Ad-hoc | 4 October 2004 08:49

BP Third Quarter 2004 Trading Update (Part 1 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 1 of 2) October 4, 2004 This trading update is aimed at providing certain estimates regarding revenue and trading conditions experienced by BP in the third quarter ending September 30, 2004, and certain identified non-operating items expected to be included in that quarter’s result. The third quarter margin, price, realisation, cost, production and other data referred to below are currently provisional, some being drawn from figures applicable to the first month or so of the quarter. All such data are subject to change and may differ quite considerably from the final numbers that will be reported on October 26, 2004. The statement is produced in order to provide greater disclosure to investors and potential investors of currently expected outcomes, and to ensure that they all receive equal access to the same information at the same time. Resources Business : Exploration and Production Marker Prices 3Q’04 2Q’04 1Q’04 3Q’03 Brent Dated ($/bbl) 41.54 35.32 32.03 28.38 WTI ($/bbl) 43.88 38.28 35.30 30.19 ANS USWC ($/bbl) 41.82 36.99 34.22 28.83 US gas Henry Hub first of month index ($/mmbtu) 5.75 6.00 5.69 4.97 UK gas price – National Balance Point (p/therm) 23.63 20.70 24.59 15.08 Overview : Exploration and Production Overall BP production in 3Q’04 is expected to be around 3,880 mboed, up by some 11 per cent from 3,502 mboed in 3Q’03, but 2 per cent lower than the rate of 3,971 mboed in 2Q ’04. As indicated in BP’s Strategy Presentation on March 29, 2004, average production for 2004 as a whole is expected to be over 4 mmboed, an increase of more than 10 per cent compared to 2003. Production excluding Russia: Production in 3Q’04, excluding volumes from our Russian operations, is expected to be approximately 2,935 mboed, lower than the 2Q’04 level of 3,080 mboed due to planned maintenance in both the North Sea and Alaska (115 mboed), the operational impact of Hurricane Ivan in the Gulf of Mexico and the blow- out at partner operated Temsah in Egypt (together around 65 mboed). These effects, in relatively high margin operations, are partially offset by the continuing ramp-up of production in the New Profit Centres, and with the In Salah project in Algeria and the Kizomba A field in Angola both coming on stream this quarter. Relative to 2Q’04, liquids realisations moved in line with marker prices. Relative to 2Q’04, gas realisations in North America have moved in line with the Henry Hub marker. Gas realisations in the UK have remained flat with 2Q’04. The 3Q’04 impact of Unrealised Profit in Stock (UPIS) is expected to reduce earnings by approximately $65m. Russia – BP net share Production in mboed 3Q’04 2Q’04 1Q’04 3Q’03* TNK-BP: Oil 858 814 766 654 TNK-BP: Gas 87 77 66 41 Total 945 891 832 695 Marker Prices Urals (NWE – cif) ($/bbl) 37.23 32.32 29.01 27.11 Urals (Med – cif ) ($/bbl) 37.41 32.60 28.98 27.05 Domestic Oil ($/bbl) 22.84** 19.71 17.08 16.65 *BP’s acquisition of its 50 per cent share in TNK-BP was completed on August 29, 2003. BP completed the deal to include Alfa Group and Access-Renova’s (AAR’s) 50 per cent interest in Slavneft into TNK-BP on January 16, 2004. Production information 3Q’03 is shown for comparison purposes only. ** as at September 21 In 3Q’04, BP’s net share of production from TNK-BP is anticipated to be approximately 945 mboed, as shown in the table above. 2004 information includes TNK-BP’s interest in Slavneft. During 3Q’04, Urals NWE marker prices increased by $4.91/bbl with the differential to Brent expanding to approximately $4.31/bbl. Domestic oil prices increased by $3.13/bbl relative to 2Q. Increases in export duty rates became effective on August 1, 2004. The impact of this change at current prices is expected to reduce earnings by approximately $100m pre-tax in 3Q’04. Customer facing Businesses Refining Indicator Margins ($/bbl) 3Q’04 2Q’04 1Q’04 3Q’03 USA – West Coast 11.28 15.41 8.06 9.04 – Gulf Coast 6.99 9.18 6.92 5.61 – Midwest 5.01 9.01 4.67 6.39 North West Europe 4.37 5.29 2.73 2.47 Singapore 5.48 2.80 3.42 1.27 Refining Global Indicator Margin* ($/bbl.) 6.20 7.89 4.62 4.59 *The refining Global Indicator Margin (GIM) is a weighted average based on BP’s portfolio. Actual margins may vary because of refinery configuration, crude slate and operating practices. Demand growth and low aggregate OECD product inventories have continued to underpin the refining environment. While lower than the record second quarter, margins were significantly higher than a year earlier, except for Midwest USA. However, including the effects of supply optimisation benefits, the refining margin actually experienced was similar to that in 2Q’04, despite the decline in the Global Indicator Margin. In Marketing, the rise in input prices was faster than the increase in selling prices, leading to lower margins. End of part 1 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 040849 Okt 04