BP PLC - Glass Lewis plc is an integrated oil and gas company, which ... UK companies are required to submit their remuneration report for non-binding shareholder approval annually,

PROXY PAPERBP PLC

London Stock Exchange: BP ISIN: GB0007980591

MEETING DATE: 16 APRIL 2015

RECORD DATE: 14 APRIL 2015

PUBLISH DATE: 23 MARCH 2015

COMPANY DESCRIPTION

BP plc is an integrated oil and gas company, whichoperates in two business segments: Exploration andProduction; and Refining and Marketing.

INDEX MEMBERSHIP:FTSE ALL-SHARE (GBP); OMXCOPENHAGEN 20; S&P EUROPE 350;DOW JONES GLOBAL TITANS 50; FTSE100; S&P GLOBAL 100

SECTOR: ENERGY

INDUSTRY: OIL, GAS AND CONSUMABLE FUELS

COUNTRY OF TRADE: UNITED KINGDOM

COUNTRY OF INCORPORATION: UNITED KINGDOM

VOTING IMPEDIMENT: NONE

DISCLOSURES: NONE

OWNERSHIP COMPANY PROFILE REMUNERATION PREVIOUS BOARD VOTE RESULTS APPENDIX

2015 ANNUAL MEETING PROPOSAL ISSUE BOARD GLASS LEWIS CONCERNS

1.00 Accounts and Reports FOR FOR

2.00 Remuneration Report (Advisory) FOR AGAINSTPay performance disconnectConcerns regarding payout stucture,targets & disclosure

3.00 Elect Robert W. Dudley FOR FOR

4.00 Elect Brian Gilvary FOR FOR

5.00 Elect Paul M. Anderson FOR FOR

6.00 Elect Alan L. Boeckmann FOR FOR

7.00 Elect Frank L. Bowman FOR FOR

8.00 Elect Antony Burgmans FOR FOR

9.00 Elect Cynthia B. Carroll FOR FOR

10.00 Elect Ian E.L. Davis FOR FOR

11.00 Elect Ann Dowling FOR FOR

12.00 Elect Brendan R. Nelson FOR FOR

13.00 Elect Phuthuma F. Nhleko FOR FOR

14.00 Elect Andrew B. Shilston FOR FOR

15.00 Elect Carl-Henric Svanberg FOR FOR

16.00 Appointment of Auditor and Authority to Set Fees FOR FOR

17.00 Scrip Dividend Alternative FOR FOR

18.00 Share Award Plan 2015 FOR FOR

19.00 Authorisation of Political Donations FOR FOR

20.00 Authority to Issue Shares w/ Preemptive Rights FOR FOR

21.00 Authority to Issue Shares w/o Preemptive Rights FOR FOR

22.00 Authority to Repurchase Shares FOR FOR

23.00 Amendments to Articles (Technical) FOR FOR

24.00 Authority to Set General Meeting Notice Period at 14Days

FOR AGAINST Shortened notice period

25.00 Shareholder Proposal Regarding Climate ChangeReporting FOR FOR

BP April 16, 2015 Annual Meeting 2 Glass, Lewis & Co., LLC

SHARE OWNERSHIP PROFILE

SHARE BREAKDOWN

1

SHARE CLASS Ordinary Shares

SHARES OUTSTANDING 18,237.8 M

VOTES PER SHARE 1

INSIDE OWNERSHIP 0.10%

STRATEGIC OWNERS** 3.50%

FREE FLOAT 96.50%

SOURCE CAPITAL IQ AND GLASS LEWIS. AS OF 10-MAR-2015

TOP 20 SHAREHOLDERS HOLDER OWNED* COUNTRY INVESTOR TYPE

1. BlackRock, Inc. 6.37% United States Traditional Investment Manager 2. Capital Research and Management Company 3.36% United States Traditional Investment Manager 3. UBS Global Asset Management 3.35% Switzerland Traditional Investment Manager 4. State Street Global Advisors, Inc. 3.18% United States Traditional Investment Manager 5. Legal & General Investment Management 3.12% United Kingdom Traditional Investment Manager 6. Franklin Resources, Inc. 2.44% United States Traditional Investment Manager 7. Government Of People's Republic Of China 2.19% China Government Institution 8. Norges Bank Investment Management 2.19% Norway Government Pension Plan Sponsor 9. The Vanguard Group, Inc. 2.13% United States Traditional Investment Manager 10. Aberdeen Asset Management PLC 1.92% United Kingdom Traditional Investment Manager 11. Kuwait Investment Authority 1.80% Kuwait Sovereign Wealth Fund 12. PPM America, Inc 1.66% United States Traditional Investment Manager 13. Invesco Ltd. 1.51% United States Traditional Investment Manager 14. Standard Life Investments Limited 1.36% United Kingdom Traditional Investment Manager 15. Schroder Investment Management Limited 1.10% United Kingdom Traditional Investment Manager 16. Barrow, Hanley, Mewhinney & Strauss, Inc. 0.92% United States Traditional Investment Manager 17. AXA Investment Managers S.A. 0.90% France Traditional Investment Manager 18. Dimensional Fund Advisors LP 0.80% United States Traditional Investment Manager 19. HSBC Global Asset Management (UK) Limited 0.80% United Kingdom Traditional Investment Manager 20. BNY Mellon Asset Management 0.75% United States Traditional Investment Manager

*COMMON STOCK EQUIVALENTS (AGGREGATE ECONOMIC INTEREST) SOURCE: CAPITAL IQ. AS OF 10-MAR-2015 **CAPITAL IQ DEFINES STRATEGIC SHAREHOLDER AS A PUBLIC OR PRIVATE CORPORATION, INDIVIDUAL/INSIDER, COMPANY CONTROLLED FOUNDATION,ESOP OR STATE OWNED SHARES OR ANY HEDGE FUND MANAGERS, VC/PE FIRMS OR SOVEREIGN WEALTH FUNDS WITH A STAKE GREATER THAN 5%.

SHAREHOLDER RIGHTS MARKET THRESHOLD COMPANY THRESHOLD1

VOTING POWER REQUIRED TO CALL A SPECIAL MEETING 5.0% 5.0% VOTING POWER REQUIRED TO ADD AGENDA ITEM 5.0%2 5.0%

1N/A INDICATES THAT THE COMPANY DOES NOT PROVIDE THE CORRESPONDING SHAREHOLDER RIGHT.2OR AT LEAST 100 HOLDERS OF PAID UP SHARES OF AT LEAST £100 EACH.


COMPANY PROFILE

GENERAL

COUNTRY OF INCORPORATION United Kingdom STOCK MARKET London Stock Exchange LISTING SEGMENT Premium Equity Commercial Companies SUBJECT TO TAKEOVER CODE Yes FREE FLOAT REQUIREMENT 25%

FINANCIALS

1 YR TSR 3 YR TSR AVG. 5 YR TSR AVG.

BP -11.4% 1.1% -3.5%FTSE ALL-SHARE INDEX 1.2% 11.1% 8.7%

31-DEC-2014 MARKET CAPITALIZATION (MM USD) 116,611 ENTERPRISE VALUE (MM USD) 140,903 REVENUES (MM USD) 353,568

TSR FIGURES AS OF 31-DEC-2014. SOURCE: CAPITAL IQ. ANNUALIZED SHAREHOLDER RETURNS.

EXECUTIVEREMUNERATION

NON-BINDING SAY ON PAYVOTE Yes BINDING PAY POLICY LAST

APPROVED April 10, 2014

GLASS LEWIS STRUCTURERATING Fair GLASS LEWIS DISCLOSURE

RATING Poor

SHARE DILUTION LIMITS Yes EXECUTIVES SUBJECT TOOWNERSHIP GUIDELINES Yes

STI RECOUPMENTPROVISIONS Clawback & Malus LTI RECOUPMENT

PROVISIONS Clawback & Malus

BONUS DEFERRAL Yes, Mandatory

BOARD &MANAGEMENT

ELECTION METHOD Majority CEO START DATE October 1, 2010 STAGGERED BOARD No AVERAGE NED TENURE 5 years CHAIRMAN STATUS Non-Executive CHAIRMAN START DATE January 1, 2010 LAST TRIENNIAL EXTERNALREVIEW 2013 ANNUAL REVIEW OF

BOARD EFFECTIVENESS Yes

DESCRIPTION OF DIVERSITYPOLICY Yes

AUDITORSAUDITOR: ERNST & YOUNG TENURE: N/D EMPHASIS OF MATTER IDENTIFIED IN PAST 12 MONTHS No MATERIAL RESTATEMENT(S) IN PAST 12 MONTHS No

CURRENT AS OF MAR 23, 2015


REMUNERATION DETAILS

BP

The Company paid: more remuneration to its CEO than the median CEO remuneration for a group of similarly sized UKcompanies with an average market capitalization of £78.91 billion; and more to its CEO than the median CEOremuneration for a group of European Energy companies. Overall, the Company performed worse than the peers.

CEO Remuneration

All figures in £ 2014

Fixed 1,176,040

STI 1,940,756

LTI 7,083,659

Pensions 1,671,045

Other / Benefits 73,382

Total remuneration 10,273,837

Notes: STI includes deferred element. LTIreflects value at grant date and includesmatching shares. Converted to sterling atfiscal year end rate: $1 = 0.6437

Composition of Remuneration

Company's CEO

Sector CEO

CEO Compared To Median

Shareholder Wealth and BusinessPerformance

Note: Remuneration analysis for period ending December 31, 2014. Total return and EPS growth based on weighted average of annualized 1, 2 and 3 year data. Totalremuneration does not include pensions.


1.00: ACCOUNTS AND REPORTS

PROPOSAL REQUEST: Receipt of financial statements and reports RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): 98.38% FOR- NO CONCERNS

BINDING/ADVISORY: Binding

REQUIRED TO APPROVE: Majority of votes cast

GLASS LEWIS ANALYSISShareholders will receive and consider the Company's financial statements and directors' and auditor's reports for thefiscal year ended December 31, 2014. Shareholders are voting to approve receipt of the statements and reports, not toapprove their substance and content.

EMPHASIS OF MATTER

We note that in its unqualified opinion, Ernst & Young has placed an emphasis of matter on the "significant uncertaintyover provisions and contingnecies related to the Gulf of Mexico oil spill". Specifically, the auditor states that:

[it has] considered the adequacy of the disclosure in Note 2 to the financial statements concerning the provisions,future expenditures which cannot be reliably estimated and other contingent liabilities related to the claims, penaltiesand litigation arising from the Gulf of Mexico oil spill. The total amount that will ultimately be paid by [the Company] inrelation to all obligations arising from this significant event is subject to significant uncertainty and the ultimateexposure and cost to [the Company] is dependent on many factors, including but not limited to, the determinations ofthe Courts and Regulatory authorities in the US. Significant uncertainty exists in relation to the amount of claims thatwill become payable by [the Company] and the amount of fines that will be levied on [it] (including any ultimatedetermination of [the Company]’s culpability based on negligence, gross negligence or wilful misconduct). Theoutcome of litigation and the cost of the longer term environmental consequences of the oil spill are also subject tosignificant uncertainty. For these reasons it is not possible to estimate reliably the ultimate cost to [the Company].

However, we believe that all of the necessary financial statements and reports are present in the Company's annualreport. Further, we note that in the opinion of Ernst & Young, the Company's independent auditor, the financial statementsand the directors' reports have been properly prepared in accordance with International Financial Reporting Standards,Article 4 of the IAS Regulation and the Companies Act 2006. Furthermore, we note that shareholders are only approvingreceipt of the statements and reports, not their substance or content.

Accordingly, we recommend that shareholders vote FOR this proposal.


2.00: REMUNERATION REPORT (ADVISORY)

PROPOSAL REQUEST: Approve Remuneration Report(Advisory)

RECOMMENDATION: AGAINST

PRIOR YEAR VOTE RESULT (FOR): 67.94%

BINDING/ADVISORY: Advisory


REMUNERATION POLICY FEATURES

POSITIVE

LTI based on multiple metricsSTI targets and results disclosedIncentives reflect performance relative to peersMandatory STI deferralLTI and deferred STI subject to clawbackBalance of short- and long-term incentivesExecutive share ownership guidelinesStated 10% dilution limit

NEGATIVE

Pay exceeds market peers despiteunderperformanceSTI payout structure appears excessiveQuestionable performance measures (matchingshares)Incomplete disclosure of LTI targetsMultiple payouts for single area of performanceDisclosure concerns

Both positive and negative remuneration features are ranked according to Glass Lewis' view of their importance or severity.

PROPOSAL DETAILSUK companies are required to submit their remuneration report for non-binding shareholder approval annually, in additionto receiving binding shareholder approval of the remuneration policy at least every three years.

The annual advisory proposal is intended to provide shareholders with a voice on the implementation of the remunerationpolicy during the year under review and current fiscal year. While this is a non-binding proposal, if it is not approved by amajority of shareholders the Company will be required to submit its executive remuneration policy to a binding vote at thenext annual general meeting.

The policy below was approved at last year's AGM and, as such, will not require further shareholder approval for a threeyear period, unless the policy is changed or an annual advisory remuneration proposal does not receive majority support.We have included an overview of the policy for informational purposes.


APPROVED POLICY

FIXED

TERMS

SALARY BENCHMARK Oil and other top European multinationals, and related UScorporations

TARGET SALARY POSITIONING N/D

PENSION ARRANGEMENTSEmployer cash supplement limited to 35% of salary (whereexecutives have exceeded the annual defined benefit schemeaccrual allowance); certain executives participate in defined benefitschemes

NOTES None

VARIABLE

AWARD TYPE

PERF. PERIOD

ADD'L HOLDING

NORMAL MAX.* METRICS

BONUS SCHEMECash,

deferredshares

Oneyear

Threeyears 225%

Safety and riskmanagement (30%),Financial/operational

value (70%)

MATCHING PLAN Matchingshares

Threeyears

Threeyears 150%^

Safety andenvironmentalsustainability

EDIP Performanceshares

Threeyears

Threeyears 550%

TSR, operating cashflow, Strategic

imperatives

*Reflects CEO maximum as a percentage of base salary.

^Assumes maximum bonus and voluntary deferral of 75% of salary into the scheme. Only one-third of bonus (75% assuming maximum

award) is mandatorily deferred.

RECRUITMENT/ LOSS OF OFFICE

TERMS

RECRUITMENTIn line with the Company's standard remuneration policy; however,initial EDIP awards may be subject to time-restrictions rather thanperformance conditions, and additional awards may be granted toreflect forfeited amounts

NOTICE PERIOD (COMPANY)

12 months or less; executives are entitled to salary, and may beentitled to pension and benefits. For Iain Conn and Dr. BrianGilvary, entitlements are limited to a payment in lieu of notice of 12months salary in instalments or as a lump sum.

When termination is for cause, no compensation is due.

STI (LEAVING)Upon cessation, executives may be entitled to a bonus payment,pro-rated for time served. No bonus is normally payable in respectof notice period.

LTI (LEAVING)Vesting of outstanding awards is at the discretion of thecommittee; if EDIP awards are preserved they would normally veston the normal vesting date.

NOTES A shorter vesting period for share awards may apply on a changeof control.

OTHER FEATURES

TERMS

BONUS DEFERRAL Yes, mandatory

RECOUPMENT PROVISIONS Yes, malus and clawback under deferred STI and LTI

DILUTION LIMITS 10% of issued share capital

EXECUTIVE SHAREHOLDING GUIDELINES Yes; 500% of base salary


IMPLEMENTATION REPORTEXECUTIVE DIRECTORS

NAME AND TITLE SALARY/FEES BENEFITS PENSION BONUS AWARDS VESTED INCENTIVES TOTAL

Bob Dudley Group Chief Executive $1,827,000 $114,000 $2,596,000 $1,005,000 $9,792,000 $15,334,000

Dr Brian Gilvary Chief Financial Officer £721,000 £51,000 £273,000 £396,000 £1,904,000 £3,345,000

Iain Conn Former Chief Executive, Refining and Marketing £786,000 £55,000 £293,000 £1,252,000 £3,712,000 £6,098,000

^Vested incentives includes value of deferred portion of 2011 annual bonus and related matching share awards

This table reflects the "single total figure" of remuneration for each executive as disclosed by the Company, comprisingfixed payments made during the year, short-term incentive awards paid in respect of the year, and any long-term awardsvesting during the year. As such, it excludes awards granted during the year that will vest based on future performance.

Mr. Dudley's pension reflects increase in accrued pension (net inflation); Messrs. Gilvary and Conn's pension reflects thisincrease, along with cash payments in lieu of future accrual totalling £252,000 and £275,000, respectively. Increases inaccrued pension are multiplied by 20, in line with regulations.

Shareholders should note that the Company has not included deferred bonus earned during the year ($2,010,000 for theCEO; £793,000 for Dr. Brian Gilvary) in its single figure of remuneration, on the basis that it is conditional on futureperformance. However, the deferred bonus and associated matching shares in respect of fiscal year 2011, which vestedduring the year, are included by the Company in "Vested Incentives" above. Glass Lewis' methodology, as displayed inour Remuneration Details page, is to include deferred bonus under "STI", and potential matching shares under "LTI".

TURNOVER

Iain Conn, former Chief Executive, Refining and Marketing, resigned as a director and left employment on December 31,2014, as announced in July 2014. Mr. Conn was entitled to a 12-month notice period, of which he worked five months;termination payments due to be made in respect of the other seven months of his notice period lapsed due to hiscommencement of employment elsewhere. He was eligible for early retirement from age 55, and his pension in respect ofservice from 2006 to departure will be reduced by 3% per annum from age 55. Mr. Conn was eligible for a bonus paymentin respect of the full 2014 fiscal year (paid in cash, as set out above, with no deferred element) and his outstanding shareawards have been preserved in accordance with 'good leaver' provisions. Future vested performance and matching shareawards will be pro-rated and subject to a twelve month retention period. Existing vested awards that were subject to thethree-year holding requirement must be retained until December 31, 2015.

2014/15 OVERVIEW

FIXEDCHANGES Base salaries did not increase significantly during the past fiscal

year

CEO ANNUALISED SALARY $1,854,000

CHAIRMAN FEE £785,000

ANNUAL BONUS SCHEME

AWARD TYPE Cash, deferred shares

AWARD LIMITSBonus awards are limited to 225% of salary

Matching awards are granted on a 1:1 basis on any deferredshares (up to two-thirds of bonus)

DEFERRAL & MATCHINGTERMS

One third of an award is mandatorily deferred into Companyshares for a three year period, one third is paid in cash and onethird can be either paid in cash or voluntarily deferred into sharesat the Executive's discretion.

Deferred shares are eligible for matching awards on a 1:1 basis;see "Deferred Bonus and Matching Plan" table below for furtherinformation.


ANNUAL BONUS

RECOVERY PROVISIONS

The deferred portion of awards is subject to clawback in the eventof material misstatement of financial or other data. The Companyhas not disclosed how long the clawback provisions apply.

The Company states that it is considering the introduction ofclawback on the cash element of bonus on the next occasion itsubmits its policy for shareholder approval.

NOTES

The performance conditions for all executives bar Iain Conn werebased entirely on group results as detailed below. Mr. Conn'saward was based 30% on Downstream segment results and 70%on group results. Mr. Conn's Downstream segment was subject toadditional targets, focusing on operating efficiency, safety andprofitability.

Each metric below is assessed on a scale from 0.0 to 2.0, with 1.0representing target performance. Bonus outturn is calculated bymultiplying the total score by the target bonus of 150% of basesalary, up to a maximum of 225% of salary. Total score for fiscalyear year 2014 was calculated at 1.10, resulting in a payout of165% of salary to Messrs. Dudley and Gilvary. Iain Conn's payoutwas calculated at 159% of salary, based both on the group scoreand downstream segment performance.

Messrs. Dudley and Gilvary both elected to voluntarily defer thefinal third of their bonus in respect of fiscal year 2014. Thedeparting Mr. Conn, however, was not eligible for deferral and, assuch, all his bonus was paid in cash.

From 2015, the number of value metrics will be reduced from six tofive and will be more heavily weighted on operating cash flow(20%) and underlying replacement cost profit (20%). Netinvestment (15%) will be introduced as a metric; and downstreamnet income and upstream planned deferrals will be removed.

METRICS

CONDITIONS WEIGHTING* FY 2014 TARGETS

FY 2014 ACTUAL

FY 2014 SCORE

Loss of primary containment 10%

3-10%improvement

246events

(betweenthreshold& target)

Aggregatescore of1.10

Tier 1 process safety events 10%28 events

(belowthreshold)

Recordable injury frequency 10%

0.307 per200khours

(betweenthreshold& target)

Operating cash flow 16.33% $30bn$32.8bn

(atmaximum)

Underlying replacementcost profit 16.33% $14.5bn

$12.1bn(betweenthreshold

andtarget)

Corporate and functionalcosts 16.33% 7% reduction

9%reduction(abovetarget)

Downstream net income/bbl 7% $6.4/bbl

$4.4/bbl(betweenthreshold

andtarget)

Major project delivery 7% 6 projectstart-ups

7 projectstart-ups(abovetarget)


Upstream unplanneddeferrals 7% 9% reduction

6%reduction(betweenthreshold

andtarget)

*AS A PERCENTAGE OF MAXIMUM OPPORTUNITY

DEFERRAL &MATCHING

DEFERRED BONUS & MATCHING PLAN

AWARD TYPE Deferred & matching shares

PEER GROUP N/A

VESTING TERMSDeferred and matching shares may only vest following athree year performance period; any matching shares are subjectto an additional three-year retention period

INDIVIDUAL LIMITS Deferred shares are eligible for matching awards on a 1:1 basis.

RECOVERY PROVISIONSAwards are subject to malus and clawback in the event ofmaterial misstatement of financial or other data. The Companyhas not disclosed how long the clawback provisions apply.

PREVIOUS AWARDS

Deferred and matching share awards granted in respect of the2011 deferred bonus vested in full in the past fiscal year.

Since inception, all awards subject to the performance frameworkdiscussed below have vested in full.

PERFORMANCE ASSESSMENT

Both deferred and matching shares may be reduced, including tonil, "If there has been a material deterioration in safety andenvironmental metrics, or there have been major incidentsrevealing underlying weaknesses in safety and environmentalmanagement", based on the remuneration committee'sassessment, with advice from the safety, ethics andenvironmental assurance committee.

With regard to 2011 awards that vested during the year, thecommittee states that safety measures showed steadyimprovement, that all performance hurdles were met, and thatthe group-wide operating management system is now sufficientlyembedded in the organization to drive improvement inenvironmental and safety areas.

LONG-TERM

EXECUTIVE DIRECTORS' INCENTIVE PLAN ('' EDIP '')

AWARD TYPE Performance shares

PEER GROUP Chevron, ExxonMobil, Shell and Total

VESTING TERMS Awards may only vest following a three year performance periodand an additional three year holding period

AWARD LEVELS Awards are normally granted at 550% of base salary for the CEOand at 400% for other executives

PREVIOUS AWARDS

For awards granted in fiscal year 2011, which had been expectedto vest at 39.5% of total, final vesting was increased to 45.5%based on a final relative reserves replacement assessment of firstplace (previously assessed as second place).

Awards granted in fiscal year 2012 are expected to vest at 60.5%of total. A preliminary assessment found relative reservesreplacement to be second place within the peer group of oilmajors. Relative TSR was below threshold. Operating cash flow of$32.8bn exceeded the target of a 50% increase at $100/bbl. Anyadjustment to expected vesting levels will be reported in nextyear's annual report.

RECOVERY PROVISIONS Awards may be recouped by the Company in the event of materialmisstatement.

NOTES

The Committee has the discretion to reduce vesting outcomes if itconcludes that payouts are inconsistent with Companyperformance or shareholder benefits.

Metrics and targets below reflect to planned 2015 awards.


INCENTIVES

METRICS

TSR 33.3%

Vesting* Performance** Measured

25% Third place

Against peers80% Second place

100% First place

OPERATING CASH FLOW 33.3%

Target and vesting schedule not disclosed

STRATEGIC IMPERATIVES 33.3%

Condition Measured

Reserves replacement ratio Relative to peers; same vestingschedule as TSR condition

Safety and operational riskmanagement

Target and vesting schedule notdisclosed

Major project delivery Target and vesting schedule notdisclosed

*Percent of this portion of an award. **Straight-line vesting between points.

TSR/REMUNERATION REVIEW* 1-YEAR 3-YEAR 5-YEAR

TOTAL SHAREHOLDER RETURN -11% 1% -4%

STI PAYOUTS 73% 75% 59%

PERFORMANCE SHARE VESTING 61% 35% 28%

*TSR figures are as of fiscal year end dates. STI and performance share figures reflect vesting/payout for current year, and average for 3 and 5 year periods. Source: Capital IQ ; STI and performance

share vesting and payout data based on disclosure in the Company's most recent annual report.

MARKET COMPARISON

COMPANY FTSE 350**

LAST FISCAL YEAR SOP SUPPORT 67.94% 91.70%

STI RECOVERY* Yes 78.60%

LTI RECOVERY* Yes 81.22%

STI DEFERRAL Yes 66.15%

LONG TERM INCENTIVE PLAN Yes 95.33%

WEIGHTED LTI PERFORMANCE PERIOD 3.0 3.04

ADDITIONAL HOLDING/VESTING PERIOD 3.0 56.33%

SHAREHOLDING GUIDELINES Yes 94.16%


*Recovery provisions relate to either clawback or malus provisions. **The figures in this column relate to the percentage of companies within the FTSE 350 that have each of the elements described.

Companies that do not have any executives, or variable pay arrangements, have been excluded.

GLASS LEWIS ANALYSIS

UK firms are required to fully disclose and explain all aspects of their executives' and directors' remuneration soshareholders can analyse the implementation of the remuneration policy during the past fiscal year. In completing ourassessment of the Company's executive remuneration report, we consider, among other factors, the appropriateness ofperformance targets and the overall remuneration structure in the context of strategy and risk, activity during the past yearincluding pay outcomes, and the committee's level of disclosure.

QUANTUM & STRUCTURE

Alignment of Pay and PerformanceAs shown in our Remuneration Details section, the Company's chief executive receives remuneration that out-paces theremuneration given to chief executives at firms of a similar size, despite the Company's relative underperformance overthe period.

Shareholders should note that this comparison focuses on UK and European peers; as such, and with particular regard tothe sector and industry group comparisons, it excludes several of the Company's direct oil-major peers.

Nonetheless, we have concerns regarding the overall alignment of pay and performance in respect of the past year. Asshown above, bonuses paid out at 73% of maximum, in line with payouts over the past three years, despite below-targetperformance in six of the nine metrics used under the balanced scorecard. In part this reflects extremely strongperformance in operating cash flow and corporate and functional costs, which paid out at or near maximum; however italso reflects a payout structure that provides two-thirds of the maximum opportunity for target performance. In addition,shareholders should note that executives received multiple payouts during the year based on achievement of the $30billion operating cash flow target, totalling 216% of salary for the CEO under the bonus and EDIP plans. We recognise thatwhile the same target was achieved, the EDIP award was based on growth over a three-year period, providing somevariation; nonetheless, we generally question providing executives with multiple payouts for the same measure ofperformance.

In addition, the CEO's vested incentives include matching shares worth 100% of salary (at grant) that vested on the basisof the absence of any "material deterioration in safety and environmental metrics" or "major incidents revealing underlyingweaknesses in safety and environmental management." As discussed in prior Proxy Papers, we have concerns regardingthe provision of matching awards on this basis. We recognise the importance of improving the Company's approach tosafety and environmental issues, and moreover of avoiding incidents that may contribute to a significant loss ofshareholder value and public trust; indeed, we consider these areas of performance to be intrinsic to executives' roles andbelieve that inclusion of such considerations as underpins or as part of recovery provisions (such as clawback and malus)would be appropriate. However we strongly question providing executives with an extra reward simply for avoiding poorperformance in these areas.

We recognise that all share-based payouts, including the matching and performance shares that vested during the year,are subject to an additional three-year holding period and will be subject to share price movements over that time.Moreover, we recognise that the incentive structure and quantum opportunity should be viewed in the context of globaloil-major peers as well as UK and European companies of a similar size. Nonetheless, given a significant drop in profitsover the past year and stagnant shareholder returns over recent years, and noting our concerns regarding the payoutstructure under the bonus scheme, the potential for multiple payouts based on the same areas of performance, and theperformance structure underlying the grant of matching shares, believe shareholders should question whether payoutswere fully earned in respect of the past fiscal year relative to the Company's performance.

DISCLOSURE

Description of Hurdles and Vesting Schedule The remuneration report has failed to disclose a full, clear description of the non-peer based targets and their associatedvesting schedule under the Company's EDIP. We believe clearly defined performance metrics and vesting schedules areessential for shareholders to fully understand and evaluate an incentive plan. We recognise that certain environmentaland safety goals are discussed at greater length in the Company's separate sustainability report, and that general


performance forecasts for certain financial metrics have been disclosed in financial reviews and shareholderpresentations; however such disclosures do not address the targets in the context of remuneration in general or thepayout schedule specifically. Moreover, we generally believe that the remuneration report should include provide fulldisclosure of the performance assessment structure, rather than requiring shareholders to refer to other documentation.

While the Company has committed to providing retrospective disclosure in the year of vesting, and has improved itsnarrative disclosure regarding performance against strategic/non-financial targets, we note that no target range orassociated vesting schedule is disclosed in the remuneration report for the non-peer based metrics for vestedperformance share awards, comprising the majority of the opportunity, or for matching awards on deferred bonuses. Thisis out of line with common market practice for UK issuers, which generally provide clear disclosure of the threshold andmaximum targets and associated payout levels within the remuneration report for all long-term incentives. As such weremain concerned that the level of disclosure provided may not allow shareholders to conduct a complete assessment ofthe incentive structure.

CEO Historical Pay DisclosureUnder the "History of CEO Remuneration" heading, the remuneration report sets out total remuneration, annual bonuspayouts as a percentage of maximum, and performance share vesting as a percentage of maximum for the CEO(s) inrespect of each of the past six years. However, while the value of vested matching shares is included in totalremuneration, the percentage of matching shares that vested is not included in with performance shares or in a separatecolumn.

We note that article 18(2)(c) of the Large and Medium-sized Companies and Groups (Accounts and Reports)(Amendment) Regulations 2013 states that this table should include all amounts included in the vested incentivescomponent of the single figure of remuneration, which in the Company's case includes matching shares, "restated as apercentage of the number of shares vesting against the maximum number of shares that could have been received." Assuch, it appears that the Company may not have fully provided applicable disclosure in this regard.

We note that if the vesting and maximum of matching and performance shares were aggregated, the CEOs payout for2014 would increase from 60.5%, as stated, to 85% of maximum.

OTHER ISSUES

Shareholder Disapproval It should be noted that approximately 13.0% of voting shareholders voted against the Company's remuneration report atlast year's annual general meeting and a further 19.0% abstained; including abstentions, approximately 63% of theCompany's total issued share capital was voted. By contrast, the Company's binding remuneration policy was supportedby over 95% of voting shareholders. This demonstrates a fair level of shareholder protest at the Company's advisoryremuneration report.

The committee states that it consulted with shareholders and found that concerns focused on the level of disclosureprovided regarding vesting outcomes and targets, as well as quantum pay levels.

We believe the committee has gone some way to addressing concerns regarding disclosure, with increased narrativediscussion of performance against certain strategic targets and a commitment to retrospective disclosure of targets whenthey are not commercially sensitive. However, as discussed above we remain concerned by certain aspects of thecommittee's approach to disclosure, in particular the absence of full target ranges and associated vesting schedules formost metrics. With regard to quantum, the committee chairman states that these concerns are "properly recognized andbalanced in the way in which the policy is framed and implemented." As discussed above, we remain concerned bypayouts during the year relative to performance and the performance assessment structure underlying the payouts; assuch we believe the Company could have been more responsive to shareholders in this area.

CONCLUSIONGlass Lewis notes that the approved policy in operation for the past year includes a variety of positive structural features,including a strong emphasis on variable pay, extended holding restrictions on vested share awards, and recoveryprovisions applying to most incentives (with the intention of applying clawback to cash bonus when the policy is renewed).Further, we recognise that quantum pay opportunity is set in the context of the Company's direct global competitors.Nonetheless, as discussed above, we have strong concerns regarding pay outcomes relative to financial performance andinvestor outcomes in respect of the past fiscal year, as well as certain aspects of the performance assessment structurethat led to these outcomes and the committee's disclosure thereof.

In particular, we believe shareholders should be mindful of the bonus payout structure, which pays out at two-thirds of


In particular, we believe shareholders should be mindful of the bonus payout structure, which pays out at two-thirds ofmaximum for target level performance. As a result, executives received payouts of 73% of maximum despite below-targetperformance in six of the nine relevant metrics. Additionally, we continue to question the assessment of performanceunderlying the matching share opportunity. We consider the Company's overall emphasis on safety and environmentalissues to be appropriate, and recognise that basing a portion of incentives on strong performance against clearly definedmetrics relating to environmental impact and operational safety is relatively common within the industry. However, westrongly question the Company's policy of granting additional awards of up to 150% of salary (100% of salary for 2014)based on the absence of major incidents or a deterioration of standards. Given the negative impact of prior incidents onshareholder value, we believe that such criteria should serve to underpin awards rather than giving rise to additionalpayments.

Our concerns regarding the alignment of pay with performance and the performance assessment methodology areheightened due to the limited level of disclosure provided regarding incentive outcomes. We recognise that the committeehas improved its narrative disclosure in certain areas, and has committed to the retrospective disclosure of targetsdeemed commercially sensitive. Nonethless, we consider the level of disclosure provided regarding the incentivestructure, including target ranges and vesting schedules for non-peer based metrics, to be out of line with standard marketpractice, and a potential deterrent to a comprehensive assessment of executive pay.

In light of our concerns, we do not believe shareholders should support the implementation of the remuneration policy atthis time.

Accordingly, we recommend that shareholders vote AGAINST this proposal.


3.00: ELECT ROBERT W. DUDLEY

PROPOSAL REQUEST: Election of thirteen directors RECOMMENDATIONS & CONCERNS:ELECTION METHOD: Majority FOR- Anderson P.

Boeckmann A.Bowman F.Burgmans A.Carroll C.Davis I.Dowling A.Dudley R.Gilvary B.Nelson B.Nhleko P.Shilston A.Svanberg C.

NOT UP- None

PROPOSAL SUMMARYIn line with the UK Corporate Governance Code (the "UK Code"), all directors stand for election annually.

BOARD OF DIRECTORS

NAME UP AGE GLASS LEWISCLASSIFICATION

COMPANYCLASSIFICATION

OWNERSHIP** COMMITTEES TERMSTART

TERMEND

YEARSON

BOARDAUDIT REM GOV NOM

Robert W. Dudley* ·CEO 59 Insider 1 Not Independent Yes 2009 2015 6

Brian Gilvary* 53 Insider 2 Not Independent Yes 2012 2015 3

Carl-Henric Svanberg ·Chairman 62 Non-Executive 3 Non-Executive Yes C 2009 2015 6

Paul M. Anderson 69 Independent Independent Yes 2010 2015 5

Alan L. Boeckmann 66 Independent Independent Yes 2014 2015 1

Frank L. Bowman 70 Independent Independent Yes 2010 2015 5

Antony Burgmans 68 Independent 4 Independent Yes 2004 2015 11

Cynthia B. Carroll 58 Independent Independent Yes 2007 2015 8

Ian E.L. Davis 63 Independent Independent Yes C 2010 2015 5

Ann Dowling 62 Independent Independent Yes C 2012 2015 3

Brendan R. Nelson 65 Independent Independent Yes C 2010 2015 5

Phuthuma F. Nhleko 54 Independent Independent No 2011 2015 4

Andrew B. Shilston 59 Independent 5 Independent Yes 2012 2015 3

C = Chair, * = Public Company Executive, = Withhold or Against Recommendation

Group chief executive. 1.CFO. 2.Chairman. 3.Has served as a director for more than nine years; however, is considered independent by the board. Intends to retire from the board in 2016. 4.Senior independent director. 5.

**Percentages displayed for ownership above 3%, when available

Note: The Gov column in the above board table represents membership of the board Gulf of Mexico committee.

NAME ATTENDED ATLEAST 75% OFMEETINGS

ADDITIONAL PUBLIC COMPANY DIRECTORSHIPS


Robert W. Dudley Yes (1) Rosneft Oil Co OAO

Brian Gilvary Yes None

Carl-Henric Svanberg Yes (1) Volvo AB

Paul M. Anderson Yes None

Alan L. Boeckmann N/A (2) Sempra Energy; Archer-Daniels-Midland Company

Frank L. Bowman Yes (1) Morgan Stanley Funds

Antony Burgmans No (2) Akzo Nobel N.V.; TNT Express NV

Cynthia B. Carroll Yes (1) Hitachi Limited

Ian E.L. Davis Yes (2) Johnson & Johnson; Rolls-Royce Holdings plc

Ann Dowling Yes None

Brendan R. Nelson Yes (1) Royal Bank of Scotland Group Plc

Phuthuma F. Nhleko Yes (2) Anglo American plc; MTN Group Limited

Andrew B. Shilston Yes (2) Circle Holdings plc; Morgan Advanced Materials plc

MARKET PRACTICE

INDEPENDENCE AND COMPOSITION BP* REQUIREMENT BEST PRACTICE

Independent Chairman Non-Executive Independent on appointment1 Same

Board Independence** 83% 50% excluding ind.-on-appt.chair2

Same

Audit Committee Independence 100% ; Independent Chair 100%2 Same

Remuneration Committee Independence 100% ; Independent Chair 100%2 Same

Nominating Committee Independence** 100% Majority2 Same

Percentage of women on board 15% None 25% by 2015 (FTSE 100 only)3

Directors' biographies Biographical details for current directors can be found on pages 53-55 of the Company's annualreport.

* Based on Glass Lewis Classification** Excludes Non-Executive Chairman

UK Corporate Governance Code recommendation; a Senior Independent Directorshould also be appointed

1. UK Corporate Governance Code recommendation 2.Davies Review, 'Women on Boards' 3.

UK CODE COMPLIANCE

Companies listed on the London Stock Exchange are required to comply or explain against the UK Code.

The board states that during the past fiscal year the Company complied with the provisions of the UK Code in full, exceptin the following aspects:

Provision B.3.2: Letters of appointment do not set out fixed-time commitments since the schedule of board andcommittee meetings is subject to change according to the demands of business and other events. All directors areexpected to demonstrate their commitment to the work of the board on an ongoing basis. This is reviewed by thenomination committee in recommending candidates for annual re-election; andProvision D.2.2: The remuneration of the chairman is not set by the remuneration committee. Instead thechairman’s remuneration is reviewed by the remuneration committee which makes a recommendation to the boardas a whole for final approval, within the limits set by shareholders. This wider process enables all board membersto discuss and approve the chairman’s remuneration (rather than solely the members of the remunerationcommittee).

GLASS LEWIS ANALYSISWe believe shareholders should be mindful of the following:

GULF OF MEXICO OIL SPILL

As discussed in further detail below, the Company continues to be the subject of various legal proceedings in the USfollowing the Deepwater Horizon accident and oil spill in the Gulf of Mexico in 2010.

As a result of these proceedings, the cost of the spill response, and various other penalties and functional costs, the $20


http://www.glasslewis.net?company_Id=18426















billion Deepwater Horizon Oil Spill Trust fund, which was set up in agreement with the US government, has now beenexhausted and subsequent additional costs will be charged to the income statement as they arise. During the year, theCompany made further provision for costs associated with the oil spill of $819 million, and as at December 31, 2014, thetotal cumulative charges recognised in relation to the spill had reached $43.5 billion (2014 annual report, p.38). TheCompany notes that there remains significant uncertainty as to the extent and timing of the remaining costs, and thatcurrent provisions are representative of the best estimates of future expenditures in this regard.

We note that the board Gulf of Mexico committee met eleven times during the year, during which time it reviewed plansand progress in moving shoreline response activities through to completion and sign-off by the US Coast Guard, andcontinued to oversee relevant legal proceedings.

Consolidated Litigation: MDL 2185 & MDL 2179Many of the pending lawsuits against the Company have been consolidated by the Federal Judicial Panel on MultidistrictLitigation ("FJP") into two multi-district federal proceedings:

MDL 2185, being heard in federal district court in Houston, in relation to securities, derivative and EmployeeRetirement Income Security Act ("ERISA") claims; andMDL 2179, being heard in the federal district court in New Orleans, covering a large class of claimants seekingcivil recompense under the Oil Pollution Act 1990 ("OPA 90") and the Clean Water Act ("CWA").

We note that the proceedings under MDL 2185 are currently on hold pending appeal or alteration by the plaintiffs to thecase, and that amended complaints were due to be filed by February 12, 2015.

The proceedings under MDL 2179 began in February 2013, scheduled to be held in three phases. Phase one wascompleted in September 2014 and found the Company guilty of gross negligence and wilful misconduct. In addition to thefinding on the Company's culpability, the court rejected claims that the Company's co-defendants, Haliburton Companyand Transocean Ltd., were equally to blame for the oil spill, and Justice Carl Barbier apportioned 67% of the blame to theCompany ("BP found grossly negligent in 2010 Gulf of Mexico spill". Bloomberg. September 5, 2014).

Phase two began that September, before concluding in January 2015, and found that 3.19 million barrels of oil weredischarged into the Gulf of Mexico, but that the Company was not grossly negligent in its source control efforts in theaftermath of the spill. This figure represents a middle ground between the US Government's estimate of 4.1 millionbarrels and the Company's own estimate of 2.45 million ("Judge sets a crucial number in BP's oil spill case". HoustonChronicle. January 15, 2015). The Company is appealing this decision.

Phase three, deemed the "penalty stage", was concluded in February 2015. Justice Barbier was tasked with outlining astatutory per barrel rate to be applied in determining the Company's civil liability under the CWA. The Companymaintained that the appropriate level to be apportioned was a maximum of $3,000 per barrel, which would equate to amaximum fine of $9.57 billion; however, Justice Barbier determined that this rate did not account for inflation and that themaximum rate should be $4,300 per barrel, increasing the potential liability of the Company to $13.7 billion (" BP loses bidto cut maximum $13.7bn Gulf of Mexico spill fine". The Irish Times. February 20, 2015). Justice Barbier has requestedpost-trial briefings, scheduled to be concluded by April 24, after which he will consider his decision for an indefinite periodbefore making a ruling.

Plaintiffs' Steering Committee SettlementsIn 2012, the Company reached settlements with the Plaintiff's Steering Committee ("PSC") to resolve the majority ofindividual and business class action lawsuits relating to damages caused by the spill. The deadline for submitting claims tothe PSC is June 8, 2015. We note that PSC settlements totalled $600 million in 2014, and that total costs arising fromPSC claims are currently estimated to be in the order of $9.9 billion (2014 annual report, p.113).

In November 2014, the Company sought to have the claims administrator and settlement trustee of the PSC, PatrickJuneau, removed for reasons including a conflict of interest pre-dating his appointment. The Company claimed that Mr.Juneau had previously advocated for potential participants to the PSC prior to his appointment, as well as acting as aconsultant for the state of Louisiana in previous oil spill litigation. The Company also accused Mr. Juneau of allowinginflated claims using questionable calculations ("BP fails in US Supreme Court gulf appeal". Financial Times. December8, 2014) and of mishandling administrative fees chargeable under the PSC, which have reached over $1 billion ("Criticsdoubt BP can win bid to oust spill claims boss". Houston Chronicle. September 3, 2014). The Company's appeal in thisregard was, however, dismissed by the New Orleans district court.

In response, the Company asserted that it was "unacceptable for the [PSC process] to continue operating... inefficiently,secretively, and marred by corruption, fraud, and conflicts of interest" ("Gulf of Mexico oil spill: BP loses bid to oust payoutadministrator Patrick Juneau". International Business Times. November 11, 2014). However, the Company subsequentlydropped its attempt to remove Mr. Juneau as claims administrator following the introduction of new fraud preventionprocedures at the settlement programme ("BP ends bid to oust oil spill claims boss". Financial Times. March 7, 2015).


http://www.bloomberg.com/news/articles/2014-09-04/bp-found-grossly-negligent-in-2010-gulf-of-mexico-spill

http://www.houstonchronicle.com/business/energy/article/Judge-rules-Gulf-spill-totaled-3-19-million-6018971.php

http://www.irishtimes.com/business/energy-and-resources/bp-loses-bid-to-cut-maximum-13-7bn-gulf-of-mexico-spill-fine-1.2110955

http://www.irishtimes.com/business/energy-and-resources/bp-loses-bid-to-cut-maximum-13-7bn-gulf-of-mexico-spill-fine-1.2110955

http://www.ft.com/intl/cms/s/0/2034b7d4-7eec-11e4-b83e-00144feabdc0.html?siteedition=intl#axzz3LKEIhDOY

http://www.houstonchronicle.com/business/energy/article/Critics-doubt-BP-can-win-bid-to-oust-spill-claims-5732097.php

http://www.houstonchronicle.com/business/energy/article/Critics-doubt-BP-can-win-bid-to-oust-spill-claims-5732097.php

http://www.ibtimes.co.uk/gulf-mexico-oil-spill-bp-loses-bid-oust-spill-claims-chief-patrick-juneau-1474151

http://www.ibtimes.co.uk/gulf-mexico-oil-spill-bp-loses-bid-oust-spill-claims-chief-patrick-juneau-1474151

http://www.ft.com/intl/cms/s/0/e57dc43e-c44e-11e4-a949-00144feab7de.html

Federal AgreementsIn 2012, the Company entered into two payment agreements in order to resolve all federal criminal claims pertaining tothe spill, pursuant to which the Company agreed to pay the US government $4 billion over a period of five years. As atDecember 31, 2014, the outstanding amount under this agreement was just over $2.9 billion, of which $595 millionbecomes chargeable in 2015. The Company also reached a settlement with the US Securities and ExchangeCommission ("SEC") of $525 million, of which the final installment was paid during 2014.

BOARD CHANGES & SUCCESSION PLANNING

We note the following board changes, which have taken place during the past year:

Iain Conn retired as executive director and chief executive of the Company's Downstream segment on December31, 2014 in order to become chief executive of FTSE 100 energy company Centrica plc; andAlan Boeckmann was appointed non-executive director ("NED") with effect from July 24, 2014.

The board states that Mr. Boeckmann brings to the board experience of contractor management, procurement and projectdelivery in the Company's industry. Please see below for further biographical information on Mr. Boeckmann as disclosedby the Company.

In addition, we note that:

George David will retire as NED at the conclusion of the forthcoming annual general meeting ("AGM"), and hasbeen omitted from the above board table;Antony Burgmans intends to retire as NED in 2016, and in anticipation of his retirement will be succeeded aschairman of the remuneration committee by Ann Dowling in June; andAndrew Shilston and Alan Boeckmann will join the remuneration committee following the conclusion of theforthcoming AGM.

The nomination committee state that it has continued to assess the mix of skills and experience on the board whenconsidering succession planning. More specifically, in 2014, the committee considered the sequencing of boardretirements in the future and, as such, is "pursuing several promising individuals" with the intention that appointments bemade in 2015.

Gender DiversityWe note that two of the thirteen directors are female, representing 15% of the board. In line with the recommendationsof Lord Davies' Women on Boards report, we believe that the Company should, as a member of the FTSE 100 Index,aspire to meeting a target of 25% female board representation. In this case, we note the board's assertion that it"recognises the importance of diversity, including gender diversity" across the business and that it is supportive of LordDavies' recommendations. More specifically, the board states that it is actively seeking qualified candidates forappointment to the board and that it remains committed to the goal of 25% female board representation by the end of2015.

ATTENDANCE

We note that director Antony Burgmans attended only seven of the ten board meetings held during the most recentlycompleted fiscal year. While we typically recommend voting against directors who attend fewer than 75% of boardmeetings, the board states that Mr. Burgmans was unable to attend the teleconference board meeting scheduled at shortnotice on September 5, 2014 due to a prior commitment, and that he was unable to attend the teleconference boardmeeting on October 27, 2014 for health reasons. As such, and given that Mr. Burgmans has historically demonstratedexcellent attendance at board and committee meetings, we do not believe this issue warrants shareholder action at thistime.

AUDITOR TENURE

We note that Ernst & Young has served as the Company's auditor for an undisclosed period of time. As long-tenure mayerode the independence and effectiveness of the auditor, we believe that the audit committee should be responsible fortendering the audit work at least every ten years, in line with the UK Code and emerging EU regulations.

In this case, the audit committee states its intention to tender the audit in 2016. Following such a tender, it is envisagedthat a new auditor will be appointed with effect from 2018. As such, and in the absence of any other concerns as to theauditor's independence, we do not believe this issue warrants shareholder action at this time.

RECOMMENDATIONS


http://www.ft.com/intl/cms/s/0/e57dc43e-c44e-11e4-a949-00144feab7de.html

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31710/11-745-women-on-boards.pdf

Having reviewed the nominees, we do not believe there are substantial issues for shareholder concern.

Accordingly, we recommend that shareholders vote FOR all nominees.

The Company discloses the following biographical information for director Alan L. Boeckmann, a new nominee to the board:Alan L. Boeckmann retired as non-executive chairman of Fluor Corporation in February 2012, ending a 35-year career with the company. Between 2002and 2011, he held the post of chairman and chief executive officer, and was president and chief operating officer from 2001 to 2002. His tenure with thecompany included responsibility for global operations. As chairman and chief executive officer, he refocused the company on engineering, procurement,construction and maintenance services. After graduating from the University of Arizona with a degree in electrical engineering, he joined Fluor in 1974 asan engineer and worked in a variety of domestic and international locations, including South Africa and Venezuela. Alan was previously a non-executivedirector of BHP Billiton and the Burlington Santa Fe Corporation, and has served on the boards of the American Petroleum Institute, the NationalPetroleum Council and the advisory board of Southern Methodist University’s Cox School of Business.


16.00: APPOINTMENT OF AUDITOR AND AUTHORITY TO SET FEES

PROPOSAL REQUEST: Ratification of Ernst & Young RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): 98.28% FOR- NO CONCERNS



AUDITOR OPINION: Unqualified

AUDITOR FEES 2014 2013 2012

Audit Fees: $40,000,000 $39,000,000 $39,000,000 Audit-Related Fees: $7,000,000 $8,000,000 $7,000,000 Tax Fees: $2,000,000 $2,000,000 $4,000,000 All Other Fees: $4,000,000 $4,000,000 $4,000,000 Total Fees: $53,000,000 $53,000,000 $54,000,000 Auditor: Ernst & Young Ernst & Young Ernst & Young

Years Serving Company: N/D Restatement in Past 12 Months: No

GLASS LEWIS ANALYSISWe believe the balance of fees paid to the auditor is reasonable and that the Company has a track record of disclosingthe appropriate information about these services in its filings.



17.00: SCRIP DIVIDEND ALTERNATIVE

PROPOSAL REQUEST: Authorise scrip dividend alternative RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): N/A FOR- NO CONCERNS



PROPOSAL DETAILSIf approved, the scrip dividend alternative would allow shareholders to receive their final dividend through taking newordinary shares instead of cash. This authority would expire at the 2018 annual general meeting.

In this case, we note that shareholders will only be permitted to avail of the scrip dividend alternative in relation to thewhole of their shareholding; however, the board may, at its discretion, allow shareholders to avail of the scrip dividendalternative in respect of part of their shareholding where they are acting on behalf of more than one beneficial owner.

GLASS LEWIS ANALYSISIn general, Glass Lewis believes that scrip dividend plans are beneficial to shareholders. They offer a less expensive wayfor shareholders to acquire additional shares by avoiding paying brokers’ commissions or taxes applicable to normalstock transactions. In addition, the offer allows the Company to retain cash that it would otherwise distribute in a normaldividend.



18.00: SHARE AWARD PLAN 2015

PROPOSAL REQUEST: Approve Share Award Plan 2015 RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): N/A FOR- NO CONCERNS



PROPOSAL SUMMARYIf approved, the Company will adopt a new umbrella plan, the Share Award Plan 2015 (SAP), covering a number ofexisting discretionary below-board share plans (which will become sub-plans of the SAP). While the overall structure ofthese sub-plans will not change, the revised SAP would provide flexibility to satisfy awards with new-issue or treasuryshares, in place of having to rely solely on market purchases, subject to the pre-existing best-practice dilution limits. TheCompany may adopt further sub-plans, as it sees fit. Awards will not be made to executives under the new plan (or anynew sub-plan).

GLASS LEWIS ANALYSISIn general, Glass Lewis believes that equity-based compensation is an effective way to attract, retain and motivate keyemployees. When used appropriately, it can provide a vehicle for linking executive pay to a company's performance,thereby aligning the interests of executives with those of shareholders. Tying a portion of an executive's compensation tothe performance of the Company provides an incentive to maximise share value by those in the best position to realisethat value.

In this case, we believe the proposal is intended to provide additional flexibility in satisfying awards under the existingplans for below-board employees. We see no cause for shareholder concern, and note that the Company will continue toadhere to best-practice dilution limits.



19.00: AUTHORISATION OF POLITICAL DONATIONS

PROPOSAL REQUEST: General authority to make political donations in the EU RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): N/A FOR- NO CONCERNS



PROPOSAL DETAILSIf approved, in accordance with sections 366 and 367 of the Companies Act 2006 ("2006 Act") the Company will have theauthority to:

make donations not exceeding £100,000 to EU political parties and/or independent candidates; make donations not exceeding £100,000 to EU political organisations; andincur political expenditure not exceeding £100,000 in aggregate.

If approved, this authority will expire at the conclusion of the 2016 annual general meeting.

BACKGROUND

This proposal is being submitted pursuant to the Political Parties, Elections and Referendums Act 2000 ("PPER Act"),which prohibits a company from making donations to any EU political organisations or incurring expenditures related tosuch organisations, unless shareholder approval is given. The PPER Act defines political donations in a way that is opento broad range of interpretation. As a result, it is possible that activities that form part of the normal relationship between acompany and bodies concerned with policy review and law reform, the representation of the business community orsections of it, or the representation of other communities or special interest groups, may be included within therestrictions of the PPER Act. As such, UK companies will often routinely seek authority to make political donations so asto avoid inadvertently breaching the terms of the PPER Act.

GLASS LEWIS ANALYSISThe Company states that it does not intend to make any donations or incur any expenditure in respect of any politicalparty in the EU, and that no such donations were made in the prior fiscal year. As such, we believe that the board has putforth this proposal to ensure that the Company does not inadvertently breach the PPER Act and the 2006 Act given theambiguous nature of what constitutes a donation, an EU political organisation or an EU political expenditure according tothe legislation. As such, we see no cause for shareholder concern as to this primarily technical proposal.



20.00: AUTHORITY TO ISSUE SHARES W/ PREEMPTIVE RIGHTS

PROPOSAL REQUEST: General authority to issue shares on a preemptive basis RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): 90.38% FOR- NO CONCERNS



PROPOSAL DETAILSAuthority Type General authority with preemptive rightsAmount Requested $3,040,000,000 (see notes)Percentage ofShare Capital 66.0%

Expiry July 16, 2016 or 2016 AGMPrior Year Issuances None, excluding obligations under its employee share plans and scrip dividend programme.

Notes The amount requested comprises $1,520,000,000 for general purposes and an additional $1,520,000,000issuable only under a fully preemptive rights issue.

GLASS LEWIS ANALYSISUnder the proposal, the board's general authority to issue shares will be limited to 66.0% of the Company's issuedordinary share capital, which exceeds the traditional 33% guideline issued by the Investment Association / theAssociation of British Insurers and other UK investor bodies. However, such investor bodies continue to treat authoritiesup to 66% of share capital as routine, provided that the additional amount applies to a fully preemptive rights issue. It isalso recommended that issuers adopt certain safeguards in the event that the extra authority were used, including therequired annual election of all directors, with the intent that shareholders could vote against directors in the event of anyperceived abuse of this increased authority.

In this case, we note the Company's assertion that any shares issued above the traditional one-third cap will be restrictedto a fully preemptive rights issue. Given such an assurance, we will regard the authority as a routine proposal beingsought in accordance with prevailing guidelines. Further, and pursuant to such guidelines, we will expect all directors tostand for election in the event that the extra authority is used so that the board may be held accountable for its actions.



21.00: AUTHORITY TO ISSUE SHARES W/O PREEMPTIVE RIGHTS

PROPOSAL REQUEST: General authority to issue shares on a non-preemptivebasis

RECOMMENDATIONS & CONCERNS:

PRIOR YEAR VOTE RESULT (FOR): 98.35% FOR- NO CONCERNS


REQUIRED TO APPROVE: 75%

PROPOSAL DETAILSAuthority Type General authority without preemptive rightsAmount Requested $228,000,000Percentage ofShare Capital 5.0%

Expiry July 16, 2016 or 2016 AGMPrior Year Issuances None, excluding obligations under its employee share plans and scrip dividend programme.Notes None

GLASS LEWIS ANALYSISUnder the proposal, the board's authority to issue shares without preemptive rights will be limited to 5.0% of theCompany's issued ordinary share capital. This limit meets the 5% cap generally recommended by the InvestmentAssociation / the Association of British Insurers and other UK investor bodies.

We believe that this authority will benefit shareholders by providing the Company with the flexibility to finance operationsand future business opportunities should the need arise.



22.00: AUTHORITY TO REPURCHASE SHARES

PROPOSAL REQUEST: General authority to repurchase shares RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): 99.43% FOR- NO CONCERNS



PROPOSAL DETAILSAuthority Type Market repurchases of ordinary sharesPercentage ofShare Capital 10.00%

Maximum Price105% of the average of the middle-market quotations for an ordinary share according to the Daily Official List ofthe London Stock Exchange for the five business days immediately preceding the day on which the purchasecontract is made.

Minimum Price Nominal valueExpiry July 16, 2016 or 2016 AGM

Prior YearRepurchases

The Company purchased shares representing 1.59% of the prior year's issued share capital pursuant to theCompany's $8 billion share buyback programme, which was completed in July 2014. In addition, the Companypurchased shares representing a further 1.41% of the prior year's issued share capital pursuant to the generalauthority granted by shareholders at the 2014 AGM. These purchases were funded by the Company'scontinued divestment of assets as announced in October 2013.

NotesThe board states that the Company would only repurchase its shares if, in the board's opinion, the expectedeffect would benefit shareholders generally. It is the board's intention that an amount of the shares repurchasedunder this authority will be held in treasury to meet the requirements of the Companys share incentivearrangements with the remainder being cancelled.

GLASS LEWIS ANALYSISAs a general rule, we believe that buyback programs and associated share cancellation programs are in shareholders'best interests, so long as the Company is left with a sufficiently strong balance sheet in light of its capital requirements.Typically, a repurchase is used to return surplus capital to shareholders, increase earnings per share, or provide sharesfor equity compensation plans.

We believe that the terms under which the Company is considering a repurchase of its shares are reasonable.



23.00: AMENDMENTS TO ARTICLES (TECHNICAL)

PROPOSAL REQUEST: Amendments to Articles of Association RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): N/A FOR- NO CONCERNS



PROPOSAL DETAILSIf approved, the Company will adopt amended articles of association ("Articles"). In this case, the board states that thesubstantive changes being proposed are intended to "reflect developments in practice, and to provide clarification andadditional flexibility".

The proposed amendments are as follows:

PROPOSEDEFFECT ON

SHAREHOLDER RIGHTSANALYSIS

ARTICLES THAT DUPLICATE STATUTORY

PROVISIONS: Provisions in the current articles that

replicate requirements contained in the Companies Act

2006 ("the Act") have been removed or amended as

appropriate. For example, references to the provision of

accounts to shareholders have been removed because the

Act itself requires this.

Neutral Technical amendment

FRACTIONAL ENTITLEMENTS ARISING ON THE

CONSOLIDATION, SUBDIVISION OR CANCELLATION

OF SHARES: The new Articles provide that, on a

consolidation or subdivision of shares, the board may

provide that any amounts representing fractional

entitlements are sold and the proceeds can be retained for

the benefit of the Company.

Neutral Technical amendment in line with common practice

UNTRACED SHAREHOLDERS: The new Articles provide

additional flexibility and forfeiture rights in relation to the

sale of shares owned by shareholders who are untraced

after a period of 12 years. Under the current Articles, the

Company is required to give notice to untraced

shareholders of an intention to sell their shares by way of

an advertisement in a national newspaper and a leading

London newspaper. Under the new Articles, however, the

Company must instead send a final notice to the last

registered address of the shareholder and use reasonable

steps to trace the shareholder including, if considered

appropriate, using a professional asset reunification

company or other tracing agent.

Neutral

Provides enhanced flexibility and efficiency as regards

fulfilling the Company's obligations to untraceable

shareholders


SHAREHOLDERS MEETINGS: Under the current Articles,

accidental failure to provide notice of a shareholder

meeting to a shareholder or the non-receipt of a notice of a

shareholder meeting by a shareholder will not invalidate the

meeting. The new articles clarify that, in addition, a failure

to give notice due to circumstances outside the Company’s

control will not invalidate the meeting.

In addition, the new Articles expressly provide that the

chairman of the meeting may permit non-shareholders or

persons who are not entitled to exercise the rights of

shareholders to attend and, at the chairman’s discretion,

speak at a general meeting or at any separate class

meeting.

Moreover, the new Articles provide that if there are not

sufficient directors to form a quorum in order to call a

general meeting, any director may call a general meeting.


PROXIES AND CORPORATE REPRESENTATIVES: The

new Articles expressly confirm that if a shareholder

appoints a proxy, they can still attend and vote at the

meeting, and that a member can appoint more than two

proxies provided they exercise rights attached to a different

share or shares.

In addition, the new Articles confirm that the directors can

determine the procedure to be applied in relation to proxies

at a general meeting.

Moreover, the new Articles provide that proxies for a poll to

be taken after the date of a meeting or adjourned meeting

must be received not less than 24 hours, or such shorter

time as the directors may determine, before the time of the

poll.

NeutralClarifies procedures regarding the appointment of proxies

and the casting of votes by poll

BEARER SHARES: All of the provisions in the current

Articles relating to bearer shares (i.e. shares represented

by share warrants to bearer) have been deleted in the new

Articles. The board states that these provisions were

previously relevant because the Company had a share

warrant to bearer in issue in relation to its ordinary shares

as a legacy of the arrangements for the creation of

American Depositary Shares ("ADS") following the merger

between Amoco Corporation and the Company in 1998.

This is no longer required and this deletion meets the

proposals of the UK Government to abolish bearer shares.



DISCLOSURES OF INTERESTS IN SHARES: The new

Articles include changes in relation to the powers of the

Company related to notices served under Section 793 of

the Act that require the disclosure of details of interests in

shares in the Company. If there is a default in complying

with a notice, the new powers allow the Company to require

shares held in uncertificated form to be converted into

certificated shares, and extend the power to any new

shares issued in respect of the shares in default. The

definition of what constitutes a default in supplying the

information requested by the Company is stated in the new

Articles to include the Company knowing, or having

reasonable cause to believe, that the information provided

is false or materially incorrect.


DIRECTORS' INTERESTS AND VOTING: Both the current

and new Articles provide that a director may hold a position

in a body corporate in which the Company is interested (for

example by being a director of a subsidiary company).

However, the new Articles confirm that no transaction or

arrangement will be liable to be avoided as a result and

also ensure that the director is able to deal with confidential

information in accordance with his duties to each relevant

company.

In addition, the new Articles expand the circumstances in

which a director can vote on matters notwithstanding an

interest. A director can vote on a resolution of the board

which relates to giving the director an indemnity or funding

for expenditure incurred in defending proceedings provided

that all the other directors have been given, or are to be

given, arrangements on substantially the same terms. A

director can also vote on retirement benefit schemes and

share schemes.

Neutral Technical amendment in line with common practice

APPOINTMENT, RETIREMENT AND REMOVAL OF

DIRECTORS: The new Articles provide that if a director

has not attended a board meeting for six months or more

the other directors may unanimously agree that the director

should be removed from office.

In addition, the new Articles have removed the provision in

the current Articles which states that a director’s

appointment automatically terminates should a court order

be made concerning a mental disorder for his detention or

for the appointment of a guardian or other person to

exercise powers with respect to his property or affairs. The

provision which requires a director to retire if he has

reached a particular age has also been deleted. This is in Neutral Technical amendment in line with common practice


response to the developments in mental health and age

discrimination legislation.

Moreover, the current Articles provide for automatic

retirement of all of the Company’s directors at each annual

general meeting. The new Articles include an amendment

to cater for a situation in which a director is appointed after

the notice of annual general meeting has been despatched,

because no provision can then be made for the election of

that director at that forthcoming annual general meeting.

The new Articles provide that a director shall retire at the

next annual general meeting of which notice is first given

after his or her appointment as a director.

DIRECTORS' POWERS OF DELEGATION: The board

states that the new Articles follow a broader and more

simplified approach to delegation of powers by directors, in

line with the Act’s model articles and other listed

companies, allowing the directors to delegate as they deem

appropriate.

NeutralTechnical amendment in line with common practice and the

model articles contained in the Companies Act 2006

DIRECTORS' BORROWING POWERS: Under the current

Articles, the board’s borrowing power threshold is

equivalent to the amount of the Company’s share capital

and reserves. The new Articles increase the borrowing

threshold equivalent to two times the amount of the

Company’s share capital and reserves.

NeutralTechnical amendment in line with common practice and

institutional investor guidance

PAYMENT OF DIVIDENDS: The current Articles permit the

directors to determine that the payment of dividends may

be made by electronic means only. The ICSA registrars’

group issued guidance in 2014 including recommended

wording for articles of association to allow sufficient

flexibility for electronic payment of dividends. Although it is

not the board’s intention to change the current methods of

payment at this time, the board states that it is important

that the Company is able to cater for new developments

and changes in practice, including considering the

efficiency and costs savings that would flow from a change

to electronic only payment. The new Articles therefore

follow the wording recommended by the ICSA registrars’

group guidance and make express provision for setting a

default method of payment.

In addition, the new Articles provide that if the company

sells the shares of an untraced shareholder, then any

dividend or other money unclaimed in respect of those

shares will be forfeited after a period of two years.

NeutralTechnical amendment in line with the Institute of Chartered

Secretaries and Administrators' ("ICSA") guidance


SCRIP DIVIDENDS: The new Articles state that a

resolution to authorise a scrip dividend can only be for a

maximum three-year period, instead of the current five-year

period, and that the number of scrip shares is to be

calculated by reference to the share price over five dealing

days instead of the current four dealing days.

NeutralTechnical amendment in line with new institutional investor

guidance

NOTICES: The new Articles contain provisions which

specifically provide for service of notice in the event of

industrial action by postal service employees. The

Company is permitted in such circumstances to serve

notices only on those shareholders who receive notices via

electronic means, provided that the Company also puts an

advert in two national newspapers and sends a

confirmatory hard copy notice, if the postal service is

available again within seven days of the meeting. The new

Articles also provide minor clarifications in relation to the

method and receipt of notices, including via personal

delivery.


GLASS LEWIS ANALYSISGlass Lewis generally supports changes made to a company's articles of association that do not run contrary toshareholders' interests. In this case, and upon review, we see no cause for shareholder as to the proposed amendments,which are primarily technical in nature and intended to bring the Company's Articles into line with current best practice.



24.00:

AUTHORITY TO SET GENERAL MEETING NOTICE PERIOD AT 14DAYS

PROPOSAL REQUEST: Authority to hold general meetings on 14 days notice RECOMMENDATIONS & CONCERNS:PRIOR YEAR VOTE RESULT (FOR): 86.25% AGAINST- Shortened notice period could disenfranchise

shareholdersBINDING/ADVISORY: Binding


PROPOSAL DETAILSIf approved, the board will be authorised to set the notice period for a general meeting, also commonly known as a specialor extraordinary meeting, at 14 days. Historically, the general meeting notice period in the UK has been set at 21 days.This reduction is allowed under both the Companies Act 2006 (the "Act") and also the EU Shareholder Rights Directive,which came into effect in August 2009. If approved, the authority will expire at the conclusion of the Company's nextannual general meeting.

We note that the notice period for an annual general meeting will remain unchanged.

GLASS LEWIS ANALYSISGlass Lewis generally supports regulatory changes that provide companies with increased flexibility, so long asshareholder rights are safeguarded. In this case, we are concerned with the effect of reducing the notice period for ageneral meeting from 21 to 14 days, as we believe this authority may limit the ability of some shareholders, particularlythose located overseas, from participating at a meeting in a fully-informed manner, due to their generally advanced votingdeadlines. While this shortened notice period is also permitted by the UK Corporate Governance Code (as revised in2014) and the EU Shareholders Rights Directive, provided a company conforms to specific electronic voting andcommunication requirements, we continue to believe 14 days is simply insufficient time for shareholders to receive aballot, weigh the issues and vote. Further, issues raised at extraordinary general meetings are by nature often morecomplex than routine annual general meeting proposals, thereby requiring a deeper and more time-consuming level ofreview.

We note that the Company has adopted electronic disclosure and voting provisions for shareholder meetings, mitigatingto some extent the negative aspects of a shortened notice period. We also recognise that, compared with overseasshareholders, shareholders in the UK enjoy voting deadlines substantially closer to the meeting date, eliminating theconcern about insufficient notice and evaluation periods. Therefore, UK shareholders may be more inclined to supportthese proposals.

However, we still believe that a shortened notice period does not provide non-UK shareholders with sufficient time toadequately review proposals being presented at an extraordinary general meeting. As such, we believe that, in general,shareholders should oppose any reduction in the notice period.

Accordingly, we recommend voting AGAINST this proposal.


25.00:

SHAREHOLDER PROPOSAL REGARDING CLIMATE CHANGEREPORTING

PROPOSAL REQUEST: That the Company expand its reporting regarding climatechange

SHAREHOLDER PROPONENT: The Aiming for A Coalition, whichincludes the Local AuthorityPension Fund Forum and theChurch Investors Group


PRIOR YEAR VOTE RESULT (FOR): N/A REQUIRED TO APPROVE: 75% of votes cast

RECOMMENDATIONS, CONCERNS & SUMMARY OF REASONING: FOR - NO CONCERNS

GLASS LEWIS REASONINGParticularly given board support for this resolution, we believe that both the Company and its shareholders willbenefit from increased disclosure on in the information requested by this proposal; andWe recognize and the Company acknowledges that it is subject to certain risks concerning climate change and webelieve that the Company's support for this resolution demonstrates both leadership in this area andresponsiveness to shareholder concerns.

PROPOSAL SUMMARYText of resolution: That in order to address our interest in the longer term success of the Company, given the recognisedrisks and opportunities associated with climate change, we as shareholders of the Company direct that routine annualreporting from 2016 includes further information about: ongoing operational emissions management; asset portfolioresilience to the International Energy Agency’s (IEA’s) scenarios; low-carbon energy research and development (R&D)and investment strategies; relevant strategic key performance indicators (KPIs) and executive incentives; and public policypositions relating to climate change. This additional ongoing annual reporting could build on the disclosures already madeto CDP (formerly the Carbon Disclosure Project) and/or those already made within the Company’s Energy Outlook,Sustainability Review and Annual Report.

Proponent's Perspective

Horizon-scanning investors are aware of the portfolio risks ofpublic policy uncertainty and potential asset stranding;Major technology transitions are rarely smooth, and draconianpolicy action that has to be introduced quickly after prolongeddelay increases risks to investors;In 2014, the Company earned a “B” carbon performance bandfrom CDP;Within the CDP performance methodology, considerable weight isgiven to operational emissions management, alongside strategicand governance issues like those addressed by this proposal;The proponents and other shareholders are interested in how thecompany is maintaining progress towards reaching an “A”;The Company's diverse portfolio of assets reflects the role of gasas a transitional fuel, and compares favourably with other oil andgas majors with regards to resilience;The proponents request that an assessment of the portfolio’sresilience against the range relevant post-2035 scenarios beoutlined to investors in routine reporting from 2016;The proponents are also interested in the role that exploration,disposals and cash distributions to investors will play in the nearterm;The Company has an alternative energy business, in which $8bnhas been invested ahead of schedule, and 20% of its R&D isalready directed towards the low carbon transition;The proponents and investors are interested in the Company'spost-2015 plans in alternative energy and the low carbon

Board's Perspective

The Company expects energy demand to grow by nearly 40% inthe next 20 years, based on projections that the world’spopulation will increase by 1.5 billion and that the world economyis likely to more than double;Affordable, secure and sustainable energy is essential foreconomic prosperity;A diverse mix of energy sources will be needed to meet futureenergy demands, including fossil fuels;Carbon emissions are rising and will continue to do so, andin responding to the need to transition to a lower-carbon future,no single change or improvement is likely to be sufficient on itsown;It is the role of regulators to set the boundary conditions andpolicy framework which are needed to bring about alower-carbon future, and the Company's role is to develop itsbusiness within that framework;The Company has a role in educating policy makers andinforming their work;The Company has advocated for an economy-wide carbon priceto support the competitiveness of lower carbon alternatives andfor transitioning from coal to gas, which will dramatically reduceCO2 emissions;The Company has focused on energy efficiency in its ownoperations and products, and on investing and collaborating onevolving lower-carbon technologies;


post-2015 plans in alternative energy and the low carbontransition, including any for carbon capture and storage;The Company was one of the first oil and gas majors to signal astrategy of “value not volume”;Transitions that span decades are complex to manage and oftenrequire lead indicators and incentives;The proponents and investors are interested in the Company'sevolving approach to KPIs and executive incentives, in thecontext of the transition to a low carbon economy, including therole played by the reserves replacement ratio;The Company has co-ordinated its approach to public policy atthe group level since 2011 and recently joined over 70 countriesand over 1000 companies in signing the World Bank statement fora price on carbon;The proponents and investors are interested in theCompany's public policy programme, including positions on keypolicy measures, especially for the critical 2015 to 2020 policymaking period; andThe proponents wish to highlight the global investor coalition onclimate change’s document outlining their expectations for oil &gas majors, which can be found on their website and builds ontheir carbon asset risk initiative.

The Company's Annual Report, Form 20-F and SustainabilityReport set out its approach in detail, particularly on energy andclimate policy, and address many of the requests made in theproposal;The Company is supportive of maintaining progress on deliveringemissions reductions and will assess and pursue commerciallysound options to do so;The Company requires operations to incorporate energy useconsiderations in business plans and to implement technologiesthat improve efficiency;The Company measures the energy performance of its refiningbusiness, sets annual targets and tracks quarterly performanceusing the Solomon Energy Intensity Index;The Company manages flaring and venting at its operationswhere it does not compromise safety;The Company factors a carbon cost, currently $40 per tonne ofCO2-equivalent in industrialized countries, into the investmentand engineering decisions for major new projects;The Company uses more efficient technologies in its productsthat are developed in partnership with equipment manufacturers;The value of the Company's upstream business is basedprimarily on proved reserves, which are produced over a 13-yeartime frame on average, over which the Company can adapt itsinvestment strategy and portfolio to changes in policy, market ortechnology conditions;The Company assesses how potential carbon policy could affectits businesses, and will adapt to regulatory requirements as theyemerge;The Company makes regional and global assessments ofenergy supply and demand in its Energy Outlook 2035,undertakes detailed analysis of the transport sector, includingreviews into potential innovation, and tests its investmentsagainst a range of oil and gas prices to check if they areprofitable over the long term;The Company has invested $8.7 billion since 2005 in energyefficiency technologies and alternative energies for bothoperations and products, including R&D investment throughproprietary research, corporate venturing investment anduniversity programs;The Company's efficient and alternative energy investmentshave experienced mixed outcomes, and are currently focusedon scalable, cost-effective Brazilian biofuels;Strategic key performance indicators ("KPIs") and executiveincentive KPIs are shown in the Company's Annual Report andForm 20-F, including annual greenhouse gas emissions, safetyand operational risk KPIs and reserves replacement ratio; andThe Company has co-ordinated its approach to public policy atgroup level for many years, and recently endorsed the WorldBank statement on carbon pricing.

GLASS LEWIS ANALYSISIn general, we believe it is prudent for management to assess its potential exposure to all risks, including environmentalconcerns and regulations, in order to incorporate this information into its overall business risk profile. We also believe thatcompanies should ensure that there is appropriate disclosure to shareholders of these risks and the steps that are beingtaken to mitigate them. Though we support this disclosure and believe that it is an important aspect of a company'saccountability to shareholders, when there is no evidence of egregious or illegal conduct that might suggest pooroversight or management of environmental issues that may threaten shareholder value, Glass Lewis believes thatmanagement and reporting of environmental issues associated with business operations are generally best left tomanagement and the directors who can be held accountable for failure to address relevant risks on these issues whenthey face re-election. We note that, in this case, the Company has determined the requested disclosure to be inshareholders' best interests and has thus recommended that shareholders vote in favor of this resolution.


RISKS ASSOCIATED WITH CLIMATE CHANGE

The Company is an integrated oil and gas company, operating in both exploration and production and refining andmarketing. The Company maintains activities in oil and natural gas exploration, field development and production,midstream transportation, storage and processing and the marketing and trading of natural gas, including liquefied naturalgas. Additionally, the Company refines, manufactures, markets, transports and supplies and trades crude oil, petroleum,petrochemical products and related services to wholesale and retail customers. Given the nature and scope of theCompany's operations, it could be subjected to significant risks both with respect to climate change and the regulatoryimplications or investor pressures that come as a result of climate change.

Over the last several years, there has been an increasing focus on how companies are both responding and contributingto climate change. For example, in 2009, world leaders established the Copenhagen Accord with the goal of limiting anincrease in global temperature as a result of climate change to two degrees Celsius. The agreement is non-binding anddid not establish definitive plans on how this goal would be met. However, the International Energy Agency, anautonomous organization with the goal of promoting global energy security, has stated that the international community isfalling short of the goals established by the Copenhagen Accord. The agency concluded in 2012 that, unless carboncapture technology is widely deployed, no more than one-third of the worlds' fossil fuel reserves can be consumed prior to2050 if nations are to achieve the two-degree Celsius goal (p.3). Analysts believe that fossil fuel industries in the world'seconomies are at risk, as markets have not adequately prepared for future limitations that will render many carbon emittingfossil fuels unusable (James Leaton. “Carbon Bubble Growing, but Markets Aren't Listening”. Reuters. July 15, 2011). Anumber of investors have agreed with this prediction and have either began to carefully scrutinize or divest completelyfrom their investments in certain companies that produce or extract fossil fuels. As of December 2014, 181 institutions and656 individuals, together representing $50 billion in assets, have pledged divestment in these firms. However, somewhatunsurprisingly, many of the companies that have been the target of these campaings disagree; the Company has statedthat that the concept of unburnable carbon "overstates the potential financial impact on the value of oil explorers" andExxon stated that it was "confident" that none of its assets are in danger of being stranded (Alex Morales. " Oil InvestorsMay Be Running Off a Cliff They Can't See". Bloomberg Business. December 1, 2014).

Further, in April 2014, the Intergovernmental Panel on Climate Change stated in a report that greenhouse gas ("GHG")emissions are increasing faster than ever and political leaders and national governments have not done enough to preventthe impacts of climate change. However, the IPCC also concluded that climate change could be controlled if there is aconcerted and significant effort to reduce emissions over the next 15 years. There are no explicitly outlined actions thatgovernments should take, but the report "does make clear that putting a price on emissions of carbon dioxide and othergreenhouse gases, either through taxes or the sale of emission permits, is a fundamental approach that could helpredirect investment toward climate-friendly technologies" (Justin Gillis. " Climate Efforts Falling Short, U.N. PanelSays". The New York Times. April 13, 2014).

AIMING FOR A COALITION

The proponent of this proposal, the Aiming for A Coalition, was started in 2012 and comprises investors from UK charitiesand pension plans. The coalition has announced its aim to target large-cap UK companies that have been identified asbeing slow to implement carbon reduction measures, mainly focusing on those firms in the extractive industries that havelow scores on the Carbon Disclosure Project's carbon performance leadership index. CCLA, a specialist investmentmanagement for charities, faith organisations and local authorities that is leading this coalition, has stated that itsengagement efforts are a part of a long-term programme to encourage investee companies to measure and manage theircarbon emissions. The group also includes the Local Authority Pension Fund Forum as well as the Church of England'sEthical Investment Advisory Group (Ruth Sullivan. " Investors Act on Carbon Control". Financial Times. October 21,2012). Although it is a common practice in North America, shareholder groups rarely engage with UK companies onmatters related to the environment or social issues through the shareholder proposal process. As such, this novelapproach, taken by large long-term shareholders, has garnered significant attention from both the investment communityand from the companies targeted by the coalition's shareholder resolutions. In fact, it was announced in February of thisyear that both the Company and Shell (the only two companies targeted by the coalition in 2015) have agreed to supportthese resolutions.

COMPANY DISCLOSURE

The Company currently provides significant disclosure concerning its environmental risks, management of such risks andits environmental initiatives both in its filings and on its website. For example, the Company details many of its risk factorsin its most recent Annual Report. For example, the Company details a number of risks to its operations, including, (i) Gulfof Mexico oil spill; (ii) process safety, personal safety and environmental risks; (iii) climate change and carbon pricing; and(iv) regulation (pp.46-50). The Company also provides information concerning climate change on its website, where itdiscusses its acknowledgment of the global scientific consensus regarding climate change and the challenges it presents.


http://unfccc.int/resource/docs/2009/cop15/eng/l07.pdf

http://www.iea.org/

http://www.iea.org/publications/freepublications/publication/English.pdf

http://www.reuters.com/article/2011/07/15/idUS159952340120110715

http://www.bloomberg.com/news/articles/2014-12-02/oil-investors-may-be-running-off-a-cliff-they-can-t-see

http://www.bloomberg.com/news/articles/2014-12-02/oil-investors-may-be-running-off-a-cliff-they-can-t-see

http://www.ipcc.ch/index.htm

http://www.nytimes.com/2014/04/14/science/earth/un-climate-panel-warns-speedier-action-is-needed-to-avert-disaster.html?emc=edit_th_20140414&nl=todaysheadlines&nlid=58398011&_r=0

http://www.nytimes.com/2014/04/14/science/earth/un-climate-panel-warns-speedier-action-is-needed-to-avert-disaster.html?emc=edit_th_20140414&nl=todaysheadlines&nlid=58398011&_r=0

https://www.cdproject.net/en-us/results/pages/leadership-index.aspx

http://www.ccla.co.uk/

http://www.ft.com/intl/cms/s/0/ba36c106-185a-11e2-80af-00144feabdc0.html?siteedition=intl#axzz3U6HhcM6Q

https://www.churchofengland.org/media-centre/news/2015/02/bp-board-advises-shareholders-to-support-resolution-on-climate-change-at-2015-agm.aspx

http://www.bp.com/en/global/corporate/sustainability/the-energy-future/climate-change.html

The Company further states its support for governments to adopt carbon regulation, calling it a requirement if companiesare to lower GHGs while providing energy competitively. The Company also discusses investor concerns regardingstranded asset risk, and explains its approach to managing this risk. In addition, the Company provides informationregarding climate and carbon risk management, where it details a number of its initiatives aimed at addressingclimate-related issues, including: (i) low-carbon energy investments; (ii) internal carbon pricing; (iii) climate changeadaptation measures; and the Company's annually-updated Energy Outlook reports. The Company provides furtherinformation on its approach to GHG emissions, including methane emissions, emissions targets and regulation. Further,the Company provides an annually-updated Sustainability Review, which details its environmental performance, includingits GHG emissions over the past five years. With respect to board oversight of these matters, the Company states that itsinitiatives states that its initiatives regarding climate change are overseen by the board's safety, ethics and environmentassurance committee (p.12).

Responsiveness to Carbon Disclosure ProjectWe note that the Company has responded to the Carbon Disclosure Project ("CDP") since 2003, and publishes its mostrecent response publicly through its website. The CDP, acting on behalf of 822 institutional investors with $95 trillion inassets under management and approximately 66 purchasing organizations, advocates improved disclosure of climatechange data through responses to comprehensive annual questionnaires. The CDP issues reports and collects data oncarbon emissions, water management, public procurement, and supply chain information, among others. While not allcompanies are invited to disclose data through the CDP, based on information on the CDP's the Company has beeninvited. Glass Lewis generally views a company’s response as indicative of its commitment to disclosure of itsenvironmental impact and responses to that impact.

CONCLUSION

Although the Company currently provides significant disclosure with respect to its risks and opportunities with respect toclimate change, we believe that adoption of this proposal could provide meaningful information to shareholders.Particularly given board support for this resolution, we believe that both the Company and its shareholders will benefitfrom increased disclosure on in the information requested by this proposal. We recognize and the Companyacknowledges that it is subject to certain risks concerning climate change. As such, we believe that the Company'ssupport for this resolution demonstrates both leadership in this area and responsiveness to shareholder concerns.



http://www.bp.com/en/global/corporate/sustainability/the-energy-future/climate-change/our-programme-of-action-to-manage-climate-and-carbon-risk.html#par_largeimage

http://www.bp.com/content/dam/bp/pdf/Energy-economics/energy-outlook-2015/Energy_Outlook_2035_booklet.pdf

http://www.bp.com/en/global/corporate/sustainability/environment/greenhouse-gas-emissions.html

http://www.bp.com/content/dam/bp/pdf/investors/bp_board_governance_principles.pdf

https://www.cdp.net/en-US/Results/Pages/Company-Responses.aspx?company=2083

https://www.cdp.net/en-US/Pages/HomePage.aspx

http://www.bp.com/content/dam/bp/pdf/sustainability/issue-reports/CDP_2013_questionnaire_response.pdf

VOTING RESULTS FROM LAST ANNUAL MEETING (APRIL 10, 2014)

NO. PROPOSAL FOR/DISCRETIONARY AGAINST WITHHELD/ABSTAIN GLCREC

1.00 Accounts and Reports 98.38% 1.34% 0.28% For 2.00 Remuneration Report (Advisory) 67.94% 13.02% 19.03% Against 3.00 Remuneration Policy (Binding) 95.35% 3.58% 1.07% For 4.00 Elect Robert W. Dudley 99.54% 0.20% 0.26% For 5.00 Elect Iain C. Conn 99.42% 0.32% 0.26% For 6.00 Elect Brian Gilvary 99.44% 0.30% 0.26% For 7.00 Elect Paul M. Anderson 99.52% 0.21% 0.27% For 8.00 Elect Frank L. Bowman 99.41% 0.33% 0.27% For 9.00 Elect Antony Burgmans 97.44% 2.20% 0.35% For 10.00 Elect Cynthia B. Carroll 99.50% 0.24% 0.26% For 11.00 Elect George David 96.26% 3.45% 0.28% Against 12.00 Elect Ian E.L. Davis 98.93% 0.80% 0.27% For 13.00 Elect Dame Ann Dowling 99.09% 0.65% 0.26% For 14.00 Elect Brendan R. Nelson 99.37% 0.36% 0.27% For 15.00 Elect Phuthuma F. Nhleko 99.24% 0.50% 0.27% For 16.00 Elect Andrew B. Shilston 98.40% 0.39% 1.21% For 17.00 Elect Carl-Henric Svanberg 95.72% 1.22% 3.06% For 18.00 Appointment of Auditor and Authority to Set Fees 98.28% 1.14% 0.58% For 19.00 Executive Directors' Incentive Plan 91.13% 8.16% 0.70% Against 20.00 Increase in NEDs' Fee Cap 95.86% 2.84% 1.30% For 21.00 Authority to Issue Shares w/ Preemptive Rights 90.38% 9.08% 0.54% For 22.00 Authority to Issue Shares w/o Preemptive Rights 98.35% 1.21% 0.44% For 23.00 Authority to Repurchase Shares 99.43% 0.30% 0.28% For

24.00 Authority to Set General Meeting Notice Period at14 Days 86.52% 13.20% 0.28% Against


APPENDIX

Questions or comments about this report, GL policies, methodologies or data? Contact your client service representative or go towww.glasslewis.com/issuer/ for information and contact directions.

DISCLOSURES© 2015 Glass, Lewis & Co., Glass Lewis Europe, Ltd., and CGI Glass Lewis Pty Ltd. (collectively, “Glass Lewis”). All Rights Reserved.

This report is intended to provide research, data and analysis of proxy voting issues and, therefore, should not be relied upon as investment advice.Glass Lewis analyzes the issues presented for shareholder vote and makes recommendations as to how Glass Lewis believes institutional shareholdersshould vote their proxies, without commenting on the investment merits of the securities issued by the subject companies. Therefore, none of GlassLewis’ proxy vote recommendations should be construed as a recommendation to invest in, purchase, or sell any securities or other property. Moreover,Glass Lewis’ proxy vote recommendations must be construed solely as statements of opinion, and not as statements of fact, and may be revised basedon additional information or any other reason at any time.

The information contained in this report is based on publicly available information. While Glass Lewis exercises reasonable care to ensure that allinformation included in this report is accurate and is obtained from sources believed to be reliable, no representations or warranties express or implied,are made as to the accuracy or completeness of any information included herein. In addition, Glass Lewis shall not be liable for any losses or damagesarising from or in connection with the information contained herein or the use or inability to use any such information.

Glass Lewis expects its subscribers possess sufficient experience and knowledge to make their own decisions entirely independent of any informationcontained in this report. Subscribers are ultimately and solely responsible for making their own voting decisions. This Glass Lewis report is intended toserve as a complementary source of information and analysis for subscribers in making their own voting decisions and therefore should not be relied onby subscribers as the sole determinant in making voting decisions.

All information contained in this report is protected by law, including but not limited to, copyright law, and none of such information may be copied orotherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, or stored for subsequent use for any suchpurpose, in whole or in part, in any form or manner or by any means whatsoever, by any person without Glass Lewis’ express prior written consent.

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LEAD ANALYSTS Governance: Martin Garcia MortellCompensation: Dimitri ZagoroffShareholder Proposals: Courteney Keatinge


http://www.glasslewis.com/

Documents

BP PLC - Glass Lewis plc is an integrated oil and gas company, which ... UK companies are required to submit their remuneration report for non-binding shareholder approval annually,