bp e.on announcement

8/3/2019 BP E.on Announcement

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BP/E.ON Announcement

16thJuly 2001


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This document, and in particular the deal summaries and key

financials, contain certain forward-looking statements, with respectto, inter alia, returns, costs, prices, sales, volumes, value, earnings,synergies, market share and margins. By their nature, forward-

looking statements involve risk and uncertainty because they relate toevents and depend on circumstances that will occur in the future and

are outside the control of BP. Actual results may differ materiallyfrom those expressed in such statements for many reasons includinglevels of industry product supply, demand and pricing, currencyexchange rates, economic growth in relevant countries, successful

partnering, the actions of competitors and other changes to businessconditions. Additional information including information on factorswhich may affect BPs business, is contained in BPs Annual Report

and Accounts for 2000 and in the Annual Report on Form 20 F filed

with US Securities and Exchange Commission.

July 2001


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Lord Browne

Group Chief Execut ive


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Strategy and Opportunity

Subject to Regulatory Approval

Corporate Strategic Fit

Focused strategic resources realise full value of Ruhrgas

Important markets Germany

Valuable brands ARAL

Unique Opportunity Ruhrgas - E.ON views as strategic

BP - accesses leadership position in major market

- accesses material value

High Quality Transaction

Accretive to Group earnings and returns

Acquisition accounting


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Doug FordManaging Director


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Transaction Details

*Subject to Certain adjustments$/ exchange rate 0.86 Subject to Regulatory Approval

BP cash consideration $1.63bn* plus $0.95bn debtcontributes 51% of BPs 25.5% share of Ruhrgas

BP acquires 51% of Veba Oil

E.ON option to Put remaining 49% of Veba Oil after 1Q2002BP option to Put remaining 49% of BPs shares in Ruhrgas after

1Q2002 - BP Pays net cash of $340m

Opens up integration cost synergies of at least $200 million pa

BP review likely to lead to sale of material but non-strategicupstream assetsretaining proceeds with sharing mechanism abovea threshold price

Subject to regulatory approval, expected by early 2002


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Asset Earnings History

0

200

400

600

800

1000

1998 1999 2000

Veba Oil Downstream

& Petrochemicals

Estimated EBITDA $m

1998: BP Estimates, 1999: BP Estimate usingE.ON data, 2000: Audited Data from E.ON

Average 98-00$656m pa


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0

200

400

600

800

1000

1998 1999 2000

Veba Oil Downstream

& Petrochemicals

Estimated EBITDA $m

BP 25.5% Ruhrgas

Operating Dividend

0

100

200

1998 1999 2000

$m Post Tax



Average 98-00 $70m post tax p.a.


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0

200

400

600

800

1000

1998 1999 2000


Veba Oil Downstream

& Petrochemicals

Estimated EBITDA $m

Veba Oil Upstream

2000 EBITDA $418m

Production 159 mboedProven reserves 604 mmboe

Probable resources 155mmboe

Possible resources 366 mmboe

BP 25.5% Ruhrgas

Operating Dividend

0

100

200

1998 1999 2000

Average 98-00 $70m post tax p.a.

$m Post Tax



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Downstream StrategyImplementation

Amoco & Arco [ coast to coast #1 in USA

Castrol [ leading global lubricants player

China [ investing for growth in retail

Mobil [ strengthening BP in Europe

Veba Oil


> 18%

10-18%

< 10%

Market shareBP + Aral

BP Data


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Positioning BP in Europe

0

2

4

68

10

12

14

16

BP pre-Mobil

BP postMobil

BP &Aral

Shell/Dea

TFE Exxon Repsol Agip

Europe Retail

Market Share (%)

BP & Aral Chosen

Markets

# of sites 5,355 8,170 10,975 9,869 9,908 5,089 3,540 1,341

Source: BP & PFC Data Subject to Regulatory Approval


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Marketing Efficiency

Market Leader in Germany

Source: M WV 2000


Market Efficiency Ratio


Market Share

0-5% 5-10% 10-15% 15-20% 20-25% 25-30%

High

Low


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Retail Deal impact

0 100 200 300 0 100 200 300

Retailcustomers

Retail volume

Convenience

sales

Numberof sites

Central Europe Europe

BP BP + Aral

Source: BP data, Subject to Regulatory Approval


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Retail Marketing

A leading brand added to the portfolio


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BP & Veba Oil Refinery Interestsin Europe

BP Veba

2000 Throughput

(000bpd)

BP* 1,084Veba Oil** 314

* Adjusted for 100% Mobil

**Veba Oil Share - Accounts 2000


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Deal Summary

BP acquires majority of Veba Oil

BP realises full value of Ruhrgas

BP/Aral fuels market leadership in Germany & Austria

Opens up integration cost synergies of at least$200m pa restructuring costs of $200m over 2years

Estimated to be accretive to Group earnings andreturns in 2002



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Question & Answer Session

Lord Browne

Group Chief Executive

Doug Ford

Managing Director

bp e.on announcement

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