Solid Strategy, Confident Execution

Goldman Sachs 11th Annual Cyclicals and Specialty Materials Forum

May 21, 2003

Kevin DeNicolaSenior Vice President and CFO

2

Safe Harbor Language

Statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are just predictions or expectations and are subject to risks and uncertainties. Actual results could differ materially, based on factors including but not limited to the cyclical nature of the chemical and refining industries; availability, cost and volatility of raw materials and utilities; governmental regulatory actions and political unrest; global economic conditions; industry production capacity and operating rates; the supply/demand balance for Lyondell's and its joint ventures' products; competitive products and pricing pressures; access to capital markets; and technological developments and other risk factors. For more detailed information about the factors that could cause our actual results to differ materially, please refer to Lyondell Chemical Company’s Annual Report on Form 10-K for the year ended December 31, 2002, filed in March 2003, and Lyondell’s Quarterly Report on Form 10-Q, which was filed in May 2003. Reconciliations of GAAP financial measures to non-GAAP financial measures are provided at the end of this presentation.

3

Lyondell Has Built a Balanced Portfolio

Lyondell

IC&D

LCR

Equistar

Commodity Leverage-- A leading North American producer of ethylene, propylene

and polyethylene-- Low cost position based on feedstock flexibility and scale

Stability & Growth-- A leading global producer of PO and derivatives-- Process technology strength

Cash Generation-- Unique capability to refine heavy crude oils-- Contractually stable business; strong cash flow generator

($ MM)

Revenues EBITDALyondell

OwnershipIC&D $3,262 $410 100.0%Equistar 5,537 256 70.5LCR 3,392 362 58.75

2002

4

Leading Positions in All Key Products

1 Source: CMAI, LYO capacities as of Jan 20032 Includes 1.5 billion pounds that represents Bayer’s share under the PO Joint Venture and 385 million pounds or

100% of the capacity of Nihon Oxirane3 Does not include refinery-grade material or production from the product flexibility unit at Equistar’s Channelview

facility.

Inte

rmed

iate

C

hem

ica

ls a

nd

D

eriv

ati

ves

Eq

uis

tar

Product Annual Capacity1

Capacity Position

Propylene Oxide2 (lbs) 3.9 billion 1st in North America2nd in the world

Styrene Monomer (lbs) 3.7 billion 1st in North America3rd in the world

MTBE (bbl/day) 58,500 1st in North America1st in the world

Ethylene (lbs) 11.6 billion 2nd in North America5th in the world

Propylene (lbs) 5.0 billion 2nd in North America6 th in the world

Polyethylene (lbs) 5.7 billion 3 rd in North America4 th in the world

1

3

5

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2002 1995 Margins¹ 1988 Margins¹

LCR IC&D Equistar

Significant Cash and Earnings Generation in Up-Cycle

Cycle EBITDA Potential

1 1988/1995 Chem Data/CMAI margins for Ethylene, Polyethylene and Styrene applied to current capacities and ownership Note: Assumes current capital structure; 160MM shares

($MM)

$6.20/share

$1.35/share

6

A Brief Portfolio Review

IC&D

LCR

Equistar

7

PO Industry Capacity Lyondell PO & Derivatives

Other24%

LYO/Bayer/Sumitomo

33%

Shell/BASF15%

Dow28%

PG33%

BDO18%

Merchant PO33%

Deicers6%

PO Solvents

10%

Our Propylene Oxide and Derivatives Business (IC&D) Benefits from a Strong Position

ProductCapacityPosition

MarketGrowth

Merchant PO 1

PG 1 Moderate

BDO 2 High

P-Solvents 2 Low

Deicers 1 Low

PO 4-5%/yr

Source: LYO databook and SRI Post PO-11 Project

Durables- Furniture

- Automotive

- Construction

- Boating

- Electronics

Non-Durables- Coatings/Adhesives

- Personal Care

- Spandex

- Aircraft DeIcing

PO End Uses

8

Olefins PO BDO

NMPGBLTHF

PTMEG

End Use

• Spandex

• Solvents

• Urethanes

• Automotive

• Electronics

• Cosmetics

$0.10 $0.50-.80$0.45$0.20 $1.00+

Illustrative Price, $/lb.

Merchant

Merchant

We are completing an investment cycle in the PO and Butanediol Value Chain

9

40

60

80

100

120

140

160

180

200

PG Styrene HDPE

Relative Raw Material Margin Range, 1994-2002100 = Period Average

•PG: U.S. Industrial Grade Propylene Glycol minus (0.59) x Chem Grade Propylene, both as reported by Chem Data•Styrene: US Net Industry Average Styrene Price minus 0.28 x North America ethylene Net Transaction Price, minus 0.105 x North America Contract Benzene, all as reported by CMAI•HDPE: North America HDPE Domestic Market Contract Injection Molding price - Ethylene product cash cost (Weighted Average Feed) as reported by CMAI

Propylene Glycol (PG) Margin History Illustrates the Stability in the PO Chain Relative to Other Products

10

Global Styrene Supply/Demand Balances Are Tightening

20

30

40

50

60

70

80

90

100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Cap

acit

y (B

illio

n P

ound

s)

70%

75%

80%

85%

90%

95%

100%

Op

erat

ing

Rat

e (%

)

Supply

Source CMAI 2003 World Styrene Analysis

Operating Rate

92% Rate

Demand at 4.5% Growth

11

600

500

400

300

200

100

MTBE is a Source of Premium Clean Octane to the 19-20 MMB/D Global Gasoline Market

Global Supply/Demand US Market Balance

MB/D

CA

U.S.

Non-U.S.

CARefinery/Olefins

U.S.Dehydro

DehydroNon -US

PO

DEMAND

CAPACITY

DEMAND SUPPLY

Refinery/Olefins

U.S.

Imports

U.S.Dehydro

PO

Source : Dewitt

12

2003 MTBE Legislative Activity

Legislation Could Lead To Any Of Three Options:

• Continue MTBE Production

• Add Iso-octane Flexibility

• Utilize ETBE Capability

Senate Proposal

• Ban MTBE after 4 years

• Ethanol use to 5B gal/yr

• Oxygen requirement eliminated

• ETBE tax equality

• Liability protection Ethanol only

House Proposal

• No MTBE ban

• Ethanol use to 5B gal/yr

• Oxygen requirement eliminated

• Liability Protection Ethers and Ethanol

13

Lyondell Products Help Make Clean Gasoline

Octane RVP Toxics VOC NOX

MTBE 109 8 (10.9%) (2.4%) (1.5%)

ETBE 111 4 (7.1%) (6.6%) (1.8%)

Iso-Octane 100 2.5 (3.5%) (2.6%) (2.4%)

Ethanol 114 20 (5.4%) + 9.1% (1.3%)

Reformulated Gasoline 87 6.8

BlendingAutomobile Emissions

Change in Clean Air Act Pollutants

Calculations based on typical reformulated gasoline in 8 U.S. cities and application of EPA complex model

14

LCR Important Cash Generator

Operating Reliability and Crude Deliveries Drive Performance

1 4Q01: Scheduled maintenance turnaround2 1Q03: Includes a $25MM write-off

0

50

100

150

200

250

300

1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03

0

20

40

60

80

100

120

140CSA Spot Mkt EBITDA

MB/day $MM

21

15

Equistar is a Leading Ethylene Producer

#2 in North America

Competitive position based on feedstock flexibility

1991 2002

Top 5 North America

Shell9%

Dow9%

Equistar15%Nova

8%

Union Carbide7%

Exxon7%

Dow/Carbide20%

ExxonMobil13%

ChevronPhillips10%

Nova 8%

40%

66%

Source: CMAI

16

Equistar Capability

NGL

37%

Liquid

63%

N. American Industry

(ex. Equistar)

NGL

78%

Liquid

22%

Liquid Cracking Provides an Advantage

Source: CMAI and Lyondell.

Ethane - Light Naphtha Cost of Ethylene Spread

0

1

2

3

4

5

6

7

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

¢/lb

eth

yle

ne Average

Liquid Cracking Variable Cost Advantage

Source: ChemData,

17

0

5

10

15

02-J

an

02-A

pr

02-J

ul

02-O

ct

03-J

an

03-A

pr

03-J

ul

03-O

ct

04-J

an

04-A

pr

Oil/

Ga

s

Oil/Gas Ratio

Energy Value Parity

The Oil/Gas Price Ratio has Moved in FavorThe Oil/Gas Price Ratio has Moved in Favorof Liquid Feedstockof Liquid Feedstock

History : CMAI -4/03Future : NYMEX

18

500

700

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

3,100

3,300

Wor

king

Gas

in U

nder

grou

nd S

tora

ge,

BC

FUS Natural Gas Inventories Are Forecast To Remain Very Tight

Inventory Forecasts under 3 Demand Scenarios

Mar Apr NovMay

Source: PIRA / DOE

Rolling 5-Year Average

Actual (thru 05/8/03)

Jun Jul Aug DecSep Oct

5-Yr Average

Jan Feb Mar Apr

Base Case: 4 BCF/D Demand Destruction

High Case: 6-7 BCF/D Demand Destruction

Low Case: 1.5-2 BCF/D Demand Destruction

19

Both The Overall Ethylene Margin and the Naphtha Advantage Have Increased Significantly

-5

0

5

10

15

20

25

30

35

Jan Jul Jan Jul

Delta COE

Ethane COE

Naphtha COE

Ethylene Price

Cents/lb

2002 2003

Source : ChemData

COE – Cost of ethylene production

20

North American Supply/Demand Balance Is Expected to Improve

30

40

50

60

70

80

90

100

110

120

1994 1996 1998 2000 2002 2004 2006

Bil

lio

n P

ou

nd

s

60%

70%

80%

90%

100%

Op

erat

ing

Rat

e

Ethylene Supply/Demand Balance – North America

Source: CMAI / Equistar (April 2003)

Na

me

pla

te C

ap

ac

ity

N. American Effective Operating Rate(96% On-Stream Time)

N. America Demand

World

N. America

21

12000

14000

16000

18000

20000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004QtrlyAvg

Mill

ion

s C

ap

ac

ity

Lb

s

70

75

80

85

90

95

100

Op

era

tin

g R

ate

, %

Effective Capacity Downtime Operating Rate

Effective Ethylene Operating Rates Are Effective Ethylene Operating Rates Are Forecast To Be In The Low To Mid 90% RangeForecast To Be In The Low To Mid 90% Range

U.S. Ethylene Supply/Demand

CMAI-4/03

2002 20032002 2003

22

Our Financial Strategy is Unchanged

Maintain Sufficient Liquidity

Repay Debt

23

We Have Maintained Significant Liquidity

Lyondell Equistar

Cash & ST Investments* $384MM $112MM

Revolver* $350MM $354MM

Total Liquidity $734MM $466MM

1 1

1 – does not include 3/31 amounts committed against letters of credit : (LYO-$50MM, Equ-$16MM) * As of 3/31/2003

24

We Have Actively Managed Our Maturity Profile

Debt Maturities

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2003 2004 2005 2006

Lyondell Equistar($MM)

Note: Pro-forma the May LYO bond offering

Pre-Payable Debt

$0

$400

$800

$1,200

$1,600

2003 2004 2005 2006

Lyondell Equistar($MM)

25

0102030405060708090

1998 2002

Lyondell Equistar

0

30

60

90

120

150

180

Lyondell Equistar PO11 Spending

Processes and Systems Have Steadily Improved the Capital Utilization Within the Enterprise

$MM

1999 2002

Capital Spending Days of Working Capital*

* Based on accounts receivable (including those sold), inventories and accounts payable as of 12/31, and fourth-quarter days of sales

26

Industry Leading Safety Performance - Enterprise Incident Rate

0.931.18

0.99

0.8

0.52

0

0.5

1

1.5

2

199819992000

20012002

ACC Best ‘01 - 0.48

RIR

(1) Enterprise Recordable Incident Rate data does not include Lyondell-Citgo Refining (LCR)Note: RIR = Recordable Incident Rate

(1)

27

A Snapshot of Operating Metrics Highlights the Success

0

10

20

30

40

50

60

70

80

90

EQU LYO/EQU Polymers

Downtime Environment Quality

% Improvement*

* 1998 to 2002

28

1 Capitalization = debt + book value of equity + minority interest

De-leveraging Will Benefit All Stakeholders

Impact of Lyondell debt reduction at constant capitalization1:

Debt Reduction

$1B $2B

Debt to capitalization 54% 36%

Avoided interest expense $100MM/Yr $200MM/Yr

Earnings improvement 40¢/share 80¢/share

Share price improvement atconstant capitalization $6/share $12/share

29

2002 2001

Lyondell

Operating income 174$ 112$

Add:Restructuring charges (credits) (a) (3) 63 Depreciation and amortization 244 254 Other income (expense), net (6) (4) Income from other equity investments 1 -

Lyondell EBITDA excluding restructuring charges (credits) 410$ 425$

Equistar

Operating income (loss) (44)$ (99)$

Add:Facility closing costs (b) - 22 Depreciation and amortization 298 319 Other income (expense), net 2 8

Equistar EBITDA excluding facility closing costs 256$ 250$

Proportionate Share - % varies (c) 122$ 103$

LCR

Operating income 246$ 256$

Add:Depreciation and amortization 116 108

LCR EBITDA 362$ 364$

Proportionate Share - 58.75% 213$ 214$

EBITDA - Lyondell and Proportionate Share of Equity Investments

Lyondell EBITDA excluding restructuring charges (credits) 410$ 425$ Lyondell share of Equistar EBITDA excluding facility closing costs (c) 122 103 58.75% of LCR EBITDA 213 214 75% of LMC EBITDA through April 30, 2002 (3) (4) Lyondell and Proportionate Share of Equity Investments 742$ 738$

________(a) Restructuring charges (credits) related to shutdown of Lyondell's ADI business.(b) Closing costs related to Equistar’s Port Arthur, Texas facility.(c) Lyondell had a 41% interest in Equistar through August 22, 2002 and 70.5% thereafter.

LYONDELL CHEMICAL COMPANYSELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)

(Millions of dollars)

RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA

For the twelve months ended

December 31,

30

1Q2000 2Q2000 3Q2000 4Q2000 1Q2001 2Q2001 3Q2001 4Q2001 Q12002 Q22002 Q32002 Q42002 Q12003

Operating income (loss) 34$ (6)$ 82$ 79$ 58$ 81$ 90$ 27$ 49$ 70$ 58$ 69$ 38$

Add:Depreciation and amortization 26 30 28 28 28 27 26 27 29 30 28 29 28

Other expense, net - - - - - - (2) - - - - (1) -

LCR EBITDA 60$ 24$ 110$ 107$ 86$ 108$ 114$ 54$ 78$ 100$ 86$ 97$ 66$

________(a) EBITDA for the three months ended December 31, 2002 was originally reported as $98 million and was restated to include extraordinary charges related to

early debt retirement, currently reflected in other expense, net.

(b) EBITDA for LCR for the three months ended September 30, 2001 was originally reported as $116 million and was restated to include extraordinary charges related to early debt retirement, currently reflected in other expense, net.

LYONDELL CHEMICAL COMPANYRECONCILIATION OF LCR OPERATING INCOME (LOSS) TO EBITDA

(Millions of dollars)

Dollars in Millions

Lyondell Equistar Lyondell Equistar

Working Capital as of December 31: b

Accounts Receivable 479$ 522$ 396$ 625$

Inventories 550 549 344 424

Accounts Payable (310) (337) (344) (459)

Total 719 734 396 590

Add: Accounts Receivable Sold 160 130 65 81

Adjusted Working Capital 879$ 864$ 461$ 671$

Days of Working Capital:Fourth Quarter Sales Revenue 872$ 1,141$ 890$ 1,431$

Days in Quarter 92 92 92 92

Sales per Day $9.5 $12.4 $9.7 $15.6

Days of Working Capital c 93 70 48 43

a - Certain amounts for 1998 have been restated to conform to the 2002 presentation.b - Defined as the major controllable components of working capital - receivables, inventories and payables.

c - Days of working capital are calculated as adjusted working capital divided by sales per day.

Days of Working CapitalReconciliation

1998 a 2002