Trading Statement

BP PLC 2 October 2001 October 2, 2001 BP 3Q TRADING UPDATE This trading update is aimed at providing an overview of the trading conditions experienced by BP during the third quarter ending September 30, 2001. The third quarter volume, expense, margin, throughput, sales, debt, tax rate and other data referred to below are currently provisional and remain estimates of likely outcomes, some being drawn from figures applicable to the first month or so of the quarter. All such data is subject to change and may differ quite considerably from the final numbers that will be reported on November 6, 2001. The statement is, however, produced in order to provide greater disclosure to investors and potential investors of expected outcomes and to ensure that they all receive equal access to the same information at the same time. 3Q headlines * On track for at least 5.5% increase in reported hydrocarbon production for the full calendar year. * 3Q like-for-like production up around 3% on last year's 3Q. * Downstream refineries all operating at normal levels following the completion of major planned maintenance programmes in 1H * Remain on course to deliver $2bn pre-tax performance improvement in 2001. * $0.4bn of buybacks was completed in the quarter. * The tragic events of September 11 are expected to have no material impact on 3Q results. Exploration and Production 3Q 2Q 3Q Crude and gas price trends 2001 2001 2000 Brent dated ($/bbl) 25.30 27.39 30.43 WTI Cushing ($/bbl) 26.72 27.88 31.71 ANS USWC ($/bbl) 24.05 26.05 29.82 Gas Henry Hub first of month index ($/mmbtu) 2.93 4.66 4.26 Total production for the year to date remains consistent with BP's targets with an expectation that BP should grow reported hydrocarbon production for the full year by at least 5.5% compared with last year. Like for like production (production over the same period in the previous year adjusted for acquisition and divestment activity) in 2001 continues to grow quarter on quarter - with 1Q like for like at 0%, 2Q at 2%, and 3Q expected to be up around 3%. 3Q 2001 total reported oil and gas production is expected to be up between 2 to 3% on 3Q last year. Adjusted for EU mandated UK North Sea disposals during 2001, like for like production is estimated to be up by around 3% on 3Q last year. Liquids production is anticipated to be approximately flat compared with the same period last year at around 1.9 mmboed, with continued ramp up in the deep water Gulf of Mexico being offset by expected declines in UKCS mature fields. Gas production for the quarter is estimated to be around 8.4 billion scfd, 7% higher on a reported basis than the same period a year ago and around 9% on a like-for-like basis after adjusting for the North Sea disposals. These gains reflect expected strong US production output growth and continued expansion from BP's businesses in Trinidad and Argentina. Liquids prices have moderated in the third quarter with the differential between WTI and Brent returning to more historical levels. We anticipate that BP's average liquids realisation will be around $2.00 per barrel lower than 2Q'01. Henry Hub prices have weakened on the back of strong US gas storage and high injection levels. Regional price differentials to Henry Hub are in line with 2Q'01. US gas realisations are expected to be around $1.70 per mcf down on the previous quarter. Gas and Power Gas and power marketing and trading volumes have remained at normal levels through 3Q. The extreme volatility in the US market in 2Q was not repeated in 3Q. Accordingly, operating profit from these activities has decreased. This decrease has been partially offset by improved NGL margins which are returning to more historical levels. NGL volumes remain at normal seasonal levels. Refining and Marketing Refining Indicator Margin, $/bbl 3Q 2Q 3Q 2001 2001 2000 Europe 1.74 3.35 3.44 USA -- Gulf Coast (PADD 3) 3.24 7.71 3.87 -- West Coast (PADD 5) 8.17 9.11 6.00 -- Mid West (PADD 2) 7.20 10.51 3.06 -- Other US - - - Singapore 0.74 0.96 3.19 Global Indicator Margin* 3.83 5.78 4.83 Refining margins during the quarter have been extremely volatile. From record levels achieved during 2Q they fell to around bottom-of-cycle early in the quarter before partially recovering, with particularly strong gains in the US mid-West and the West Coast. The global indicator margin for 3Q averaged $3.83 /bbl compared with $5.78/bbl last quarter and $4.83/bbl last year. Marketing margins recovered slightly from the depressed levels in 2Q. The heavy turnaround programmes in the first half of the year are now completed with affected refineries now back on line. Refinery throughputs increased about 2.5% over 2Q as the increased throughput associated with completion of turnaround programmes was partially offset by the divestment of Mandan and Salt Lake City refineries in early September. 3Q 2001 throughputs are anticipated to be down about 2.5% compared with 3Q 2000 as the result of the sale of the Alliance refinery in September of last year. Marketing sales are broadly in line with 3Q of last year, with underlying growth being offset by divested marketing sites associated with the Salt Lake City and Mandan refinery sales, together with further rationalisation of retail outlets and the sale of our North East European commercial business. *The global industry refining margin is a weighted average based on BP's portfolio. Actual margins may differ due to refinery configuration and operating practices. Chemicals Weighted Chemicals Indicator Margin ($/te)* 2Q '01 1Q '01 3Q '00 108 111 132 Operations at the Chocolate Bayou, Grangemouth and Lavera sites are now fully restored following recent outages, which depressed operating profits in the second quarter by around $100 million. Due to sluggish economic conditions, demand for products remains weak and margins continue to reflect this. *The Chemicals Indicator Margin is a weighted average of externally-based product margins. It is based on market data collected by Chem Systems in their quarterly market analyses, then weighted on BP's product portfolio. This is described more fully in the Group's quarterly results releases. This quarter the margin indicator has been adjusted to reflect the Erdoelchemie purchase and the impact of recently divested businesses. Past quarters have been restated. Debt The net debt gearing ratio on a proforma basis at end 3Q is expected to be around 25% which compares with 25.1% last quarter. Tax The effective tax rate on the proforma result adjusted for special items is anticipated to be 26% compared with last quarter's figure of 28.5%. Stock Purchases In the year to date, the company has purchased for cancellation 140 million of its own shares at a total cost of $1.2bn. - ENDS -

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