Ad-hoc | 4 October 2004 08:50

BP Third Quarter 2004 Trading Update (Part 2 of 2)

Ad-hoc-announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– BP Third Quarter 2004 Trading Update (Part 2 of 2) October 4, 2004 Petrochemicals Weighted Chemicals Indicator Margin ($/te)* 3Q’04 2Q’04 1Q’04 4Q’03 n/a 129 125 109 *The Chemicals Indicator Margin is a weighted average of externally-based product margins. It is based on market data collected by Nexant (formerly 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. BP Petrochemicals’ 3Q’04 margins and sales volumes were broadly comparable with 2Q’04. Increases in feedstock and energy costs have been recovered through higher product realisations. Gas, Power and Renewables Gas marketing margins are expected to be significantly lower than 2Q’04. NGL margins have remained at similar levels to those seen in 2Q’04. Identified Non-Operating Items As advised at the time of 2Q’04 results, the 3Q’04 non-operating items covering provisions for environmental remediation and other liabilities amount to around $500m pre-tax, comparable to last year. Of the $500m, around $200m relates to Refining and Marketing, $50m to Petrochemicals and $250m to Other Business and Corporate. In addition, non-operating losses of approx $100m are expected to arise in the Exploration and Production segment, in respect of the write-off of the Temsah platform in Egypt plus a charge taken for vessel leases no longer required. Interest Expense We expect interest expense to be broadly unchanged compared with 2Q’04. Tax Rate The effective tax rate for the quarter is expected to be around 35 per cent. Gearing Gearing for the quarter is expected to remain below the bottom end of our target 25-35 per cent band. Share Purchases During the quarter the company bought back for cancellation 241m shares for a total consideration of $2.25bn. Year to date the total number of shares bought back for cancellation amounted to 621m at a cost of $5.5bn. Also during the quarter the company issued 139m ordinary shares to the AAR partners as the first of three tranches of deferred consideration relating to the formation of the TNK-BP joint venture. Shares in issue as at September 28, 2004 were 21,727m. As in previous quarters, BP has entered into an arrangement that will allow it to continue the share buy back programme during the close period commencing October 1, 2004. Rules of Thumb As indicated in BP’s strategy presentation on March 29, 2004, the following rules of thumb can be used to estimate the impact of changes in the trading environment on BP’s 2004 full yearpre-tax results. These rules of thumb are approximate. In particular the impact of large movements in the trading environment relative to that of 2003 may differ from those implied by the rules of thumb. Particular differences may arise due to higher government shares of Exploration and Production revenues in some jurisdictions at current price levels, as well as from variations between the Refining Global Indicator Margin (GIM) and BP’s realized refining margins due to crude price levels and differentials, product price movements and other factors. Many other factors will affect BP’s earnings quarter by quarter. Actual results in individual quarters may therefore differ significantly from the estimates implied by the application of these rules. 2004 Operating Environment Rules of Thumb : pre tax per year Full Year Oil Price – Brent +/- $1/bbl $570m Gas – Henry Hub +/- $ 0.10/mcf $110m Refining – GIM +/- $ 1/bbl $1120m Petrochemicals – CIM +/- $10/te $200m – ENDS – This information is provided by RNS The company news service from the London Stock Exchange End of part 2 end of ad-hoc-announcement (c)DGAP 04.10.2004 ——————————————————————————– WKN: 850517; ISIN: GB0007980591; Index: Listed: Amtlicher Markt in Düsseldorf (Dt. Zertifikate DE0008618737), Frankfurt (General Standard) und Hamburg; Freiverkehr in Berlin-Bremen, Hannover und Stuttgart / Freiverkehr in Berlin-Bremen, Düsseldorf, Frankfurt, Hamburg, Hannover, München und Stuttgart 040850 Okt 04