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 -