BP/E.ON Announcement

16th July 2001

This document, and in particular the deal summaries and key financials, contain certain forward-looking statements, with respect to, 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 to events and depend on circumstances that will occur in the future and are outside the control of BP. Actual results may differ materially from those expressed in such statements for many reasons including levels of industry product supply, demand and pricing, currency exchange rates, economic growth in relevant countries, successful partnering, the actions of competitors and other changes to business conditions. Additional information including information on factors which may affect BP’s business, is contained in BP’s Annual Report and Accounts for 2000 and in the Annual Report on Form 20 –F filed with US Securities and Exchange Commission.

July 2001

Lord Browne

Group Chief Executive

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

Doug Ford

Managing Director

Transaction Details

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

BP cash consideration $1.63bn* plus $0.95bn debt

contributes 51% of BP’s 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 BP’s 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-strategic upstream assets–retaining proceeds with sharing mechanism above a threshold price

Subject to regulatory approval, expected by early 2002

Asset Earnings History

0

200

400

600

800

1000

1998 1999 2000

Veba Oil Downstream& PetrochemicalsEstimated EBITDA $m

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

Average 98-00 $656m pa

Asset Earnings History

0

200

400

600

800

1000

1998 1999 2000

Veba Oil Downstream& PetrochemicalsEstimated EBITDA $m

BP 25.5% Ruhrgas Operating Dividend

0

100

200

1998 1999 2000

$m Post Tax

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

Average 98-00 $656m pa

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

Asset Earnings History

0

200

400

600

800

1000

1998 1999 2000

Average 98-00 $656m pa

Veba Oil Downstream& PetrochemicalsEstimated EBITDA $m

Veba Oil Upstream

2000 EBITDA $418m

Production 159 mboed

Proven 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

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

Downstream StrategyImplementationAmoco & Arco coast to coast #1 in USACastrol leading global lubricants playerChina investing for growth in retailMobil strengthening BP in Europe

Veba Oil

Subject to Regulatory Approval

> 18%

10-18%

< 10%

Market shareBP + Aral

BP Data

Positioning BP in Europe

0

2

4

6

8

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

Marketing Efficiency

Market Leader in Germany

Source: MWV 2000Subject to Regulatory Approval

Market Efficiency Ratio

Subject to Regulatory Approval

Market Share0-5% 5-10% 10-15% 15-20% 20-25% 25-30%

High

Low

Retail Deal impact

0 100 200 300 0 100 200 300

Retail customers

Retail volume

Conveniencesales

Number of sites

Central Europe Europe

BP BP + Aral

Source: BP data,

Subject to Regulatory Approval

Retail Marketing

A leading brand added to the portfolio

BP & Veba Oil Refinery Interests in Europe

BP Veba

2000 Throughput

(000bpd)

BP* 1,084VebaOil** 314

* Adjusted for 100% Mobil**Veba Oil Share - Accounts 2000

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 2 years

Estimated to be accretive to Group earnings and returns in 2002

Subject to Regulatory Approval

Question & Answer Session

Lord Browne

Group Chief Executive

Doug Ford

Managing Director