BP in the Arctic and beyondA world-class company for world-scale projects

BP Exploration Operating Co. Ltd.

Chertsey Road, Sunbury-on-Thames,Middlesex TW16 7LN, UKTelephone +44 (0)1932 762000 Fax +44 (0)1932 762999

The Trans AlaskaPipeline runs for1280km throughvery diverselandscapes andterrains.

Written and designedby Loewy, London

BP in RussiaToday Russia forms a key part of BP’sglobal portfolio, accounting for more than 20% of the company’s worldwideoil and gas production. BP has beenoperating in Russia since 1990 withactivities ranging from oil and gasexploration and production to marine and aviation lubricants and fuels.

BP pursues its global standard of ‘noaccidents, no harm to people and nodamage to the environment’ throughoutits projects in Russia.

TNK-BPBP has a 50% interest in TNK-BP, the second largestintegrated oil company operating in Russia.In 2004 TNK-BP’s daily productionaveraged 1.5 million barrels per day(74 million tonnes per annum) – anincrease of 13% on the previous year. The company’s proven oil andcondensate reserves are estimated at over nine billion barrels (1.23 billion tonnes).

Development of gas resources will beincreasingly important to secureRussia’s place in new and expandinggas markets. TNK-BP is working tocontribute to this growth and Russia’ssuccess based on its significant gasreserves in both West Siberia (RospanInternational) and East Siberia (Kovykta).

SakhalinBP is working in Sakhalin through a joint venture, Elvary-Neftegaz (BP 49%, Rosneft 51%), to explore Sakhalin IV and V. The JV made the first offshorediscovery in 20 years drilling the PelaLache well in 2004. The well, whichwas further offshore (49km) and indeeper water (114m) than anyprevious well offshore Sakhalin,

encountered significant volumes of oiland gas in a number of high qualitysandstone reservoirs. The JV is drillingthe Udachnaya exploration well in2005, which is the second well in theDeriugin basin.

TNK-BP operates the Samotlor oil field in Western Siberia,which is one of the world’s largest oil fields.

Caspian PipelineConsortiumBP holds 6.6% net interest in the Caspian PipelineConsortium (CPC). CPC is the first and only privately-owned,quality banked pipeline in the CIS providing an export routefor Kazakh and Russian crudes to the Black Sea.

TradingCrude oil and oil products purchased in Russia and the CISaccount for a substantial share of BP’s supply and demandbalance. Each year BP’s Integrated Supply and Trading Groupbuys more than 15 million tonnes (equivalent to 110 millionbarrels) of crude oil, representing about 10% of all oil and gascondensate exports either passing through or originating fromRussia. BP is the largest buyer of water-borne Russian crude.

Baltic PetroleumIn St Petersburg BP is represented by Baltic Petroleum, a JV between BP (81%) and Lukoil (19%). Formed in 1993 to supply marine lubricants to international shippingvessels calling at the port of St Petersburg, the JV nowsupplies around 600 ships each year in the port, both Russian and international.

BP traders work around the clock in a number of worldwide locations.

ExplorationexcellenceBP has one of the best exploration records in the industry. In recent years, the industry average exploration success has been one in three, while BP has had a two in threeexploration success rate.In the last six years, BP has participatedin more giant field discoveries than anyof its major competitors.

In the past year, BP has madesignificant hydrocarbon discoveries in Egypt, deepwater Gulf of Mexico and Angola, Trinidad andSakhalin Island.

Using advanced seismic processing in the deepwater Gulf of Mexico and offshore West Africa, BP was successful in unlocking thehydrocarbons in salt provinces.

As a result, BP has had severalsubsalt discoveries in recent years,including Thunder Horse, TubularBells, Puma (Gulf of Mexico); fivefields that make up Greater Plutonioand the most recent eight discoveriesin Block 31 offshore Angola.

In terms of Arctic experience, BP has undertaken over 20 years ofexploration drilling in the Beaufort Sea, Labrador Shelf and NorthernNorway which has included icemanagement, ship operations andsupply in an ice-bound environment.

The Transocean Legend rig operating offshore Sakhalin.

“BP’s exploration performance between 1999 and2003 was outstanding. In terms of value creation, thecompany easily outperformed its supermajor peers.”(Wood Mackenzie, RADAR)

BP reservereplacement ratio

Extensions anddiscoveries

In 2004 BP’s replacement of proven reserves at over 100% exceeded production for the twelfthyear running.

0 94 95 96 97 98 99 00 01 02 03 04

50

100

150

200

20

1 2 3 4

40

0

60

80

100

120

140

% %Average 99-03

Finding cost $/boe

BP

Total

ExxonMobil ChevronTexaco

Shell

Worker operating a valve on a well in the Parlange natural gas field, USA.

BP has successfuloperations in 12countries

Vietnam– Nam Con Son

Sakhalin– Blocks IV & V

Indonesia– Tangguh

Australia– NW Shelf

Abu DhabiWesternNile Delta

Azerbaijan– Azeri-Chirag-Gunashli– Shah Deniz

Norway– Ula– Skarv– Valhall

North Sea– Clair– Rhum

Angola– Kizomba– Greater

Plutonio

Trinidad & Tobago– Kapok– Cannonball– Columbus

Offshore Projects – Operating

Offshore Projects UnderConstruction/Planned

Offshore Oil & Gas Pipelines – Operating/Under Construction

Deepwater Gulf of Mexico– Mardi Gras– Thunder Horse– Atlantis

Alaska– Endicott– Northstar

Floating Production, Storage & Offloading (FPSO) Vessels

Drilling rig at Cromarty Firth, Scotland, UK.

A solid Arctic track recordBP has worked in Alaska since 1969 and over the past 35years has built a long and successful track record as an Arctic explorer and operator – both onshore and offshore.BP Exploration (Alaska) operates 13North Slope oil fields, four North Slope pipelines, and owns a significantinterest in six other producing fields. In 2004, its net share of crude oilproduction was 308,800 barrels of oil equivalent per day (15.4Mta).

BP operates Prudhoe Bay, NorthAmerica’s largest oil field and amongthe 20 largest fields ever discoveredworldwide. Alaska provides about 8%of BP’s worldwide oil production.

To maximize Prudhoe production, BPhas drilled more than 260 sidetrackwells as part of an infill programmeover the last four years. Approximately200 of these wells use coil-tubingtechnology to reach previouslyuntouched oil.

In all its global operations, BP iscommitted to protecting theenvironment. In Alaska and Canada, it has researched the fragile Arcticenvironment and designed projects to minimize adverse environmentalimpacts. After 30 years wildlife, fishand bird populations remain healthyand diverse.

For over 10 years, it has conductedthe most extensive research in theBeaufort Sea on the effects of an oil spill in ice. In addition, in 2004 it took delivery of the first of four, state-of-the-art, double-hulled ‘Alaskaclass’ oil tankers, and plans to have an entirely double-hulled fleet by 2007.

An oil field service contractor on the causeway in the Prudhoe Bay field, Alaska.

Endicott consists of two man-madegravel islands connected by a 2.5kmman-made gravel causeway. Theoperations centre and processingfacilities are located on a 18-hectare

main production island. Processed oil is sent via a 38km pipeline to jointhe Trans-Alaska Pipeline for onwardexport to Valdez and shipment tointernational markets.

The Endicott fieldThe BP-operated Endicott field is the first continuouslyproducing offshore oil field in the Arctic, and is located about16km northeast of Prudhoe Bay. It came on stream in 1987 and currently produces around 20,000 barrels of oil a day (1Mta).

Located about 9.5km northwest ofPrudhoe Bay, it is the first Arcticoffshore field connected by a buriedpipeline to shore. BP designed a state-of-the-art facility to produce andprocess the field’s fluids from a 2-hectare production island, with afootprint of around 0.05% of thereservoir’s area.

The pipeline to shore has a wallthickness triple those of typicalonshore North Slope pipelines and has three separate leak detectionsystems, including one that can detect a leak as small as a single barrel per day.

Northstar: BP’snewest offshorefield in AlaskaBP’s newest offshore field in Alaska, Northstar, was the first to use a buried offshore pipeline located in an ice gougeenvironment. Producing since November 2001, it has recoverablereserves estimated at 175 million barrels (24 million tonnes) andproduction averaged 70,000 barrels a day (3.5Mta) in 2004.

Aerial view of the Endicott main production island, Alaska.

A leader in offshore technologyTo unlock the potential resource in the offshore Arctic, theindustry will require technology that has been developed inother provinces, notably deepwater, worldwide.BP pioneered the first developmentsin the North Sea and is a leadingplayer in the new generation ofdeepwater developments in the Gulf of Mexico and Angola.

BP currently operates 156 sub-sea wellsworldwide in water depths down to2000m, producing around 380,000barrels of oil equivalent per day BP net.In the next five years BP plans toincrease the number of operated sub-sea wells to 320.

BP’s investment in deepwater R&Dtotals tens of millions of dollars andfocuses on five broad categories:concepts for floating production

installations and mooring systems;pipelines and risers; sub-sea andsurface processing systems; flowassurance; and cold flow technology.

This investment is paying off indevelopments such as the BP-operated Mad Dog in the Gulf ofMexico. Lying 300km south of New Orleans, the field is beingdeveloped by 12 wells produced with a single-piece truss sparpermanently moored in 1360m waterdepths. The field came onstream inJanuary 2005 and peak production is expected to total over 100,000barrels of oil per day (5Mta) and 90million cubic feet (930 million cubicmetres per annum) of natural gas.

The Mad Dog spar being upended at night, Gulf of Mexico, USA.

Connecting to marketsTo connect produced oil and gas to markets, BP has built aleading position in pipeline and tanker transportation as wellas LNG production and trading.BP is involved in the design,construction and operation of major oiland gas pipeline systems all over theworld. Examples include the 1280kmTrans-Alaska Pipeline System (BP47%), which has transported about 13billion barrels (1.8 billion tonnes) of oilsince its start-up over 25 years ago.

BP has also designed and built theworld’s longest (300km) dual-phaseoffshore gas pipeline which exportsgas from the Lan Tay field offshoreVietnam to the Phu My power station.

BP is participating in a proposed gaspipeline project to deliver Alaskan gasto the US markets.

Tanker transportation is an essential linkin the supply chain. By 2007, BP’s fleetwill have grown from 42 vessels tonearly 100, to carry cargoes of crude oiland products and LNG. BP is currentlybuilding six large crude oil carriers whichare designed to withstand the winter iceof the Baltic Sea.

BP’s Integrated Supply & TradingGroup links BP’s experience as aleading energy producer with global markets to provide customerswith the products and services they need.

Over recent years BP has achieved asignificant position in the global LNGmarket. It participates in LNG projectsthat supply almost one-third of theworld’s LNG, and is also the largestprovider of gas supplied as LNG to the US market.

BP is the only company to be involved in both LNG supply dealsagreed with China to date – NorthWest Shelf and Tangguh.

BP is the world’s second largestmarketer of gas after Gazprom, and is the largest marketer of gas in North America – the world’s largestgas market.

BP is operator of the BTC pipeline which will export oil from the landlocked Caspian Sea to a new marine terminal atCeyhan on the Mediterranean coast in Turkey

2004 global gas salesBP is the world’s second largest marketer of gas after Gazprom, and is the largest marketer of gas in North America.

5

0

10

15

20

25

30

35

40

45

50

BCFD

Gazprom BP Shell ExxonMobil

ChevronTexaco

Sonatrach

BCMA

0

100

200

300

400

500

The dual membrane LNG vessel British Innovator off the coast of Fujairah in the UAE.

BP is a global LNG major

Japan

Kwangyang

FujianTaiwan

Guangdong

TangguhBontang

NWS

Oman

QatarEgypt

Bilbao

Angola

Trinidad

Dominican Republic

ElbaCosta Azul

BP is involved in fourof the world’s majorliquefaction plantsthat together supplyover 30% of theworld’s LNG sales

BP has securedcontracts to be thelargest supplier ofLNG to China

BP LNG Supply

Future BP LNG Supply

BP LNG Access

Cove Point

Isle of Grain

Abu Dhabi

BP Gas Sales

BP is the largestmarketer (26bcf/d) andproducer of gasin the USA

BP is the 2ndlargest producerof gas into plantamongst IOCs(1.6bcf/d)

BP is a major LNG ship owner andmanager with over 600 LNG cargoessafely loaded, carried and deliveredwithout incident

LNG plant at Karratha on the Burrup Peninsula, part of the North West Shelf Venture.