TEXT-S&P release on BP PLC, BP Finance PLC

(The following statement was released by the ratings agency)

Sept 1 - Standard & Poor's Ratings Services said today that it lowered its corporate credit ratings on international oil and gas supermajor BP PLC (BP.L) and its U.S. and U.K. affiliates, including Jupiter Insurance Ltd., to 'AA' from 'AA+'. We also lowered the long-term corporate credit rating on BP Finance PLC to 'AA-' from 'AA'. The downgrades follow our review of the company's business and financial performance and comparison with those of other major integrated oil companies.

At the same time, we affirmed the 'A-1+' short-term ratings on the group. The outlook is stable.

The lowering of the long-term ratings mainly reflects the following negatives, analyzed in the context of benchmarking with other major private integrated oil and gas companies:

-- Reassessment of BP's U.S. downstream weaknesses relative to peers. Bridging part of the profitability gap with peers will require a prolonged effort, and the other part of the gap is structural.

- Less conservative than peers' financial policies, as evidenced by BP's heavy (30%) and unexpected hike this year in annual common dividends to over $10 billion, only partly compensated by a reduction in share repurchases. While remaining very strong, BP's financial profile is now significantly less conservative than peers' and is becoming more in line with a 'AA' rating.

- Turbulences around 50%-owned, equity-consolidated, Russia-based affiliate TNK-BP International Ltd., which we downgraded late July to 'BB/B' with a negative outlook, from 'BB+/B' with a stable outlook.

The stable outlook reflects our expectation that BP's excellent business and minimal financial risk profiles will continue to be supported by, in particular:

-- Continued successful upstream field start-ups;