
   Rest of Europe                                    2,278        1,701          7,925         6,713
   USA                                               2,279        2,255          8,943         9,874
   Rest of World                                       699          596          2,722         2,341
                                                   -------      -------        -------       -------
Total production                                     6,048        5,385         22,716        22,065
                                                   =======      =======        =======       =======




Page 8

                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

DETAILED REVIEW OF BUSINESSES (EXCLUDING EXCEPTIONAL ITEMS)

EXPLORATION AND PRODUCTION



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                                 - $m      5,336         8,965        28,229        30,942
  Total replacement cost operating profit  - $m      1,655         4,238        12,417        14,012
  Results included:
  Exploration expense                      - $m        144           157           480           599
  Key Statistics:
  Average prices   :Crude oil (a)          - $/bbl   17.72         28.08         22.50         26.63
  realized by BP
                   :Natural gas            - $/mcf    2.28          3.76          3.30          2.91
  Brent oil price                          - $/bbl   19.41         29.56         24.44         28.44
  West Texas intermediate oil price        - $/bbl   20.31         31.99         25.89         30.38
  Henry Hub gas price (b)                  - $/mmBtu  2.43          5.28          4.26          3.90



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

(a)   Crude oil and natural gas liquids
(b)   Henry Hub First of the Month Index


Total  replacement  cost  operating  profit for the three  months and year ended
December  31, 2001 was $1,655  million and $12,417  million  respectively.  This
compares with $4,238 million and $14,012 million for the  corresponding  periods
in 2000.  Significantly  lower oil and gas prices are reflected in both turnover
and  replacement  cost  operating  profit for the fourth  quarter 2001.  Average
liquids realizations declined by over $10 a barrel for the fourth quarter and $4
for the year;  average  natural gas  realizations  were down $1.48 per  thousand
cubic feet for the  quarter and up  slightly  for the year.  The impact of lower
prices on turnover and replacement cost operating profit for the year was partly
offset by the inclusion of ARCO and other portfolio  changes for the whole year,
compared to only around nine months (from April 14) for the same period in 2000.
The  special  items  for  the  quarter  and the  year  included  a $175  million
impairment  of  our  partner  operated  Venezuelan  Lake  Maracaibo  operations,
following a technical reassessment,  $77 million additional severance costs, $60
million litigation and $10 million Grangemouth  restructuring  costs. The fourth
quarter  benefited  from higher volumes and continued  productivity  driven cost
savings  with  lifting  costs  declining  versus the  previous  quarter  and the
equivalent   quarter  last  year.  The  year  also  benefited  from  operational
improvements.

Total hydrocarbon production for 2001 increased 5.5%, in line with our growth to
target. Production for the fourth quarter was a record 3.5 mmboe/d, which was up
over  3%  compared  with a year  ago  and up  over  4% on a  consistent  current
portfolio basis.  Liquids production increased by over 4% and benefited from new
production from Girassol in Angola, Northstar in Alaska and Qinghangdao in China
as well as  further  production  increases  in  Norway  and the Gulf of  Mexico.
Natural gas  production  for the quarter was up 1.5% and 3.5% when  adjusted for
disposals.

The  reserve  replacement  ratio  was  191%  with  2.2  billion  barrels  of oil
equivalent  booked  through  extensions,  discoveries,  revisions  and  improved
recovery. Replacement exceeded production for the eighth consecutive year.

In support of  continued  growth,  2001  capital  expenditure,  at $8.9  billion
(including  $0.3 billion of  acquisitions),  was nearly $2.5 billion higher than
last year. During the quarter,  the Mad Dog development (BP 60.5% and operator),
in the US Gulf of Mexico,  was approved.  Also, BP announced  that the assets of
Chernogorneft  have been  returned  to Sidanco (BP 11.2%).  This  completes  the
restructuring  of  Sidanco  with its  debt  substantially  repaid,  subsidiaries
recovered and non-core  assets  disposed of.  Sidanco is now positioned as a low
cost Russian producer.


Page 9
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

GAS AND POWER


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                                 - $m      7,452         8,553        39,208        21,013
  Total replacement cost operating profit  - $m        106           183           521           571


On January 1, 2001,  the  natural gas liquids  (NGL)  business  located in North
America  was moved to Gas and Power from  Refining  and  Marketing.  Comparative
information has been restated.

The decrease in turnover for the fourth  quarter 2001  reflects the  significant
fall in natural gas prices,  which has more than offset volume  increases during
the same  period.  The  increase in turnover  for the year is  primarily  due to
higher  sales  volumes  in the  natural  gas  marketing  and  trading  business.
Replacement  cost  operating  profit  for the fourth  quarter  and year was $106
million and $521  million,  respectively,  compared  with $183  million and $571
million for the corresponding periods in 2000. Profit for the quarter is down on
a year ago due to lower  contributions  from  trading  and  marketing  and NGLs.
Despite  continued  growth in gas sales volumes (up 13% on the fourth quarter of
2000),  marketing  and  trading  profit  is down due to less  favourable  market
conditions.  NGL volumes have  increased  but margins are lower than a year ago.
For the year, lower  contribution  from NGLs was partly offset by better results
from marketing and trading and Ruhrgas. NGL margins have declined  significantly
relative to 2000 levels.

The BP gas and power  business  in Spain took part in the  Spanish  Release  Gas
programme,  an initiative to liberalise the market in line with the European gas
directive.  BP captured 25% of the total 150 bcf of gas supply  auctioned by the
incumbent monopoly company.

The Tangguh LNG project (BP approximately  50%) in Eastern Indonesia has secured
the first letter of intent for delivery of LNG to GNPower in the Philippines.

BP and Chevron  Texaco have  announced that they are to build and operate a 22.5
megawatt  wind  farm  at  their  jointly  owned  Nerefco  oil  refinery  in  the
Netherlands.  It will  generate  electricity  equivalent to the  consumption  of
20,000 households,  displacing 20,000 tonnes of carbon dioxide emissions a year.
The scheme will begin operations in the second half of 2002.



Page 10
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


REFINING AND MARKETING



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                                  - $m    26,528        32,708       120,233       107,883
  Total replacement cost operating profit   - $m       392           792         3,625         3,523
  Global Indicator Refining Margin (a)      - $/bbl   2.40          4.46          4.06          4.22


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

(a)  The Global Indicator Refining Margin (GIM) is the average of seven regional
     indicator margins weighted for BP's crude refining capacity in each region.
     Each regional  indicator margin is based on a single  representative  crude
     with  product  yields  characteristic  of the  typical  level of  upgrading
     complexity.

The  decrease in  turnover  for the fourth  quarter  reflects  lower  retail and
wholesale fuel prices. Turnover for the year primarily reflects the inclusion of
ARCO for the whole of the year in 2001,  compared to around  nine  months  (from
April 14) in 2000,  the  acquisition  of Burmah  Castrol on July 7, 2000 and the
consolidation of the European fuels business with effect from August 1, 2000.

Replacement  cost operating  profit for the three months and year ended December
31, 2001 was $392 million and $3,625 million,  respectively,  including  special
charges of $213 million and $487 million. For the corresponding periods in 2000,
replacement  cost operating  profit was $792 and $3,523 after special charges of
$344 million and $595 million,  respectively. The special charges for the fourth
quarter comprised $146 million Castrol integration costs, $37 million associated
with  restructuring of operations at the Grangemouth,  Scotland refinery and $30
million additional  severance charges related to former ARCO employees.  Special
charges  for the year  also  included  rationalization  costs in the  downstream
European commercial business.  Lower profit for the fourth quarter was primarily
the result of lower US and European  refining margins.  Refining  throughputs in
the quarter  declined by 8% compared  with the previous year because of the sale
of the Mandan,  North Dakota and Salt Lake City,  Utah  refineries  in the third
quarter of 2001 and a turnaround  at the Whiting,  Indiana  refinery.  Marketing
volumes  declined by 3% in the  quarter,  reflecting  the  slowdown in the world
economy.  Retail shop sales  increased by 14% versus a year ago,  reflecting the
impact of new BP Connect  stations and worldwide  growth in shop sales.  Average
retail margins were little changed from a year ago,  though fell away at the end
of the quarter.  Profit for the year reflects the benefit of the ARCO and Burmah
Castrol  acquisitions and the consolidation of the fuels business in Europe, and
improved  marketing  volumes,  offset  by  the  effects  of  a  larger  refinery
maintenance programme in 2001.

For  the  year  marketing  volumes  increased  by 11%  (2%  excluding  portfolio
changes).  Retail  shop  sales grew 23% (7%  excluding  portfolio  changes).  We
achieved  a unit cash cost  reduction  of 6% during  the year,  compared  to our
target of 2.5%.

The clean  fuels  programme  was  rolled out to the 113th city by the end of the
year. A total of 339 BP Connect  stations  were open at the end of the year,  in
the USA,  Europe,  Australia and New Zealand.  In addition,  we have reimaged in
excess of 4,600 retail stations worldwide to incorporate BP's new Helios logo.

In December, BP received approval from the European Commission and German Cartel
office for its  acquisition  of Veba Oel AG, subject to certain  disposals.  The
deal,  initially  for a 51% interest,  was  completed on February 1, 2002.  This
completes one part of the arrangement initially announced in mid 2001.


Page 11
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued


CHEMICALS



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                              - $m         2,481         2,754        11,515        11,247
  Total replacement cost                - $m           (67)          (82)          128           760
  operating profit
  Chemicals Indicator Margin (a)        - $/te         108 (b)       117 (c)       108 (b)       126 (c)


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

(a)  The   Chemicals   Indicator   Margin   (CIM)  is  a  weighted   average  of
     externally-based  product margins.  It is based on market data collected by
     Chem Systems in their  quarterly  market  analyses,  then weighted based on
     BP's product  portfolio.  While it does not cover our entire portfolio,  it
     includes a broader range of products than our previous  indicator.  Amongst
     the products and businesses covered in the CIM are olefins and derivatives,
     aromatics and derivatives, linear alpha olefins, acetic acid, vinyl acetate
     monomer  and  nitriles.  Not  included  are  fabrics  and  fibres,  plastic
     fabrications,  poly alpha  olefins,  anhydrides,  engineering  polymers and
     carbon fibres,  speciality  intermediates,  and the remaining  parts of the
     solvents and acetyls businesses.

(b)  Provisional.  The  data for the  fourth  quarter  is  based on two  months'
     actuals and one month of provisional data.

(c)  Restated following review of product margins with Chem Systems.

Turnover for the fourth quarter primarily  reflects lower prices.  For the year,
the effect of lower  prices  was more than  offset by the  inclusion  of 100% of
Erdolchemie in 2001.  Replacement cost operating loss for the three months ended
December 31, 2001 was $67 million  compared with $82 million for the prior year,
including  special charges of $106 million and $222 million,  respectively.  For
the year,  replacement  cost operating  profit was $128 million in 2000 compared
with $760  million  in the  previous  year,  including  special  charges of $114
million  and $276  million,  respectively.  Excluding  special  charges,  fourth
quarter profit reflected ongoing deterioration in market conditions during 2001.
Profit for the year decreased due to a weaker trading  environment,  operational
problems in the first half of 2001, and costs  associated with  restructuring to
improve the efficiency of underlying operations.

Chemicals  production of 6,048  thousand  tonnes in the fourth  quarter was just
above the previous quarter,  as a result of the Solvay joint venture and organic
growth  from our new linear  alpha  olefins,  vinyl  acetate  monomer  and ethyl
acetate  plants coming on stream.  Production  for the year was 22,716  thousand
tonnes, up 3% on 2000 due to new production and acquired assets.

Major  restructuring  continued  throughout  2001,  aimed at  repositioning  the
portfolio  and  lowering  the cost base.  Special  charges  for the year of $106
million and $114 million for the quarter and year, respectively, include charges
for  Grangemouth  restructuring  and those  related  to  Erdolchemie  and Solvay
integration  costs.  In addition to special  items,  the fourth quarter and full
year  results   include  $36  million  and  $102  million,   respectively,   for
rationalization costs.

During the quarter we announced further portfolio rationalization, including the
sale of our butyl and  isopropyl  acetate  business  in  Antwerp,  Belgium,  the
closure of a high-density  polyethylene facility as part of the restructuring at
Grangemouth, Scotland, the idling of one of the polypropylene lines at Chocolate
Bayou, USA and the cessation of alcohol  production to concentrate on production
of linear alpha olefins at Pasadena, USA.


Page 12
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - continued

OTHER BUSINESSES AND CORPORATE



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Turnover                               - $m          216            51           783           249
  Replacement cost operating profit      - $m         (179)         (368)         (556)       (1,110)


Other  businesses and Corporate  comprises  Finance,  BP Solar, the Group's coal
asset,  aluminium  asset,  its  investments in PetroChina and Sinopec,  interest
income and costs relating to corporate activities.

Replacement cost operating loss for the three months and year ended December 31,
2001 was $179 million and $556 million,  respectively,  after special charges of
$73 million  comprising  additional  severance  charges mainly related to former
ARCO  employees.  This  compares  with $368  million and $1,110  million for the
corresponding  periods in 2000,  after special  charges of $236 million and $488
million,  respectively,  comprising  rationalization  costs  post  the BP  Amoco
merger, ARCO integration costs and an environmental charge.

BP Solar  increased  its share of the world's  solar  market to 18% during 2001;
production  for the year was 30% higher.  At the end of the year, as part of its
global real estate  strategy,  BP  completed  the  purchase of a new head office
building  in  London,  England.  This will  permit  rationalization  of other BP
occupied London properties.

EXCEPTIONAL ITEMS


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
  Profit (loss) on sale of fixed assets and
    businesses and termination of operations  - $m     (38)           78           535           220
  Taxation credit (charge)                    - $m    (126)           94          (505)         (292)
                                                   -------       -------       -------        ------
  Exceptional items after taxation - $m               (164)          172            30           (72)
                                                   -------       -------       -------        ------


Exceptional  items for the fourth quarter  include losses on the  termination or
sale of  chemicals  activities  and the  sale of  BP's  interest  in  Kazakhstan
pipeline ventures,  largely offset by gains on the sale of our majority interest
in Vysis and the Frontier and Mandan pipeline systems in the USA.

OUTLOOK

Demand for oil and gas is weaker than last year because of the global economy, a
mild US winter and reduced jet fuel demand following the events of September 11.
The crude oil market  looks  broadly  balanced  for the first  half of 2002,  if
OPEC's  latest  round  of  quota  reductions  offset  current  demand  weakness.
Additional  OPEC oil may be  required  in the second half of the year to balance
the market if demand improves in line with an economic recovery.

In the US gas market,  a combination  of economic  recovery and lower gas prices
may boost demand over the course of 2002 whilst lower  drilling  activity  could
curtail  domestic  production  growth.  In the near term,  high levels of gas in
storage  are  likely  to  maintain  the  downward  pressure  on  prices.  UK gas
fundamentals  had improved  following cold weather across Europe during November
and December, though prices have eased recently, reflecting warmer weather.

Refining  margins have been poor so far in 2002 and may remain under pressure in
the near term  because of weak oil product  demand  growth and  relatively  high
inventories,  especially  in the key US market.  Retail  margins  are  currently
weaker due to intense competitive pressure.

In Chemicals, the near-term pattern of demand is likely to be unchanged.



Page 13
                           BP p.l.c. AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - concluded


FORWARD-LOOKING STATEMENTS

In order to utilize the 'Safe Harbor'  provisions  of the United States  Private
Securities  Litigation  Reform  Act  of  1995,  BP is  providing  the  following
cautionary  statement.  The foregoing  discussion,  in particular,  although not
limited to, the statements under `Outlook', with regard to trends in the trading
environment, oil and gas prices, refining, marketing, NGL and chemicals margins,
inventory  and product  stock  levels,  supply  capacity,  capital  expenditure,
working  capital,   profitability,   results  of  operation,  dividend  payments
liquidity or financial  position and  statements  regarding  our targets are all
forward-looking  in nature.  Forward-looking  statements  are identified by such
phrases as `will', `expects', `is expected to', `may', `is likely to', `intends'
and `believes'.  By their nature,  forward-looking  statements  involve risk and
uncertainty  because they relate to events and depend on circumstances that will
occur in the future and are outside the control of BP. Actual results may differ
materially  from those expressed in such  statements,  depending on a variety of
factors,   including  the  specific   factors   identified  in  the  discussions
accompanying such forward-looking statements;  future levels of industry product
supply, demand and pricing;  political stability and economic growth in relevant
areas  of the  world;  development  and  use of new  technology  and  successful
partnering;  the actions of competitors;  natural disasters and other changes to
business conditions;  wars and acts of terrorism or sabotage;  and other factors
discussed  elsewhere in this report.  In addition to factors set forth elsewhere
in this report, the factors set forth above are important factors,  although not
exhaustive,  that may cause actual results and developments to differ materially
from those expressed or implied by these forward-looking statements.  Additional
information, including information on factors which may affect BP's business, is
contained in BP's Annual  Report and Accounts for 2000 and in the Annual  Report
on Form 20-F for 2000 filed with the US Securities and Exchange Commission.

2001 DIVIDENDS

On February 12,2002, BP p.l.c. announced a fourth quarterly dividend for 2001 of
5.75 cents per ordinary share of 25 cents (ordinary shares), representing $0.345
per American  Depositary  Share (ADS) amounting to $1,289 million in total.  The
record date for qualifying US resident holders of American  Depositary Shares as
well as holders of ordinary  shares was February  12,  2002,  with payment to be
made on March 18, 2002.

The dividend payable on March 18 2002 entitles qualifying US ADS shareholders to
a refund of the 1/9th UK tax  credit  (approximately  $0.038)  attaching  to the
dividend less a UK withholding tax limited to the amount of the tax credit.  The
effect of these  arrangements  for ADS holders is  currently  a cash  payment of
$0.345,  a gross  dividend for tax purposes of $0.383 and a potential tax credit
of $0.038 per ADS.

There is a Dividend  Reinvestment  Plan whereby  holders of ordinary  shares can
elect to reinvest the net cash dividend in shares  purchased on the London Stock
Exchange.  This  plan is not  available  to any  person  resident  in the USA or
Canada,  or in any  jurisdiction  outside  the UK where  such an offer  requires
compliance by the Company with any governmental or regulatory  procedures or any
similar formalities. A dividend reinvestment facility is, however, available for
holders of ADSs through the Direct Access Plan of Morgan  Guaranty Trust Company
of New York.  Participants  in the  Dividend  Reinvestment  Plan or the dividend
reinvestment  facility  included in the US Direct  Access Plan will  receive the
dividend in the form of shares on March 18, 2002.


Page 14
                           BP p.l.c. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME




                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                          ($ million, except per share amounts)

Turnover - Note 3                                   37,114        44,846       175,389       161,826
Less: joint ventures                                   297           284         1,171        13,764
                                                   -------        ------       -------       -------
Group turnover                                      36,817        44,562       174,218       148,062

Replacement cost of sales                           32,499        36,827       146,893       121,516
Production taxes - Note 4                              336           564         1,689         2,061
                                                   -------        ------       -------       -------
Gross profit                                         4,032         7,171        25,636        24,485
Distribution and administration expenses             2,499         2,875        10,918         8,535
Exploration expense - Note 5                           144           157           480           599
                                                   -------        ------       -------       -------
                                                     1,389         4,139        14,238        15,351
Other income                                           208           272           694           805
                                                   -------        ------       -------       -------
Group replacement cost operating profit              1,597         4,411        14,932        16,156
Share of profits of joint ventures                      91            92           443           808
Share of profits of associated undertakings            219           260           760           792
                                                   -------        ------       -------       -------
Total replacement cost operating profit
  Notes 6 and 7                                      1,907         4,763        16,135        17,756
Profit (loss) on sale of fixed assets and businesses
  and termination of operations - Note 8                38           (78)         (537)         (196)
                                                   -------        ------       -------       -------
Replacement cost profit before interest and tax
 - Note 6                                            1,869         4,841        16,670        17,976
Inventory holding gains (losses) - Note 9           (1,297)         (561)       (1,900)          728
                                                   -------        ------       -------       -------
Historical cost profit before interest and tax         572         4,280        14,770        18,704
Interest expense - Note 10                             414           611         1,670         1,770
                                                   -------        ------       -------       -------
Profit before taxation                                 158         3,669        13,100        16,934
Taxation - Note 11                                     537         1,242         5,017         4,972
                                                   -------        ------       -------       -------
Profit after taxation                                 (379)        2,427         8,083        11,962
Minority shareholders' interest                         26            17            73            92
                                                   -------        ------       -------       -------
Profit for the period                                 (405)        2,410         8,010        11,870
                                                   =======        ======       =======       =======
Earnings per ordinary share - cents (a)
   Basic                                             (1.78)        10.53         35.70         54.85
   Diluted                                           (1.76)        10.47         35.48         54.48
                                                   -------        ------       -------       -------
Earnings per American depositary share - cents (a)
   Basic                                            (10.68)        63.18         214.2         329.1
   Diluted                                          (10.56)        62.82         212.9         362.9
                                                   -------        ------       -------       -------
Average number of outstanding ordinary
  shares (millions)                                 22,396        22,516        22,436        21,638
                                                   =======        ======       =======       =======



Page 15
                           BP p.l.c. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET


                                                    December 31, 2001               December 31, 2000
                                                        (Unaudited)
                                                                      ($ million)
                                                                                   
Fixed assets
  Intangible assets                                            15,593                          16,893
  Tangible assets                                              77,410                          74,284
  Investments                                                  12,047                          11,962
                                                             --------                        --------
                                                              105,050                         103,007
Current assets
  Business held for resale                          -                             636
  Inventories                                   7,631                           9,234
  Receivables                                  26,669                          28,418
  Investments                                     450                             661
  Cash at bank and in hand                      1,358                           1,170
                                             --------                        --------
                                               36,108                          40,119
                                             --------                        --------

Current liabilities - falling due within one year
  Finance debt                                  9,090                           6,418
  Accounts payable and accrued liabilities     28,524                          31,298
                                             --------                        --------
                                               37,614                          37,716
                                             --------                        --------

Net current assets (liabilities)                               (1,056)                          2,403
                                                             --------                        --------
Total assets less current liabilities                         103,544                         105,410

Noncurrent liabilities
  Finance debt                                 12,327                          14,772
  Accounts payable and accrued liabilities      3,086                           3,842
  Provisions for  liabilities  and charges     13,137                          12,795
                                             --------                        --------
                                                               28,550                          31,409
                                                             --------                        --------
Net assets                                                     74,994                          74,001
Minority shareholders' interest                                   627                             585
                                                             --------                        --------

BP shareholders' interest (a) - Note 15                        74,367                          73,416
                                                             ========                        ========
Represented by:
Capital shares
  Preference                                                       21                              21
  Ordinary                                                      5,608                           5,632
Paid-in surplus                                                 4,014                           3,770
Merger reserve                                                 26,286                          26,869
Retained earnings                                              23,757                          36,668
Other reserves                                                    247                             456
                                                             --------                        --------
                                                               74,367                          73,416
                                                             ========                        ========




Page 16
                           BP p.l.c. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
Net cash inflow from operating activities            5,547         5,779        22,409        20,416
                                                   -------       -------       -------       -------
Dividends from joint ventures                           12             -           104           645
                                                   -------       -------       -------       -------
Dividends from associated undertakings                 104           120           528           394
                                                   -------       -------       -------       -------
Servicing of finance and returns on investments
Interest received                                       83           100           256           444
Interest paid                                         (229)         (471)       (1,282)       (1,354)
Dividends received                                      35            30           132            42
Dividends paid to minority shareholders                (38)           (4)          (54)          (24)
                                                   -------       -------       -------       -------
Net cash outflow from servicing of finance            (149)         (345)         (948)         (892)
and returns on investments
                                                   -------       -------       -------       -------
Taxation
UK corporation tax                                   (454)          (428)       (1,058)         (869)
Overseas tax                                         (968)        (1,571)       (3,602)       (5,329)
                                                   -------       -------       -------       -------
Tax paid                                           (1,422)        (1,999)       (4,660)       (6,198)
                                                   -------       -------       -------       -------
Capital expenditure
Payments for fixed assets                          (3,688)        (3,689)      (12,214)      (10,101)
Proceeds from the sale of fixed assets                615            917         2,365         3,029
                                                   -------       -------       -------       -------
Net cash outflow for capital expenditure           (3,073)        (2,772)       (9,849)       (7,072)
                                                   -------       -------       -------       -------
Acquisitions and disposals
Investments in associated undertakings               (179)           (88)         (586)         (985)
Acquisitions, net of cash acquired                   (602)        (1,561)       (1,210)       (6,265)
Net investment in joint ventures                     (220)             -          (497)         (218)
Proceeds from the sale of businesses                  231            402           538         8,333
                                                   -------       -------       -------       -------
Net cash (outflow) inflow for                        (770)        (1,247)       (1,755)          865
acquisitions and disposals
                                                   -------       -------       -------       -------
Equity dividends paid                              (1,232)        (1,183)       (4,827)       (4,415)
                                                   -------       -------       -------       -------
Net cash inflow (outflow)                            (983)        (1,647)        1,002         3,743
                                                   =======       =======       =======       =======

Financing                                            (855)        (1,059)          972         3,413
Management of liquid resources                        (65)          (158)         (211)          452
Increase (decrease) in cash                           (63)          (430)          241          (122)
                                                  -------        -------       -------       -------
                                                     (983)        (1,647)        1,002         3,743
                                                  =======        =======       =======       =======


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

(a)  This cash flow  statement has been  prepared in accordance  with UK GAAP. A
     cash flow  statement presented on a SFAS95 format is included in Note 16.




Page 17
                           BP p.l.c. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS - continued



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
Reconciliation of historical cost profit before interest
and tax to net cash inflow from operating activities

Historical cost profit before interest and tax         572         4,280        14,770        18,704
Depreciation and amounts provided                    2,430         2,228         8,750         7,449
Exploration expenditure written off                     85            73           238           264
Share of profits of joint ventures and
  associated undertakings                             (303)         (350)       (1,194)       (1,853)
Interest and other income                             (132)          (79)         (478)         (360)
(Profit) loss on sale of fixed assets and businesses    36           (78)         (537)         (196)
Charge for provisions                                  187            33         1,008           702
Utilization of provisions                             (221)         (426)       (1,119)         (969)
Decrease (increase) in stocks                        1,368          (185)        1,490        (1,449)
Decrease (increase) in debtors                       1,241        (1,952)        1,989        (5,587)
Increase (decrease) in creditors                       284         2,235        (2,508)        3,711
                                                   -------       -------       -------       -------
Net cash inflow from operating activities            5,547         5,779        22,409        20,416
                                                   =======       =======       =======       =======

Financing
Long-term borrowing                                   (267)          (96)       (1,296)       (1,680)
Repayments of long-term borrowing                      434         1,359         2,602         2,353
Short-term borrowing                                (2,764)       (3,072)       (6,257)       (4,120)
Repayments of short-term borrowing                   1,656           148         4,823         4,821
                                                   -------       -------       -------       -------
                                                      (941)       (1,661)         (128)        1,374

Issue of ordinary share capital                        (13)          (16)         (181)         (257)
Repurchase of ordinary share capital                    99           618         1,281         2,001
Stamp duty reserve tax                                   -             -             -           295
                                                   -------       -------       -------       -------
Net cash outflow from financing                       (855)       (1,059)          972         3,413
                                                   =======       =======       =======       =======


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

(a)  This cash flow  statement has been  prepared in accordance  with UK GAAP. A
     cash flow  statement presented on a SFAS95 format is included in Note 16.




Page 18
                           BP p.l.c. AND SUBSIDIARIES
                      CAPITAL EXPENDITURE AND ACQUISITIONS



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
By business

Exploration and Production
   UK                                                 312            362         1,095           961
   Rest of Europe                                      99             85           329           195
   USA                                                862            897         4,155         3,179
   Rest of World                                      880            781         3,282         2,048
                                                  -------        -------       -------       -------
                                                    2,153          2,125         8,861         6,383
                                                  -------        -------       -------       -------
Gas and Power
   UK (a)                                              46             86            97           194
   Rest of Europe                                      45             13            82            16
   USA (b)                                             61              5           109            73
   Rest of World                                       57             23            71            53
                                                  -------        -------       -------       -------
                                                      209            127           359           336
                                                  -------        -------       -------       -------
Refining and Marketing
   UK (c)(d)                                          127            393           394         5,409
   Rest of Europe (d)                                 209            328           380         1,712
   USA (e)                                            623            652         1,311         1,092
   Rest of World                                      157            227           330           480
                                                  -------        -------       -------       -------
                                                    1,116          1,600         2,415         8,693
                                                  -------        -------       -------       -------
Chemicals
   UK                                                  26            210           205           620
   Rest of Europe (f)                                 294             17           917           112
   USA                                                167            166           460           349
   Rest of World                                      107            119           344           504
                                                  -------        -------       -------       -------
                                                      594            512         1,926         1,585
                                                  -------        -------       -------       -------

Other businesses and corporate (g)                    356            596           563        30,616
                                                  -------        -------       -------       -------
                                                    4,428          4,960        14,124        47,613
                                                  =======        =======       =======       =======
By geographical area
   UK                                                 745          1,144         2,128         7,438
   Rest of Europe                                     709            443         1,787         2,041
   USA                                              1,758          1,796         6,160        34,037
   Rest of World                                    1,216          1,577         4,049         4,097
                                                  -------        -------       -------       -------
                                                    4,428          4,960        14,124        47,613
                                                  =======        =======       =======       =======


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

(a)  4Q 2000  included $62 million for the second  instalment  on two LNG ships.
     Year 2000 also included investment in Great Yarmouth Power Station plus the
     first and second instalment on the two LNG ships.
(b)  Year 2000,  4Q 2001 and year 2001  included  investment  in Green  Mountain
     Energy Company.
(c)  Year 2000  included  $4,686  million for the  purchase of Burmah  Castrol's
     issued  share  capital.  4Q and year 2000  included  $175  million  for the
     acquisition of the minority interest in Castrol India.
(d)  Year 2000 included $1,450 million for the acquisition of the Mobil share of
     the European Joint Venture.
(e)  4Q and year 2000  included  $110  million for the Olympic  pipeline and $70
     million for Exxon's aviation lubricants business.
(f)  4Q 2001 included the formation of the joint venture with Solvay.  Year 2001
     also included the acquisition of Bayer's 50% interest in Erdolchemie.
(g)  4Q and year 2000 included $416 million for the investment in Sinopec.  Year
     2000 included  $27,506 million for the acquisition of ARCO,  $1,688 million
     for the acquisition of the minority interest in Vastar and $578 million for
     the acquisition of a 2.2% interest in PetroChina.


Page 19
                           BP p.l.c. AND SUBSIDIARIES
                            ENVIRONMENTAL INDICATORS



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
Average oil realizations (a) - $/bbl
   UK                                                18.53         28.55         23.55         27.38
   USA                                               17.05         28.02         21.87         25.94
   Rest of World                                     17.70         27.48         21.90         26.49
   BP average                                        17.72         28.08         22.50         26.63

   Brent oil price                                   19.41         29.56         24.44         28.44
   West Texas Intermediate oil price                 20.31         31.99         25.89         30.38
   Alaska North Slope US West Coast                  17.79         29.42         23.18         28.35

Average natural gas realizations - $/mcf
   UK                                                 3.15          3.03          3.07          2.42
   USA                                                2.06          5.15          3.99          3.72
   Rest of World                                      1.99          2.63          2.52          2.25
   BP average                                         2.28          3.76          3.30          2.91

Henry Hub gas price (b) ($/mmBtu)                     2.45          5.28          4.26          3.90

Global Indicator Refining Margins (c) - $/bbl
   Northwest Europe                                   1.53          3.63          2.24          3.35
   US Gulf Coast                                      1.79          3.78          4.84          3.99
   Midwest                                            2.63          3.54          6.05          4.03
   US West Coast                                      6.25         10.21          8.60          8.77
   Singapore                                          1.20          2.18          0.90          2.11
   BP average                                         2.40          4.46          4.06          4.22

Chemicals Indicator Margin (d) - $/te                  108(e)        117(f)        108(e)        126(f)


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

(a)  Crude oil and natural gas liquids.
(b)  Henry Hub First of Month Index.
(c)  The Global Indicator Refining Margin (GIM) is the average of seven regional
     indicator margins weighted for BP's crude refining capacity in each region.
     Each regional  indicator margin is based on a single  representative  crude
     with  product  yields  characteristic  of the  typical  level of  upgrading
     complexity.
(d)  The   Chemicals   Indicator   Margin   (CIM)  is  a  weighted   average  of
     externally-based  product margins.  It is based on market data collected by
     Chem Systems in their  quarterly  market  analyses,  then weighted based on
     BP's product  portfolio.  While it does not cover our entire portfolio,  it
     includes a broader range of products than our previous  indicator.  Amongst
     the products and businesses covered in the CIM are olefins and derivatives,
     aromatics and derivatives, linear alpha olefins, acetic acid, vinyl acetate
     monomer  and  nitriles.  Not  included  are  fabrics  and  fibres,  plastic
     fabrications,  poly alpha  olefins,  anhydrides,  engineering  polymers and
     carbon fibres,  speciality  intermediates,  and the remaining  parts of the
     solvents and acetyls businesses.
(e)  Provisional.  The  data for the  fourth  quarter  is  based on two  months'
     actuals and one month of provisional data.
(f)  Restated following review of product margins with Chem Systems.


US dollar/sterling exchange rates


                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
Average rates for the period                          1.44          1.45          1.44          1.51
Period-end rates                                      1.45          1.49          1.45          1.49
                                                   =======       =======        ======       =======




Page 20
                           BP p.l.c. AND SUBSIDIARIES
         SPECIAL ITEMS AND ACQUISITION AMORTIZATION BY SEGMENT (PRE-TAX)



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
Special items

   Exploration and Production
   UK                                                   70             5            70           117
   Rest of Europe                                        -             -             -             -
   USA                                                  77            25            77           312
   Rest of World                                       175            19           175            95
                                                   -------       -------       -------       -------
                                                       322            49           322           524
                                                   -------       -------       -------       -------
   Gas and Power
   UK                                                    -             -             -             -
   Rest of Europe                                        -             -             -             -
   USA                                                   -             -             -             -
   Rest of World                                         -             -             -             -
                                                   -------       -------       -------       -------
                                                         -             -             -             -
                                                   -------       -------       -------       -------
   Refining and Marketing
   UK                                                   70            59           131            73
   Rest of Europe                                       44            38           167            89
   USA                                                  63           188            82           358
   Rest of World                                        36            59           107            75
                                                   -------       -------       -------       -------
                                                       213           344           487           595
                                                   -------       -------       -------       -------
  Chemicals
   UK                                                   89             1            89             6
   Rest of Europe                                       33            18            41            20
   USA                                                 (16)           18           (16)           65
   Rest of World                                         -           185             -           185
                                                    -------       -------       -------       -------
                                                       106           222           114           276
                                                    -------       -------       -------       -------
  Other businesses and corporate
   UK                                                    -            63             -           119
   Rest of Europe                                        -             -             -             -
   USA                                                  73           173            73           369
   Rest of World                                         -             -             -             -
                                                    -------       -------       -------       -------
                                                        73           236            73           488
                                                    -------       -------       -------       -------
   Total special items before interest                 714           851           996         1,883
   Interest - bond redemption charges                    -           111            62           111
                                                   -------       -------       -------       -------
   Total                                               714           962         1,058         1,994
                                                   =======       =======       =======       =======

Acquisition amortization

   Exploration and Production
   UK                                                   41            30           151            85
   USA                                                 323           373         1,474         1,058
   Rest of World                                        33            10           134            31
                                                   -------       -------       -------       -------
                                                       397           413         1,759         1,174
                                                   -------       -------       -------       -------
   Refining and Marketing
   UK                                                   99           104           394           208
   USA                                                  81            81           324           232
                                                   -------       -------       -------       -------
                                                       180           185           718           440
                                                   =======       =======       =======       =======
   Total                                               577           598         2,477         1,614
                                                   =======       =======       =======       =======



Page 21
                                 BP p.l.c. AND SUBSIDIARIES
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   The  financial  statements  and notes  included in this Report for the year
     ended  December 31, 2001 do not  constitute  statutory  accounts.  It is an
     extract from the 2001 annual accounts (except Notes 16 and 17), approved by
     a duly appointed and authorized  committee of the Board of Directors at the
     Results  Committee on February 12,  2002,  but not yet  delivered to the UK
     Registrar of  Companies;  the report of the auditors on those  accounts was
     unqualified.  The  accounting  policies  used in preparing  the 2001 annual
     accounts  are  consistent  with  those  applied  in  the  preceding  annual
     accounts. The results for the three months ended December 31, 2001 and 2000
     are  unaudited  and in the opinion of  management  include all  adjustments
     necessary for a fair presentation of the results for the periods presented.
     The financial  statements  and notes included in this Report should be read
     in conjunction with the consolidated financial statements and related notes
     for the year ended December 31, 2000 included in BP's Annual Report on Form
     20-F filed with the Securities and Exchange Commission.

2.   Business held for resale

     The sale of Foseco  was  completed  during the third  quarter of 2001.  The
     other former Burmah Castrol chemicals businesses originally  categorized as
     businesses  held for resale will for now be retained and have been included
     within the Chemicals segment from July 1, 2001.



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
3. Turnover
   By business
   Exploration and Production                        5,336         8,965        28,229         30,942
   Gas and Power                                     7,452         8,553        39,208         21,013
   Refining and Marketing                           26,528        32,708       120,233        107,883
   Chemicals                                         2,481         2,754        11,515         11,247
   Other businesses and corporate                      216            51           783            249
                                                   -------        ------      --------       --------
                                                    42,013        53,031       199,968        171,334
   Less: sales between businesses                    5,196         8,469        25,750         23,272
                                                   -------        ------      --------       --------
   Group excluding joint ventures                   36,817        44,562       174,218        148,062
   Sales of joint ventures                             297           284         1,171         13,764
                                                   -------        ------      --------       --------
                                                    37,114        44,846       175,389        161,826
                                                   =======        ======      ========       ========

   By geographical area
   UK                                               11,432        11,982        47,618         45,400
   Rest of Europe                                    8,657        11,217        36,701         20,553
   USA                                              16,039        19,023        84,696         71,084
   Rest of World                                     7,285         9,406        33,911         31,014
                                                   -------        ------      --------       --------
                                                    43,413        51,628       202,926        168,051
   Less: Sales between areas                         6,596         7,066        28,708         19,989
                                                   -------        ------      --------       --------
   Group excluding joint ventures                   36,817        44,562       174,218        148,062
                                                   =======        ======      ========       ========
   Sales of joint ventures
   UK                                                   13             -            13          3,314
   Rest of Europe                                       30             -            30         12,316
   USA                                                  82            87           318            270
   Rest of World                                       172           197           810            686
                                                   -------        ------      --------       --------
                                                       297           284         1,171         16,586
   Less: sales between areas                             -             -             -          2,822
                                                   -------        ------      --------       --------
                                                       297           284         1,171         13,764
                                                   =======        ======      ========       ========
4. Production taxes
   UK petroleum revenue tax                            147           162           600            707
   Overseas production taxes                           189           402         1,089          1,354
                                                   -------        ------      --------       --------
                                                       336           564         1,689          2,061
                                                   =======        ======      ========       ========




Page 22
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
5. Exploration expense
   Exploration and Production
      UK                                                 9            13            14            36
      Rest of Europe                                     7            10            22            42
      USA                                               82            72           256           257
      Rest of World                                     46            62           188           264
                                                   -------       -------       -------       -------
                                                       144           157           480           599
                                                   =======       =======       =======       =======


6.   Replacement cost profit

     Replacement  cost  profits  reflect  the  current  cost  of  supplies.  The
     replacement  cost profit for the period is arrived at by excluding from the
     historical cost profit  inventory  holding gains and losses.  These are the
     difference  between  the  amount  that is  charged  to cost of  sales  on a
     first-in,  first-out  (FIFO)  basis of inventory  valuation  and the amount
     charged to cost of sales  based on the average  cost of  supplies  incurred
     during the period.  The former basis is used in arriving at the  historical
     cost result whereas the latter basis is used in arriving at the replacement
     cost result.  For further  discussion of replacement  cost operating profit
     see Item 3 of BP`s Annual  Report on Form 20-F for the year ended  December
     31, 2000.



7.   Total replacement cost operating profit
     By business
     Exploration and Production
                                                                                 
     UK                                                571         1,082         3,424         4,043
     Rest of Europe                                    144           232           748           826
     USA                                               440         1,678         4,629         5,114
     Rest of World                                     500         1,246         3,616         4,029
                                                   -------       -------       -------       -------
                                                     1,655         4,238        12,417        14,012
                                                   -------       -------       -------       -------
     Gas and Power
     UK                                                (29)            1            58            14
     Rest of Europe                                     61            54           181           148
     USA                                                45            29           265           104
     Rest of World                                      29            99            17           305
                                                   -------       -------       -------       -------
                                                       106           183           521           571
                                                   -------       -------       -------       -------
     Refining and Marketing
     UK                                               (197)          (71)         (475)          173
     Rest of Europe                                    227           354           762           753
     USA                                                59           388         2,637         2,211
     Rest of World                                     303           121           701           386
                                                   -------       -------       -------       -------
                                                       392           792         3,625         3,523
                                                   -------       -------       -------       -------
     Chemicals
     UK                                                (75)           10          (216)          (71)
     Rest of Europe                                     (1)           15           185           286
     USA                                                (9)           56            62           581
     Rest of World                                      18          (163)           97           (36)
                                                   -------       -------       -------       -------
                                                       (67)          (82)          128           760
                                                   -------       -------       -------       -------
     Other businesses and corporate                   (179)         (368)         (556)       (1,110)
                                                   -------       -------       -------       -------
                                                     1,907         4,763        16,135        17,756
                                                   =======       =======       =======       =======
     By geographical area
     UK                                                375           834         2,668         3,773
     Rest of Europe                                    388           608         1,814         2,013
     USA                                               243         2,026         7,049         7,296
     Rest of World                                     901         1,295         4,604         4,674
                                                   -------       -------       -------       -------
                                                     1,907         4,763        16,135        17,756
                                                   =======       =======       =======       =======




Page 23
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
8. Analysis of exceptional items
   Profit (loss) on sale of fixed assets and
   businesses and termination of operations
   Exploration and Production                          (85)          (96)          195           119
   Gas and Power                                         -             2            (1)            1
   Refining and Marketing                               18           (87)          471            98
   Chemicals                                          (130)           28          (297)         (212)
   Other businesses and corporate                      159           231           167           214
                                                   -------       -------       -------       -------
   Exceptional items before taxation                   (38)           78           535           220
   Taxation charge                                    (126)           94          (505)         (292)
                                                   -------       -------       -------       -------
   Exceptional items after taxation                   (164)          172            30           (72)
                                                   =======       =======       =======       =======

9. Inventory holding gains (losses)
   Exploration and Production                           (5)           (1)           (6)            4
   Gas and Power                                       (20)          (11)          (81)           11
   Refining and Marketing                           (1,138)         (520)       (1,583)          620
   Chemicals                                          (134)          (29)         (230)           93
                                                   -------       -------       -------       -------
                                                    (1,297)         (561)       (1,900)          728
                                                   =======       =======       =======       =======

10.Interest expense
   Group interest payable (a)                          286           532         1,308         1,482
   Capitalized                                          (7)          (42)          (81)         (119)
                                                   -------       -------       -------       -------
                                                       279           490         1,227         1,363
   Joint ventures                                       21            19            70            78
   Associated undertakings                              26            42           135           140
   Unwinding of discount on provisions                  46            60           196           189
   Change in discount rate for provisions               42             -            42             -
                                                   -------       -------       -------       -------
                                                       414           611         1,670         1,770
                                                   =======       =======       =======       =======
(a)Includes charges relating to the
   early redemption of debt (a)                          -           111            62           111
                                                   -------       -------       -------       -------

11.Charge for taxation
   United Kingdom                                      174           334           940         1,207
   Overseas                                            363           908         4,077         3,765
                                                   -------       -------       -------       -------
                                                       537         1,242         5,017         4,972
                                                   =======       =======       =======       =======



Page 24
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
12.Return on average capital employed (ROACE)

   Replacement cost basis
   Replacement cost profit before
     exceptional items                               1,056         2,799         9,880        11,214
   Interest                                            414           611         1,670         1,770
   Minority shareholders' interest                      26            17            73            92
                                                   -------       -------       -------       -------
                                                     1,496         3,427        11,623        13,076
                                                    ======       =======       =======       =======
   Average capital employed                         97,025        94,402        95,829        86,214*
   ROACE                                               6.2%           15%         12.1%           16%
                                                   -------       -------       -------       -------

   Acquisitions and special items adjustments
   Acquisition amortization                            577           598         2,477         1,614
   Special items (post tax)                            571           582           775         1,343
   Average capital employed                         18,275        20,762        19,225        20,755*
   ROACE - pro forma basis adjusted
     for special items                                13.4%           25%         19.4%           23%
                                                   -------       -------       -------       -------
   Historical cost basis
   Historical cost profit after exceptional items     (405)        2,410         8,010        11,870
   Interest                                            414           611         1,670         1,770
   Minority shareholders' interest                      26            17            73            92
                                                   -------       -------       -------       -------
                                                        35         3,038         9,753        13,732
                                                   =======       =======       =======       =======
   ROACE                                               0.1%           13%         10.2%           17%
                                                   =======       =======       =======       =======


*    As the  acquisition  of ARCO was completed in April 2000 and Burmah Castrol
     in July 2000, the average capital  employed for 2000 has been calculated as
     the average of the four discrete quarters.




                                                                                 
13.Analysis of changes in net debt
   Opening balance
   Finance debt                                     20,474        19,688        21,190        14,544
   Less:Cash                                         1,438         1,607         1,170         1,331
        Current asset investments                      519           862           661           220
                                                   -------       -------       -------       -------
   Opening net debt                                 18,517        17,219        19,359        12,993
                                                   -------       -------       -------       -------
   Closing balance
   Finance debt                                     21,417        21,190        21,417        21,190
   Less:Cash                                         1,358         1,170         1,358         1,170
        Current asset investments                      450           661           450           661
                                                   -------       -------       -------       -------
   Closing net debt                                 19,609        19,359        19,609        19,359
                                                   -------       -------       -------       -------
   Decrease (increase) in net debt                  (1,092)       (2,140)         (250)       (6,366)
                                                   =======       =======       =======       =======

   Movement in cash/bank overdrafts                   (63)          (430)          241          (122)
   (Decrease) increase in current
      asset investments                               (65)          (158)         (211)          452
   Net cash (inflow) outflow from
     financing (excluding share capital)             (941)        (1,661)         (128)        1,374
   Other movements                                    (17)           (24)          (36)          (44)
   Debt acquired                                       (8)             -           (55)       (8,072)
                                                   -------       -------       -------       -------
   Movements in net debt before
     exchange effects                              (1,094)        (2,273)         (189)       (6,412)
   Exchange adjustments                                 2            133           (61)           46
                                                   -------       -------       -------       -------
   Decrease (increase) in net debt                 (1,092)        (2,140)         (250)       (6,366)
                                                   =======       =======       =======       =======




Page 25
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
 14.Net debt ratio - net debt: net debt + equity
    Gross debt                                      21,417        21,190        21,417        21,190
    Cash and current asset investments               1,808         1,831         1,808         1,831
                                                   -------       -------       -------       -------
    Net debt                                        19,609        19,359        19,609        19,359
    Equity                                          74,994        74,001         74,94        74,001
                                                   -------       -------       -------       -------
    Net debt ratio                                      21%           21%           21%           21%
    Acquisition adjustment (a)                      17,986        20,463        17,986        20,463
                                                   -------       -------       -------       -------
    Net debt ratio - pro forma basis (b)                26%           27%           26%           27%
                                                   =======       =======       =======       =======

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

(a)  Acquisition adjustment refers to the fixed asset revaluation adjustment and
     goodwill consequent upon the ARCO and Burmah Castrol acquisitions.

(b)  Based on  equity  excluding  the fixed  asset  revaluation  adjustment  and
     goodwill resulting from the ARCO and Burmah Castrol acquisitions.


 15.Movement in BP shareholders' interest                         $ million

    Balance at December 31, 2000                                     73,416

    Profit for the period                                             8,010
    Distribution to shareholders                                     (4,935)
    Currency translation differences                                   (908)
    Employee share schemes                                              181
    Share buyback                                                    (1,281)
    Redemption of ARCO preference shares                               (116)
                                                                    -------
    Balance at December 31, 2001                                     74,367
                                                                    =======


Page 26
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


16.   Consolidated statement of cash flows presented on a SFAS95 format



                                                      Three months ended              Year ended
                                                          December 31                 December 31
                                                          (Unaudited)
                                                      2001          2000          2001          2000
                                                      ------------------          ------------------
                                                                                 
                                                                        ($ million)
   Operating activities
   Profit after taxation                              (379)        2,427         8,083        11,962
   Adjustments to reconcile profits after tax to
   net cash provided by operating activities
   Depreciation and amounts provided                 2,430         2,228         8,750         7,449
   Exploration expenditure written off                  85            73           238           264
   Share of profits of joint ventures and
     associates less dividends received                (52)          (78)          (60)         (377)
   (Profit) loss on sale of businesses
     and fixed assets                                   36           (78)         (537)         (196)
   Working capital movement (see analysis below)     2,087          (578)        1,319        (2,848)
   Other                                               (71)         (393)         (225)       (1,650)
                                                   -------       -------       -------       -------
   Net cash provided by operating activities         4,136         3,601        17,568        14,604
                                                   -------       -------       -------       -------

   Investing activities
   Capital expenditures                             (3,695)       (3,731)      (12,295)      (10,220)
   Acquisitions, net of cash acquired                 (602)       (1,561)       (1,210)       (6,265)
   Investment in associated undertakings              (179)          (88)         (586)         (985)
   Net investment in joint ventures                   (220)            -          (497)         (218)
   Proceeds from disposal of assets                    846         1,319         2,903        11,362
                                                   -------       -------       -------       -------
   Net cash used in investing activities            (3,850)       (4,061)      (11,685)       (6,326)
                                                   -------       -------       -------       -------

   Financing activities
   Net proceeds from shares (repurchased) issued       (86)         (602)       (1,100)       (2,039)
   Proceeds from long-term financing                   267            96         1,296         1,680
   Repayments of long-term financing                  (434)       (1,359)       (2,602)       (2,353)
   Net increase (decrease) in short-term debt        1,108         2,924         1,434          (701)
   Dividends paid - BP shareholders                 (1,232)       (1,183)       (4,827)       (4,415)
                  - Minority shareholders              (38)           (4)          (54)          (24)
                                                   -------       -------       -------       -------
   Net cash used in financing activities              (415)         (128)       (5,853)       (7,852)
                                                   -------       -------       -------       -------
   Currency translation differences
     relating to cash and cash equivalents             (20)          (50)          (53)          (50)
                                                   -------       -------       -------       -------
   (Increase) decrease in cash and
     cash equivalents                                 (149)         (638)          (23)          376
                                                   -------       -------       -------       -------
   Cash and cash equivalents at
     beginning of period                             1,957         2,469         1,831         1,455
                                                   -------       -------       -------       -------
   Cash and cash equivalents at end of period        1,808         1,831         1,808         1,831
                                                   =======       =======       =======       =======
   Analysis of working capital movement
   Decrease (increase) in inventories                1,368          (185)        1,490        (1,449)
   Decrease (increase) in receivables                1,202        (1,904)        1,905        (5,501)
   (Decrease) increase in current
     liabilities (excluding finance debt)             (483)        1,511        (2,076)        4,102
                                                   -------       -------       -------       -------
   Total working capital movement                    2,087          (578)        1,319        (2,848)
                                                   =======       =======       =======       =======



Page 27
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


17.Restatement of 2000 segment information

   On January 1, 2001 the natural gas liquids (NGL) operations located in the
   USA and Canada, were moved to the Gas and Power business from Refining and
   Marketing. Comparative information for 2000 has been restated as shown below.



                                                                                    
                                                         First     Second      Third     Fourth
                                                       Quarter    Quarter    Quarter    Quarter     2000
                                                       -------------------------------------------------
                                                                           ($ million)

   Replacement cost operating profit

   Previously reported Refining and Marketing total        674      1,271      1,048        915    3,908
   Previously reported Gas and Power total                  52         26         48         60      186
                                                       =================================================

   Restated as:

   Refining and Marketing

     UK                                                     33        148         63        (71)    173
     Rest of Europe                                         36        130        233        354     753
     USA                                                   409        814        600        388   2,211
     Rest of World                                         106         91         68        121     386
                                                       ------------------------------------------------
                                                           584      1,183        964        792   3,523
                                                       =================================================

   Gas and Power

     UK                                                    (5)          4         14          1      14
     Rest of Europe                                        55          11         28         54     148
     USA                                                   14          47         14         29     104
     Rest of World                                         78          52         76         99     305
                                                       ------------------------------------------------
                                                          142         114        132        183     571
                                                       =================================================

   Turnover

   Previously reported Refining and Marketing total    20,778      25,120     32,555     34,362 112,815

   Previously reported Gas and Power total              2,173       2,772      4,237      6,899  16,081
                                                       =================================================

   Restated as:

   Refining and Marketing                              19,696      24,168     31,311     32,708 107,883

   Gas and Power                                        3,255       3,724      5,481      8,553  21,013
                                                       =================================================




Page 28
                           BP p.l.c. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

17.Restatement of 2000 segment information - concluded



                                                                                    
                                                         First     Second      Third     Fourth
                                                       Quarter    Quarter    Quarter    Quarter     2000
                                                       -------------------------------------------------
                                                                           ($ million)


   Exceptional items

   Previously reported Refining and Marketing total         19         5         160       (85)       99
   Previously reported Gas and Power total                   -         -           -         -         -
                                                       =================================================
   Restated as:

   Refining and Marketing                                   19         5         161       (87)       98
   Gas and Power                                             -         -          (1)        2         1
                                                       =================================================

   Capital expenditure and acquisitions

   Previously reported Refining and Marketing total      1,102       518       5,504     1,626     8,750
   Previously reported Gas and Power total                   7        57         114       101       279
                                                       =================================================

   Restated as:

   Refining and Marketing

     UK                                                    889       29        4,098       393     5,409
     Rest of Europe                                         44       65        1,275       328     1,712
     USA                                                    76      334           30       652     1,092
     Rest of World                                          87       76           90       227       480
                                                       -------------------------------------------------
                                                         1,096      504        5,493     1,600     8,693
                                                       =================================================

   Gas and Power

     UK                                                      2       28           78        86       194
     Rest of Europe                                          1        1            1        13        16
     USA                                                     1       30           37         5        73
     Rest of World                                           9       12            9        23        53
                                                       -------------------------------------------------
                                                            13       71          125       127       336
                                                       =================================================



Page 29


                                   SIGNATURES





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                                      BP p.l.c.
                                    (Registrant)





Dated: February 19, 2002                          /S/ D. J. PEARL
                                                  ............................
                                                   D. J. PEARL
                                                   Deputy Company Secretary