UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) — April 1, 2012

Plains All American Pipeline, L.P.

(Exact name of registrant as specified in its charter)

333 Clay Street, Suite 1600, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)

713-646-4100
(Registrant’s telephone number, including area code)

 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

On April 5, 2012, Plains All American Pipeline, L.P. (the “Partnership” or “PAA”) filed a current report on Form 8-K (the “Original Filing”) in connection with the acquisition on April 1, 2012 (the “Closing Date”) by a subsidiary of PAA of all of the outstanding shares of BP Canada Energy Company (“BPCEC”), an indirect subsidiary of BP Corporation North America (“BP North America”). As a result of the closing of such acquisition and after giving effect to a series of reorganization transactions completed prior to the Closing Date, PAA became the indirect owner of all of BP North America’s Canadian based natural gas liquids (“NGL”) business and certain of BP North America’s NGL assets located in the upper-Midwest United States (collectively, the “Acquired Business”). The Partnership is filing this Form 8-K/A to provide the financial statements and unaudited pro forma financial information required by Item 9.01(a) and Item 9.01(b) of Form 8-K. This information was not included in the Original Filing.

The historical financial statements that are provided in the exhibits reflect the results of operations from, and the assets and liabilities that are a part of, the Acquired Business, which is referred to in such exhibits as “Project Argyle;” however, such historical financial statements also reflect certain assets and liabilities (and associated results of operations) that were not a part of the Acquired Business on the Closing Date. The historical financial statements provided have been prepared in accordance with International Financial Reporting Standards.

Item 9.01.         Financial Statements and Exhibits.

(a)  Financial Statements of Businesses Acquired

The audited financial statements of Project Argyle as of and for the years ended December 31, 2011 and 2010, including the notes thereto, are filed herewith as Exhibit 99.2.

(b)  Pro Forma Financial Information

The unaudited pro forma condensed combined financial statements of Plains All American Pipeline, L.P. as of and for the three months ended March 31, 2012 and for the twelve months ended December 31, 2011, including the notes thereto, are filed herewith as Exhibit 99.1.

(d)  Exhibits

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SIGNATURES

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

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EXHIBIT INDEX

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Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference of our report dated March 22, 2012 relating to the financial statements of Project Argyle, a business owned by BP p.l.c. and affiliates, in the Registration Statements of Plains All American Pipeline, L.P. on Form S-3 (No. 333-138888, 333-155673, 333-162475, 333-162476 and 333-162477) and on Form S-8 (No. 333-91141, 333-54118, 333-74920, 333-122806 and 333-141185), which report is included in the Current Report on Form 8-K/A of Plains All American Pipeline, L.P. filed on May 29, 2012 with the Securities and Exchange Commission.

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Exhibit 99.1

Plains All American Pipeline, L.P.

Unaudited pro forma condensed combined financial statements of Plains All American Pipeline, L.P. as of and for the three months ended March 31, 2012 and for the year ended December 31, 2011, including the notes thereto.

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PLAINS ALL AMERICAN PIPELINE, L.P.

INDEX TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

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PLAINS ALL AMERICAN PIPELINE, L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements give effect to the acquisition by Plains All American Pipeline, L.P. (“PAA”) of BP Canada Energy Company (“BPCEC”), an indirect subsidiary of BP Corporation North America (“BP North America”) from Amoco Canada International Holdings B.V. (the “Seller”) for approximately $1.68 billion in cash, including $17 million of imputed interest, subject to working capital adjustments. As a result of the closing of such acquisition and after giving effect to a series of reorganization transactions completed prior to the Closing Date, PAA became the indirect owner of all of BP North America’s Canadian based natural gas liquids (“NGL”) business and certain of BP North America’s NGL assets located in the upper-Midwest United States (collectively, the “Acquired Business”).

The following unaudited pro forma condensed statements of combined operations for the three months ended March 31, 2012 and for the year ended December 31, 2011 have been prepared as if the transaction described above had taken place on January 1, 2011. The unaudited pro forma condensed combined balance sheet at March 31, 2012 assumes the transaction was consummated on that date.

The unaudited pro forma financial statements should be read in conjunction with and are qualified in their entirety by reference to the notes accompanying such unaudited pro forma financial statements as well as the historical financial statements and notes included in PAA’s Quarterly Report on Form 10-Q for the period ended March 31, 2012 and PAA’s Annual Report on Form 10-K for the year ended December 31, 2011 and the historical financial statements included in Exhibit 99.2 of this filing. The historical financial statements that are provided in the exhibits reflect the results of operations from, and the assets and liabilities that are a part of, the Acquired Business, which is referred to in such exhibits as “Project Argyle;” however, such historical financial statements also reflect certain assets and liabilities (and associated results of operations) that were not a part of the Acquired Business on the Closing Date. For the purposes of these pro forma financial statements and footnotes, we will refer to the historical financial statements of Project Argyle as the BPCEC historical financial statements.

The unaudited pro forma condensed combined financial statements have been prepared giving effect to the acquisition, which is accounted for as a purchase business combination in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, “Business Combinations.” The unaudited pro forma financial statements are based on assumptions that we believe are reasonable under the circumstances and are intended for informational purposes only. They reflect management’s preliminary estimates of the values of the tangible and intangible assets and liabilities acquired, pending the completion of valuation procedures. A change in the unaudited pro forma adjustments of the purchase price for the acquisition would primarily result in an adjustment to the determined fair values assigned to tangible and intangible assets. The income statement effect of these changes will depend on the nature and amount of the assets or liabilities adjusted.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of the actual or future operations or financial condition that would have been achieved had the transactions occurred at the dates assumed (as noted above). The actual results in the periods following the acquisition may differ significantly from those reflected in the unaudited pro forma condensed combined financial statements for a number of reasons including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed combined financial data and the actual amounts and the completion of a final valuation of the acquisition.

The BPCEC historical financial statements were prepared in accordance with International Financial Reporting Standards as adopted by the IASB (IFRS) which is a method of accounting different from accounting principles generally accepted in the United States of America (U.S. GAAP). However, no significant adjustments were necessary to conform the IFRS information to U.S. GAAP.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

March 31, 2012
(in millions)

The accompanying notes are an integral part of these Unaudited Pro Forma Condensed Combined Financial Statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF COMBINED OPERATIONS

For the Three Months Ended March 31, 2012
(in millions, except per unit data)

The accompanying notes are an integral part of these Unaudited Pro Forma Condensed Combined Financial Statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF COMBINED OPERATIONS

For the Year Ended December 31, 2011
(in millions, except per unit data)

The accompanying notes are an integral part of these Unaudited Pro Forma Condensed Combined Financial Statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

These unaudited pro forma condensed combined financial statements and underlying pro forma adjustments are based upon currently available information and certain estimates and assumptions made by management; therefore, actual results could differ materially from the pro forma information. However, we believe the assumptions provide a reasonable basis for presenting the significant effects of the transactions noted herein.  We believe the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the pro forma information.

The acquisition of BPCEC presented in these pro forma statements has been accounted for using the acquisition method of accounting and the determination of the fair value of the assets and liabilities acquired has been estimated in accordance with the applicable accounting literature.  The following table shows our preliminary determination of the fair value of those assets and liabilities (in millions):

The determination of the fair value of the assets and liabilities acquired is preliminary pending the completion of valuation procedures and other potential adjustments.  To the extent that any amount is assigned to a tangible or finite lived intangible asset, this amount will be depreciated or amortized (as appropriate) to earnings over the expected period of benefit of the asset. To the extent that any amount remains as goodwill or indefinite lived intangible assets, this amount would not be subject to depreciation or amortization, but would be subject to periodic impairment testing and, if necessary, would be written down to fair value should circumstances warrant.

The preliminary allocation of fair value to intangible assets above is comprised of a contract with a 14 year life.  Amortization of the contract under the declining balance method of amortization is estimated to be approximately $39 million for the remaining nine months of 2012 and approximately $30 million, $10 million, $8 million, $7 million and $6 million for each of the five years thereafter.

The acquisition was pre-funded through various means including the issuance of PAA’s common units in March 2012 and the issuance of senior notes in March 2012.  For purposes of the pro forma financial statements, we have assumed that the short-term portion of the acquisition (consisting of short-term inventory of approximately $132 million and cash acquired of approximately $120 million) was funded through short-term borrowings under our credit facilities.  PAA has assumed that the $120 million of short-term borrowings discussed above was immediately repaid through the cash acquired and thus, did not incur any additional interest expense. Total long-term funding was approximately $1.43 billion and we have assumed that $455 million was funded through the March 2012 equity issuance and the remaining balance of $976 was funded through the March 2012 issuance of senior notes.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Pro Forma Adjustments

(a)          Reflects the impact of the March 2012 issuance of PAA’s common units on the weighted average number of units outstanding.

(b)         Reflects the cash paid and the adjustments to fair value of the assets purchased and liabilities assumed in the acquisition of BPCEC based on the acquisition method of accounting. A deposit of $50 million had been paid during 2011 towards the purchase price and that deposit (and the related interest of approximately $1 million) is reflected as an adjustment to Other current assets on the Pro Forma Condensed Combined Balance Sheet. The remaining $1.63 billion of the purchase price is reflected as a reduction to Restricted cash on the Pro Forma Condensed Combined Balance Sheet.

(c)          Reflects the reversal of the historical depreciation and amortization recorded by BPCEC (excluding that associated with asset retirement obligations — see note g. below).

(d)         Reflects the depreciation on the acquired property and equipment based on the straight-line method of depreciation over remaining average useful lives ranging from 5 to 70 years. Also reflects the amortization of the intangible asset (contract) on the declining balance method resulting in amortization expense of $52 million and $13 million for the year ended December 31, 2011 and the quarter ended March 31, 2012.  The pro forma amortization expense is calculated based on an extrapolation of the estimated $39 million amortization expense for the remaining nine months of 2012, using the declining balance method of amortization as discussed above.

(e)          Reflects the adjustment to Interest expense for the increase in Short-term debt of $132 million and for the increase in Senior notes of $976 million. This adjustment assumes an interest rate applied to short-term debt of 2.3% (PAA’s current rate) and an interest rate of 4.3% applied to the senior notes.

(f)            Reflects the adjustments required to conform the BPCEC historical financial statements to PAA’s accounting policy for inventory costing. BPCEC’s inventory is valued at the lower of cost or net realizable value with cost determined by the first-in, first out method.  PAA inventory is valued at the lower of cost or market with cost determined using an average cost method within specific inventory pools.  The pro forma adjustments to conform the BPCEC financial statements to the PAA accounting policy impacts the cost of the inventory sold as reflected in Purchases and related costs in the Pro Forma Condensed Statement of Combined Operations.  The pro forma value for Inventory as reflected in the Pro Forma Condensed Combined Balance Sheet is based on the fair value of the inventory as discussed in footnote b.

(g)         Reflects the adjustments required to conform the BPCEC historical financial statements to PAA’s accounting policy for asset retirement obligations. BPCEC has obligations to decommission oil and natural gas facilities and related pipelines.  Provision has been made in the BPCEC historical financial statements for the asset retirement obligations (“ARO”) and the related assets as well as associated amortization and accretion expense.  There is uncertainty regarding both the amount and the timing of these costs, given the long-term nature of these obligations.  BPCEC has historically assessed the timing of the decommissioning and their ability to estimate the future costs based on the operation of the assets in conjunction with other assets owned by BP p.l.c. and its affiliates.  We have considered that the related assets have been in existence for many years and with regular maintenance will continue in service for many years to come.  We do not believe that it is possible to predict when demand for these facilities will cease, and we do not believe that such demand will cease for the foreseeable future.  As such, we believe that the assets have indeterminate lives and consequently that an ARO cannot be estimated.  Therefore, the unaudited pro forma condensed combined financial statements include an adjustment to conform the ARO-related balances in the BPCEC historical financial statements to our accounting policy.

(h)         Reflects the adjustments required to conform the BPCEC historical financial statements to PAA’s accounting policy for Linefill and Long-term inventory. The BPCEC historical financials include all balances related to inventory in current assets. PAA classifies as Linefill those barrels (i) used to pack the pipeline such that when an incremental product is injected into or enters a pipeline it forces product out at another location and (ii) that represent the minimum working requirements in tanks that we own. Minimum working inventory requirements in third-party assets and other working inventory in our assets that is needed for our commercial operations are included within specific inventory pools. At the end of each period, we reclassify the inventory not expected to be liquidated within the succeeding twelve months out of Inventory and into Long-term inventory, which is reflected as a separate line item in Other assets on the consolidated balance sheet. Therefore, the unaudited pro forma condensed combined financial statements include an adjustment to conform the linefill-related balances and long-term inventory-related balances in the BPCEC historical financial statements to our accounting policy.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(i)             Reflects adjustments to eliminate the income and expenses associated with certain assets and liabilities that are included in the BPCEC historical financial statements but were disposed of prior to closing the acquisition.

(j)             Reflects the impact of the adjustments in footnotes a through i (above) and footnote m (below) on Income tax expense for the periods presented, based on the capitalization and financing structure of our Canadian subsidiaries.

(k)          Reflects an adjustment to present a contingent tax liability and the offsetting indemnification of that amount. BPCEC has a contingent tax liability provision of $89 million related to benefits recorded in Canada for uncertain tax positions as at March 31, 2012.  Pursuant to the Share Purchase Agreement, the Seller is required to indemnify PAA for all periods prior to the acquisition for any tax liabilities including interest and penalties arising from all entities that PAA is acquiring.  The contingent tax liability and associated indemnification are presented on the Pro Forma Condensed Combined Balance Sheet in Other current liabilities and Other current assets, respectively.

(l)             Reflects the cash paid to PAA by the Seller upon closing the acquisition. In accordance with the terms of the Share Purchase Agreement, PAA was entitled to the cash flows from the operations of BPCEC for the period between October 1, 2011 and the closing date of the acquisition. The cash flows for that period are estimated to be $120 million and that amount was paid to PAA upon closing. The cash paid to PAA also includes an amount of $34 million related to a pension liability that was not included on the March 31, 2012 historical balance sheet of Project Argyle. That liability was assumed by PAA and cash equivalent to the liability was provided to PAA by the Seller through an escrow account. The pension liability was settled by PAA on April 2, 2012. The total $154 million cash was not included on the historical balance sheet of Project Argyle as of March 31, 2012 but was paid to PAA upon closing the acquisition on April 1, 2012.

(m)       Reflects transaction and other costs that are directly attributable to the acquisition. Costs that had been incurred prior to closing the acquisition have been removed from General and administrative expenses on the Pro Forma Condensed Statement of Combined Operations. Costs that are expected to be incurred subsequent to closing the acquisition are reflected as an adjustment to Accounts payable and accrued liabilities on the Pro Forma Condensed Combined Balance Sheet, with the offset to Partners’ capital and net parent investment.

Pro Forma Net Income Per Limited Partner Unit

Pro forma net income per unit is determined by dividing the pro forma net income that would have been allocated, in accordance with the provisions of PAA’s limited partnership agreement, to the limited partner unitholders by the number of common units outstanding during the applicable periods. For purposes of this calculation, we assumed that distributions were equal to historical PAA distributions for the respective periods; all remaining excess earnings were assumed to be allocated between the limited partners and the general partner according to the contractual terms of the partnership agreement. If an additional portion of the earnings had been distributed to the general partner, then the pro forma net income available to limited partners would have decreased and consequently, the pro forma net income per limited partner unit would also have decreased. Because the limited partnership agreement requires us to distribute available cash rather than earnings reflected in our statement of operations and the pro forma net income per unit calculation has been prepared on an annual basis in lieu of a quarterly basis, actual cash distributions declared and paid by us may vary significantly from reported pro forma net income per limited partner unit.

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Exhibit 99.2

PROJECT ARGYLE

Financial Statements

December 31, 2011 and 2010

(With Independent Auditors’ Report Thereon)

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PROJECT ARGYLE

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INDEPENDENT AUDITORS’ REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of BP Canada Energy Company and its Subsidiaries

We have audited the accompanying balance sheets of Project Argyle, a business wholly owned by BP p.l.c (the “Company”) and its affiliates, as of December 31, 2011 and 2010, and the related statements of comprehensive income, change in net parent investment and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of Project Argyle’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Project Argyle’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Project Argyle at December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

A member firm of Ernst & Young Global Limited

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PROJECT ARGYLE

Balance Sheets

December 31, 2011 and 2010

(Dollars in thousand)

See accompanying notes to financial statements.

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PROJECT ARGYLE

Statements of Comprehensive Income

Years ended December 31, 2011 and 2010

(Dollars in thousand)

See accompanying notes to financial statements.

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PROJECT ARGYLE

Statements of Change in Net Parent Investment

Years ended December 31, 2011 and 2010

See accompanying notes to financial statements.

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PROJECT ARGYLE

Statements of Cash Flows

Years ended December 31, 2011 and 2010

(Dollars in thousand)

See accompanying notes to financial statements.

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Notes to Financial Statements

December 31, 2011 and 2010

(1)                     Reporting Entity

Argyle (the Business, Company, we, us, or our) is domiciled in Canada with operations in Canada and the United States. The address of the Business’ registered office is 240 4th Avenue Southwest, Calgary, Alberta. The Business is 100% owned by BP p.l.c. and its affiliates (collectively, BP or the Parent). The Business is primarily involved in the processing and sale of Natural Gas Liquids (NGLs). The financial statements of the Company at and for the year ended December 31, 2011 comprise the Business and its net assets.

On December 1, 2011 BP announced that it has agreed to sell the Business to Plains Midstream Canada ULC (Plains Midstream), a wholly-owned subsidiary of the Plains All American Pipeline, LP.  Plains Midstream will pay BP a total of US$1.67 billion in cash, subject to customary adjustments, for the Business.

(2)                     Basis of Preparation

(a)                      Statement of Compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations issued and effective for the year ended December 31, 2011, or issued and early adopted. The standards and interpretations adopted in the year are described further in note 3 – Significant Accounting Policies.

The financial statements were authorized for issue on March 22, 2012.

(b)                      Basis of Measurement

The accompanying financial statements of Argyle have been prepared from the historical accounting records of BP in anticipation of a potential transaction to separate the Business from BP.

Historically, financial statements have not been prepared for Argyle as it has not operated as a separate business. These financial statements reflect the carve-out financial position and the related results of operations, cash flows, and changes in the parent’s net investment in Argyle described above in a manner consistent with how BP managed the Business and as though Argyle had been a stand-alone company for all periods presented. All material assets and liabilities specifically identified to Argyle have been presented in the carve-out balance sheets; all material revenues and expenses specifically identified to Argyle and allocations of overhead expenses have been presented in the carve-out statements of comprehensive income.

Allocations of expenses related to shared assets and liabilities and overhead expenses have been allocated to Argyle in accordance with the Securities and Exchange Commission of the United States’ Staff Accounting Bulletin Topic 1-B, Allocations of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity. The financials also are intended to comply with the disclosure requirements of the Ontario and Alberta Securities Commissions.

BP’s net investment in Argyle has been presented in lieu of stockholder’s equity in the carve-out financial statements. Transactions between Argyle and BP have been identified as related-party transactions. It is possible that the terms of the transactions with other BP affiliates are not the same as those that would result from transactions among unrelated parties. Payments made by BP to

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Notes to Financial Statements

December 31, 2011 and 2010

Argyle or to BP from Argyle are presented as transfers to and from parent as a component of net parent investment in the Business. Additionally, the carve-out financial statements for Argyle include allocations of costs for certain support functions for which the balance sheet impact is accounted for through BP’s net investment in Argyle. These support functions include legal, finance, human resources, and other administrative functions. As Argyle is not a separate legal entity, assets and liabilities associated with certain items that are included in the statements of comprehensive income are not included on the Argyle balance sheets. See note 20 – Related Parties for further information. In the opinion of BP’s management, all adjustments have been reflected that are necessary for a fair presentation of the carve-out financial statements. Also, BP’s management believes that the allocations have been made on a reasonable basis and have been consistently applied for each period presented. The carve-out financial statements may not necessarily reflect the financial position, results of operations, or cash flows that Argyle might have had in the past had it existed as a separate, stand-alone business during the periods presented.

The accounting policies that follow have been consistently applied to all years presented. The balance sheet as at January 1, 2010 is not presented as it is not affected by the retrospective adoption of any new accounting policies during the year, nor any other retrospective restatements or reclassifications.

(c)                       Functional and Presentation Currency

These financial statements are presented in United States Dollars (USD), which is the Business’ functional currency. All financial information presented in USD has been rounded to the nearest thousand unless otherwise noted.

(d)                      Use of Estimates and Judgments

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

Note 9 – Taxes

Note 14 – Valuations and Other Qualifying Accounts

Note 16 – Derivative Financial Instruments

Note 17 – Provisions

Note 18 – Contingencies and Commitments

Note 20 – Related Parties (Including Relationship with Parent and Corporate Allocations)

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Notes to Financial Statements

December 31, 2011 and 2010

(3)                     Significant Accounting Policies

(a)                      Jointly Controlled Assets

Argyle conducts many of its activities through joint ventures where the venturers have a direct ownership interest in, and jointly control, the assets of the venture. Argyle recognizes, on a line-by-line basis in the consolidated financial statements, its share of the assets, liabilities, and expenses of these jointly controlled assets incurred jointly with the other partners, along with the group’s income from the sale of its share of the output and any liabilities and expenses that the Business has incurred in relation to the venture.

(b)                      Relationship with Parent

BP’s net investment in Argyle is shown in lieu of stockholders’ equity in the financial statements as there was no direct ownership relationship between BP and the Business (as the Business is not a separate legal entity). BP’s net investment in the Business is presented as “Net parent investment.” Changes in net parent investment include net cash transfers and other transfers to and from Parent and the Business. BP performs cash management and other treasury-related functions on a centralized basis for nearly all of its operating units, which includes the Business. Assets and liabilities not specifically identifiable to the Business are reflected in the net parent investment account and include:

·                 Cash transfers to and from BP and Argyle;

·                 Accrued liabilities related to corporate allocations including administrative expenses for legal, accounting, treasury, information technology, human resources, and other services; and

·                 Interest expense and financing-related balances such as debt that is managed centrally by the Parent and which was not secured by the Argyle’s assets.

(c)                       Related Parties

In addition to transactions with the Parent that are discussed above, Argyle also has operating transactions, primarily purchases and sales of NGLs, with BP and other BP-owned entities (collectively, Related Parties). These purchases and sales are included in Argyle’s statement of comprehensive income and are disclosed as being with related parties on the face of the statements of comprehensive income. As noted above, Argyle participates in BP’s cash management and treasury-related functions. The BP policy in settling intercompany receivables and payables is automatic settlement at 30 days. Accordingly, receivables and payables aged less than 30 days are shown on the balance sheet and disclosed as being receivables from, and payables to, related parties. After 30 days, receivables and payables are deemed settled and reclassified to net parent investment.

(d)                      Property, Plant, and Equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses.

The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, and the initial estimate of the decommissioning obligation, if any. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.

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Notes to Financial Statements

December 31, 2011 and 2010

Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets, inspection costs, and overhaul costs. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Business, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Overhaul costs for major maintenance programs and all other maintenance costs are expensed as incurred.

Property, plant, and equipment are depreciated on a straight-line basis over their expected useful life.

The useful lives of property, plant, and equipment are as follows:

The expected useful lives of property, plant, and equipment are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively.

The carrying value of property, plant, and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. See further discussion below.

An item of property, plant, and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of comprehensive income in the years in which the item is derecognized.

(e)                       Intangible Assets

Intangible assets are limited to internally developed software. These intangible assets have a finite life and are amortized on a straight-line basis over their expected useful lives. The expected useful life of the intangible asset is four years.

The expected useful lives of intangible assets are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively.

The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. See further discussion below.

(f)                         Impairment of Intangible Assets and Property, Plant, and Equipment

The Business assesses assets or groups of assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, for example, low prices or margins for an extended period. If any such indication of impairment exists, the Business makes an estimate of the asset’s recoverable amount. Individual assets are grouped for impairment assessment purposes at the lowest level at which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. An asset group’s recoverable amount is the

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December 31, 2011 and 2010

higher of its fair value less costs to sell and its value in use. Where the carrying amount of an asset group exceeds its recoverable amount, the asset group is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are adjusted for the risks specific to the asset group and are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(g)                      Financial Assets

Financial assets are classified as receivables or as financial assets at fair value through profit or loss, as appropriate. Note that there are no loans or available-for-sale financial assets held by the Business. Financial assets held by the Business include trade receivables and other receivables (derivative financial instruments are held by the parent and discussed in the derivatives policy below). The Business determines the classification of its financial assets at initial recognition. Financial assets are recognized initially at fair value, normally being the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The subsequent measurement of financial assets depends on their classification, as follows:

Receivables

Receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at their stated value as the time value of money is insignificant. Gains and losses are recognized in income when the receivables are derecognized or impaired. This category of financial assets includes trade and other receivables.

Financial Assets at Fair Value through Profit and Loss

Derivatives are included in this category. The actual derivative contracts are held by another BP entity, Integrated Sales and Trading (IST), which is not part of the Argyle Business. Accordingly, while realized gains and losses as well as the mark to market adjustments are recognized on the Argyle statement of comprehensive income, the corresponding asset is retained by the Parent.

(h)                      Impairment of Financial Assets

The Business assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

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December 31, 2011 and 2010

Receivables

If there is objective evidence that an impairment loss on receivables has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced and the amount of the loss is recognized in the statement of comprehensive income. Argyle has no general reserve against accounts receivable and specific accounts are reserved against when necessary. Argyle believes that the creditworthiness of its clients is of a high quality.

(i)                         Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method and comprises direct purchase costs, cost of processing, and transportation expenses. Net realizable value is determined by reference to prices existing at the balance sheet date.

(j)                         Financial Liabilities

Financial liabilities are classified as financial liabilities at fair value through profit or loss or as other financial liabilities, as appropriate. Financial liabilities include trade and other payables, accruals, and derivative financial instruments (which are held by IST on behalf of Argyle). The Business determines the classification of its financial liabilities at initial recognition. The measurement of financial liabilities depends on their classification, as follows:

Financial Liabilities Measured at Fair Value through Profit and Loss

Derivatives are included in this category. The actual derivative contracts are held by BP and not the Argyle business. Accordingly, while realized gains and losses as well as the mark-to-market adjustments are recognized on the Argyle statement of comprehensive income, the corresponding liability is retained by the Parent.

Other Financial Liabilities

Other financial liabilities of the Business include trade and other payables as well as accruals. Due to the short-term nature of these financial liabilities, they are initially and subsequently measured at their stated value, which approximates fair value.

(k)                      Leases

Argyle evaluates whether its leases are a finance or operating lease in accordance with International Accounting Standard (IAS) 17, Leases.  It was concluded all of its leases are operating leases. Operating lease payments are recognized as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

(l)                         Derivative Financial Instruments