1. Climate Change Policy Gordon Harvey

2. The extent of the challenge • Global emissions need to peak no later than 2030 and be lower in 2050 than they are now. • In the developed countries there is increasing alignment that GHG emission reductions of 60 to 80% vs 1990 will be required by 2050. • We recognise that these targets will have profound implications on our business.

3. Climate change context: BP’s point of view • Climate change is happening; there are costs of both mitigation and adaptation. Doing nothing is not an option • Policy needs to be put in place to reduce emissions over time, significantly in the case of developed countries. • A carbon-constrained economy creates business opportunities for BP as well as potentially creating some additional costs. • But • The provision of cheap and reliable energy has been a major factor in the economic and social development of the world • New technologies will increasingly be needed to supply low carbon energy • Fossil fuels will play an important part in energy supply for several decades to come

4. Our global presence Oil Gas Chemicals Refining Market positions An opportunity and a responsibility

5. 15% of UK production 45 producing fields 33 platforms in operation 10 pipeline systems 3000 BP staff + contractors >$2bn Capex + Opex per annum Production over 400mbd Total resources circa 3.5 billion barrels BP in the North Sea bn boe

6. The climate change journey 2001 BP achieves its 2010 target nine years early, having reduced GHG emissions by energy efficiency projects and cutting flaring of unwanted gas. 2003 Based on work at Princeton, BP sets out a range of technology options to stabilize GHG emissions over 50 years, including increases in solar, wind, gas-fired power and carbon capture and storage. 1999 BP initiates the CO2 capture project with other companies and governments, studying methods of capturing and storing CO2 at power plants. 2005 BP announces plans for the world’s first industrial-scale hydrogen power plant. BP launches BP Alternative Energy 1997 BP publicly acknowledges the need for precautionary action to cut GHG emissions after exiting the Global Climate Coalition. 2002 BP announces plans to build a wind farm at Nerefco, the Netherlands. 2000 BP begins funding the Carbon Mitigation Initiative at Princeton University, exploring solutions to climate change. 2004 BP’s solar business moves into profit and announces plans to double production. BP launches CO2 capture and storage project at the In Salah gas field in Algeria. 1998 BP sets target to cut emissions from our operations to 10% below 1990 levels by 2010

7. Schiehallion Foinaven > 400,000 tonnes p.a. reduction in greenhouse gas (CO2) emissions Innovation: Magnus EOR project Magnus Gas Injection Line Gas Export Line Live Crude FLAGS Sullom Voe SHETLAND ISLANDS Gas to Market

8. Cost curve

9. Carbon price “funnel” is the key framework for future explicit carbon prices and transitional incentives